ZHEJIANG YONGTAI TECHNOLOGY
CO., LTD.
(GDR under the symbol:
"YTT")
(a joint stock company
established under the laws of the People's Republic of China with
limited liability)
2024 Restricted Stock Incentive Plan
(Draft)
Special
Notes
I. The 2024 Restricted Stock Incentive Plan of
Zhejiang Yongtai Technology Co., Ltd. (hereinafter referred to as
the "Company", "Yongtai Technology") (hereinafter referred to as
the "Incentive Plan") adopts the form of incentive in the form of
restricted shares. The source of the shares is the Company's RMBA
common shares issued to the incentive recipients.
II. The number of Restricted Shares to be granted to
the Incentive Participants under the Incentive Plan is 12,310,000
shares, representing approximately 1.35% of the total share capital
of the Company of 913,760,795 shares as at the date of announcement
of the Incentive Plan. The grant is a one-off grant with no
reserved interests.
As at the date of announcement of the Incentive Plan,
the total number of subject Shares involved in all of the Company's
share incentive plans in force has not exceeded 10% of the total
share capital of the Company in aggregate. The number of shares of
the Company granted to any one of the incentive recipients under
the Incentive Plan through all of the equity incentive plans in
effect has not exceeded 1% of the total share capital of the
Company in aggregate.
III. The total number of incentive recipients under
the Incentive Plan is 321, including directors, senior management,
middle management and core technical (business) personnel serving
in the Company (including subsidiaries, hereinafter the same) at
the time of the announcement of the Incentive Plan by the Company,
excluding independent directors, supervisors, shareholders or de
facto controllers of Yongtai Technology who hold, individually or
in the aggregate, more than 5% of the shares of the Company, and
their spouses, parents and offspring.
Chapter I Purpose of the Incentive Plan
In order to further improve the corporate governance
structure of the Company, establish and improve the long-term
incentive and restraint mechanism of the Company, attract and
retain core personnel, fully mobilize their enthusiasm and
creativity, effectively enhance the cohesion of the core team and
the core competitiveness of the enterprise, effectively combine the
interests of the shareholders, the Company and the core team, so as
to enable all parties to pay common attention to the long-term
development of the Company and to ensure that the Company's
development strategies and business objectives are achieved in the
future, and on the premise of fully safeguarding the interests of
shareholders and in accordance with the principle of reciprocity
between incentives and constraints, and in accordance with the
Company Law of the People's Republic of China (hereinafter referred
to as the "Company Law"), Securities Law of the People's Republic
of China (hereinafter referred to as the "Securities Law"),
Measures for the Administration of Equity Incentives for Listed
Companies (hereinafter referred to as the "Administration
Measures"), Rules for Listing of Stocks on Shenzhen Stock Exchange
(hereinafter referred to as the "Listing Rules"), Shenzhen Stock
Exchange Self-Regulatory Guidelines for Listed Companies No. 1 -
Business Handling (hereinafter referred to as the "Self-Regulatory
Guidelines") and other relevant laws, administrative regulations
and standardized documents, as well as the Articles of Association
of Zhejiang Yongtai Technology Co., Ltd. (hereinafter referred to
as the "Articles of Association"), the Company has formulated the
Incentive Plan.
Chapter II Basis and scope of determination of
incentive targets
I. Basis for
determining incentive targets
(I) Legal Basis for Determination of Incentive
Targets
The incentive targets of the Incentive Plan are
determined in accordance with the Company Law, the Securities Law,
the Administrative Measures, the Listing Rules, the Self-Regulatory
Guidelines and other relevant laws, administrative regulations,
standardized documents and relevant provisions of the Articles of
Association of the Company, taking into account the actual
situation of the Company.
(ii) Job basis for determination of incentive
targets
The incentive targets of the Incentive Plan are
directors, senior management, middle management and core technical
(business) personnel serving in the Company (including
subsidiaries). For those who meet the scope of the incentive
targets of the Incentive Plan, the Remuneration and Evaluation
Committee shall draw up a list and determine it after verification
by the Supervisory Committee of the Company.
The basis for determining the incentive targets is
consistent with the purpose of the Incentive Plan and in accordance
with relevant laws and regulations and the requirements of the
relevant provisions of the Shenzhen (hereinafter referred to as the
"Stock Exchange").
II. Scope of
Incentive Targets
The Incentive Plan involves a total of 321 incentive
recipients, accounting for 8.93% of the Company's total number of
3,593 employees as of 31 December 2023, including:
1. Directors and senior management;
2. Middle management and core technical (business)
personnel.
The above incentive recipients do not include
independent directors, supervisors, shareholders or de facto
controllers of Yongtai Science & Technology who individually or
collectively hold more than 5% of the Company's shares, and their
spouses, parents and children. Among the incentive recipients under
the Incentive Plan, the directors and senior management of the
Company must be elected by the shareholders' meeting of the Company
or appointed by the Board of Directors of the Company. All
incentive recipients must sign labor contracts or employment
contracts with the Company or the Company's subsidiaries during the
assessment period of the Incentive Plan.
III. Verification of
Incentive Targets
(i) After the Board of Directors of the Company has
considered and approved the Incentive Plan, the Company will
publicize the names and positions of the incentive targets within
the Company through the Company's website or other means for a
period of not less than 10 days.
(ii) The Supervisory Committee of the Company will
review the list of incentive targets and fully listen to the
opinions of the public announcement. The Company will disclose the
Supervisory Committee's explanation on the review of the list of
incentive recipients and the public announcement 5 days prior to
the shareholders' general meeting to consider the Incentive Plan.
The list of incentive targets adjusted by the Board of Directors of
the Company shall also be verified by the Supervisory Committee of
the Company.
