RemeGen Co., Ltd. - Proxy Solicitation & Information Statement 2022

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to any aspect of this circular or as to the action to be taken, you should consult your stockbroker or other registered dealer in securities, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in RemeGen Co., Ltd.* (榮昌生物製藥(煙台)股份有限公司), you should at once hand this circular and the accompanying form of proxy to the purchaser or transferee or to the bank, stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee.

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this circular.

This circular appears for information purposes only and does not constitute an invitation or offer to acquire, purchase or subscribe for securities of the Company.

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RemeGen Co., Ltd.[*]

榮昌生物製藥（煙台）股份有限公司 (A joint stock company incorporated in the People’s Republic of China with limited liability) (Stock Code: 9995)

(1) PROPOSED ADOPTION OF THE 2022 A SHARE INCENTIVE SCHEME (2) PROPOSED ADOPTION OF THE ASSESSMENT MANAGEMENT MEASURES (3) PROPOSED ISSUE AND GRANT OF NEW A SHARES UNDER THE 2022 A SHARE INCENTIVE SCHEME PURSUANT TO THE SPECIFIC MANDATE (4) PROPOSED AUTHORIZATION TO THE BOARD TO HANDLE MATTERS PERTAINING TO THE 2022 A SHARE INCENTIVE SCHEME AND

(5) NOTICES OF THE EGM AND THE H SHARE CLASS MEETING

Notices convening the EGM and the H Share Class Meeting of RemeGen Co., Ltd.* (榮昌生物製藥(煙台)股份有限公司) to be held at 2:00 p.m. and 2:40 p.m. or immediately after the conclusion of the EGM and the 2022 first class meeting of A shareholders of the Company, respectively, on Wednesday, December 28, 2022 at MakerSpace, 3/F, Incubation Center, 60 Middle Beijing Road, Yantai Development Zone, Yantai Area of Shandong Pilot Free Trade Zone, PRC are set out in this circular. Forms of proxy for use at the EGM and the H Share Class Meeting are also enclosed. Such forms of proxy are also published on the websites of the Stock Exchange (www.hkexnews.hk) and the Company (www.remegen.cn).

Shareholders who intend to appoint a proxy to attend the EGM and/or the H Share Class Meeting shall complete and return the enclosed form(s) of proxy in accordance with the instructions printed thereon not less than 24 hours before the time fixed for holding the EGM and the H Share Class Meeting or any adjournment thereof (as the case may be). Completion and return of the form(s) of proxy will not preclude Shareholders from attending and voting in person at the EGM and/or the H Share Class Meeting if they so wish.

For identification purpose only

December 12, 2022

CONTENTS

	Page
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
LETTER FROM THE BOARD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
APPENDIX I — 2022 A SHARE INCENTIVE SCHEME . . . . . . . . . . . . . . . . . . . .	I-1
APPENDIX II — ASSESSMENT MANAGEMENT MEASURES . . . . . . . . . . . . .	II-1
NOTICE OF EGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	EGM-1
NOTICE OF H SHARE CLASS MEETING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	HCM-1

– i –

DEFINITIONS

In this circular, the following expression shall have the meanings set out below unless the context requires otherwise:

‘‘2022 A Share Incentive Scheme’’ or ‘‘Incentive Scheme’’
the 2022 Restricted A Share Incentive Scheme of the Company
‘‘Articles of Association’’
the Articles of Association of the Company
‘‘Assessment Management Measures’’
the Assessment Management Measures for the 2022 Restricted A Share Incentive Scheme of RemeGen Co., Ltd.* (榮昌生物製藥(煙台)股份有限公司2022年A股限制性股票激勵計劃實施考核管理辦法)
‘‘associate(s)’’
has the meaning ascribed to it under the Listing Rules
‘‘Attribution’’
the act of registering the Restricted Shares by the Company to the account of an Participant after the Attribution Conditions having been satisfied by the Participant
‘‘Attribution Conditions’’
the Attribution Conditions as stipulated under the Incentive Scheme which must be satisfied by a Participant in order to obtain the incentive shares
‘‘Attribution Date’’
the date on which the registration of the granted Restricted Shares is completed after the Attribution Conditions having been satisfied by a Participant, which must be a trading day
‘‘A Share(s)’’
the domestic RMB ordinary share(s) with a nominal value of RMB1.00 each in the share capital of the Company, which are listed on the Science and Technology Innovation Board of the Shanghai Stock Exchange
‘‘A Shareholder(s)’’
holder(s) of A Shares
‘‘A Share Class Meeting’’
the 2022 first class meeting of A Shareholders to be held on Wednesday, December 28, 2022 immediately after the conclusion of the EGM, or any adjournment thereof
‘‘A Share Offering’’
the initial public offering of A Shares of the Company on March 31, 2022
‘‘Board’’
the board of Directors
‘‘Class Meetings’’

the A Share Class Meeting and the H Share Class Meeting

– 1 –

DEFINITIONS

‘‘Company’’
RemeGen Co., Ltd.* (榮昌生物製藥(煙台)股份有限公司), a company incorporated in the PRC with limited liability, the H shares and A shares of which are listed on the Main Board of the Stock Exchange (stock code: 9995) and the Science and Technology Innovation Board of the Shanghai Stock Exchange (stock code: 688331), respectively, and if the context requires, includes branches and subsidiaries
‘‘Company Law’’

the Company Law of the People’s Republic of China (中華人民共和國公司法)

‘‘Connected Participant(s)’’
Participant(s) who is a connected person of the Company
‘‘connected person(s)’’
has the meaning ascribed to it under the Listing Rules
‘‘CSDC’’
China Securities Depository and Clearing Corporation Limited
‘‘CSRC’’ China Securities Regulatory Commission
‘‘Director(s)’’ the director(s) of the Company
‘‘de facto controller’’ has the meaning ascribed to it under the Company Law
‘‘EGM’’ the 2022 second extraordinary general meeting of the Company to be held on Wednesday, December 28, 2022 at 2:00 p.m., or any adjournment thereof
‘‘First Grant’’ the proposed first grant of not more than 2,869,450 Restricted Shares, representing approximately 80.15% of the total number of Restricted Shares under the Incentive Scheme
‘‘Grant Date’’ the date on which the Company grants the Restricted Shares to the Participants, which must be a trading day
‘‘Grant Price’’ the price of each Restricted Share granted to the Participants
‘‘Group’’ the Company and its subsidiaries
‘‘Guidelines for Self-discipline’’ the Guidelines for Self-discipline Supervision of Companies Listed on the STAR Market No. 4 — Disclosure of Information on Share Incentives (科創板上市公司自律監管指南第4號—股權激勵信息披露)
‘‘Hong Kong’’ the Hong Kong Special Administrative Region of the People’s Republic of China

– 2 –

DEFINITIONS

‘‘H Share Award and Trust Scheme’’
‘‘H Share(s)’’
‘‘H Shareholder(s)’’
‘‘H Share Class Meeting’’
‘‘HK$’’
‘‘Independent Shareholders’’
‘‘Latest Practicable Date’’
‘‘Listing Rules’’
‘‘Management Measures’’
‘‘Participant(s)’’ or ‘‘Incentive Participant(s)’’
the First H Share Award and Trust Scheme in its present or any amended form as adopted by the Company on March 23, 2021, with a maximum scheme limit of 7,347,550 H Shares, the details of which are set out in the Company’s announcement dated February 3, 2021 and the circular dated March 5, 2021
overseas listed foreign share(s) in the ordinary share capital of the Company with a nominal value of RMB1.00 each, which are listed on the Stock Exchange
holder(s) of H Shares
the 2022 first class meeting of H Shareholders to be held on Wednesday, December 28, 2022 at 2:40 p.m. or immediately after the conclusion of the EGM and A Share Class Meeting, or any adjournment thereof
Hong Kong dollars, the lawful currency of Hong Kong
Shareholders who are not required to abstain from voting on the relevant resolutions in relation to the Incentive Scheme and the issue and grant of the Restricted Shares by the Company under Specific Mandate. to be considered and, if thought fit, approved at the EGM and the Class Meetings
December 5, 2022, being the latest practicable date prior to the printing of this circular of ascertaining certain information
the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited
the Management Measures for Share Incentive Scheme Adopted by Listed Companies (上市公司股權激勵管理辦法)
the participant(s) of the 2022 A Share Incentive Scheme, including, certain Directors, senior management, core technical personnel of the Company and other employees that the Board considers necessary to be incentivised to receive the Restricted Shares, excluding Supervisors and independent non-executive Directors

– 3 –

DEFINITIONS

‘‘PRC’’ or ‘‘China’’
the People’s Republic of China, which, for the purpose of this circular, excludes Hong Kong, the Macau Special Administrative Region of the People’s Republic of China and Taiwan
‘‘Remuneration and Appraisal Committee’’
the remuneration and appraisal committee of the Board
‘‘Reserved Grant’’
the reserved grant of not more than 710,550 Restricted Shares, representing approximately 19.85% of the total number of Restricted Shares under the Incentive Scheme
‘‘Restricted Share(s)’’
the A Share(s) to be obtained in tranches and registered by the Participants who meet the conditions for grant under the Incentive Scheme after meeting the corresponding Attribution Conditions
‘‘RMB’’ Renminbi, the lawful currency of the PRC
‘‘Securities Law’’
the Securities Law of the People’s Republic of China (中華人民共和國證券法)
‘‘Share(s)’’
ordinary share(s) in the share capital of the Company, with a nominal value of RMB1.00 each, comprising A Shares and H Shares
‘‘Shareholder(s)’’ holder(s) of the Share(s)
‘‘Specific Mandate’’
the specific mandate to be sought from the Shareholders at the EGM and the Class Meetings to issue and allot not more than 3,580,000 A Shares as Restricted Shares under the Incentive Scheme
‘‘STAR Market Listing Rules’’
the Rules Governing the Listing of Stocks on the Science and Technology Innovation Board of Shanghai Stock Exchange
‘‘substantial shareholder’’ has the meaning ascribed to it under the Listing Rules
‘‘Supervisor(s)’’ supervisor(s) of the Company
‘‘Supervisory Committee’’ the supervisory committee of the Company
‘‘Stock Exchange’’ The Stock Exchange of Hong Kong Limited
‘‘%’’
percent
For identification purposes only

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LETTER FROM THE BOARD

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RemeGen Co., Ltd.[*]

榮昌生物製藥（煙台）股份有限公司

(A joint stock company incorporated in the People’s Republic of China with limited liability)

(Stock Code: 9995)

Executive Directors: Registered office, headquarters and Mr. Wang Weidong (Chairman) principal place of business in the PRC: Dr. Fang Jianmin 58 Middle Beijing Road Dr. He Ruyi Yantai Development Zone Mr. Lin Jian Yantai Area of Shandong Pilot Free Trade Zone PRC

Non-executive Directors: Dr. Wang Liqiang Dr. Su Xiaodi

Independent Non-executive Directors: Mr. Hao Xianjing Dr. Ma Lan Mr. Chen Yunjin

Principal place of business in Hong Kong: 40th Floor, Dah Sing Financial Centre No. 248 Queen’s Road East Wanchai Hong Kong

December 12, 2022

To the Shareholders:

Dear Sir/Madam,

(1) PROPOSED ADOPTION OF THE 2022 A SHARE INCENTIVE SCHEME

(2) PROPOSED ADOPTION

OF THE ASSESSMENT MANAGEMENT MEASURES

(3) PROPOSED ISSUE AND GRANT OF NEW A SHARES UNDER THE 2022 A SHARE INCENTIVE SCHEME PURSUANT TO THE SPECIFIC MANDATE

(4) PROPOSED AUTHORIZATION TO THE BOARD TO HANDLE MATTERS PERTAINING

TO THE 2022 A SHARE INCENTIVE SCHEME

AND

(5) NOTICES OF THE EGM AND THE H SHARE CLASS MEETING

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LETTER FROM THE BOARD

I. INTRODUCTION

Reference is made to the Company’s announcement dated October 16, 2022 in relation to, among others, (i) the proposed adoption of the 2022 A Share Incentive Scheme; (ii) the proposed adoption of the Assessment Management Measures; (iii) the proposed issue and grant of new A Shares under the 2022 A Share Incentive Scheme pursuant to the Specific Mandate; and (iv) the proposed authorization to the Board to handle matters pertaining to the 2022 A Share Incentive Scheme.

The purposes of this circular are to provide you with the notice of the EGM, the notice of the H Share Class Meeting and the information reasonably necessary to enable you to make an informed decision on whether to vote for or against at the EGM and the H Share Class Meeting.

II. PROPOSED ADOPTION OF THE 2022 A SHARE INCENTIVE SCHEME

Reference is made to the Company’s announcement dated October 16, 2022 in relation to, among others, the proposed adoption of the 2022 A Share Incentive Scheme and the proposed issue and grant of new A Shares under the 2022 A Share Incentive Scheme pursuant to the Specific Mandate.

To achieve and realize the purpose of the 2022 A Share Incentive Scheme as set out in the paragraph ‘‘(i) Purpose of the 2022 A Share Incentive Scheme’’ below, the Board passed the resolution on October 16, 2022 on the proposed adoption of the 2022 A Share Incentive Scheme. A special resolution will be proposed at the EGM and the Class Meetings to consider, and if thought fit, approve the adoption of the draft 2022 A Share Incentive Scheme.

The full text of the 2022 A Share Incentive Scheme is set out in Appendix I to this circular. The 2022 A Share Incentive Scheme was prepared in Chinese. In the event of any discrepancy between the English translation and the Chinese version of the 2022 A Share Incentive Scheme, the Chinese version shall prevail.

The principal terms of the 2022 A Share Incentive Scheme are summarized as follows:

(i) Purpose of the 2022 A Share Incentive Scheme

The purpose of the Incentive Scheme is to improve the Company’s long-term incentive mechanism, attract and retain outstanding personnel, fully mobilise the enthusiasm of the Company’s employees, effectively bond the interests of the Shareholders, the Company and the core teams together, and enable all parties to jointly pay attention to the long-term development of the Company.

(ii) Form and Source of the Restricted Shares to be Granted

The incentive instruments adopted in the Incentive Scheme are the Restricted Shares (Type II Restricted Shares). Based on different allocation principles, the Restricted Shares granted under the Incentive Scheme will be divided into Class A interests and

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LETTER FROM THE BOARD

Class B interests, which are different only in terms of time arrangement and assessment arrangement. Regardless of the interests, the source of all Restricted Shares under the Incentive Scheme is the A Shares to be issued to the Participants by the Company.

(iii) Total Number of the Restricted Shares to be Issued and Granted

The total number of Restricted Shares to be issued and granted to the Participants under the Incentive Scheme is 3,580,000 shares, representing approximately 0.6578% of the total shares of the Company of 544,263,003 Shares as at the Latest Practicable Date. More specifically:

(a) First Grant: 873,050 Restricted Shares of Class A interests and 1,996,400 Restricted Shares of Class B interests will be granted in the First Grant, totaling 2,869,450 Shares, representing approximately 0.5272% of the total shares of the Company of 544,263,003 Shares as at the Latest Practicable Date, and approximately 80.15% of the total Restricted Shares available under the Incentive Scheme; and
(b) Reserved Grant: 710,550 Restricted Shares will be reserved, representing approximately 0.1306% of the total shares of the Company of 544,263,003 Shares as at the Latest Practicable Date, and approximately 19.85% of the total Restricted Shares available under the Incentive Scheme.

As at the Latest Practicable Date, save for the H Share Award and Trust Scheme (which involves no issue of new shares or granting of option for any new securities of the Company), the Company has not adopted any other share schemes. The total number of underlying Shares involved in all share schemes of the Company (including the 2022 A Share Incentive Scheme and the H Share Award and Trust Scheme) will be 10,927,500 Shares, representing approximately 2.01% of the total shares of the Company of 544,263,003 Shares. As at the Latest Practicable Date, the total number of underlying Shares involved in all share schemes of the Company does not exceed 20% of the total shares of the Company as at the Latest Practicable Date. The number of Shares to be granted to any Participant under all share schemes of the Company does not exceed 1% of the total shares of the Company as at the Latest Practicable Date.

(iv) Participants of the 2022 A Share Incentive Scheme

(A) Basis for determining the Participants

(a) Legal basis for determining the Participants

The Participants are determined after taking into account the actual circumstances of the Company and in accordance with the Company Law, the Securities Law, the Management Measures, the STAR Market Listing Rules, the Guidelines for Self-discipline, the Listing Rules and the other relevant laws, regulations and regulatory documents, as well as the relevant provisions of the Articles of Association.

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LETTER FROM THE BOARD

(b) Functional basis for determining the Participants

The Participants include certain Directors, senior management, core technical personnel and other employees (excluding independent non-executive Directors and Supervisors) who the Board considers necessary to be incentivized. The list of the Participants eligible for the Incentive Scheme shall be prepared by the Remuneration and Appraisal Committee and verified and determined by the Supervisory Committee.

(B) Scope of the Participants

(a) The total number of Participants proposed for the First Grant under the Incentive Scheme is 188, representing approximately 10.91% of the total number of 1,723 employees of the Company as at December 31, 2021, including (1) certain Directors and senior management; (2) core technical personnel; and (3) other employees who the Board considers necessary to be incentivized.

Among the above Participants, the Directors must be elected at the general meeting of the Company and the senior management must be appointed by the Board. All Participants must have employment or labour relationship with the Company when the Company grants the Restricted Shares. If the circumstances of the Participants change before the actual grant of the Restricted Shares by the Board, the Board may make appropriate adjustments to the actual Participants.

(b) The Participants for the Reserved Grant shall be determined within 12 months from the date on which the Incentive Scheme is considered and approved at the EGM and the Class Meetings. Upon the proposal by the Board, the opinions of the independent non-executive Directors and the Supervisory Committee, the professional opinions of the lawyers and the issuance of legal opinions, the Company shall disclose the relevant information of the Participants on the designated website in a timely and accurate manner as required. If the Participants are not determined for more than 12 months, the reserved interests shall lapse. The basis for determining the Participants for the Reserved Grant shall be determined with reference to the basis of the First Grant.
(C) Persons who are prohibited to participate in the 2022 A Share Incentive Scheme

The Participants shall exclude Supervisors and independent non-executive Directors. Each of the Participants shall have satisfied the provisions in Article 8 of the Management Measures, namely not subject to any following circumstances:

(1) being identified as an inappropriate candidate by the Shanghai Stock Exchange in the most recent 12 months;

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LETTER FROM THE BOARD

(2) being identified as an inappropriate candidate by the CSRC or its delegated institutions in the most recent 12 months;
(3) subject to administrative penalties or market ban measures by the CSRC or its delegated institutions due to material non-compliance with laws and regulations in the most recent 12 months;
(4) being prohibited from acting as a director or a member of the senior management of a company under the Company Law;
(5) being prohibited from participation in share schemes of listed companies by laws and regulations; or
(6) other circumstances as determined by the CSRC.

(D) Allocation of Restricted Shares to be granted

The allocation of the Restricted Shares to be granted under the 2022 A Share Incentive Scheme is set out in the table below:

No. Name Nationality Position(s) I. Directors, Senior Management and Core Technical 1 Wang Weidong (王威東) China Chairman, executive Director 2 He Ruyi (何如意) United States Executive Director, core technical personnel 3 Lin Jian (林健) China Executive Director 4 Fu Daotian (傅道田) United States President, core technical personnel 5 Li Jia (李嘉) China Chief financial officer 6 Wen Qingkai (溫慶凱) China Board secretary Total	Class A interests Class B interests (0’000 shares) (0’000 shares) Personnel (6 persons) 35 0 2.42 0 1.485 0 2.2 0 1.485 0 1.815 0 44.405 0	Number of Restricted Shares to be granted (0’000 shares) 35 2.42 1.485 2.2 1.485 1.815 44.405	Percentage to the total number of Restricted Shares to be granted 9.78% 0.68% 0.41% 0.61% 0.41% 0.51% 12.40%	Percentage to the total shares of the Company as at the Latest Practicable Date 0.0643% 0.0044% 0.0027% 0.0040% 0.0027% 0.0033%
				0.0816%

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LETTER FROM THE BOARD

No. Name Nationality Position(s) II. Other Participants Other de facto controllers and their spouses, parents, children, shareholders individually or jointly holding 5% or more of the Company’s Shares (5 persons) Foreign employees (6 persons) Other employees considered by the Board to be incentivised (171 persons) Total of the First Grant (188 persons) III. Reserved Grant Total	Class A interests (0’000 shares) 5.885 10.615 26.4 87.305	Class B interests (0’000 shares) 1 0 198.64 199.64 71.055	Number of Restricted Shares to be granted (0’000 shares) 6.885 10.615 225.04 286.945	Percentage to the total number of Restricted Shares to be granted 1.92% 2.97% 62.86% 80.15% 19.85% 100.00%	Percentage to the total shares of the Company as at the Latest Practicable Date 0.0127% 0.0195% 0.4135%
					0.5272% 0.1306%
		358.000			0.6578%

Notes:

The number of Shares granted to any one of the above Participants through all effective share schemes of the Company does not exceed 1% of the total shares of the Company as at the Latest Practicable Date. As at the Latest Practicable Date, the total number of Shares under the Company’s effective share schemes does not exceed 20% of the total shares of the Company as at the Latest Practicable Date. If a Participant voluntarily renounces the grant for personal reasons, the Board shall adjust the number of grant accordingly and the Participant may reduce the amount of Restricted Shares subscribed due to insufficient funds when subscribing for Restricted Shares.
The aggregate number of issued Shares and Shares to be issued for the interests granted to any one of the Participant through all effective share schemes of the Company in the past 12 months does not exceed 0.1% of the relevant class of shares in issue of the Company as at the Latest Practicable Date.
Any difference in the total amount and the sum of the breakdowns in the above table is due to rounding.

(v) Grant Price and Basis of Determination of the Grant Price

(A) Grant Price of the Restricted Shares

The Grant Price of the Restricted Shares (including the Reserved Grant) shall be RMB36.36 per Share, which means that the Participants can purchase the A Shares issued by the Company to the Participants at the price of RMB36.36 per Share upon satisfaction of the Attribution Conditions.

In the event of any capitalisation issue, bonus issue, sub-division, rights issue or share consolidation of the Company in the period from the date of announcement of the Incentive Scheme (ie. October 16, 2022) to the completion of the Attribution

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LETTER FROM THE BOARD

of Restricted Shares to the Participants, the Grant Price or the number of Restricted Shares to be granted/attributed shall be adjusted in accordance with the relevant rules of the Incentive Scheme accordingly.

(B) Basis for determining the Grant Price

The Grant Price (including the Reserved Grant) was determined to be RMB36.36 per Share, which represents:

(1) approximately 63.16% of the average trading price of the A Shares on the trading day preceding the date of announcement of the Incentive Scheme being RMB57.57 per Share;
(2) approximately 70.45% of the average trading price of the A Shares for the 20 trading days preceding the date of announcement of the Incentive Scheme being RMB51.61 per Share;
(3) approximately 68.18% of the average trading price of the A Shares for the 60 trading days preceding the date of announcement of the Incentive Scheme being RMB53.33 per Share;
(4) approximately 80.00% of the average trading price of the A Shares for the 120 trading days preceding the date of announcement of the Incentive Scheme being RMB45.45 per Share.

(vi) Validity Period, Grant Date, Attribution Arrangements and Lock-up Period

(A) Validity period of the 2022 A Share Incentive Scheme

The 2022 A Share Incentive Scheme shall become effective upon the date of the First Grant and shall be valid until the date on which all Restricted Shares granted to the Participants have been attributed or lapsed, such period shall not exceed 84 months.

(B) Grant Date of the Restricted Shares

The Grant Date shall be determined by the Board after the Incentive Scheme is considered and approved at the EGM and the Class Meetings. The Company shall, within 60 days after the approval at the EGM and the Class Meetings, convene a Board meeting to make grants to the Participants under the First Grant in accordance with the relevant requirements, and complete the announcement(s) and other relevant procedures. If the Company fails to complete the above work within the 60-day period, it shall disclose the reasons for such failure and terminate the implementation of the Incentive Scheme, and the Restricted Shares that have not been granted shall lapse. According to the requirements of the Management Measures, the period during which a listed company shall not make grants is not counted within the 60 days.

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LETTER FROM THE BOARD

The Reserved Grant shall be made within 12 months after the Incentive Scheme is considered and approved at the EGM and the Class Meetings. If the Participants for the Reserved Grant are not determined within the 12-month period, the Reserved Grant shall lapse. The Reserved Grant, if lapsed, will not be regarded as utilised for the purpose of calculating the Scheme Mandate Limit, and the Company will not be required under the STAR Market Listing Rules or any other PRC laws to adjust the Scheme Mandate Limit. Therefore, the Scheme Mandate Limit shall remain unchanged if the Reserved Grant is lapsed.

The Grant Date must be a trading day and no grants shall be made during the following periods:

(a) The Company shall not grant the relevant interests after inside information has come to its knowledge until (and including) the trading day after the announcement of the relevant information. In particular, no such interest shall be granted within one month immediately before the earlier of:
(1) the date of the board meeting (as such date is first notified to the Stock Exchange under the Listing Rules) for approving any annual, half-year, quarterly or any other interim results of the Company (whether or not required under the Listing Rules); and
(2) the deadline by which the Company is required to announce its year or half-year results, or the deadline for announcing quarterly or any other interim results under the Listing Rules (whether or not required under the Listing Rules).

The relevant restrictions end on the date of the announcement of the results. No interest may be granted for the period during which the announcement of the results is delayed.

(b) Other periods as prescribed by the Shanghai Stock Exchange or the Stock Exchange.
(C) Attribution arrangements under 2022 A Share Incentive Scheme
(a) The Restricted Shares granted under the Incentive Scheme may be attributed in tranches as per the agreed proportions upon the Participants satisfying the corresponding Attribution Conditions. The Attribution Date must be a trading day, and the period during which Attribution is not permitted under the STAR Market Listing Rules or the Listing Rules is not included. The Restricted Shares granted to the Participants shall not be attributed in the following periods:
- (1) Within sixty (60) days and thirty (30) days prior to the announcement of the annual reports and of the semi-annual reports, respectively, and on the date of the announcement for the Company, or in the

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LETTER FROM THE BOARD

event of postponement in publishing the periodic reports for special reasons, thirty (30) days prior to the original announcement date and ending the day prior to the announcement date;

(2) Ten (10) days prior to the release of the Company’s quarterly reports, results forecast or preliminary report;
(3) From the date of a major event which may have a material impact on the trading price of the Company’s securities and derivatives or during the process of decision making until the date of legal disclosure of the same;
(4) Other periods stipulated by the Shanghai Stock Exchange or the Stock Exchange.

If the relevant regulations of the relevant stock exchanges regarding the attribution period change during the validity period of the Incentive Scheme, the Attribution Date shall comply with the relevant laws, regulations and regulatory documents after the amendment.

(b) The Restricted Shares to be granted under the Incentive Scheme have different Attribution arrangements for Class A and Class B interests respectively.
(1) The Restricted Shares of Class A interests shall be attributed in five tranches after 12 months from the Grant Date. The specific Attribution arrangement is as follows:

Class A interests

Percentage of the number of attributed interests to the total number of granted interests

Attribution to the total number arrangement Time of Attribution of granted interests First Attribution From the first trading day after 20% Period the expiry of 12 months following the Grant Date for the corresponding interest until the last trading day within the 24 months following the Grant Date for corresponding interest

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LETTER FROM THE BOARD

	Class A interests
		Percentage of
		the number of
		attributed interests
Attribution		to the total number
arrangement	Time of Attribution	of granted interests
Second Attribution	From the first trading day after	20%
Period	the expiry of 24 months
	following the Grant Date for
	the corresponding interest until
	the last trading day within the
	36 months following the Grant
	Date for corresponding interest
Third Attribution	From the first trading day after	20%
Period	the expiry of 36 months
	following the Grant Date for
	the corresponding interest until
	the last trading day within the
	48 months following the Grant
	Date for corresponding interest
Fourth Attribution	From the first trading day after	20%
Period	the expiry of 48 months
	following the Grant Date for
	the corresponding interest until
	the last trading day within the
	60 months following the Grant
	Date for corresponding interest
Fifth Attribution	From the first trading day after	20%
Period	the expiry of 60 months
	following the Grant Date for
	the corresponding interest until
	the last trading day within the
	72 months following the Grant
	Date for corresponding interest

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LETTER FROM THE BOARD

(2) The Restricted Shares of Class B interests shall be attributed in four tranches after 24 months from the Grant Date. The specific Attribution arrangement is as follows:

Class B interests

	Class B interests
		Percentage of
		the number of
		attributed interests
Attribution		to the total number
arrangement	Time of Attribution	of granted interest
First Attribution	From the first trading day after	20%
Period	the expiry of 24 months
	following the Grant Date for
	the corresponding interest until
	the last trading day within the
	36 months following the Grant
	Date for corresponding interest
Second Attribution	From the first trading day after	40%
Period	the expiry of 36 months
	following the Grant Date for
	the corresponding interest until
	the last trading day within the
	48 months following the Grant
	Date for corresponding interest
Third Attribution	From the first trading day after	20%
Period	the expiry of 48 months
	following the Grant Date for
	the corresponding interest until
	the last trading day within the
	60 months following the Grant
	Date for corresponding interest
Fourth Attribution	From the first trading day after	20%
Period	the expiry of 60 months
	following the Grant Date for
	the corresponding interest until
	the last trading day within the
	72 months following the Grant
	Date for corresponding interest

Restricted Shares that are not attributed within the above-mentioned agreed period or that cannot be applied for Attribution for that period due to failure to meet the Attribution Conditions shall not be attributed and shall lapse.

