Hefei Jinghe Integrated Circuit Co., Ltd
2025 Restricted Stock Incentive Plan (Draft)
March 2025
statement
1. The company and all directors and supervisors guarantee that the "Hefei Jinghe Integrated Circuit Co., Ltd. 2025 Restricted Stock Incentive Plan (Draft)" does not contain false records, misleading statements or major omissions, and assume legal responsibility for the authenticity, accuracy and completeness of its content in accordance with the law.
2. All incentive recipients of the Company promise that if the Company does not comply with the grant of rights or the vesting arrangement of rights and interests due to false records, misleading statements or material omissions in the information disclosure documents, the incentive recipients shall return all the benefits obtained by this incentive plan to the Company after the relevant information disclosure documents are confirmed to contain false records, misleading statements or material omissions.
Special Tips
1. The 2025 Restricted Stock Incentive Plan (Draft) of Hefei Jinghe Integrated Circuit Co., Ltd. (hereinafter referred to as the "Incentive Plan") is formulated by Hefei Jinghe Integrated Circuit Co., Ltd. (hereinafter referred to as "Jinghe Integration", "the Company" or "the Company") in accordance with the Company Law of the People's Republic of China, the Securities Law of the People's Republic of China, the Measures for the Administration of Equity Incentives of Listed Companies, the Rules for the Listing of Stocks on the Science and Technology Innovation Board of the Shanghai Stock Exchange, and the State-Controlled Listed Companies (Domestic) The Trial Measures for the Implementation of Equity Incentives, the Notice on Issues Concerning the Regulation of the Implementation of the Equity Incentive System by State-Controlled Listed Companies, the Self-Regulatory Guide for Listed Companies on the Science and Technology Innovation Board No. 4 - Information Disclosure of Equity Incentive Information and other relevant laws, administrative regulations, normative documents, and the Articles of Association of the Company were formulated.
2. The incentive form adopted by this incentive plan is restricted stock (Class II restricted stock). The source of the stock is the company's A-share ordinary shares repurchased by the company from the secondary market and/or the company's A-share ordinary shares issued by the company to the incentive recipients.
Incentive recipients who meet the conditions for the grant of this incentive plan shall, after satisfying the corresponding vesting conditions and vesting arrangements, receive the A-share ordinary shares repurchased and/or issued by the Company from the secondary market at the grant price during the vesting period, which will be registered with the Shanghai Branch of China Securities Depository and Clearing Co., Ltd. The restricted shares granted to the incentive recipients do not enjoy the rights of shareholders of the company before vesting, and the above-mentioned restricted shares shall not be transferred, used for guarantee or repayment of debts.
3. The number of restricted shares to be granted to the incentive object under this incentive plan is 62,088,500 shares, accounting for about 3.09% of the company's total share capital of 2,006,135,157 shares at the time of the announcement of the draft incentive plan. Among them, 59,388,500 restricted shares were granted for the first time, accounting for about 2.96% of the company's total share capital at the time of the announcement of the draft incentive plan, and accounting for about 95.65% of the total number of restricted shares granted this time; 2,700,000 restricted shares are reserved for grant, accounting for about 0.13% of the company's total share capital at the time of the announcement of the draft incentive plan, and about 4.35% of the total number of restricted shares granted this time.
Unless approved by a special resolution of the shareholders' meeting, the total number of shares obtained by any incentive recipient through the Plan and other effective equity incentive plans of the Company (if any) shall not exceed 1.00% of the total share capital of the Company; The total number of underlying shares involved in all effective incentive plans of the company shall not exceed 10.00% of the total share capital of the company.
4. A total of 1,007 incentive recipients were granted for the first time in this incentive plan, accounting for about 18.83% of the company's total number of 5,348 employees (as of December 31, 2024). The incentive recipients participating in this incentive plan do not include independent directors of the company, outside directors and supervisors who are held by persons other than the holding company of the listed company. The incentive recipients comply with the provisions of Article 8 of the Administrative Measures for Equity Incentives of Listed Companies, and there is no circumstance stipulated in Article 35 of the Trial Measures for the Implementation of Equity Incentives by State-Controlled Listed Companies (Domestic). The incentive objects granted by this incentive plan include:
1. Company directors, senior management personnel and core technical personnel;
2. The core backbone employees (including employees of subsidiaries) that the board of directors of the company believes need to be motivated.
The reserved incentive object refers to the incentive object that has not been determined at the time of the approval of the incentive plan by the shareholders' meeting but is included in the incentive plan during the existence of the incentive plan, which shall be determined after the incentive plan is deliberated and approved by the shareholders' meeting and before the company's third quarter report of 2025 is disclosed. The incentive object of reserved restricted shares shall be determined with reference to the criteria for the first grant.
5. The grant price of the restricted shares granted to the incentive object under this incentive plan is 12.10 yuan per share (including reserved grant). From the date of the announcement of this incentive plan to the completion of the registration of the vesting of restricted shares, if the company converts capital reserve into share capital, distributes stock dividends, pays dividends, subdivides or shrinks shares, allotments, etc., the grant price and number of rights and interests of restricted shares will be adjusted accordingly according to this incentive plan.
6. The validity period of this incentive plan shall not exceed 72 months from the date of the first grant of restricted shares to the date on which all the restricted shares granted to the incentive recipients are vested or invalidated.
7. The company does not have the following circumstances that prohibit the implementation of equity incentives as stipulated in the Administrative Measures for Equity Incentives of Listed Companies:
(1) The audit report of the financial accounting report of the most recent fiscal year has been issued by a certified public accountant with a negative opinion or cannot express an opinion;
(2) The audit report on the internal control of the financial report of the most recent fiscal year was issued by a certified public accountant with a negative opinion or could not express an opinion;
(3) In the last 36 months after listing, there has been a failure to distribute profits in accordance with laws and regulations, the Articles of Association, and public commitments;
(4) Where laws and regulations provide that equity incentives must not be implemented;
(5) Other circumstances identified by the China Securities Regulatory Commission.
8. All the funds for the incentive recipients to participate in this incentive plan shall be resolved in the form of self-raising, and the Company promises not to provide loans or any other forms of financial assistance for the incentive recipients of the restricted stock incentive plan to obtain restricted shares through this plan, including providing guarantees for their loans.
9. The Company promises that there are no false records, misleading statements or major omissions in the information disclosure documents related to this incentive plan.
10. The incentive object of this incentive plan promises: If the company does not comply with the arrangement of granting rights or vesting rights due to false records, misleading statements or material omissions in the information disclosure documents, the incentive object shall return all the benefits obtained by this incentive plan to the public after the relevant information disclosure documents are confirmed to have false records, misleading statements or material omissions
Manage.
11. After the draft of this incentive plan is drafted by the Remuneration and Appraisal Committee of the Company and submitted to the Board of Directors for deliberation and approval, the following conditions must be met before it can be implemented: it shall be approved by the competent department of state-owned assets and/or the authorized entity, and shall be deliberated and approved by the shareholders' meeting of the Company.
12. Within 60 days from the date of the shareholders' meeting deliberating and approving the incentive plan and the achievement of the grant conditions, the company shall convene the board of directors to grant restricted shares to the incentive object for the first time in accordance with relevant regulations, and complete the announcement and other related procedures. If the company fails to complete the above work within 60 days, it shall promptly disclose the reasons for the failure and announce the termination of the implementation of this incentive plan. According to the Measures for the Administration of Equity Incentives of Listed Companies and the Self-Regulatory Guidelines for Listed Companies on the Science and Technology Innovation Board No. 4 - Disclosure of Equity Incentive Information, the period during which rights and interests may not be granted shall not be counted within 60 days.
13. The implementation of this incentive plan will not lead to the company's equity distribution not meeting the listing conditions.