Chapter III Information on the interests to be granted
under this Incentive Scheme
I. Form of interests
to be granted under the Incentive Plan
The form of incentive to be granted under the
Incentive Plan is Restricted Shares.
II. Source and type
of underlying shares involved in the interests to be granted under
the Incentive Plan
The source of underlying shares involved in the
Incentive Plan is the Company's RMB A ordinary shares of the
Company issued to the incentive recipients.
III. Number of
interests to be granted under the Incentive Plan and percentage of
the total number of shares of the Company
The number of Restricted Shares to be granted to the
incentive recipients under the Incentive Plan is 12,310,000 shares,
representing approximately 1.35% of the total share capital of the
Company of 913,760,795 shares as at the date of announcement of the
Incentive Plan. The grant is a one-off grant with no reserved
interests.
As at the date of announcement of the Incentive Plan,
the total number of Subject Shares involved in all of the Company's
share incentive plans in force has not exceeded 10% of the total
share capital of the Company in aggregate. The number of shares of
the Company granted to any one of the incentive recipients under
the Incentive Plan through all of the share incentive plans in
force has not exceeded 1% of the total share capital of the Company
in aggregate.
Chapter IV List of Incentive Recipients and Allocation
of Interests to be Granted
I. List of Incentive
Recipients and Allocation of Interests to be Granted
|
Name
|
Position
|
Number of Restricted
Shares Granted (in 10,000 shares)
|
Percentage of the
total number of interests to be granted under the Incentive
Plan
|
Percentage of total
share capital as at the date of publication of the Incentive
Plan
|
|
Chen Lijie
|
Director, Deputy General Manager, Chief Financial
Officer
|
15.00
|
1.22%
|
0.02%
|
|
Jin Yizhong
|
Director, Deputy General Manager
|
15.00
|
1.22%
|
0.02%
|
|
Wang Lirong
|
Director
|
15.00
|
1.22%
|
0.02%
|
|
Wei Hegeng
|
Director, Deputy General Manager
|
15.00
|
1.22%
|
0.02%
|
|
Huang Jinfeng
|
Deputy General Manager
|
14.00
|
1.14%
|
0.02%
|
|
Wang Chunhua
|
Deputy General Manager
|
14.00
|
1.14%
|
0.02%
|
|
Wang Zichen
|
Deputy General Manager
|
14.00
|
1.14%
|
0.02%
|
|
Zhang Jiangshan
|
Deputy General Manager, Secretary of the Board
|
14.00
|
1.14%
|
0.02%
|
|
Middle management, core technical (business) personnel
(313 persons)
|
1,115.00
|
90.58%
|
1.22%
|
|
Total
|
1,231.00
|
100.00%
|
1.35%
|
Note: Differences between partial totals in the above
table and the sum of the breakdowns, if any, are due to
rounding.
II. Relevant Notes
The aggregate number of shares of the Company granted
to any one of the above incentive recipients through all of the
Share Incentive Plans in force does not exceed 1% of the total
share capital of the Company. The total number of Subject Shares
involved in all the Company's share incentive plans in force does
not exceed 10% of the Company's total share capital in aggregate.
In the event that an incentive recipient voluntarily forfeits the
rights and interests granted to him/her due to personal reasons,
the Board of Directors shall adjust the number of grants
accordingly, and the share of restricted shares forfeited by the
incentive recipient shall be directly reduced or distributed among
the incentive recipients. Incentive recipients may reduce the
amount of restricted stock subscription accordingly due to
insufficient funds at the time of subscription.
Chapter Ⅴ Effective Period,
Grant Date, Selling Restriction Period, Unlocking Arrangement and
Restriction Period of the Incentive Plan
I. Effective Period of the Incentive Plan
The validity period of the Incentive Plan shall be
from the date of grant of the Restricted Shares to the date on
which all Restricted Shares granted to the Incentive Participants
are released from restricted sale or repurchased and canceled, with
a maximum of not more than 48 months.
II. Grant Date of the Incentive Plan
After the Incentive Plan has been considered and
approved by the shareholders' meeting of the Company, the Company
will convene the Board of Directors to grant interests to the
incentive recipients and complete the announcement, registration
and other relevant procedures in accordance with the relevant
regulations within 60 days (if there are conditions for the
granting of the interests, the date shall be counted from the
fulfillment of the conditions). If the Company fails to complete
the above work within 60 days, it shall promptly disclose the
reasons for such failure and announce the termination of the
implementation of the Incentive Plan. The period during which the
Company is not allowed to grant interests according to the
Administrative Measures and Self-Regulatory Guidelines shall not be
counted in the 60-day period.
The grant date shall be determined by the Board of
Directors of the Company after the Incentive Plan has been
considered and approved by the shareholders' general meeting of the
Company, and the grant date must be a trading day; if the date
determined in accordance with the above principles is a non-trading
day, the grant date shall be postponed to the first trading day
thereafter, whichever is the later. And no restricted shares may be
granted to the incentive recipients during the period in which
there are restrictions on the trading of the Company's shares by
directors and senior management of listed companies under relevant
laws, administrative regulations and departmental rules.
In the event that a director or senior management
member of the Company, his/her spouse, parent or child as an
incentive recipient reduces his/her shareholding prior to the
granting of restricted shares, the granting of restricted shares to
him/her shall be deferred for six months from the date of the last
reduction in accordance with the provisions of the Securities Law
on short-term trading.
During the validity period of the Incentive Plan, if
the relevant provisions of the Company Law, the Securities Law and
other relevant laws, administrative regulations, regulatory
documents and the Articles of Association of the Company in respect
of the aforesaid period are changed, the granting of Restricted
Shares by the Company to the Incentive Participants shall be in
compliance with the provisions of the amended Company Law, the
Securities Law and other relevant laws, regulations, regulatory
documents and the Articles of Association of the Company.
