Chinese Online (300364): Beijing Zhonglun (Shenzhen) Law Firm regarding the second exercise conditions of the stock option incentive plan of China Online Group Co., Ltd. were not met and some stock options were cancelled, and the first place in the 2021 restricted stock incentive plan The vesting conditions for each vesting period are not met and the portion is invalidated. – CFi.CN China Finance Network

Original title: Chinese Online: Beijing Zhonglun (Shenzhen) Law Firm regarding the second exercise conditions of the stock option incentive plan of Chinese Online Group Co., Ltd. and the cancellation of some stock options and the first place in the 2021 restricted stock incentive plan The vesting conditions for each vesting period are not met and some restricted stocks are invalidated.

Beijing Zhonglun (Shenzhen) Law Firm
About Chinese Online Group Co., Ltd.
The conditions for the second exercise of the stock option incentive plan were not met and the department was cancelled.
The first vesting stock option and 2021 restricted stock incentive plan
Matters related to the failure to meet vesting conditions and the invalidation of some restricted stocks
item
legal opinion

April 2024
Beijing Zhonglun (Shenzhen) Law Firm
About Chinese Online Group Co., Ltd.
The conditions for the second exercise of the stock option incentive plan were not met and part of the stock period was cancelled.
Rights, vesting conditions for the first vesting period of the 2021 restricted stock incentive plan are not met
and invalidate some matters related to restricted stocks.
legal opinion
To: Chinese Online Group Co., Ltd.
According to the Company Law of the People’s Republic of China (hereinafter referred to as the “Company Law”), the Securities Law of the People’s Republic of China (hereinafter referred to as the “Securities Law”), and the “Measures for the Administration of Equity Incentives of Listed Companies” (hereinafter referred to as the “” “Administrative Measures”) and other laws, administrative regulations, departmental rules and normative documents (hereinafter referred to as the “laws and regulations”) and the relevant provisions of the Articles of Association of Chinese Online Group Co., Ltd. (hereinafter referred to as the “Articles of Association”), Beijing Zhonglun (Shenzhen) Law Firm (hereinafter referred to as the “firm”) is entrusted by Chinese Online Group Co., Ltd. (hereinafter referred to as the “Company” or “Chinese Online”) in accordance with the business standards, ethics and diligence recognized by the lawyer industry. In the spirit of due diligence, some of the incentive targets of the “Chinese Online Digital Publishing Group Co., Ltd. Stock Option Incentive Plan” (hereinafter referred to as the “Stock Option Incentive Plan”) implemented by the company resigned and some of the stocks were canceled because the conditions for the second exercise were not met. Options (hereinafter referred to as “this cancellation”), the vesting conditions for the first vesting period of the “Chinese Online Digital Publishing Group Co., Ltd. 2021 Restricted Stock Incentive Plan” (hereinafter referred to as the “Restricted Stock Incentive Plan”) are not met And issue this legal opinion on the relevant matters involved in the invalidation of some restricted stocks (hereinafter referred to as “this invalidation”).

In order to issue this legal opinion, our firm based on the current laws and regulations of the People’s Republic of China (hereinafter referred to as “China”, for the purpose of this legal opinion, excluding the Hong Kong Special Administrative Region, the Macau Special Administrative Region and Taiwan) and the Articles of Association. , and verified the relevant facts and legal matters involving the company’s cancellation and invalidation.

In accordance with the recognized business standards and ethics of the Chinese lawyer industry, our firm reviewed the documents that we considered necessary to review, including documents, records, materials and information provided by the company related to the “Stock Option Incentive Plan” and “Restricted Stock Incentive Plan”. Prove that the relevant laws and regulations are in force, and have conducted necessary inquiries and discussions with the company and its senior managers on the relevant matters involved in the “Stock Option Incentive Plan” and “Restricted Stock Incentive Plan”. Our firm issues legal opinions based on the facts that have occurred or existed before the date of issuance of this legal opinion and the relevant provisions of China’s current laws and regulations and the Articles of Association.