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LETTER FROM THE BOARD

Prior to the Attribution, the Restricted Shares granted to the Participants shall not be transferred or used to guarantee or repay debts. For the Restricted Shares granted to the Participants but not yet attributed, Shares increased due to capitalisation issue, bonus issue, etc. are also subject to the Attribution Conditions, and shall not be transferred or used to guarantee or repay debts. Where the Restricted Shares are not allowed to be attributed at that time, Shares obtained for the aforementioned reasons shall also not be attributed.

(vii) Conditions for Grant and Attribution of Restricted Shares

(A) Conditions for grant of the Restricted Shares

The Company shall grant the Restricted Shares to the Participants upon satisfaction of all of the following grant conditions; or conversely, if any of the following grant conditions has not been satisfied, no Restricted Shares shall be granted to the Participants.

(a) None of the following has occurred on the part of the Company:
(1) an audit report on the financial and accounting report for the most recent financial year in which a certified public accountant issued an adverse opinion or was unable to express an opinion;
(2) an audit report on internal control over financial reporting for the most recent financial year in which a certified public accountant issued an adverse opinion or was unable to express an opinion;
(3) in the most recent 36 months upon listing, there have been cases of failure to distribute profits according to laws and regulations, the Articles of Association and public undertakings;
(4) laws and regulations stipulate that equity incentives shall not be implemented;
(5) other circumstances as determined by the CSRC.
(b) None of the following has occurred on the part of the Participant:
(1) being identified as an inappropriate candidate by the Shanghai Stock Exchange within the most recent 12 months;
(2) being identified as an inappropriate candidate by the CSRC and its delegated institutions within the most recent 12 months;
(3) subject to administrative penalties or market ban measures by the CSRC and its delegated institutions due to material non-compliance with laws and regulations within the most recent 12 months;

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LETTER FROM THE BOARD

(4) being prohibited from acting as a director or a member of the senior management of a company under the Company Law;
(5) being prohibited from participation in share schemes of listed companies by laws and regulations;
(6) other circumstances as determined by the CSRC.

(B) Attribution Conditions of the Restricted Shares

The following Attribution Conditions shall be satisfied before Restricted Shares granted to the Participants are attributed in tranches:

(a) None of the following has occurred on the part of the Company:
(1) an audit report on the financial and accounting report for the most recent financial year in which a certified public accountant issued an adverse opinion or was unable to express an opinion;
(2) an audit report on internal control over financial reporting for the most recent financial year in which a certified public accountant issued an adverse opinion or was unable to express an opinion;
(3) in the most recent 36 months upon listing, there have been cases of failure to distribute profits according to laws and regulations, the Articles of Association and public undertakings;
(4) laws and regulations stipulate that equity incentives shall not be implemented;
(5) other circumstances as determined by the CSRC.
(b) None of the following has occurred on the part of the Participant:
(1) being identified as an inappropriate candidate by the Shanghai Stock Exchange within the most recent 12 months;
(2) being identified as an inappropriate candidate by the CSRC and its delegated institutions within the most recent 12 months;
(3) subject to administrative penalties or market ban measures by the CSRC and its delegated institutions due to material non-compliance with laws and regulations in the most recent 12 months;
(4) being prohibited from acting as a director or a member of the senior management of a company under the Company Law;
(5) being prohibited from participation in share schemes of listed companies by laws and regulations;

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LETTER FROM THE BOARD

(6) other circumstances as determined by the CSRC.

In the event that any one of the circumstances specified in the above subparagraph (a) arises, the Restricted Shares that have been granted but have not yet been attributed to all of the Participants under the Incentive Scheme shall not be attributed and shall lapse. In the event that the Restricted Shares shall not be granted to a Participant as specified in the above subparagraph (b), the Restricted Shares that have been granted but have not yet been attributed to such Participant shall not be attributed and shall lapse.

(c) The relevant Participant satisfies the requirements on length of employment in each Attribution period, namely before each tranche of Restricted Shares granted to a Participant is attributed, the length of employment of the Participant must be more than 12 months in the Company.
(d) Performance assessment requirements at the Company level

According to the Assessment Management Measures, the performance assessment at the Company level of the Incentive Scheme sets different appraisal arrangements for Class A interests and Class B interests.

(1) First Grant
① The assessment years of the First Grant of the Class A interests shall be for the five accounting years from 2022 to 2026, and the Company’s performance shall be assessed once in each accounting year. The performance assessment targets for each year are set out in the table below:

		Class A interests	Class A interests
		Performance assessment	Performance assessment	Performance assessment
Attribution	Assessment	target A	target B	target C
arrangements	year	100% of company	80% of company	70% of company
		Attribution	Attribution	Attribution
First Attribution	2022	The Company satisfies any	The Company satisfies any	The Company satisfies any
Period		one of the following	one of the following	one of the following
		conditions:	conditions:	conditions:
		1. The total revenue of the	1. The total revenue of the	1. The total revenue of the
		Group for 2022 shall not	Group for 2022 shall not	Group for 2022 shall not
		be less than RMB750	be less than RMB700	be less than RMB650
		million	million	million
		2. In 2022, the Group shall	2. In 2022, the Group shall	2. In 2022, the Group shall
		launch 6 new clinical trials	launch 5 new clinical trials	launch 4 new clinical trials
		(including I-III phase	(including I-III phase	(including I-III phase
		clinical trials, achieving the	clinical trials, achieving the	clinical trials, achieving the
		first patient enrolment)	first patient enrolment)	first enrolment)

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LETTER FROM THE BOARD

		Class A interests	Class A interests
		Performance assessment	Performance assessment	Performance assessment
Attribution	Assessment	target A	target B	target C
arrangements	year	100% of company	80% of company	70% of company
		Attribution	Attribution	Attribution
Second Attribution	2023	The Company satisfies any	The Company satisfies any	The Company satisfies any
Period		one of the following	one of the following	one of the following
		conditions:	conditions:	conditions:
		1. From 2022 to 2023, the	1. From 2022 to 2023, the	1. From 2022 to 2023, the
		total revenue of the Group	total revenue of the Group	total revenue of the Group
		shall not be less than	shall not be less than	shall not be less than
		RMB2 billion	RMB1.8 billion	RMB1.6 billion
		2. From 2022 to 2023, the	2. From 2022 to 2023, the	2. From 2022 to 2023, the
		Group shall launch a total	Group shall launch a total	Group shall launch a total
		of 12 new clinical trials	of 10 new clinical trials	of 8 new clinical trials
		(including I-III phase	(including I-III phase	(including I-III phase
		clinical trials, achieving the	clinical trials, achieving the	clinical trials, achieving the
		first patient enrolment)	first patient enrolment)	first patient enrolment)
Third Attribution	2024	The Company satisfies any	The Company satisfies any	The Company satisfies any
Period		one of the following	one of the following	one of the following
		conditions:	conditions:	conditions:
		1. From 2022 to 2024, the	1. From 2022 to 2024, the	1. From 2022 to 2024, the
		total revenue of the Group	total revenue of the Group	total revenue of the Group
		shall not be less than	shall not be less than	shall not be less than
		RMB4 billion	RMB3.6 billion	RMB3.3 billion
		2. From 2022 to 2024, the	2. From 2022 to 2024, the	2. From 2022 to 2024, the
		Group shall launch a total	Group shall launch a total	Group shall launch a total
		of 20 new clinical trials	of 17 new clinical trials	of 14 new clinical trials
		(including I-III phase	(including I-III phase	(including I-III phase
		clinical trials, achieving the	clinical trials, achieving the	clinical trials, achieving the
		first patient enrolment)	first patient enrolment)	first patient enrolment)
Fourth Attribution	2025	The Company satisfies any	The Company satisfies any	The Company satisfies any
Period		one of the following	one of the following	one of the following
		conditions:	conditions:	conditions:
		1. From 2022 to 2025, the	1. From 2022 to 2025, the	1. From 2022 to 2025, the
		total revenue of the Group	total revenue of the Group	total revenue of the Group
		shall not be less than	shall not be less than	shall not be less than
		RMB7 billion	RMB6.5 billion	RMB6 billion
		2. From 2022 to 2025, the	2. From 2022 to 2025, the	2. From 2022 to 2025, the
		Group shall launch a total	Group shall launch a total	Group shall launch a total
		of 28 new clinical trials	of 24 new clinical trials	of 20 new clinical trials
		(including I-III phase	(including I-III phase	(including I-III phase
		clinical trials, achieving the	clinical trials, achieving the	clinical trials, achieving the
		first patient enrolment)	first patient enrolment)	first patient enrolment)

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LETTER FROM THE BOARD

		Class A interests	Class A interests
		Performance assessment	Performance assessment	Performance assessment
Attribution	Assessment	target A	target B	target C
arrangements	year	100% of company	80% of company	70% of company
		Attribution	Attribution	Attribution
Fifth Attribution	2026	The Company satisfies any	The Company satisfies any	The Company satisfies any
Period		one of the following	one of the following	one of the following
		conditions:	conditions:	conditions:
		1. From 2022 to 2026, the	1. From 2022 to 2026, the	1. From 2022 to 2026, the
		total revenue of the Group	total revenue of the Group	total revenue of the Group
		shall not be less than	shall not be less than	shall not be less than
		RMB11 billion	RMB10 billion	RMB9 billion
		2. From 2022 to 2026, the	2. From 2022 to 2026, the	2. From 2022 to 2026, the
		Group shall launch a total	Group shall launch a total	Group shall launch a total
		of 36 new clinical trials	of 31 new clinical trials	of 26 new clinical trials
		(including I-III phase	(including I-III phase	(including I-III phase
		clinical trials, achieving the	clinical trials, achieving the	clinical trials, achieving the
		first patient enrolment)	first patient enrolment)	first patient enrolment)

Note: The above ‘‘revenue’’ is calculated based on the data set out in the consolidated statements audited by the accounting firm engaged by the Company, excluding the overseas licencing income of telitacicept.

② The assessment year for the First Grant of the Class B interests shall be the four accounting years from 2023 to 2026, which shall be assessed once in each accounting year. The performance assessment targets for each year are set out in the table below:

		Class B interests	Class B interests
		Performance assessment	Performance assessment	Performance assessment
Attribution	Assessment	target A	target B	target C
arrangements	year	100% of company	80% of company	70% of company
		Attribution	Attribution	Attribution
First Attribution	2023	The Company satisfies any	The Company satisfies any	The Company satisfies any
Period		one of the following	one of the following	one of the following
		conditions:	conditions:	conditions:
		1. From 2022 to 2023, the	1. From 2022 to 2023, the	1. From 2022 to 2023, the
		total revenue of the Group	total revenue of the Group	total revenue of the Group
		shall not be less than	shall not be less than	shall not be less than
		RMB2 billion	RMB1.8 billion	RMB1.6 billion
		2. From 2022 to 2023, the	2. From 2022 to 2023, the	2. From 2022 to 2023, the
		Group shall a total of 12	Group shall launch a total	Group shall launch a total
		new clinical trials	of 10 new clinical trials	of 8 new clinical trials
		(including I-III phase	(including I-III phase	(including I-III phase
		clinical trials, achieving the	clinical trials, achieving the	clinical trials, achieving the
		first patient enrolment)	first patient enrolment)	first patient enrolment)

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LETTER FROM THE BOARD

		Class B interests	Class B interests
		Performance assessment	Performance assessment	Performance assessment
Attribution	Assessment	target A	target B	target C
arrangements	year	100% of company	80% of company	70% of company
		Attribution	Attribution	Attribution
Second Attribution	2024	The Company satisfies any	The Company satisfies any	The Company satisfies any
Period		one of the following	one of the following	one of the following
		conditions:	conditions:	conditions:
		1. From 2022 to 2024, the	1. From 2022 to 2024, the	1. From 2022 to 2024, the
		total revenue of the Group	total revenue of the Group	total revenue of the Group
		shall not be less than	shall not be less than	shall not be less than
		RMB4 billion	RMB3.6 billion	RMB3.3 billion
		2. From 2022 to 2024, the	2. From 2022 to 2024, the	2. From 2022 to 2024, the
		Group shall launch a total	Group shall launch a total	Group shall launch a total
		of 20 new clinical trials	of 17 new clinical trials	of 14 new clinical trials
		(including I-III phase	(including I-III phase	(including I-III phase
		clinical trials, achieving the	clinical trials, achieving the	clinical trials, achieving the
		first patient enrolment)	first patient enrolment)	first patient enrolment)
Third Attribution	2025	The Company satisfies any	The Company satisfies any	The Company satisfies any
Period		one of the following	one of the following	one of the following
		conditions:	conditions:	conditions:
		1. From 2022 to 2025, the	1. From 2022 to 2025, the	1. From 2022 to 2025, the
		total revenue of the Group	total revenue of the Group	total revenue of the Group
		shall not be less than	shall not be less than	shall not be less than
		RMB7 billion	RMB6.5 billion	RMB6 billion
		2. From 2022 to 2025, the	2. From 2022 to 2025, the	2. From 2022 to 2025, the
		Group shall launch a total	Group shall launch a total	Group shall launch a total
		of 28 new clinical trials	of 24 new clinical trials	of 20 new clinical trials
		(including I-III phase	(including I-III phase	(including I-III phase
		clinical trials, achieving the	clinical trials, achieving the	clinical trials, achieving the
		first patient enrolment)	first patient enrolment)	first patient enrolment)
Fourth Attribution	2026	The Company satisfies any	The Company satisfies any	The Company satisfies any
Period		one of the following	one of the following	one of the following
		conditions:	conditions:	conditions:
		1. From 2022 to 2026, the	1. From 2022 to 2026, the	1. From 2022 to 2026, the
		total revenue of the Group	total revenue of the Group	total revenue of the Group
		shall not be less than	shall not be less than	shall not be less than
		RMB11 billion	RMB10 billion	RMB9 billion
		2. From 2022 to 2026, the	2. From 2022 to 2026, the	2. From 2022 to 2026,, the
		Group shall launch a total	Group shall launch a total	Group shall launch a total
		of 36 new clinical trials	of 31 new clinical trials	of 26 new clinical trials
		(including I-III phase	(including I-III phase	(including I-III phase
		clinical trials, achieving the	clinical trials, achieving the	clinical trials, achieving the
		first patient enrolment)	first patient enrolment)	first patient enrolment)

Note: The above ‘‘revenue’’ is calculated based on the data set out in the consolidated financial statements audited by the accounting firm engaged by the Company, excluding the overseas licencing income of telitacicept.

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LETTER FROM THE BOARD

(2) Reserved Grant

① The assessment years of the Restricted Shares of Class A interests under the Reserved Grant shall be the five accounting years from 2023 to 2027, and the Company shall be assessed once in each accounting year. The performance assessment targets for each year are set out in the table below:

		Class A interests	Class A interests
		Performance assessment	Performance assessment	Performance assessment
Attribution	Assessment	target A	target B	target C
arrangements	year	100% of company	80% of company	70% of company
		Attribution	Attribution	Attribution
First Attribution	2023	The Company satisfies any	The Company satisfies any	The Company satisfies any
period under		one of the following	one of the following	one of the following
the Reserved		conditions:	conditions:	conditions:
Grant		1. From 2022 to 2023, the	1. From 2022 to 2023, the	1. From 2022 to 2023, the
		total revenue of the Group	total revenue of the Group	total revenue of the Group
		shall not be less than	shall not be less than	shall not be less than
		RMB2 billion	RMB1.8 billion	RMB1.6 billion
		2. From 2022 to 2023, the	2. From 2022 to 2023, the	2. From 2022 to 2023, the
		Group shall launch a total	Group shall launch a total	Group shall launch a total
		of 12 new clinical trials	of 10 new clinical trials	of 8 new clinical trials
		(including I-III phase	(including I-III phase	(including I-III phase
		clinical trials, achieving the	clinical trials, achieving the	clinical trials, achieving the
		first patient enrolment)	first patient enrolment)	first patient enrolment)
Second Attribution	2024	The Company satisfies any	The Company satisfies any	The Company satisfies any
period under		one of the following	one of the following	one of the following
the Reserved		conditions:	conditions:	conditions:
Grant		1. From 2022 to 2024, the	1. From 2022 to 2024, the	1. From 2022 to 2024, the
		total revenue of the Group	total revenue of the Group	total revenue of the Group
		shall not be less than	shall not be less than	shall not be less than
		RMB4 billion	RMB3.6 billion	RMB3.3 billion
		2. From 2022 to 2024, the	2. From 2022 to 2024, the	2. From 2022 to 2024, the
		Group shall launch a total	Group shall launch a total	Group shall launch a total
		of 20 new clinical trials	of 17 new clinical trials	of 14 new clinical trials
		(including I-III phase	(including I-III phase	(including I-III phase
		clinical trials, achieving the	clinical trials, achieving the	clinical trials, achieving the
		first patient enrolment)	first patient enrolment)	first patient enrolment)
Third Attribution	2025	The Company satisfies any	The Company satisfies any	The Company satisfies any
period under		one of the following	one of the following	one of the following
the Reserved		conditions:	conditions:	conditions:
Grant		1. From 2022 to 2025, the	1. From 2022 to 2025, the	1. From 2022 to 2025, the
		total revenue of the Group	total revenue of the Group	total revenue of the Group
		shall not be less than	shall not be less than	shall not be less than
		RMB7 billion	RMB6.5 billion	RMB6 billion
		2. From 2022 to 2025, the	2. From 2022 to 2025, the	2. From 2022 to 2025, the
		Group shall launch a total	Group shall launch a total	Group shall launch a total
		of 28 new clinical trials	of 24 new clinical trials	of 20 new clinical trials
		(including I-III phase	(including I-III phase	(including I-III phase
		clinical trials, achieving the	clinical trials, achieving the	clinical trials, achieving the
		first patient enrolment)	first patient enrolment)	first patient enrolment)

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LETTER FROM THE BOARD

		Class A interests	Class A interests
		Performance assessment	Performance assessment	Performance assessment
Attribution	Assessment	target A	target B	target C
arrangements	year	100% of company	80% of company	70% of company
		Attribution	Attribution	Attribution
Fourth Attribution	2026	The Company satisfies any	The Company satisfies any	The Company satisfies any
period under		one of the following	one of the following	one of the following
the Reserved		conditions:	conditions:	conditions:
Grant		1. From 2022 to 2026, the	1. From 2022 to 2026, the	1. From 2022 to 2026, the
		total revenue of the Group	total revenue of the Group	total revenue of the Group
		shall not be less than	shall not be less than	shall not be less than
		RMB11 billion	RMB10 billion	RMB9 billion
		2. From 2022 to 2026, the	2. From 2022 to 2026, the	2. From 2022 to 2026, the
		Group shall launch a total	Group shall launch a total	Group shall launch a total
		of 36 new clinical trials	of 31 new clinical trials	of 26 new clinical trials
		(including I-III phase	(including I-III phase	(including I-III phase
		clinical trials, achieving the	clinical trials, achieving the	clinical trials, achieving the
		first patient enrolment)	first patient enrolment)	first patient enrolment)
Fifth Attribution	2027	The Company satisfies any	The Company satisfies any	The Company satisfies any
period under		one of the following	one of the following	one of the following
the Reserved		conditions:	conditions:	conditions:
Grant		1. From 2022 to 2027, the	1. From 2022 to 2027, the	1. From 2022 to 2027, the
		total revenue shall not be	total revenue shall not be	total revenue shall not be
		less than RMB16 billion	less than RMB15 billion	less than RMB14 billion
		2. From 2022 to 2027, the	2. From 2022 to 2027, the	2. From 2022 to 2027, the
		Group shall launch a total	Group shall launch a total	Group shall launch a total
		of 44 new clinical trials	of 38 new clinical trials	of 32 new clinical trials
		(including I-III phase	(including I-III phase	(including I-III phase
		clinical trials, achieving the	clinical trials, achieving the	clinical trials, achieving the
		first patient enrolment)	first patient enrolment)	first patient enrolment)

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LETTER FROM THE BOARD

② The assessment years of the Restricted Shares of Class B interests under the Reserved Grant shall be the four accounting years from 2024 to 2027, and the Company shall be assessed once in each accounting year. The performance assessment targets for each year are set out in the table below:

		Class B interests	Class B interests
		Performance assessment	Performance assessment	Performance assessment
Attribution	Assessment	target A	target B	target C
arrangements	year	100% of company	80% of company	70% of company
		Attribution	Attribution	Attribution
First Attribution	2024	The Company satisfies any	The Company satisfies any	The Company satisfies any
period under		one of the following	one of the following	one of the following
the Reserved		conditions:	conditions:	conditions:
Grant		1. From 2022 to 2024, the	1. From 2022 to 2024, the	1. From 2022 to 2024, the
		total revenue of the Group	total revenue of the Group	total revenue of the Group
		shall not be less than	shall not be less than	shall not be less than
		RMB4 billion	RMB3.6 billion	RMB3.3 billion
		2. From 2022 to 2024, the	2. From 2022 to 2024, the	2. From 2022 to 2024, the
		Group shall launch a total	Group shall launch a total	Group shall launch a total
		of 20 new clinical trials	of 17 new clinical trials	of 14 new clinical trials
		(including I-III phase	(including I-III phase	(including I-III phase
		clinical trials, achieving the	clinical trials, achieving the	clinical trials, achieving the
		first patient enrolment)	first patient enrolment)	first patient enrolment)
Second Attribution	2025	The Company satisfies any	The Company satisfies any	The Company satisfies any
period under		one of the following	one of the following	one of the following
the Reserved		conditions:	conditions:	conditions:
Grant		1. From 2022 to 2025, the	1. From 2022 to 2025, the	1. From 2022 to 2025, the
		total revenue of the Group	total revenue of the Group	total revenue of the Group
		shall not be less than	shall not be less than	shall not be less than
		RMB7 billion	RMB6.5 billion	RMB6 billion
		2. From 2022 to 2025, the	2. From 2022 to 2025, the	2. From 2022 to 2025, the
		Group shall launch a total	Group shall launch a total	Group shall launch a total
		of 28 new clinical trials	of 24 new clinical trials	of 20 new clinical trials
		(including I-III phase	(including I-III phase	(including I-III phase
		clinical trials, achieving the	clinical trials, achieving the	clinical trials, achieving the
		first patient enrolment)	first patient enrolment)	first patient enrolment)
Third Attribution	2026	The Company satisfies any	The Company satisfies any	The Company satisfies any
period under		one of the following	one of the following	one of the following
the Reserved		conditions:	conditions:	conditions:
Grant		1. From 2022 to 2026, the	1. From 2022 to 2026, the	1. From 2022 to 2026, the
		total revenue of the Group	total revenue of the Group	total revenue of the Group
		shall not be less than	shall not be less than	shall not be less than
		RMB11 billion	RMB10 billion	RMB9 billion
		2. From 2022 to 2026, the	2. From 2022 to 2026, the	2. From 2022 to 2026, the
		Group shall launch a total	Group shall launch a total	Group shall launch a total
		of 36 new clinical trials	of 31 new clinical trials	of 26 new clinical trials
		(including I-III phase	(including I-III phase	(including I-III phase
		clinical trials, achieving the	clinical trials, achieving the	clinical trials, achieving the
		first patient enrolment)	first patient enrolment)	first patient enrolment)

– 24 –

LETTER FROM THE BOARD

		Class B interests	Class B interests
		Performance assessment	Performance assessment	Performance assessment
Attribution	Assessment	target A	target B	target C
arrangements	year	100% of company	80% of company	70% of company
		Attribution	Attribution	Attribution
Fourth Attribution	2027	The Company satisfies any	The Company satisfies any	The Company satisfies any
period under		one of the following	one of the following	one of the following
the Reserved		conditions:	conditions:	conditions:
Grant		1. From 2022 to 2027, the	1. From 2022 to 2027, the	1. From 2022 to 2027, the
		total revenue shall not be	total revenue shall not be	total revenue shall not be
		less than RMB16 billion	less than RMB15 billion	less than RMB14 billion
		2. From 2022 to 2027, the	2. From 2022 to 2027, the	2. From 2022 to 2027, the
		Group shall launch a total	Group shall launch a total	Group shall launch a total
		of 44 new clinical trials	of 38 new clinical trials	of 32 new clinical trials
		(including I-III phase	(including I-III phase	(including I-III phase
		clinical trials, achieving the	clinical trials, achieving the	clinical trials, achieving the
		first patient enrolment)	first patient enrolment)	first patient enrolment)

If the Company fails to meet the above performance indicators, all the Restricted Shares that are not attributed to the Participants for the period shall not be attributed or deferred to the next period, and shall lapse.

(e) Performance assessment requirements at the Participant’s individual level

According to the Assessment Management Measures, the Company conducts individual performance assessment on each of the Participants during the assessment year and determines the number of Restricted Shares actually attributed to the Participants based on their assessment results. The performance assessment results of the Participants are divided into four levels, namely A, B, C and D, and the actual number of Restricted Shares to be attributed to the Participants will be determined according to the proportion of Attribution at the individual level corresponding to the following assessment rating table:

Assessment results	A	B	C	D
Individual-level attribution
ratio		100%		0%

The number of Restricted Shares actually attributed to a Participant in the Attribution period = the number of Restricted Shares planned to be attributed to the individual in that Attribution period × Company-level Attribution ratio × Individual-level Attribution ratio.

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LETTER FROM THE BOARD

If the Restricted Shares attributed to the Participants for an Attribution period cannot be attributed or cannot be fully attributed due to assessment results, the Restricted Shares which are not attributed shall lapse and shall not be deferred to the following years.

The assessments under the Incentive Scheme are implemented in accordance with the Assessment Management Measures.

(viii) Implementation, Grant and Attribution Procedures

(A) Procedures for the implementation of the 2022 A Share Incentive Scheme
(a) The Remuneration and Appraisal Committee is responsible for fixing the draft and summary of the Incentive Scheme.
(b) The Board shall resolve on the Incentive Scheme in accordance with laws. When the Board considers the Incentive Scheme, the Directors who are the Participants or the Directors who are related thereto shall abstain from voting. The Board shall submit the Incentive Scheme to the EGM and the Class Meetings for consideration after considering and approving the Incentive Scheme and performing the public disclosure and announcement procedures, and at the same time propose to the EGM and the Class Meetings to authorise and implement the grants and attributions (registration) of the Restricted Shares.
(c) The independent non-executive Directors and the Supervisory Committee shall express their opinions on whether the Incentive Scheme is beneficial to the sustainable development of the Company or is significantly detrimental to the interests of the Company and the Shareholders as a whole. The Company will engage an independent financial adviser with securities qualifications to give its professional opinion on the feasibility of the Incentive Scheme, whether the Incentive Scheme is conducive to the sustainable development of the Company, and whether it harms the interests of the Company, and the impact on the interests of Shareholders. The PRC law firm shall issue a legal opinion on the Incentive Scheme.
(d) The Company shall carry out self-examination on the trading of Shares by insiders within six (6) months prior to the announcement of the Incentive Scheme.
(e) The Incentive Scheme shall be subject to the consideration and approval at the EGM and the Class Meetings. Before convening the EGM and the Class Meetings, the Company shall publish the names and positions of the Participants internally through the Company’s website or other channels for a period of not less than ten (10) days. The Supervisory Committee shall review the list of Participants and fully listen to the public opinions. The Company shall disclose the explanation of the Supervisory Committee

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on the review opinions and announcements on the list of the Participants five (5) days before the Incentive Scheme is considered at the EGM and the Class Meetings.

(f) The independent non-executive Directors shall solicit proxy voting rights from all independent Shareholders in respect of the Incentive Scheme.
(g) At the EGM and the Class Meetings, the attending Shareholders or proxies shall vote by ballot on the Incentive Scheme, which shall be approved by more than two-thirds of the voting rights held by the shareholders present at the meeting. The voting of other Shareholders who are not Directors, Supervisors, senior management of the Company individually or collectively holding more than 5% of the Shares of the Company shall be separately counted and disclosed.

When the Incentive Scheme is considered at the EGM and the Class Meetings, shareholders who are Participants or shareholders who are related to or associates of the Participants shall abstain from voting thereon.

(h) The Company shall grant the Restricted Shares to the Participants within the prescribed period upon approval of the Incentive Scheme at the EGM and the Class Meetings and the fulfilment of grant conditions stipulated under the Incentive Scheme. The Board shall be responsible for the grant and Attribution of the Restricted Shares in accordance with the Specific Mandate granted at the EGM and the Class Meetings.

(B) Procedures for granting the Restricted Shares

(a) Upon consideration and approval of the Incentive Scheme at the EGM and the Class Meetings and passing the resolution of granting interests to the Participants at the Board meeting, the Company shall sign an ‘‘Agreement on the Grant of Restricted Shares’’ with each of the Participants in order to set out their respective rights and obligations.
(b) The Board shall consider and announce whether the conditions of a grant to a Participant as set out in the Incentive Scheme have been satisfied before the Company makes a grant to such Participant, and the Reserved Grant shall be determined, considered and approved by the Board. The independent non-executive Directors and the Supervisory Committee shall simultaneously express clear opinions. The PRC law firm shall issue legal opinions on whether the conditions for the grant to the Participants are fulfilled or not.
(c) The Supervisory Committee shall verify the Grant Date and the list of Participants and issue opinions thereon.

