Chapter 1 General Principles
Article 1
To further standardize the compensation management of directors and senior executives of Ningxia Yinxing Energy Co., Ltd. (hereinafter referred to as the "Company"), establish a sound incentive and constraint mechanism, and effectively motivate the enthusiasm and creativity of the Company's directors and senior executives, this system is formulated based on the "Company Law of the People's Republic of China," the "Securities Law of the People's Republic of China," the "Articles of Association of Ningxia Yinxing Energy Co., Ltd." (hereinafter referred to as the "Articles of Association"), and relevant laws and regulations, in conjunction with the actual situation of the Company.
Article 2
This system applies to members of the Company's board of directors (independent directors, non-independent directors) and senior executives (general manager, deputy general manager, board secretary, financial director, and other senior executives as stipulated in the Articles of Association, appointed by the board of directors).
Article 3
The performance assessment and compensation management for the Company's directors and senior executives shall follow these principles:
- Adhere to legal compliance and coordinate incentives and constraints. Implement national income distribution policies and scientifically evaluate the performance contributions of senior executives.
- Maintain internal and external coordination, considering overall balance. The determination of senior executive compensation standards should comprehensively consider the value of job contributions and reference the compensation levels of executives in similar industries. It should align with market development, match company performance and individual performance, and coordinate with the company's sustainable development.
- Base salary on position and increase the variable proportion. Establish a compensation management system based on job value and performance contributions, linking performance compensation closely to assessment results and reasonably widening the income distribution gap.
Chapter 2 Compensation Structure and Payment Mechanism
Article 4
Non-independent directors (including employee representative directors) serving in the Company shall receive compensation according to the relevant provisions of the compensation management system corresponding to their specific positions and duties, without receiving additional director allowances; non-independent directors not holding any other positions in the Company shall not receive compensation or director allowances from the Company.
Article 5
Independent directors shall implement a fixed allowance system, effective after approval by the shareholders' meeting, and shall not participate in performance-based compensation distribution. The Company shall bear reasonable expenses incurred during their performance of duties (such as travel expenses, meeting fees, etc.).
Article 6
Senior executives of the Company shall implement an annual salary system, generally including basic annual salary, performance annual salary, and medium- to long-term incentive income, where the performance annual salary generally accounts for no less than 60% of the total annual salary (the sum of basic annual salary and performance annual salary). The determination and payment of performance annual salary and medium- to long-term incentive income shall be based on performance evaluations.