Luxshare Precision Industry Co., Ltd.
Management System for Director and Senior Management Remuneration and Performance Evaluation
Chapter 1 General Provisions
Article 1 To regulate the remuneration and performance evaluation management of directors and senior management of Luxshare Precision Industry Co., Ltd. (hereinafter referred to as the "Company"), establish a scientific and effective incentive and restraint mechanism, and improve corporate governance, this system is formulated in accordance with the "Company Law of the People's Republic of China" (hereinafter referred to as the "Company Law"), the "Securities Law of the People's Republic of China", the "Corporate Governance Guidelines for Listed Companies", the "Rules Governing the Listing of Stocks on the Shenzhen Stock Exchange", the "Shenzhen Stock Exchange Listed Company Self-Regulatory Supervision Guidelines No. 1 - Norms for Operations of Main Board Listed Companies", and other relevant laws, regulations, normative documents, and the "Articles of Association of Luxshare Precision Industry Co., Ltd." (hereinafter referred to as the "Articles of Association"), taking into account the Company's actual situation.
Article 2 This system applies to all directors and senior management personnel as stipulated in the Articles of Association of the Company.
Article 3 The management of remuneration and performance evaluation for directors and senior management shall adhere to the following principles: (1) Remuneration shall be in line with market development, matched with the Company's operating performance and individual performance, and coordinated with the Company's sustainable development. (2) Remuneration standards shall integrate rights, responsibilities, and benefits. (3) Both incentives and restraints shall be emphasized, with clear rewards and punishments, and individual performance evaluation results shall be the core basis for determining remuneration. (4) The remuneration design system shall incorporate long-term strategic and ESG performance indicators to drive the Company's green and low-carbon transformation and high-quality development.
Chapter 2 Remuneration Management Organization
Article 4 The Remuneration and Performance Evaluation Committee of the Board of Directors shall, in accordance with this system, formulate performance evaluation standards for directors and senior management and conduct evaluations, formulate and review remuneration policies and plans for directors and senior management, and clarify the basis for remuneration determination, specific components, and payment and clawback arrangements. When the Board of Directors or its Remuneration and Performance Evaluation Committee discusses the remuneration of individual directors, such directors shall recuse themselves. The Remuneration and Performance Evaluation Committee of the Board of Directors shall propose recommendations to the Board of Directors on the following matters: (1) Remuneration of directors and senior management; (2) Formulation or amendment of equity incentive plans, employee stock ownership plans, and the conditions for incentive recipients to obtain authorization and exercise their rights; (3) Arrangements for directors and senior management to hold shares in subsidiaries spun off from the Company; (4) Other matters stipulated by laws, regulations, rules of the stock exchange, and the Articles of Association. If the Board of Directors does not adopt or does not fully adopt the recommendations of the Remuneration and Performance Evaluation Committee, the reasons for not adopting them shall be recorded in the board resolution and disclosed.