Chapter 1 General Principles
Article 1
To standardize the compensation management of directors and senior management of Jiangsu Dongfang Shenghong Co., Ltd. (hereinafter referred to as "the Company"), establish a scientific and effective incentive and restraint mechanism, effectively motivate the work enthusiasm of the Company's directors and senior management, and improve the operational management efficiency of the Company, this system is formulated in accordance with the "Company Law of the People's Republic of China," "Guidelines for the Governance of Listed Companies," and other relevant laws and regulations, as well as the provisions of the "Articles of Association of Jiangsu Dongfang Shenghong Co., Ltd." (hereinafter referred to as "the Articles of Association").
Article 2
The directors applicable to this system refer to all current members of the board of directors during the execution period of this system. The board consists of internal directors, external directors, and independent directors.
- Internal directors: refer to directors who are senior management personnel or other employees of the Company and have signed employment contracts or labor contracts with the Company.
- External directors: refer to non-independent directors who do not hold other positions in the Company besides being directors.
- Independent directors: refer to directors appointed by the Company in accordance with the "Management Measures for Independent Directors of Listed Companies," who have no relationships with the Company and its major shareholders that may hinder their independent and objective judgment.
Article 3
The senior management personnel applicable to this system refer to the general manager, deputy general managers, board secretary, financial officer, and other personnel appointed and confirmed by the board of directors who perform important operational management positions.
Article 4
The compensation of directors and senior management personnel is linked to the Company's operational performance and shareholder interests, ensuring stable development of the Company while complying with market value laws. The compensation system follows these principles:
- The compensation provided by the Company is competitive compared to the income levels of similar positions in the market.
- The principle of distribution according to labor combined with responsibilities, rights, and benefits.
- The principle of linking compensation to the Company's performance and work objectives.
- The principle of combining short-term and long-term incentives.
- The principle of openness, fairness, and transparency.
Chapter 2 Compensation Management
Article 5
The Compensation and Assessment Committee of the board of directors is a specialized body for the management of compensation for directors and senior management personnel. It shall formulate the compensation plans for directors and senior management personnel annually based on the Company's compensation management system, clarifying the basis for determining compensation and its specific components. The compensation plan for directors is decided by the shareholders' meeting and disclosed. The compensation plan for senior management personnel is approved by the board of directors, explained to the shareholders' meeting, and disclosed. When the board of directors or the Compensation and Assessment Committee evaluates individual directors or discusses their compensation, the concerned director shall abstain from voting. The human resources and finance departments of the Company are responsible for the specific implementation of the compensation plans.