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(d) Where there is any discrepancy between the grant of interests by the Company to the Participants and the arrangement of the Incentive Scheme, the independent non-executive Directors, the Supervisory Committee (when the Participants change) and the PRC law firm shall simultaneously express clear opinions.
(e) The Company shall grant Restricted Shares to the Participants under the First Grant and make an announcement within 60 days after the Incentive Scheme is considered and approved at the EGM and the Class Meetings. In the event the Company fails to make the First Grant within such 60 days, the Incentive Scheme shall be terminated, and the Board shall disclose the reason for such failure in a timely manner and announce the termination of the Incentive Scheme, and shall be prohibited from approving a share scheme again within three (3) months commencing from the date of the announcement of the termination of the Incentive Scheme.

Participants eligible for Reserved Grant shall be determined within 12 months after the Incentive Scheme is considered and approved at the EGM and the Class Meetings. If the Participants for the Reserved Grant are not confirmed within such 12 months, the interests under the Reserved Grant will lapse.

(C) Procedures for the Attribution of the Restricted Shares

(a) Before the Attribution of the Restricted Shares, the Board shall consider whether the Attribution Conditions of the Participants as set out in the Incentive Scheme have been fulfilled, and the independent non-executive Directors and the Supervisory Committee shall simultaneously issue clear opinions, and the PRC law firm shall issue legal opinions on whether the Attribution Conditions for the exercise of the Participants have been fulfilled. For the Participants who have fulfilled the Attribution Conditions, the Company shall handle the Attribution in a unified manner, and for the Participants who have not fulfilled the Attribution Conditions, the Restricted Shares in the relevant tranche shall not be attributed and shall lapse. The Company shall disclose the announcement of the resolutions of the Board in a timely manner after the Attribution of the Participants, and publish the opinions of the independent non-executive Directors, the Supervisory Committee and the PRC law firm and the relevant implementation thereof.
(b) Before handling the Attribution of the Restricted Shares in a unified manner, the Company shall apply to the Shanghai Stock Exchange. The Company shall apply to the securities depository and clearing institution for the registration and settlement matters after confirmation by the Shanghai Stock Exchange.

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(ix) Method and Procedures for Adjustment

(A) Adjustment method of the number of the Restricted Shares

In the event of any capitalisation issue, bonus issue, sub-division, rights issue or share consolidation of the Company during the period from the date of announcement of the Incentive Scheme to the completion of Attribution and registration of Restricted Shares for the Participants, the number of Restricted Shares granted/attributed shall be adjusted accordingly. The adjustment method is as follows:

1. Capitalisation issue, bonus issue and sub-division of shares

Q = Q0 × (1 + n)

Where: Q0 represents the number of Restricted Shares granted/attributed before the adjustment; n represents the ratio of increase per Share resulting from the issue of Shares by capitalisation of capital reserves, bonus issue or sub-division of Shares (i.e., the number of Shares increased per Share upon capitalisation of capital reserves, bonus issue or sub-division of Shares); Q represents the adjusted number of Restricted Shares granted/attributed.

2. Rights issue

==> picture [187 x 11] intentionally omitted <==

Where: Q0 represents the number of Restricted Shares granted/attributed before the adjustment; P1 represents the closing price as at the record date; P2 represents the price of the rights issue; n represents the ratio of the rights issue (i.e. the ratio of the number of Shares to be issued under the rights issue to the total share capital of the Company before the rights issue); Q represents the adjusted number of Restricted Shares granted/attributed.

3. Share consolidation

Q = Q0 × n

Where: Q0 represents the number of Restricted Shares granted/attributed before the adjustment; n represents the ratio of consolidation of shares (i.e., one share shall be consolidated into n shares); Q represents the adjusted number of Restricted Shares granted/attributed.

4. New issue of shares

In the event of issue of new shares, no adjustment shall be made to the number of Restricted Shares granted/attributed.

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LETTER FROM THE BOARD

(B) Adjustment method of the Grant Price

In the event of any capitalisation issue, bonus issue, sub-division, rights issue, share consolidation or dividend distribution of the Company in the period from the date of announcement of the Incentive Scheme to the completion of Attribution and registration of Restricted Shares for the Participants, an adjustment to the Grant Price of Restricted Shares shall be made by the Company accordingly. The adjustment method is as follows:

Capitalisation issue, bonus issue and sub-division of shares P = P0 ÷ (1 + n)

Where: P0 represents the Grant Price before the adjustment; n represents the ratio of increase per share resulting from the capitalisation issue, bonus issue and sub-division of shares to each share; P represents the adjusted Grant Price.

2. Rights issue

P = P0 × (P1 + P2 × n) ÷ [P1 × (1 + n)]

Where: P0 represents the Grant Price before the adjustment; P1 represents the closing price as at the record date; P2 represents the price of the rights issue; n represents the ratio of the rights issue (i.e., the ratio of the number of shares to be issued under the rights issue to the total share capital of the Company before the rights issue); P represents the adjusted Grant Price.

Share consolidation

P = P0 ÷ n

Where: P0 represents the Grant Price before the adjustment; n represents the ratio of share consolidation; P represents the adjusted Grant Price.

Dividend distribution

P = P0 – V

Where: P0 represents the Grant Price before the adjustment; V represents the dividend per share; P represents the adjusted Grant Price. P shall be greater than 1 after the dividend distribution.

Additional issue of new shares

Under the circumstance of additional issue of new shares, no adjustment will be made on the Grant Price.

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LETTER FROM THE BOARD

(C) Adjustment procedures

In the event of the above circumstances, the Board shall consider and approve the proposal on the adjustment of the number of Restricted Shares to be granted/ attributed and the Grant Price (The number and price of Restricted Shares to be granted/attributed proposed to be adjusted for matters other than the above circumstances shall be submitted to the general meeting and the class meetings of A Shareholders and H Shareholders of the Company for consideration, despite the Board’s consideration of the relevant resolution). The Company shall engage a PRC law firm to issue professional opinions to the Board on whether the above adjustments are in compliance with the Management Measures, the Articles of Association and the Incentive Scheme. After the adjustment proposal is considered and approved by the Board, the Company shall timely disclose the announcement of the resolutions of the Board and the legal opinion.

(x) Other Rights and Obligations of the Company and the Participants and Dispute Mechanism

(A) Rights and obligations of the Company

(a) The Company shall have the right to interpret and execute the Incentive Scheme and shall appraise the performance of Participants based on the requirements under the Incentive Scheme. If a Participant fails to fulfil the Attribution Conditions required under the Incentive Scheme, the Restricted Shares that have been granted to the Participant but not yet attributed shall not be attributed and shall lapse.
(b) The Company undertakes not to provide loans and any other forms of financial assistance, including providing guarantee for their loans, to the Participants to obtain relevant Restricted Shares according to the Incentive Scheme.
(c) The Company shall make timely, true, accurate and complete disclosure of information disclosure documents related to the Incentive Scheme in accordance with relevant laws, regulations and regulatory documents, and ensure that there are no false records, misleading statements or material omissions, and timely fulfil the relevant reporting obligations of the Incentive Scheme.
(d) The Company shall proactively procure the Attribution of Restricted Shares for Participants who have satisfied with the Attribution Conditions pursuant to the Incentive Scheme and the relevant requirements of the CSRC, the Shanghai Stock Exchange and CSDC Shanghai Branch. The Company shall not be held liable for losses incurred by the Participants who fail to complete the Attribution due to reasons caused by the CSRC, the Shanghai Stock Exchange and CSDC.

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LETTER FROM THE BOARD

(e) If the Participants violate the laws and professional ethics, leak confidential information of the Company, and are negligent or gross misconduct in performance of duties, which may cause serious damage to the interests or reputation of the Company, upon being reviewed by the Remuneration and Appraisal Committee and reported to the Board for approval, the Restricted Shares that have been granted to Participants but not yet attributed shall not be attributed and shall lapse. At the same time, in the event of serious circumstances, the Company may also recover the losses suffered by the Company in accordance with relevant laws and regulations.
(f) In accordance with the relevant provisions of the national tax laws and regulations, the Company shall withhold and pay the individual income tax and other taxes payable by the Participants for participation in the Incentive Scheme.
(g) The Company’s determination of the Participants under the Incentive Scheme does not mean to ensure the Participants’ right to continue to serve the Company, and does not constitute the Company’s commitment to the term of employment of employees. The Company’s employment and employment management of employees are still implemented in accordance with the employment contract or labour contract signed between the Company and the Participants.
(h) Other relevant rights and obligations as stipulated by laws, administrative regulations and regulatory documents.

(B) Rights and obligations of the Participants

(a) The Participants shall, based on the requirements of their position, perform their responsibilities diligently in compliance with professional ethic and strive to contribute to the development of the Company.
(b) The source of funding of Participants shall derive from their own funds.
(c) The Restricted Shares granted to the Participants shall not be transferred or used to guarantee or repay debts.
(d) The Restricted Shares granted to the Participants according to the requirements of the Incentive Scheme are not entitled to voting power before Attribution and registration, and are not entitled to participate in the distribution of share bonuses and dividends.
(e) The gains acquired by the Participants as a result of the Incentive Scheme shall be subject to individual income tax and other taxes and fees according to tax laws and regulations of the PRC.

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(f) Participants undertake that where false statements or misleading representations in or material omissions from the information disclosure documents of the Company result in non-compliance with condition of grant or Attribution arrangements, Participants concerned shall return to the Company all interests gained through the Incentive Scheme calculated from the date when it is confirmed that the relevant information disclosure documents of the Company contain false statements or misleading representations or material omissions.
(g) Upon consideration and approval of the Incentive Scheme at the EGM and the Class Meetings and passing the resolution of granting interest to the Participants at the Board meeting, the Company shall sign an ‘‘Agreement on the Grant of Restricted Shares’’ with each of the Participants in order to set out their respective rights and obligations as well as other matters.
(h) Other relevant rights and obligations under the laws, regulations and the Incentive Scheme.

(C) Dispute settlement mechanism between the Company and the Participants

The disputes between the Company and the Participants arising from the execution of the Incentive Scheme, or the ‘‘Agreement on the Grant of Restricted Shares’’ signed by the parties or in relation to the Incentive Scheme or the ‘‘Agreement on the Grant of Restricted Shares’’ shall be solved through negotiation and communication by both parties, or mediation by the Remuneration and Appraisal Committee. If relevant disputes are not solved through the abovementioned methods within 60 days from the date of occurrence of the disputes, either party is entitled to file a lawsuit with the people’s court with jurisdiction in the place where the Company is located.

(xi) Amendment to and Termination of the 2022 A Share Incentive Scheme
(A) Procedures for the amendment to and termination of the 2022 A Share Incentive Scheme
- (a) Procedures for the amendment to the 2022 A Share Incentive Scheme
  - (1) In the event that the Company intends to amend the Incentive Scheme before it is considered and approved at the EGM and the Class Meetings, such amendment shall be considered and approved by the Board.

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(2) In the event that the Company intends to amend the Incentive Scheme after it is considered and approved at the EGM and the Class Meetings, such amendment shall be considered and determined at the general meeting and the class meetings of A Shareholders and H Shareholders given that such amendment shall not result in the following:
- a. accelerating the Attribution;
- b. reducing the Grant Price (except for circumstances where the Grant Price is lowered due to shares by capitalisation issue, bonus issue, rights issue and other reasons).
(3) The independent non-executive Directors and the Supervisory Committee shall express their independent opinions on whether the amended Incentive Scheme is beneficial to the sustainable development of the Company or is significantly detrimental to the interests of the Company and the Shareholders as a whole. The law firm shall issue professional opinions on whether the amended scheme complies with the provisions of the Management Measures and relevant laws and regulations, and whether there is any obvious damage to the interests of the Company and its Shareholders as a whole.
(b) Procedures for the termination of the 2022 A Share Incentive Scheme
(1) If the Company intends to terminate the implementation of the Incentive Scheme before it is considered at the EGM and the Class Meetings, such termination shall be considered and approved by the Board.
(2) If the Company intends to terminate the implementation of the Incentive Scheme after it is considered and approved at the EGM and the Class Meetings, such termination shall be considered and approved at general meeting and the class meetings of A Shareholders and H Shareholders.
(3) The PRC law firm shall issue professional opinions on whether the Company’s termination of the Incentive Scheme complies with the provisions of the Management Measures and relevant laws and regulations, and whether there is any obvious damage to the interests of the Company and its Shareholders as a whole.

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(B) In the event of any changes occurred at the Company level

(a) In the event that any of the circumstances below occurs in respect of the Company, the Incentive Scheme shall be terminated and the Restricted Shares (including the Reserved Grant) that have been granted to the Participants but not yet attributed shall not be attributed and shall lapse:
(1) an audit report on the financial and accounting report for the most recent financial year in which a certified public accountant issued an adverse opinion or was unable to express an opinion;
(2) an audit report on internal control over financial reporting for the most recent financial year in which a certified public accountant issued an adverse opinion or was unable to express an opinion;
(3) in the most recent 36 months upon listing, there have been cases of failure to distribute profits according to laws and regulations, the Articles of Association and public undertakings;
(4) laws and regulations stipulate that equity incentives shall not be implemented;
(5) other circumstances where the Incentive Scheme should be terminated as determined by the CSRC.
(b) The Incentive Scheme shall remain unchanged if any of the following events occurs to the Company:
(1) a change of control of the Company without reorganisation of major assets;
(2) a merger or division of the Company, where the Company continues to exist.
(c) If any of the following events occurs to the Company, the general meeting and the class meetings of A Shareholders and H Shareholders of the Company shall decide whether to amend or adjust the Incentive Scheme:
(1) a change of control of the Company involving reorganisation of major assets;
(2) a merger or division of the Company, where Company no longer exists.
(d) Where false statements or misleading statements in or material omissions from the information disclosure documents of the Company result in noncompliance with conditions for the grant or Attribution of Restricted Shares, the Restricted Shares granted to Participants but not yet attributed shall not be attributed and shall lapse. In respect of the Restricted Shares

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LETTER FROM THE BOARD

already attributed, the Participants concerned shall return to the Company all equities granted. The Board shall recover the income of Participants in accordance with the provisions of the preceding paragraph. The Participants who bear no responsibility for the aforesaid matters and who incur losses as a result of the return of interests granted may seek compensation from the Company or responsible parties.

(C) In the event of any changes in the personal circumstances of the Participants
(a) If a Participant ceases to be eligible to participate in the Incentive Scheme due to the occurrence of any of the following circumstances, the Board may decide that the Restricted Shares (including the Reserved Grant) granted to the Participant but not yet attributed shall not be attributed and shall lapse on the date of occurrence of the circumstances under the Incentive Scheme:
- (1) being identified as an inappropriate candidate by the Shanghai Stock Exchange within the most recent 12 months;
- (2) being identified as an inappropriate candidate by the CSRC and its delegated institutions within the most recent 12 months;
- (3) subject to administrative penalties or market ban measures by the CSRC and its delegated institutions due to material non-compliance with laws and regulations in the most recent 12 months;
- (4) being prohibited from acting as a director or a member of the senior management of the Company under the Company Law;
- (5) being prohibited from participation in share schemes of listed companies by laws and regulations;
- (6) other circumstances as determined by the CSRC.
(b) If a Participant’s position(s) has been changed but he/she still works in the Company, the Restricted Shares granted to him/her shall be carried out in full accordance with the procedures stipulated in the Incentive Scheme prior to the change of his/her position; however, if the Participant’s position(s) has changed due to his/her incompetence to his/her position, violation of laws, violation of professional ethics, leakage of confidential information of the Company, dereliction of duty or malfeasance, serious violation of the Company’s system and other acts that damage the interests or reputation of the Company, or the Company terminates his/her labour relationship or employment relationship with the Participant due to the above reasons, the Restricted Shares that have been granted to the Participant but not yet attributed shall not be attributed and shall lapse.

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LETTER FROM THE BOARD

(c) Where a Participant resigns, including circumstances of voluntary resignation, resignation due to layoffs of the Company, labour contract/ employment agreement expired and no longer renewed, dismissal by the Company due to personal fault, negotiated termination of labour contract or employment agreement, Restricted Shares that have been granted to such Participant but not yet attributed since the date of resignation shall not be attributed and shall lapse. Such Participant shall pay the Company the individual income tax involved in the attributed Restricted Shares before resignation. The Company has the right to recover the losses incurred from a Participant in accordance with the provisions of relevant laws, depending on the seriousness of the circumstances when he/she conducts personal faults including, but are not limited to: violation of the employment contract, confidentiality agreement, non-competition agreement or any other similar agreements signed with the Company or its affiliates; violation of the laws of the country of residence, resulting in criminal offenses or other negative conditions that affect the performance of the job; collection of remuneration from companies other than the Company or individuals, which has not been disclosed to the Company in advance.
(d) If a Participant retires normally in accordance with national regulations and the Company’s requirements, the Restricted Shares granted to him/her shall remain valid and shall be attributed in accordance with the procedures stipulated in the Incentive Scheme.
(e) The resignation of a Participant due to his/her incapacity shall be dealt with in the following two circumstances:
(1) When a Participant resigns due to incapacity in performing his/her duties, the Restricted Shares granted to him/her shall be carried out in accordance with the procedures stipulated in the Incentive Scheme prior to his/her incapacity. The Board may determine that his/her personal performance assessment conditions shall no longer be included in the Attribution Conditions. The Participants shall pay to the Company the individual income tax in relation to the Restricted Shares that have been attributed before they leave the Company, and shall pay the individual income tax in relation to the Restricted Shares that will be attributed in the current period in advance of each Attribution thereafter.
(2) When a Participant leaves the Company due to incapacity not resulting from performance of duties, the Restricted Shares that have been granted to the Participant but not yet attributed shall not be attributed and shall lapse. Prior to the resignation of the Participants, the Participants shall pay to the Company the individual income tax incurred in the Restricted Shares that have been attributed.

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(f) The death of a Participant shall be dealt with in the following two circumstances:
(1) If a Participant dies in the course of performing his/her duties, the Restricted Shares granted to him/her shall be inherited by his/her successor and shall be attributed in accordance with the procedures stipulated in the Incentive Scheme prior to the death of the Participant. The Board may determine that his/her personal performance assessment conditions shall no longer be included in the Attribution Conditions. The successor shall pay to the Company the individual income tax in respect of the Restricted Shares attributed before the inheritance, and shall pay the individual income tax in respect of the Restricted Shares attributed for the current period in advance of each Attribution thereafter.
(2) If a Participant dies other than due to his/her duty, the Restricted Shares that have been granted to the Participant but have not yet been attributed shall not be attributed and shall lapse on the date of occurrence of such event. If the Board, at its discretion, allows the Restricted Shares that have been granted but have not yet been attributed to be carried out in accordance with the procedures stipulated in the Incentive Scheme prior to the death of the Participants, the Board may determine that their personal performance assessment will no longer be included in the Attribution Conditions, and the successors shall pay the individual income tax in respect of the Restricted Shares that have been attributed before the inheritance, and shall pay the individual income tax in respect of the Restricted Shares that will be attributed in the current period in advance of each Attribution thereafter.
(g) Other unspecified circumstances shall be determined by the Board and its treatment method shall be determined.

(xii) Accounting Treatment and Impact on the Operating Performance

(A) Accounting treatment

In accordance with the requirements of the Accounting Standards for Business Enterprises No. 11 — Share-based Payments 《( 企業會計準則第11號—股份支付》) and the Accounting Standards for Business Enterprises No. 22 — Recognition and Measurement of Financial Instruments 《( 企業會計準則第22號—金融工具確認和計量》) of the PRC, the Company shall, on each balance sheet date during the period from the Grant Date to the Attribution Date, revise the number of Restricted Shares expected to be attributed according to the latest information such as the change in the number of persons entitled to be attributed and the completion of performance indicators, and recognise the services obtained in the current period in relevant costs or expenses and capital reserve according to the fair value of the Restricted Shares on the Grant Date.

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With reference to the ‘‘Application of Share-based Payment Standards — Grant of Restricted Shares 《( 股份支付準則應用案例—授予限制性股票》)’’ issued by the Accounting Department of the Ministry of Finance of the PRC, the measurement of the share-based payment expenses for Type II Restricted Shares is based on share options. In accordance with the relevant requirements of the Accounting Standards for Business Enterprises No. 11 — Share-based Payments 《( 企業會計準則第11號— 股份支付》) and the Accounting Standards for Business Enterprises No. 22 — Recognition and Measurement of Financial Instruments 《( 企業會計準則第22號—金融工具確認和計量》) of the PRC, the Company selected the Black-Scholes model to calculate the fair value of the Type II Restricted Shares, and measured the fair value of the 2,869,450 Restricted Shares under the First Grant on October 14, 2022. Specific parameters are as follows:

(1) Underlying share price: RMB58.21 per share (assuming the closing price on the date of the First Grant is the closing price on October 14, 2022);
(2) Validity period: 12 months, 24 months, 36 months, 48 months and 60 months (the period from the Grant Date of the Restricted Shares to the date of Attribution of each tranche);
(3) Historical volatility: 38.3215%, 39.8787%, 42.6063%, 42.2306% and 42.0227% (adopted average annualized volatility of comparable companies in the same industry in the past one, two, three, four, five years);
(4) Risk-free interest rate: 1.8051%, 2.0963%, 2.2875%, 2.4097% and 2.5122% (using the 1-year, 2-year, 3-year, 4-year and 5-year-yield rate of treasury bonds disclosed on ChinaBond.com.cn, respectively).

(B) Estimated impact on the operating performance in each accounting period due to the implementation of the Restricted Shares

The fair value of the Restricted Shares on the Grant Date will be determined by the Company in accordance with the requirements of accounting standards, and the costs of payment of shares under the Incentive Scheme will be further determined accordingly. The cost of the Incentive Scheme will be recognised according to the percentage of Attribution during the implementation of the Incentive Scheme and will be charged to the recurring profit and loss.

According to the requirements of the PRC Accounting Standards, the impact of the Restricted Shares under the First Grant of the Incentive Scheme on the accounting costs for each period is as follows (assuming the Company makes the grant in the beginning of December 2022):

Number of
Restricted	Total
Shares under	costs to be
the First Grant	amortised	2022	2023	2024	2025	2026	2027
(0’000 shares)	(RMB0,000)	(RMB0,000)	(RMB0,000)	(RMB0,000)	(RMB0,000)	(RMB0,000)	(RMB0,000)
286.945	8,264.05	240.04	2,846.59	2,411.52	1,655.92	770.81	339.17

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The above calculation does not include the Reserved Grant, and additional share payment fees will be incurred when the reserved Shares are granted.

According to the preliminary evaluation by the Company based on the information available, the amortisation of expenses of the Restricted Shares will have an impact on the net profit each year within the validity period of the Incentive Scheme. But at the same time, the implementation of the Incentive Scheme will further enhance the cohesion of employees and team stability, and effectively motivate the management team, thereby improving operating efficiency and bringing higher operating performance and intrinsic value to the Company.

III. PROPOSED ADOPTION OF THE ASSESSMENT MANAGEMENT MEASURES

To ensure the smooth implementation of the Incentive Scheme, the Assessment Management Measures have been formulated according to the PRC Company Law, the PRC Securities Law, the Management Measures and other relevant laws, administrative regulations, normative documents, the relevant requirements of the Articles of Association as well as the actual situation of the Company. A special resolution will be proposed at the EGM and the Class Meetings to consider and, if thought fit, approve the adoption of the Assessment Management Measures for implementation of the Incentive Scheme.

The full text of the Assessment Management Measures is set out in Appendix II to this circular. The Assessment Management Measures was prepared in Chinese language. In the event of any discrepancy between the English translation and the Chinese version of the Assessment Management Measures, the Chinese version shall prevail.

IV. PROPOSED ISSUE AND GRANT OF THE NEW A SHARES UNDER THE 2022 A SHARE INCENTIVE SCHEME PURSUANT TO THE SPECIFIC MANDATE

Subject to the approval of the Shareholders at the EGM and the Class Meetings, the Board has resolved to grant not more than 3,580,000 Restricted Shares (including those under the First Grant and the Reserved Grant) under the 2022 A Share Incentive Scheme, representing approximately 0.6578% of the total issued shares of the Company as at the Latest Practicable Date. The Restricted Shares to be granted will be issued and allotted pursuant to the Specific Mandate which may be granted at the EGM and the Class Meetings.

The 3,580,000 Shares to be issued and allotted pursuant to the Specific Mandate, which represents less than 10% of the total issued A Shares of the Company of 354,681,764 shares as at the Latest Practicable Date, is the Scheme Mandate Limit within which the Company may grant share incentives under the A Share Incentive Scheme and all other share schemes (if applicable). If the Company has the actual need to increase the Scheme Mandate Limit after the A Share Incentive Scheme is approved at the EGM and the Class Meetings, the Company will further comply with the relevant requirements under Rule 17.03C to seek approval by its Shareholders for refreshing the Scheme Mandate Limit accordingly.

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LETTER FROM THE BOARD

In addition to the principal terms of the proposed 2022 A Share Incentive Scheme summarized in the section headed ‘‘I. Proposed Adoption of the 2022 A Share Incentive Scheme’’ above, further information in relation to the issue and allotment of the Restricted Shares under the 2022 A Share Incentive Scheme are set out below:

The total funds to be raised and the proposed use of proceeds: Not more than RMB130,168,800, being the aggregate Grant Price, will be paid by the Participants to subscribe for 3,580,000 Restricted Shares under the 2022 A Share Incentive Scheme. The proceeds obtained by the Company from the 2022 A Share Incentive Scheme shall be applied towards the replenishment of the Group’s liquidity.

Grant Price: The Grant Price of the Restricted Shares under both the First Grant and the Reserved Grant shall be RMB36.36 per A Share which was determined with reference to the basis set out in the paragraph ‘‘(v) Grant Price and Basis of Determination of the Grant Price’’ above. A Participant who has satisfied the conditions for grant and attribution may subscribe new A Shares issued by the Company at such Grant Price.

Aggregate nominal value: The nominal value of the A Shares of the Company is RMB1.0 per A Share. The aggregate nominal value of the Restricted Shares to be granted under the Incentive Scheme (including the First Grant and the Reserved Grant) is not more than RMB3,580,000.

Dilution effect: The shareholding structure of the Company before and after the attribution of the Restricted Shares granted under the Incentive Scheme to the Participants is set out as follows:

Number of A Shares Number of H Shares Total	As at the Latest Practicable Date 354,681,764 189,581,239 544,263,003	Assuming full Attribution and issue of the Restricted Shares under the Incentive Scheme(1) 358,261,764 189,581,239
		547,843,003

Note:

(1) Assuming that no other Shares are issued or repurchased by the Company.

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LETTER FROM THE BOARD

The public float of the Company before and after the attribution of the Restricted Shares granted under the Incentive Scheme to the Participants is set out as follows:

Assuming full Attribution and issue of the Restricted Shares As at the Latest under the Practicable Date Incentive Scheme[(1)] Public float 29.9% 29.7%

Note:

(1) Assuming that no other Shares are issued or repurchased by the Company.

Fund raising activities in the past 12 months: Save for the A Share Offering as disclosed below, the Company has not conducted any fund raising activities involving the issuance of share capital within 12 months immediately preceding the date of this circular.

Date of fund Fund raising raising activity activity Net proceeds Intended use of proceeds March 31, 2022 Issue of new Approximately 1. Industrialization of A Shares on the RMB2,505.94 biologics Science and million Technology 2. Research and Innovation Board of development of the Shanghai Stock anticancer antibodies Exchange 3. Research and development of antibodies targeting autoimmune and ophthalmic diseases 4. Working capital

The Company will seek a Specific Mandate from the Shareholders at the EGM and the Class Meetings for the issue and allotment of the Restricted Shares under the 2022 A Share Incentive Scheme and a special resolution will be proposed at the EGM and the Class Meetings to consider and, if thought fit, approve the issue and grant of new A Shares under the 2022 A Share Incentive Scheme pursuant to the Specific Mandate.

