Kidswant (301078): Beijing Han Kun Law Firm’s achievements in the first lifting of sales restriction period, vesting conditions and achievements in the first vesting period of the 2022 restricted stock incentive plan of Kidswant Children’s Products Co., Ltd. Legal Opinion on Matters Related to the Repurchase and Cancellation of Certain Restricted Stocks – CFi.CN China Finance Network

Original title: Kidswant: Beijing Han Kun Law Firm’s achievements in the first lifting of sales restriction period, vesting conditions and achievements in the first vesting period of the 2022 restricted stock incentive plan of Kidswant Children’s Products Co., Ltd. Legal opinions on matters related to the repurchase and cancellation of some restricted stocks

Beijing Han Kun Law Firm regarding the achievements of the first lifting of the sales restriction period, the achievements of the vesting conditions of the first vesting period and the repurchase and cancellation of some restrictions of the 2022 restricted stock incentive plan of Kidswant Children’s Products Co., Ltd. Legal opinions on stock-related matters Han Kun (certificate)[2024]No. 22219-10-O-4

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Beijing Han Kun Law Firm
About Kidswant Children’s Products Co., Ltd.
The 2022 Restricted Stock Incentive Plan is the first to lift the lock-up period and lift the conditions for sale,
Achievement of vesting conditions in the first vesting period and matters related to the repurchase and cancellation of some restricted stocks
legal opinion

Han Kun (certificate) character[2023]No. 22219-10-O-4

To: Kidswant Children’s Products Co., Ltd.

Beijing Han Kun Law Firm (hereinafter referred to as the “firm”) was entrusted by Kidswant Children’s Products Co., Ltd. (hereinafter referred to as “Kidswant Co., Ltd.” or the “Company”) to serve as the company’s 2022 restricted stock incentive plan (hereinafter referred to as “This Incentive Plan”)’s special legal counsel, regarding the company’s achievements in lifting the sales restrictions during the first lifting period of this incentive plan (hereinafter referred to as “this lifting of sales restrictions”), and the achievements in vesting conditions in the first vesting period (hereinafter referred to as “this incentive plan”). This legal opinion is issued on matters related to the repurchase and cancellation of some restricted stocks (hereinafter referred to as the “repurchase and cancellation”).

In order to issue this legal opinion, the lawyers of our firm reviewed the “2022 Restricted Stock Incentive Plan (Draft) of Kidswant Children’s Products Co., Ltd.” (hereinafter referred to as the “Incentive Plan (Draft)”), “Kidswant Children’s Products Co., Ltd. Co., Ltd.’s 2022 Restricted Stock Incentive Plan Implementation Assessment Management Measures” (hereinafter referred to as the “Assessment Management Measures”), the company’s relevant board of directors meeting documents, board of supervisors meeting documents, independent opinions of independent directors, and other matters that our lawyers believe need to be reviewed documents, and verified and verified relevant facts and information by querying public information.

The company has issued a written document to the firm, guaranteeing that all the documents and materials it provides to the lawyers of the firm are complete, authentic, accurate, and valid, and that the signatures and seals on the relevant materials are authentic, and the materials provided are copies or photocopies. We guarantee that the original and the copy, the original and the copy are consistent; the statements, explanations, confirmations and commitments made are true, accurate and complete, and there are no falsehoods, omissions, misleading, etc.; any other information provided that was not produced by ourselves The document data are consistent with the document data obtained by the company from the original provider of such document data. No formal or substantive changes, deletions, omissions or concealments have been made to such document data and have been provided or disclosed. Other auxiliary document data or information related to such document data are provided to avoid the Exchange’s reasonable understanding, judgment and reference of such document data due to incorrect or incomplete information. All relevant natural persons in the company have full capacity for civil conduct, and the information verbally introduced by relevant staff members is true.

