Chapter 1 General Provisions
Article 1 To further improve the compensation management of directors and senior management of Luoyang New Strong Bearing Co., Ltd. (hereinafter referred to as "the Company"), establish a scientific and effective incentive and restraint mechanism, effectively mobilize the enthusiasm of the Company's directors and senior management, and improve the Company's operational and management efficiency, this system is formulated in accordance with the "Company Law of the People's Republic of China" (hereinafter referred to as "Company Law"), "Corporate Governance Guidelines for Listed Companies" and other laws, regulations, normative documents, and the "Articles of Association of Luoyang New Strong Bearing Co., Ltd." (hereinafter referred to as "Articles of Association"), combined with the Company's actual situation.
Article 2 This system applies to the Company's directors and senior management, specifically including the following personnel: (1) Independent Directors: Directors who do not hold any other positions in the Company besides director, and who have no direct or indirect interest relationship with the Company and its major shareholders or actual controllers, or other relationships that may affect their independent and objective judgment; (2) Non-Independent Directors: Including internal directors and external directors. External directors refer to non-independent directors who do not hold any positions in the Company besides director; internal directors refer to non-independent directors who simultaneously hold other positions in the Company besides director (including the Chairman). (3) Senior Management Personnel: Refers to the Company's General Manager, Deputy General Managers, Financial Controller, and Board Secretary.
Article 3 The compensation management system for the Company's directors and senior management follows the following principles: (1) The principle of reflecting income levels in line with the Company's scale and performance; (2) The principle of combining factors such as job position, work performance, contribution size, and rights and responsibilities; (3) The principle of emphasizing market-oriented income, establishing a reasonable salary structure ratio, and maintaining the Company's compensation attractiveness and market competitiveness, which is conducive to attracting talent; (4) The principle of reflecting the Company's long-term interests and aligning with the goal of the Company's sustainable and healthy development; (5) The principle of emphasizing both incentives and restraints.
Article 4 Mechanism for determining total salary: The Company implements budget management for the total salary of directors and senior management. The total salary of the Company's directors and senior management is determined based on the total salary of the previous year, combined with the Company's operating performance, individual performance, and the Company's future development plans.
Chapter 2 Compensation Management Institution
Article 5 The compensation plan for directors shall be decided by the Company's shareholders' meeting and disclosed. The compensation plan for senior management shall be approved by the Company's board of directors, explained to the shareholders' meeting, and fully disclosed.