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LETTER FROM THE BOARD

V. PROPOSED AUTHORIZATION TO THE BOARD TO HANDLE MATTERS PERTAINING TO THE 2022 A SHARE INCENTIVE SCHEME

In order to ensure successful implementation of the 2022 A Share Incentive Scheme, the Board proposed to the EGM and the Class Meetings to grant an authorization to the Board to handle the following matters pertaining to the 2022 A Share Incentive Scheme:

(i) To authorize the Board to determine the eligibility requirements and conditions of the Participants under the 2022 A Share Incentive Scheme, and determine the Grant Date of the Restricted Shares;
(ii) To authorize the Board to adjust the number of the Restricted Shares and the number of underlying shares involved according to the method stipulated in the 2022 A Share Incentive Scheme in the event of capitalization issue, bonus issue, share sub-division or consolidation, and rights issue of the Company;
(iii) To authorize the Board to adjust the Grant Price of the Restricted Shares according to the method stipulated in the 2022 A Share Incentive Scheme in the event of capitalization issue, bonus issue, share sub-division or consolidation, rights issue and dividend distribution of the Company;
(iv) To authorize the Board to directly reduce the number of Restricted Shares forfeited by employees prior to any further grant of the Restricted Shares;
(v) To authorize the Board to grant the Restricted Shares to a Participant upon his/her fulfillment of the conditions of grant, and to handle all necessary matters in connection with the grant of the Restricted Shares;
(vi) To authorize the Board to review and confirm the attribution eligibility of the Participants and the conditions for attributing the Restricted Shares;
(vii) To authorize the Board to delegate such rights to the Remuneration and Appraisal Committee;
(viii) To authorize the Board to determine whether the Restricted Shares may be attributed to a Participant;
(ix) To authorize the Board to handle all matters necessary in connection with the attribution of the Restricted Shares to the Participants, including but not limited to the submission of application to the Shanghai Stock Exchange in respect of the attribution of the Restricted Shares, applying to CSDC for registration and clearing services, amending the Articles of Association, and registering the change in registered capital of the Company;
(x) To authorize the Board to handle matters in connection with the Attribution of the Restricted Shares which have not been attributed;

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LETTER FROM THE BOARD

(xi) To authorize the Board to sign, execute, amend or terminate any agreement in connection with the 2022 A Share Incentive Scheme and other relevant agreements;
(xii) To authorize the Board to complete procedures with relevant governments and authorities in relation to the 2022 A Share Incentive Scheme including review, registration, filing, approval and consent; to sign, execute, amend and complete documents submitted to relevant governments, authorities, organizations, and individuals; to amend the Articles of Association and handle the registration of the change in registered capital of the Company; and to carry out all actions deemed to be necessary, appropriate, or expedient in relation to the 2022 A Share Incentive Scheme; and
(xiii) To authorize the Board to engage intermediaries, such as financial consultant, receiving bank, accountants, lawyers or securities companies, for the implementation of the 2022 A Share Incentive Scheme.

The Board further proposed that the Shareholders also approve the period of authorization given to the Board to be consistent with the validity period of the 2022 A Share Incentive Scheme. Save as specifically required by the laws, administrative regulations, rules of the CSRC, regulatory documents, the 2022 A Share Incentive Scheme, or the Articles of Association to be approved by the Board through resolutions, other matters may be directly exercised on behalf of the Board by the chairman of the Board or appropriate person(s) authorized thereby.

A special resolution will be proposed at the EGM and Class Meetings to consider and, if thought fit, approve the authorizations to be granted to the Board to handle matters pertaining to the 2022 A Share Incentive Scheme.

VI. RECOMMENDATION

The Board (including the independent non-executive Directors) considers that (i) the proposed adoption of the 2022 A Share Incentive Scheme; (ii) the proposed adoption of the Assessment Management Measures; (iii) the proposed issue and grant of new A Shares under the 2022 A Share Incentive Scheme pursuant to the Specific Mandate; and (iv) the proposed authorization to the Board to handle matters pertaining to the 2022 A Share Incentive Scheme, are on normal commercial terms and are fair and reasonable, and in the best interests of the Company and the Shareholders as a whole, although the Specific Mandate for issue and allotment of A Shares under the 2022 A Share Incentive Scheme is not in the usual and ordinary course of business of the Company due to the nature of such transaction. Accordingly, the Directors recommend the Shareholders to vote in favour of these proposed resolutions at the EGM and the Class Meetings.

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LETTER FROM THE BOARD

The Directors (including the independent non-executive Directors) are of a view that the terms of the A Share Incentive Scheme align with the purpose of the A Share Incentive Scheme as set out in the scheme documents. In particular:

(i) the Participants include from Directors, senior management, core technical personnel and other employees who the Board considers necessary to be incentivised, and the eligibility of the Participants is consistent with the purpose of the Incentive Scheme, which enables the Company to use share incentives to retain certain outstanding personnel employed with the Group, align the interest of those employees with the Group and fully mobilise their enthusiasm for the benefit of long term growth of the Group;
(ii) the Attribution period, either in five tranches after 12 months from the Grant Date or in four tranches after 24 months from the Grant Date, is in line with market practice and can ensure employee loyalty over the long run and increase long-term sustainability for the business development of the Company, and therefore is in line with the purpose of the Incentive Scheme;
(iii) the performance targets, being concrete and qualitative rather than generic ones, are closely tied to the Company’s financial performance and R&D progress and are in line with common key performance indicators in the industry of the Group, and therefore is in line with the purpose of the Incentive Scheme;
(iv) the determination of the Grant Price is in line with the requirements under the STAR Market Listing Rules and the Management Measures as well as the market practice for determining Grant Price for Type II restricted shares, which can provide the Company with sufficient flexibility to determine the Grant Price that can provide adequate incentive to the Participants to achieve the purpose of the Incentive Scheme; and
(v) the clawback mechanism provides an option for the Company to clawback the equity incentives granted to the Participants culpable of misconduct and is in line with the purpose of the Incentive Scheme and the interests of the Company and its Shareholders as a whole.

VII. LISTING RULES IMPLICATIONS

As the 2022 A Share Incentive Scheme involves the grant by the Company of its new Shares, the 2022 A Share Incentive Scheme is subject to the regulation by Chapter 17 of the Listing Rules to be effective from January 1, 2023.

As Connected Participants in the First Grant are the Company’s Directors, Supervisors, substantial shareholders and/or their respective associates, they are connected persons of the Company pursuant to Chapter 14A of the Listing Rules. Accordingly, the proposed grant of Restricted Shares to the Connected Participants contemplated under the Incentive Scheme will constitute fully exempt connected transactions of the Company and will be exempted from the reporting, announcement and independent shareholders’ approval requirements pursuant to Rule 14A.92(3) of the Listing Rules to be effective from January 1, 2023.

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LETTER FROM THE BOARD

The Directors who are also Connected Participants or connected with the Connected Participants (namely Mr. Wang Weidong, Dr. Fang Jianmin, Dr. Wang Liqiang, Mr. Lin Jian and Dr. He Ruyi) have declared their interests in the Incentive Scheme and abstained from voting on the resolutions in relation to the adoption of the proposed Incentive Scheme and the Assessment Management Measures and the proposed issue and grant of the Restricted Shares to the Participants (including the issue and grant of the Restricted Shares to Connected Participants) under the Incentive Scheme at the Board meeting as a result of their interests. Save as Mr. Wang Weidong, Dr. Fang Jianmin, Dr. Wang Liqiang, Mr. Lin Jian and Dr. He Ruyi, there is no other Director who is required to abstain from voting on the Board resolutions in relation to the Incentive Scheme.

In the event that any Reserved Grant (i) will result in the share awards granted to any Participant representing in aggregate over 1% of the issued shares of the Company over any 12-month period up to and including the relevant Grant Date; and/or (ii) will cause the shares awards granted to any Participant who is a Director, chief executive, Supervisor, substantial shareholder of the Company or any of their respective associates, representing in aggregate over 0.1% of the relevant class of Shares in issue of the Company over any 12-month period up to and including the relevant Grant Date, the Company will comply with the relevant requirements under Chapter 17 of the Listing Rules to be effective from January 1, 2023.

Rule 17.03(13) of the Listing Rules requires that the scheme document must include a provision for adjustment to the exercise or purchase price and/or the number of shares subject to options or awards granted under the scheme in the event of a capitalisation issue, rights issue, sub-division or consolidation of shares or reduction of capital. Note to Rule 17.03(13) of the Listing Rules states that any adjustment required under Rule 17.03(13) must give the Participants the same proportion of the equity capital as that to which that person was previously entitled. The Company has applied for, and the Stock Exchange has granted a waiver from strict compliance with the requirements under Rule 17.03(13) of the Listing Rules so as to enable the adjustments to Grant Price of the Restricted Shares granted under the A Share Incentive Scheme in the event of dividend distribution on the basis that, among other things, (i) the Company is a PRC issuer with its A Shares listed on the Science and Technology Innovation Board of the Shanghai Stock Exchange, and the A Share Incentive Scheme involves issue of new A Shares only. Therefore, the A Share Incentive Scheme must comply with the PRC laws. As advised by the Company’s PRC legal advisers for the A Share Incentive Scheme, Hai Run Law Firm, the adjustments to the Grant Price of the Restricted Shares granted under the A Share Incentive Scheme in the event of dividend distribution are required by Article 48 of the Management Measures; (ii) the proposed adoption of the A Share Incentive Scheme will be subject to the approval of the Shareholders at the EGM and the Class Meetings, whereby the H Shareholders will have the opportunity to fully consider and evaluate the terms of the A Share Incentive Scheme based on its merits and the interest of the H Shareholders will not be prejudiced; (iii) the number of A Shares proposed to be issued and granted under the A Share Incentive Scheme is 3,580,000 shares, representing only approximately 0.6578% of the total shares of the Company of 544,263,003 Shares as at the Latest Practicable Date, and the dilution effect of the A Share Incentive Scheme is minimal; and (iv) the Company believes that the adjustment to the Grant Price of the A Share Incentive Scheme in the event of dividend distribution will not adversely affect interest of Shareholders of the Company.

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LETTER FROM THE BOARD

VIII. RESPONSIBILITY STATEMENT

This circular, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the Listing Rules for the purpose of giving information on the Company. The Directors, having made all reasonable enquiries, confirm that to the best of their knowledge and belief the information contained in this circular is accurate and complete in all material respects and not misleading or deceptive, and there are no matters the omission of which would make this circular or any statement herein misleading.

IX. THE EGM AND THE H SHARE CLASS MEETING

The EGM and the H Share Class Meeting will be held at 2:00 p.m. and 2:40 p.m. or immediately after the conclusion of EGM and A Share Class Meeting, respectively, on Wednesday, December 28, 2022. Notice of the EGM and Notice of the H Share Class Meeting are set out in pages EGM-1 to HCM-2 of this circular and are available on the websites of the Stock Exchange (www.hkexnews.hk) and of the Company (www.remegen.cn).

For determining the list of H Shareholders who are entitled to attend and vote at the EGM and the H Share Class Meeting, which is scheduled to be held on Wednesday, December 28, 2022, the H Shares register of members will be closed from Wednesday, December 21, 2022 to Wednesday, December 28, 2022, both days inclusive. The H Shareholders whose name appear on the register of members of the Company on Wednesday, December 21, 2022 will be entitled to attend and vote at the EGM and the H Share Class Meeting. During such period, no share transfers will be registered.

In order to be eligible for attending and voting at the EGM and the H Share Class Meeting, all transfers of H Shares accompanied by the relevant share certificate(s) must be lodged with the Company’s H share registrar in Hong Kong, Computershare Hong Kong Investor Services Limited, at Shops 1712–1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong not later than 4:30 p.m. on Tuesday, December 20, 2022.

Pursuant to the Listing Rules, any vote of Shareholders at a general meeting must be taken by poll except where the chairman decides to allow a resolution relating to a procedural or administrative matter to be voted on by a show of hands. An announcement on the poll results will be published by the Company after the EGM and the H Share Class Meeting in the manner prescribed under the Listing Rules.

X. PROXY ARRANGEMENT

The forms of proxy of each of the EGM and the H Share Class Meeting are enclosed with this circular. If you intend to appoint a proxy to attend the EGM and/or the Class Meetings, you are required to complete and return the accompanying form(s) of proxy in accordance with the instructions printed thereon. For holders of H Shares, the form(s) of proxy should be returned to the Company’s H Share Registrar, Computershare Hong Kong Investor Services Limited, at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong; not less than 24 hours before the time fixed for holding the EGM and the H

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LETTER FROM THE BOARD

Share Class Meeting or any adjourned meeting thereof. Completion and return of the form of proxy will not preclude you from attending and voting in person at the EGM and/or the H Share Class Meetings or at any other adjourned meeting should you so wish.

XI. GENERAL

To the best of the Directors’ knowledge, information and belief, having made all reasonable enquiries, save for Yantai Rongda Venture Capital Center (Limited Partnership) (煙台榮達創業投資中心(有限合夥)), Dr. Fang Jianmin, Yantai Rongqian Enterprise Management Center (Limited Partnership) (煙台榮謙企業管理中心(有限合夥)), Yantai Rongyi Enterprise Management Center (Limited Partnership) (煙台榮益企業管理中心(有限合夥)), I-NOVA Limited, Yantai Rongshi Enterprise Management Center (Limited Partnership) (煙台榮實企業管理中心(有限合夥)), RongChang Holding Group LTD. and Yantai Rongjian Enterprise Management Center (Limited Partnership) (煙台榮建企業管理中心(有限合夥)) which collectively control or are entitled to exercise control approximately 40.38% voting right in respect of their shares in the issuer as at the Latest Practicable Date, no Shareholder is required to abstain from voting on any resolutions to be proposed at the EGM and the Class Meetings. The Board confirms that to the best of its knowledge, information and belief having made all reasonable enquiries, as at the Latest Practicable Date, there was no voting trust or other agreement or arrangement or understanding (other than an outright sale) entered into by or binding upon any Shareholder and there was no obligation or entitlement of any Shareholder whereby he has or may have temporarily or permanently passed control over the exercise of the voting right in respect of his Shares to a third party, either generally or on a case-by-case basis.

By order of the Board RemeGen Co., Ltd.* 榮昌生物製藥(煙台)股份有限公司 Mr. Wang Weidong Chairman and executive Director

For identification purposes only

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2022 A SHARE INCENTIVE SCHEME

APPENDIX I

DISCLAIMER

The board of directors and all directors of the Company guarantee that there are no false representations or misleading statements contained in, or material omissions from, this announcement, and accept responsibilities for the truthfulness, accuracy and completeness of its contents in accordance with law.

All Incentive Participants of the Company undertake that, where false statements or misleading representations in or material omissions from the information disclosure documents of the Company result in non-compliance with condition of grant or Attribution arrangement for the interest, the Incentive Participants concerned shall return to the Company all interests gained through the Incentive Scheme calculated from the date when it is confirmed that the relevant information disclosure documents of the Company contain false statements, misleading representations or material omissions.

SPECIAL NOTICE

I. The Incentive Scheme is formulated in accordance with the Company Law of the People’s Republic of China 《( 中華人民共和國公司法》), the Securities Law of the People’s Republic of China 《( 中華人民共和國證券法》), the Rules Governing the Listing of Stocks on the STAR Market of Shanghai Stock Exchange 《( 上海證券交易所科創板股票上市規則》), the Management Measures for Share Incentives of Listed Companies 《( 上市公司股權激勵管理辦法》), the Guidelines for Self-discipline Supervision of Companies Listed on the STAR Market No. 4 – Disclosure of Information on Share Incentives 《( 科創板上市公司自律監管指南第4號—股權激勵信息披露》), the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited 《( 香港聯合交易所有限公司證券上市規則》) and other relevant laws, regulations and regulatory documents, as well as the Articles of Association of RemeGen Co., Ltd.* 《( 榮昌生物製藥（煙台）股份有限公司章程》).
II. The incentive instruments adopted in the Incentive Scheme are the Restricted Shares (Type II Restricted Shares). Based on different allocation principles, the Restricted Shares granted under the Incentive Scheme will be divided into Class A interests and Class B interests, which are different only in terms of time arrangement and assessment arrangement. Regardless of the interests, the source of the shares is the ordinary A shares of the Company to be issued to the Incentive Participants by RemeGen Co., Ltd.* (hereinafter referred to as the ‘‘Company’’).

Incentive Participants that meet the conditions for the grant under the Incentive Scheme, after fulfilling the corresponding Attribution Conditions, shall obtain in tranches the ordinary A shares newly issued by the Company at the Grant Price. Such shares will be registered at the Shanghai Branch of China Securities Depository and Clearing Corporation Limited. Prior to the Attribution, the Restricted Shares granted to the Incentive Participants do not carry any rights of the shareholders of the Company, and such Restricted Shares shall not be transferred or used to guarantee or repay debts.

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2022 A SHARE INCENTIVE SCHEME

APPENDIX I

III. The number of Restricted Shares to be granted to the Incentive Participants under the Incentive Scheme is 3,580,000 Shares, representing approximately 0.6578% of the total shares of the Company of 544,263,000 Shares as at the date of the announcement of the draft Incentive Scheme, among which 873,050 Restricted Shares of Class A interest and 1,996,400 Restricted Shares of Class B interest were granted under the First Grant, totaling 2,869,450 Shares, representing approximately 0.5272% of the total shares of the Company of 544,263,000 Shares as at the date of the announcement of the draft Incentive Scheme, and 80.15% of the total Restricted Shares available under the Incentive Scheme; and 710,550 Shares were reserved, representing approximately 0.1306% of the total shares of the Company of 544,263,000 Shares as at the date of the announcement of the draft Incentive Scheme, and 19.85% of the total Restricted Shares available under the Incentive Scheme.

As at the date of the announcement of the draft Incentive Scheme, the total number of underlying shares involved in all effective share schemes of the Company does not exceed 20% of the total shares of the Company as at the date of the announcement of the draft Incentive Scheme. The number of Shares of the Company to be granted to any one of the Incentive Participants under all effective share schemes shall not exceed 1% of the total shares of the Company as at the date of the announcement of the draft Incentive Scheme.

IV. The Grant Price of the Restricted Shares under the Scheme (including Reserved Grant) shall be RMB36.36 per share.

In the event of any capitalisation issue, bonus issue, sub-division, rights issue or share consolidation of the Company in the period from the date of the announcement of the draft Incentive Scheme to the completion of the Attribution of Restricted Shares by the Incentive Participants, the Grant Price or number of Restricted Shares to be granted/ attributed shall be adjusted in accordance with the relevant rules of the Incentive Scheme accordingly.

V. The total number of Incentive Participants proposed for the First Grant under the Incentive Scheme is 188, representing 10.91% of the total number of 1,723 employees of the Company as at December 31, 2021, including certain directors, senior management, core technical personnel and other employees who the Board considers necessary to be incentivised when the Company announces the Incentive Scheme.

The Incentive Participants for the Reserved Grant refer to the Incentive Participants who were not determined when the Incentive Scheme was approved at the general meeting and the A shareholder class meeting and H shareholder class meeting but have been included in the Incentive Scheme during the Validity Period of the Incentive Scheme and who are determined within 12 months since the date the Incentive Scheme was considered and approved at the general meeting and the A shareholder class meeting and H shareholder class meeting. The reserved interest shall lapse where the Incentive Participants for the Reserved Grant are not determined after 12 months from the aforesaid date. The Incentive Participants for the Reserved Grant shall be determined by the Board with reference to the standard of the First Grant.

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2022 A SHARE INCENTIVE SCHEME

APPENDIX I

VI. The Validity Period of the Incentive Scheme commences from the date of First Grant of the Restricted Shares until the date on which all Restricted Shares granted to the Incentive Participants have been attributed or lapsed. The Validity Period shall not exceed 84 months. The Restricted Shares granted to the Incentive Participants shall be attributed in tranches as per the agreed proportions, and it is a prerequisite for each Attribution to meet the corresponding Attribution Conditions.
VII. None of the following circumstances under which the implementation of the share incentive shall not be conducted as stipulated in Article 7 of the Management Measures on Equity Incentives of Listed Companies 《( 上市公司股權激勵管理辦法》) has occurred to the Company:
(I) issue of the Company’s financial and accounting report for the most recent financial year in which a certified public accountant issued an adverse opinion or was unable to express an opinion;
(II) issue of the Company’s financial internal control report for the most recent financial year in which a certified public accountant issued an adverse opinion or was unable to express an opinion;
(III) in the most recent 36 months upon listing, there have been cases of failure to distribute profits according to laws and regulations, the Articles of Association and public undertakings;
(IV) laws and regulations stipulate that equity incentives shall not be implemented;
(V) other circumstances as determined by the CSRC.
VIII.The Incentive Participants under the Incentive Scheme exclude Supervisors and independent Directors of the Company. Incentive Participants have satisfied the provisions of Article 8 of the Management Measures on Equity Incentives of Listed Companies, and are not subject to any following circumstances where a person is prohibited to be an Incentive Participant:
(I) being identified as an inappropriate candidate by the SSE in the most recent 12 months;
(II) being identified as an inappropriate candidate by the CSRC or its delegated institutions in the most recent 12 months;
(III) subject to administrative penalties or market ban measures by the CSRC and its delegated institutions due to material non-compliance with laws and regulations in the most recent 12 months;
(IV) being prohibited from acting as a director or a member of the senior management of the Company under the Company Law;

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2022 A SHARE INCENTIVE SCHEME

APPENDIX I

(V) being prohibited from participation in share schemes of listed companies by laws and regulations;
(VI) other circumstances as determined by the CSRC.
IX. The Company undertakes that it shall not provide loans and any other forms of financial assistance to the Incentive Participants for acquiring the Restricted Shares under the Incentive Scheme, including provision of guarantee for their loans.
X. The Incentive Scheme shall be formulated by the Remuneration and Appraisal Committee and submitted to the Board for consideration and approval, and shall be implemented after being considered and approval at the general meeting and the A shareholder class meeting and H shareholder class meeting of the Company.
XI. Within 60 days from the date on which the Incentive Scheme is considered and approved at the general meeting and the A shareholder class meeting and H shareholder class meeting of the Company, the Company shall convene a Board meeting to make grants to the Incentive Participants under the First Grant in accordance with the relevant requirements, and complete announcement and other relevant procedures. If the Company fails to complete the above work within the 60-day period, it shall timely disclose the reasons for the failure and terminate the implementation of the Incentive Scheme, and the Restricted Shares that have not been granted shall lapse. According to the requirements of the Management Measures on Equity Incentives of Listed Companies, the period during which a listed company may not make grants is not counted within the 60 days.
XII. The implementation of the Incentive Scheme will not result in the shareholding distribution not meeting the listing requirements.

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2022 A SHARE INCENTIVE SCHEME

APPENDIX I

DISCLAIMER	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	I-1
SPECIAL NOTICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		I-1
CHAPTER I	DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	I-6
CHAPTER II	PURPOSE AND PRINCIPLE OF THE INCENTIVE SCHEME
	AND OTHER INCENTIVE SCHEME . . . . . . . . . . . . . . . . . . . . . . . . . .	I-8
CHAPTER III	ADMINISTRATIVE BODIES OF THE INCENTIVE SCHEME . .	I-8
CHAPTER IV	BASIS FOR DETERMINATION AND SCOPE OF THE
	INCENTIVE PARTICIPANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	I-9
CHAPTER V	INCENTIVE METHOD, SOURCE, NUMBER AND
	ALLOCATION OF RESTRICTED SHARES . . . . . . . . . . . . . . . . . . .	I-13
CHAPTER VI	VALIDITY PERIOD, GRANT DATE, ATTRIBUTION
	ARRANGEMENT AND BLACK-OUT PERIOD
	OF INCENTIVE SCHEME . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	I-15
CHAPTER VII	GRANT PRICE OF THE RESTRICTED SHARES AND
	THE BASIS FOR DETERMINATION THEREOF . . . . . . . . . . . . .	I-21
CHAPTER VIII	GRANT AND ATTRIBUTION CONDITIONS OF THE
	RESTRICTED SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	I-21
CHAPTER IX	PROCEDURES OF IMPLEMENTATION OF THE
	RESTRICTED SHARE INCENTIVE SCHEME . . . . . . . . . . . . . . . .	I-31
CHAPTER X	ADJUSTMENT METHOD AND PROCEDURES OF THE
	RESTRICTED SHARE INCENTIVE SCHEME . . . . . . . . . . . . . . . .	I-35
CHAPTER XI	ACCOUNTING TREATMENT ON THE RESTRICTED
	SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	I-37
CHAPTER XII	RIGHTS AND OBLIGATIONS OF THE COMPANY/
	THE INCENTIVE PARTICIPANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . .	I-39
CHAPTER XIII	HANDLING UNUSUAL CHANGES TO THE COMPANY/
	THE INCENTIVE PARTICIPANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . .	I-41
CHAPTER XIV	SUPPLEMENTARY PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	I-45

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APPENDIX I

CHAPTER I DEFINITIONS

Unless otherwise specified, capitalised terms shall have the same meanings as those hereinafter defined:

the Company, our Company, the Listed Company
RemeGen Co., Ltd.* (including its branches and subsidiaries)
The Incentive Scheme, the Scheme
2022 Restricted A Share Incentive Scheme of RemeGen Co., Ltd.*
Restricted Shares, Type II Restricted Shares
the A Shares of the Company to be obtained in tranches and registered by the Incentive Participants who meet the conditions for grant under the Incentive Scheme after meeting the corresponding Attribution Conditions
Incentive Participants
in accordance with the provisions of the Incentive Scheme, the Directors, senior management, core technical personnel of the Company and other employees that the Board considers necessary to be incentivised to receive the Restricted Shares, excluding Supervisors and independent Directors of the Company
Grant Date
the date on which the Company grants the Restricted Shares to the Incentive Participants, and that must be a trading day
Grant Price the price of each Restricted Share granted to the Incentive Participants
Validity Period
the period commencing on the date of the First Grant of the Restricted Shares and ending on the date on which all Restricted Shares granted to the Incentive Participants have been attributed or lapsed
Attribution
the act of registering the Restricted Shares by the Listed Company to the account of an Incentive Participant after the Attribution Conditions having been satisfied by the Incentive Participant
Attribution Conditions
the Attribution Conditions as stipulated under the Incentive Scheme which must be satisfied by an Incentive Participant in order to obtain the incentive shares
Attribution Date
the date on which the registration of the granted Restricted Shares is completed after the Attribution Conditions having been satisfied by an Incentive Participant, which must be a trading day

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APPENDIX I

Company Law
the Company Law of the People’s Republic of China

Securities Law

the Securities Law of the People’s Republic of China
Management Measures
the Management Measures on Equity Incentives of Listed Companies 《( 上市公司股權激勵管理辦法》)

STAR Market Listing Rules

the Rules Governing the Listing of Stocks on the STAR Market of Shanghai Stock Exchange
Hong Kong Listing Rules
the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited
Guidelines for Self-discipline the Guidelines for Self-discipline Supervision of Companies Listed on the STAR Market No. 4 — Disclosure of Information on Share Incentives 《( 科創板上市公司自律監管指南第4號—股權激勵信息披露》)
Articles of Association Articles of Association of RemeGen Co., Ltd.*
Assessment Management the Assessment Management Measures for the 2022 Measures Restricted A Share Incentive Scheme of RemeGen Co., Ltd.* 《( 榮昌生物製藥(煙台)股份有限公司2022年A股限制性股票激勵計劃實施考核管理辦法》)

CSRC

the China Securities Regulatory Commission
Scheme Mandate Limit
a total number of 3,580,000 shares, representing approximately 0.6578% of the total shares of the Company of 544,263,003 Shares as at the Latest Practicable Date

SSE Shanghai Stock Exchange

Stock exchanges the stock exchanges where each class of the shares of the Company is listed

RMB, RMB0’000

Notes:

Unless otherwise stated, the financial data and financial indicators referenced herein shall mean the financial data on a consolidated basis and financial indicators calculated based on such financial data.
Some figures shown as totals herein may not be an arithmetic aggregation of the figures preceding them due to rounding adjustments.

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APPENDIX I

CHAPTER II PURPOSE AND PRINCIPLE OF THE INCENTIVE SCHEME AND OTHER INCENTIVE SCHEME

I. Purpose and Principle of the Incentive Scheme

To improve the Company’s long-term incentive mechanism, attract and retain outstanding personnel, fully mobilise the enthusiasm of the Company’s employees, effectively bond the interests of shareholders, the Company and core teams together, enable all parties to jointly pay attention to the long-term development of the Company, and under the premise of fully safeguarding the interests of shareholders, the Incentive Scheme is formulated following the principle of income equivalent to contribution in accordance with the relevant laws, regulations and regulatory documents including Company Law, the Securities Law, the Management Measures, the STAR Market Listing Rules, the Guidelines for Self-discipline and the Hong Kong Listing Rules, as well as the relevant provisions of the Articles of Association.

II. Other Incentive Scheme

The Board meeting held by the Company on February 3, 2021 proposed the adoption of the H Share Award and Trust Scheme, which was considered and approved by the Shareholders at the general meeting on March 23, 2021. The maximum scheme limit of the shares under the H Share Award and Trust Scheme is 7,347,500 H Shares. As at the date of announcement of the draft Incentive Scheme, the total number of underlying involved in all effective shares schemes of the Company is 10,927,500 Shares, representing approximately 2.01% of the total shares of the Company of 544,263,003 shares at the time of announcement of the draft Incentive Scheme. The total number of underlying shares involved in the all effective share schemes of the Company does not exceed 20% of the total shares of the Company as at the date of announcement of the draft Incentive Scheme.

The Incentive Scheme and the H Share Award and Trust Scheme are independent of, and not connected with each other.

CHAPTER III ADMINISTRATIVE BODIES OF THE INCENTIVE SCHEME

I. The general meeting, as the body vested with the supreme authority of the Company, is responsible for consideration and approval of the implementation, change and termination of the Incentive Scheme. The general meeting may authorise the Board to deal with certain matters related to the Incentive Scheme to the extent of its authority.
II. The Board shall act as the executive and administrative body for the Incentive Scheme and be responsible for the implementation of the Incentive Scheme. The Remuneration and Appraisal Committee (the ‘‘Remuneration Committee’’) under the Board is responsible for drafting and revising the Incentive Scheme and submitting the same to the Board for consideration. Upon consideration and approval of the Incentive Scheme, the Board will submit the Incentive Scheme to the general meeting and the A shareholder class meeting and H shareholder class meeting for consideration. The Board may handle other matters related to the Incentive Scheme within its scope of authority as delegated by the general meeting and the A shareholder class meeting and H shareholder class meeting.