Our firm has issued the “Legal Opinion of Beijing Han Kun Law Firm on the 2022 Restricted Stock Incentive Plan (Draft) of Kidswant Children’s Products Co., Ltd.” (Han Kun Law Firm) on matters related to this incentive plan on October 27, 2022. Kun (certificate) character[2022]No. 22219-10-O-1), issued the “Beijing Han Kun Law Firm’s Law on the Adjustment and Initial Grant of the 2022 Restricted Stock Incentive Plan of Kidswant Children’s Products Co., Ltd. on November 16, 2022 Letter of Opinion” (written by Han Kun (certificate)[2022]No. 22219-10-O-2), and issued the “Beijing Han Kun Law Firm on the 2022 Restricted Stock Incentive Plan of Kidswant Children’s Products Co., Ltd. Repurchase of Partial Restricted Stocks” on August 25, 2023 Legal opinions on cancellation or invalidation of relevant matters. Unless otherwise stated in this legal opinion, the premises and assumptions of the firm’s legal opinions expressed in the aforementioned legal opinions and the abbreviations and interpretations of relevant terms also apply to this legal opinion.

Based on the above statement, in accordance with the provisions of relevant laws and regulations, and in accordance with the recognized business standards, ethics and diligence of the lawyer industry, our lawyers now issue the following legal opinions:
1. Approval, authorization and information disclosure of this lifting of sales restrictions, this vesting and this repurchase and cancellation
According to the company’s board of directors meeting resolution announcement, supervisory board meeting resolution announcement and shareholders’ meeting resolution announcement and other documents, the approval, authorization and information disclosure of the company’s incentive plan are as follows:

1. On October 25, 2022, the company held the fourth meeting of the third board of directors, and reviewed and approved the “Proposal on the Company’s <2022 Restricted Stock Incentive Plan (Draft)> and its Summary” and “On the Company’s <2022 Restricted Stock Incentive Plan (Draft)> and its Summary” Proposal on the Implementation Assessment and Management Measures for Restricted Stock Incentive Plans, “Proposal on Proposing to the General Meeting of Shareholders to Authorize the Board of Directors to Handle Matters Related to Equity Incentives” and other related proposals. On the same day, the company held the fourth meeting of the third board of supervisors, and reviewed and approved the “Proposal on the Company’s 2022 Restricted Stock Incentive Plan (Draft)” and its Summary and “On the Implementation Assessment of the Company’s 2022 Restricted Stock Incentive Plan” “Administrative Measures” and “Proposal on Verifying the List of Incentive Objects First Granted to the 2022 Restricted Stock Incentive Plan of Kidswant Children’s Products Co., Ltd.” and issued verification opinions on matters related to this incentive plan. The company’s independent directors have reviewed the “Incentive Plan (Draft)” and “Assessment Methods”. The independent directors believe that the company’s restricted stock incentive plan is conducive to the company’s sustainable development and is conducive to the formation of a long-term incentive mechanism for core talents. There is no harm to the interests of the company and all shareholders, especially small and medium shareholders, and voting rights are publicly solicited.

2. From October 27, 2022 to November 6, 2022, the company publicized the list, positions and incentive tools of the first incentive recipients of this incentive plan within the company. During the publicity period, except for the situation where the three incentive recipients announced were inconsistent with the actual incentive tools they were awarded due to staff negligence and input errors, but the company has made modifications and publicized them in accordance with the revised information, the company’s board of supervisors has not accepted to any objections to the intended recipients of this incentive plan. On November 11, 2022, the company announced the “Explanation of the Board of Supervisors of Kidswant Children’s Products Co., Ltd. on the list of incentive objects of the company’s 2022 restricted stock incentive plan” on the cninfo.com (www.cninfo.com.cn). Verification Opinions”.

3. On November 16, 2022, the company held the third extraordinary general meeting of shareholders in 2022, and reviewed and approved the “Proposal on the Company’s 2022 Restricted Stock Incentive Plan (Draft)” and its Summary and “On the Company’s 2022 Restricted Stock Incentive Plan (Draft)” and its Summary Proposal on Implementation Assessment and Management Measures for Restricted Stock Incentive Plans” and “Proposal on Requesting the General Meeting of Shareholders to Authorize the Board of Directors to Handle Matters Related to Equity Incentives”. The incentive plan was approved, and the board of directors was authorized to determine the grant date, grant restricted stocks to the incentive objects when the incentive objects meet the conditions, and handle other necessary matters required for the grant.

