Zhongjing Electronics (002579): Beijing Junhe (Shenzhen) Law Firm’s legal opinion on Huizhou Zhongjing Electronics Technology Co., Ltd.’s cancellation of some of the granted stock options in the 2021 stock option incentive plan – CFi.CN China Finance Network

Original title: Zhongjing Electronics: Beijing Junhe (Shenzhen) Law Firm’s legal opinion on matters related to Huizhou Zhongjing Electronic Technology Co., Ltd.’s cancellation of some of the stock options granted under the 2021 stock option incentive plan

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Beijing Junhe (Shenzhen) Law Firm
About Huizhou Zhongjing Electronic Technology Co., Ltd.
Matters related to cancellation of some stock options granted under the 2021 stock option incentive plan
legal opinion

Huizhou Zhongjing Electronic Technology Co., Ltd.:
Beijing Junhe (Shenzhen) Law Firm (hereinafter referred to as the “firm”) is a law firm qualified to engage in legal business. The firm accepted the entrustment of Huizhou Zhongjing Electronic Technology Co., Ltd. (hereinafter referred to as the “Company” or “Zhongjing Electronics”) to cancel some of the shares granted in the Zhongjing Electronics 2021 Stock Option Incentive Plan (hereinafter referred to as the “2021 Equity Incentive Plan”) This legal opinion is issued on matters related to options (hereinafter referred to as “this cancellation”).

This legal opinion is based on 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 China Securities Regulatory Commission (hereinafter referred to as the “Securities Law”). “China Securities Regulatory Commission”) “Measures for the Administration of Equity Incentives of Listed Companies” (hereinafter referred to as the “Administration Measures”) and “Shenzhen Stock Exchange Self-Regulation Guidelines for Listed Companies No. 1 – Business Handling” (hereinafter referred to as “Self-Regulation Guidelines No. 1″) No. 1”) and other laws, regulations and normative documents.

Our lawyers express opinions based on the legality of facts that have occurred or existed before the date of issuance of this legal opinion and related legal issues. In order to issue this legal opinion, our lawyers have verified the relevant documents and their copies provided by the company, and based on the following guarantee made by the company to our lawyers: the company has provided the necessary, true and complete information necessary to issue this legal opinion. Original written materials, copies of materials or oral testimony, there are no omissions or concealments in these documents; all documents provided and facts stated are true, accurate and complete; documents provided by the company and the signatures and seals on the documents All are authentic; the copies or photocopies provided by the company are exactly the same as the originals.

Lawyers from our firm agree that this legal opinion will be one of the necessary legal documents for the company’s cancellation, and it will be reported or publicly disclosed together with other materials, and we will assume corresponding legal responsibility for the legal opinion issued in accordance with the law.

This legal opinion is only used by the company for the purpose of this cancellation and may not be used for any other purpose.

Our lawyers have verified and verified the documents and relevant facts provided by the company in accordance with the relevant legal provisions and the recognized business standards, ethics and diligence of the Chinese lawyer industry, and hereby issue the following legal opinions:
1. The company implements the approval process for this cancellation
1. On May 25, 2021, the first meeting of 2021 of the Compensation and Assessment Committee of the fourth board of directors of Zhongjing Electronics reviewed and approved the “2021 Stock Option Incentive Plan (Draft) of Huizhou Zhongjing Electronic Technology Co., Ltd.” (hereinafter referred to as ” “2021 Draft Incentive Plan”), and decided to submit the “2021 Draft Incentive Plan” to the company’s board of directors for review.

2. On May 27, 2021, the 29th meeting of the fourth board of directors of Zhongjing Electronics reviewed and approved the “Proposal on the Company’s <2021 Stock Option Incentive Plan> (Draft) and its Summary” and “About the Company’s <2021 Stock Option Incentive Plan> (Draft) and its Summary” On proposals related to the 2021 Equity Incentive Plan such as the Measures for the Implementation of Assessment and Management of Stock Option Incentive Plans, directors Liu Dewei and Yu Xiangbin, who are the incentive targets of the 2021 Equity Incentive Plan, abstained from voting. The company’s independent directors expressed independent opinions on matters related to the “2021 Draft Incentive Plan”.

