Trillion Market Capitalization is not a Dream

"Trillion market capitalization is not a dream ()"

The question raised by Zhou Wencheng is the same for the other 69 people who were motivated. Basically, they were unable to get more than 3.225 million yuan in cash on April 1, 2012.

This is a typical situation where you want to make money but don't want to invest capital yet. Now, Zhou Wencheng regarded it as a big problem and raised it clearly and seriously to Wen Pingmin, the general manager of the company's securities department.

Wen Pingmin, general manager of the securities department, said with a smile: "In principle, employees who exercise their options are required to find money to deposit into the stock account where they exercise their options.

But the current amount is indeed relatively large.

It depends on whether Boss Bai is willing to come forward to help solve the problem. "

Bai Qingting: "The issue of the exercise principal will not be discussed at this conference today. After the company issues a policy, it will be discussed with the 70 core backbones who are motivated by the options.

Zhou Wencheng, please ask other questions. "

Zhou Wencheng replied: "Okay, Boss Bai.

Mr. Wen, do I need to make any preparations when this option is exercised?

I have never had any contact with stocks. "

Wen Pingmin, general manager of the securities department, answered: “As an individual, you must first have a stock account.

Because our Western Construction Co., Ltd. is listed on the Shenzhen Stock Exchange, when you go to open an account, you must tell the company that opened the account for you and open a stock account on the Shenzhen Stock Exchange for you. "

Zhou Wencheng asked: "How can I open this stock account?"

Wen Pingmin, general manager of the securities department, answered: "Because you are a complete layman, I suggest you bring your personal ID card, a bank card with your name on one of the four major banks of China Construction Bank, and go to any well-known securities company that is convenient for you. The company's business office handles the opening of stock accounts.

After successfully opening an account, you can trade stocks.

You need to collect and save the account information after successful account opening.

When handling option exercise matters at the beginning of the year, the company will form a form document and send it to everyone to fill in their stock account information. "

Zhou Wencheng continued to ask: "Are there any other things to note during the account opening process? Mr. Wen."

Wen Pingmin, general manager of the securities department, answered: “There are still many things to do in the process of opening a stock account, including many agreements to be signed.

Just remember to go to the business office of a large and well-known securities company to open a stock account.

Because this matter needs to be done in person.

It is recommended that after today’s meeting, people on the option incentive list who do not have stock accounts should start opening their own accounts.

After opening it, you still need to transfer some money to the bound bank card, and then use the stock trading software to operate the bank-securities transfer, including bank transfer to securities, securities to bank, transfer inquiry and other functions, and familiarize yourself with the operations in advance.

Avoid exercising your rights when the time comes and you really don’t know what to do, which may be very troublesome. "

Zhou Wencheng replied: "Okay. Thank you, Mr. Wen. I have no problem."

Bai Qingting asked everyone again if they had any questions. No one asked any more questions about options. Wen Pingmin, general manager of the securities department, left the podium and returned to his seat in the conference room.

Bai Qingting: "I just used Zhou Wencheng as an example and only talked about his option profit amount in 2012.

Now let me take Zhou Wencheng as an example and continue to calculate for him the benefits he should receive after exercising his rights in 2013, 2014, and 2015.

Let's first calculate the estimated unit price per share.

In 2013, the output value indicator doubled to 8 billion, the market value was 160 billion, and the share price was 800 yuan.

In 2014, the output value indicator doubled to 16 billion, the market value was 320 billion, and the share price was 1,600 yuan.

In 2015, the output value indicator doubled to 32 billion, the market value was 640 billion, and the share price was 3,200 yuan.

I will then use April 1st of the exercise year as the exercise date to calculate how much profit will be calculated after the option is exercised?

The second exercise date of the first-phase option is April 1, 2013.

25,000 shares × (800-129) = 16.775 million yuan.

The third exercise date of the first-phase option is April 1, 2014, 25,000 shares × (1600-129) = 36.775 million yuan.

The fourth exercise date of the first-phase option is April 1, 2015, 25,000 shares × (3200-129) = 76.775 million yuan. "

Bai Qingting: “I was shocked by the calculated profit amount that I understood.

