What are the precautions for equity incentive plans?

Legal analysis: First of all, it is necessary to select the incentive object, and the equity incentive should give enough attention to the talent at the strategic height, so as to make a significant contribution to the development of the company; Secondly, before the old age, the incentive shares should be granted in installments, and a certain proportion of equity will be granted to the incentive object in each period; Thirdly, as an additional condition, the incentive object must complete the corresponding assessment indicators every year, and set up the equity treatment opinions in the case of failure to achieve the goal, serious dereliction of duty, etc.

Legal basis: Company Law of the People's Republic of China Article 142 The company shall not acquire the shares of the company. However, this does not apply in any of the following circumstances:

1) Reduction of the company's registered capital;

2) Merger with other companies holding shares of the Company;

3) Use the shares for employee stock ownership plans or equity incentives;

4) Shareholders request the company to acquire their shares because they disagree with the resolution of the general meeting of shareholders to merge or divide the company;

5) The shares will be used to convert the corporate bonds issued by the listed public company that can be converted into **;

6) It is necessary for the listed company to maintain the value of the company and the rights and interests of shareholders.

The implementation of equity incentives requires profit distribution in accordance with laws and regulations, articles of association, and public commitments within the last 36 months after listing. According to the relevant laws and regulations, the equity used for incentives generally does not have voting rights.

Article 2 of the Measures for the Administration of Equity Incentives of Listed Companies The term "equity incentives" in these measures refers to the long-term incentives carried out by listed companies to their directors, senior management personnel and other employees with the company's ** as the target. If a listed company implements equity incentives with restricted options or options, these Measures shall apply; Where equity incentives are implemented in other ways permitted by laws and administrative regulations, they shall be implemented with reference to the relevant provisions of these Measures. Article 14 of the Measures for the Administration of Equity Incentives of Listed Companies provides that listed companies may implement multi-period equity incentive plans at the same time.

At the same time, if a multi-phase equity incentive plan is implemented, the performance indicators of the companies established in each phase of the incentive plan shall remain comparable, and the performance indicators of the company in the later incentive plan shall be lower than those in the previous incentive plan, and the listed company shall fully explain the reasons and reasonableness. The total number of targets involved in all equity incentive plans of listed companies within the validity period shall not exceed 10% of the total share capital of the company. Unless approved by a special resolution of the general meeting of shareholders, the cumulative amount of the company** granted to any incentive recipient through all the equity incentive plans within the validity period shall not exceed 1% of the total share capital of the company.

Legal analysis: The Measures for the Administration of Equity Incentives of Listed Companies are formulated in accordance with the provisions of the Company Law of the People's Republic of China, the ** Law of the People's Republic of China and other relevant laws and administrative regulations to further promote the establishment and improvement of incentive and restraint mechanisms for listed companies. It was promulgated by the China ** Supervision and Administration Commission on July 13, 2016, and came into force on August 13, 2016.

Listed companies that intend to implement equity incentives may be used as the subject matter in the following ways:(1) issuing shares to incentive recipients; (2) to repurchase the shares of the Company; (3) Other methods permitted by laws and administrative regulations.

1) Issuing shares to incentive recipients; (2) to repurchase the shares of the Company; (3) Other documents permitted by laws and administrative regulations.

1. The purpose of equity incentives;

2. The basis and scope of the determination of the incentive object;

3. The number of rights to be granted, the type, quantity and percentage of the total share capital of the listed company involved in the rights and interests to be granted;

4. The validity period of the equity incentive plan, the grant date, the restriction period and the release of the restriction arrangement, the authorization date, the exercisable date, the exercise validity period and the exercise arrangement of the option;

5. The method of determining the granting or granting of restrictive rights, and the method of determining the exercise or exercise of options;

6. The conditions for the incentive recipient to be authorized to benefit and exercise rights and interests;

7. Procedures for the granting of rights and interests by listed companies and the exercise of rights and interests by incentive recipients.

1. Whether equity crowdfunding is legal.

Equity crowdfunding is not legal.

Equity crowdfunding is mostly issued to unspecified objects**, so most equity crowdfunding is not legal. The company can raise funds in the form of equity, but only listed companies can issue to unspecified objects**, and non-listed companies are not allowed to issue to unspecified objects through public advertising, publicity, etc.

Equity crowdfunding refers to a financing model based on Internet channels in which the company sells a certain proportion of shares to ordinary investors, and investors obtain future income through capital contribution to the company.

From the perspective of whether equity crowdfunding is guaranteed or not, it can be divided into guaranteed equity crowdfunding and guaranteed equity crowdfunding. Unsecured equity crowdfunding, unsecured equity crowdfunding refers to the guarantee liability of investors in the process of crowdfunding investment without a third-party company providing relevant rights and interests. In China, it is basically unsecured equity crowdfunding; Secured equity crowdfunding, secured equity crowdfunding refers to the equity crowdfunding project at the same time as the crowdfunding, this guarantee is a fixed-term guarantee liability.

However, this model only provides guarantee services for crowdfunding projects in China, and has not yet been accepted by most platforms.

2. Is virtual equity legal?

As long as the virtual equity issued by the company to employees is real and there is no false fraud, it is in accordance with the law and is a kind of incentive mechanism of the company.

The virtual ** model refers to the company granting the incentive object a "virtual" **, according to which the incentive object can enjoy a certain amount of dividend rights and stock price appreciation income. If the company's performance targets are achieved, the grantee can enjoy a certain amount of dividends accordingly, but has no ownership and voting rights, cannot be transferred and **, and automatically expires when leaving the company.

Article 142, Paragraph 3 of the Company Act prohibits a company from acquiring shares of the company. However, there is an exception for one of the following circumstances: using shares for employee stock ownership plans or equity incentives.