III. Selling Restriction Period of the Incentive
Plan
Restricted shares granted to incentive recipients are
subject to different restriction periods, all of which start from
the date of completion of registration of the restricted shares
granted to the incentive recipients. The interval between the grant
date and the date of the first release of restricted shares shall
not be less than 12 months.
Restricted Shares granted to the incentive recipients
under the Incentive Plan may not be transferred, used for guarantee
or repayment of debts during the restriction period. Restricted
Shares granted to the incentive recipients shall be entitled to the
rights to which their shares are entitled upon registration by
China Securities Depository & Clearing Corporation, Shenzhen
Branch (hereinafter referred to as the "Depository & Clearing
Corporation"), including but not limited to the rights to
dividends, allotment of shares, voting rights, etc. During the
restricted period, the shares acquired by the incentive staff as a
result of capitalization of capital surplus, distribution of stock
dividends, share allotment, and shares allotted to the original
shareholders in the additional issue shall be restricted for sale
and shall not be sold in the secondary market or transferred by any
other means, and the expiration date of the restricted period of
the shares shall be the same as that of the restricted shares.
When the Company makes cash dividends, the cash
dividends to be received by the incentive recipients in respect of
the restricted shares granted to them shall be enjoyed by the
incentive recipients after withholding and paying individual income
tax, and in principle, shall be collected by the Company on behalf
of the incentive recipients and returned to the incentive
recipients upon the release of such part of the restricted shares
from restricted sale; in the event that such part of the restricted
shares fails to be released from restricted sale, the corresponding
cash dividends shall be withdrawn by the Company and the accounting
treatment shall be made accordingly.
IV. Unlocking Arrangement and Restriction Period of
the Incentive Plan
The arrangements for the release of restricted shares
are shown in the table below:
|
Resale restriction
period
|
Release of Restricted Shares
|
Proportion of
Restricted Shares
|
|
1st Resale restriction period
|
From the first trading day after 12 months from the
grant date of restricted shares to the last trading day within 24
months from the grant date of restricted shares
|
40%
|
|
2nd Resale restriction period
|
From the first trading day after 24 months from the
date of grant of restricted shares to the last trading day within
36 months from the date of grant of restricted shares.
|
30%
|
|
3rd Resale restriction period
|
From the first trading day after 36 months from the
date of grant of restricted shares to the last trading day within
48 months from the date of grant of the restricted shares.
|
30%
|
Restricted shares whose conditions for release of
restricted shares have not been fulfilled within the above agreed
period shall not be released from restricted shares or deferred to
the next period for release of restricted shares, and shall be
repurchased and canceled by the Company in accordance with the
principles stipulated in the Incentive Plan.
After the fulfillment of the conditions for the
release of restricted shares from restricted sale, the Company will
uniformly handle the release of restricted shares from restricted
sale if the conditions for the release of restricted shares are
fulfilled.
V. Lock-up period of the Incentive Plan
The provisions on lock-up of the Company's shares
granted to the incentive recipients through the Incentive Plan
shall be implemented in accordance with the Company Law, the
Securities Law and other relevant laws, administrative regulations,
normative documents and the Articles of Association, as
follows:
(i) Where the incentive recipients are directors and
senior management of the Company, the shares transferred by them
during their tenure of office shall not exceed 25% of the total
number of shares of the Company held by them each year; and the
shares of the Company held by them shall not be transferred within
half a year after their departure from office.
(ii) Where an incentive recipient is a director or
senior management member of the Company and his/her spouse, parent
or offspring, if he/she sells the Company's shares held by him/her
within six months of the purchase or buys them again within six
months of the sale, the proceeds therefrom shall be owned by the
Company and the Board of Directors of the Company shall recover the
proceeds therefrom.
(iii) In the event that there are changes in the
relevant laws, administrative regulations, regulatory documents and
the Articles of Association of the Company regarding the transfer
of shares held by the Company's directors and senior management
during the validity period of the Incentive Plan, the transfer of
the Company's shares held by such incentive recipients shall be
made in compliance with the amended Company Law, Securities Law and
other relevant laws and regulations at the time of the transfer,
normative documents and the provisions of the Articles of
Association.
Chapter VI Grant Price and Method of Determination of
Restricted Shares
I. Grant Price of
Restricted Shares
The grant price of the Restricted Shares under the
Incentive Plan is RMB 4.30 per share.
II. Method of
determining the grant price of restricted shares
The grant price of Restricted Shares under the
Incentive Plan shall not be less than the par value of the Shares
and shall not be less than the higher of the following prices:
(i) 50% of the average trading price of the Company's
stock on the 1 trading day prior to the announcement of the
Incentive Plan, which is RMB 3.96 per share;
(ii) 50% of the average trading price of the Company's
stock for the 20 trading days preceding the announcement of the
Incentive Plan, which is RMB 4.30 per share.
Chapter VII Grant and Release Conditions of Restricted
Shares
I. Conditions for granting restricted shares
The Company may grant Restricted Shares to the
Incentive Participants only if the following conditions are
simultaneously met; conversely, Restricted Shares may not be
granted to the Incentive Participants if any of the following grant
conditions are not met.
(I) The Company has not occurred any of the following
circumstances:
1. The financial accounting report for the latest
fiscal year is issued a negative opinion or an audit report that
cannot express an opinion by a certified public accountant;
2. The internal control over financial reporting for
the most recent fiscal year has been issued a negative opinion or
an audit report that cannot express an opinion by a certified
public accountant;
3.In the last 36 months after listing, there have been
cases in which profit distribution has not been made in accordance
with laws and regulations, the Articles of Association, and public
commitments;
4. Laws and regulations prohibit the implementation of
equity incentives;
5. China Securities Regulatory Commission (hereinafter
referred to as "CSRC") recognized other circumstances.