Table of Contents
Statement...... 2
Special Reminder ...... 3
Chapter I: Interpretation...... 7
Chapter 2 Purpose of this incentive plan...... 9
Chapter III The management body of the incentive plan...... 10
Chapter IV: Basis and Scope for Determining Incentive Targets...... 11
Chapter 5 The rights and interests to be granted in this incentive plan...... 13
Chapter VI List of Incentive Recipients and Distribution of Rights and Interests to be Granted...... 14
Chapter VII Validity Period, Grant Date, Vesting Arrangements and Lock-up Period...... 16
Chapter VIII Grant Price of Restricted Shares and Method of Determination ...... 19
Chapter IX Conditions for the Grant and Vesting of Restricted Stocks...... 21
Chapter 10 Adjustment Methods and Procedures of the Incentive Plan...... 27
Chapter 11 Accounting Treatment of Restricted Stocks...... 29
Chapter 12 Procedures for the Implementation, Grant, Vesting, Change and Termination of the Incentive Plan...... 31
Chapter 13 Other Rights and Obligations of the Company/Incentive Recipients...... 34
Chapter 14 Handling of this incentive plan in the event of a change in the company/incentive object...... 36
Chapter XV: Supplementary Provisions ...... 38
Chapter I: Interpretation
Unless otherwise specified, the following words shall have the following meanings in this incentive plan:
Crystal Integration, the Company, refers to Hefei Crystal Integrated Circuit Co., Ltd
Division, listed companies
Restricted Stock Incentive Plan refers to the 2025 Restricted Stock Incentive Plan of Hefei Jinghe Integrated Circuit Co., Ltd. This incentive plan and this plan
Restricted Stocks, Category II Restricted Stocks refer to the incentive objects that meet the conditions for granting this incentive plan and meet the corresponding benefit conditions
Stock: The company's shares that are acquired and registered in installments
In accordance with the provisions of this incentive plan, the directors and senior managers of the company who have obtained restricted shares
Incentive Objects Refers to the core backbone employees (including children) that the board of directors believes needs to be motivated
Company Employees)
Grant Date refers to the date on which the Company grants restricted shares to the incentive recipients, and the grant date must be a transaction
day
Grant Price refers to the amount determined by the Company when granting restricted shares to the incentive recipients
The price of the company's shares
Vesting means that the listed company registers the shares after the restricted stock incentive recipients meet the conditions for benefit
to the incentive's account
Vesting date refers to the registration of the granted shares after the restricted stock incentive recipients meet the conditions for benefit
Date, which must be the trading day
Vesting conditions refer to the restricted stock incentive plan established by the incentive plan, and the incentive object is the incentive stock exchange
Beneficiary conditions to be met
Validity period refers to the restricted shares granted from the date of the first grant of restricted shares to the incentive recipients
The date on which all vesting or voiding expires
Remuneration and Appraisal Committee means the Remuneration and Appraisal Committee of the Board of Directors of the Company
China Securities Regulatory Commission means the China Securities Regulatory Commission
Stock Exchange means the Shanghai Stock Exchange
Depository and Clearing Corporation means China Securities Depository and Clearing Corporation Shanghai Branch
"Company Law" means the Company Law of the People's Republic of China
"Securities Law" means the Securities Law of the People's Republic of China
"Administrative Measures" refers to the Administrative Measures for Equity Incentives of Listed Companies
"Listing Rules" means the Rules Governing the Listing of Stocks on the Science and Technology Innovation Board of the Shanghai Stock Exchange
Circular No. 175 refers to the Trial Measures for the Implementation of Equity Incentives by State-Controlled Listed Companies (Domestic) (State-Owned Listed Companies).
Resources Distribution [2006] No. 175)
Circular No. 171 refers to the "Issues Concerning the Regulation of the Implementation of the Equity Incentive System by State-Controlled Listed Companies".
Notice (Guo Zi Fa Distribution [2008] No. 171)
"Regulatory Guide" refers to the Self-Regulatory Guide for Listed Companies on the STAR Market No. 4 - Equity Incentive Information
Dew
"Articles of Association" means the Articles of Association of Hefei Jinghe Integrated Circuit Co., Ltd.
"Assessment and Management Measures" refers to the "2025 Restricted Stock Incentive Plan of Hefei Jinghe Integrated Circuit Co., Ltd."
Measures for the management of the implementation of the assessment
Yuan and 10,000 yuan refer to RMB and 10,000 yuan
Note: 1. The financial data and financial indicators cited in this draft refer to the financial data of the consolidated statement and the financial indicators calculated based on such financial data, unless otherwise specified.
2. If there is any difference in the mantissa between the partial totals and the sum of the detailed numbers directly added in this draft, it is due to rounding.
Chapter 2 The purpose of this incentive plan
In order to further improve the corporate governance structure of the company, establish and improve the company's long-term incentive and restraint mechanism, attract and retain outstanding talents, fully mobilize their enthusiasm and creativity, effectively enhance the cohesion of the core team and the core competitiveness of the enterprise, and effectively combine the interests of shareholders, the company and the core team, so that all parties can pay attention to the long-term development of the company and ensure the realization of the company's development strategy and business objectives, under the premise of fully protecting the interests of shareholders, in accordance with the principle of equal income and contribution, in accordance with the "Company Law" This incentive plan is formulated in accordance with the provisions of the Securities Law, Administrative Measures, Listing Rules, Regulatory Guidelines, Circular No. 175, No. 171 and other relevant laws, administrative regulations, normative documents and the Articles of Association.
As of the announcement date of this incentive plan, the company is also implementing the 2023 restricted stock incentive plan, which is independent of the 2023 restricted stock incentive plan being implemented and has no relevant connection.
Chapter 3 The management body of this incentive plan
1. As the highest authority of the company, the shareholders' meeting is responsible for reviewing and approving the implementation, change and termination of this incentive plan. The shareholders' meeting may, within the scope of its authority, authorize the board of directors to handle certain matters related to this incentive plan.
2. The Board of Directors is the executive management body of the incentive plan and is responsible for the implementation of the incentive plan. The Remuneration and Appraisal Committee under the Board of Directors is responsible for formulating and revising the incentive plan and submitting it to the Board of Directors of the Company for deliberation. After the board of directors deliberates and approves the incentive plan, it shall report to the state-owned assets management department for approval and the company's shareholders' meeting for approval, and handle the relevant matters of the incentive plan within the scope of the authorization of the shareholders' meeting.
3. The Board of Supervisors is the supervisory body of the incentive plan, and shall express its opinions on whether the incentive plan is conducive to the sustainable development of the company and whether there is any obvious damage to the interests of the company and all shareholders. The board of supervisors shall review the list of incentive recipients of the incentive plan, and supervise whether the implementation of the incentive plan complies with relevant laws, administrative regulations, normative documents and business rules of the stock exchange. The independent directors shall solicit proxy voting rights from all shareholders in connection with the incentive plan.
4. If the company changes the incentive plan before or after the shareholders' meeting deliberates and approves it, the board of supervisors shall express an independent opinion on whether the changed plan is conducive to the sustainable development of the company and whether there is any obvious damage to the interests of the company and all shareholders.
Before the Company grants rights and interests to the incentive recipients, the Board of Supervisors shall express a clear opinion on the conditions for the incentive recipients to be granted benefits set out in this incentive plan. If there is a discrepancy between the rights and interests granted by the Company to the incentive recipients and the arrangements of the Plan, the Board of Supervisors (when the incentive recipients change) shall express a clear opinion.
Before the vesting of the restricted shares granted to the incentive recipients, the board of supervisors shall express a clear opinion on whether the vesting conditions of the incentive recipients set out in this incentive plan have been achieved.
Chapter IV: The basis and scope for determining the incentive targets
1. The basis for determining the incentive object
(1) The legal basis for the determination of the incentive recipients
The incentive objects of this incentive plan are determined in accordance with the relevant provisions of the Company Law, the Securities Law, the Administrative Measures, the Listing Rules, the Regulatory Guidelines, Circular No. 175, No. 171 and other relevant laws, administrative regulations, normative documents and the Articles of Association, combined with the actual situation of the Company.
(2) The basis for the position determined by the incentive recipient
The incentive targets of this incentive plan are the directors, senior managers, core technical personnel of the company, and the core backbone employees (including employees of subsidiaries) that the board of directors deems necessary to be incentivized. The incentive objects do not include independent directors of the company, external directors and supervisors who are held by persons other than the holding company of the listed company, shareholders or actual controllers holding more than 5% of the shares individually or collectively, and their spouses, parents and children. For the personnel who meet the scope of incentive objects of this incentive plan, the remuneration and assessment committee shall draw up a list and verify and determine it by the board of supervisors of the company.
2. The scope of incentive objects
The number of incentive recipients granted for the first time under this incentive plan is 1,007, accounting for about 18.83% of the company's total number of employees of 5,348 (as of December 31, 2024). The incentive objects granted by this incentive plan include:
1. Company directors, senior management personnel and core technical personnel;
2. The core backbone employees (including employees of subsidiaries) that the board of directors of the company believes need to be motivated.
The above incentive targets do not include independent directors of the company, external directors and supervisors who are held by persons other than the holding company of the listed company, shareholders or actual controllers who hold more than 5% of the company's shares individually or collectively, and their spouses, parents and children. Among the incentive objects of this 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 have an employment, labor or labor relationship with the Company or its subsidiaries at the time of the Company's grant of restricted shares and during the assessment period specified in this incentive plan.
The incentive object reserved for grant shall be determined after the incentive plan is deliberated and approved by the shareholders' meeting and before the disclosure of the company's third quarter report of 2025, and the company shall disclose the relevant information in a timely and accurate manner as required on the designated website after the board of directors proposes it, the board of supervisors issues a clear opinion, and the lawyer issues a professional opinion and issues a legal opinion. If the incentive object is not specified beyond the above period, the reserved rights and interests will become invalid. The incentive object of reserved restricted shares shall be determined with reference to the criteria for the first grant.
The above incentive objects include some foreign employees, and the reason why the company includes them in this incentive plan is that foreign incentives are paired
It plays an important role in the company's technology research and development and business development at home and abroad, providing a strong guarantee for the company's R&D level to maintain an advanced position in the industry, so that the company has the ability to maintain and improve the international competition level of products and the company's international market position. Therefore, the implementation of incentives for foreign employees is an important means to attract and retain foreign employees, which reflects the company's equal policy towards Chinese and foreign employees. It is also an effective measure for the company to achieve sustainable development, which will further promote the construction and stability of the company's core talent team, thereby contributing to the company's long-term development.
