Ningbo Henghe Precision Industry Co., Ltd. Board of Directors Compensation Management System
Chapter 1 General Provisions
Article 1 To further improve the compensation management of the directors of Ningbo Henghe Precision Industry Co., Ltd. (hereinafter referred to as the "Company" or "this Company"), establish a scientific and effective incentive and restraint mechanism, fully mobilize and leverage the enthusiasm of directors, improve the company's operational management level, promote the company's healthy, stable, and sustainable development, and ensure the realization of the company's development strategic goals. In accordance with the "Company Law of the People's Republic of China," the "Securities Law of the People's Republic of China," the "Guiding Opinions on the Articles of Association of Listed Companies," the "Guiding Principles for Corporate Governance of Listed Companies," the "Shenzhen Stock Exchange Listed Company Self-Regulatory Guidelines No. 2 - Norms for Operation of GEM Listed Companies," and other relevant laws, regulations, normative documents, and the "Articles of Association," and in conjunction with the actual situation of the Company, this system is formulated.
Article 2 This system applies to directors as stipulated in the "Articles of Association."
Article 3 The compensation management of the Company's directors shall follow the following principles: (1) The principle of openness, fairness, and transparency; (2) The principle of combining with the company's long-term interests; (3) The principle of combining responsibility, rights, and benefits; (4) The principle of combining with the company's actual operating conditions and operating goals; (5) The principle of balancing incentives and restraints.
Chapter 2 Mechanism for Determining Total Payroll and Compensation Management Body
Article 4 The Company implements budget management for the total payroll of directors. Based on the total payroll of directors in the previous year as the base, the total budget for the current year shall be determined according to principles such as determining the growth range based on efficiency, adjusting the growth magnitude based on performance, and controlling the growth target based on level.
Article 5 The Company shall reasonably determine the compensation allocation ratio among directors, senior management personnel, and ordinary employees by considering factors such as industry level, development strategy, and position value, promoting the allocation of compensation towards key positions, the front line of production, and urgently needed high-level, high-skilled talents, and improving the compensation level of ordinary employees.
Article 6 The compensation plan or scheme for directors shall be reviewed and approved by the shareholders' meeting.