(II) The incentive targets have not occurred in any of
the following circumstances:
1. Being recognized as an unsuitable candidate by the
Stock Exchange within the last 12 months;
2. Being recognized as an unsuitable candidate by the
CSRC and its dispatched agencies within the recent 12 months;
3. Being administratively penalized or subject to a
market ban by the CSRC and its dispatched agencies within the last
12 months for major violations of laws and regulations;
4. Having the circumstances stipulated in the Company
Law that he/she shall not be a director or senior management of the
Company;
5. shall not participate in equity incentives of
listed companies as stipulated by laws and regulations;
6. Other circumstances as determined by the CSRC.
II. Conditions for release of restricted shares from
restricted sale
Restricted shares granted to the incentive recipients
may be released from restricted sale only if the following
conditions are simultaneously met during the period of release from
restricted sale:
(i) None of the following circumstances has occurred
in the Company:
1. The financial accounting report for the latest
fiscal year is issued by a certified public accountant with a
negative opinion or an audit report that cannot express an
opinion;
2. The internal control over financial reporting for
the most recent fiscal year has been issued an adverse opinion or
an audit report with an inability to express an opinion by a
certified public accountant;
3.In the last 36 months after listing, there have been
cases in which profit distribution has not been made in accordance
with laws and regulations, the Articles of Association, and public
commitments;
4. Laws and regulations prohibit the implementation of
equity incentives;
5. Other circumstances as determined by the CSRC.
In the event that one of the circumstances set forth
in Article (1) above occurs in the Company, the restricted shares
granted to the incentive recipients under the Incentive Plan but
not yet released from restricted sale shall be repurchased and
canceled by the Company at the grant price.
(ii) None of the following circumstances has occurred
in respect of the incentive recipients:
1. Being recognized as an unsuitable candidate by the
stock exchange within the last 12 months;
2. Being recognized as an unsuitable candidate by the
CSRC and its dispatched agencies within the recent 12 months;
3. Being administratively penalized or subject to a
market ban by the CSRC and its dispatched agencies within the last
12 months for major violations of laws and regulations;
4. Having the circumstances stipulated in the Company
Law that he/she shall not be a director or senior management of the
Company;
5. Shall not participate in equity incentives of
listed companies as stipulated by laws and regulations;
6. Other circumstances as determined by the CSRC.
In the event that an incentive recipient is subject to
one of the circumstances set forth in Article (2) above, the
Company shall terminate his/her right to participate in the
Incentive Plan, and the restricted shares granted but not yet
released from restriction under the Incentive Plan shall be
repurchased and canceled by the Company at the grant price.
(iii) Performance Appraisal requirements at the
Company level:
The Incentive Plan assesses the Company's performance
targets in annual installments during the fiscal years 2024-2026,
with the achievement of the performance Appraisal targets as one of
the conditions for the release of restricted shares for the
incentive recipients in the current year. The performance Appraisal
targets at the Company level for the restricted shares granted
under the Incentive Plan are set out in the table below:
|
Resale restriction period
|
Corresponding Appraisal year
|
Revenues（A）
|
|
Target amount（Am）
|
Trigger amount（An）
|
|
1st Resale restriction
period
|
2024
|
4.747billion
|
4.541 billion
|
|
2nd Resale restriction
period
|
2025
|
5.459 billion
|
4.995 billion
|
|
3rd Resale restriction
period
|
2026
|
6.278 billion
|
5.494 billion
|
Note: The above "
Revenues " refers to the audited business revenue
of listed companies.
In accordance with the above
performance appraisal objectives, the percentage of release of
restricted shares at the Company level for each period is linked to
the degree of achievement of the performance for the appraisal
period, and the specific arrangements for the percentage of release
of restricted shares are set out below:
|
Index
|
Achievement of performance
|
Percentage of restricted sales lifted at
company level （X）
|
|
Revenues（A）
|
A≥Am
|
X=100%
|
|
An≤A＜Am
|
X=A/Am×100%
|
|
A＜An
|
X=0%
|
During the period of release of restricted shares, the
Company handles the release of restricted shares for incentive
recipients who fulfill the conditions for release of restricted
shares. The proportion of restricted shares to be released from
restricted sale at the Company level is recognized based on the
completion of performance at the Company level (X). If the
restricted shares of the incentive recipients that are scheduled to
be released from restricted sale in the current period cannot be
released from restricted sale due to performance Appraisal at the
Company level or cannot be completely released from restricted
sale, such part of the restricted shares will be repurchased by the
Company at the grant price for cancellation.
(iv) Performance appraisal requirements at the
individual level for incentive recipients:
The Appraisal of the individual level of incentive
recipients shall be implemented in accordance with the Company's
internal performance appraisal system. The results of individual
Appraisal of incentive targets are categorized into two grades of
"qualified" and "unqualified", and the corresponding percentage of
individual level of release of sales restriction is as follows:
|
Appraisal level
|
Qualified
|
Unqualified
|
|
Individual level release
of restriction ratio（Y）
|
100%
|
0%
|
The number of restricted shares actually released from
restricted sale in the year of the incentive recipient = the number
of restricted shares planned to be released from restricted sale in
the year of the individual × the percentage of release from
restricted sale at the Company level (X) × the percentage of
release from restricted sale at the individual level (Y).
Restricted shares that cannot be released from
restricted sale in the year of the incentive recipient's Appraisal
for reasons of performance evaluation at the individual level will
be repurchased and canceled by the Company at the grant price.
The specific assessment of the Incentive Plan is based
on the "Management Measures for the Implementation and Assessment
of the 2024 Restricted Stock Incentive Plan of Zhejiang Yongtai
Technology Co., Ltd." (hereinafter referred to as the "Company's
Assessment Management Measures").