This firm only expresses opinions on legal issues related to the company’s cancellation and invalidation, and does not comment on the rationality of the underlying stock value, assessment standards, etc. involved in the company’s “Stock Option Incentive Plan” and “Restricted Stock Incentive Plan” and express opinions on non-legal professional matters such as accounting and finance. When quoting relevant financial data or conclusions in this legal opinion, the Firm has fulfilled the necessary obligations of care, but such quotations shall not be deemed as any representation by the Firm as to the authenticity and accuracy of such data and conclusions. EXPRESS OR IMPLIED WARRANTIES.

For facts that are crucial to the issuance of this legal opinion but cannot be supported by independent evidence, our firm relies on explanations or supporting documents issued by relevant government departments, companies or other relevant units and individuals to issue legal opinions.

The issuance of this legal opinion has been guaranteed by the company as follows:
1. The seals of the company and related companies and the seals and signatures of relevant personnel on the documents provided by the company to our firm and our lawyers are all authentic and valid, and the required authorization has been obtained;
2. The documents provided by the company to the firm and our lawyers are all true, accurate and complete, and the contents recorded in the documents are also comprehensive, accurate and authentic; the copies of such documents are consistent with their originals, and the originals are consistent with the originals. The copies are consistent;
3. The written statements, explanations, confirmations and commitments made by the company and related companies and relevant personnel to the firm and our lawyers are true, accurate, comprehensive and complete, and do not contain any falsehoods, major omissions or misleading; 4. Company The documents and information provided to the firm and our lawyers are consistent with the documents and information obtained by the company from the original provider of such documents and information, and no formal or substantive changes, deletions, or modifications have been made to these documents and information. omissions and concealments, and other auxiliary documents or information related to such documents and information have been provided or disclosed to the firm and our lawyers as reasonably requested by our firm and our lawyers, so as to avoid our firm and our lawyers’ The inaccuracy, incompleteness and/or incompleteness of such documents or information affects its reasonable understanding, judgment and reference of such documents and information.

The firm has strictly performed its statutory duties, followed the principles of diligence and good faith, and fully verified the facts and legal issues involved in the company’s “Stock Option Incentive Plan” and “Restricted Stock Incentive Plan” to ensure that this legal The facts identified in the opinions are true, accurate and complete, the concluding opinions expressed are legal and accurate, and there are no false records, misleading statements or major omissions, and corresponding legal responsibilities shall be borne.

The Exchange agrees to regard this legal opinion as one of the necessary documents for the company to implement the “Stock Option Incentive Plan” and “Restricted Stock Incentive Plan”, and to report or announce it together with other materials as a public disclosure document, and to comply with the law. Legal opinions bear corresponding legal responsibilities.

This legal opinion is only used by the company for the purpose of this cancellation and invalidation, and may not be used for any other purpose. The Exchange agrees that the company may quote the relevant contents of this legal opinion in the relevant documents produced for the implementation of the “Stock Option Incentive Plan” and “Restricted Stock Incentive Plan”. However, when the company makes the above quotation, it shall not cause any legal liability due to the quotation. If there is any ambiguity or misunderstanding, we have the right to review and confirm the corresponding content of the above-mentioned relevant documents again.

In accordance with the Company Law, Securities Law, Management Measures and other relevant laws and regulations, as well as the requirements of the relevant regulations of the China Securities Regulatory Commission and the Shenzhen Stock Exchange, and in accordance with the business standards, ethics and diligence and responsibility recognized by the lawyer industry, our firm Legal opinions are issued as follows:
Definition
In this legal opinion, unless otherwise stated, the following abbreviations or terms have the following meanings:

text
1. Approval and authorization of this cancellation and invalidation
1. On April 19, 2024, the fourth meeting of the company’s fifth board of directors reviewed and approved the “Proposal on the Company’s Stock Option Incentive Plan’s Second Exercise Period Failure to Meet the Exercise Conditions and the Cancellation of Part of the Stock Options” and “About the Company’s 2021 Proposal to cancel some restricted stocks if vesting conditions are not met during the first vesting period of the annual restricted stock incentive plan.