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APPENDIX I

III. The Supervisory Committee and the independent Directors are the supervisory body of the Incentive Scheme and shall express their opinions on whether the Incentive Scheme is beneficial to the sustainable development of the Company or is significantly detrimental to the interests of the Company and the shareholders as a whole. The Supervisory Committee shall supervise whether the implementation of the Incentive Scheme complies with the relevant laws, regulations, regulatory documents and the rules of the stock exchanges and shall be responsible for reviewing the list of Incentive Participants. The independent Directors will solicit proxy voting rights from all shareholders in respect of the Incentive Scheme, and are responsible for granting Restricted Shares to the Company’s Directors, chief executive officers or substantial shareholders or their respective associates in advance.
IV. If the Company changes the Share Incentive Scheme prior to the consideration and approval at the general meeting and the A shareholder class meeting and H shareholder class meeting, the independent Directors and the Supervisory Committee shall express independent opinions on whether the amended scheme is beneficial to the sustainable development of the Company or is significantly detrimental to the interests of the Company and the Shareholders as a whole.
V. Prior to making grants to the Incentive Participants by the Company, the independent Directors and the Supervisory Committee shall express clear opinions on the conditions for the Incentive Participants to be granted under the Incentive Scheme. If there is any difference between the interest granted by the Company to the Incentive Participants and the arrangements under the Incentive Scheme, the independent Directors and the Supervisory Committee (when there are changes to the Incentive Participants) shall simultaneously issue clear opinions.
VI. Prior to the Attribution of the Restricted Shares granted to the Incentive Participants, the independent Directors and the Supervisory Committee shall issue clear opinions as to whether the Attribution Conditions of the Incentive Participants as set out in the Incentive Scheme have been fulfilled.

CHAPTER IV BASIS FOR DETERMINATION AND SCOPE OF THE INCENTIVE PARTICIPANTS

I. Basis for determination of the Incentive Participants

(I) Legal basis for determining the Incentive Participants

The Incentive Participants of the Incentive Scheme are determined after taking into account the actual circumstances of the Company and in accordance with the relevant laws, regulations, regulatory documents including Company Law, Securities Law, Management Measures, STAR Market Listing Rules, Guidelines for Self-discipline and Hong Kong Listing Rules, as well as the relevant provisions of the Articles of Association.

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(II) Functional basis for determining the Incentive Participants

The Incentive Participants under the Incentive Scheme are the Company’s Directors, senior management, core technical personnel and other employees (excluding independent Directors and Supervisors) who the Board considers necessary to be incentivised. The list of the Incentive Participants eligible for the Incentive Scheme shall be prepared by the Remuneration Committee and verified and determined by the Supervisory Committee.

II. Scope of the Incentive Participants

(I) The total number of Incentive Participants proposed for the First Grant under the Incentive Scheme is 188, representing 10.91% of the total number of 1,723 employees of the Company as at December 31, 2021, including:
the Directors and senior management;
core technical personnel;
other employees who the Board considers necessary to be incentivised.

Among the above Incentive Participants, the Directors must be elected at the general meeting and the senior management must be appointed by the Board. All Incentive Participants must have employment or labour relationship with the Company when the Company grants the Restricted Shares. If the circumstances of the Incentive Participants change before the actual grant of the Restricted Shares by the Board, the Board may make appropriate adjustments to the actual Incentive Participants.

(II) The Incentive Participants of the Incentive Scheme include de facto controllers, Wang Weidong (王威東), Wen Qingkai (溫慶凱), Yang Minhua (楊敏華), Wei Jianliang (魏建良), Lin Jian (林健), Wang Yuxiao (王玉曉), the son of Wang Weidong (the de facto controller) and the shareholder individually or jointly holding more than 5% of the shares of the Company, Wang Yinxiao (王寅曉), the son of Wang Xudong (王旭東), and Jiang Jing (姜靜), the spouse of Wang Liqiang (王荔強). The reasons for the Company to include them in the Incentive Scheme are as follows:
As the chairman of the Company, Mr. Wang Weidong has a significant impact on the Company’s strategic policies, business decisions and major operational and management matters. He is responsible for formulating the Company’s overall R&D strategies, participating in the formulation of development plans for important R&D projects, and as the core of the Company’s actual operation and management, leading the continuous introduction of talents in the development stage of the Company and making significant contributions to the Company.

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APPENDIX I

Mr. Lin Jian, as an executive Director of the Company, has long participated in and formulated the Company’s strategic direction, operational decisions and major operational and management matters.
As the secretary to the Board, Mr. Wen Qingkai is fully responsible for the information disclosure, investor relations, investment and financing activities of the Company. On the other hand, he provides strong management support for the Company’s internal governance and capital operation.
Ms. Yang Minhua, as the vice president of human resources of the Company, has been coordinating and planning the human resources strategy of the Company for many years, establishing and improving the human resources management mechanism and system to support the implementation of the overall strategy of the Company.
As the Executive Director of International Cooperation Department of the Company, Mr. Wang Yuxiao is mainly responsible for organizing the formulation and implementation of the Company’s international cooperation work objectives, work systems and processes, and coordinating and arranging participation in relevant international conferences, exhibitions, talks and other foreign affairs activities. He is also responsible for seeking overseas partners and promoting the clinical research and commercialization of the Company’s product pipeline worldwide.
As the deputy director of securities affairs of the Company, Mr. Wang Yinxiao is mainly responsible for assisting the secretary of the Board in organizing the preparation of the three meetings of the Company and the drafting of relevant documents, participating in and organising the disclosure of information of the Company, liaising with various intermediaries and regulatory authorities on a daily basis, and coordinating the management of investor relations.
As the vice President of the Company, Ms. Jiang Jing is mainly responsible for the management of the non-clinical research department, and her main responsibilities include but not limited to: continuously building the technical platform related to non-clinical research and improving the functions of the department according to the Company’s R&D strategy, and building and managing the experimental animal platform according to the laws and regulations, conducting pharmacological, toxicological and pharmacogenetic research of the approved projects and the establishment and development of related methods, and undertaking the abnormal toxicity examination of the Company’s products.
As the vice president of the Company, Mr. Wei Jianliang is fully responsible for managing the auditing work of financial and accounting of the Group and its subsidiaries and giving consultation and guidance for finance, accounting and taxation. He is also responsible for reviewing and supervising the financial plans, cash flow plan reports and capital status of the affiliated companies.

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APPENDIX I

Therefore, the participation of Wang Weidong, Lin Jian, Wen Qingkai, Yang Minhua, Wei Jianliang, Wang Yuxiao, Wang Yinxiao and Jiang Jing in the Incentive Scheme is based on their positions as the management personnel and core management/technical personnel of the Company rather than the de facto controller or connected person. All of them play an important role in the operation and management of the Company. Having them as the Incentive Participants is in line with the actual situation and development needs of the Company and in compliance with the requirements of the Management Measures, the STAR Market Listing Rules and other relevant laws and regulations, and is necessary and reasonable.

(III) The Incentive Participants of the Incentive Scheme include some foreign employees. The reason for the Company to include them in the Incentive Scheme is that: in the biopharmaceutical industry in which the Company operates, the competition for talents is relatively fierce, and the foreign employees of the Incentive Participants play an important role in the Company’s technology research and development and business expansion, etc., and equity incentives are commonly used incentives for overseas companies. The inclusion of them in the Incentive Scheme is conducive to promoting the construction and stability of the Company’s core talent team and the long-term development of the Company. Therefore, it is necessary and reasonable for the Incentive Scheme to include such employees as Incentive Participants in line with the actual situation and development needs of the Company and the requirements of the Management Measures, the STAR Market Listing Rules and other relevant laws and regulations.
(IV) Incentive Participants for the Reserved Grant shall be determined within 12 months from the date on which the Incentive Scheme is considered and approved at the general meeting and the A shareholder class meeting and H shareholder class meeting. Upon the proposal by the Board, the opinions of the independent Directors and the Supervisory Committee, the professional opinions of the lawyers and the issuance of legal opinions, the Company shall disclose the relevant information of the Incentive Participants on the designated website in a timely and accurate manner as required. If the Incentive Participants are not determined for more than 12 months, the reserved interests shall lapse. The basis for determining the Incentive Participants of the Reserved Grant shall refer to the basis of the First Grant.

III. Verification of Incentive Participants

(I) After the Incentive Scheme has been reviewed and approved by the Board, the Company shall publish the names and positions of the Incentive Participants for not less than ten (10) days within the Company via the Company’s website or other channels.
(II) The Supervisory Committee will review the list of Incentive Participants, fully listen to the public opinions, and disclose the explanation of the Supervisory Committee on the review and publication of the list of Incentive Participants five (5) days before the Incentive Scheme is considered at the general meeting and the A

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APPENDIX I

shareholder class meeting and H shareholder class meeting of the Company. The list of Incentive Participants adjusted by the Board shall also be verified by the Supervisory Committee.

IV. List of Certain Connected Persons under the First Grant

The Incentive Participants under the First Grant of the Incentive Scheme consist of ten (10) connected persons of the Company recognised under the relevant provisions of the Hong Kong Listing Rules, the specific list of which is as follows:

No. Name Relationship with the Company 1 Wang Weidong Chairman, Executive Director, de facto controller 2 Lin Jian Executive Director, de facto controller 3 Wen Qingkai Board secretary, de facto controller 4 He Ruyi Executive Director, core technical personnel 5 Wei Jianliang De facto controller 6 Yang Minhua De facto controller 7 Jiang Jing Spouse of Wang Liqiang, de facto controller 8 Wang Yuxiao Son of Wang Weidong, de facto controller, and shareholder holding more than 5% of the shares 9 Wang Yinxiao Son of Wang Xudong, de facto controller 10 Yao Xuejing Spouse of Li Zhuanglin, Supervisor Total	Class A interests (0’000 shares) 35 1.485 1.815 2.42 1.485 1.485 1.815 1.1 0 3.3 49.905	Class B interests (0’000 shares) 0 0 0 0 0 0 0 0 1 0 1	Number of Restricted Shares to be granted (0’000 shares) 35 1.485 1.815 2.42 1.485 1.485 1.815 1.1 1 3.3 50.905	Percentage of the total number of Restricted Shares to be granted 9.78% 0.41% 0.51% 0.68% 0.41% 0.41% 0.51% 0.31% 0.28% 0.92% 14.22%	Percentage to the total shares of the Company as at the date of announcement of the Incentive Scheme 0.0643% 0.0027% 0.0033% 0.0044% 0.0027% 0.0027% 0.0033% 0.0020% 0.0018% 0.0061%
					0.0935%

CHAPTER V INCENTIVE METHOD, SOURCE, NUMBER AND ALLOCATION OF RESTRICTED SHARES

I. Incentive Method and Source of Shares under the Incentive Scheme

The incentive instruments adopted in the Incentive Scheme are Type II Restricted Shares. Based on different allocation principles, the Type II Restricted Shares granted under the Incentive Scheme will be divided into Class A interests and Class B interests, which are different only in terms of time arrangement and assessment arrangement. Regardless of the interests, the source of the Restricted Shares is the ordinary A Shares to be issued by the Company to the Incentive Participants.

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APPENDIX I

II. Number of Restricted Shares to be Granted

The number of Restricted Shares to be granted to the Incentive Participants under the Incentive Scheme is 3,580,000 Shares, representing approximately 0.6578% of the total shares of the Company of 544,263,000 Shares as at the date of the announcement of the draft Incentive Scheme, among which, 873,050 Restricted Shares of Class A Shares and 1,996,400 Restricted Shares of Class B Shares were granted under the First Grant, totalling 2,869,450 Shares, representing approximately 0.5272% of the total shares of the Company of 544,263,000 Shares as at the date of the announcement of the draft Incentive Scheme, and 80.15% of the total Restricted Shares available under the Incentive Scheme; and 710,550 Shares were reserved, representing approximately 0.1306% of the total shares of the Company of 544,263,000 Shares as at the date of the announcement of the draft Incentive Scheme, and 19.85% of the total Restricted Shares available under the Incentive Scheme.

III. Allocation of the Restricted Shares to the Incentive Participants

Allocation of Restricted Shares to be granted to each Incentive Participant under the Incentive Scheme is as follows:

No. Name Nationality Position(s) Class A interests (0’000 shares) I. Directors, Senior Management and Core Technical Personnel (6 persons) 1 Wang Weidong China Chairman, Executive Director 35 2 He Ruyi (何如意) United States Executive Director, core technical personnel 2.42 3 Lin Jian China Executive Director 1.485 4 Fu Daotian (傅道田) United States President, core technical personal 2.2 5 Li Jia (李嘉) China Chief financial officer 1.485 6 Wen Qingkai China Board secretary 1.815 Total 44.405	Class B interests (0’000 shares) 0 0 0 0 0 0 0	Number of Restricted Shares to be granted (0’000 shares) 35 2.42 1.485 2.2 1.485 1.815 44.405	Percentage of the total number of Restricted Shares to be granted 9.78% 0.68% 0.41% 0.61% 0.41% 0.51% 12.40%	Percentage to the total share capital of the Company as at the date of announcement of the Incentive Scheme 0.0643% 0.0044% 0.0027% 0.0040% 0.0027% 0.0033%
				0.0816%

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APPENDIX I

No. Name Nationality Position(s) II. Other Incentive Participants Other de facto controllers and their spouses, parents, children, or shareholders individually or jointly holding 5% or more of the Company’s shares (5 persons) Foreign employees (6 persons) Other employees who the Board considers necessary to be incentivised. (171 persons) Total of the First Grant (188 persons) III. Reserved Grant Total	Class A interests (0’000 shares) 5.885 10.615 26.4 87.305	Class B interests (0’000 shares) 1 0 198.64 199.64 71.055	Number of Restricted Shares to be granted (0’000 shares) 6.885 10.615 225.04 286.945	Percentage of the total number of Restricted Shares to be granted 1.92% 2.97% 62.86% 80.15% 19.85% 100.00%	Percentage to the total share capital of the Company as at the date of announcement of the Incentive Scheme 0.0127% 0.0195% 0.4135%
					0.5272% 0.1306%
		358.000			0.6578%

Note 1: As at the date of the announcement of the draft Incentive Scheme, the number of shares of the Company granted to any one of the above Incentive Participants through all effective share schemes of the Company does not exceed 1% of the total shares of the Company as at the date of the announcement of the draft Incentive Scheme. As at the date of announcement of the draft Incentive Scheme, the total number shares under the Company’s share schemes does not exceed 20% of the total shares of the Company as at the date of announcement of the draft Incentive Scheme. If an Incentive Participant voluntarily renounces the grant for personal reasons, the Board shall adjust the number of grant accordingly and the Incentive Participant may reduce the amount of Restricted Shares subscribed due to insufficient funds when subscribing for restricted shares.
Note 2: The aggregate number of issued Shares and Shares to be issued for the interests granted to any one Incentive Participant in this Incentive Scheme in the past 12 months shall not exceed 0.1% of relevant issued class shares of the Company at the time of the announcement of the draft Incentive Scheme.
Note 3: Any difference in the total amount and the sum of the breakdowns in the above table is due to rounding.

CHAPTER VI VALIDITY PERIOD, GRANT DATE, ATTRIBUTION ARRANGEMENT AND BLACK-OUT PERIOD OF INCENTIVE SCHEME

I. Validity Period of the Incentive Scheme

The Validity Period of the Incentive Scheme commences from the date of the First Grant of the Restricted Shares until the date on which all Restricted Shares granted to the Incentive Participants have been attributed or lapsed. The Validity Period shall not exceed 84 months.

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APPENDIX I

II. Grant Date of the Incentive Scheme

The Grant Date shall be determined by the Board after the Incentive Scheme is considered and passed at the general meeting and the A shareholder class meeting and H shareholder class meeting of the Company. The Company shall, within 60 days after the approval at the general meeting and the A shareholder class meeting and H shareholder class meeting, convene a Board meeting to make grants to the Incentive Participants under the First Grant in accordance with the relevant requirements, and complete the announcement(s) and other relevant procedures. If the Company fails to complete the above work within the 60-day period, it shall disclose the reasons for such failure and terminate the implementation of the Incentive Scheme, and the Restricted Shares that have not been granted shall lapse. The period during which a listed company shall not make grant is not counted within the 60 days. The Reserved Grant shall be within 12 months after the Incentive Scheme is considered and approved at the general meeting and the A shareholder class meeting and H shareholder class meeting of the Company. If the Incentive Participants are not determined for more than 12 months, the Reserved Grant shall lapse. The Grant Date must be a trading day and no grants shall be made during the following periods:

(I) The Company shall not grant the relevant interests after inside information has come to its knowledge until (and including) the trading day after the announcement of the relevant information. In particular, no such interest shall be granted within one month immediately before the earliest of:
the date of the Board meeting (as such date is first notified to the Hong Kong Stock Exchange in accordance with the Hong Kong Listing Rules) for approving any annual, half-year, quarterly or any other interim results of the Company (whether or not required under the Hong Kong Listing Rules); and
the deadline by which the Company is required to announce its annual, halfyear results, or the deadline for announcing quarterly or any other interim results under the Hong Kong Listing Rules (whether or not required under the Hong Kong Listing Rules). The relevant restrictions end on the date of the announcement of the results. No interest may be granted for the period during which the announcement of the results is delayed.
(II) Other periods as prescribed by the stock exchanges.

III. Attribution arrangements of the Incentive Scheme

(I) The Restricted Shares granted under the Incentive Scheme may be attributed in tranches as per the agreed proportions upon the Incentive Participants satisfying the corresponding Attribution Conditions. The Attribution Date must be a trading day, and the period during which Attribution is not permitted under the listing rules of the stock exchanges is not included.

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APPENDIX I

The Restricted Shares granted under the Incentive Participants shall not be attributed in the following periods:

Within sixty days and thirty days prior to the announcement of the annual reports and of the semi-annual reports, respectively, and on the date of the announcement for the Company, or in the event of postponement in publishing the periodic reports for special reasons, thirty days prior to the original announcement date and ending on one day prior to the announcement date;
Ten days prior to the release of the Company’s quarterly reports, results forecast or preliminary report;
From the date of a major event which may have a material impact on the trading price of the Company’s securities and derivatives or during the process of decision making until the date of legal disclosure of the same;
Other periods stipulated by stock exchanges.

If the relevant regulations of the stock exchanges regarding the Attribution Period change during the Validity Period of the Incentive Scheme, the Attribution Date shall comply with the relevant laws, regulations and regulatory documents after the amendment.

(II) The Restricted Shares to be granted under the Incentive Scheme have different Attribution arrangements for Class A and Class B interests respectively.
The Restricted Shares of Class A interests shall be attributed in five tranches after 12 months from the Grant Date. The specific Attribution arrangement is as follows:

Class A interests

Attribution arrangement Time of Attribution

Percentage of the number of attributive interests to the total number of granted interests

First Attribution From the first trading day after the 20% Period expiry of 12 months following the date of the corresponding interest until the last trading day within the 24 months following the Grant Date for corresponding interest

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APPENDIX I

Class A interests

	Class A interests
		Percentage of
		the number of
		attributive
		interests to the
Attribution		total number of
arrangement	Time of Attribution	granted interests
Second Attribution	From the first trading day after the	20%
Period	expiry of 24 months following the
	date of the corresponding interest
	until the last trading day within the
	36 months following the Grant Date
	for corresponding interest
Third Attribution	From the first trading day after the	20%
Period	expiry of 36 months following the
	date of the corresponding interest
	until the last trading day within the
	48 months following the Grant Date
	for corresponding interest
Fourth Attribution	From the first trading day after the	20%
Period	expiry of 48 months following the
	date of the corresponding interest
	until the last trading day within the
	60 months following the Grant Date
	for corresponding interest
Fifth Attribution	From the first trading day after the	20%
Period	expiry of 60 months following the
	date of the corresponding interest
	until the last trading day within the
	72 months following the Grant Date
	for corresponding interest

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APPENDIX I

The Restricted Shares under Class B interests shall be attributed in four tranches after 24 months from the Grant Date. The specific Attribution arrangement is as follows:

Class B interests

	Class B interests
		Percentage of
		the number of
		attributive
		interests to the
Attribution		total number of
arrangement	Time of Attribution	granted interests
First Attribution	From the first trading day after the	20%
Period	expiry of 24 months following the
	date of the corresponding interest
	until the last trading day within the
	36 months following the Grant Date
	for corresponding interest
Second Attribution	From the first trading day after the	40%
Period	expiry of 36 months following the
	date of the corresponding interest
	until the last trading day within the
	48 months following the Grant Date
	for corresponding interest
Third Attribution	From the first trading day after the	20%
Period	expiry of 48 months following the
	date of the corresponding interest
	until the last trading day within the
	60 months following the Grant Date
	for corresponding interest
Fourth Attribution	From the first trading day after the	20%
Period	expiry of 60 months following the
	date of the corresponding interest
	until the last trading day within the
	72 months following the Grant Date
	for corresponding interest

Restricted Shares that do not attribute within the above-mentioned agreed period or that cannot be applied for attribution for that period due to failure to meet the Attribution Conditions shall not be attributed and shall lapse.

Prior to the Attribution, the Restricted Shares granted to the Incentive Participants under the Incentive Scheme shall not be transferred or used to guarantee or repay debts. For the Restricted Shares granted to the Incentive Participants but not yet attributed, shares increased due to capitalisation issue, bonus issue, etc. are also

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2022 A SHARE INCENTIVE SCHEME

APPENDIX I

subject to the Attribution Conditions, and shall not be transferred or used to guarantee or repay debts. Where the Restricted Shares are not allowed to be attributed at that time, shares obtained for the aforementioned reasons shall also not be attributed.

IV. Black-out period under the Incentive Scheme

The black-out period refers to the period during which the Restricted Shares granted to the Incentive Participants are restricted to be sold after Attribution. There is no black-out period for the shares granted under the Incentive Scheme after they are attributed. For the Incentive Participants who are Directors and senior management of the Company, the blackout provisions shall be implemented in accordance with the Company Law, the Securities Law, the Several Provisions on Shareholding Reduction by Shareholders, Directors, 、 Supervisors and Senior Management of Listed Companies (《上市公司股東董監高减持股份的若干規定》), and the Detailed Implementing Rules of the Shanghai Stock Exchange for Shareholding Reduction by Shareholders, Directors, Supervisors and Senior Executives of 、、 Listed Companies (《上海證券交易所上市公司股東及董事監事高級管理人員减持股份實施細則》) and other relevant laws, regulations and regulatory documents and the Articles of Association, including but not limited to:

(I) Where the Incentive Participant is a Director and a member of the senior management of the Company, the number of shares which may be transferred each year during his/her term of office shall not exceed 25% of the total number of shares held by him/her in the Company. No shares held by him/her may be transferred within six (6) months after his/her termination of office.
(II) For Incentive Participants who are Directors and members of the senior management of the Company, if they have sold the Company’s shares held by them within six (6) months after purchasing such shares, or if they have purchased the shares within six (6) months after selling their shares, the gains obtained therefrom shall be attributed to the Company and the Board shall forfeit the gains.

During the Validity Period of the Incentive Scheme, if the relevant requirements under the relevant laws, regulations, regulatory documents including the Company Law, the Securities Law, the Several Provisions on Shareholding Reduction by Shareholders, Directors, Supervisors and Senior Management of Listed Companies, and the Detailed Implementing Rules of the Shanghai Stock Exchange for Shareholding Reduction by Shareholders, Directors, Supervisors and Senior Executives of Listed Companies as well as the Articles of Association regarding the transfer of shares held by the Directors and members of the senior management of the Company are changed, the transfer of the shares held by the Incentive Participants under this section shall comply with the requirements as amended at the time of transfer.

– I-20 –

2022 A SHARE INCENTIVE SCHEME

APPENDIX I

CHAPTER VII GRANT PRICE OF THE RESTRICTED SHARES AND THE BASIS FOR DETERMINATION THEREOF

I. Grant Price of the Restricted Shares

The Grant Price of the Restricted Shares under the Incentive Scheme (including the Reserved Grant) shall be RMB36.36 per share, which means the Incentive Participants can purchase the A Shares issued by the Company to the Incentive Participants at the price of RMB36.36 per share upon satisfaction of the Attribution Conditions.

II. Basis for determining the Grant Price of the Restricted Shares

The Grant Price of the Restricted Shares under the Incentive Scheme (including the Reserved Grant) shall be RMB36.36 per share, which represents approximately:

63.16% of the average trading price of A Shares of the Company on the trading day preceding the date of announcement of the draft Incentive Scheme being RMB57.57/share;

70.45% of the average trading price of A Shares of the Company on the 20 trading days preceding the date of announcement of the draft Incentive Scheme being RMB51.61/share;

68.18% of the average trading price of A Shares of the Company on the 60 trading days preceding the date of announcement of the draft Incentive Scheme being RMB53.33/share;

80.00% of the average trading price of A Shares of the Company on the 120 trading days preceding the date of announcement of the draft Incentive Scheme being RMB45.45/share.

CHAPTER VIII GRANT AND ATTRIBUTION CONDITIONS OF THE RESTRICTED SHARES

I. Conditions for grant of the Restricted Shares

The Company shall grant the Restricted Shares to the Incentive Participants upon satisfaction of all of the following granting conditions; or conversely, if any of the following granting conditions has not been satisfied, no Restricted Shares shall be granted to the Incentive Participants.

(I) None of the following has occurred on the part of the Company:
an audit report on the financial and accounting report for the most recent financial year in which a certified public accountant issued an adverse opinion or was unable to express an opinion;
an audit report on internal control over financial reporting for the most recent financial year in which a certified public accountant issued an adverse opinion or was unable to express an opinion;

– I-21 –

2022 A SHARE INCENTIVE SCHEME

APPENDIX I

in the most recent 36 months upon listing, there have been cases of failure to distribute profits according to laws and regulations, the Articles of Association and public undertakings;
laws and regulations stipulate that equity incentives shall not be implemented;
other circumstances as determined by the CSRC.
(II) None of the following has occurred on the part of the Incentive Participants:
being identified as an inappropriate candidate by the SSE within the most recent 12 months;
being identified as an inappropriate candidate by the CSRC and its delegated institutions within the most recent 12 months;
being subject to administrative penalties or market ban measures by the CSRC and its delegated institutions due to material non-compliance with laws and regulations in the most recent 12 months;
being prohibited from acting as a director or a member of the senior management of a company under the Company Law;
being prohibited from participation in share schemes of listed companies by laws and regulations;
other circumstances as determined by the CSRC.

II. Conditions for Attribution of the Restricted Shares

Restricted Shares granted to the Incentive Participants need to satisfy all of the following Attribution Conditions before they are attributed in tranches:

(I) None of the following has occurred on the part of the Company:
an audit report on the financial and accounting report for the most recent financial year in which a certified public accountant issued an adverse opinion or was unable to express an opinion;
an audit report on internal control over financial reporting for the most recent financial year in which a certified public accountant issued an adverse opinion or was unable to express an opinion;
in the most recent 36 months upon listing, there have been cases of failure to distribute profits according to laws and regulations, the Articles of Association and public undertakings;

– I-22 –

2022 A SHARE INCENTIVE SCHEME

APPENDIX I

laws and regulations stipulate that equity incentives shall not be implemented;
other circumstances as determined by the CSRC.
(II) None of the following has occurred on the part of the Incentive Participants:
being identified as an inappropriate candidate by the SSE within the most recent 12 months;
being identified as an inappropriate candidate by the CSRC and its delegated institutions within the most recent 12 months;
subject to administrative penalties or market ban measures by the CSRC and its delegated institutions due to material non-compliance with laws and regulations in the last 12 months;
being prohibited from acting as a director or a member of the senior management of the Company under the Company Law;
being prohibited from participation in share schemes of listed companies by laws and regulations;
other circumstances as determined by the CSRC.

In the event that any one of the circumstances specified in the above subparagraph (I) arises, the Restricted Shares that have been granted but have not yet been attributed to all of the Incentive Participants under the Incentive Scheme shall not be attributed and shall lapse. In the event that the Restricted Shares shall not be granted to an Incentive Participant as specified in the above subparagraph (II), the Restricted Shares that have been granted but have not yet been attributed to such Incentive Participant shall not be attributed and shall lapse.

(III) Incentive Participants satisfying the requirements on length of employment in each Attribution period

Before each tranche of Restricted Shares granted to the Incentive Participants is attributed, the length of employment of the Incentive Participant must be more than 12 months in the Company.

