Shanghai jintiancheng law firm
About Hangzhou Century Co.Ltd(300078)
Legal opinions on matters related to stock options and restricted stock incentive plan in 2019
Address: floor 9/11/12, Shanghai center building, No. 501, Yincheng Middle Road, Pudong New Area, Shanghai
Tel: 02120511000 Fax: 02120511999
Postal Code: 200120
Shanghai jintiancheng law firm
About Hangzhou Century Co.Ltd(300078)
Matters related to stock options and restricted stock incentive plan in 2019
Legal opinion
To: Hangzhou Century Co.Ltd(300078)
Shanghai jintiancheng law firm (hereinafter referred to as "the firm") has accepted the entrustment of Hangzhou Century Co.Ltd(300078) (hereinafter referred to as "the company") to act as the special legal adviser for its 2019 stock option and restricted stock incentive plan (hereinafter referred to as "the equity incentive plan" and "the 2019 equity incentive plan") on the adjustment of stock option and restricted stock related to the equity incentive plan, In accordance with the securities law of the people's Republic of China (hereinafter referred to as the "Securities Law"), the company law of the people's Republic of China (hereinafter referred to as the "company law"), and the measures for the administration of equity incentives of listed companies (hereinafter referred to as the "administrative measures") promulgated by the China Securities Regulatory Commission (hereinafter referred to as the "CSRC") The Shenzhen Stock Exchange GEM Listing Rules (revised in December 2020) (hereinafter referred to as "Listing Rules") and other laws, regulations and normative documents, as well as the provisions of Hangzhou Century Co.Ltd(300078) articles of Association (hereinafter referred to as "articles of association") and Hangzhou Century Co.Ltd(300078) 2019 stock option and restricted stock incentive plan (Draft) (hereinafter referred to as "2019 equity incentive plan (Draft)", This legal opinion is issued in accordance with the business standards, ethics and the spirit of diligence recognized by the lawyer industry.
The exchange issues legal opinions in accordance with the facts that have occurred or exist before the issuance date of this legal opinion, the current laws and regulations of China and the relevant provisions of the CSRC, The statement is as follows: in accordance with the provisions of the securities law, the measures for the administration of securities legal business of law firms and the rules for the practice of securities legal business of law firms (for Trial Implementation), as well as the facts that have occurred or exist before the date of issuance of this legal opinion, the firm and its handling lawyers have strictly performed their statutory duties, followed the principles of diligence and good faith, and conducted full verification and verification, Ensure that the facts identified in this legal opinion are true, accurate and complete, that the concluding opinions issued are legal and accurate, and that there are no false records, misleading statements or major omissions, and bear corresponding legal liabilities.
In the process of investigation for the issuance of this legal opinion, the company guarantees that it has provided the original written materials and duplicate materials deemed necessary by the exchange for the issuance of this legal opinion, and ensures that the above documents are true, accurate and complete, that all signatures and seals on the documents are true, and that the copies are consistent with the original.
The exchange agrees to take this legal opinion as a necessary legal document for the relevant adjustment of the company's equity incentive plan, report or announce it together with other materials, and bear corresponding legal liabilities for the legal opinion issued in accordance with the law.
This legal opinion is only for the purpose of relevant adjustment of this equity incentive plan, and shall not be used for any other purpose without the prior written consent of the exchange.
According to the requirements of the law and in accordance with the business standards, ethics and the spirit of diligence recognized by the lawyer industry, our lawyers issue the following legal opinions on the relevant adjustments of the company's equity incentive plan.
1、 Approval and authorization of the adjustment of the equity incentive plan
The lawyer of the firm consulted the relevant meeting materials of the company on matters related to the 2019 equity incentive plan. According to the verification of our lawyers, the above matters have been approved and authorized as follows:
(I) approval and authorization of 2019 equity incentive plan
1. On December 16, 2019, the company held the 15th meeting of the 4th board of directors and the 13th meeting of the 4th board of supervisors, deliberated and adopted the proposal on the company's 2019 stock option and restricted stock incentive plan (Draft) and its summary, and the proposal on the assessment measures for the implementation of the company's 2019 stock option and restricted stock incentive plan. The independent directors expressed their independent opinions on the equity incentive plan. The board of supervisors checked the list of incentive objects and issued verification opinions.
