Sanhua Intelligent Control: Beijing Zhonglun Law Firm’s legal opinion on the adjustment of the repurchase price of Zhejiang Sanhua Intelligent Control Co., Ltd.’s 2024 restricted stock incentive plan
Beijing Zhonglun Law Firm
Legal Opinion on the Adjustment of the Repurchase Price for the 2024 Restricted Stock Incentive Plan of Zhejiang Sanhua Intelligent Control Co., Ltd.
September 2026
Beijing Zhonglun Law Firm
About Zhejiang Sanhua Intelligent Control Co., Ltd.
Adjustment of repurchase price under the 2024 restricted stock incentive plan
legal opinion
To: Zhejiang Sanhua Intelligent Control Co., Ltd.
Beijing Zhonglun Law Firm was entrusted by Zhejiang Sanhua Intelligent Control Co., Ltd. (hereinafter referred to as "Sanhua Intelligent Control" or the "Company") to serve as the special legal counsel for Sanhua Intelligent Control on matters related to the implementation of Zhejiang Sanhua Intelligent Control Co., Ltd.'s 2024 restricted stock incentive plan. Our lawyers are based on the Company Law of the People's Republic of China (hereinafter referred to as the "Company Law"), the Securities Law of the People's Republic of China (hereinafter referred to as the "Securities Law"), and the "Equity Equity of Listed Companies" issued by the China Securities Regulatory Commission (hereinafter referred to as the "China Securities Regulatory Commission"). Incentive Management Measures" (hereinafter referred to as the "Management Measures") and other relevant laws, regulations, normative documents and the "Articles of Association of Zhejiang Sanhua Intelligent Control Co., Ltd." (hereinafter referred to as the "Articles of Association"), Sanhua Intelligent Control shall, in accordance with the provisions of the "Zhejiang Sanhua Intelligent Control Co., Ltd. 2024 Restricted Stock Incentive Plan (Draft)" (hereinafter referred to as the "2024 Restricted Stock Incentive Plan") and issued a legal opinion (hereinafter referred to as the "Legal Opinion") on matters related to the adjustment of the repurchase price (hereinafter referred to as the "this adjustment").
In order to issue this legal opinion, our lawyers have verified and verified the relevant documents and facts of this adjustment in accordance with the provisions of relevant laws, regulations and normative documents and based on the principles of prudence and importance. Regarding this legal opinion, our lawyers make the following statement:
- During the course of work, our lawyers have received the guarantee from Sanhua Intelligent Control that the company has provided our lawyers with the original written materials, duplicate materials, scanned copies, photocopies and oral testimony that our lawyers believe are necessary for making legal opinions. The documents and materials provided are true, accurate and complete, and there is no concealment.
The legal opinion contains concealments, falsehoods and major omissions.
Our lawyers issue legal opinions based on the facts that have occurred or existed before the date of issuance of this legal opinion, the Company Law, the Securities Law and other current national laws, regulations, normative documents, and relevant provisions of the China Securities Regulatory Commission.
For facts that are crucial to this legal opinion but cannot be supported by independent evidence, our lawyers rely on certification documents issued by relevant government departments, Sanhua Intelligent Controls or other relevant units and publicly available information from the competent authorities as the basis for preparing this legal opinion.
The firm and its handling lawyers have strictly performed their statutory duties in accordance with the provisions of the Securities Law, the Administrative Measures for Law Firms Engaging in Securities Legal Business, the Rules for the Practice of Securities Legal Business of Law Firms (Trial), and the facts that have occurred or existed before the date of issuance of this legal opinion. Following the principles of diligence and good faith, we have conducted sufficient verification and verification to ensure that the facts identified in this legal opinion are true, accurate, and complete, and that the concluding opinions expressed are legal and accurate, and there are no false records, misleading statements, or major omissions, and we shall bear corresponding legal responsibilities.
This legal opinion only expresses legal opinions on this adjustment and related legal issues in China. Based on the principle of professional division of labor and due diligence, our lawyers perform the special duty of care of securities law professionals on domestic legal matters and perform the ordinary people's general duty of care on non-legal matters such as finance and accounting. When accounting and auditing content is involved in this legal opinion, it is quoted strictly in accordance with the professional documents issued by relevant intermediaries and the instructions of Sanhua Intelligent Control. This does not mean that our firm and our lawyers make any express or implied guarantee for the authenticity and accuracy of the quoted content. Our firm and our lawyers do not have the appropriate qualifications to verify and make judgments on these contents. When this legal opinion involves accounting, auditing matters, etc., it is quoted strictly in accordance with the professional documents issued by the relevant intermediaries and the instructions of Sanhua Intelligent Control.