– I-23 –

2022 A SHARE INCENTIVE SCHEME

APPENDIX I

(IV) Performance assessment requirements at the Company level

(1) First Grant
① The assessment year of the First Grant of the Class A interests is for the five accounting years from 2022 to 2026, and shall be assessed once in each accounting year. The performance assessment targets for each year are set out in the table below:

Class A interests

		Performance assessment	Performance assessment	Performance assessment
Attribution	Assessment	target A	target B	target C
Arrangements	year	100% of company	80% of company	70% of company
		Attribution	Attribution	Attribution
First Attribution	2022	The Company satisfies any	The Company satisfies any	The Company satisfies any
Period		one of the following	one of the following	one of the following
		conditions:	conditions:	conditions:
		1. The total revenue for	1. The total revenue for	1. The total revenue for
		2022 shall not be less than	2022 shall not be less than	2022 shall not be less than
		RMB750 million	RMB700 million	RMB650 million
		2. In 2022, we shall launch	2. In 2022, we shall launch	2. In 2022, we shall launch
		6 new clinical trials	5 new clinical trials	4 new clinical trials
		(including I-III phase	(including I-III phase	(including I-III phase
		clinical trials, achieving the	clinical trials, achieving the	clinical trials, achieving the
		first patient enrolment)	first patient enrolment)	first patient enrolment)
Second Attribution	2023	The Company satisfies any	The Company satisfies any	The Company satisfies any
Period		one of the following	one of the following	one of the following
		conditions:	conditions:	conditions:
		1. From 2022 to 2023, the	1. From 2022 to 2023, the	1. From 2022 to 2023, the
		total revenue shall not be	total revenue shall not be	total revenue shall not be
		less than RMB2 billion	less than RMB1.8 billion	less than RMB1.6 billion
		2. From 2022 to 2023, we	2. From 2022 to 2023, we	2. From 2022 to 2023, we
		shall launch a total of 12	shall launch a total of 10	shall launch a total of 8
		new clinical trials (including	new clinical trials (including	new clinical trials (including
		I-III phase clinical trials,	I-III phase clinical trials,	I-III phase clinical trials,
		achieving the first patient	achieving the first patient	achieving the first patient
		enrolment)	enrolment)	enrolment)
Third Attribution	2024	The Company satisfies any	The Company satisfies any	The Company satisfies any
Period		one of the following	one of the following	one of the following
		conditions:	conditions:	conditions:
		1. From 2022 to 2024, the	1. From 2022 to 2024, the	1. From 2022 to 2024, the
		total revenue shall not be	total revenue shall not be	total revenue shall not be
		less than RMB4 billion	less than RMB3.6 billion	less than RMB3.3 billion
		2. From 2022 to 2024, we	2. From 2022 to 2024, we	2. From 2022 to 2024, we
		shall launch a total of 20	shall launch a total of 17	shall launch a total of 14
		new clinical trials (including	new clinical trials (including	new clinical trials (including
		I-III phase clinical trials,	I-III phase clinical trials,	I-III phase clinical trials,
		achieving the first patient	achieving the first patient	achieving the first patient
		enrolment)	enrolment)	enrolment)

– I-24 –

2022 A SHARE INCENTIVE SCHEME

APPENDIX I

Class A interests

		Performance assessment	Performance assessment	Performance assessment
Attribution	Assessment	target A	target B	target C
Arrangements	year	100% of company	80% of company	70% of company
		Attribution	Attribution	Attribution
Fourth Attribution	2025	The Company satisfies any	The Company satisfies any	The Company satisfies any
Period		one of the following	one of the following	one of the following
		conditions:	conditions:	conditions:
		1. From 2022 to 2025, the	1. From 2022 to 2025, the	1. From 2022 to 2025, the
		total revenue shall not be	total revenue shall not be	total revenue shall not be
		less than RMB7 billion	less than RMB6.5 billion	less than RMB6 billion
		2. From 2022 to 2025, we	2. From 2022 to 2025, we	2. From 2022 to 2025, we
		shall launch a total of 28	shall launch a total of 24	shall launch a total of 20
		new clinical trials (including	new clinical trials (including	new clinical trials (including
		I-III phase clinical trials,	I-III phase clinical trials,	I-III phase clinical trials,
		achieving the first patient	achieving the first patient	achieving the first patient
		enrolment)	enrolment)	enrolment)
Fifth Attribution	2026	The Company satisfies any	The Company satisfies any	The Company satisfies any
Period		one of the following	one of the following	one of the following
		conditions:	conditions:	conditions:
		1. From 2022 to 2026, the	1. From 2022 to 2026, the	1. From 2022 to 2026, the
		total revenue shall not be	total revenue shall not be	total revenue shall not be
		less than RMB11 billion	less than RMB10 billion	less than RMB9 billion
		2. From 2022 to 2026, we	2. From 2022 to 2026, we	2. From 2022 to 2026, we
		shall launch a total of 36	shall launch a total of 31	shall launch a total of 26
		new clinical trials (including	new clinical trials (including	new clinical trials (including
		I-III phase clinical trials,	I-III phase clinical trials,	I-III phase clinical trials,
		achieving the first patient	achieving the first patient	achieving the first patient
		enrolment)	enrolment)	enrolment)

– I-25 –

2022 A SHARE INCENTIVE SCHEME

APPENDIX I

② The assessment year for the First Grant of the Class B interests shall be the four accounting years from 2023 to 2026, which shall be assessed once in each accounting year. The performance assessment targets for each year are set out in the table below:

Class B interests

		Performance assessment	Performance assessment	Performance assessment
Attribution	Assessment	target A	target B	target C
Arrangements	year	100% of company	80% of company	70% of company
		Attribution	Attribution	Attribution
First Attribution	2023	The Company satisfies any	The Company satisfies any	The Company satisfies any
Period		one of the following	one of the following	one of the following
		conditions:	conditions:	conditions:
		1. From 2022 to 2023, the	1. From 2022 to 2023, the	1. From 2022 to 2023, the
		total revenue shall not be	total revenue shall not be	total revenue shall not be
		less than RMB2 billion	less than RMB1.8 billion	less than RMB1.6 billion
		2. From 2022 to 2023, we	2. From 2022 to 2023, we	2. From 2022 to 2023, we
		shall launch a total of 12	shall launch a total of 10	shall launch a total of 8
		new clinical trials (including	new clinical trials (including	new clinical trials (including
		I-III phase clinical trials,	I-III phase clinical trials,	I-III phase clinical trials,
		achieving the first patient	achieving the first patient	achieving the first patient
		enrolment)	enrolment)	enrolment)
Second Attribution	2024	The Company satisfies any	The Company satisfies any	The Company satisfies any
Period		one of the following	one of the following	one of the following
		conditions:	conditions:	conditions:
		1. From 2022 to 2024, the	1. From 2022 to 2024, the	1. From 2022 to 2024, the
		total revenue shall not be	total revenue shall not be	total revenue shall not be
		less than RMB4 billion	less than RMB3.6 billion	less than RMB3.3 billion
		2. From 2022 to 2024, we	2. From 2022 to 2024, we	2. From 2022 to 2024, we
		shall launch a total of 20	shall launch a total of 17	shall launch a total of 14
		new clinical trials (including	new clinical trials (including	new clinical trials (including
		I-III phase clinical trials,	I-III phase clinical trials,	I-III phase clinical trials,
		achieving the first patient	achieving the first patient	achieving the first patient
		enrolment)	enrolment)	enrolment)
Third Attribution	2025	The Company satisfies any	The Company satisfies any	The Company satisfies any
Period		one of the following	one of the following	one of the following
		conditions:	conditions:	conditions:
		1. From 2022 to 2025, the	1. From 2022 to 2025, the	1. From 2022 to 2025, the
		total revenue shall not be	total revenue shall not be	total revenue shall not be
		less than RMB7 billion	less than RMB6.5 billion	less than RMB6 billion
		2. From 2022 to 2025, we	2. From 2022 to 2025, we	2. From 2022 to 2025, we
		shall launch a total of 28	shall launch a total of 24	shall launch a total of 20
		new clinical trials (including	new clinical trials (including	new clinical trials (including
		I-III phase clinical trials,	I-III phase clinical trials,	I-III phase clinical trials,
		achieving the first patient	achieving the first patient	achieving the first patient
		enrolment)	enrolment)	enrolment)

– I-26 –

2022 A SHARE INCENTIVE SCHEME

APPENDIX I

Class B interests

		Performance assessment	Performance assessment	Performance assessment
Attribution	Assessment	target A	target B	target C
Arrangements	year	100% of company	80% of company	70% of company
		Attribution	Attribution	Attribution
Fourth Attribution	2026	The Company satisfies any	The Company satisfies any	The Company satisfies any
Period		one of the following	one of the following	one of the following
		conditions:	conditions:	conditions:
		1. From 2022 to 2026, the	1. From 2022 to 2026, the	1. From 2022 to 2026, the
		total revenue shall not be	total revenue shall not be	total revenue shall not be
		less than RMB11 billion	less than RMB10 billion	less than RMB9 billion
		2. From 2022 to 2026, we	2. From 2022 to 2026, we	2. From 2022 to 2026, we
		shall launch a total of 36	shall launch a total of 31	shall launch a total of 26
		new clinical trials (including	new clinical trials (including	new clinical trials (including
		I-III phase clinical trials,	I-III phase clinical trials,	I-III phase clinical trials,
		achieving the first patient	achieving the first patient	achieving the first patient
		enrolment)	enrolment)	enrolment)

(2) Reserved Grant
① The assessment years of the Class A interests of the Restricted Shares under the Reserved Grant shall be the five accounting years from 2023 to 2027, which shall be assessed once in each accounting year. The performance assessment targets for each year are set out in the table below:

Class A interests

		Performance assessment	Performance assessment	Performance assessment
Attribution	Assessment	target A	target B	target C
Arrangements	year	100% of company	80% of company	70% of company
		Attribution	Attribution	Attribution
Attribution Period	2023	The Company satisfies any	The Company satisfies any	The Company satisfies any
of first tranche		one of the following	one of the following	one of the following
under the		conditions:	conditions:	conditions:
Reserved Grant		1. From 2022 to 2023, the	1. From 2022 to 2023, the	1. From 2022 to 2023, the
		total revenue shall not be	total revenue shall not be	total revenue shall not be
		less than RMB2 billion	less than RMB1.8 billion	less than RMB1.6 billion
		2. From 2022 to 2023, we	2. From 2022 to 2023, we	2. From 2022 to 2023, we
		shall launch a total of 12	shall launch a total of 10	shall launch a total of 8
		new clinical trials (including	new clinical trials (including	new clinical trials (including
		I-III phase clinical trials,	I-III phase clinical trials,	I-III phase clinical trials,
		achieving the first patient	achieving the first patient	achieving the first patient
		enrolment)	enrolment)	enrolment)

– I-27 –

2022 A SHARE INCENTIVE SCHEME

APPENDIX I

Class A interests

Performance assessment Performance assessment Performance assessment Attribution Assessment target A target B target C Arrangements year 100% of company 80% of company 70% of company Attribution Attribution Attribution

Attribution Period 2024 The Company satisfies any The Company satisfies any The Company satisfies any of second one of the following one of the following one of the following tranche under conditions: conditions: conditions: the Reserved 1. From 2022 to 2024, the 1. From 2022 to 2024, the 1. From 2022 to 2024, the Grant total revenue shall not be total revenue shall not be total revenue shall not be less than RMB4 billion less than RMB3.6 billion less than RMB3.3 billion 2. From 2022 to 2024, we 2. From 2022 to 2024, we 2. From 2022 to 2024, we shall launch a total of 20 shall launch a total of 17 shall launch a total of 14 new clinical trials (including new clinical trials (including new clinical trials (including I-III phase clinical trials, I-III phase clinical trials, I-III phase clinical trials, achieving the first patient achieving the first patient achieving the first patient enrolment) enrolment) enrolment)
Attribution Period 2025 The Company satisfies any The Company satisfies any The Company satisfies any of third tranche one of the following one of the following one of the following under the conditions: conditions: conditions: Reserved Grant 1. From 2022 to 2025, the 1. From 2022 to 2025, the 1. From 2022 to 2025, the total revenue shall not be total revenue shall not be total revenue shall not be less than RMB7 billion less than RMB6.5 billion less than RMB6 billion 2. From 2022 to 2025, we 2. From 2022 to 2025, we 2. From 2022 to 2025, we shall launch a total of 28 shall launch a total of 24 shall launch a total of 20 new clinical trials (including new clinical trials (including new clinical trials (including I-III phase clinical trials, I-III phase clinical trials, I-III phase clinical trials, achieving the first patient achieving the first patient achieving the first patient enrolment) enrolment) enrolment)

Attribution Period	2026	The Company satisfies any	The Company satisfies any	The Company satisfies any
of fourth		one of the following	one of the following	one of the following
tranche under		conditions:	conditions:	conditions:
the Reserved		1. From 2022 to 2026, the	1. From 2022 to 2026, the	1. From 2022 to 2026, the
Grant		total revenue shall not be	total revenue shall not be	total revenue shall not be
		less than RMB11 billion	less than RMB10 billion	less than RMB9 billion
		2. From 2022 to 2026, we	2. From 2022 to 2026, we	2. From 2022 to 2026, we
		shall launch a total of 36	shall launch a total of 31	shall launch a total of 26
		new clinical trials (including	new clinical trials (including	new clinical trials (including
		I-III phase clinical trials,	I-III phase clinical trials,	I-III phase clinical trials,
		achieving the first patient	achieving the first patient	achieving the first patient
		enrolment)	enrolment)	enrolment)
Attribution Period	2027	The Company satisfies any	The Company satisfies any	The Company satisfies any
of fifth tranche		one of the following	one of the following	one of the following
under the		conditions:	conditions:	conditions:
Reserved Grant		1. From 2022 to 2027, the	1. From 2022 to 2027, the	1. From 2022 to 2027, the
		total revenue shall not be	total revenue shall not be	total revenue shall not be
		less than RMB16 billion	less than RMB15 billion	less than RMB14 billion
		2. From 2022 to 2027, we	2. From 2022 to 2027, we	2. From 2022 to 2027, we
		shall launch a total of 44	shall launch a total of 38	shall launch a total of 32
		new clinical trials (including	new clinical trials (including	new clinical trials (including
		I-III phase clinical trials,	I-III phase clinical trials,	I-III phase clinical trials,
		achieving the first patient	achieving the first patient	achieving the first patient
		enrolment)	enrolment)	enrolment)

– I-28 –

2022 A SHARE INCENTIVE SCHEME

APPENDIX I

② The assessment years of the Class B interests of the Restricted Shares under the Reserved Grant shall be the four accounting years from 2024 to 2027, which shall be assessed once in each accounting year. The performance assessment targets for each year are set out in the table below:

		Class B interests	Class B interests
		Performance assessment	Performance assessment	Performance assessment
Attribution	Assessment	target A	target B	target C
Arrangements	year	100% of company	80% of company	70% of company
		Attribution	Attribution	Attribution
Attribution Period	2024	The Company satisfies any	The Company satisfies any	The Company satisfies any
of first tranche		one of the following	one of the following	one of the following
under the		conditions:	conditions:	conditions:
Reserved Grant		1. From 2022 to 2024, the	1. From 2022 to 2024, the	1. From 2022 to 2024, the
		total revenue shall not be	total revenue shall not be	total revenue shall not be
		less than RMB4 billion	less than RMB3.6 billion	less than RMB3.3 billion
		2. From 2022 to 2024, we	2. From 2022 to 2024, we	2. From 2022 to 2024, we
		shall launch a total of 20	shall launch a total of 17	shall launch a total of 14
		new clinical trials (including	new clinical trials (including	new clinical trials (including
		I-III phase clinical trials,	I-III phase clinical trials,	I-III phase clinical trials,
		achieving the first patient	achieving the first patient	achieving the first patient
		enrolment)	enrolment)	enrolment)
Attribution Period	2025	The Company satisfies any	The Company satisfies any	The Company satisfies any
of second		one of the following	one of the following	one of the following
tranche under		conditions:	conditions:	conditions:
the Reserved		1. From 2022 to 2025, the	1. From 2022 to 2025, the	1. From 2022 to 2025, the
Grant		total revenue shall not be	total revenue shall not be	total revenue shall not be
		less than RMB7 billion	less than RMB6.5 billion	less than RMB6 billion
		2. From 2022 to 2025, we	2. From 2022 to 2025, we	2. From 2022 to 2025, we
		shall launch a total of 28	shall launch a total of 24	shall launch a total of 20
		new clinical trials (including	new clinical trials (including	new clinical trials (including
		I-III phase clinical trials,	I-III phase clinical trials,	I-III phase clinical trials,
		achieving the first patient	achieving the first patient	achieving the first patient
		enrolment)	enrolment)	enrolment)
Attribution Period	2026	The Company satisfies any	The Company satisfies any	The Company satisfies any
of third tranche		one of the following	one of the following	one of the following
under the		conditions:	conditions:	conditions:
Reserved Grant		1. From 2022 to 2026, the	1. From 2022 to 2026, the	1. From 2022 to 2026, the
		total revenue shall not be	total revenue shall not be	total revenue shall not be
		less than RMB11 billion	less than RMB10 billion	less than RMB9 billion
		2. From 2022 to 2026, we	2. From 2022 to 2026, we	2. From 2022 to 2026, we
		shall launch a total of 36	shall launch a total of 31	shall launch a total of 26
		new clinical trials (including	new clinical trials (including	new clinical trials (including
		I-III phase clinical trials,	I-III phase clinical trials,	I-III phase clinical trials,
		achieving the first patient	achieving the first patient	achieving the first patient
		enrolment)	enrolment)	enrolment)

– I-29 –

2022 A SHARE INCENTIVE SCHEME

APPENDIX I

Class B interests

		Performance assessment	Performance assessment	Performance assessment
Attribution	Assessment	target A	target B	target C
Arrangements	year	100% of company	80% of company	70% of company
		Attribution	Attribution	Attribution
Attribution Period	2027	The Company satisfies any	The Company satisfies any	The Company satisfies any
of fourth		one of the following	one of the following	one of the following
tranche under		conditions:	conditions:	conditions:
the Reserved		1. From 2022 to 2027, the	1. From 2022 to 2027, the	1. From 2022 to 2027, the
Grant		total revenue shall not be	total revenue shall not be	total revenue shall not be
		less than RMB16 billion	less than RMB15 billion	less than RMB14 billion
		2. From 2022 to 2027, we	2. From 2022 to 2027, we	2. From 2022 to 2027, we
		shall launch a total of 44	shall launch a total of 38	shall launch a total of 32
		new clinical trials (including	new clinical trials (including	new clinical trials (including
		I-III phase clinical trials,	I-III phase clinical trials,	I-III phase clinical trials,
		achieving the first patient	achieving the first patient	achieving the first patient
		enrolment)	enrolment)	enrolment)

If the Company fails to meet the above performance indicators, all the Restricted Shares that are not attributed to the Incentive Participants for the current period shall not be attributed or deferred to the next Attribution Period, and shall lapse.

(V) Performance assessment requirements at the Incentive Participant’s individual level

According to the Assessment Management Measures, the Company conducts individual performance assessment on the Incentive Participants during the assessment year and determines the number of Restricted Shares actually attributed to the Incentive Participants based on their assessment results. The performance assessment results of the Incentive Participants are divided into four levels, namely A, B, C and D, and the actual number of Shares to be attributed to the Incentive Participants will be determined according to the proportion of Attribution at the individual level corresponding to the following assessment rating table:

Assessment results	A	B	C	D
Individual-level Attribution ratio		100%		0%

The number of Restricted Shares actually attributed to the Incentive Participants in the current year = the number of Restricted Shares planned to be attributed to individuals in the current year × Company-level Attribution ratio × Individual-level Attribution ratio.

If the Restricted Shares attributed to the Incentive Participants for an Attribution period cannot be attributed or cannot be fully attributed due to assessment reasons, the Restricted Shares shall lapse and shall not be deferred to the following years.

The assessments under the Incentive Scheme are implemented in accordance with the Assessment Management Measures.

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III. Explanation on the scientificity and reasonableness of the assessment indicators

The Company is an innovative biopharmaceutical company with a global vision. Since its establishment, it has been focusing on therapeutic antibody drugs such as antibody-drug conjugate (ADC), antibody fusion proteins, monoclonal antibodies and bispecific antibodies. Relying on its core technology platform and strong R&D capabilities, the Company has always been committed to developing targeted biological innovative drugs with new structures and mechanisms, and showing breakthrough therapeutic effects in clinical trials through selfdeveloped innovative products.

The assessment indicators of the Incentive Scheme are divided into two levels, namely performance assessment at Company level and performance assessment at individual level.

The Company’s performance indicators include operating income and number of clinical trials. Operating income indicators can truly reflect the Company’s operating conditions and market conditions, and are effective indicators for predicting the trend of business expansion and measuring the growth of the Company. The long R&D cycle of original innovative drugs, large capital investment, high technical barriers, and the number of clinical trials can truly reflect the Company’s R&D progress, which is an important indicator to measure the Company’s future development potential. The Company has set the performance assessment indicators for the Incentive Scheme after taking into account the macroeconomic environment, the Company’s historical performance, industry development, market competition and the Company’s future development plan and other relevant factors. The assessment indicators set in the Scheme are challenging to a certain extent, which will help enhance the Company’s competitiveness and motivate the employees, ensure the realisation of the Company’s future development strategy and business objectives, and bring more efficient and lasting returns to the Shareholders.

In addition to performance assessment at the Company level, the Company has also set up a strict performance assessment system for individuals, which can make a relatively accurate and comprehensive evaluation of the work performance of the Incentive Participants. The Company will determine whether the Incentive Participants meet the Attribution Conditions based on their performance assessment results for the previous year.

In summary, the assessment system of the Incentive Scheme of the Company is all-round, comprehensive and practicable, and the assessment indicators are scientific and reasonable, which are binding on the Incentive Participants and can serve the assessment purpose of the Incentive Scheme.

CHAPTER IX PROCEDURES OF IMPLEMENTATION OF THE RESTRICTED SHARE INCENTIVE SCHEME

I. Procedures for the implementation of the Restricted Share Incentive Scheme

(I) The Remuneration Committee of the Board is responsible for fixing the draft and summary of the Incentive Scheme.

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(II) The Board shall resolve on the Incentive Scheme in accordance with the laws. When the Board considers the Incentive Scheme, the Directors who are the Incentive Participants or Directors who are related thereto shall abstain from voting. The Board shall submit the Incentive Scheme to the general meeting and the A shareholder class meeting and H shareholder class meeting for consideration after considering and approving the Incentive Scheme and performing the public announcement and announcement procedures, and propose to the general meeting and the A shareholder class meeting and H shareholder class meeting to authorise and implement the Grant and Attribution (registration) of the Restricted Shares.
(III) The independent Directors and the Supervisory Committee shall express their opinions on whether the Incentive Scheme is beneficial to the sustainable development of the Company or is significantly detrimental to the interests of the Company and the Shareholders as a whole. The Company will engage an independent financial adviser with securities qualifications to give its professional opinion on the feasibility of the Incentive Scheme, whether the Incentive Scheme is conducive to the sustainable development of the Company, and whether it harms the interests of the Company, and the impact on the interests of shareholders. The law firm shall issue a legal opinion on the Incentive Scheme.
(IV) The Company shall carry out self-examination on the trading of shares of the Company by insiders within six (6) months prior to the announcement of the Incentive Scheme.
(V) The Incentive Scheme shall be subject to the consideration and approval at the general meeting and the A shareholder class meeting and H shareholder class meeting of the Company. Before convening the general meeting and the A shareholder class meeting and H shareholder class meeting, the Company shall publish the names and positions of the Incentive Participants internally through the Company’s website or other channels for a period of not less than 10 days. The Supervisory Committee shall review the list of the Incentive Participants and fully listen to the public opinions. The Company shall disclose the explanation of the Supervisory Committee on the review opinions and announcements on the list of the Incentive Participants five (5) days before the Incentive Scheme is considered at the general meeting and the A shareholder class meeting and H shareholder class meeting.
(VI) The independent Directors shall solicit proxy voting rights from all shareholders in respect of the Incentive Scheme.
(VII) The general meeting and A shareholder class meeting and H shareholder class meeting of the Company shall vote by ballot on the Incentive Scheme, and shall be approved by more than two-thirds of the voting rights held by the shareholders present at the meeting. The voting of other shareholders other than the directors, supervisors, senior management of the Company and shareholders individually or collectively holding more than 5% of the shares of the Company shall be separately counted and disclosed.

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When the Incentive Scheme is considered at the Company’s general meeting and A shareholder class meeting and H shareholder class meeting, shareholders who are Incentive Participants or shareholders who are related to the Incentive Participants or their associates shall abstain from voting thereon.

(VIII) The Company shall grant the Restricted Shares to the Incentive Participants within the prescribed period upon approval of the Incentive Scheme at the general meeting and A shareholder class meeting and H shareholder class meeting of the Company and the fulfilment of grant conditions stipulated under the Incentive Scheme. The Board shall be responsible for the grant and Attribution of the Restricted Shares in accordance with the mandate granted at the general meeting and A shareholder class meeting and H shareholder class meeting.

II. Procedures for granting the Restricted Shares

(I) Upon consideration and approval of the Incentive Scheme at the general meeting and A shareholder class meeting and H shareholder class meeting and passing the resolution of granting interests to the Incentive Participants at the board meeting, the Company shall sign an ‘‘Agreement on the Grant of Restricted Shares’’ with the Incentive Participants in order to set out their respective rights and obligations.
(II) The Board shall consider and announce whether the conditions of a grant to an Inventive Participant as set out in the Incentive Scheme have been satisfied before the Company makes a grant to such Incentive Participant, and the Reserved Grant shall be determined, considered and approved by the Board. The independent Directors and the Supervisory Committee shall simultaneously express clear opinions. The law firm shall issue legal opinions on whether the conditions for the granting of interests to the Incentive Participants are fulfilled or not.
(III) The Supervisory Committee shall verify the Grant Date of the Restricted Shares and the list of Incentive Participants and issue opinions thereon.
(IV) Where there is any discrepancy between the grant of interests by the Company to the Incentive Participants and the arrangement of the Incentive Scheme, the independent Directors, the Supervisory Committee (when the Incentive Participants change) and the law firm shall simultaneously express clear opinions.
(V) The Company shall grant Restricted Shares to Incentive Participants under the First Grant and make an announcement within 60 days after the Incentive Scheme is considered and approved at the general meeting and A shareholder class meeting and H shareholder class meeting of the Company. In the event the Company fails to make the First Grant within such 60 days, the Incentive Scheme shall be terminated, and the Board shall disclose the reason for such failure in a timely manner and announce the termination of the Incentive Scheme, and shall be prohibited from approving a share scheme again within three months commencing from the date of the announcement of the termination of the Incentive Scheme.

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Incentive Participants eligible for Reserved Grant shall be determined within 12 months after the Incentive Scheme is considered and approved at the general meeting and A shareholder class meeting and H shareholder class meeting of the Company. If Incentive Participants are not confirmed within such 12 months, the Reserved Grant will lapse.

III. Procedures for the Attribution of the Restricted Shares

(I) Before the Attribution of the Restricted Shares, the Board shall consider whether the Attribution Conditions of the Incentive Participants as set out in the Incentive Scheme have been fulfilled, and the independent Directors and the Supervisory Committee shall simultaneously issue clear opinions, and the law firm shall issue legal opinions on whether the Attribution Conditions for the exercise of the Incentive Participants have been fulfilled. For the Incentive Participants who have fulfilled the Attribution Conditions, the Company shall handle the Attribution in a unified manner, and for the Incentive Participants who have not fulfilled the Attribution Conditions, the Restricted Shares in the relevant tranche shall not be attributed and shall lapse. The Company shall disclose the announcement of the resolutions of the Board in a timely manner after the Attribution of the Incentive Participants, and announce the opinions of the independent Directors, the Supervisor Committee and the law firm and the relevant implementation thereof.
(II) Before handling the Attribution of the Restricted Shares in a unified manner, the Company shall apply to the SSE. The Company shall apply to the securities depository and clearing institution for the registration and settlement matters after confirmation by the SSE.

IV. Procedures for amendments to the Incentive Scheme

(I) In the event that the Company intends to amend the Incentive Scheme before it is considered and approved at the general meeting and A shareholder class meeting and H shareholder class meeting, such amendment shall be considered and approved by the Board.
(II) In the event that the Company intends to amend the Incentive Scheme after it is considered and approved at the general meeting and A shareholder class meeting and H shareholder class meeting, such amendment shall be considered and determined at the general meeting and A shareholder class meeting and H shareholder class meeting given that such amendment shall not result in the following:
accelerating the Attribution;
reducing the Grant Price (except for circumstances where the Grant Price is lowered due to capitalisation issue, bonus issue, rights issue and other reasons).
(III) The independent Directors and the Supervisory Committee shall express their independent opinions on whether the amended Incentive Scheme is beneficial to the sustainable development of the Company or is significantly detrimental to the

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interests of the Company and the shareholders as a whole. The law firm shall issue professional opinions on whether the amended scheme complies with the provisions of the Management Measures and relevant laws and regulations, and whether there is any obvious damage to the interests of the Company and its shareholders as a whole.

V. Procedures for Termination of the Incentive Scheme

(I) If the Company intends to terminate the implementation of the Incentive Scheme before it is considered at the general meeting and A shareholder class meeting and H shareholder class meeting, such termination shall be considered and approved by the Board.
(II) If the Company intends to terminate the implementation of the Incentive Scheme after it is considered and approved at the general meeting and A shareholder class meeting and H shareholder class meeting, such termination shall be considered and approved at general meeting and A shareholder class meeting and H shareholder class meeting.
(III) The law firm shall issue professional opinions on whether the Company’s termination of the Incentive Scheme complies with the provisions of the Management Measures and relevant laws and regulations, and whether there is any obvious damage to the interests of the Company and its shareholders as a whole.