According to the “Proposal on Failure to Meet the Exercise Conditions and Cancellation of Part of the Stock Options in the Second Exercise Period of the Company’s Stock Option Incentive Plan”, 412,500 stock options were planned to be canceled due to the resignation of four incentive targets. It is planned to cancel 8,313,699 stock options if the exercise conditions are not met during each exercise period, and a total of 8,726,199 stock options will be cancelled. After this cancellation, the total number of stock option incentive objects of the company was adjusted from 20 to 16, and the total number of stock options granted but not exercised by the company remained 16,627,402.

According to the “Proposal on the Company’s 2021 Restricted Stock Incentive Plan’s First Vesting Period Not Meeting the Vesting Conditions and Cancellation of Certain Restricted Stocks”, the company’s 2021 Restricted Stock Incentive Plan’s first vesting period has not met the vesting conditions and is planned to be cancelled. 3.75 million restricted shares. After this cancellation, the total number of restricted shares that have been granted but not vested by the company remains 11.25 million shares.

2. On April 19, 2024, the fourth meeting of the company’s fifth board of supervisors reviewed and approved the “Proposal on the Company’s Stock Option Incentive Plan’s Second Exercise Period Failure to Meet the Exercise Conditions and the Cancellation of Part of the Stock Options” and the “Proposal on the Company’s 2021 Proposal to cancel some restricted stocks if vesting conditions are not met during the first vesting period of the annual restricted stock incentive plan.

According to the “Proposal on the Company’s Stock Option Incentive Plan’s Failure to Meet the Exercise Conditions and Cancellation of Part of the Stock Options in the Second Exercise Period”, the Supervisory Board believes that: due to the company’s stock option incentive plan’s failure to meet the exercise conditions and incentives during the second exercise period, If the target resigns, the company’s board of directors will cancel the stock options granted to the incentive target. This is in compliance with the “Measures for the Administration of Equity Incentives for Listed Companies” and other relevant regulations and the provisions of the “Company Stock Option Incentive Plan”, and will not have any impact on the company’s financial status and operating results. It will have a substantial impact and will not affect the diligence and diligence of the company’s management team. The Board of Supervisors agreed that the second exercise period of the company’s stock option incentive plan did not meet the exercise conditions and canceled some stock options.

According to the “Proposal on the Company’s 2021 Restricted Stock Incentive Plan’s First Vesting Period Not Meeting the Vesting Conditions and the Voiding of Part of the Restricted Stocks”, the Supervisory Board believes that: because the company’s 2021 Restricted Stock Incentive Plan’s first vesting period has not reached the vesting conditions, Conditions, the company’s board of directors will invalidate the restricted stocks granted to the incentive objects accordingly, which is in compliance with the “Measures for the Administration of Equity Incentives for Listed Companies” and other relevant regulations and the provisions of the “Company’s 2021 Restricted Stock Incentive Plan”, and will not have any impact on the company’s financial status. It will have a substantial impact on the company’s operating results and will not affect the diligence and diligence of the company’s management team. The Board of Supervisors agreed that the first vesting period of the company’s 2021 restricted stock incentive plan did not meet the vesting conditions and invalidated some restricted stock matters.

Our lawyers believe that as of the date of issuance of this legal opinion, the company’s cancellation and invalidation have obtained the approvals and authorizations that should be obtained at this stage, and are in compliance with the provisions of the “Management Measures” and “Incentive Plan”.