III. Explanation on the
scientific and reasonable nature of the Company's performance
appraisal index setting
In order to realize the Company's strategic planning,
business objectives and maintain comprehensive competitiveness, the
Incentive Plan has decided to select the audited operating income
of listed companies as the performance assessment indicators at the
Company level, which can directly reflect the Company's main
business operations.
The setting of the performance indicators is a
combination of the Company's current situation, future strategic
planning and the development of the industry and other factors for
comprehensive consideration, set the assessment indicators for the
future development of a certain degree of challenge, the indicators
on the one hand, help to enhance the Company's competitiveness and
mobilize the enthusiasm of the staff, on the other hand, can focus
on the strategic direction of the Company's future development, and
stabilize the achievement of business
objectives.
In addition to the performance assessment at the
Company level, the Company has also set up a strict performance
assessment system for individuals, which can make a more
comprehensive and accurate evaluation of the performance of the
incentive recipients. The Company will determine whether the
individual incentive recipients will fulfill the conditions for the
release of the sales restriction based on the performance appraisal
results of the assessment year corresponding to the release of the
sales restriction of the incentive
recipients.
In summary, the assessment system of the Incentive
Scheme is comprehensive, integrated and operable, and the
assessment indexes are set with good scientific and rationality,
and at the same time, it has a certain binding effect on the
incentive targets, which is able to achieve the assessment purpose
of the Incentive Scheme.
Chapter VIII Methods and Procedures for Adjustment of
the Incentive Plan
I. Method of adjusting the number of restricted
shares
If during the period from the date of announcement of
the Incentive Plan to the completion of registration of grant of
Restricted Shares to be granted to the Incentive Participants, the
Company has any matters such as capitalization of capital stock,
distribution of stock dividends, stock splitting, share reduction
or share allotment, the number of Restricted Shares shall be
adjusted accordingly. The adjustment methods are as follows:
(i) Capitalization of capital surplus, distribution of
stock dividends, stock splits
Q＝Q0×(1＋n)
Where: Q0 is the number of restricted
shares before adjustment; n is the ratio of capitalization of
capital surplus to share capital, distribution of stock dividends
and stock split per share (i.e., the number of shares per share
increased by the conversion, distribution or stock split); and Q is
the number of restricted shares after adjustment.
(ii) Reduction of shares
Q＝Q0×n
Where: Q0 is the number of restricted
shares before adjustment; n is the ratio of downsizing (i.e., 1
share of Yongtai Science and Technology stock is downsized to n
shares of stock); Q is the number of restricted shares after
adjustment.
(iii) Allotment of shares
Q＝Q0×P1×(1＋n)/(P1＋P2×n)
Where: Q0 is the number of restricted
shares before adjustment; P1 is the closing price on the
day of the share registration date; P2 is the price of
allotment; n is the ratio of allotment (i.e., the ratio of the
number of shares allotted to the total share capital of the Company
before allotment); and Q is the number of restricted shares after
adjustment.
(iv) Additional Issue
The number of restricted shares granted will not be
adjusted in the event that the Company incurs an additional issue
of new shares.
II. Method of adjusting the grant price of restricted
shares
If during the period from the date of announcement of
the Incentive Plan to the completion of the registration of grant
of Restricted Shares to be granted to the Incentive Participants,
the Company has any matters such as capitalization of capital
stock, distribution of stock dividends, stock split, reduction of
shares, share allotment or dividend payment, the Restricted Shares
grant price shall be adjusted accordingly. The adjustment methods
are as follows:
(i) Capitalization of capital surplus, distribution of
stock dividends, stock splits
P = P0 ÷ (1 + n)
Where: P0 is the grant price before
adjustment; n is the ratio of capitalization of capital surplus to
share capital, distribution of stock dividends and stock split per
share (i.e., the number of shares per share increased by
conversion, stock dividend or stock split); P is the grant price
after adjustment.
(ii) Share reduction
P = P0÷n
Where: P0 is the grant price before
adjustment; n is the ratio of downsizing (i.e., 1 share of Yongtai
Science & Technology stock is downsized to n shares); P is the
grant price after adjustment.
(iii) Allotment of shares
P = P0 × (P1 + P2 ×
n) / [P1 × (1 + n):]
Where: P0 is the grant price before
adjustment; P1 is the closing price on the day of the
share registration date; P2 is the allotment price; n is
the ratio of allotment (i.e., the ratio of the number of shares to
be allotted to the total share capital of the Company before
allotment); and P is the grant price after adjustment.
(iv) Dividend payout
P = P0-V
Where: P0 is the grant price before
adjustment; V is the dividend payout per share; P is the adjusted
grant price. After adjustment for dividend payout, P must still be
greater than the par value of the Company's stock.
(V) Additional Issue
The grant price of restricted shares will not be
adjusted in the event of additional new shares issued by the
Company.
III. Procedures for Adjustment of the Incentive
Plan
The general meeting of the Company shall authorize the
Board of Directors of the Company to adjust the number of
restricted share grants and the grant price in accordance with the
reasons set out in the Incentive Plan. After the Board of Directors
adjusts the number of restricted share grants and the grant price
in accordance with the above provisions, it shall make a timely
announcement and notify the incentive recipients. The Company shall
engage a law firm to issue a professional opinion as to whether the
aforesaid adjustments are in compliance with the provisions of the
Administrative Measures, the Articles of Association and the
Incentive Plan.
Chapter IX Accounting for Restricted Shares
In accordance with the relevant provisions of the
Ministry of Finance's "Accounting Standard for Business Enterprises
No. 11 - Share-based Payment" and "Accounting Standard for Business
Enterprises No. 22 - Recognition and Measurement of Financial
Instruments", the Company will revise the estimated number of
restricted shares to be released from restricted sale at each
balance sheet date during the period of restricted sale in
accordance with the latest obtained changes in the number of
restricted shares, achievement of performance targets and other
subsequent information, the Company will revise the number of
restricted shares expected to be released from restricted sale and
recognize the services acquired during the period in the relevant
costs or expenses and capital surplus based on the fair value on
the date of grant of the restricted shares.