Our lawyers agree to regard this legal opinion as a necessary legal document for this adjustment of Sanhua Intelligent Control.
This legal opinion is only for the purpose of this adjustment by Sanhua Intelligent Control and shall not be used for any other purpose.
Our legal opinions are as follows:
1. Approval and authorization of this adjustment
- On April 19, 2024, the 20th extraordinary meeting of the company’s seventh board of directors reviewed and approved the “Relevant
The legal opinions are on the "Proposal on the 2024 Restricted Stock Incentive Plan (Draft) of Zhejiang Sanhua Intelligent Control Co., Ltd." and its summary, "The Proposal on the Implementation Assessment and Management Measures for the 2024 Equity Incentive Plan of Zhejiang Sanhua Intelligent Control Co., Ltd." and the "Proposal on Proposing to the General Meeting of Shareholders to Authorize the Board of Directors to Handle Matters Related to the 2024 Equity Incentive Plan" and other related proposals.
On April 19, 2024, the 17th extraordinary meeting of the company's seventh session of the Supervisory Board reviewed and approved the "Proposal on the <Zhejiang Sanhua Intelligent Control Co., Ltd. 2024 Restricted Stock Incentive Plan (Draft)> and its Summary", the "Proposal on the <Zhejiang Sanhua Intelligent Control Co., Ltd. Co., Ltd. 2024 Equity Incentive Plan Implementation Assessment and Management Measures>" and the "Proposal on Verifying the <2024 Restricted Stock Incentive Plan List of Incentive Objects>" and other related proposals. The Board of Supervisors verified the list of incentive targets for this incentive plan and issued verification opinions.
From April 19, 2024 to April 29, 2024, the company announced the names and positions of the recipients of the incentives 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. On April 30, 2024, the company announced the "Board of Supervisors' Disclosure and Verification Opinions on the List of Incentive Objects of the 2024 Equity Incentive Plan".
On May 6, 2024, the company held the first extraordinary general meeting of shareholders in 2024, and reviewed and approved the "Proposal on the <Zhejiang Sanhua Intelligent Control Co., Ltd. Co., Ltd. 2024 Restricted Stock Incentive Plan (Draft)> and its Summary", the "Proposal on the <Zhejiang Sanhua Intelligent Control Co., Ltd. Co., Ltd. 2024 Equity Incentive Plan Implementation Assessment and Management Measures>" and the "Proposal on Requesting the General Meeting of Shareholders to Authorize the Board of Directors to Handle Matters Related to the 2024 Equity Incentive Plan".
On May 7, 2024, the company announced the "Self-examination Report of Zhejiang Sanhua Intelligent Control Co., Ltd. on the Purchase and Sale of Company Stocks by Insiders and Incentive Objects of the 2024 Equity Incentive Plan". Within six months before the first public disclosure of this incentive plan (hereinafter referred to as the "self-examination period"), no insiders and incentive objects were found to use the inside information related to this incentive plan to buy or sell the company's stocks or leak any inside information related to this incentive plan.
On May 13, 2024, the 22nd extraordinary meeting of the company's seventh board of directors and the 19th extraordinary meeting of the seventh board of supervisors reviewed and approved the "Proposal on Granting Restricted Stocks to the Incentive Objects of the Company's 2024 Restricted Stock Incentive Plan" and other proposals. The company's Supervisory Board verified the list of incentive objects involved in this incentive plan and issued verification opinions.
On June 3, 2024, the 23rd extraordinary meeting of the company’s 7th board of directors and the 20th extraordinary meeting of the 7th board of supervisors reviewed and approved the “About Adjustment of the Incentives Granted under the 2024 Restricted Stock Incentive Plan”
The Proposal on the List of Incentive Objects, Grant Quantity and Grant Price of the Legal Opinion, and the Proposal on Granting Restricted Stocks to Incentive Objects with Suspension of Grant in the Company’s 2024 Restricted Stock Incentive Plan, etc. The Company’s Supervisory Board has verified the above matters and issued verification opinions.
On July 10, 2025, the fifth extraordinary meeting of the company's eighth board of directors and the fourth extraordinary meeting of the eighth board of supervisors reviewed and approved the "Proposal on Adjusting the Repurchase Price of the 2024 Restricted Stock Incentive Plan" and the "Proposal on the Achievements of Lifting the First Restriction Period and Lifting the Restriction Conditions of the 2024 Restricted Stock Incentive Plan" and other proposals. The Remuneration and Appraisal Committee of the company's board of directors has issued an agreed opinion on the above matters, and the company's board of supervisors has issued a verification opinion.