CHAPTER X ADJUSTMENT METHOD AND PROCEDURES OF THE RESTRICTED SHARE INCENTIVE SCHEME

I. Adjustment method of the number of Restricted Shares granted and the number attributed

In the event of any capitalisation issue, bonus issue, sub-division, rights issue or share consolidation of the Company in the period from the date of announcement on the Incentive Scheme to the completion of Attribution and registration of Restricted Shares by the Incentive Participants, the number of Restricted Shares granted/attributed shall be adjusted accordingly. The adjustment method is as follows:

(I) Capitalisation issue, bonus issue and sub-division of share capital
Q = Q0 × (1 + n)

Where: Q0 represents the number of Restricted Shares granted/attributed before the adjustment; n represents the ratio of increase per Share resulting from the capitalisation issue, bonus issue or sub-division of Shares (i.e., the number of Shares increased per Share upon capitalisation issue, bonus issue or sub-division of Shares); Q represents the adjusted number of Restricted Shares granted/attributed.

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(II) Rights issue

Q = Q0 × P1 × (1 + n) ÷ (P1 + P2 × n)

Where: Q0 represents the number of Restricted Shares granted/attributed before the adjustment; P1 represents the closing price as at the record date; P2 represents the price of the rights issue; n represents the ratio of the rights issue (i.e., the ratio of the number of Shares to be issued under the rights issue to the total share capital of the Company before the rights issue); Q represents the adjusted number of Restricted Shares granted/ attributed.

(III) Share consolidation

Q = Q0 × n

(IV) New issue of shares

In the event of issue of new shares, no adjustment shall be made to the number of Restricted Shares granted/attributed.

II. Adjustment method of the Grant Price of the Restricted Shares

In the event of any capitalisation issue, bonus issue, sub-division, rights issue, share consolidation or dividend distribution of the Company in the period from the date of announcement of the Incentive Scheme to the completion of Attribution and registration of Restricted Shares by the Incentive Participants, an adjustment to the Grant Price of Restricted Shares shall be made by the Company accordingly. The adjustment method is as follows:

(I) Capitalisation issue, bonus issue and sub-division of share capital

P = P0 ÷ (1 + n)

Where: P0 represents the Grant Price before the adjustment; n represents the ratio of increase per share resulting from the capitalisation issue, bonus issue and sub-division of share capital to each share; P represents the adjusted Grant Price.

(II) Rights issue

P = P0 × (P1 + P2 × n) ÷ [P1 × (1 + n)]

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(III) Share consolidation

P = P0 ÷ n

Where: P0 represents the Grant Price before the adjustment; n represents the ratio of share consolidation; P represents the adjusted Grant Price.

(IV) Dividend distribution

P = P0 – V

Where: P0 represents the Grant Price before the adjustment; V represents the dividend per share; P represents the adjusted Grant Price. P shall be greater than 1 after the dividend distribution.

(V) Additional issue of new shares

Under the circumstance of additional issue of new shares, no adjustment will be made on the Grant Price of the Restricted Shares.

III. Adjustment procedures of the Restricted Share Incentive Scheme

In the event of the above circumstances, the Board shall consider and approve the resolution on the adjustment of the number of Restricted Shares to be granted/attributed and the Grant Price (if the number and price of Restricted Shares to be granted/attributed needs to be adjusted for matters other than the above circumstances, such resolution shall be submitted to the general meeting and A shareholder class meeting and H shareholder class meeting of the Company for consideration, except for the Board’s consideration of the relevant resolution). The Company shall engage a law firm to issue professional opinions to the Board on whether the above adjustments are in compliance with the Management Measures, the Articles of Association and the Incentive Scheme. After the adjustment proposal is considered and approved by the Board, the Company shall timely disclose the announcement of the resolutions of the Board and the legal opinion.

CHAPTER XI ACCOUNTING TREATMENT ON THE RESTRICTED SHARES

In accordance with the requirements of the Accounting Standards for Business Enterprises No. 11 – Share-based Payments 《( 企業會計準則第11號—股份支付》) and the Accounting Standards for Business Enterprises No. 22 – Recognition and Measurement of Financial Instruments 《( 企業會計準則第22號—金融工具確認和計量》), the Company shall, on each balance sheet date during the period from the Grant Date to the Attribution Date, revise the number of Restricted Shares expected to be attributed according to the latest

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information such as the change in the number of persons entitled to be attributed and the completion of performance indicators, and recognise the services obtained in the current period in relevant costs or expenses and capital reserve according to the fair value of the Restricted Shares on the Grant Date.

I. Fair value of the Restricted Shares and the determination method

With reference to the ‘‘Application of Share-based Payment Standards – Grant of Restricted Shares 《( 股份支付準則應用案例—授予限制性股票》)’’ issued by the Accounting Department of the Ministry of Finance of the People’s Republic of China, the measurement of the share-based payment expenses for Type II Restricted Shares is based on share options. In accordance with the relevant requirements of the Accounting Standards for Business Enterprises No. 11 – Share-based Payments 《( 企業會計準則第11號—股份支付》) and the Accounting Standards for Business Enterprises No. 22 – Recognition and Measurement of Financial Instruments 《( 企業會計準則第22號—金融工具確認和計量》), the Company selected the Black-Scholes model to calculate the fair value of the Type II Restricted Shares, and measured the fair value of the 2,869,450 Restricted Shares under the First Grant on October 14, 2022. Specific parameters are as follows:

(I) Underlying share price: RMB58.21/share (assuming the closing price on the date of the First Grant is the closing price on October 14, 2022);
(II) Validity Period: 12 months, 24 months, 36 months, 48 months and 60 months (the period from the Grant Date of the Restricted Shares to the date of Attribution of each tranche);
(III) Historical volatility: 38.3215%, 39.8787%, 42.6063%, 42.2306% and 42.0227% (adpoting the average annualized volatility of comparable companies in the same industry for the past one, two, three, four, five years);
(IV) Risk-free interest rate: 1.8051%, 2.0963%, 2.2875%, 2.4097% and 2.5122% (using the 1-year, 2-year, 3-year, 4-year and 5-year-yield rate of treasury bonds disclosed on ChinaBond.com.cn, respectively).

II. Estimated impact on operating performance in each period due to implementation of the Restricted Shares

The fair value of the Restricted Shares on the Grant Date will be determined by the Company in accordance with the requirements of accounting standards, and the share-based payments under the Incentive Scheme will be further determined accordingly, which will be amortised according to the percentage as set out in the Attribution arrangement during the implementation of the Incentive Scheme. The costs of incentive arising from the Incentive Scheme will be charged to the recurring profit and loss.

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Number of
Restricted Shares	Total
under the	costs to be
First Grant	amortised	2022	2023	2024	2025	2026	2027
(0’000 shares)	(RMB0’000)	(RMB0’000)	(RMB0’000)	(RMB0’000)	(RMB0’000)	(RMB0’000)	(RMB0’000)
286.945	8,264.05	240.04	2,846.59	2,411.52	1,655.92	770.81	339.17

Notes:

The above calculation results do not represent the final accounting costs. The actual accounting costs are related to the Grant Date, the Grant Price and the number of Restricted Shares attributed. If an Incentive Participant resigns before Attribution, or fails to meet the corresponding standards of the performance assessment of the Company or personal performance assessment, the actual number of shares attributed will be reduced accordingly and thus lower the share payment. Besides, the possible dilutive effects are brought to the attention of shareholders.
The final result 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 does not include the Reserved Grant of Restricted Shares, and additional share payment fees will be incurred when the reserved shares are granted.

According to the preliminary evaluation by the Company based on the information available, the amortisation of expenses of the Restricted Shares will have an impact on the net profit each year within the Validity Period. But at the same time, the implementation of the Restricted Share Incentive Scheme will further enhance the cohesion of employees and team stability, and effectively motivate the management team, thereby improving operating efficiency and bringing higher operating performance and intrinsic value to the Company.

CHAPTER XII RIGHTS AND OBLIGATIONS OF THE COMPANY/THE INCENTIVE PARTICIPANTS

I. Rights and Obligations of the Company

(I) The Company shall have the right to construe and execute the Incentive Scheme and shall appraise the performance of Incentive Participants based on the requirements under the Incentive Scheme. If an Incentive Participant fails to fulfil the Attribution Conditions required under the Incentive Scheme, the Restricted Shares that have been granted to Incentive Participants but not yet attributed shall not be attributed and shall lapse.
(II) The Company undertakes not to provide loans and any other forms of financial assistance, including providing guarantee for their loans, to the Incentive Participants to obtain relevant Restricted Shares according to the Incentive Scheme.

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(III) The Company shall make timely, true, accurate and complete disclosure of information disclosure documents related to the Incentive Scheme in accordance with relevant laws, regulations and regulatory documents, and ensure that there are no false records, misleading statements or material omissions, and timely fulfil the relevant reporting obligations of the Incentive Scheme.
(IV) The Company shall proactively procure the Attribution of Restricted Shares for Incentive Participants who have satisfied with the Attribution Conditions pursuant to the Incentive Scheme and the relevant requirements of the CSRC, the SSE and China Securities Depository and Clearing Corporation Limited Shanghai Branch. The Company shall not be held liable for losses incurred by the Incentive Participants who fail to complete the Attribution of their Restricted Shares due to reasons caused by the CSRC, the SSE and China Securities Depository and Clearing Corporation Limited.
(V) If the Incentive Participants violate the laws and professional ethics, leak confidential information of the Company, and are negligent or gross misconduct in performance of duties which may cause serious damage to the interests or reputation of the Company, upon being reviewed by the Remuneration Committee of the Board and reported to the Board for approval, the Restricted Shares that have been granted to Incentive Participants but not yet attributed shall not be attributed and shall lapse. At the same time, in the event of serious circumstances, the Company may also recover the losses suffered by the Company in accordance with relevant laws and regulations.
(VI) In accordance with the relevant provisions of the national tax laws and regulations, the Company shall withhold and pay the individual income tax and other taxes payable by the Incentive Participants for participation in the Incentive Scheme.
(VII) The Company’s determination of the Incentive Participants under the Incentive Scheme does not mean to ensure that the Incentive Participants enjoy the right to continue to serve the Company, and does not constitute the Company’s commitment to the term of employment of employees. The Company’s employment and employment management of employees are still implemented in accordance with the employment contract or labour contract signed between the Company and the Incentive Participants.
(VIII) Other relevant rights and obligations as stipulated by laws, administrative regulations and regulatory documents.

II. Rights and obligations of the Incentive Participants

(I) Incentive Participants shall, based on the requirement of the position, perform their responsibilities diligently in compliance with professional ethic and strive to contribute to the development of the Company.
(II) The source of funding of Incentive Participants shall derive from their own funds.

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(III) The Restricted Shares granted to the Incentive Participants shall not be transferred or used to guarantee or repay debts.
(IV) Restricted Shares granted to the Incentive Participants according to the requirements of the Incentive Scheme are not entitled to voting power before Attribution and registration, and they are not entitled to participate in the distribution of share bonuses and dividends.
(V) The gains acquired by the Incentive Participants as a result of the Incentive Scheme shall be subject to individual income tax and other taxes and fees according to tax laws and regulations of the PRC.
(VI) Incentive Participants undertake that where false statements or misleading representations in or material omissions from the information disclosure documents of the Company result in non-compliance with condition of grant or Attribution arrangements, Incentive Participants concerned shall return to the Company all interests gained through the Incentive Scheme calculated from the date when it’s confirmed that the relevant information disclosure documents of the Company contain false statements or misleading representations or material omissions.
(VII) Upon consideration and approval of the Incentive Scheme at the general meeting and A shareholder class meeting and H shareholder class meeting, and passing the resolution of granting interest to the Incentive Participants at the Board meeting, the Company shall sign an ‘‘Agreement on Grant of Restricted Shares’’ with the Incentive Participants in order to set out their respective rights and obligations as well as other matters.
(VIII) Other relevant rights and obligations under the laws, regulations and the Incentive Scheme.

CHAPTER XIII HANDLING UNUSUAL CHANGES TO THE COMPANY/THE INCENTIVE PARTICIPANTS

I. Handling unusual changes to the Company

(I) In the event that any of the circumstances below occurs in respect of the Company, the Incentive Scheme shall be terminated and the Restricted Shares that have been granted to the Incentive Participants but not yet attributed shall not be attributed:
an audit report on the financial and accounting report for the most recent financial year in which a certified public accountant issued an adverse opinion or was unable to express an opinion;
an audit report on internal control over financial reporting for the most recent financial year in which a certified public accountant issued an adverse opinion or was unable to express an opinion;

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in the most recent 36 months upon listing, there have been cases of failure to distribute profits according to laws and regulations, the Articles of Association and public undertakings;
laws and regulations stipulate that equity incentives shall not be implemented;
other circumstances where the Incentive Scheme should be terminated as determined by the CSRC.
(II) The Incentive Scheme shall remain unchanged if any of the following events occurs to the Company:
a change of control of the Company without reorganisation of major assets;
a merger or division of the Company, where the Company continues to exist.
(III) If any of the following events occurs to the Company, the general meeting and A shareholder class meeting and H shareholder class meeting of the Company shall decide whether to amend or adjust the Incentive Scheme:
a change of control of the Company involving reorganisation of major assets;
a merger or division of the Company, where Company no longer exists.
(IV) Where false statements or misleading statements in or material omissions from the information disclosure documents of the Company result in non-compliance with conditions for the grant or Attribution of Restricted Shares, the Restricted Shares granted to Incentive Participants but not yet attributed shall not be attributed and shall lapse. In respect of the Restricted Shares already attributed, the Incentive Participants concerned shall return to the Company all equities granted. The Board shall recover the income of Incentive Participants in accordance with the provisions of the preceding paragraph. The Incentive Participants who bear no responsibility for the aforesaid matters and who incur losses as a result of the return of interests granted may seek compensation from the Company or responsible parties.

II. Change in personal particulars of the Incentive Participants

(I) If an Incentive Participant ceases to be eligible to participate in the Incentive Scheme due to the occurrence of any of the following circumstances, the Board may decide that the Restricted Shares granted to the Incentive Participant but not yet attributed shall not be attributed and shall lapse on the date of occurrence of the circumstances under the Incentive Scheme:
being identified as an inappropriate candidate by the SSE within the most recent 12 months;
being identified as an inappropriate candidate by the CSRC and its delegated institutions within the most recent 12 months;

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subject to administrative penalties or market ban measures by the CSRC and its delegated institutions due to material non-compliance with laws and regulations in the last 12 months;
being prohibited from acting as a director or a member of the senior management of the Company under the Company Law;
being prohibited from participation in Share Incentive Schemes of listed companies by laws and regulations;
other circumstances as determined by the CSRC.
(II) If an Incentive Participant’s position(s) has been changed but he/she still works in the Company, the Restricted Shares granted to him/her shall be carried out in full accordance with the procedures stipulated in the Incentive Scheme prior to the change of his/her position(s); however, if the Incentive Participant’s position(s) has changed due to his/her incompetence to his/her position, violation of laws, violation of professional ethics, leakage of confidential information of the Company, dereliction of duty or malfeasance, serious violation of the Company’s system and other acts that damage the interests or reputation of the Company, or the Company terminates his/her labour relationship or employment relationship with the Incentive Participant due to the above reasons, the Restricted Shares that have been granted to the Incentive Participant but not yet attributed shall not be attributed and shall lapse.
(III) Where an Incentive Participants resigns, including circumstances of voluntary resignation, resignation due to layoffs of the Company, labour contract/employment agreement expired and no longer renewed, dismissal by the Company due to personal fault, negotiated termination of labour contract or employment agreement, Restricted Shares that have been granted to the Incentive Participant but not yet attributed since the date of resignation shall not be attributed and shall lapse. The Incentive Participant shall pay the Company the individual income tax involved in the attributed Restricted Shares before resignation.

The Company has the right to recover the losses incurred from an Incentive Participant in accordance with the provisions of relevant laws, depending on the seriousness of the circumstances when he/she conducts personal faults including but not limited to:

Violation of the employment contract, confidentiality agreement, non-competition agreement or any other similar agreements signed with the Company or its affiliates; violation of the laws of the country of residence, resulting in criminal offenses or other bad conditions that affect the performance of the job; collection of remuneration from companies other than the Company or individuals, which has not been disclosed to the Company in advance.

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(IV) If an Incentive Participant retires normally in accordance with national regulations and the Company’s requirements, the Restricted Shares granted to him/her shall remain valid and shall be attributed in accordance with the procedures stipulated in the Incentive Scheme.
(V) The resignation of an Incentive Participant due to his/her incapacity shall be dealt with in the following two circumstances:
When an Incentive Participant resigns due to incapacity in performing his/her duties, the Restricted Shares granted to him/her shall be carried out in accordance with the procedures stipulated in the Incentive Scheme prior to the incapacity. The Board may determine that his/her personal performance assessment conditions shall not be included in the Attribution Conditions. The Incentive Participants shall pay to the Company the individual income tax in relation to the Restricted Shares that have been attributed before they leave the Company, and shall pay the individual income tax in relation to the Restricted Shares that will be attributed in the current period for each Attribution thereafter.
When an Incentive Participant leaves the Company due to incapacity not resulting from performance of duties, the Restricted Shares that have been granted to the Incentive Participant but not yet attributed shall not be attributed and shall lapse. Prior to the resignation of the Incentive Participants, the Incentive Participants shall pay to the Company the individual income tax involved in the Restricted Shares that have been attributed.
(VI) The death of an Incentive Participant shall be dealt with in the following two circumstances:
If an Incentive Participant dies in the course of performing his/her duties, the Restricted Shares granted to him/her shall be inherited by his/her successor and shall be attributed in accordance with the procedures stipulated in the Scheme prior to the death of the Incentive Participant. The Board may determine that his/her personal performance assessment conditions shall no longer be included in the Attribution Conditions. The successor shall pay to the Company the individual income tax in respect of the Restricted Shares attributed before the inheritance, and shall pay the individual income tax in respect of the Restricted Shares attributed for the current period in advance of each Attribution thereafter.
If an Incentive Participant dies other than due to his/her duty, the Restricted Shares that have been granted to the Incentive Participant but have not yet been attributed shall not be attributed and shall lapse on the date of occurrence of such event. If the Board, at its discretion, allows the Restricted Shares that have been granted but have not yet been attributed to be carried out in accordance with the procedures stipulated in the Incentive Scheme prior to the death of the Incentive Participants, the Board may determine that their personal performance assessment will no longer be included in the Attribution

– I-44 –

2022 A SHARE INCENTIVE SCHEME

APPENDIX I

Conditions, and the successors shall pay the individual income tax in respect of the Restricted Shares that have been attributed before the inheritance, and shall pay the individual income tax in respect of the Restricted Shares that will be attributed in the current period in advance of each Attribution thereafter.

(VII) Other unspecified circumstances shall be determined by the Board and its treatment method shall be determined.
III. Settlement mechanism for relevant disputes between the Company and Incentive Participants

The disputes between the Company and the Incentive Participants arising from the execution of the Incentive Scheme and/or the ‘‘Agreement on the Grant of Restricted Shares’’ signed by the parties or in relation to the Incentive Scheme and/or the ‘‘Agreement on the Grant of Restricted Shares’’ shall be solved through negotiation and communication by both parties, or mediation by the Remuneration Committee of the Board. If relevant disputes are not solved through the above-mentioned methods within 60 days from the date of occurrence of the disputes, either party is entitled to file a lawsuit with the people’s court with jurisdiction in the place where the Company is located.

CHAPTER XIV SUPPLEMENTARY PROVISIONS

I. The Incentive Scheme shall become effective upon consideration and approval at the general meeting and A shareholder class meeting and H shareholder class meeting of the Company.
II. The Incentive Scheme shall be interpreted by the Board of the Company.
III. If the provisions of the Incentive Scheme conflict with relevant national laws, regulations, administrative rules and regulatory documents, it shall be implemented or adjusted in accordance with the relevant national laws, regulations, administrative rules and regulatory documents. If there is no provision stipulated in the Incentive Scheme, it shall be implemented or adjusted in accordance with the relevant national laws, regulations, administrative rules and regulatory documents.

The Board of RemeGen Co., Ltd.* October 16, 2022

– I-45 –

ASSESSMENT MANAGEMENT MEASURES

APPENDIX II

THE MANAGEMENT MEASURES FOR ASSESSMENT FOR THE IMPLEMENTATION OF THE 2022 RESTRICTED A SHARE INCENTIVE SCHEME OF REMEGEN CO., LTD.*

RemeGen Co., Ltd.* (the ‘‘Company’’) intends to implement the 2022 A Share Restricted Share Incentive Scheme (the ‘‘Share Incentive Scheme’’ or the ‘‘Restricted Share Incentive Scheme’’), in order to further improve the corporate governance structure, solidify the incentive and restraint mechanism of the Company, form a well-balanced value distribution system, fully mobilise the motivation of the employees of the Company such that they can conduct their work in a more honest and diligent manner, so as to secure the steady improvement of the Company’s performance and the achievement of the Company’s development strategy and operating objectives.

In order to ensure the smooth implementation of the Share Incentive Scheme, the Measures are hereby formulated based on the actual situation of the Company in accordance with the Company Law of the People’s Republic of China 《( 中華人民共和國公司法》), the Securities Law of the People’s Republic of China 《( 中華人民共和國證券法》), the Management Measures for Share Incentives of Listed Companies 《( 上市公司股權激勵管理辦法》), the Rules Governing the Listing of Stocks on the STAR Market of Shanghai Stock Exchange 《( 上海證券交易所科創板股票上市規則》), the Guidelines for Self-discipline Supervision of Companies Listed on the STAR Market No. 4 – Disclosure of Information on Share Incentives 《( 科創板上市公司自律監管指南第4號—股權激勵信息披露》), the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited 《( 香港聯合交易所有限公司證券上市規則》) and other relevant laws, regulations and regulatory documents, as well as the Articles of Association of RemeGen Co., Ltd 《( 榮昌生物製藥(煙台)股份有限公司章程》) and relevant provisions of the Restricted Share Incentive Scheme of the Company.

I. Purpose of the Assessment

To further improve the corporate governance structure, establish and solidify the incentive constraint mechanism of the Company, ensure the smooth implementation of the 2022 A Share Restricted Share Incentive Scheme of the Company and maximise the effect of share incentive to ensure the achievement of the development strategy and business objectives of the Company.

II. Principles of Assessment

The assessment and evaluation must adhere to the principles of impartiality, openness and fairness, and be carried out in strict accordance with the Measures and the performance of the Incentive Participants, to realise the close combination of the 2022 A Share Incentive Scheme with the work performance and contribution of the Incentive Participants, so as to improve the overall performance of the Company and maximise the interests of the Company and shareholders as a whole.

– II-1 –

ASSESSMENT MANAGEMENT MEASURES

APPENDIX II

III. Scope of Assessment

The Measures shall apply to all Incentive Participants involved in the Company’s Restricted Share Incentive Scheme, i.e., all Incentive Participants identified by the Remuneration and Appraisal Committee and approved by the Board, including the Directors, senior management, core technical personnel and other employees (excluding independent Directors and Supervisors) who the Board considers necessary to be incentivised when the Company announces the Incentive Scheme. All Incentive Participants must have an employment or labour relationship with the Company (or its subsidiaries or branches) at the time of the grant of the Restricted Shares and during the assessment period specified in the Restricted Share Incentive Scheme.

IV. Assessment Body

(I) The Remuneration and Appraisal Committee of the Board is responsible for leading and organising the assessment of the Incentive Participants.
(II) The human resources department of the Company is responsible for the implementation of specific assessment work. The human resources department of the Company is responsible for and will report to the Remuneration and Appraisal Committee.
(III) The human resources department, the finance department and other relevant departments of the Company are responsible for the collection and provision of relevant assessment data, as well as the authenticity and reliability of the data.
(IV) The Board of the Company is responsible for reviewing the Measures and the assessment results.

V. Assessment Indicators and Standards

(I) Performance assessment requirements at the Company level

The performance assessment at the company level of the Incentive Scheme sets different appraisal arrangements for Type A interests and Type B interests.

– II-2 –

ASSESSMENT MANAGEMENT MEASURES

APPENDIX II

(1) First Grant
① The assessment year of the First Grant of the Class A interests is for the five accounting years from 2022 to 2026, and shall be assessed once in each accounting year. The performance assessment targets for each year are set out in the table below:

Class A interests

		Performance assessment	Performance assessment	Performance assessment
Attribution	Assessment	target A	target B	target C
Arrangements	year	100% of company	80% of company	70% of company
		Attribution	Attribution	Attribution
First Attribution	2022	The Company satisfies any	The Company satisfies any	The Company satisfies any
Period		one of the following	one of the following	one of the following
		conditions:	conditions:	conditions:
		1. Total revenue for 2022	1. Total revenue for 2022	1. Total revenue for 2022
		shall not be less than	shall not be less than	shall not be less than
		RMB750 million	RMB700 million	RMB650 million
		2. In 2022, the Group shall	2. In 2022, the Group shall	2. In 2022, the Group shall
		launch 6 new clinical trials	launch 5 new clinical trials	launch 4 new clinical trials
		(including I-III phase	(including I-III phase	(including I-III phase
		clinical trials, achieving the	clinical trials, achieving the	clinical trials, achieving the
		first patient enrolment)	first patient enrolment)	first patient enrolment)
Second Attribution	2023	The Company satisfies any	The Company satisfies any	The Company satisfies any
Period		one of the following	one of the following	one of the following
		conditions:	conditions:	conditions:
		1. From 2022 to 2023, the	1. From 2022 to 2023, the	1. From 2022 to 2023, the
		cumulative revenue shall not	cumulative revenue shall not	cumulative revenue shall not
		be less than RMB2 billion	be less than RMB1.8 billion	be less than RMB1.6 billion
		2. From 2022 to 2023, the	2. From 2022 to 2023, the	2. From 2022 to 2023, the
		Group shall launch a total	Group shall launch a total	Group shall launch a total
		of 12 new clinical trials	of 10 new clinical trials	of 8 new clinical trials
		(including I-III phase	(including I-III phase	(including I-III phase
		clinical trials, achieving the	clinical trials, achieving the	clinical trials, achieving the
		first patient enrolment)	first patient enrolment)	first patient enrolment)
Third Attribution	2024	The Company satisfies any	The Company satisfies any	The Company satisfies any
Period		one of the following	one of the following	one of the following
		conditions:	conditions:	conditions:
		1. From 2022 to 2024, the	1. From 2022 to 2024, the	1. From 2022 to 2024, the
		cumulative revenue shall not	cumulative revenue shall not	cumulative revenue shall not
		be less than RMB4 billion	be less than RMB3.6 billion	be less than RMB3.3 billion
		2. From 2022 to 2024, the	2. From 2022 to 2024, the	2. From 2022 to 2024, the
		Group shall launch a total	Group shall launch a total	Group shall launch a total
		of 20 new clinical trials	of 17 new clinical trials	of 14 new clinical trials
		(including I-III phase	(including I-III phase	(including I-III phase
		clinical trials, achieving the	clinical trials, achieving the	clinical trials, achieving the
		first patient enrolment)	first patient enrolment)	first patient enrolment)

– II-3 –

ASSESSMENT MANAGEMENT MEASURES

APPENDIX II

Class A interests

		Performance assessment	Performance assessment	Performance assessment
Attribution	Assessment	target A	target B	target C
Arrangements	year	100% of company	80% of company	70% of company
		Attribution	Attribution	Attribution
Fourth Attribution	2025	The Company satisfies any	The Company satisfies any	The Company satisfies any
Period		one of the following	one of the following	one of the following
		conditions:	conditions:	conditions:
		1. From 2022 to 2025, the	1. From 2022 to 2025, the	1. From 2022 to 2025, the
		cumulative revenue shall not	cumulative revenue shall not	cumulative revenue shall not
		be less than RMB7 billion	be less than RMB6.5 billion	be less than RMB6 billion
		2. From 2022 to 2025, the	2. From 2022 to 2025, the	2. From 2022 to 2025, the
		Group shall launch a total	Group shall launch a total	Group shall launch a total
		of 28 new clinical trials	of 24 new clinical trials	of 20 new clinical trials
		(including I-III phase	(including I-III phase	(including I-III phase
		clinical trials, achieving the	clinical trials, achieving the	clinical trials, achieving the
		first patient enrolment)	first patient enrolment)	first patient enrolment)
Fifth Attribution	2026	The Company satisfies any	The Company satisfies any	The Company satisfies any
Period		one of the following	one of the following	one of the following
		conditions:	conditions:	conditions:
		1. From 2022 to 2026, the	1. From 2022 to 2026, the	1. From 2022 to 2026, the
		cumulative revenue shall not	cumulative revenue shall not	cumulative revenue shall not
		be less than RMB11 billion	be less than RMB10 billion	be less than RMB9 billion
		2. From 2022 to 2026, the	2. From 2022 to 2026, the	2. From 2022 to 2026, the
		Group shall launch a total	Group shall launch a total	Group shall launch a total
		of 36 new clinical trials	of 31 new clinical trials	of 26 new clinical trials
		(including I-III phase	(including I-III phase	(including I-III phase
		clinical trials, achieving the	clinical trials, achieving the	clinical trials, achieving the
		first patient enrolment)	first patient enrolment)	first patient enrolment)

– II-4 –

ASSESSMENT MANAGEMENT MEASURES

APPENDIX II

② The assessment year for the First Grant of the Class B interests shall be the four accounting years from 2023 to 2026, which shall be assessed once in each accounting year. The performance assessment targets for each year are set out in the table below:

Class B interests

		Performance assessment	Performance assessment	Performance assessment
Attribution	Assessment	target A	target B	target C
Arrangements	year	100% of company	80% of company	70% of company
		Attribution	Attribution	Attribution
First Attribution	2023	The Company satisfies any	The Company satisfies any	The Company satisfies any
Period		one of the following	one of the following	one of the following
		conditions:	conditions:	conditions:
		1. From 2022 to 2023, the	1. From 2022 to 2023, the	1. From 2022 to 2023, the
		cumulative revenue shall not	cumulative revenue shall not	cumulative revenue shall not
		be less than RMB2 billion	be less than RMB1.8 billion	be less than RMB1.6 billion
		2. From 2022 to 2023, the	2. From 2022 to 2023, the	2. From 2022 to 2023, the
		Group shall launch a total	Group shall launch a total	Group shall launch a total
		of 12 new clinical trials	of 10 new clinical trials	of 8 new clinical trials
		(including I-III phase	(including I-III phase	(including I-III phase
		clinical trials, achieving the	clinical trials, achieving the	clinical trials, achieving the
		first patient enrolment)	first patient enrolment)	first patient enrolment)
Second Attribution	2024	The Company satisfies any	The Company satisfies any	The Company satisfies any
Period		one of the following	one of the following	one of the following
		conditions:	conditions:	conditions:
		1. From 2022 to 2024, the	1. From 2022 to 2024, the	1. From 2022 to 2024, the
		cumulative revenue shall not	cumulative revenue shall not	cumulative revenue shall not
		be less than RMB4 billion	be less than RMB3.6 billion	be less than RMB3.3 billion
		2. From 2022 to 2024, the	2. From 2022 to 2024, the	2. From 2022 to 2024, the
		Group shall launch a total	Group shall launch a total	Group shall launch a total
		of 20 new clinical trials	of 17 new clinical trials	of 14 new clinical trials
		(including I-III phase	(including I-III phase	(including I-III phase
		clinical trials, achieving the	clinical trials, achieving the	clinical trials, achieving the
		first patient enrolment)	first patient enrolment)	first patient enrolment)
Third Attribution	2025	The Company satisfies any	The Company satisfies any	The Company satisfies any
Period		one of the following	one of the following	one of the following
		conditions:	conditions:	conditions:
		1. From 2022 to 2025, the	1. From 2022 to 2025, the	1. From 2022 to 2025, the
		cumulative revenue shall not	cumulative revenue shall not	cumulative revenue shall not
		be less than RMB7 billion	be less than RMB6.5 billion	be less than RMB6 billion
		2. From 2022 to 2025, the	2. From 2022 to 2025, the	2. From 2022 to 2025, the
		Group shall launch a total	Group shall launch a total	Group shall launch a total
		of 28 new clinical trials	of 24 new clinical trials	of 20 new clinical trials
		(including I-III phase	(including I-III phase	(including I-III phase
		clinical trials, achieving the	clinical trials, achieving the	clinical trials, achieving the
		first patient enrolment)	first patient enrolment)	first patient enrolment)

– II-5 –

ASSESSMENT MANAGEMENT MEASURES

APPENDIX II

Class B interests

		Performance assessment	Performance assessment	Performance assessment
Attribution	Assessment	target A	target B	target C
Arrangements	year	100% of company	80% of company	70% of company
		Attribution	Attribution	Attribution
Fourth Attribution	2026	The Company satisfies any	The Company satisfies any	The Company satisfies any
Period		one of the following	one of the following	one of the following
		conditions:	conditions:	conditions:
		1. From 2022 to 2026, the	1. From 2022 to 2026, the	1. From 2022 to 2026, the
		cumulative revenue shall not	cumulative revenue shall not	cumulative revenue shall not
		be less than RMB11 billion	be less than RMB10 billion	be less than RMB9 billion
		2. From 2022 to 2026, the	2. From 2022 to 2026, the	2. From 2022 to 2026, the
		Group shall launch a total	Group shall launch a total	Group shall launch a total
		of 36 new clinical trials	of 31 new clinical trials	of 26 new clinical trials
		(including I-III phase	(including I-III phase	(including I-III phase
		clinical trials, achieving the	clinical trials, achieving the	clinical trials, achieving the
		first patient enrolment)	first patient enrolment)	first patient enrolment)

(2) Reserved Grant

① The assessment years of the Class A interests of the Restricted Shares under the Reserved Grant shall be the four accounting years from 2023 to 2027, which shall be assessed once in each accounting year. The performance assessment targets for each year are set out in the table below:

Class A interests

		Performance assessment	Performance assessment	Performance assessment
Attribution	Assessment	target A	target B	target C
Arrangements	year	100% of company	80% of company	70% of company
		Attribution	Attribution	Attribution
Attribution Period	2023	The Company satisfies any	The Company satisfies any	The Company satisfies any
of first tranche		one of the following	one of the following	one of the following
under the		conditions:	conditions:	conditions:
Reserved Grant		1. From 2022 to 2023, the	1. From 2022 to 2023, the	1. From 2022 to 2023, the
		cumulative revenue shall not	cumulative revenue shall not	cumulative revenue shall not
		be less than RMB2 billion	be less than RMB1.8 billion	be less than RMB1.6 billion
		2. From 2022 to 2023, the	2. From 2022 to 2023, the	2. From 2022 to 2023, the
		Group shall launch a total	Group shall launch a total	Group shall launch a total
		of 12 new clinical trials	of 10 new clinical trials	of 8 new clinical trials
		(including I-III phase	(including I-III phase	(including I-III phase
		clinical trials, achieving the	clinical trials, achieving the	clinical trials, achieving the
		first patient enrolment)	first patient enrolment)	first patient enrolment)

– II-6 –

ASSESSMENT MANAGEMENT MEASURES

APPENDIX II

Class A interests

		Performance assessment	Performance assessment	Performance assessment
Attribution	Assessment	target A	target B	target C
Arrangements	year	100% of company	80% of company	70% of company
		Attribution	Attribution	Attribution
Attribution Period	2024	The Company satisfies any	The Company satisfies any	The Company satisfies any
of second		one of the following	one of the following	one of the following
tranche under		conditions:	conditions:	conditions:
the Reserved		1. From 2022 to 2024, the	1. From 2022 to 2024, the	1. From 2022 to 2024, the
Grant		cumulative revenue shall not	cumulative revenue shall not	cumulative revenue shall not
		be less than RMB4 billion	be less than RMB3.6 billion	be less than RMB3.3 billion
		2. From 2022 to 2024, the	2. From 2022 to 2024, the	2. From 2022 to 2024, the
		Group shall launch a total	Group shall launch a total	Group shall launch a total
		of 20 new clinical trials	of 17 new clinical trials	of 14 new clinical trials
		(including I-III phase	(including I-III phase	(including I-III phase
		clinical trials, achieving the	clinical trials, achieving the	clinical trials, achieving the
		first patient enrolment)	first patient enrolment)	first patient enrolment)
Attribution Period	2025	The Company satisfies any	The Company satisfies any	The Company satisfies any
of third tranche		one of the following	one of the following	one of the following
under the		conditions:	conditions:	conditions:
Reserved Grant		1. From 2022 to 2025, the	1. From 2022 to 2025, the	1. From 2022 to 2025, the
		cumulative revenue shall not	cumulative revenue shall not	cumulative revenue shall not
		be less than RMB7 billion	be less than RMB6.5 billion	be less than RMB6 billion
		2. From 2022 to 2025, the	2. From 2022 to 2025, the	2. From 2022 to 2025, the
		Group shall launch a total	Group shall launch a total	Group shall launch a total
		of 28 new clinical trials	of 24 new clinical trials	of 20 new clinical trials
		(including I-III phase	(including I-III phase	(including I-III phase
		clinical trials, achieving the	clinical trials, achieving the	clinical trials, achieving the
		first patient enrolment)	first patient enrolment)	first patient enrolment)
Attribution Period	2026	The Company satisfies any	The Company satisfies any	The Company satisfies any
of fourth		one of the following	one of the following	one of the following
tranche under		conditions:	conditions:	conditions:
the Reserved		1. From 2022 to 2026, the	1. From 2022 to 2026, the	1. From 2022 to 2026, the
Grant		cumulative revenue shall not	cumulative revenue shall not	cumulative revenue shall not
		be less than RMB11 billion	be less than RMB10 billion	be less than RMB9 billion
		2. From 2022 to 2026, the	2. From 2022 to 2026, the	2. From 2022 to 2026, the
		Group shall launch a total	Group shall launch a total	Group shall launch a total
		of 36 new clinical trials	of 31 new clinical trials	of 26 new clinical trials
		(including I-III phase	(including I-III phase	(including I-III phase
		clinical trials, achieving the	clinical trials, achieving the	clinical trials, achieving the
		first patient enrolment)	first patient enrolment)	first patient enrolment)
Attribution Period	2027	The Company satisfies any	The Company satisfies any	The Company satisfies any
of fifth tranche		one of the following	one of the following	one of the following
under the		conditions:	conditions:	conditions:
Reserved Grant		1. From 2022 to 2027, the	1. From 2022 to 2027, the	1. From 2022 to 2027, the
		cumulative revenue shall not	cumulative revenue shall not	cumulative revenue shall not
		be less than RMB16 billion	be less than RMB15 billion	be less than RMB14 billion
		2. From 2022 to 2027, the	2. From 2022 to 2027, the	2. From 2022 to 2027, the
		Group shall launch a total	Group shall launch a total	Group shall launch a total
		of 44 new clinical trials	of 38 new clinical trials	of 32 new clinical trials
		(including I-III phase	(including I-III phase	(including I-III phase
		clinical trials, achieving the	clinical trials, achieving the	clinical trials, achieving the
		first patient enrolment)	first patient enrolment)	first patient enrolment)

– II-7 –

ASSESSMENT MANAGEMENT MEASURES

APPENDIX II

② The assessment years of the Class B interests of the Restricted Shares under the Reserved Grant shall be the four accounting years from 2024 to 2027, which shall be assessed once in each accounting year. The performance assessment targets for each year are set out in the table below:

Class B interests

		Performance assessment	Performance assessment	Performance assessment
Attribution	Assessment	target A	target B	target C
Arrangements	year	100% of company	80% of company	70% of company
		Attribution	Attribution	Attribution
Attribution Period	2024	The Company satisfies any	The Company satisfies any	The Company satisfies any
of first tranche		one of the following	one of the following	one of the following
under the		conditions:	conditions:	conditions:
Reserved Grant		1. From 2022 to 2024, the	1. From 2022 to 2024, the	1. From 2022 to 2024, the
		cumulative revenue shall not	cumulative revenue shall not	cumulative revenue shall not
		be less than RMB4 billion	be less than RMB3.6 billion	be less than RMB3.3 billion
		2. From 2022 to 2024, the	2. From 2022 to 2024, the	2. From 2022 to 2024, the
		Group shall launch a total	Group shall launch a total	Group shall launch a total
		of 20 new clinical trials	of 17 new clinical trials	of 14 new clinical trials
		(including I-III phase	(including I-III phase	(including I-III phase
		clinical trials, achieving the	clinical trials, achieving the	clinical trials, achieving the
		first patient enrolment)	first patient enrolment)	first patient enrolment)
Attribution Period	2025	The Company satisfies any	The Company satisfies any	The Company satisfies any
of second		one of the following	one of the following	one of the following
tranche under		conditions:	conditions:	conditions:
the Reserved		1. From 2022 to 2025, the	1. From 2022 to 2025, the	1. From 2022 to 2025, the
Grant		cumulative revenue shall not	cumulative revenue shall not	cumulative revenue shall not
		be less than RMB7 billion	be less than RMB6.5 billion	be less than RMB6 billion
		2. From 2022 to 2025, the	2. From 2022 to 2025, the	2. From 2022 to 2025, the
		Group shall launch a total	Group shall launch a total	Group shall launch a total
		of 28 new clinical trials	of 24 new clinical trials	of 20 new clinical trials
		(including I-III phase	(including I-III phase	(including I-III phase
		clinical trials, achieving the	clinical trials, achieving the	clinical trials, achieving the
		first patient enrolment)	first patient enrolment)	first patient enrolment)

– II-8 –

ASSESSMENT MANAGEMENT MEASURES

APPENDIX II

Class B interests

		Performance assessment	Performance assessment	Performance assessment
Attribution	Assessment	target A	target B	target C
Arrangements	year	100% of company	80% of company	70% of company
		Attribution	Attribution	Attribution
Attribution Period	2026	The Company satisfies any	The Company satisfies any	The Company satisfies any
of third tranche		one of the following	one of the following	one of the following
under the		conditions:	conditions:	conditions:
Reserved Grant		1. From 2022 to 2026, the	1. From 2022 to 2026, the	1. From 2022 to 2026, the
		cumulative revenue shall not	cumulative revenue shall not	cumulative revenue shall not
		be less than RMB11 billion	be less than RMB10 billion	be less than RMB9 billion
		2. From 2022 to 2026, the	2. From 2022 to 2026, the	2. From 2022 to 2026, the
		Group shall launch a total	Group shall launch a total	Group shall launch a total
		of 36 new clinical trials	of 31 new clinical trials	of 26 new clinical trials
		(including I-III phase	(including I-III phase	(including I-III phase
		clinical trials, achieving the	clinical trials, achieving the	clinical trials, achieving the
		first patient enrolment)	first patient enrolment)	first patient enrolment)
Attribution Period	2027	The Company satisfies any	The Company satisfies any	The Company satisfies any
of fourth		one of the following	one of the following	one of the following
tranche under		conditions:	conditions:	conditions:
the Reserved		1. From 2022 to 2027, the	1. From 2022 to 2027, the	1. From 2022 to 2027, the
Grant		cumulative revenue shall not	cumulative revenue shall not	cumulative revenue shall not
		be less than RMB16 billion	be less than RMB15 billion	be less than RMB14 billion
		2. From 2022 to 2027, the	2. From 2022 to 2027, the	2. From 2022 to 2027, the
		Group shall launch a total	Group shall launch a total	Group shall launch a total
		of 44 new clinical trials	of 38 new clinical trials	of 32 new clinical trials
		(including I-III phase	(including I-III phase	(including I-III phase
		clinical trials, achieving the	clinical trials, achieving the	clinical trials, achieving the
		first patient enrolment)	first patient enrolment)	first patient enrolment)

– II-9 –

ASSESSMENT MANAGEMENT MEASURES

APPENDIX II

(II) Performance assessment requirements at the Incentive Participant’s individual level

The Company conducts individual performance assessment on the Incentive Participants during the assessment year and determines the number of Shares actually attributed to the Incentive Participants based on their assessment results. The performance assessment results of the Incentive Participants are divided into four levels, namely A, B, C and D, and the actual number of Shares to be attributed to the Incentive Participants will be determined according to the proportion of Attribution at the individual level corresponding to the following assessment rating table:

Assessment results	A	B	C	D
Individual Attribution ratio		100%		0%

If the Restricted Shares attributed to the Incentive Participants for the current period cannot be attributed or cannot be fully attributed due to assessment reasons, the Restricted Shares shall lapse and shall not be deferred to the following years.

VI. Period and Times of Assessment

(I) Period of Assessment:

For the First Grant, the assessment period for Class A interests is five accounting years from 2022 to 2026, and the assessment period for Class B interests is four accounting years from 2023 to 2026.

For the Reserved Grant, the assessment period for Class A interests is five accounting years from 2023 to 2027, and the assessment period for Class B interests is four accounting years from 2024 to 2027.

(II) Times of Assessment

The results assessment at the Company level and performance assessment at the individual level shall be conducted at annual basis.

VII. Assessment Procedures

The human resources department of the Company is responsible for the specific assessment work under the guidance of the Remuneration and Appraisal Committee and retaining the assessment results. On this basis, a performance assessment report shall be prepared and submitted to the Remuneration and Appraisal Committee.

– II-10 –

ASSESSMENT MANAGEMENT MEASURES

APPENDIX II

VIII. Management of Assessment Results

(I) Feedback and appealing of assessment results

The Incentive Participants are entitled to know their own assessment results. The Remuneration and Appraisal Committee shall inform the Incentive Participants of the assessment results within 15 working days after the completion of the assessment.

If the Incentive Participants have objections against the assessment results, they can communicate with the human resources department to resolve within 5 days after receiving the results of the assessment. If the objections cannot be resolved through communication, the Incentive Participants may appeal to the Remuneration and Appraisal Committee which shall review and determine the final assessment result within 20 working days.

(II) Record of assessment results

After the completion of the assessment, the human resources department shall retain all the records of the performance assessment as confidential information, and the assessment results shall be kept for 10 years. Documents and records that exceed the storage period shall be uniformly destroyed by the human resources department upon approval by the Remuneration and Appraisal Committee.

IX. Supplementary Provisions

(I) The Board is responsible for the formulation, interpretation and revision of the Measures. If the relevant provisions of the Measures conflict with the relevant laws, administrative regulations and departmental rules, the relevant laws, administrative regulations and departmental rule shall prevail.
(II) The Measures shall be subject to consideration and approval at the general meeting and A shareholder class meeting and H shareholder class meeting and become effective upon the 2022 restricted A Share Incentive Scheme becoming effective.

The Board of RemeGen Co., Ltd.* October 16, 2022

– II-11 –

NOTICE OF EGM

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RemeGen Co., Ltd.[*] 榮昌生物製藥（煙台）股份有限公司 (A joint stock company incorporated in the People’s Republic of China with limited liability) (Stock Code: 9995)

NOTICE OF 2022 SECOND EXTRAORDINARY GENERAL MEETING

NOTICE IS HEREBY GIVEN that the 2022 second extraordinary general meeting (the ‘‘EGM’’) of RemeGen Co., Ltd.* (the ‘‘Company’’) will be held at MakerSpace, 3/F, Incubation Center, 60 Middle Beijing Road, Yantai Development Zone, Yantai Area of Shandong Pilot Free Trade Zone, PRC at 2:00 p.m. on Wednesday, December 28, 2022 or at any adjournment thereof for the purpose of considering and, if thought fit, passing the following resolutions:

SPECIAL RESOLUTIONS

To consider and approve the 2022 Restricted A Share Incentive Scheme (Draft) of the Company and its summary.
To consider and approve the Assessment Management Measures for the 2022 Restricted A Share Incentive Scheme of the Company.
To consider and approve the proposed authorization to the board of directors of the Company to handle matters pertaining to the 2022 Restricted A Share Incentive Scheme of the Company.

By order of the Board RemeGen Co., Ltd.* 榮昌生物製藥(煙台)股份有限公司 Mr. Wang Weidong

Chairman and executive director

Yantai, the PRC December 12, 2022

For identification purposes only

– EGM-1 –

NOTICE OF EGM

Notes:

All resolutions at the EGM will be taken by poll (except where the chairman decides to allow a resolution relating to a procedural or administrative matter to be voted on by a show of hands) pursuant to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited. The results of the poll will be published on the websites of the Company at www.remegen.com and Hong Kong Exchanges and Clearing Limited at www.hkexnews.hk after the EGM.
Any shareholder entitled to attend and vote at the EGM convened by the above notice is entitled to appoint one or more proxies to attend and vote instead of him/her. A proxy need not be a shareholder of the Company.
In order to be valid, the instrument appointing a proxy together with the power of attorney or other authority, if any, under which it is signed, or a notarially certified copy of such power of attorney or authority, must be completed and returned to the H share registrar of the Company, Computershare Hong Kong Investor Services Limited, at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong (for holders of H shares), at least 24 hours before the EGM (i.e. before 2:00 p.m. on December 27, 2022) or any adjourned meeting thereof. Completion and return of the form of proxy will not preclude a shareholder from attending and voting at the EGM or any adjourned meeting thereof should he/she so wish.
For the purpose of determining the list of holders of H shares who are entitled to attend the EGM, the H share register of members of the Company will be closed from December 21, 2022 to December 28, 2022, both days inclusive, during which period no transfer of shares will be registered. In order to be eligible to attend and vote at the EGM, unregistered holders of the shares shall ensure all transfer documents accompanied by the relevant share certificates must be lodged with the Company’s H share registrar, Computershare Hong Kong Investor Services Limited at Shops 1712–1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong no later than 4:30 p.m. on December 20, 2022 for registration.
Where there are joint registered holders of any share, any one of such joint holders may vote, either in person or by proxy, in respect of such share as if he/she was solely entitled thereto, but if more than one of such joint holders are present at the EGM, whether in person or by proxy, the joint registered holder present whose name stands first on the register of members of the Company in respect of the shares shall alone be entitled to vote in respect thereof.
A shareholder or his/her proxy should produce proof of identity when attending the EGM.
Shareholders who attend the meeting in person or by proxy shall bear their own travelling and accommodation expenses. Shareholders may contact the Investor Relations Department of the Company at +86–0535–3573598 or [email protected] for any enquiries in respect of the EGM.

As at the date of this notice, the board of directors of the Company comprises Mr. Wang Weidong, Dr. Fang Jianmin, Dr. He Ruyi and Mr. Lin Jian as the executive directors, Dr. Wang Liqiang and Dr. Su Xiaodi as the non-executive directors, and Mr. Hao Xianjing, Dr. Ma Lan and Mr. Chen Yunjin as the independent non-executive directors.

– EGM-2 –

NOTICE OF H SHARE CLASS MEETING

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RemeGen Co., Ltd.[*] 榮昌生物製藥（煙台）股份有限公司 (A joint stock company incorporated in the People’s Republic of China with limited liability) (Stock Code: 9995)

NOTICE OF 2022 FIRST CLASS MEETING OF H SHAREHOLDERS

NOTICE IS HEREBY GIVEN that the 2022 first class meeting of H shareholders (the ‘‘Class Meeting of H Shareholders’’) of RemeGen Co., Ltd.* (the ‘‘Company’’) will be held at MakerSpace, 3/F, Incubation Center, 60 Middle Beijing Road, Yantai Development Zone, Yantai Area of Shandong Pilot Free Trade Zone, PRC, at 2:40 p.m. or immediately after the conclusion of the 2022 second extraordinary general meeting and the 2022 first class meeting of A shareholders of the Company to be held at the same location on Wednesday, December 28, 2022 or at any adjournment thereof for the purpose of considering and, if thought fit, passing the following resolutions:

SPECIAL RESOLUTIONS

To consider and approve the 2022 Restricted A Share Incentive Scheme (Draft) of the Company and its summary.
To consider and approve the Assessment Management Measures for the 2022 Restricted A Share Incentive Scheme of the Company.
To consider and approve the proposed authorization to the board of directors of the Company to handle matters pertaining to the 2022 Restricted A Share Incentive Scheme of the Company.

By order of the Board RemeGen Co., Ltd.* 榮昌生物製藥(煙台)股份有限公司 Mr. Wang Weidong

Chairman and executive director

Yantai, the PRC December 12, 2022

For identification purposes only

– HCM-1 –

NOTICE OF H SHARE CLASS MEETING

Notes:

All resolutions at the Class Meeting of H Shareholders will be taken by poll (except where the chairman decides to allow a resolution relating to a procedural or administrative matter to be voted on by a show of hands) pursuant to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited. The results of the poll will be published on the websites of the Company at www.remegen.com and Hong Kong Exchanges and Clearing Limited at www.hkexnews.hk after the Class Meeting of H Shareholders.
Any shareholder entitled to attend and vote at the Class Meeting of H Shareholders convened by the above notice is entitled to appoint one or more proxies to attend and vote instead of him/her. A proxy need not be a shareholder of the Company.
In order to be valid, the instrument appointing a proxy together with the power of attorney or other authority, if any, under which it is signed, or a notarially certified copy of such power of attorney or authority, must be completed and returned to the H share registrar of the Company, Computershare Hong Kong Investor Services Limited, at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong (for holders of H shares), at least 24 hours before the Class Meeting of H Shareholders (i.e. before 2:40 p.m. on December 27, 2022) or any adjourned meeting thereof. Completion and return of the form of proxy will not preclude a shareholder from attending and voting at the Class Meeting of H Shareholders or any adjourned meeting thereof should he/she so wish.
For the purpose of determining the list of holders of H shares who are entitled to attend the Class Meeting of H Shareholders, the H share register of members of the Company will be closed from December 21, 2022 to December 28, 2022, both days inclusive, during which period no transfer of shares will be registered. In order to be eligible to attend and vote at the Class Meeting of H Shareholders, unregistered holders of the shares shall ensure all transfer documents accompanied by the relevant share certificates must be lodged with the Company’s H share registrar, Computershare Hong Kong Investor Services Limited at Shops 1712–1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong no later than 4:30 p.m. on December 20, 2022 for registration.
Where there are joint registered holders of any share, any one of such joint holders may vote, either in person or by proxy, in respect of such share as if he/she was solely entitled thereto, but if more than one of such joint holders are present at the Class Meeting of H Shareholders, whether in person or by proxy, the joint registered holder present whose name stands first on the register of members of the Company in respect of the shares shall alone be entitled to vote in respect thereof.
A shareholder or his/her proxy should produce proof of identity when attending the Class Meeting of H Shareholders.
Shareholders who attend the meeting in person or by proxy shall bear their own travelling and accommodation expenses. Shareholders may contact the Investor Relations Department of the Company at +86–0535–3573598 or [email protected] for any enquiries in respect of the Class Meeting of H Shareholders.

– HCM-2 –

AI assistant

RemeGen Co., Ltd. — Proxy Solicitation & Information Statement 2022

51206_rns_2022-12-09_63101482-7b52-4c2d-ba79-b7a9d3e23271.pdf

RemeGen Co., Ltd.[*]

(5) NOTICES OF THE EGM AND THE H SHARE CLASS MEETING

DEFINITIONS

DEFINITIONS

DEFINITIONS

DEFINITIONS

RemeGen Co., Ltd.[*]

榮 昌 生 物 製 藥（ 煙 台 ）股 份 有 限 公 司

(1) PROPOSED ADOPTION OF THE 2022 A SHARE INCENTIVE SCHEME

(2) PROPOSED ADOPTION

I. INTRODUCTION

II. PROPOSED ADOPTION OF THE 2022 A SHARE INCENTIVE SCHEME

(i) Purpose of the 2022 A Share Incentive Scheme

(ii) Form and Source of the Restricted Shares to be Granted

(iii) Total Number of the Restricted Shares to be Issued and Granted

(iv) Participants of the 2022 A Share Incentive Scheme

(A) Basis for determining the Participants

(a) Legal basis for determining the Participants

(b) Functional basis for determining the Participants

(B) Scope of the Participants

(D) Allocation of Restricted Shares to be granted

(v) Grant Price and Basis of Determination of the Grant Price

(A) Grant Price of the Restricted Shares

(B) Basis for determining the Grant Price

(vi) Validity Period, Grant Date, Attribution Arrangements and Lock-up Period

(A) Validity period of the 2022 A Share Incentive Scheme

(B) Grant Date of the Restricted Shares

LETTER FROM THE BOARD

Class A interests

Class B interests

LETTER FROM THE BOARD

(vii) Conditions for Grant and Attribution of Restricted Shares

(A) Conditions for grant of the Restricted Shares

(B) Attribution Conditions of the Restricted Shares

LETTER FROM THE BOARD

LETTER FROM THE BOARD

LETTER FROM THE BOARD

(2) Reserved Grant

LETTER FROM THE BOARD

LETTER FROM THE BOARD

(e) Performance assessment requirements at the Participant’s individual level

(viii) Implementation, Grant and Attribution Procedures

(B) Procedures for granting the Restricted Shares

(C) Procedures for the Attribution of the Restricted Shares

(ix) Method and Procedures for Adjustment

(A) Adjustment method of the number of the Restricted Shares

1. Capitalisation issue, bonus issue and sub-division of shares

2. Rights issue

3. Share consolidation

4. New issue of shares

(B) Adjustment method of the Grant Price

2. Rights issue

(C) Adjustment procedures

(x) Other Rights and Obligations of the Company and the Participants and Dispute Mechanism

(A) Rights and obligations of the Company

(B) Rights and obligations of the Participants

(C) Dispute settlement mechanism between the Company and the Participants

(B) In the event of any changes occurred at the Company level

(xii) Accounting Treatment and Impact on the Operating Performance

(A) Accounting treatment

LETTER FROM THE BOARD

(B) Estimated impact on the operating performance in each accounting period due to the implementation of the Restricted Shares

III. PROPOSED ADOPTION OF THE ASSESSMENT MANAGEMENT MEASURES

IV. PROPOSED ISSUE AND GRANT OF THE NEW A SHARES UNDER THE 2022 A SHARE INCENTIVE SCHEME PURSUANT TO THE SPECIFIC MANDATE

LETTER FROM THE BOARD

LETTER FROM THE BOARD

V. PROPOSED AUTHORIZATION TO THE BOARD TO HANDLE MATTERS PERTAINING TO THE 2022 A SHARE INCENTIVE SCHEME

VI. RECOMMENDATION

VII. LISTING RULES IMPLICATIONS

VIII. RESPONSIBILITY STATEMENT

IX. THE EGM AND THE H SHARE CLASS MEETING

X. PROXY ARRANGEMENT

XI. GENERAL

DISCLAIMER

SPECIAL NOTICE

CONTENTS

CHAPTER I DEFINITIONS

RemeGen Co., Ltd. Proxy Solicitation & Information Statement 2022

榮昌生物製藥（煙台）股份有限公司