3. Circumstances that cannot be the incentive object of this incentive plan
(1) Identified as an unsuitable person by the stock exchange within the last 12 months;
(2) Being identified as an unsuitable person 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 administratively punished or banned from entering the market for major violations of laws and regulations;
(4) Those who are prohibited from serving as directors or senior managers of the company as stipulated in the Company Law;
(5) Where laws and regulations provide that they must not participate in the equity incentive of a listed company;
(6) Other circumstances determined by the China Securities Regulatory Commission.
If any of the above circumstances occur during the implementation of this incentive plan, the incentive object shall not be granted restricted shares, and the restricted shares that have been granted but not yet vested will be cancelled and invalidated.
4. Verification of incentive objects
(1) After the board of directors of the company deliberates and approves the incentive plan, the company will publicize the name and position of the incentive object within the company through the company's website or other channels, and the publicity period shall not be less than 10 days.
(2) The company shall conduct a self-examination of the trading of the company's shares and its derivatives by insiders within 6 months before the announcement of the draft incentive plan, and explain whether there is insider trading. Those who buy and sell the company's shares with knowledge of inside information shall not be the target of incentives, except for circumstances that are not insider trading as stipulated by laws, administrative regulations and relevant judicial interpretations. Where insider trading occurs as a result of the disclosure of inside information, it must not be the target of incentives.
(3) The board of supervisors of the company will review the list of incentive objects and fully listen to the public opinions. The company will disclose the explanation of the review and publicity of the list of incentive objects by the board of supervisors 5 days before the shareholders' meeting deliberates on the incentive plan. The list of incentive recipients adjusted by the board of directors of the company shall also be verified by the board of supervisors of the company.
Chapter 5 The rights and interests to be granted in this incentive plan
1. The form of rights and interests to be granted in this incentive plan
The incentive form adopted by this incentive plan is restricted stock (Class II restricted stock).
2. The source and type of underlying stocks involved in the rights and interests to be granted in this incentive plan
The source of the shares of this incentive plan is the company's A-share ordinary shares repurchased by the company from the secondary market and/or the company's A-share ordinary shares issued by the company to the incentive recipients.
On December 22, 2023, the company held the 23rd meeting of the first board of directors, deliberated and approved the "Proposal on the Share Repurchase Plan by Centralized Bidding Transaction", and agreed that the company should use over-raised funds, self-owned and self-raised funds to repurchase the company's shares for equity incentives in a centralized bidding transaction. The total amount of repurchase funds shall not be less than RMB50,000,000 (inclusive) and not more than RMB100,000,000 (inclusive). The repurchase price shall not exceed RMB 25.26 per share (inclusive), and the repurchase period shall be within 12 months from the date of approval of the repurchase plan by the shareholders' meeting of the Company. For details, please refer to the "Announcement of Jinghe Integration on the Share Repurchase Plan by Centralized Bidding Transaction (Corrected)" (Announcement No.: 2023-042) and the "Repurchase Report of Jinghe Integration on Repurchasing the Company's Shares by Centralized Bidding Transaction" (Announcement No.: 2024-017) disclosed by the Company on the website of the Shanghai Stock Exchange (www.sse.com.cn) on December 29, 2023 and March 30, 2024.
According to the "Announcement of Jinghe Integration on the Implementation Results of Share Repurchase and Share Changes" (Announcement No.: 2025-011) disclosed by the Company on March 5, 2025, as of March 5, 2025, the Company has completed the repurchase, and the actual repurchase of 62,088,500 shares of the Company, accounting for 3.09% of the Company's total share capital, and the total actual repurchase funds are RMB 891,677,308.30 (excluding stamp duty, transaction commissions and other transaction costs). The purpose of the repurchased shares is in accordance with Article 162 of the Company Law.
3. The number of rights to be granted in this incentive plan and the proportion of the total shares of the company
The number of restricted shares to be granted to the incentive recipients in this incentive plan is 62,088,500 shares, accounting for about 3.09% of the company's total share capital of 2,006,135,157 shares at the time of the announcement of the draft incentive plan. Among them, 59,388,500 restricted shares were granted for the first time, accounting for about 2.96% of the company's total share capital at the time of the announcement of the draft incentive plan, and about 95.65% of the total number of restricted shares granted this time; The number of restricted shares reserved for grant is 2,700,000 shares, accounting for about 0.13% of the company's total share capital at the time of the announcement of the draft incentive plan, and about 4.35% of the total number of restricted shares granted this time.
The total number of underlying shares involved in the company's equity incentive plan during the full validity period does not exceed 10.00% of the company's total share capital when the incentive plan is submitted to the shareholders' meeting. The cumulative number of shares of the company granted to any incentive recipient through the equity incentive plan within the full validity period of this incentive plan does not exceed 1.00% of the total share capital of the company.
Chapter VI List of incentive recipients and distribution of rights and interests to be granted
1. The list of incentive recipients and the distribution of rights and interests to be granted
The distribution of restricted shares to be granted under this incentive plan among the incentive recipients is shown in the following table:
Granted Restricted Occupation Grant Limit at the time of announcement of this Plan
Serial number Name Nationality Position Number of shares Total number of shares Total share capital of the company
(10,000 shares) proportional proportion
1. Directors, senior management personnel and core technical personnel
1 Tsai Guozhi Taiwan Chairman 170.00 2.74% 0.08%
2 Qiu Xianhuan, Taiwan, China, Senior Vice President, 130.00 2.09% 0.06%
Core technical personnel
3 Zheng Zhicheng, Taiwan, Senior Vice President, 130.00 2.09% 0.06%
Core technical personnel
4 Zhu Xiaojuan, China, Deputy General Manager 110.00 1.77% 0.05%
Director and Secretary of the Board of Directors
5 Zhu Caiwei China Books and financial responsibilities 110.00 1.77% 0.05%
Deputy General Manager
6 Zhou Yiliang China Deputy General Manager 110.00 1.77% 0.05%
7 Zhang Weidong Taiwan Core technical personnel 100.00 1.61% 0.05%
8 Li Qingmin Taiwan Core technical personnel 50.00 0.81% 0.02%
Subtotal 910.00 14.66% 0.45%
2. Core backbone employees (including employees of subsidiaries)
Core employees (total 999) 5,028.85 80.99% 2.51%
Subtotal of first grant (total 1,007) 5,938.85 95.65% 2.96%
3. Reserved portion 270.00 4.35% 0.13%
Total 6,208.85 100.00% 3.09%
Note: If there is any difference in the mantissa between the sum of the above total data and the sum of each detail is due to rounding, two decimal places will be retained.
2. Relevant instructions
(1) The cumulative number of shares of the Company granted to any of the above-mentioned incentive recipients through the equity incentive plan within the full validity period shall not exceed 1.00% of the total share capital of the Company. The total number of underlying shares involved in the equity incentive plan during the company's entire validity period does not exceed 10.00% of the company's total share capital when the incentive plan is submitted to the shareholders' meeting.
(2) The list of the above-mentioned incentive recipients and their distribution ratio shall be examined and approved by the board of directors of the company, and the board of supervisors of the company shall verify the above-mentioned incentive objects and explain the verification situation at the shareholders' meeting; The final list of incentive recipients and the distribution ratio are subject to the supervisors
It will be verified, deliberated and approved by the shareholders' meeting, and shall be subject to the registration of the registration and clearing company.
(3) When transferring effective restricted shares, incentive recipients who hold the positions of directors and senior managers of the company shall retain no less than 20% of the total number of restricted shares granted until the expiration of their tenure (or tenure) and the results of the tenure assessment or economic responsibility audit are qualified.
(4) If the incentive recipient voluntarily gives up the granted benefits due to personal reasons, the board of directors shall adjust the amount of the grant accordingly, and directly reduce or distribute the equity shares waived by the incentive recipients. When the incentive recipient subscribes for restricted shares, the amount of restricted shares subscribed can be reduced accordingly due to insufficient funds.
(5) The incentive objects of this plan do not include independent directors of the company, external directors and supervisors who are held by persons other than the holding company of the listed company, shareholders who hold more than 5% of the shares of the listed company individually or in aggregate, the actual controller of the listed company and their spouses, parents and children.
(6) The reserved part of the incentive object shall be determined after the incentive plan is deliberated and approved by the shareholders' meeting and before the disclosure of the company's third quarter report of 2025, and after the board of directors proposes it, the board of supervisors issues a clear opinion, and the lawyer issues a professional opinion and issues a legal opinion, the company shall disclose the relevant information in a timely and accurate manner as required on the designated website.
Chapter VII Validity Period, Grant Date, Vesting Arrangement and Lock-up Period
1. The validity period of this incentive plan
The validity period of this incentive plan shall not exceed 72 months from the date of the first grant of restricted shares to the date when all restricted shares granted to the incentive recipients are vested or invalidated.