On July 30, 2025, the sixth extraordinary meeting of the company’s eighth board of directors and the fifth extraordinary meeting of the eighth board of supervisors reviewed and approved the “Proposal on the Repurchase and Cancellation of Certain Restricted Stocks”. The Remuneration and Appraisal Committee of the company's board of directors issued a consent opinion, and the company's board of supervisors issued a verification opinion.
On June 30, 2026, the 18th extraordinary meeting of the company's eighth board of directors reviewed and approved the "Proposal on the Achievement of Lifting the Second Restriction Period and Removing the Restriction Conditions of the 2024 Restricted Stock Incentive Plan." The Remuneration and Appraisal Committee of the company's board of directors issued verification opinions on the above matters.
On July 17, 2026, the 19th extraordinary meeting of the company's eighth board of directors reviewed and approved the "Proposal on Adjusting the Repurchase Price of the 2024 Restricted Stock Incentive Plan" and the "Proposal on the Repurchase and Cancellation of Certain Restricted Stocks". The Remuneration and Appraisal Committee of the company's board of directors issued verification opinions on the above matters.
On September 21, 2026, the 22nd extraordinary meeting of the company's eighth board of directors reviewed and approved the "Proposal on Adjusting the Repurchase Price of the 2024 Restricted Stock Incentive Plan". The Remuneration and Appraisal Committee of the company's board of directors issued verification opinions on the above matters.
In summary, our lawyers believe that as of the date of issuance of this legal opinion, the company has obtained the necessary approvals and authorizations for this adjustment at this stage, and complies with relevant regulations such as the Company Law, Securities Law, Management Measures, Articles of Association, and the 2024 Restricted Stock Incentive Plan.
2. Adjustment of Repurchase Price of Restricted Stocks
(1) Reasons for adjustment
The first extraordinary shareholders' meeting of 2026 was held on September 15, 2026, and the "Company's 2026 Semi-annual Profit Distribution Plan" was reviewed and approved. It was agreed that based on the total share capital on the equity registration date for equity distribution minus the share balance of the company's repurchase account, a cash dividend of 1.20 yuan (tax included) will be distributed to all shareholders for every 10 shares. No bonus shares will be given, and no capital reserve will be converted into share capital.
legal opinion
According to the company's statement, the company will repurchase and cancel all restricted stocks that have been granted to some incentive targets in this incentive plan but have not yet been released after the mid-term A-share equity distribution in 2026.
According to the authorization of the company's first extraordinary general meeting of shareholders in 2024, the shareholders' meeting authorizes the board of directors to make corresponding adjustments to the repurchase price of restricted stocks in accordance with the methods stipulated in the "2024 Restricted Stock Incentive Plan" when the company issues dividends, transfer of capital reserves to share capital, distribution of stock dividends, stock splits or reductions, allotments, etc.
(2) Repurchase price adjustments
According to the provisions of the "2024 Restricted Stock Incentive Plan", if the company pays dividends, the adjustment method for the repurchase price is: P = P -V, where: P is the adjusted repurchase price per restricted stock; V is the dividend amount per share; P is the grant price per restricted stock or the repurchase price per restricted stock before this adjustment; after adjustment for dividends, P must still be greater than 1.
The repurchase price of the restricted stock incentive plan in 2024 after this adjustment is: P=11.00-0.1195545≈10.88 yuan/share.
To sum up, our lawyers believe that this adjustment complies with the relevant provisions of the "Administrative Measures" and the "2024 Restricted Stock Incentive Plan".
3. Conclusions
To sum up, our lawyers believe that: as of the date of issuance of this legal opinion, this adjustment has obtained the necessary approvals and authorizations at this stage, and is in compliance with the relevant provisions of the Company Law, Securities Law, Management Measures, Articles of Association, and the 2024 Restricted Stock Incentive Plan; this adjustment is in compliance with the relevant provisions of the Management Measures and the 2024 Restricted Stock Incentive Plan.
There are three original copies of this legal opinion, which will take effect after being stamped by our firm and signed by the attorney in charge.
(No text below)
Legal Opinion (This page has no text, but is the signed and sealed page of the "Legal Opinion of Beijing Zhonglun Law Firm on Adjustment of the Repurchase Price for the 2024 Restricted Stock Incentive Plan of Zhejiang Sanhua Intelligent Control Co., Ltd.")
Beijing Zhonglun Law Firm (stamped)
Person in charge: Handling lawyer:
Zhang Xuebing Mu Jingli’s handling lawyer:
Li Kefeng
September 21, 2026