Please ask Wen Pingmin, general manager of the securities department, to explain my algorithm, is it correct? "

Wen Pingmin, the general manager of the securities department, stood up and answered: "Boss Bai, the number you calculated is based on the fact that when the output value doubles every year, the market value also doubles.

In fact, we cannot achieve such high precision in actual operation, nor can we achieve such ideal development.

In actual calculations, I have adjusted your stock price calculation. After years of trials, the accuracy is still quite high. "

Bai Qingting: "Then tell me how you adjusted your stock price calculation. I will calculate it again for Zhou Wencheng."

Wen Pingmin, general manager of the securities department, answered: "The second time the shares are multiplied by a coefficient of 0.6, the third time the stock price is multiplied by a coefficient of 0.4, and the fourth time the stock price is multiplied by a coefficient of 0.3."

Bai Qingting: "Okay, then I will help Zhou Wencheng calculate it.

The second exercise date of the first-phase option is April 1, 2013, 25,000 shares × (800 × 0.6-129) = 8.775 million yuan.

The third exercise date of the first-phase option is April 1, 2014, 25,000 shares × (1600 × 0.4-129) = 12.775 million yuan.

The fourth exercise date of the first-phase option is April 1, 2015, 25,000 shares × (3200 × 0.3-129) = 20.775 million yuan. "

Bai Qingting: "After adjusting the share coefficient, the calculated amount of profit after exercise of the option is not as shocking as before, but the amount is still very large.

Mr. Wen, how did you get these adjustment coefficients? "

Wen Pingmin, general manager of the securities department, replied: "Boss Bai, these coefficients are calculated based on the stock price changes of listed companies that I have experienced since I started working. There is no theoretical basis.

In other words, it can only be regarded as an empirical data.

For reference only. "

Bai Qingting: "Mr. Wen, you have been studying these data for many years.

What causes it? "

Wen Pingmin, general manager of the securities department, answered: "The stock price itself is very volatile. The unit price per share you originally calculated was actually the unit price per share corresponding to the peak of the market value last year, so it is a virtual High unit price.

It is impossible for the stock market value to double every year.

In addition, the exercise date selected is April 1 of each year, and the stock price at this time should not be the highest stock price that year.

The conversion coefficients of the stock unit prices I mentioned just now are the average coefficients obtained by studying the stock unit prices of many companies on the day of option exercise and the estimated highest stock unit price of the year, which has a certain reference value. "

Bai Qingting: "Well, if you put it this way, the reliability of the data calculated now is much higher.

Let’s look at the data again.

The first exercise date of the first-phase option is April 1, 2012, 25,000 shares × (400 × 0.75-129) = 4.275 million yuan.

The second exercise date of the first-phase option is April 1, 2013, 25,000 shares × (800 × 0.6-129) = 8.775 million yuan.

The third exercise date of the first-phase option is April 1, 2014, 25,000 shares × (1600 × 0.4-129) = 12.775 million yuan.

The fourth exercise date of the first-phase option is April 1, 2015, 25,000 shares × (3200 × 0.3-129) = 20.775 million yuan.

Assuming that all four options can be obtained, how much will it cost?

It is 427.5+877.5+1277.5+20.775 million yuan = 46.6 million yuan.

Oh my god, if these 70 employees who are motivated by options make a profit according to our estimated value, the person with the lowest level will receive a total of 46.6 million yuan in the fifth year.

So, in the future, these people cannot be beaten away or scolded, because the benefits are too great and too attractive.

It can be said that wages, bonuses, options, etc. at this level are among the best in the industry. Basically, our Western Construction Co., Ltd. has raised the treatment level of the entire industry. "

Bai Qingting initially explained the detailed rules of options: Western Construction Co., Ltd. first phase stock option incentive plan (draft)"

Kyoto City Junbisheng Law Firm

About "Occidental Construction Co., Ltd. First Phase Stock Option Incentive Plan"

(Draft)" Legal Opinion

Western Construction Co., Ltd.:

Kyoto Junbisheng Law Firm (hereinafter referred to as the "firm") is a law firm qualified to engage in legal business. Our firm accepts the entrustment of Western Construction Co., Ltd. (the "Company" or "Western Construction") to advise on the "Occidental Construction Co., Ltd. First Phase Stock Option Incentive Plan (Draft)" (hereinafter referred to as the "Incentive Plan (Draft)") and Act as a special legal advisor on related matters (hereinafter referred to as the "Incentive Plan" or "This Incentive Plan") and issue this legal opinion.