2. The date of grant of this incentive plan
The grant date shall be determined by the board of directors of the company after the incentive plan is deliberated and approved by the shareholders' meeting of the company. The company shall, within 60 days after the shareholders' meeting deliberates and approves, convene a board of directors in accordance with relevant regulations, grant restricted shares to the incentive recipients for the first time, and complete the announcement and other relevant procedures. If the company fails to complete the above work within 60 days, it shall promptly disclose the reasons for the failure and announce the termination of the implementation plan. According to the Administrative Measures and the Regulatory Guidelines, the period during which rights and interests shall not be granted shall not be counted within 60 days.
The grant date of the reserved part of the restricted shares shall be confirmed by the board of directors of the company after the deliberation and approval of the shareholders' meeting and before the disclosure of the company's third quarter report of 2025.
3. Attribution arrangements for this incentive plan
The restricted shares granted under this incentive plan will be vested in batches according to the agreed proportion after the incentive object meets the corresponding vesting conditions, and the vesting date must be the trading date and shall not be within the following periods:
(1) Within 15 days before the announcement of the company's annual report and semi-annual report, if the announcement date of the annual report or semi-annual report is postponed due to special reasons, it shall be counted from 15 days before the original scheduled announcement date to 1 day before the announcement;
(2) Within 5 days before the announcement of the company's quarterly report, performance forecast and performance express report;
(3) From the date of occurrence of a major event that may have a greater impact on the company's stock trading price or investment decision, or the date of entering the decision-making procedure, to the date of disclosure in accordance with law;
(4) Other periods stipulated by the China Securities Regulatory Commission and the Shanghai Stock Exchange.
The above-mentioned "material events" are transactions or other material matters that the Company should disclose in accordance with the provisions of the Listing Rules. If the relevant laws, administrative regulations, and departmental rules have other provisions on the period that must not be vested, the relevant provisions shall prevail.
During the validity period of the Plan, if there is any change in the regulations of the China Securities Regulatory Commission and the Shanghai Stock Exchange on the period during which directors, supervisors and senior management of listed companies are not allowed to buy or sell the shares of the Company, the restricted shares granted to the incentive recipients of the Plan shall be vested in accordance with the revised relevant regulations.
The vesting period and vesting arrangements of the restricted shares granted for the first time under this incentive plan are shown in the following table:
Vesting Arrangement Vesting Period Vesting Ratio
First vesting period From the first trading day after 24 months from the first grant date to 36 months from the first grant date 33%
The last trading day of the year
Second vesting period From the first trading day after 36 months from the first grant date to 48 months from the first grant date 33%
The last trading day of the year
Third vesting period From the first trading day after 48 months from the first grant date to 60 months from the first grant date 34%
The last trading day of the year
The vesting period and vesting arrangements of the restricted shares reserved for grant under this incentive plan are shown in the following table:
Vesting Arrangement Vesting Period Vesting Ratio
First vesting period from the first trading day after 24 months from the reservation grant date to 36 months from the reservation grant date 33%
The last trading day of the year
Second vesting period from the first trading day after 36 months from the reservation grant date to 48 months from the reservation grant date 33%
The last trading day of the year
Third vesting period From the first trading day after 48 months from the reservation grant date to 60 months from the reservation grant date 34%
The last trading day of the year
Restricted shares that have not been fulfilled due to vesting conditions during the above-mentioned agreed period shall not be vested or deferred to the next year, and shall be invalidated by the Company in accordance with the provisions of this incentive plan.
The restricted shares granted to the incentive recipients under this incentive plan shall not be transferred, used as collateral or to repay debts before vesting. The restricted shares that have been granted but not yet vested by the incentive recipients are subject to the vesting conditions at the same time, and shall not be transferred, used to guarantee or repay debts before vesting, and if the restricted shares are not attributable at that time, the shares obtained for the aforementioned reasons shall also not be vested.
After the vesting conditions of the restricted shares are met, the company will handle the vesting of the restricted shares that meet the vesting conditions.
4. The lock-up period of this incentive plan
The lock-up provisions on the sale of the company's shares granted to the incentive recipients through this incentive plan shall be implemented in accordance with the Company Law, the Securities Law, Several Provisions on the Reduction of Shareholdings by Shareholders, Directors, Supervisors and Senior Managers of Listed Companies on the Shanghai Stock Exchange, and the Implementation Rules for the Reduction of Shareholdings by Shareholders, Directors, Supervisors and Senior Managers of Listed Companies on the Shanghai Stock Exchange, as follows:
(1) If the incentive object is the company's directors and senior managers, the shares transferred each year during their tenure shall not exceed 25% of the total number of shares of the company held by them; Within half a year after resignation, the shares of the Company held by him shall not be transferred.
(2) If the incentive object is the company's directors and senior managers, the company's shares held by them shall be sold within 6 months after purchase, or bought again within 6 months after the sale, and the proceeds therefrom shall be owned by the company, and the board of directors of the company will recover the proceeds.
(3) During the validity period of this incentive plan, if there is a change in the relevant laws, administrative regulations, normative documents and the Articles of Association of the Company on the transfer of shares held by directors and senior managers of the Company in accordance with the relevant laws, administrative regulations, normative documents and the Articles of Association of the Company, such as the Company Law, the Securities Law, the Interim Measures for the Administration of Shareholding Reduction by Shareholders of Listed Companies, and the Self-Regulatory Guidelines for Listed Companies No. 15 - Reduction of Shareholdings by Shareholders and Directors, Supervisors and Senior Managers of the Shanghai Stock Exchange. The transfer of the company's shares held by these incentive recipients shall comply with the provisions of the amended Company Law, the Securities Law and other relevant laws, regulations, normative documents and the Articles of Association at the time of transfer.
Chapter VIII Grant Price and Determination Method of Restricted Shares
1. The grant price of restricted shares
The grant price of restricted shares (including initial and reserved grants) under this incentive plan is RMB 12.10 per share, that is, after the grant conditions and vesting conditions are satisfied, the incentive recipients can purchase the company's A ordinary shares repurchased from the secondary market and/or the company's A shares of ordinary shares issued to the incentive objects at a price of 12.10 yuan per share.
2. The method of determining the grant price of restricted shares
(1) Pricing method
The initial grant price of restricted shares in this incentive plan shall not be less than 50% of the average trading price of the company's shares in the 1st, 20th, 60th and 120th trading days prior to the announcement of this incentive plan:
1. The average price of the company's shares on the first trading day before the announcement of this incentive plan was 22.93 yuan per share, and the grant price accounted for 52.77% of the average trading price of the company's shares on the previous trading day;
2. The average trading price of the company's shares in the 20 trading days before the announcement of this incentive plan was 23.83 yuan per share, and the grant price accounted for 50.77% of the average trading price of the company's shares in the previous 20 trading days;
3. The average trading price of the company's shares in the first 60 trading days before the announcement of this incentive plan was 24.20 yuan per share, and the grant price accounted for 50.01% of the average trading price of the company's shares in the first 60 trading days;
4. The average trading price of the company's shares in the 120 trading days before the announcement of this incentive plan was 23.58 yuan per share, and the grant price accounted for 51.31% of the average trading price of the company's shares in the first 120 trading days;
The grant price of the reserved restricted shares in this incentive plan is the same as the grant price of the first grant of some restricted shares, which is RMB 12.10 per share. Before the grant of the reserved part of the restricted shares, the board of directors shall be convened to deliberate and approve the relevant proposals, and the grant shall be disclosed.
(2) Pricing basis
The grant price and pricing method of restricted shares granted under this incentive plan are to promote the development of the company, safeguard the rights and interests of shareholders, and provide a mechanism and talent guarantee for the company's long-term and steady development.
The integrated circuit manufacturing industry in which the company is located is a technology-intensive industry, and as a technology-intensive industry, talents, especially core technology and business talents, are the key factors that determine the competitiveness of the company's industry. In recent years, with the rapid development of the integrated circuit manufacturing industry, the competition for talents in the industry has been intensifying. If the company loses a large number of key talents due to compensation reasons, or the company is unable to effectively motivate existing talents, or is unable to attract excellent talents, the company may have insufficient allocation of relevant teams
As a result, it will adversely affect the company's R&D and production, unable to provide customers with high-quality services, and may even face higher recruitment and training costs, which will adversely affect the company's technology R&D capabilities and operating performance. To this end, the company urgently needs to effectively supplement the salary competitiveness of core talents through this equity incentive to ensure the company's talent competitiveness in the industry.
In addition, in line with the principle of equal incentives and constraints, this incentive plan sets a certain challenging performance target, which can further stimulate the subjective initiative and creativity of the incentive object, and the pricing principle of this incentive plan matches the performance requirements. Based on this, this incentive plan will have a positive impact on the company's sustainable development and shareholders' rights and interests in the future, and promote the smooth realization of the incentive goals.
Chapter IX Conditions for the Grant and Vesting of Restricted Stocks
1. Conditions for the grant of restricted shares
The company grants restricted shares to the incentive object only if the following conditions are met at the same time; Conversely, if any of the following grant conditions are not met, restricted shares cannot be granted to the incentive recipients.
