Special legal opinion on the unlocking and stock listing of the first phase of the restricted stock incentive plan of Henan Lingrui Pharmaceutical Co., Ltd. in 2024
Beijing Jintai (Wuhan) Law Firm
About the unlocking and stock listing of the first phase of the restricted stock incentive plan of Henan Lingrui Pharmaceutical Co., Ltd. in 2024
Special legal opinion
June 2026
Address: 55th Floor, Evergrande Capital, Sanjiao Road, Heping Avenue, Wuchang District, Wuhan City, Hubei Province
Tel: 027-87123860 Fax: 027-87819960
Beijing Jintai (Wuhan) Law Firm
About Henan Lingrui Pharmaceutical Co., Ltd.
2024 Restricted Stock Incentive Plan Phase I
Restricted stock unlocking and stock listing
Special legal opinion
To: Henan Lingrui Pharmaceutical Co., Ltd.
Beijing Jintai (Wuhan) Law Firm (hereinafter referred to as the "firm") was entrusted by Henan Lingrui Pharmaceutical Co., Ltd. (hereinafter referred to as "Lingrui Pharmaceutical" or the "Company") to serve as the The special legal counsel for the 2024 Restricted Stock Incentive Plan (hereinafter referred to as the "Incentive Plan"), in accordance with the Company Law of the People's Republic of China (hereinafter referred to as the "Company Law"), the Securities Law of the People's Republic of China (hereinafter referred to as the "Securities Law"), and the China Securities Regulatory Commission (hereinafter referred to as the "Securities Law") my country's current laws, regulations and normative documents such as the "Measures for the Administration of Equity Incentives for Listed Companies" (hereinafter referred to as the "Management Measures") promulgated by the "China Securities Regulatory Commission"), as well as the "Articles of Association of Henan Lingrui Pharmaceutical Co., Ltd." (hereinafter referred to as the "Articles of Association") and "Henan Lingrui Pharmaceutical Co., Ltd. 2024" In accordance with the relevant provisions of the "Annual Restricted Stock Incentive Plan (Draft)" (hereinafter referred to as the "Incentive Plan"), this legal opinion is issued on the unlocking and stock listing of the first phase of the restricted stock of this incentive plan (hereinafter referred to as the "unlocking").
For the purpose of issuing this legal opinion, the handling lawyers of our firm (hereinafter referred to as the "lawyers of our firm") conducted necessary verification and verification of the legal documents and other documents and materials related to this unlocking provided by Lingrui Pharmaceutical in accordance with the currently effective laws and regulations as well as the requirements and regulations of the relevant regulations and normative documents of the China Securities Regulatory Commission. At the same time, our lawyers also reviewed and verified other legal documents and other documents and information that our lawyers believed were necessary to verify and verify the issuance of this legal opinion, and inquired relevant company personnel about relevant matters.
During the aforementioned review, verification and inquiry process, our lawyers have obtained the following commitments and guarantees from Lingrui Pharmaceutical: the documents and statements and explanations provided to our lawyers are complete, true and valid, the relevant originals and the signatures and seals on them are authentic, the relevant copies, photocopies and other materials are consistent with the originals, and all facts and documents that can affect this legal opinion have been disclosed to our firm, without any concealment or omission.
Our lawyers base their legal opinions on facts that have occurred or existed before the date of issuance of this legal opinion, and based on their understanding of the relevant facts and understanding of the relevant laws and regulations.
Our firm only issues legal opinions on legal issues related to this unlocking and does not comment on professional matters such as accounting audits, asset evaluations, credit ratings, financial internal controls, investments and business decisions. When this legal opinion refers to such content, it is strictly based on the reports issued by the relevant intermediaries or the company's documents. Such quotations do not indicate that the firm makes any express or implicit endorsement or guarantee of the authenticity and accuracy of the relevant data, conclusions, and considerations.
This legal opinion will only be used by Lingrui Pharmaceutical for the purpose of this unlocking and may not be used by anyone else for any other purpose. Our lawyers agree to regard this legal opinion as a necessary document for the company to implement this unlocking, and together with other materials, it will be announced in accordance with relevant regulations.
Our firm and our lawyers have the qualifications to issue legal opinions on the subject matters and are responsible for the legal opinions issued.