I. Accounting
treatment
(i) Date of grant
The Company recognizes "share capital" and "capital
surplus - share premium" based on the issuance of shares to the
incentive recipients; at the same time, a liability is recognized
for the repurchase obligation (treated as acquisition of treasury
stock).
(ii) Each balance sheet date during the sales
restriction period
In accordance with accounting standards, at each
balance sheet date during the restricted period, based on the best
estimate of the number of equity instruments that can be exercised,
services provided by employees are expensed based on the fair value
of the equity instruments at the date of grant and the proportion
of restricted shares to be released from restricted shares in each
period, and "capital surplus - other capital surplus" is recognized
in owners' equity, with no subsequent recognition of any liability.
"No subsequent changes in fair value are recognized.
(iii) Date of release from sales restriction
On the date of release of restricted shares, if the
conditions for release of restricted shares are met, the restricted
shares may be released and the "capital surplus - other capital
surplus" recognized on each balance sheet date prior to the date of
release of restricted shares will be carried forward; if all or
some of the shares are not released from the restriction on sale
and become invalid or obsolete, they will be repurchased by the
Company for write-off, and will be handled in accordance with
accounting standards and relevant regulations as appropriate.
related regulations.
(iv) Method of determining the fair value of
restricted shares
According to the relevant provisions of ASBE No. 11 -
Share-based Payment and ASBE No. 22 - Recognition and Measurement
of Financial Instruments, unit cost of restricted shares = fair
value of restricted shares -grant price, where the fair value of
restricted shares is the closing price on the grant date.
II. Expected impact of the implementation of
restricted shares on the operating results of each period
The Company granted 12,310,000 restricted shares to
the incentive recipients. According to the closing data of the
trading day before the announcement of the draft projected fair
value of restricted shares, it is expected that the total equity
expenses of this grant will be 43.3312 million, which will be
recognized in installments according to the proportion of the
release of restricted shares in the course of the implementation of
the Incentive Plan and will be expensed in the profit and loss from
operations. In accordance with accounting standards, the specific
amount should be based on the fair value of the shares calculated
on the "actual grant date". Assuming that the Company grants the
shares in July 2024 and all the incentive recipients meet the
conditions for the release of restricted shares under the Incentive
Plan and all of them will be released from restricted shares during
the release period, the amortization of restricted share cost from
2024 to 2027 is as follows:
Unit: 0'000
|
Total cost
|
2024
|
2025
|
2026
|
2027
|
|
4,333.12
|
1,173.55
|
2,094.34
|
812.46
|
252.77
|
Note: (i) The above expenses are projected costs, and
the actual costs are related to the actual grant price, the grant
date, the closing price on the grant date, the number of grants and
the best estimate of the number of equity instruments available for
release from restricted sales;
(ii) Shareholders' attention is drawn to the possible
dilutive effect of the above share-based payment expenses;
(iii) The final impact of the above amortization
expense forecast on the Company's operating results is subject to
the audit report issued by the accountants;
(iv) Any difference between the sum of the total and
the breakdown in the above table is due to rounding.
The cost of the Incentive Plan will be charged to cost
expenses. The Company estimates, based on current information, that
the amortization of the cost of the Incentive Plan will have an
impact on net income for each year of the term of the Incentive
Plan, without taking into account the positive effect of the
Incentive Plan on the Company's performance. Considering the
positive effect of the Incentive Plan on the Company's business
development, which will stimulate the motivation of core employees,
improve operational efficiency and reduce operating costs, the
Incentive Plan will play a positive role in the Company's long-term
performance improvement.
Chapter X Procedures for the Implementation, Grant,
Release of Restricted Sales and Changes and Termination of the
Incentive Plan
I. Procedures for the implementation of the Incentive
Plan
(I) The Remuneration and Evaluation Committee shall be
responsible for the preparation of the Incentive Plan and the
Measures for the Administration of the Company's Evaluation.
(ii) The Board of Directors shall consider the
Incentive Plan and the Measures for the Administration of the
Company's Assessment prepared by the Remuneration and Assessment
Committee. When the Board of Directors considers the Incentive
Plan, the connected directors shall recuse themselves from
voting.
(iii) The Supervisory Committee shall express a clear
opinion on whether the Incentive Plan is conducive to the
sustainable development of the Company and whether there are
circumstances that are obviously detrimental to the interests of
the Company and all shareholders.
(iv) The Company shall engage an independent financial
adviser to express a professional opinion on the feasibility of the
Incentive Plan, whether it is conducive to the sustainable
development of the Company, and whether there are circumstances
that are obviously detrimental to the interests of the Company and
all shareholders. The law firm engaged by the Company shall issue a
legal opinion on the Incentive Scheme.
(v) Within 2 trading days after the Board of
Directors' consideration and approval of the Incentive Plan, the
Company shall announce the announcement of the Board of Directors'
resolution, the Incentive Plan and its summary, and the opinion of
the Supervisory Committee.
(vi) The Company conducts self-inspection on the
trading of the Company's shares by insider information knowers and
incentive recipients within 6 months prior to the announcement of
the Incentive Plan.
(vii) The Company shall publicize the names and
positions of the incentive recipients within the Company through
the Company's website or other means for a period of not less than
10 days prior to the general meeting of shareholders. The
Supervisory Committee will review the list of incentive recipients
and fully listen to the opinions of the public announcement. The
Company will disclose the Supervisory Committee's explanation on
the review of the list of incentive targets and the public
announcement 5 days before the shareholders' general meeting to
consider the Incentive Plan.