(1) The company has not experienced any of the following circumstances:
1. The audit report of the financial accounting report of the most recent fiscal year has been issued by a certified public accountant with a negative opinion or cannot express an opinion;
2. The audit report of the internal control of the financial report of the most recent fiscal year was issued by the certified public accountant with a negative opinion or unable to express an opinion;
3. In the last 36 months after listing, there has been a failure to distribute profits in accordance with laws and regulations, the Articles of Association and public commitments;
4. Where laws and regulations stipulate that equity incentives shall not be implemented;
5. Other circumstances recognized by the China Securities Regulatory Commission.
(2) The incentive recipient has not experienced any of the following circumstances:
1. Identified as an unsuitable person by the stock exchange in the last 12 months;
2. In the past 12 months, it has been identified as an unsuitable person by the China Securities Regulatory Commission and its dispatched agencies;
3. In the past 12 months, the China Securities Regulatory Commission and its dispatched agencies have been administratively punished or banned from entering the market due to major violations of laws and regulations;
4. Those who are prohibited from serving as directors or senior managers of the company as stipulated in the Company Law;
5. Laws and regulations stipulate that it is not allowed to participate in the equity incentive of listed companies;
6. Other circumstances identified by the China Securities Regulatory Commission.
(3) Grant performance conditions
At the time of restricted stock grant, the audited financial data of the company in the most recent fiscal year (i.e., 2024) needs to meet the following conditions at the same time before the grant can be implemented:
1. Economic Value Added (EVA): Positive compared with fiscal year 2024 and 2023;
2. Growth rate of net profit attributable to shareholders of listed companies after deducting non-recurring gains and losses: Compared with the fiscal year of 2024 and 2023, the growth rate of net profit attributable to shareholders of listed companies after deducting non-recurring gains and losses shall not be less than 80%;
3. Proportion of R&D investment in main business income: not less than 8.5% in fiscal year 2024.
2. Vesting conditions for restricted stocks
When the following conditions are met during the vesting period, the restricted shares granted to the incentive recipients can be vested in batches:
(1) The company has not experienced any of the following circumstances:
1. The audit report of the financial accounting report of the most recent fiscal year has been issued by a certified public accountant with a negative opinion or cannot express an opinion;
2. The audit report of the internal control of the financial report of the most recent fiscal year was issued by the certified public accountant with a negative opinion or unable to express an opinion;
3. In the last 36 months after listing, there has been a failure to distribute profits in accordance with laws and regulations, the Articles of Association and public commitments;
4. Where laws and regulations stipulate that equity incentives shall not be implemented;
5. Other circumstances recognized by the China Securities Regulatory Commission.
In the event of any of the circumstances specified in Article (1) above, the restricted shares that have been granted but not vested by the incentive recipient in accordance with the Plan shall be cancelled and invalidated.
(2) The incentive recipient has not experienced any of the following circumstances:
1. Identified as an unsuitable person by the stock exchange in the last 12 months;
2. In the past 12 months, it has been identified as an unsuitable person by the China Securities Regulatory Commission and its dispatched agencies;
3. In the past 12 months, the China Securities Regulatory Commission and its dispatched agencies have been administratively punished or banned from entering the market due to major violations of laws and regulations;
4. Those who are prohibited from serving as directors or senior managers of the company as stipulated in the Company Law;
5. Laws and regulations stipulate that it is not allowed to participate in the equity incentive of listed companies;
6. Other circumstances identified by the China Securities Regulatory Commission.
If an incentive recipient falls under any of the circumstances specified in Article (2) above, the Company will terminate its right to participate in this incentive plan, and the restricted shares that have been granted but not vested in accordance with this incentive plan will be cancelled and invalidated.
(3) Requirements for the term of office of the vested rights and interests of the incentive recipients:
Before the incentive recipient vests in each batch of restricted shares granted, he or she must meet the term of office of more than 12 months.
(4) Performance appraisal requirements at the company level:
For the first time, part of the incentive plan will be granted for three fiscal years from 2025 to 2027, and each fiscal year will be assessed once. Based on the operating income value in 2024, the revenue growth rate (B) is determined; Based on the 2025-2027 financial data projections, the ΔEVA(A) and EBITDA margin(C) for each year are determined. According to the coefficients corresponding to the completion of the above three indicators, the number of vesting at the company level in each year is calculated.
The annual performance appraisal requirements for the first grant of restricted shares are as follows:
Performance appraisal indicators 1st vesting period 2nd vesting period 3rd vesting period
(Corresponding to the assessment year 2025) (Corresponding to the assessment year 2026) (Corresponding to the assessment year 2027)
ΔEVA(A) Target value (A0) Note 1 is positive Positive is positive Positive
Target (B0) 15% 25% 35%
Revenue growth rate 10% 20% 30%
(B) Trigger value (B1)
and not lower than the average value of the industry Note 2 or the 75th percentile of the benchmarking enterprise
Interest, Taxes, Depreciation and Amortization Target (C0) 48% 48% 48%
Front Profit Margin (C) Trigger Value (C1) 45% 45% 45%
Note: 1. ΔEVA performance appraisal index, the target value is equal to the trigger value;
2. According to the China Securities Industry Classification, the industry in which the company is located is "information technology-semiconductor-integrated circuit-integrated circuit manufacturing";
3. The performance targets involved in the above-mentioned restricted stock vesting conditions do not constitute the company's performance forecast and substantive commitment to investors;
4. The above ΔEVA and EBITDA margin indicators exclude the impact of share-based payment expenses under this incentive plan and other incentive plans
Sound.
The calculation of the performance achievement coefficient of individual projects is as follows:
Performance appraisal indicators Individual project performance achievement coefficient Company-level achievement coefficient
ΔEVA(A) A>0, then X=100%
(30% weighting) A≤0, then X=0 (not triggered)
Revenue growth rate (B) B≥B0, then Y=100%
(40% weight) B1≤B B EBITDA Margin (C) C≥C0, then Z=100% (30% weighting) C1≤C C Note: 1. If the performance of an individual project does not reach the trigger value, the achievement coefficient of the project is 0; 2. The number of vested shares at the company level = the number of restricted shares during the vesting period × the achievement coefficient at the company level. The company's main business is 12-inch wafer foundry services, which belongs to the semiconductor industry. The company has selected six world-leading foundries related to the company's main business as the company's benchmarking enterprises, as follows: Serial No. Stock Code Stock Abbreviation 1 688981.SH SMIC 2 688347.SH Hua Hong Company 3 688396.SH CR Micro 4 6770.TW PSMC 5 2303.TW UMC 6 GFS. o Grofoundry Note: In the process of performance appraisal, if there is a large change in the main business of the benchmarking enterprise and the enterprise in the same industry, or the performance fluctuates greatly, resulting in the weakening of the significance of the benchmarking assessment, the board of directors of the company can eliminate the relevant abnormal data or the benchmarking enterprise, and can also replace or add the relevant benchmarking enterprise to reflect the authenticity of the benchmarking assessment. If the company fails to meet the above-mentioned performance appraisal targets, all the restricted shares that are planned to vest in the current year of the incentive object will be cancelled and invalidated. The performance appraisal objectives of the performance appraisal year reserved for the grant part of this incentive plan and the performance appraisal objectives of each assessment year are the same as those of the first grant part. (5) Performance appraisal requirements at the individual level of incentive recipients: The individual-level assessment of all incentive recipients shall be organized and implemented in accordance with the current relevant regulations of the company, and the actual number of shares attributable to them shall be determined according to the assessment results of the incentive objects. The evaluation results of the incentive object are composed of two parts: personal punishment verification and individual performance appraisal. The proportions corresponding to the approved results of individual punishment are as follows: Verification results of individual punishment No record of demerit or above punishment There is a record of demerit or above punishment The corresponding attribution ratio of the approved results of individual punishment is 100% 0 The corresponding attribution ratio of individual performance appraisal results is as follows: Individual performance appraisal results A, B, C D The corresponding attribution ratio of individual performance appraisal results is 100%, 80%, 60%, 0 The number of restricted shares actually vested by the incentive object in the current year = the number of individual plans to vest in the current year× the company-level vesting ratio × the corresponding vesting ratio of the individual punishment verification results × the corresponding vesting ratio of the individual performance appraisal results. If the restricted shares vested in the current plan of the incentive object cannot be vested or cannot be fully vested due to assessment reasons, they shall be invalid and cannot be deferred to subsequent years. If the company encounters major changes, special and abnormal circumstances, or other force majeure factors during the validity period of this plan, the company's performance appraisal indicators may be adjusted after being approved by the board of directors of the company. 3. The scientific and reasonable description of the company's performance appraisal indicators The assessment indicators of the restricted stock incentive plan are divided into two levels, namely company-level performance appraisal and individual-level performance appraisal. The company-level performance appraisal indicators are the improvement value of economic value-added ΔEVA, revenue growth rate, EBITDA and amortization margin, which are important indicators to measure the comprehensiveness, growth, profitability and predict the future business development trend of the enterprise. Thereinto: 1、ΔEVA (1) The economic added value takes into account the cost of all capital, and is based on the return obtained by the company, which more truly reflects the company's value creation ability and sustainable development ability. (2) It is conducive to the unity of the interests of employees, the company and shareholders, and realizes the binding of the interests of employees and the company as a whole, so as to improve The enthusiasm and subjective initiative of employees promote the core competitiveness of the company. (3) Since 2010, the State-owned Assets Supervision and Administration Commission of the State Council has decided that central enterprises should replace the original return on net assets by fully implementing the economic value-added assessment index, and the implementation of this indicator has received widespread attention from the industry, such as the state State-owned listed companies such as China Information and Communications Technology, China Unicom, China Communications Construction, and China Software have all selected this indicator as the equity incentive assessment Target. Compared with the traditional financial assessment index, this index is more scientific, reasonable and easy to assess. 