Chapter 1 General Principles
Article 1
To standardize the incentive and restraint mechanisms for the directors and senior management of Kanglong Chemical (Beijing) New Drug Technology Co., Ltd. (hereinafter referred to as "the Company"), and to fully motivate the work enthusiasm of directors and senior management, promoting the Company's sustainable, stable, and healthy development, this system is formulated in accordance with the Company Law of the People's Republic of China, the Articles of Association, the Code of Corporate Governance for Listed Companies, and other relevant regulations.
Article 2
This system applies to the directors and senior management of the Company. Directors refer to all members of the board of directors during the implementation of this system, including executive directors, employee representative directors, non-executive directors, and independent non-executive directors. Senior management includes managers, deputy managers, financial officers, and board secretaries (as defined in the Articles of Association).
Article 3
The management of director and senior management compensation in the Company follows these principles:
- Aligning with the long-term development and shareholder interests of the Company to ensure long-term stable development.
- Balancing internal and external fairness in overall compensation levels, in line with the Company's performance.
- Reflecting the unity of responsibility, authority, and benefits, with compensation corresponding to the value of the position and the level of responsibility.
- Combining incentives and constraints, linking compensation distribution to performance assessments with consistent changes.
Chapter 2 Management Institutions
Article 4
The compensation plan for directors and senior management is formulated by the Compensation and Assessment Committee of the Board of Directors, which clarifies the basis for determining compensation and its specific components. The director compensation plan is proposed by the Compensation and Assessment Committee and decided by the shareholders' meeting, with disclosure required. When the board or the Compensation and Assessment Committee evaluates a director's performance or discusses their compensation, that director must abstain. All directors must conduct performance evaluations according to this system and relevant rules; however, for directors not receiving compensation based on their director status, performance-related assessments do not need to be considered during their evaluations.