Chapter 1 General Provisions
Article 1 To further improve the compensation management of directors and senior management of Luolai Life Technology Co., Ltd. (hereinafter referred to as the "Company"), establish and improve the incentive and restraint mechanism for operators, maintain the stability of the core management team, effectively mobilize the work enthusiasm of directors and senior management, and improve the Company's operational management level, promote the healthy, sustained, and stable development of the Company, in accordance with the "Company Law of the People's Republic of China," the "Main Board Listing Rules of the Shenzhen Stock Exchange," the "Shenzhen Stock Exchange Listed Company Self-Regulatory Guidelines No. 1 - Standardized Operation of Main Board Listed Companies," and other relevant laws and regulations, as well as the "Articles of Association of Luolai Life Technology Co., Ltd." and the "Rules of Procedure for the Board of Directors' Remuneration and Assessment Committee," and in combination with the Company's actual situation, this system is hereby formulated.
Article 2 This system applies to the Company's directors and senior management. Senior management refers to the Company's President, Vice Presidents, Secretary of the Board, Chief Financial Officer, and other senior management personnel.
Article 3 The compensation of the Company's directors and senior management shall be commensurate with market development, matched with individual performance and company performance, and coordinated with the Company's sustainable development. The Company shall reasonably determine the compensation distribution ratio among directors, senior management, and ordinary employees by considering factors such as industry level, development strategy, and position value, to incentivize compensation distribution towards key positions, sales, and urgently needed high-level, high-skilled talent, and to promote an increase in the compensation level of ordinary employees. The Company's compensation system follows the following principles: (1) The compensation of each position in the Company shall reflect the value of the position and its grade to the Company, embodying the principle of consistency between responsibilities, rights, contributions, and benefits; (2) The principle of linking compensation levels to company goals and benefits; (3) The principle of adhering to performance appraisal standards and process systems; (4) The principle of balancing incentives and constraints, and matching rewards and punishments.