2. Revenue growth rate (1) Revenue growth rate is an important indicator to measure the growth rate of an enterprise. By comparing the revenue growth rate in different periods, we can clearly see the growth trend of the company's operating income, which is the direct embodiment of the company's growth rate and the indirect development potential Reflect. (2) The revenue growth rate can reflect the operating conditions of the enterprise. When the revenue growth rate continues to be positive and increases year by year, it indicates that the business is in good condition and its profitability is stable; At the same time, the increase in revenue growth rate also reflects the company's market share Enhancement of force. With the increase of operating income, the company's share in the market will also expand accordingly, thereby enhancing the company's market field status and competitiveness. 3. EBITDA margin (1) The EBITDA margin intuitively reflects the core profitability of the enterprise by calculating the ratio of the profit to the operating income before excluding income tax, interest, depreciation and amortization. (2) The EBITDA margin can measure the operational efficiency of the enterprise, such as cost control and resource utilization, and the efficient enterprise can usually achieve higher output at a lower cost, which is an important indicator to evaluate the market value and future development prospects of the enterprise. (3) The company's main business is 12-inch wafer foundry services, which has the characteristics of heavy assets. The company is currently in expansion During the period, the cost burden of depreciation of fixed assets and interest expenses on long-term borrowings was heavier. The EBITDA margin can exclude the impact of long-term costs such as depreciation of fixed assets and interest expenses on long-term borrowings on the company's current profit, and more truly reflect the company's operating performance. In addition to the performance appraisal at the company level, the company has also set up a strict performance appraisal system at the individual level, which can make a more accurate and comprehensive comprehensive evaluation of the work performance of the incentive object. The company will determine whether the individual incentive object meets the conditions for attribution according to the annual performance appraisal results of the incentive object. To sum up, the company's incentive plan assessment system is comprehensive, comprehensive and operable, the assessment index setting has a good scientific, forward-looking and reasonable, the incentive plan performance appraisal target value has fully considered the company's development environment, industry level and future business development planning, for the company is not only more challenging, but also reasonable incentives, is conducive to driving the company's performance development and sustainable growth. Chapter 10 Adjustment Methods and Procedures of the Incentive Plan 1. Adjustment method for the number of restricted shares If the company has matters such as the conversion of capital reserve into share capital, the distribution of stock dividends, stock subdivision, allotment and share reduction from the date of the announcement of this incentive plan to the completion of the registration of the vesting of restricted shares by the incentive object, the number of restricted shares shall be adjusted accordingly. Here's how to do this: (1) Conversion of capital reserve into share capital, distribution of stock dividends, and stock subdivision Q＝Q0×(1＋n) Among them: Q0 is the number of restricted shares before adjustment; n is the ratio of capital reserve per share to share capital, distribution of stock dividends, and stock subdivision (i.e., the number of shares increased by each share after being converted, gifted or subdivided); Q is the adjusted number of restricted shares. (2) Allotment of shares Q＝Q0×P1×(1＋n)/(P1＋P2×n) Among them: Q0 is the number of restricted shares before adjustment; P1 is the closing price on the record date; P2 is the allotment price; n is the proportion of allotment shares (i.e., the ratio of the number of allotment shares to the total share capital of the company before the allotment); Q is the adjusted number of restricted shares. (3) Share reduction Q＝Q0×n Among them: Q0 is the number of restricted shares before adjustment; n is the share reduction ratio (i.e., 1 share of the company's stock is reduced to n shares); Q is the adjusted number of restricted shares. (4) Additional issuance In the event of the issuance of new shares, the number of restricted shares will not be adjusted. 2. The method of adjusting the grant price of restricted shares If the company has dividends, capital reserve conversion to share capital, stock dividends, share subdivision, allotment or share reduction from the date of the announcement of this incentive plan to the completion of the registration of restricted stock vesting, the restricted stock grant price shall be adjusted accordingly. Here's how to do this: (1) Conversion of capital reserve into share capital, distribution of stock dividends, and stock subdivision P＝P0/(1＋n) Among them: P0 is the grant price before adjustment; n is the ratio of capital reserve per share to share capital, distribution of stock dividends, and stock splitting; P is the adjusted grant price. (2) Allotment of shares P＝P0×(P1＋P2×n)/[P1×(1＋n)] Among them: P0 is the grant price before adjustment; P1 is the closing price on the record date; P2 is the allotment price; n is the proportion of allotment shares (i.e., the ratio of the number of allotment shares to the total share capital of the joint-stock company before the allotment); P is the adjusted grant price. (3) Share reduction P＝P0/n Among them: P0 is the grant price before adjustment; n is the proportion of shares reduced per share; P is the adjusted grant price. (4) Dividends P＝P0–V Among them: P0 is the grant price before adjustment; V is the dividend payout per share; P is the adjusted grant price. After adjusting for dividends, P must still be greater than 1. (5) Additional issuance In the event of the issuance of new shares, the grant price of restricted shares will not be adjusted. 3. Procedures for the adjustment of this incentive plan The shareholders' meeting of the Company authorizes the Board of Directors of the Company to adjust the number of restricted shares and the grant price for the reasons set out in this incentive plan. After the board of directors adjusts the number and grant price of restricted shares in accordance with the above provisions, it shall make an announcement and notify the incentive recipients in a timely manner. The Company shall retain a lawyer to issue a professional opinion to the Board of Directors of the Company on whether the above-mentioned adjustments comply with the provisions of the Administrative Measures, the Articles of Association and the Incentive Plan. If it is necessary to adjust the number of restricted shares, grant price or other terms due to matters other than the above-mentioned circumstances, it shall be reported to the competent department of state-owned assets and/or the authorized entity for review and approval after the board of directors makes a resolution, and shall be implemented after deliberation and approval by the shareholders' meeting. Chapter 11 Accounting Treatment of Restricted Stocks According to the relevant provisions of the Accounting Standard for Business Enterprises No. 11 - Share-based Payment and the Accounting Standard for Business Enterprises No. 22 - Recognition and Measurement of Financial Instruments issued by the Ministry of Finance, the Company will revise the estimated number of attributable restricted shares on each balance sheet date during the waiting period based on the latest subsequent information such as changes in the number of attributable persons and the completion of performance indicators, and include the services obtained in the current period into relevant costs or expenses and capital reserve according to the fair value of the restricted shares on the grant date. 1. The fair value of restricted shares and the method of determining them Referring to the Accounting Department of the Ministry of Finance of the People's Republic of China "Application Cases of Share Payment Standards - Grant of Restricted Shares", the measurement of the share-based payment expenses of the second type of restricted stocks is carried out with reference to stock options. In accordance with the relevant provisions of 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 chooses the Black-Scholes model to calculate the fair value of Class II restricted stocks. Based on March 14, 2025, the values and descriptions of each parameter of the valuation model are as follows: 1. The underlying stock price: 23.04 yuan / share (the company's closing price on March 14, 2025, assuming the closing price of the restricted stock grant date); 2. The validity period is: 2 years, 3 years and 4 years (the period from the grant date of the second type of restricted shares to the vesting date of each period); 3. Historical volatility: 17.39%, 16.53% and 15.71% (the annualized volatility of the Shanghai Composite Index in the past 2 years, 3 years and 4 years is used respectively); 4. Risk-free interest rate: 1.56%, 1.62% and 1.62% (respectively using the yield to maturity of the corresponding period of China Treasury Bonds); 5. Dividend yield: 0%. 2. The impact of the implementation of restricted shares on the operating results of each period is expected The Company determines the fair value of the Class II restricted shares on the grant date in accordance with accounting standards and relevant valuation tools, and ultimately recognizes the share-based payment expenses of the incentive plan, which will be amortized in proportion to the vesting arrangement during the implementation of the incentive plan. Incentive costs arising from this incentive plan will be charged to recurring profit or loss. Assuming that the restricted shares are granted for the first time in mid-May 2025, the impact of the first grant of restricted shares under the incentive plan on the accounting costs of each period is shown in the following table in accordance with the requirements of the Chinese accounting standards: Unit: 10,000 yuan Restricted stock is expected to total 2025, 2026, 2027, 2028, 2029 Amortized costs 68,435.72 15,528.24 24,535.96 17,517.97 8,681.33 2,172.22 Note: 1. The above calculation results do not represent the final accounting cost, the actual accounting cost is related to the grant date, grant price and vesting quantity, and the incentive object will resign before vesting, and the actual vesting quantity will be reduced accordingly if the company's performance appraisal or individual performance appraisal does not meet the corresponding standards, thereby reducing the share-based payment expenses. At the same time, the Company reminds shareholders of the possible dilution effect; 2. The final results of the above impact on the company's operating results will be subject to the annual audit report issued by the accounting firm. The above calculation part does not include the reserved portion of 2,700,000 shares of Class II restricted stock, and additional share payment expenses will be incurred when the reserved portion is granted, and the accounting treatment of reserved restricted stock is the same as that of the first grant of restricted stock. The cost of this