In accordance with the requirements of currently effective laws and regulations, and in accordance with the recognized business standards, ethics and diligence of the Chinese lawyer industry, our lawyers issue legal opinions on the subject matter as follows:
1. Approval and authorization of matters related to this unlocking
After verification by our lawyers, as of the date of issuance of this legal opinion, the company’s unlocking-related matters have received the following approvals and authorizations:
On November 29, 2024, the company held the twelfth meeting of the ninth board of directors, which reviewed and approved the "Proposal on the "Lingrui Pharmaceutical 2024 Restricted Stock Incentive Plan (Draft)" and its Summary, the "Proposal on the "Lingrui Pharmaceutical 2024 Restricted Stock Incentive Plan Implementation Assessment Management Measures" and the "Proposal on Requesting the General Meeting of Shareholders to Authorize the Board of Directors to Handle Matters Related to the Company's 2024 Restricted Stock Incentive Plan." Mr. Zhang Qinyu, the company’s independent director, collected voting rights from all shareholders on the proposals related to the incentive plan submitted to the shareholders’ meeting for consideration.
On November 29, 2024, the company held the 10th meeting of the ninth board of supervisors, and reviewed and approved the "Proposal on the "Lingrui Pharmaceutical 2024 Restricted Stock Incentive Plan (Draft)" and its Summary, the "Proposal on the "Lingrui Pharmaceutical 2024 Restricted Stock Incentive Plan Implementation Assessment Management Measures" and the "Proposal on Verifying the List of Incentive Objects of the Lingrui Pharmaceutical 2024 Restricted Stock Incentive Plan". The company's board of supervisors will review whether the company's implementation of this incentive plan is conducive to the sustainable development of the listed company, whether there are any circumstances that harm the interests of the listed company and shareholders, and the list of incentive targets, and issue written review opinions.
From November 29, 2024 to December 9, 2024, the company will publicize the list of incentive recipients within the company. As of the expiration of the publicity period, the company's Board of Supervisors has not received any objections to the proposed incentives. The Board of Supervisors verified the list of incentive objects and disclosed the "Announcement of the Supervisory Board of Henan Lingrui Pharmaceutical Co., Ltd. on the disclosure status and verification opinions of the list of incentive objects of the company's 2024 restricted stock incentive plan" on December 11, 2024.
On December 18, 2024, the company held the first extraordinary general meeting of shareholders in 2024, which reviewed and approved the "Proposal on the "Lingrui Pharmaceutical 2024 Restricted Stock Incentive Plan (Draft)" and its Summary, the "Proposal on the "Lingrui Pharmaceutical 2024 Restricted Stock Incentive Plan Implementation Assessment Management Measures" and the "Proposal on Requesting the General Meeting of Shareholders to Authorize the Board of Directors to Handle Matters Related to the Company's 2024 Restricted Stock Incentive Plan." At the same time, the company disclosed the "Self-examination Report of Henan Lingrui Pharmaceutical Co., Ltd. on the Purchase and Sale of Company Stocks by Insiders of the 2024 Restricted Stock Incentive Plan" based on the verification of insiders' buying and selling of the company's stocks.
On December 19, 2024, the company held the 13th meeting of the 9th board of directors and the 11th meeting of the 9th board of supervisors, and reviewed and approved the "Proposal on Granting Restricted Stocks to the Incentive Objects of the Company's 2024 Restricted Stock Incentive Plan". The Board of Supervisors issued an agreed verification opinion.
On January 9, 2025, the company completed the registration of the grant of this incentive plan. The actual number of incentive targets granted by this incentive plan was 9, and the total number of restricted stocks actually granted was 1,250,000 shares.
The Remuneration and Assessment Committee of the company’s board of directors verified relevant matters and believed that: according to the relevant provisions of the “Incentive Plan”, the unlocking conditions for the first phase of this incentive plan have been met. The qualifications of the nine incentive subjects unlocked this time are legal and valid, and they all meet the unlocking conditions. A total of 625,000 restricted stocks can be unlocked. The company's unlocking arrangement complies with the "Measures for the Management of Equity Incentives for Listed Companies" and other laws and regulations, normative documents and the relevant provisions of the "Articles of Association", and does not harm the interests of the company and all shareholders, especially small and medium-sized shareholders. Therefore, it is agreed that the company will handle matters related to the unlocking of restricted stocks for the nine incentive targets who meet the unlocking conditions in accordance with the provisions of the incentive plan, and agrees to submit this proposal to the board of directors for review.
On June 11, 2026, the company held the second meeting of the tenth board of directors, and reviewed and approved the "Proposal on the Achievement of Unlocking Conditions for the First Phase of the 2024 Restricted Stock Incentive Plan". It was considered that the unlocking conditions for the first phase of this incentive plan had been achieved, and it was agreed to unlock 9 eligible incentive targets, with the number of unlocked shares being 625,000 shares.
