Chapter 1 General Principles
Article 1
To further improve the governance structure of Hangzhou Wanlong Optoelectronic Equipment Co., Ltd. (hereinafter referred to as "the Company"), strengthen the management of compensation for directors and senior management, and establish a comprehensive salary management system with effective incentives, this system is formulated in accordance with the Company Law of the People's Republic of China, the Guidelines for Corporate Governance of Listed Companies, and other relevant laws, administrative regulations, normative documents, and the Articles of Association of Hangzhou Wanlong Optoelectronic Equipment Co., Ltd. (hereinafter referred to as "the Articles of Association").
Article 2
This system applies to directors and senior management as stipulated in the Articles of Association.
Article 3
The Company's compensation management system follows these principles:
- Fairness and justice, reflecting income levels that correspond to the Company's scale and performance, while aligning with external compensation levels;
- Unity of responsibility, authority, and benefits, reflecting the alignment of compensation with the value of positions and the extent of responsibilities;
- Balance of incentives and constraints, linking compensation distribution with assessments and rewards and penalties;
- Long-term development, aligning compensation with the goals of the Company's sustainable and healthy development.
Chapter 2 Compensation Management Organization
Article 4
The performance evaluation of directors and senior management is organized by the Compensation and Assessment Committee under the Board of Directors, and the Company may entrust a third party to conduct performance evaluations. The evaluation of independent directors' performance is conducted through self-evaluation and mutual evaluation. If the Company incurs losses, it must specifically explain whether the changes in the compensation of directors and senior management meet the performance linkage requirements during the review of their compensation.
Article 5
The Board of Directors shall report to the shareholders on the performance of directors, the results of performance evaluations, and their compensation, which shall be disclosed by the Company. Relevant content may be disclosed through the Board of Directors' work report.
Article 6
The Compensation and Assessment Committee of the Board of Directors is responsible for formulating assessment standards for directors and senior management and conducting evaluations, as well as formulating and reviewing compensation policies and plans for directors and senior management. The Compensation and Assessment Committee shall develop annual compensation plans for directors and senior management based on the Company's compensation management system, clarifying the basis for determining compensation and its specific components.
Article 7
The director's allowance plan shall be implemented after being approved by the Company's Board of Directors and shareholders' meeting; the senior management compensation plan shall be implemented after being approved by the Company's Board of Directors. When the Board of Directors or the Compensation and Assessment Committee evaluates or discusses the compensation of an individual director, that director shall recuse themselves. The compensation plans for directors and senior management shall be disclosed.
Article 8
The other responsibilities and powers of the Compensation and Assessment Committee of the Board of Directors shall be executed in accordance with the Work Rules of the Compensation and Assessment Committee of the Board of Directors of Hangzhou Wanlong Optoelectronic Equipment Co., Ltd.; the Company's human resources and finance departments shall assist the Compensation and Assessment Committee in the specific implementation of the compensation plans for directors and senior management.