The list of incentive objects was publicized on the company's website from February 17, 2019 to December 30, 2019. During the publicity period, the board of supervisors of the company did not receive any objection related to the proposed incentive objects of the incentive plan, and disclosed the statement and verification opinions of Hangzhou Century Co.Ltd(300078) board of supervisors on the publicity of the list of incentive objects of the company's 2019 stock option and restricted stock incentive plan on December 31, 2019.
3. On January 6, 2020, the company held the first extraordinary general meeting of shareholders in 2020, deliberated and approved the proposal on the company's 2019 stock option and restricted stock incentive plan (Draft) and its summary, and the proposal on the measures for the implementation and assessment of the company's 2019 stock option and restricted stock incentive plan. On the same day, the company disclosed Hangzhou Century Co.Ltd(300078) the self inspection report on the trading of the company's shares by insiders with inside information about the 2019 stock option and restricted stock incentive plan.
4. On February 14, 2020, the company held the 17th meeting of the 4th board of directors and the 14th meeting of the 4th board of supervisors, deliberated and adopted the proposal on granting stock options and restricted shares to incentive objects. In view of the achievement of the grant conditions specified in the equity incentive plan, it is agreed to grant 12.321 million stock options to 66 incentive objects and 10.136 million restricted shares to 63 incentive objects on February 14, 2020. Independent directors have expressed their independent opinions on matters related to the grant of this equity incentive plan.
5. On April 28, 2021, the company held the 28th meeting of the 4th board of directors and the 25th meeting of the 4th board of supervisors, deliberated and approved the proposal on adjusting the exercise price of stock options in 2019 stock option and restricted stock incentive plan, and agreed to adjust the exercise price of stock options in 2019 stock incentive plan to 12.572 yuan / share; The proposal on cancellation of some stock options and repurchase cancellation of some restricted shares in the company's 2019 stock option and restricted stock incentive plan was reviewed and approved. In view of the resignation of two incentive objects and no longer qualified as incentive objects, the company cancelled 414000 stock options that had been granted but not exercised and repurchased and cancelled 344000 restricted shares that had been granted but not lifted; At the same time, because the company's 2020 performance assessment objectives did not meet the exercise / unlocking conditions of the first exercise period / the first release period specified in the incentive plan, the company cancelled 3572100 stock options that could not be exercised in the first exercise period granted to 64 grantees and repurchased 2937600 restricted shares that could not be released in the first release period granted to 61 grantees.
On May 20, 2021, the company held the 2020 annual general meeting of shareholders, deliberated and approved the above proposal, completed the cancellation of stock options on August 10, 2021, and completed the repurchase and cancellation of 3281600 restricted shares on September 8, 2021.
(II) approval and authorization of this adjustment
1. Stock options
On April 27, 2022, the company held the 9th meeting of the 5th board of directors and the 8th meeting of the 5th board of supervisors, deliberated and adopted the proposal on adjusting the exercise price of stock options in the company's 2019 stock option and restricted stock incentive plan.
In view of the fact that the company's 2020 profit distribution plan has been implemented, according to the provisions of the company's 2019 equity incentive plan (Draft), if the company has matters such as the conversion of capital reserve into share capital, the distribution of stock dividends, the division of shares, the allotment of shares, the reduction of shares or the distribution of dividends before the exercise of incentive objects, the exercise price shall be adjusted accordingly. The adjustment method is as follows:
Stock option exercise price adjustment P = p0-v
Where: P0 is the exercise price before adjustment; V is the dividend per share; P is the adjusted exercise price. After dividend adjustment, P must still be greater than 1.
Therefore, the exercise price of stock options under the equity incentive plan in 2019 is adjusted to P = p0-v = 12.572 – 0.013 = 12.559 yuan / share.
2. Restricted stock
On April 27, 2022, the company held the 9th meeting of the 5th board of directors and the 8th meeting of the 5th board of supervisors, deliberated and adopted the proposal on adjusting the restricted stock repurchase price of the company's 2019 stock option and restricted stock incentive plan.