To sum up, our lawyers believe that as of the date of issuance of this legal opinion, the company has completed the necessary approval and authorization procedures for matters related to this unlocking, in compliance with the "Company Law", "Securities Law", "Administrative Measures" and other relevant laws, regulations, normative documents and the relevant provisions of the "Articles of Association" and "Incentive Plan", and timely disclosure of meeting documents and announcement documents related to the above matters. As matters related to this unlocking proceed, the company still needs to go through relevant unlocking procedures in accordance with relevant laws, regulations and normative documents.
2. Description and unlocking status of this unlocking condition achievement
(1) The sales restriction period has expired
According to the relevant provisions of the "2024 Restricted Stock Incentive Plan (Draft)" (hereinafter referred to as the "Incentive Plan"), the unlocking period for the restricted stocks granted under this incentive plan and the unlocking time schedule for each period are as follows:
Arrangements for lifting sales restrictions. Time for lifting sales restrictions. Ratio of lifting sales restrictions. The first time the restrictions are lifted. From the first trading day after 12 months from the date of completion of grant registration to the date of grant.
50%
The sale period ends on the last trading day within 24 months from the date of completion of registration.
The second lifting period shall be from the first trading day 24 months after the date of completion of grant registration to the date of grant registration.
50%
The sale period ends on the last trading day within 36 months from the date of completion of registration.
The registration completion date for the grant of this incentive plan is January 9, 2025. According to the relevant provisions of the "Incentive Plan", the first restricted period for the restricted shares granted by the company under this incentive plan has expired.
(2) Unlocking conditions have been achieved
According to the relevant provisions of the "Incentive Plan", the unlocking conditions for the first phase of this incentive plan have been met. The details are as follows:
Unlock conditions and achievements
(1) The company has not experienced any of the following situations:
The financial accounting report of the most recent fiscal year was issued a negative opinion or an audit report in which a certified public accountant was unable to express an opinion;
The internal control over financial reporting in the most recent fiscal year was certified by a certified public accountant.
There is no corresponding situation in the company that would satisfy the auditor to issue a negative opinion or an audit report that is unable to express an opinion;
conditions. 3. In the last 36 months after listing, there has been any failure to distribute profits in accordance with laws, regulations, articles of association, and public commitments;
Equity incentives are not allowed according to laws and regulations;
Other circumstances determined by the China Securities Regulatory Commission.
(2) None of the following circumstances have occurred to the incentive objects:
- Determined as an inappropriate candidate by the stock exchange in the last 12 months; 2. Determined as an inappropriate candidate by the China Securities Regulatory Commission and its dispatched agencies in the last 12 months;
No corresponding circumstances have occurred for the incentive objects, which meet the requirements of 3. In the past 12 months, they have been punished by the China Securities Regulatory Commission for major violations of laws and regulations.
Unlock conditions. and its dispatched agencies shall impose administrative penalties or take market entry ban measures;
Those who are prohibited from serving as company directors or senior managers as stipulated in the Company Law;
Not allowed to participate in equity incentives of listed companies according to laws and regulations;
Other circumstances determined by the China Securities Regulatory Commission.
(3) Company-level performance assessment requirements According to the 2025 audited capital incentive plan issued by Dahua Accounting Firm (Special General Partnership), the assessment year for the lifting of sales restrictions is 2025-2026
Report (Dahua Shenzi [2026] 0011008572) for two fiscal years, the performance assessment targets for 2025 are as shown in the following table:
No.), the company’s 2025 listing will be subject to the public release of restrictions on sales. Performance assessment indicators
After deducting non-recurring gains and losses, the company’s shareholders’ income in 2023 will be
Net profit was RMB 711.5495 million, thus being the first to be lifted
The net profit is the base number, and the net profit in 2025
Calculation excluding equity incentives and employee stockholding lock-up period
The growth rate is no less than 32%.
Net profit after the impact of planned share-based payment expenses
is 733.9882 million yuan, compared with the deduction in 2023. Note: The net profit in 2025 is based on the audited deduction attributable to shareholders of listed companies.
Non-net profit increased by 37.39%. After disclosing non-recurring profits and losses in the first period and excluding the cost of equity incentives and employee stock ownership plans for the year,
The performance appraisal indicators at the company level have been achieved.
The affected net profit is used as the basis for calculation.
(4) Individual-level performance appraisal requirements:
The individual level assessment of incentive targets shall be based on the company’s current salary and assessment
Organize and implement the relevant provisions of the review, which shall be determined based on the results of individual performance appraisals.