4. On November 16, 2022, the company announced on the cninfo.com (www.cninfo.com.cn) “Insider information about the 2022 Restricted Stock Incentive Plan of Kidswant Children’s Products Co., Ltd. and insider trading of the company’s stocks Self-examination report.

5. According to the authorization of the company’s third extraordinary general meeting of shareholders in 2022, the company held the fifth meeting of the third board of directors on November 16, 2022, and reviewed and approved the “About Adjusting the List of Incentive Objects of the Company’s 2022 Restricted Stock Incentive Plan” “Proposal on Granting Restricted Stocks to Incentive Objects” and “Proposal on Granting Quantity”. The company’s independent directors expressed independent opinions on the above-mentioned proposals, and the company’s supervisory board verified the list of incentive targets granted for the first time and issued verification opinions.

6. On November 26, 2022, the company disclosed the “Announcement on the Completion of the Grant of Class I Restricted Stocks of the 2022 Restricted Stock Incentive Plan”. The company granted and registered a total of 24.0445 million Class I restricted stocks on the date of grant. is November 16, 2022, and the listing date for the shares granted is November 29, 2022.

7. On August 25, 2023, the company held the twelfth meeting of the third board of directors and the tenth meeting of the third board of supervisors, and reviewed and approved the “Repurchase and Cancellation of Restricted Stocks that have been granted but have not yet been released from sales restrictions”. and the proposal to invalidate some of the restricted stocks that have been granted but have not yet vested, and agreed to repurchase and cancel a total of 2,304,100 Class I restricted stocks held by 43 incentive recipients that cannot be released this time. The repurchase price is 5.42 yuan per share; a total of 374,400 unattributable second-class restricted shares held by one incentive subject will be invalidated. The company’s independent directors expressed independent opinions on the above matters.

8. On April 23, 2024, the company held the 23rd meeting of the third board of directors and the 18th meeting of the third board of supervisors, and reviewed and approved the “About the First Class Restricted Stocks of the 2022 Restricted Stock Incentive Plan” The First Proposal on the Achievements of Lifting the Restriction Conditions during the Restricted Stock Period”, “The Proposal on the Achievement of the Attribution Conditions of the First Vesting Period of the Second Class Restricted Stocks of the 2022 Restricted Stock Incentive Plan”, “On the Repurchase and Cancellation of Parts Granted But Proposal on Restricted Stocks that Have Not Yet Unlocked Sales Restrictions”. The company’s supervisory board verified the aforementioned matters and issued verification opinions.

In summary, our lawyers believe that as of the date of issuance of this legal opinion, the company has completed the necessary procedures at this stage and obtained the necessary approvals and authorizations at this stage for this lifting of sales restrictions, this vesting, and this repurchase and cancellation. , in compliance with the relevant laws, regulations, normative documents such as the “Measures for the Administration of Equity Incentives of Listed Companies” (hereinafter referred to as the “Management Measures”) and the “Incentive Plan (Draft)”.

2. The specific circumstances of this lifting of sales restrictions and this ownership

(1) The sales restriction period and vesting period of this incentive plan

According to the provisions of the “Incentive Plan (Draft)”, the first unlocking period for the first class of restricted stocks under this incentive plan is the first transaction 15 months from the date of completion of registration of the grant of restricted stocks. From the date of the grant to the last trading day within 27 months from the date of registration completion of the grant of restricted shares, the proportion of unlocking restrictions is 40%. The first vesting period of the second type of restricted stock under this incentive plan is from the first trading day 15 months after the date of grant to the last trading day within 27 months from the date of grant. The number of shares accounts for 40% of the total number of second-category restricted shares.