3. On May 27, 2021, the 22nd meeting of the fourth supervisory board of Zhongjing Electronics reviewed and approved the “Proposal on the Company’s <2021 Stock Option Incentive Plan> (Draft) and its Summary” and “On the Company’s <2021 Stock Option Incentive Plan> (Draft) and its Summary” “Proposal on the Implementation of Assessment and Management Measures for the Stock Option Incentive Plan” and other proposals related to the 2021 Equity Incentive Plan, and verified the list of incentive objects determined in the “Draft 2021 Incentive Plan” and concluded that there is no “Management Measures” for the incentive objects Under the stipulated circumstances that prohibit the granting of equity incentives, its subject qualifications as the incentive object of the company’s 2021 equity incentive plan are legal and valid.

4. On June 18, 2021, the third extraordinary general meeting of shareholders of Zhongjing Electronics in 2021 reviewed and approved the “Proposal on the Company’s <2021 Stock Option Incentive Plan> (Draft) and its Summary” and “On the Company’s <2021 Stock Option Plan> (Draft) and its Summary” Proposal on the Measures for the Implementation and Assessment Management of Incentive Plans” and other proposals related to the 2021 Equity Incentive Plan, which authorizes the board of directors to determine the grant date of the 2021 equity incentive plan, authorizes the board of directors to grant stock options to incentive targets when the incentive targets meet the conditions, and handle All matters necessary for the grant of stock options, including but not limited to adjustments to the number and exercise price of stock options.

5. According to the “2021 Draft Incentive Plan” and the authorization given to the board of directors by the company’s shareholders’ meeting, on July 28, 2021, the 32nd meeting of the company’s fourth board of directors reviewed and approved the “About Adjustments to the 2021 Stock Option Incentive Plan” “Proposal on the Grant of Stock Options to Incentive Objects”, Directors Liu Dewei and Yu Xiangbin, who are the incentive objects of the 2021 Equity Incentive Plan, abstained from voting, and the company’s independent directors expressed their clear agreement on the grant and adjustment matters. independent opinions.

6. On July 28, 2021, the 24th meeting of the company’s fourth board of supervisors reviewed and approved the “Proposal on Adjusting Matters Related to the 2021 Stock Option Incentive Plan” and “Proposal on Granting Stock Options to Incentive Objects”, and The adjusted list of incentive targets was verified again.

7. On June 22, 2022, the sixth meeting of the company’s fifth board of directors reviewed and approved the “Proposal on Adjusting the Exercise Price of Part of the Stock Options Initial Granted under the 2021 Stock Option Incentive Plan” and “On Cancellation of the 2021 Stock Option Incentive Plan” “Proposal on Partial Stock Options”, the exercise price of some stock options first granted under the 2021 Equity Incentive Plan was adjusted from 9.99 yuan/share to 9.91 yuan/share; due to the first exercise period of the first exercise period for the first grant of the 2021 Equity Incentive Plan, the company’s performance assessment If the conditions are not met, the company will cancel some stock options in the 2021 Equity Incentive Plan. Directors Liu Dewei and Yu Xiangbin, who are the incentive targets of the 2021 equity incentive plan, abstained from voting. The company’s independent directors expressed independent opinions clearly agreeing with the aforementioned adjustments.

8. On June 22, 2022, the fourth meeting of the company’s fifth board of supervisors reviewed and approved the “Proposal on Adjusting the Exercise Price of Part of the Stock Options First Granted under the 2021 Stock Option Incentive Plan” and “On Cancellation of the 2021 Stock Option Incentive Plan” “Proposal on Partial Stock Options”, confirming that the exercise price of some stock options first granted under the 2021 Equity Incentive Plan will be adjusted from 9.99 yuan/share to 9.91 yuan/share, and that some companies will be granted the first exercise period due to the 2021 Equity Incentive Plan. If the performance assessment conditions are not met, some stock options in the 2021 Equity Incentive Plan will be cancelled.

9. On August 21, 2023, the 15th meeting of the company’s fifth board of directors reviewed and approved the “Proposal on Adjusting the Exercise Price of Part of the Stock Option Initial Grant of the 2021 Stock Option Incentive Plan” and “On the Cancellation of the 2021 Stock Option Incentive Plan”. “Proposal on Partial Stock Option Plan”, the exercise price of some stock options first granted under the 2021 Equity Incentive Plan was adjusted from 9.91 yuan/share to 9.83 yuan/share; due to the company’s performance in the second exercise period for the first partial grant of equity incentive plan in 2021 If the assessment conditions are not met, the company will cancel some stock options in the 2021 Equity Incentive Plan. Director Yu Xiangbin, who is the incentive target of the 2021 equity incentive plan, abstained from voting, and the company’s independent directors expressed independent opinions clearly agreeing with the aforementioned adjustments.