incentive plan will be charged to the cost. Based on the current information, the company preliminarily estimates that without considering the positive effect of the incentive plan on the company's performance, the amortization of the cost of the incentive plan will have an impact on the net profit of each year during the validity period, but the impact is not significant. Considering the positive effect of this incentive plan on the company's business development, thereby stimulating the enthusiasm of the management and business teams, improving operating efficiency and reducing operating costs, the company's performance improvement brought by this incentive plan will be higher than the increase in expenses brought by it. Chapter 12 Procedures for the Implementation, Grant, Vesting, Change and Termination of the Incentive Plan 1. Implementation procedures of this incentive plan (1) The Remuneration and Appraisal Committee is responsible for formulating the draft of the incentive plan, the summary and the Assessment Management Measures, and submitting them to the Board of Directors for deliberation. (2) The board of directors of the company shall make a resolution on this incentive plan in accordance with the law. When the board of directors deliberates on the incentive plan, the affiliated directors shall abstain from voting. The board of directors shall, after reviewing and approving the plan and performing the publicity and announcement procedures, submit the plan to the shareholders' meeting for deliberation; At the same time, it is submitted to the shareholders' meeting for authorization, which is responsible for the implementation of the grant, vesting (registration) of restricted shares. (3) The board of supervisors shall express a clear opinion on whether the incentive plan is conducive to the sustainable development of the company and whether there is any obvious damage to the interests of the company and all shareholders. The lawyer hired by the company issued a legal opinion on the incentive plan. (4) The company conducts a self-examination on the trading of the company's shares by insiders within 6 months before the announcement of this incentive plan. (5) The draft incentive plan deliberated and approved by the board of directors shall be submitted to the competent department of state-owned assets and/or the authorized entity for review and approval; The company shall make an announcement within 2 trading days after obtaining the approval of the competent authority of state-owned assets and/or its authorized entity. (6) Before convening the shareholders' meeting, the company shall publicize the names and positions of the incentive recipients within the company through the company's website or other channels, and the publicity period shall not be less than 10 days. The Board of Supervisors will review the list of incentive recipients and fully listen to the public opinions. The company discloses the explanation of the board of supervisors' review and publicity of the list of incentive objects 5 days before the shareholders' meeting deliberates on the incentive plan. (7) When the shareholders' meeting of the company votes on the incentive plan and related proposals, the independent directors shall solicit proxy voting rights from all shareholders on the incentive plan and related proposals. The shareholders' meeting of the company shall vote on the content of the equity incentive plan stipulated in Article 9 of the Administrative Measures, and shall be approved by more than two-thirds of the voting rights held by the shareholders present at the meeting, and separately count and disclose the votes of other shareholders except the company's directors, supervisors, senior managers, and shareholders who individually or collectively hold more than 5% of the company's shares. When the shareholders' meeting deliberates on the incentive plan and related proposals, the related shareholders shall abstain from voting. (8) The company discloses the announcement of the resolution of the shareholders' meeting, the equity incentive plan deliberated and approved by the shareholders' meeting, the self-examination report and legal opinion of the insider who buys and sells the company's shares. (9) When the incentive plan is deliberated and approved by the shareholders' meeting of the company and the grant conditions specified in the incentive plan are met, the company shall grant restricted shares to the incentive recipients within the specified time. After being authorized by the shareholders' meeting of the company, the board of directors of the company is responsible for the granting, vesting, invalidation and invalidation of restricted shares, and handling all matters necessary for the vesting of restricted shares, including but not limited to submitting an application for vesting to the stock exchange, applying to the registration and clearing company for relevant registration and clearing business, and amending the company Articles of Association", handle the registration of the change of the company's registered capital. II. Procedures for the Grant of Restricted Shares (1) After the shareholders' meeting deliberates and approves the incentive plan and the board of directors passes the resolution to grant rights and interests to the incentive recipients, the company and the incentive recipients sign the Restricted Stock Grant Agreement to stipulate the rights and obligations of both parties. (2) Before the Company grants rights and interests to the incentive recipients, the board of directors shall deliberate and announce whether the conditions for the incentive recipients to be granted benefits set by this incentive plan have been achieved. The grant plan for the reserved restricted shares shall be determined and approved by the Board of Directors. The board of supervisors shall express clear opinions at the same time. The law firm shall issue a legal opinion on whether the conditions under which the incentive recipient is granted the benefit have been fulfilled. The board of supervisors of the company shall verify the date of grant of restricted shares and the list of incentive recipients and express their opinions. (3) If there is a discrepancy between the rights and interests granted by the company to the incentive recipients and the arrangements of the plan, the board of supervisors (when the incentive recipients change) and the law firm shall express clear opinions at the same time. (4) After the equity incentive plan is deliberated and approved by the shareholders' meeting, the company shall convene a board of directors to grant restricted shares to the incentive recipients within 60 days in accordance with relevant regulations and complete the announcement. If the company fails to complete the above work within 60 days, it shall disclose the reasons for the failure to complete it in a timely manner, and announce the termination of the implementation of the incentive plan, and shall not reconsider the equity incentive plan within 3 months from the date of announcement (according to the "Administrative Measures" and relevant laws and regulations, the period during which listed companies are not allowed to grant rights and interests shall not be counted within 60 days). The object of the grant of reserved rights and interests shall be clarified after the incentive plan is deliberated and approved by the shareholders' meeting and before the disclosure of the company's third quarter report of 2025. 3. Procedures for the vesting of restricted shares (1) Before vesting, the company shall confirm whether the incentive object meets the vesting conditions. The board of directors shall deliberate on whether the vesting conditions set by this incentive plan have been achieved, and the board of supervisors shall express a clear opinion. Law firms shall issue a legal opinion on whether the conditions for the attribution of incentive recipients have been fulfilled. (2) For incentive recipients who meet the vesting conditions, the funds for subscribing for restricted shares shall be paid into the company's designated account in accordance with the company's requirements, and confirmed by the certified public accountant's capital verification. The company shall submit an application to the stock exchange, and after confirmation by the stock exchange, the securities registration and clearing institution shall handle the ownership of shares. For incentive objects that do not meet the conditions, the restricted shares corresponding to the batch will be cancelled and invalidated. The company shall disclose the relevant implementation announcements in a timely manner. (3) The incentive recipient may transfer the vested restricted shares, but the transfer of the shares held by the company's directors and senior management personnel shall comply with the provisions of relevant laws, administrative regulations and normative documents. 4. Procedures for changing and terminating the incentive plan (1) Procedures for changing the incentive plan 1. If the company can change the incentive plan before the shareholders' meeting deliberates and approves it, the change shall be deliberated and approved by the board of directors. If the company changes the incentive plan that has been approved by the shareholders' meeting, the change plan shall be submitted to the shareholders' meeting for deliberation, and shall not include circumstances that lead to the acceleration of early vesting and the reduction of the grant price (except for the reduction of the grant price due to the conversion of capital reserve into share capital, the distribution of stock dividends, the allotment of shares, etc.). 2. The company shall disclose the reasons for the change and the content of the change in a timely manner, and the board of supervisors of the company shall express a clear opinion on whether the changed plan is conducive to the sustainable development of the company and whether there is any obvious damage to the interests of the company and all shareholders. Law firms should express professional opinions on whether the revised plan complies with the Administrative Measures and relevant laws and regulations, and whether there are any circumstances that clearly harm the interests of the company and all shareholders. (2) Procedures for terminating the incentive plan 1. If the company intends to terminate the incentive plan before the shareholders' meeting deliberates, it shall be approved and disclosed by the board of directors. If the company terminates the implementation of the incentive plan after the shareholders' meeting deliberates and approves the incentive plan, it shall be submitted to the board of directors and the shareholders' meeting for deliberation and disclosure. 2. The company shall timely disclose the announcement of the resolution of the shareholders' meeting or the resolution of the board of directors. The law firm shall issue a professional opinion on whether the termination of the incentive plan by the company complies with the provisions of the Administrative Measures and relevant laws and regulations, and whether there is any obvious harm to the interests of the company and all shareholders. 