According to the relevant announcements disclosed by the company and the company’s confirmation, the registration completion date for the grant of the first type of restricted stocks under this equity incentive plan is November 29, 2022, and the first sales restriction period has expired on February 28, 2024. Expiration; the grant date of the second type of restricted stock under this incentive plan is November 16, 2022, and the first vesting period will enter on February 16, 2024.

(2) The conditions for the lifting of sales restrictions/vesting this time meet the corresponding conditions for lifting sales restrictions/vesting.

According to the documents of the 23rd meeting of the company’s third board of directors and the 18th meeting of the third board of supervisors, the company’s confirmation and verification by our lawyers through public channels, as of the date of issuance of this legal opinion, the company has not had any Any of the following situations:

1. The financial accounting report of the most recent fiscal year was issued a negative opinion or an audit report in which a certified public accountant was unable to express an opinion;

2. An audit report in which a certified public accountant issued a negative opinion or was unable to express an opinion on the internal control of the financial report in the most recent fiscal year;

3. There has been any failure to distribute profits in accordance with laws, regulations, articles of association, and public commitments within the last 36 months after listing;

4. Equity incentives are not allowed according to laws and regulations;

5. Other circumstances determined by the China Securities Regulatory Commission.

According to the documents of the 23rd meeting of the company’s third board of directors and the 18th meeting of the third board of supervisors, the company’s confirmation and verification by our lawyers through public channels, as of the date of issuance of this legal opinion, the incentive objects have not Any of the following situations occur:

1. Determined as an unsuitable candidate by the stock exchange in the past 12 months;

2. Have been deemed as inappropriate candidates by the China Securities Regulatory Commission and its dispatched agencies within the last 12 months;

3. In the past 12 months, the China Securities Regulatory Commission and its dispatched agencies have been subject to administrative penalties or market ban measures due to major violations of laws and regulations;

4. Those who are prohibited from serving as company directors or senior managers as stipulated in the Company Law of the People’s Republic of China;

5. Not allowed to participate in equity incentives of listed companies according to laws and regulations;

6. Other circumstances determined by the China Securities Regulatory Commission.

According to the “2022 Annual Audit Report” and “2023 Annual Audit Report” disclosed by the company, the documents of the 23rd meeting of the third board of directors, the 18th meeting of the third board of supervisors and the company’s confirmation and verified by our lawyers, the company The net profit in 2023 will be 211.1905 million yuan, an increase of 55.70% compared with the net profit in 2022. The company’s performance indicators meet the “based on the net profit in 2022, the net profit growth rate in 2023 shall not be less than 50%” conditions for lifting sales restrictions/vesting. . According to the internal performance assessment results provided by the company and the company’s confirmation, the individual assessment results of the incentive objects of the first type of restricted stock and the second type of restricted stock granted in the first phase of this incentive plan in 2023 are “qualified”, corresponding to the individual The unlockable sales/vesting ratio at each level is 100%.

(3) Number of shares released/vested

According to the information provided by the company, relevant announcements disclosed and verified by our lawyers, a total of 8,556,280 shares of the first category of restricted stocks that can be applied for lifting of sales restrictions this time, and a total of 479.0560 shares of the second category of restricted stocks that can be applied for vesting. Thousands of shares.

After verification, our lawyers believe that as of the date of issuance of this legal opinion, the conditions for lifting the sales restrictions for the first lifting period and the vesting conditions for the first vesting period stipulated in the “Incentive Plan (Draft)” have been fulfilled, and this lifting The sales restriction and this vesting are in compliance with the relevant laws, regulations, normative documents such as the “Management Measures” and the “Incentive Plan (Draft)”.

3. Specific circumstances of this repurchase and cancellation

(1) Reasons for cancellation of this repurchase

According to the provisions of the “Incentive Plan (Draft)”, if the incentive target leaves the company due to resignation, company layoffs, or the contract expires and will not be renewed, the first type of restricted stock that has been granted to the incentive target but has not been released from sale restrictions shall not be released. , the company will repurchase and cancel it at the grant price.

In view of the fact that 18 of the original incentive recipients who were granted Class I restricted stocks under this incentive plan resigned due to personal reasons, the company decided to repurchase the Class I restricted stocks that had been granted but had not been released from sale.