This legal opinion is based on the Company Law of the People's Republic of China (hereinafter referred to as the "Company Law"), the Securities Law of the People's Republic of China (hereinafter referred to as the "Securities Law"), and the China Securities Regulatory Commission (hereinafter referred to as the "Securities Law"). "China Securities Regulatory Commission") "Measures for the Administration of Equity Incentives of Listed Companies (Trial)" (hereinafter referred to as the "Management Measures"), "Memorandum No. 1 on Matters Related to Equity Incentives" (hereinafter referred to as "Memorandum No. 1"), "Memorandum No. 1" for Equity Incentives

Memorandum No. 2 on Matters Related to Incentives" (hereinafter referred to as "Memorandum No. 2") and "Matters Related to Equity Incentives"

Memo No. 3" (hereinafter referred to as "Memo No. 3") and other laws, regulations and normative documents.

In accordance with the requirements of relevant laws and regulations and the company's entrustment, our lawyers reviewed the legal compliance of this incentive plan, the legal procedures for implementation, information disclosure, and the impact of this incentive plan on the interests of the company and all shareholders, and other matters, and Based on our lawyers' understanding of the relevant facts and the law, we issue legal opinions on the facts that have occurred and existed before the date of issuance of this legal opinion. Our firm is only concerned with this incentive plan

express opinions on relevant legal issues and do not express opinions on non-legal professional matters such as accounting and auditing. Our firm does not have the appropriate qualifications to verify and evaluate such content.

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

This legal opinion will take effect after it is signed by the firm's handling lawyer and stamped with the firm's official seal. It can only be used by the company for this incentive plan and may not be used for any other purpose. Our lawyers agree that the company will use this legal opinion as an integral part of the application materials for this incentive plan, and will be responsible for the legal opinions issued in accordance with the law.

Our lawyers have verified and verified the documents and relevant facts provided by the company in accordance with the relevant legal provisions and the recognized business standards, ethics and diligence of the Chinese lawyer industry, and hereby issue this legal opinion as follows:

1. Legality and compliance of this incentive plan

(1) Qualifications of entities implementing this incentive plan

According to the "Business Enforcement of Enterprise Legal Persons" issued by the Beijing Municipal Administration for Industry and Commerce on January 3, 2001

(Registration No.: 1100000041XXXXX), the company is a joint-stock limited company (listed, natural person investment or holding) established on September 12, 1992.

According to the written explanation provided by the company and due verification by our lawyers, as of the date of issuance of this legal opinion, the company’s joint-stock company listed on the Shenzhen Stock Exchange does not need to be terminated in accordance with laws, regulations and the Articles of Association. ; There is no situation where a certified public accountant has issued a negative opinion or an audit report in which an opinion cannot be expressed on the financial accounting report of the most recent fiscal year, nor has there been any administrative penalty imposed by the China Securities Regulatory Commission due to major violations of laws and regulations in the recent year.

Based on the above, the company is a validly existing listed company, does not have the circumstances that prohibit the implementation of incentive plans as stipulated in Article 7 of the "Administrative Measures", and has the qualifications to implement incentive plans.

(2) Subject qualifications of incentive objects

1. Scope of incentive objects

According to the "Incentive Plan (Draft)", the incentive targets of this incentive plan are the company's key middle-level managers, a total of 75 people. The list of incentive targets is detailed in Appendix 1 of this legal opinion. According to the relevant documents provided by the company and due verification by our lawyers, the incentive objects have been confirmed by the company's board of directors and verified by the company's supervisory board.