3. If the company terminates this incentive plan, the restricted shares that have not yet vested will be invalidated. Chapter 13 Other rights and obligations of the company/incentive recipients 1. The rights and obligations of the company (1) The company has the right to interpret and implement the incentive plan, and in accordance with the provisions of the incentive plan to carry out performance appraisal of the incentive object, if the incentive object does not meet the vesting conditions determined by the incentive plan, the company will be in accordance with the provisions of the incentive plan Then, the restricted shares that have been granted but not yet vested by the incentive object will be cancelled and invalidated. (2) The Company undertakes not to provide loans or any other form of financial assistance for the incentive recipients to obtain the relevant restricted stocks in accordance with this incentive plan, including providing guarantees for their loans. (3) The company shall timely perform the obligations of restricted stock incentive plan declaration and information disclosure in accordance with relevant regulations. (4) The company shall, in accordance with the incentive plan and the relevant provisions of the China Securities Regulatory Commission, the Shanghai Stock Exchange, the China Securities Depository and Clearing Co., Ltd., actively cooperate with the incentive recipients who meet the vesting conditions to carry out the vesting operation of restricted shares in accordance with the regulations. However, the company shall not be liable for any failure to vest the incentive object and cause losses to the incentive object due to the reasons of the China Securities Regulatory Commission, Shanghai Stock Exchange and China Securities Depository and Clearing Corporation Limited. (5) If the incentive object seriously damages the interests or reputation of the company due to violations of the law, violation of professional ethics, disclosure of company secrets, dereliction of duty or dereliction of duty, etc., the company may cancel the vesting of the restricted shares that have been granted but have not yet vested to the incentive object after deliberation by the remuneration committee of the board of directors and approval by the board of directors of the company, and shall be invalidated. If the circumstances are serious, the company may also recover the losses suffered by the company in accordance with the provisions of the relevant laws. (6) In accordance with the provisions of national tax laws and regulations, the company withholds and pays individual income tax and other taxes payable by incentive recipients. (7) Other relevant rights and obligations stipulated by laws, regulations and this incentive plan. 2. The rights and obligations of the incentive recipients (1) The incentive object shall be diligent and conscientious, abide by professional ethics according to the requirements of the position hired by the company, and make due contributions to the development of the company. (2) The source of funds for the incentive recipients shall be the self-raised funds of the incentive recipients. (3) The restricted shares granted to the incentive recipients shall not be transferred, guaranteed or used to repay debts before vesting. (4) The income obtained by the incentive recipient due to the incentive plan shall be subject to individual income tax and other taxes and fees in accordance with national tax laws and regulations. (5) The incentive recipient promises that if the company has false records, misleading statements or material omissions in the information disclosure documents, If the grant of rights or vesting arrangements is not complied with, the incentive recipient shall return all the benefits obtained from the equity incentive plan to the company after the relevant information disclosure documents are confirmed to contain false records, misleading statements or material omissions. (6) After the shareholders' meeting deliberates and approves the incentive plan and the board of directors passes the resolution to grant rights and interests to the incentive recipients, the company shall sign the Restricted Stock Grant Agreement with the incentive recipients to stipulate the rights and obligations of both parties and other related matters. (7) Other relevant rights and obligations stipulated by laws, regulations and this incentive plan. 3. Other notes Any dispute or controversy arising between the Company and the incentive recipients arising from the implementation of the Incentive Plan and/or the Restricted Stock Grant Agreement signed by both parties or in connection with the Incentive Plan and/or the Restricted Stock Grant Agreement shall be resolved through negotiation and communication or mediation by the Remuneration Committee of the Board of Directors of the Company. If the parties fail to resolve the dispute or dispute by the above means within 60 days from the date of occurrence of the dispute or dispute, either party has the right to file a lawsuit with the people's court with jurisdiction in the place where the company is located. The Company's determination of the incentive recipients of this equity incentive plan does not constitute a commitment to the employee's employment period. The company still determines the employment relationship of employees according to the "labor contract" or employment contract signed with the incentive recipient. Chapter 14 Handling of this incentive plan in the event of a change in the company/incentive object 1. Handling of changes in the company (1) In the event of any of the following circumstances, the implementation of the plan shall be terminated, and the restricted shares that have been granted but not vested by the incentive recipients in accordance with the plan shall be cancelled and invalidated: 1. The audit report of the financial accounting report of the most recent fiscal year has been issued by a certified public accountant with a negative opinion or cannot express an opinion; 2. The audit report on the internal control of the financial report of the most recent fiscal year was issued by a certified public accountant with a negative opinion or could not express an opinion; 3. In the last 36 months after listing, there has been a failure to distribute profits in accordance with laws and regulations, the Articles of Association and public commitments; 4. Circumstances where laws and regulations stipulate that equity incentives shall not be implemented; 5. Other circumstances determined by the China Securities Regulatory Commission that it is necessary to terminate the incentive plan. (2) The company has a merger, division, etc.; In the event of a merger or division of the company, the board of directors of the company shall decide whether to terminate the implementation of this incentive plan within 5 trading days from the date of the merger or division of the company. (3) There is a change in the control of the company When there is a change in the control of the company, the board of directors of the company shall decide whether to terminate the implementation of this incentive plan within 5 trading days from the date of the change of control of the company. (4) If the company does not meet the conditions for the grant of restricted shares or the vesting arrangement due to false records, misleading statements or major omissions in the information disclosure documents, the restricted shares that have been granted but not yet vested by the incentive recipients will be cancelled and invalidated. If the restricted shares granted to the incentive recipients have been vested, all incentive recipients shall return the authorized benefits. If the incentive recipient who is not responsible for the above matters suffers losses due to the return of rights and interests, it may recover from the company or the responsible object in accordance with the relevant arrangements of this plan. The board of directors shall, in accordance with the provisions of the preceding paragraph and the relevant arrangements of this plan, recover the income obtained by the incentive recipients. 2. Handling of changes in the personal circumstances of the incentive recipients (1) If the incentive recipient has a change in position, but still serves in the company or its subordinate branches or subsidiaries, the restricted shares granted to him will be vested in accordance with the procedures stipulated in this incentive plan before the change of position; However, the motivator cannot win In the event of a job change caused by any act that damages the company's interests or reputation, such as working in a position, violating the law, violating professional ethics, divulging company secrets, dereliction of duty or dereliction of duty, or seriously violating the company's system, the restricted shares that have been granted but not yet vested by the incentive recipient shall not be vested and shall be invalidated. (2) If the incentive recipient resigns, including voluntary resignation, resignation due to layoffs by the company, non-renewal of the labor contract/employment agreement upon expiration, dismissal by the company due to personal fault, or termination of the labor contract or employment agreement through negotiation, the restricted shares that have been granted but not yet vested by the incentive recipient from the date of resignation shall not be vested and shall be invalid. The incentive recipient needs to pay the individual income tax involved in the vested restricted shares to the company before leaving the company. Personal fault includes, but is not limited to, the following behaviors, and the Company has the right to recover from the incentive recipients in accordance with the provisions of relevant laws depending on the seriousness of the circumstances: violation of the employment contract, confidentiality agreement, non-compete agreement or any other similar agreement signed with the Company or its affiliates; violates the laws of the country of residence that results in a criminal offence or other aggravating circumstances that affect the performance of the duties; Receiving remuneration from a company or individual other than the company and not disclosing it to the company in advance, etc. (3) If the incentive recipient retires normally in accordance with national laws and regulations and the company's regulations and has not been rehired by the company or has not continued to serve the company in other forms, the restricted shares that have been granted but not vested by the incentive recipient shall not be vested and shall be invalid. If the incentive recipient is rehired by the company or continues to serve the company in other forms after normal retirement in accordance with national laws and regulations and the company's regulations, the restricted shares granted to him shall continue to be valid and shall still be vested in accordance with the procedures stipulated in this incentive plan. After the occurrence of the circumstances described in this paragraph, if the incentive recipient does not have an individual performance appraisal, its individual performance appraisal conditions shall no longer be included in the attribution conditions; If there is an individual performance appraisal, the individual performance appraisal is still one of the vesting conditions for restricted stocks. (4) If the incentive recipient dies or loses the capacity for civil conduct in the line of duty, the restricted shares granted to him shall continue to be valid and shall still be vested in accordance with the procedures stipulated in this incentive plan before the occurrence of relevant circumstances. The board of directors of the company may decide that its performance appraisal conditions at the individual level will no longer be included in the vesting conditions. (5) If the incentive recipient dies or loses the capacity for civil conduct not due to the act of duty, the restricted shares that have been granted to the incentive recipient but have not yet vested shall not be vested from the date of occurrence of the situation. (6) Other circumstances not specified in this incentive plan shall be determined by the board of directors of the company and the method of handling shall be determined. 3. Other circumstances Other unexplained circumstances shall be determined by the board of directors of the company and determine the way to deal with them. Chapter XV: Supplementary Provisions 1. The incentive plan shall be interpreted by the board of directors of the company and shall take effect after being deliberated and approved by the shareholders' meeting of the company. 2. If there is a change in the relevant laws, administrative regulations, departmental rules or normative documents on which this incentive plan is based, the relevant provisions after the change shall apply. 3. The board of directors of the company is responsible for the interpretation of this incentive plan. Hefei Jinghe Integrated Circuit Co., Ltd board of directors March 14, 2025
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