(2) Quantity of repurchase and cancellation

According to the information provided by the company, relevant announcements disclosed and verified by our lawyers, a total of 349,700 Class I restricted stocks are planned to be repurchased and canceled this time.

(3) Repurchase price of Class I restricted stocks

According to the relevant provisions of the “Incentive Plan (Draft)”, given that the repurchase and cancellation matters still need to comply with relevant legal procedures, the processing time will be long; and the 23rd meeting of the company’s third board of directors reviewed and approved the “About the Company’s 2023 “Proposal on the Profit Distribution Plan”, based on the company’s total share capital of 1,109,742,548 shares on March 31, 2024, after deducting the 7,954,000 shares that have been repurchased in the company’s repurchase account as of March 31, 2024, as the base number, the company will distribute the profit distribution plan to all shareholders. Shareholders are distributed a cash dividend of 0.5 yuan (tax included) for every 10 shares, with a total cash dividend of 55,089,427.40 yuan (tax included). The remaining undistributed profits are carried forward for distribution in subsequent years. They will not be converted into share capital this year, and no bonus shares will be issued. The distribution plan still needs to be submitted to the company’s 2023 annual shareholders’ meeting for review.

(1) If the company’s 2023 profit distribution plan is not approved by the company’s 2023 annual shareholders’ meeting, or is not implemented before the repurchase and cancellation of restricted stocks, the repurchase price does not need to be adjusted. The repurchase price is 5.42 yuan. /share.

(2) If the company’s 2023 profit distribution plan is approved by the company’s 2023 annual shareholders’ meeting and is implemented before the date of completion of the repurchase and cancellation of restricted stocks, the board of directors agrees that the repurchase price will be adjusted as follows:

Dividends:

P=P0-V where: P0 is the grant price before adjustment; V is the dividend amount per share; P is the repurchase price after adjustment. After adjusting for dividends, P must still be greater than 1.

Therefore, the adjusted repurchase price is P=P0-V=5.42-0.05=5.37 yuan/share, that is, the repurchase price this time is 5.37 yuan/share.

(4) Source of funds

According to the confirmation provided by the company and the announcement disclosed by the company, the funds used by the company to repurchase and cancel the first category of restricted stocks are all the company’s own funds.

In summary, our lawyers believe that the reason, quantity, price and source of funds for this repurchase and cancellation are in compliance with the relevant laws, regulations, normative documents such as the “Administration Measures” and the relevant provisions of the “Incentive Plan (Draft)”, and are legal and efficient.

4. Conclusions

In summary, our lawyers believe that as of the date of issuance of this legal opinion:

1. The company has completed the necessary procedures at this stage for the lifting of sales restrictions, this vesting, and this repurchase and cancellation, and has obtained the necessary approvals and authorizations at this stage;

2. The company’s lifting of sales restrictions and vesting have met the conditions stipulated in the “Incentive Plan (Draft)” and complied with the “Management Measures” and other relevant laws, regulations, and normative documents.

3. The reason, quantity, price and source of funds for the cancellation or cancellation of this repurchase are in compliance with the relevant laws, regulations, normative documents such as the “Administrative Measures” and the relevant provisions of the “Incentive Plan (Draft)”, and are legal and valid.

This legal opinion will take effect after it is signed by the handling lawyer and the person in charge of the firm and stamped with the official seal of the firm.

This legal opinion is made in duplicate.

(No text below, signature page continues below)

(There is no text on this page, but it is “Beijing Han Kun Law Firm Regarding the Achievements of the First Lifting of the Restricted Stock Period and the vesting conditions of the first vesting period of the 2022 Restricted Stock Incentive Plan of Kidswant Children’s Products Co., Ltd.” Signature page of the Legal Opinion on Matters Related to the Achievement and Repurchase and Cancellation of Certain Restricted Stocks)

Beijing Han Kun Law Firm (stamped)

principal:
Li Zhuowei

Handling lawyer:
Li Shijia

Wu Yichen

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