After comprehensive evaluation by the company, the proportion of 9 incentive targets who actually lifted the sales restrictions. The corresponding lifting coefficients are as follows:
The assessment results for 2025 are all 80 points based on individual assessment.
80 points (inclusive) 60 (inclusive)-80 60 points and above correspond to the first phase of unlocking system performance appraisal at the individual level
The scores above and below are all 100%.
score
Personal level solution
100% 80% 0%
Excluding sales restriction coefficient
According to the provisions of the "Incentive Plan" and based on the results of the company-level assessment and individual-level assessment in 2025, this
A total of 9 incentive objects meet the unlocking conditions, and 625,000 shares of restricted stock can be unlocked, as follows:
Can be unlocked this time
The actual number of restricted shares that have been granted and unlocked this time
Serial number Name Current position Number of votes received (10,000 shares) Volume (10,000 shares)
Award ratio (%) Wu Xizhen Party Committee Secretary 5 2.50 50
Zhao Zhijun Director 15 7.50 50
Chen Yan Director, Deputy General Manager 15 7.50 50
Pan Zirun Deputy General Manager 15 7.50 50
Feng Guoxin Director, Deputy General Manager 15 7.50 50
Director of Yingu Pharmaceutical
6 Wu Huibin 15 7.50 50
Chief, General Manager
7 Yu Peng Director, Financial Director 15 7.50 50 8 Ye Qiang Deputy General Manager 15 7.50 50 9 Li Lei Deputy General Manager 15 7.50 50Total 125 62.50 50
In summary, our lawyers believe that the conditions for unlocking the first phase of this incentive plan have been met and are in compliance with relevant laws, regulations, normative documents such as the Company Law, Securities Law, and Management Measures, as well as the relevant provisions of the Articles of Association and the Incentive Plan.
3. Listing and circulation arrangements for the restricted stocks unlocked this time and changes in capital structure
(1) The date of listing and circulation of the restricted stocks unlocked this time: June 17, 2026
(2) The number of restricted stocks unlocked this time is listed and circulated: 625,000 shares
(3) Locking and transfer restrictions on the restricted stocks unlocked by directors and senior managers this time
If the incentive targets are directors and senior managers of the company, the shares transferred each year during their term of office shall not exceed 25% of the total number of shares of the company held by them, and the shares of the company held by them shall not be transferred within six months after leaving the company.
If the incentive targets are directors and senior managers of the company, if they sell the company's stocks held by them within 6 months after buying them, or buy them again within 6 months after selling them, the proceeds will belong to the company, and the company's board of directors will take back the proceeds.
Incentive recipients must also comply with relevant regulations such as the "Interim Measures for the Management of Share Reductions by Shareholders of Listed Companies", the "Management Rules for the Shares of the Company Held by Directors and Senior Managers of Listed Companies and their Changes" and the "Shanghai Stock Exchange Self-Discipline Supervision Guidelines for Listed Companies No. 15 - Reduction of Shares by Shareholders, Directors and Senior Managers" when reducing the company's stock holdings.
During the validity period of this incentive plan, if the relevant provisions on the transfer of shares held by the company's directors and senior managers in the "Company Law", "Securities Law" and other relevant laws and regulations, normative documents and the "Articles of Association" change, then the transfer of the company stocks held by these incentive objects shall comply with the revised relevant provisions at the time of transfer.
(4) Changes in the company’s capital structure after the unlocking of restricted stocks
Category Before this change Number of changes After this change
Shares subject to sales restrictions 1,250,000 -625,000 625,000
Shares without selling restrictions 565,865,486 625,000 566,490,486
Total 567,115,486 567,115,486
4. Conclusions
To sum up, our lawyers believe that as of the date of issuance of this legal opinion, the company has fulfilled the necessary approval and authorization procedures for this unlocking; the conditions for unlocking this incentive plan have been met, and this unlocking complies with the relevant laws, regulations, normative documents such as the "Company Law", "Securities Law", "Administrative Measures" and the relevant provisions of the "Articles of Association" and "Incentive Plan"; the company has fulfilled its current information disclosure obligations in accordance with the law, and still needs to go through relevant unlocking procedures in accordance with the provisions of relevant laws, regulations and normative documents.
This legal opinion will take effect after it is stamped by the firm and signed by the person in charge of the firm and the lawyer of the firm. This legal opinion is made in triplicate, two copies shall be handed over to the company, and one copy shall be retained by the firm.
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