(viii) When the Company's shareholders' general
meeting considers the Incentive Scheme and related motions by
special resolution, connected shareholders shall abstain from
voting.
(ix) The Company shall disclose the announcement of
the resolution of the Shareholders' General Meeting, the Share
Incentive Scheme considered and approved by the Shareholders'
General Meeting, the self-inspection report on the trading of the
Company's shares by the persons who have knowledge of the insider
information and the incentive recipients, and the legal opinion of
the Shareholders' General Meeting.
(x) After the Incentive Plan has been considered and
approved by the Company's shareholders' general meeting, the Board
of Directors of the Company shall, in accordance with the
authorization of the shareholders' general meeting, grant the
rights and interests and complete the relevant procedures, such as
announcement and registration, within 60 days from the date of the
shareholders' general meeting's consideration and approval of the
Incentive Plan (if there are conditions for the granting of the
rights and interests, the period shall commence from the time of
the conditions' fulfillment). The Board of Directors shall handle
specific matters such as the release of restricted shares,
repurchase and cancellation of restricted shares in accordance with
the authorization of the shareholders' general meeting.
II. Procedures for granting restricted shares
(i) Within 60 days from the date of
consideration and approval of the Incentive Plan by the
shareholders' general meeting of the Company, the Company shall
convene the Board of Directors to make grants to the incentive
recipients.
(ii) Before the Company grants the interests to the
incentive recipients, the Board of Directors shall consider and
announce whether the conditions set out in the Incentive Plan for
the granting of interests to the incentive recipients have been
fulfilled. The Remuneration and Evaluation Committee and the
Supervisory Committee shall express their clear opinions. The Law
Firm shall issue a legal opinion as to whether the conditions for
the granting of interests to the incentive recipients have been
fulfilled. The Supervisory Committee of the Company shall verify
the list of incentive recipients on the date of grant of restricted
shares and issue opinions.
In the event that the granting of interests by the
Company to the incentive recipients differs from the arrangements
under the Incentive Plan, the Remuneration and Evaluation
Committee, the Supervisory Committee (when there is a change in the
incentive recipients), the Law Firm, and the Independent Financial
Adviser shall express their clear opinions at the same time.
(iii) The Company and the incentive recipients shall
enter into the Restricted Share Grant Agreement, agreeing on the
rights and obligations of both parties.
(iv) The Company shall issue a restricted stock grant
notice to the incentive recipients on the grant date.
(v) Within the period specified by the Company, the
incentive recipients shall pay the funds for subscription of
restricted shares to the designated account of the Company in
accordance with the requirements of the Company and confirmed by a
certified public accountant, and any overdue payment shall be
deemed as a waiver of the incentive recipients' subscription for
the restricted shares granted.
(vi) The Company shall create a roster for the
administration of the Incentive Plan based on the signing of the
agreement and subscription by the incentive recipients, recording
the names of the incentive recipients, the number of shares
granted, the date of grant, the amount of payment, and the number
of the Restricted Stock Grant Agreement.
(vii) The Company shall submit to the Stock Exchange
an application for granting restricted shares to the incentive
recipients, and after confirmation by the Stock Exchange, the
Company shall apply to the Registrar and Settlement Company for
registration and settlement. The Board of Directors of the Company
shall, upon completion of the registration of the restricted shares
granted, promptly disclose the announcement of the relevant
implementation status. If the Company fails to complete the
aforesaid work within 60 days, the implementation of the Incentive
Plan shall be terminated, and the Board of Directors shall promptly
disclose the reasons for the failure and shall not reconsider the
Equity Incentive Plan for a period of 3 months (the period during
which no restricted shares may be granted shall not be counted as
part of the 60 days).
III. Procedures for the release of restricted shares
from restricted sale
(i) Prior to the release of restricted shares,
the Company shall confirm whether the conditions for the release of
restricted shares are fulfilled by the incentive recipients. The
Board of Directors shall deliberate on whether the conditions for
the release of restricted shares set out in the Incentive Plan have
been fulfilled, the Remuneration and Evaluation Committee and the
Supervisory Committee shall express their clear opinions, and the
Law Firm shall issue a legal opinion on whether the conditions for
the release of restricted shares of the incentive recipients have
been fulfilled.
(ii) For the incentive recipients who fulfill the
conditions for lifting the restriction on sale, the Company shall
uniformly submit an application for lifting the restriction on sale
to the Stock Exchange, and after confirmation by the Stock
Exchange, the Company shall apply for registration and settlement
with the Registration and Settlement Company. For the incentive
recipients who do not meet the conditions for the release of
restricted shares, the Company shall repurchase and cancel the
restricted shares held by them corresponding to the release of
restricted shares. The Company shall disclose the relevant
implementation announcement in a timely manner.
(III) The incentive recipients may transfer the
restricted shares released from restricted sale, but the transfer
of shares held by the directors and senior management of the
Company shall be in compliance with the relevant laws,
administrative regulations and regulatory documents.
IV. Procedures for Change and
Termination of the Incentive Plan
(I) Procedures for the change of the Incentive
Plan
1. If the Company makes changes to the Incentive Plan
before it has been considered and approved by the shareholders'
general meeting, the Remuneration and Evaluation Committee shall
make a recommendation to the Board of Directors of the Company and
the changes shall be considered and approved by the Board of
Directors. If the Company makes changes to the Incentive Plan which
has been considered by the shareholders' general meeting, the
Remuneration and Evaluation Committee shall make a recommendation
to the Board of Directors of the Company, and the change proposal
shall be submitted to the shareholders' general meeting for
consideration and shall not include circumstances leading to the
early release of the restricted sales and the reduction of the
grant price.