10. On August 21, 2023, the 11th meeting of the company’s fifth board of supervisors reviewed and approved the “Proposal on Adjusting the Exercise Price of Part of the Stock Option First Granted under the 2021 Stock Option Incentive Plan” and “On Cancellation of the 2021 Stock Option Incentive Plan”. “Proposal on Partial Stock Options of the Plan” confirms that the exercise price of some stock options first granted under the 2021 Equity Incentive Plan will be adjusted from 9.91 yuan/share to 9.83 yuan/share, and that the second exercise period will be due to the first partial grant of the equity incentive plan in 2021. If the company’s performance assessment conditions are not met, some stock options in the 2021 Equity Incentive Plan will be cancelled.

11. On April 24, 2024, the 21st meeting of the company’s fifth board of directors reviewed and approved the “Proposal on Cancellation of Partial Stock Options of the 2021 Stock Option Incentive Plan”. Because the 2021 Equity Incentive Plan granted some third parties for the first time The company’s performance assessment conditions were not met during the exercise period, and the company canceled some stock options in the 2021 Equity Incentive Plan. Director Yu Xiangbin, who is the incentive target of the 2021 equity incentive plan, abstained from voting. The first meeting of the company’s board of directors’ remuneration and assessment committee in 2024 reviewed and approved the cancellation-related motion in advance and agreed to submit it to the company’s board of directors for review.

12. On April 24, 2024, the 16th meeting of the company’s fifth board of supervisors reviewed and approved the “Proposal on Cancellation of Part of the Stock Options of the 2021 Stock Option Incentive Plan”, confirming that part of the third-party shares were granted for the first time due to the 2021 Equity Incentive Plan. If the company’s performance assessment conditions are not met during each exercise period, some stock options in the 2021 Equity Incentive Plan will be cancelled.

Our lawyers believe that the approval process for the company’s cancellation complies with the relevant provisions of the “Administrative Measures” and the “Articles of Association of Huizhou Zhongjing Electronic Technology Co., Ltd.” (hereinafter referred to as the “Articles of Association”) and the “2021 Draft Incentive Plan”. The company’s board of directors has obtained the necessary authorization from the shareholders’ meeting, and its resolution on this cancellation is legal and valid.

2. Matters related to this cancellation
According to the company’s “Draft 2021 Incentive Plan”, the company’s performance assessment requirements for the third exercise period of the 2021 Equity Incentive Plan are: The company’s performance assessment indicator is that the net profit in 2023 is not less than 520 million yuan. If the actual net profit achieved that year is lower If the performance assessment index reaches 90% of the company’s performance assessment indicators, all stock options exercisable by the incentive objects corresponding to the assessment period will not be exercised and will be canceled by the company.

According to the “2023 Annual Report” and the 2023 “Audit Report” disclosed by the company, the company’s audited net profit in 2023 was lower than 90% of the company’s performance assessment indicators, and did not reach the third level of the first grant of some stock options under the 2021 equity incentive plan. Exercise conditions for each exercise period.

On April 24, 2024, the 21st meeting of the company’s fifth board of directors and the 16th meeting of the fifth board of supervisors respectively passed the “Proposal on Cancellation of Partial Stock Options of the 2021 Stock Option Incentive Plan”. The company will The 8,504,460 stock options corresponding to the third exercise period of some stock options granted for the first time in the 2021 Equity Incentive Plan will be cancelled. After this cancellation is completed, the company’s 2021 Equity Incentive Plan will end.

Our lawyers believe that this cancellation complies with relevant laws and regulations and the relevant provisions of the “2021 Draft Incentive Plan” and “Articles of Association”.

3. Conclusions
To sum up, our lawyers believe:
1. This cancellation has obtained the necessary authorization and approval, and has fulfilled the necessary procedures at this stage; 2. This cancellation complies with relevant laws and regulations and the relevant provisions of the “2021 Incentive Plan Draft” and “Articles of Association”;
3. The company still needs to go through the cancellation procedures for the granted stock options and fulfill its information disclosure obligations accordingly.

This legal opinion is made in triplicate and will take effect after being stamped by the firm and signed by the person in charge of the firm and the handling lawyer. Each copy has the same legal effect.

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