2. Subject qualifications of incentive objects

According to the relevant documents provided by the company and due verification by our lawyers, the incentive targets are all Chinese nationals and have full capacity for civil conduct; the incentive targets have not been publicly condemned or declared as inappropriate personnel by the stock exchange in the past three years. Those who have been administratively punished by the China Securities Regulatory Commission for major violations of laws and regulations in the past three years are not prohibited from serving as directors, supervisors and senior managers of the company as stipulated in the Company Law; the incentive targets do not include independent directors and supervisors of the company, and Including major shareholders or actual controllers who hold more than 5% of the company's shares.

According to the written documents provided by the company and due verification by our lawyers, the incentive recipients have not participated in the stock option incentive plans of any other listed companies other than the company.

In summary, the incentive objects and the confirmation and verification methods of the incentive objects are in compliance with the provisions of Article 8 of the "Administrative Measures", Articles 2 and 7 of "Memorandum No. 1" and Article 1 of "Memorandum No. 2".

(3) Fund sources of incentive objects

According to the "Incentive Plan (Draft)", the incentive objects shall raise funds by themselves according to the sources of exercise funds stipulated in this incentive plan. The company shall not provide loans or any other form of financial assistance to the incentive objects to obtain relevant stock options in accordance with the stock option incentive plan. funding, including guarantees for its loans.

Accordingly, the source of funds for the incentive objects determined in this incentive plan complies with the provisions of Article 10 of the "Administration Measures".

(4) Source and number of stocks involved in this incentive plan

According to the "Incentive Plan (Draft)", the company granted incentive objects 2 million stock options. Each stock option has the right to purchase one Western Construction stock at the exercise price and exercise conditions on the exercise date within the validity period of the incentive plan. After the incentive plan is approved, the company will issue 2 million company shares to the incentive targets as the source of shares for this incentive plan. The total number of stock options to be granted under this incentive plan is 2 million, and the number of underlying stocks involved accounts for 2.66% of the company's total share capital of 75,121,950 shares. The type of underlying stocks involved is RMB A-share ordinary shares. The total number of shares involved in the cumulative stock options granted to any incentive subject shall not exceed 1% of the company's total share capital.

Accordingly, the source of stocks involved in this incentive plan complies with the provisions of Articles 2 and 11 of the "Administrative Measures", and the number of stocks involved in this incentive plan complies with the provisions of Article 12 of the "Administrative Measures".

(5) Main contents of the incentive plan

After verification by our lawyers, the "Incentive Plan (Draft)" consists of 14 parts, including: "The purpose of implementing the incentive plan", "The management organization of the stock option incentive plan", "The basis and scope of the incentive objects", " Source and number of shares of the stock option incentive plan", "Allocation of stock options", "Validity period of the incentive plan, grant date, vesting date, lock-up period of the underlying stock", "Stock option exercise price and determination of the exercise price" "Methods", "Conditions for granting and exercising stock options", "Financial calculations for implementing equity incentives", "Adjustment methods and procedures for incentive plans", "Stock option granting procedures and incentive object exercise procedures", "Company "Rights and Obligations of Incentive Objects", "Changes, Terminations and Other Matters of the Incentive Plan" and "Others", which cover various contents required to be stipulated or explained in the incentive plan in Article 13 of the "Administrative Measures" , and clearly explains the accounting treatment method for equity incentives, calculates and lists the impact of the implementation of the equity incentive plan on the performance of each period, and does not set the incentive objects that can accelerate the exercise of rights or unlock in advance when the listed company undergoes changes in control, mergers, divisions, etc. terms.

Accordingly, the main content of this incentive plan complies with Article 13 of the "Administrative Measures" and "Memo No. 3"

The provisions of Articles 2 and 4.

(6) Grant and exercise of stock options 1. Transferability of stock options

According to the "Incentive Plan (Draft)", stock options granted to incentive targets may not be transferred or used to guarantee or repay debts.

2. Validity period and vesting date of stock options

According to the "Incentive Plan (Draft)", the validity period of this incentive plan is six years from the date of grant of stock options. The stock options granted under this incentive plan can be exercised 12 months from the date of grant.