2. The Company shall promptly disclose the reasons for
the change and the content of the change, and the Remuneration and
Evaluation Committee and the Supervisory Committee shall express a
clear opinion as to whether the changed plan is conducive to the
sustainable development of the Company, and whether there are any
circumstances that are obviously detrimental to the interests of
the Company and all shareholders. The Law Firm shall issue a
professional opinion on whether the changed plan complies with the
provisions of the Administrative Measures and relevant laws and
regulations, and whether there are circumstances that are obviously
detrimental to the interests of the Company and all
shareholders.
(II) Procedures for termination of the incentive
program
1. If the Company intends to terminate this Incentive
Scheme before the shareholders' general meeting, the Board of
Directors shall consider and approve the termination and disclose
the termination. If the Company terminates the Incentive Plan after
the Shareholders' General Meeting has considered and approved the
Incentive Plan, it shall submit the Incentive Plan to the Board of
Directors and the Shareholders' General Meeting for consideration
and disclosure.
2. The Company shall disclose the announcement of the
resolution of the shareholders' meeting or the announcement of the
resolution of the Board of Directors in a timely manner. The Law
Firm shall issue a professional opinion on whether the termination
of the implementation of the Incentive Plan by the Company is in
compliance with the provisions of the Administrative Measures and
relevant laws and regulations, and whether there are circumstances
that are obviously detrimental to the interests of the Company and
all shareholders.
3. In the event of termination of the implementation
of the Incentive Plan, the Company shall, after fulfilling the
corresponding deliberation procedures, timely apply to the
Registrar and Settlement Company for the procedures of repurchase
and cancellation of the granted restricted shares.
Chapter 11 Repurchase and Cancellation of Restricted
Shares
I. Principles of repurchase and cancellation of
restricted shares
After the completion of the registration of the grant
of restricted shares granted to the incentive recipients, if the
Company incurs any matters such as capitalization of capital stock,
distribution of stock dividends, stock split, stock placement,
stock reduction or dividend payment, the Company shall repurchase
the restricted shares granted to the incentive recipients but not
yet released from restriction, and the Company's shares acquired
based on such part of the restricted shares, in accordance with the
adjusted quantity. If the repurchase price and the number of shares
to be repurchased need to be adjusted in accordance with the
Incentive Plan, the corresponding adjustments shall be made in
accordance with the following method.
II. Adjustment method for the number of shares to be
repurchased
(I) Capitalization of capital surplus, distribution of
stock dividends, stock split
Q = Q0 × (1 + n)
Where: Q0 is the number of restricted
shares before adjustment; n is the ratio of capitalization of
capital surplus to share capital, distribution of stock dividends
and stock split per share (i.e., the number of shares per share
increased by the conversion, distribution or stock split); and Q is
the number of restricted shares after adjustment.
(ii) Reduction of shares
Q = Q0×n
Where: Q0 is the number of restricted
shares before adjustment; n is the ratio of downsizing (i.e., 1
share of Yongtai Science and Technology stock is downsized to n
shares of stock); Q is the number of restricted shares after
adjustment.
(iii) Allotment of shares
Q = Q0 x (1 + n)
Where: Q0 is the number of restricted
shares before adjustment n is the ratio of share allotment (i.e.,
the ratio of the number of shares allotted to the total share
capital of the Company before allotment); Q is the number of
restricted shares after adjustment.
III. Adjustment method of repurchase price
(i) Capitalization of capital surplus, distribution of
stock dividends, stock splits
P = P0 ÷ (1 + n)
Where: P0 is the grant price before
adjustment; n is the ratio of capitalization of capital surplus to
share capital, distribution of stock dividends, stock split (i.e.,
the number of shares per share increased by conversion, stock
dividend or stock split); P is the adjusted repurchase price.
(ii) Share reduction
P = P0÷n
Where P0 is the grant price before
adjustment; n is the ratio of stock reduction; and P is the
adjusted repurchase price.
(iii) Dividend payout
P = P0-V
Where P0 is the grant price before
adjustment; V is the dividend payout per share; and P is the
repurchase price after adjustment. If the cash dividends received
by the incentive recipients as a result of the restricted shares
granted are collected by the Company on their behalf, they shall be
paid to the incentive recipients as dividends payable upon the
release of the restricted shares from restricted sale, and the
repurchase price of the restricted shares that have not yet been
released from restricted sale shall not be adjusted.
(iv) Allotment of shares
P = (P0＋P1×n)/(1＋n)
Where: P0 is the grant price before
adjustment; P1 is the allotment price; n is the ratio of
allotment (i.e., the ratio of the number of shares allotted to the
total share capital of the Company before allotment); and P is the
repurchase price after adjustment.
IV. Procedures for adjustment of repurchase quantity
or repurchase price
The Board of Directors of the Company shall convene a
meeting of the Board of Directors in a timely manner under the
authorization of the general meeting of shareholders of the Company
to formulate a plan for adjusting the repurchase in accordance with
the reasons already listed above, and the Board of Directors shall
make an announcement in a timely manner after it has adjusted the
number of shares to be repurchased or the price of the repurchase
in accordance with the above. If the number of restricted shares
repurchased or the repurchase price needs to be adjusted for other
reasons, a resolution shall be made by the Board of Directors and
considered and approved by the shareholders' general meeting.
V. Procedures for Repurchase and Cancellation
When the Company implements the repurchase in
accordance with the provisions of the Incentive Plan, it shall
apply to the Stock Exchange for the repurchase of such Restricted
Shares, and after confirmation by the Stock Exchange, the
Registration and Settlement Company shall handle the registration
and settlement matters. The Company shall pay the repurchase amount
to the incentive recipients and complete the transfer procedures of
the corresponding shares by the registration and settlement
company; within a reasonable period of time after the completion of
the transfer, the Company shall cancel such part of the shares.
The Board of Directors
Zhejiang Yongtai Technology
Co., Ltd.
28 June 2024