2. Specific contents of this cancellation
(1) Reasons for this cancellation
1. Some incentive recipients resigned
Item (2) of the “Chapter 13 Handling of Changes in the Company/Incentive Objects” section of “II. Handling of Changes in Personal Circumstances of the Incentive Objects” of the “Stock Option Incentive Plan” stipulates that if the incentive objects resign due to resignation or layoffs of the company, . If the labor contract expires and the employee resigns, on the date when the situation occurs, the stock options that have been granted but have not yet been exercised shall not be exercised and will be canceled by the company.

According to the information provided by the company, four incentive targets of the “Stock Option Incentive Plan” have resigned. Their stock options that have been granted but have not yet been exercised cannot be exercised and will be canceled by the company.

2. The exercise conditions are not met during the second exercise period.
The “Stock Option Incentive Plan” provides that “V. Exercise Arrangements of the Plan” in “Chapter 6: The Validity Period, Grant Date, Waiting Period, Exercise Date, Exercise Arrangements and Lock-up Period of the Plan”, “Stock Option Incentive Plan” The exercise arrangements for the stock options granted to incentive objects under the Incentive Plan are as follows:

The stock options of the incentive object that have not applied for exercise during the above-mentioned exercise period or the stock options of this period that cannot be applied for exercise because they have not met the exercise conditions shall not be exercised or deferred to the next period, and will be exercised by the company according to this plan. The stock options corresponding to the incentive objects shall be canceled according to the prescribed principles. After the end of each exercise period of stock options, the current stock options that have not been exercised by the incentive objects shall be terminated and the company will cancel them.

The “Stock Option Incentive Plan” stipulates that in “Chapter 8 Grant and Exercise Conditions of Stock Option”, “II. Exercise Conditions of Stock Option”, “(3) Company-Level Performance Appraisal Requirements”, during each exercise period Within the period, the company-level performance assessment objectives that must be met for exercise of rights are as follows:

When determining whether the above-mentioned company performance assessment objectives have been met, the impact of share-based payment expenses for the current year will be eliminated. If the company fails to meet the above performance assessment goals, all stock options corresponding to the incentive objects that enter the vesting date after the end of the assessment year shall not be exercised and will be canceled by the company.

According to the “Audit Report” and explanation provided by the company, the company’s net profit attributable to shareholders of the listed company in 2023 is 89.4369 million yuan, and the net profit attributable to shareholders of the listed company after excluding share-based payment expenses for the year is 87.8247 million yuan. Based on the company’s net profit attributable to shareholders of listed companies in 2020, the company’s performance assessment goals for the second exercise of options are planned for 2023. If the conditions for the second exercise of options are not met, all incentive targets of the “Stock Option Incentive Plan” The corresponding stock options that enter the vesting date after the assessment of the second exercise period are not exercisable and will be canceled by the company.

(2) The number of stock options canceled this time
Due to the resignation of four incentive targets of the “Stock Option Incentive Plan”, according to the provisions of the “Stock Option Incentive Plan”, 412,500 stock options that had been granted but not exercised by the aforementioned incentive targets were canceled by the company.

Because the company’s net profit attributable to shareholders of listed companies in 2020 is used as the base, the growth rate of the company’s net profits attributable to shareholders of listed companies after excluding share-based payment expenses for the year in 2023 is less than 80%, and the company fails to meet the requirements of the Stock Option Incentive Plan. 》The company’s performance assessment target for the second exercise of rights and the exercise conditions for the second exercise of rights have not been met. According to the provisions of the “Stock Option Incentive Plan”, the 8,313,699 stock options that have been granted to the 16 incentive targets of the “Stock Option Incentive Plan” shall not be exercised and will be canceled by the company.

Our lawyers believe that the company’s cancellation complies with the provisions of the “Management Measures” and “Incentive Plan”.

