Board Remuneration Management System
Chapter 1 General Provisions
Article 1 To promote the establishment of a modern corporate governance mechanism for Zhongdian Environmental Protection Co., Ltd. (hereinafter referred to as the "Company"), effectively motivate directors' enthusiasm, initiative, and creativity, improve the company's operational and management level, and promote the growth of enterprise benefits, this system is formulated in accordance with the "Company Law," "Corporate Governance Guidelines for Listed Companies," "Shenzhen Stock Exchange GEM Listing Rules," "Shenzhen Stock Exchange GEM Listed Company Self-Regulatory Management Guide No. 2 – Norms for Operations of GEM Listed Companies," and the "Articles of Association," as well as the Company's actual situation.
Article 2 This system applies to all directors of the Company.
Article 3 The remuneration of the Company's directors shall be determined based on the Company's scale and performance, taking into account the directors' job responsibilities, individual performance goals, and other factors through comprehensive assessment.
Article 4 The principles for determining the remuneration of the Company's directors are as follows: (1) Adhere to the principle of the parity of responsibilities, rights, and interests; (2) Implement the principle of closely linking income levels with the Company's benefits and work objectives, while also conforming to market value laws; (3) The remuneration shall be consistent with the Company's long-term interests; (4) The principle of open, fair, and transparent remuneration standards.
Chapter 2 Remuneration Management Organization
Article 5 The Board of Directors shall be responsible for formulating the board remuneration management system, which shall be submitted to the Shareholders' Meeting for approval. The Remuneration and Assessment Committee shall formulate specific remuneration assessment plans or schemes, and the directors' remuneration assessment plans or schemes shall be submitted to the Shareholders' Meeting for approval.
Article 6 The Board of Directors' Remuneration and Assessment Committee shall formulate the Company's annual operating objectives and the total annual remuneration budget, and shall be responsible for supervising the implementation of the remuneration system, reviewing the directors' fulfillment of their duties and assessing them, and making recommendations to the Board of Directors regarding directors' remuneration. When the Board of Directors and the Board of Directors' Remuneration and Assessment Committee evaluate individual directors or review their remuneration, such directors shall recuse themselves. The Board of Directors shall report to the Shareholders' Meeting on the directors' fulfillment of their duties, performance evaluation results, and remuneration. The performance evaluation of independent directors shall be conducted through self-evaluation and other methods, and they shall submit an annual report at the Company's annual general meeting.
Article 7 The Company's Human Resources Department, Finance Department, and other relevant functional departments shall be responsible for cooperating in the implementation of the directors' remuneration plan.
Chapter 3 Composition, Assessment, and Distribution of Remuneration
Article 8 The total remuneration of directors shall be based on an annual performance-based salary system, linked to the Company's development status in the corresponding year, the overall annual work objectives, especially the assessment of overall operating indicators and individual work performance. It shall consist of basic salary, company performance bonus, individual performance bonus, and long-term incentive income (if any). That is, annual performance salary = basic salary + company performance bonus + individual performance bonus + long-term incentive income (if any).