Chapter 1 General Principles
Article 1
To further improve the compensation management system for directors and senior management of North Chemical Industry Co., Ltd. (hereinafter referred to as "the Company"), establish and enhance incentive and restraint mechanisms, fully mobilize the work enthusiasm and creativity of the Company's directors and senior management, and promote the healthy, sustainable, and stable development of the Company, this system is formulated in accordance with the relevant laws, administrative regulations, departmental rules, normative documents, and the provisions of the Articles of Association of North Chemical Industry Co., Ltd. (hereinafter referred to as "the Articles of Association"), combined with the actual situation of the Company.
Article 2
This system applies to the directors and senior management of the Company. Senior management refers to the general manager, deputy general managers, financial officer, board secretary, chief engineer, and other senior management personnel of the Company.
Article 3
The compensation for the Company's directors and senior management follows these principles:
- Adhering to the principle of combining labor distribution with responsibility, authority, and benefits;
- Linking compensation levels to the Company's operational performance, individual performance, market development, and sustainable development;
- Balancing incentives and constraints, reflecting the connection between compensation distribution and assessment, rewards and penalties, and incentive mechanisms.
Chapter 2 Management Institutions
Article 4
The Compensation and Assessment Committee of the Board of Directors is responsible for formulating assessment standards for directors and senior management and conducting assessments; developing and reviewing the compensation decision-making mechanism, decision-making process, payment and recovery arrangements, and other compensation policies and plans; and supervising the implementation of the Company's compensation system. The human resources department of the Company is responsible for assisting the Compensation and Assessment Committee in formulating and implementing specific compensation plans for directors and senior management.
Article 5
The compensation plan for directors is determined by the shareholders' meeting and disclosed. When the Board of Directors or the Compensation and Assessment Committee evaluates or discusses the compensation of individual directors, the concerned director must abstain. The compensation plan for senior management is approved by the Board of Directors, explained to the shareholders' meeting, and fully disclosed. If the Company transitions from profit to loss or experiences an expanded loss compared to the previous accounting year, the reasons for the average performance compensation of directors and senior management not decreasing accordingly must be disclosed. During the review of compensation for directors and senior management in the event of a loss, it must be specifically stated whether the changes in compensation comply with performance linkage requirements.