4. The specific contents of this invalidation
(1) Reasons for this cancellation
Item (2) of the “Chapter 6 Validity Period, Grant Date, Vesting Arrangements and Lock-up Period of the Incentive Plan” of the “Restricted Stock Incentive Plan”, “III. Vesting Arrangements of the Incentive Plan”, “Restricted Stock Incentive Plan” The vesting arrangements for each batch of restricted stocks granted under the Stock Incentive Plan are as follows:

Restricted stocks that have not vested within the above agreed period or restricted stocks that cannot be applied for vesting due to failure to meet vesting conditions shall not be vested and will become invalid.

The “Restricted Stock Incentive Plan” provides that “Chapter 8 Granting and Vesting Conditions of Restricted Stocks”, “II. Vesting Conditions of Restricted Stocks”, “(4) Company-Level Performance Appraisal Requirements”, “Restricted Stock Incentives” The restricted stocks granted under the Plan will be assessed every two fiscal years, and the performance assessment targets for each year are as follows:

Note: 1. The “net profit growth rate” indicator is calculated based on the audited net profit attributable to shareholders of listed companies and excluding the impact of share payment expenses of this and other incentive plans;
2. “Market value” refers to the total value of the company’s stocks calculated based on market prices for any 20 consecutive trading days in the current period (i.e. closing price × total share capital).

If the company fails to meet the above performance assessment goals, all restricted stocks planned to vest in the corresponding assessment year for the incentive objects shall not be vested or deferred to the next period, and will become invalid.

According to the “Audit Report” and explanation provided by the company, the company’s net profit attributable to shareholders of the listed company in 2023 is 89.4369 million yuan, and the net profit attributable to shareholders of the listed company after excluding the impact of share-based payment expenses for the year is 87.8247 million yuan. Based on the company’s 2020 net profit attributable to shareholders of listed companies, the net profit growth rate in 2023 is 52.63%, lower than 80%. Therefore, the company failed to meet the company’s performance assessment objectives in the first vesting period of the “Restricted Stock Incentive Plan” and the vesting conditions in the first vesting period were not met. All incentive objects of the “Restricted Stock Incentive Plan” corresponding to the first vesting period were Restricted stocks vested in a vesting period plan shall not vest or be deferred to vest in the next period, and shall be invalidated.

(2) The number of restricted stocks to be voided this time
Because the company’s net profit attributable to shareholders of listed companies in 2020 is used as the base, the company’s net profit growth rate attributable to shareholders of listed companies after excluding the impact of the “Restricted Stock Incentive Plan” and other incentive plan share payment expenses in 2023 is less than 80% , the company failed to meet the company’s performance assessment targets for the first vesting period of the “Restricted Stock Incentive Plan”, and the vesting conditions for the first vesting period were not met. According to the provisions of the “Restricted Stock Incentive Plan”, the 3.75 million restricted shares that have been granted to all incentive targets of the “Restricted Stock Incentive Plan” shall not be vested and will become invalid.

Our lawyers believe that the company’s cancellation complies with the provisions of the “Management Measures” and “Incentive Plan”.

3. Concluding observations
To sum up, our lawyers believe that as of the date of issuance of this legal opinion, the company’s current cancellation and invalidation have obtained the necessary approvals and authorizations at this stage, and are in compliance with the provisions of the “Management Measures” and “Incentive Plan”.

This legal opinion is made in quadruplicate and will take effect after being stamped by the firm and signed by the handling lawyer.

(There is no text below, it is the signature page of this legal opinion)
(This page is “Beijing Zhonglun (Shenzhen) Law Firm Regarding the Second Exercise Conditions of the Stock Option Incentive Plan of China Online Group Co., Ltd. and the cancellation of some stock options and the cancellation of some stock options, the first of the 2021 Restricted Stock Incentive Plan The signature page of the Legal Opinion on Matters Related to Certain Restricted Stocks If the Vesting Conditions Are Not Satisfied During the Vesting Period and Some Restricted Stocks Are Void)

Beijing Zhonglun (Shenzhen) Law Firm (stamped)

Person in charge: Handling lawyer:
Lai Jihong Zheng Junsheng

Handling lawyer:
Liang Hengyu

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