In view of the company's cash dividends of 0.018 yuan / share and 0.013 yuan / share in 2019 and 2020 respectively, according to the provisions of the company's 2019 equity incentive plan (Draft), after the restricted shares granted to the incentive objects are registered, if the company has matters affecting the total amount of the company's share capital or the company's share price, such as the conversion of capital reserve into share capital, the distribution of share dividends, the division of shares, the allotment or reduction of shares, and the dividend distribution, The company shall adjust the repurchase price of restricted shares that have not been lifted. The adjustment method is as follows:
P＝P0-V
Where: P0 is the repurchase price of restricted shares per share before adjustment; V is the dividend per share; P is the adjusted repurchase price of restricted shares per share. After dividend adjustment, P must still be greater than 1.
Therefore, the repurchase price of restricted shares under the equity incentive plan in 2019 is adjusted to P = p0-v = 6.30 – 0.018 – 0.013 = 6.269 yuan / share.
(III) approval and authorization of this cancellation and repurchase cancellation
On April 27, 2022, the company held the 9th meeting of the 5th board of directors and the 8th meeting of the 5th board of supervisors, deliberated and adopted the proposal on cancellation of partial stock options and partial repurchase cancellation of restricted shares in the company's 2019 stock option and restricted stock incentive plan. In view of the resignation of 12 incentive objects and no longer qualified as incentive objects, the company will cancel 1474200 stock options held by them; In view of the resignation of 11 incentive objects, the company will repurchase and cancel 883400 restricted shares granted but not unlocked. At the same time, because the company's performance assessment objectives in 2021 did not meet the exercise / unlocking conditions of the second exercise period / the second release period specified in the incentive plan, according to the provisions of the company's incentive plan and the assessment measures for the implementation of the company's 2019 stock option and restricted stock incentive plan, The company cancelled 2535300 stock options that could not be exercised in the second exercise period granted to 52 grantees and repurchased 1479000 restricted shares that could not be lifted in the second release period granted to 50 grantees. This time, the company plans to cancel 4009500 stock options that have been granted but not yet exercised under the 2019 equity incentive plan, and plans to repurchase and cancel 2362400 restricted shares that have been granted but not yet lifted under the 2019 equity incentive plan. The independent directors expressed their independent opinions on the cancellation of this repurchase.
The exchange believes that the relevant matters of the 2019 equity incentive plan of the company have fulfilled the approval and authorization that should be fulfilled, and the repurchase and cancellation of restricted shares still need to be approved by the general meeting of shareholders, which is in line with the relevant provisions of the administrative measures, the listing rules and the 2019 equity incentive plan (Draft).
2、 Specific contents of this cancellation and repurchase cancellation
(I) reasons for cancellation of this and repurchase
Among the original incentive objects, 12 incentive objects quit their jobs and no longer have the qualification of incentive objects. The company will cancel 1474200 stock options held by them; The company will buy back and cancel 883400 restricted shares that have been granted but not yet unlocked. In the 2019 equity incentive plan, 2535300 stock options and 1479000 restricted shares that have not been exercised / unlocked will be cancelled / repurchased due to the fact that the company's 2021 annual performance evaluation target does not meet the exercise / unlocking conditions of the second exercise period / second release period specified in the 2019 equity incentive plan.
(II) quantity and price of this cancellation and repurchase cancellation
This time, a total of 4009500 stock options granted by the 2019 equity incentive plan are cancelled, and a total of 2362400 restricted shares granted by the 2019 equity incentive plan that have not been lifted are repurchased and cancelled. The price of the restricted shares to be repurchased and cancelled this time is 6.269 yuan / share. Source of repurchase and cancellation of restricted shares: all the capital sources are the company's own funds.
(III) impact of this repurchase cancellation on the company
After the cancellation of this repurchase, the total share capital of the company decreased from 86612986600 shares to 863767466 shares. (IV) other aspects of this cancellation and repurchase cancellation
According to the company's commitment, all the funds for this repurchase and cancellation will use the company's own funds. This cancellation and repurchase and cancellation will not have an impact on the company's financial status and operation
