Chapter 1 General Provisions
Article 1 To further improve the compensation management system for directors and senior management of Tianjin Nine-Star Medical Electronics Co., Ltd. (hereinafter referred to as the "Company"), establish and improve incentive and restraint mechanisms, fully mobilize the enthusiasm of directors and senior management, improve the company's operational management level, and promote the company's continuous innovation and healthy, stable development in its business areas, this system is formulated in accordance with the "Company Law of the People's Republic of China," the "Code of Corporate Governance for Listed Companies," the "Guiding Opinions on the Articles of Association of Listed Companies," the "Shenzhen Stock Exchange Stock Listing Rules," and other relevant laws, administrative regulations, departmental rules, normative documents, and the "Articles of Association of Tianjin Nine-Star Medical Electronics Co., Ltd." (hereinafter referred to as the "Articles of Association"), taking into account the company's actual situation.
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 controller, board secretary, and other senior management personnel as stipulated in the "Articles of Association."
Article 3 The compensation of the Company's directors and senior management shall adhere to the following principles: (1) Fairness principle: Compensation distribution standards shall be clear and open, ensuring that directors and senior management personnel enjoy fair rights in compensation distribution. (2) Market matching principle: Compensation levels shall be determined reasonably by referencing the market compensation trends of similar positions in listed companies of the same industry, scale, and region, combined with the company's actual operating conditions and payment capacity, to ensure the competitiveness of the compensation incentive system and attract and retain outstanding talents. (3) Unity of responsibility, rights, and benefits principle: Compensation shall be commensurate with the value of the position and the extent of responsibilities undertaken, particularly reflecting the responsibilities for R&D innovation, international operations, and revenue generation. (4) Long-term development principle: Compensation shall be aligned with the company's long-term sustainable development goals, preventing short-term behavior and promoting the company's long-term stable development. (5) Principle of equal emphasis on incentives and restraints: Compensation payments shall be linked to performance evaluations, rewards and punishments, and incentive mechanisms, adhering to the principle of "rewards and punishments are equal."
Chapter 2 Management Structure
Article 4 The Compensation and Remuneration Committee of the Board of Directors shall be responsible for formulating and assessing the performance standards for the Company's directors and senior management; formulating and reviewing the compensation decision-making mechanisms, decision-making processes, payment, and clawback arrangements for directors and senior management, as well as compensation policies and plans; and supervising the implementation of the company's compensation system. The Company's Human Resources Department and Finance Department shall be responsible for assisting the Compensation and Remuneration Committee in formulating and implementing specific compensation plans for directors and senior management.
Article 5 The compensation plan for directors shall be decided by the shareholders' meeting and disclosed. Any director who is discussing or voting on their own remuneration shall recuse themselves. The compensation plan for senior management shall be approved by the Board of Directors, explained to the shareholders' meeting, and fully disclosed.