Shenzhen Yhlo Biotech Co.Ltd(688575)
In order to further improve the corporate governance structure, improve the company’s incentive and restraint mechanism, form a good and balanced value distribution system, fully mobilize the enthusiasm of the company’s core team, make them work more honestly and diligently, and ensure the steady improvement of the company’s performance, To ensure the realization of the company’s development strategy and business objectives, the company plans to implement the restricted stock incentive plan in 2022 (hereinafter referred to as “the incentive plan” or “the plan”).
In order to ensure the smooth implementation of the equity incentive plan, in accordance with the company law of the people’s Republic of China, the securities law of the people’s Republic of China, the measures for the administration of equity incentive of listed companies, the rules for the listing of shares on the science and Innovation Board of Shanghai Stock Exchange, the self regulatory guide for listed companies on the science and Innovation Board No. 4 – disclosure of equity incentive information and other relevant laws These measures are formulated in accordance with the relevant provisions of laws, regulations and normative documents, the articles of association and the company’s restricted stock incentive plan, and in combination with the actual situation of the company.
1、 Assessment purpose
Further improve the corporate governance structure, establish and improve the company’s incentive and restraint mechanism, ensure the smooth implementation of the incentive plan, and give full play to the role of equity incentive to the greatest extent, so as to ensure the realization of the company’s development strategy and business objectives.
2、 Assessment principle
The assessment and evaluation must adhere to the principles of fairness, openness and fairness, and evaluate in strict accordance with the measures and the performance of the assessment objects, so as to realize the close combination of the incentive plan with the work performance and contribution of the incentive objects, so as to improve the overall performance of the company and maximize the interests of the company and all shareholders.
3、 Assessment scope
These measures are applicable to all incentive objects participating in the company’s restricted stock incentive plan, that is, all incentive objects verified and determined by the board of supervisors, including directors, senior managers, core technicians (if any) and core backbone of the company (including subsidiaries).
All incentive objects must have employment or labor relations with the company when the company grants restricted shares and within the assessment period specified in the incentive plan.
4、 Assessment organization
(I) the remuneration and assessment committee of the board of directors is responsible for leading and organizing the assessment of incentive objects.
(II) the human resources department of the company is responsible for the specific implementation of the assessment, and is responsible for and reports to the remuneration and assessment committee of the board of directors.
(III) the human resources department, finance department and other relevant departments of the company are responsible for the collection and provision of relevant assessment data, and are responsible for the authenticity and reliability of the data.
(IV) the board of directors of the company is responsible for reviewing the assessment results.
5、 Assessment indicators and standards
(I) performance assessment requirements at the company level
The assessment year of the incentive plan is two fiscal years from 2022 to 2023, and the company’s financial performance indicators are assessed annually. Based on the net profit value of 2021, the net profit growth rate (a) of the net profit value of each assessment year compared with the net profit value of 2021 is assessed. According to the annual completion of the above indicators, the company level attribution proportion (x) is calculated, and the performance assessment objectives and attribution ratio are arranged as follows:
The ownership arrangement and performance evaluation objectives of the restricted shares granted for the first time are shown in the table below:
Net profit growth rate of each year corresponding to the assessment year (a)
Target value (AM) trigger value (an)
First vesting period 2022 30% 24%
Second vesting period 2023 69% 55%
Performance completion of assessment indicators company level ownership proportion (x)
A≧ Am X=100%
Annual net profit growth rate an ≤ a < am x = 80% + (a-an) / (am an) * 20%
（A）
A<An X=0
Note: 1. The above “net profit” refers to the audited net profit attributable to the shareholders of the listed company, excluding the impact of incentive costs arising from the implementation of equity incentive plan or employee stock ownership plan and other incentive matters during the evaluation period of the incentive plan.
2. The above performance assessment objectives do not constitute the company’s performance prediction and substantive commitment to investors.
The performance assessment objectives of the performance assessment years reserved for grant and each assessment year are the same as those of the first grant.
If the company fails to reach the trigger value of the above performance appraisal indicators, all restricted shares of incentive objects corresponding to the appraisal plan in the current year will be cancelled and invalid; If the company reaches the trigger value of the above performance evaluation indicators, the attribution proportion at the company level is the attribution proportion x corresponding to the performance completion. The attribution of some restricted stocks that cannot be attributed will be cancelled and invalid.
(II) performance appraisal requirements at the individual level of incentive objects
The individual level performance appraisal of all incentive objects shall be organized and implemented in accordance with the current relevant provisions of the company, and the actual number of shares shall be determined according to the appraisal results of incentive objects. The performance appraisal results of the incentive object are divided into five grades: A, B, C, D and E. at that time, the actual number of shares of the incentive object shall be determined according to the corresponding ownership proportion at the individual level in the following appraisal rating table:
Assessment results a b c d e
Ownership ratio 100% 100% 90% 0% 0%
The number of restricted shares actually owned by the incentive object in the current year = the number of individual planned ownership in the current year × Company level ownership ratio × Ownership ratio at the individual level.
If the restricted shares of all incentive objects that are planned to be vested in the current period cannot be vested or cannot be fully vested due to assessment reasons, they will be invalid and cannot be deferred to the next year.
If the company / company’s shares change due to economic situation, market conditions and other factors, it is difficult to continue to implement the incentive plan to achieve the incentive purpose, the board of directors and / or the general meeting of shareholders may decide to cancel the ownership or terminate the incentive plan for a batch / batches of restricted shares that have not been vested in the incentive plan after deliberation and confirmation. 6、 Assessment period and times
The assessment periods of the first grant and reserved part of the incentive plan are two fiscal years from 2022 to 2023. The company level performance appraisal and individual level performance appraisal shall be conducted once a year.
7、 Assessment procedure
The remuneration and assessment committee of the board of directors of the company shall conduct annual assessment on the incentive objects, verify and analyze the annual assessment results, form a performance assessment report and submit it to the board of directors.
8、 Assessment result management
(I) feedback and appeal of assessment results
The appraisee has the right to know his own appraisal results, and the human resources department shall notify the appraisee of the appraisal results within 5 working days after the appraisal.
If the appraisee has any objection to his / her appraisal results, he / she can communicate with the human resources department for settlement. If it cannot be solved through communication, the assessed object can appeal to the remuneration and assessment committee of the board of directors. The remuneration and assessment committee of the board of directors can review its assessment results according to the actual situation and finally determine the assessment results according to the review results.
(II) filing of assessment results
After the assessment, the assessment results shall be archived and kept by the human resources department as confidential data. In order to ensure the effectiveness of performance incentives, performance records are not allowed to be altered. If they need to be modified or re recorded, they must be signed by the parties concerned.
The retention period of performance appraisal records is 5 years. The documents and records exceeding the retention period shall be uniformly destroyed by the human resources department after being approved by the remuneration and appraisal committee of the board of directors.
9、 Supplementary Provisions
(I) the board of directors is responsible for formulating, interpreting and revising these measures. In case of any conflict between these measures and the laws, administrative regulations and departmental rules issued and implemented in the future, the laws, administrative regulations and departmental rules issued and implemented in the future shall prevail.
(II) the measures have been deliberated and approved by the general meeting of shareholders of the company and will be implemented after the incentive plan takes effect.
Shenzhen Yhlo Biotech Co.Ltd(688575) board of directors January 14, 2022
