Chapter 1 General Provisions
Article 1 To further improve the compensation management of directors and senior management of Jiangsu Tunan Alloy Co., Ltd. (hereinafter referred to as the "Company"), establish a scientific and effective incentive and restraint mechanism, continuously enhance the Company's governance level and operational management efficiency, and promote the Company's long-term sustainable development, this System is formulated in accordance with the "Company Law of the People's Republic of China," the "Guiding Opinions on Corporate Governance of Listed Companies," and other laws, administrative regulations, normative documents, and the "Articles of Association of Jiangsu Tunan Alloy Co., Ltd." (hereinafter referred to as the "Articles of Association"), as well as the Company's actual situation.
Article 2 For the purposes of this System, directors include non-independent directors (including employee representative directors, hereinafter the same) and independent directors. Senior management personnel include the general manager, deputy general managers, financial controller, secretary of the board of directors, and other senior management personnel as stipulated in the "Articles of Association."
Article 3 The Company implements an annual total budget management system for the compensation of directors and senior management. The annual compensation of directors and senior management is determined based on the total compensation of the previous year, combined with the Company's operating performance, individual positions and performance, the Company's future development plans, and the compensation levels in the same industry. The compensation of the Company's directors and senior management should be commensurate with market development, match the Company's operating performance and individual performance, and be coordinated with the Company's sustainable development.
The Company shall reasonably determine the proportion of compensation distribution between directors, senior management, and ordinary employees based on industry levels, development strategies, and position value, promoting the allocation of compensation towards key positions, front-line production, and urgently needed high-level, high-skilled talents, thereby improving the compensation level of ordinary employees and building a profit distribution mechanism that is competitive in the market, promotes internal harmony, and ensures long-term stable development, achieving a balance between talent incentives, risk control, and sustainable development.
Chapter 2 Compensation Management Institution
Article 4 The Compensation and Assessment Committee of the Board of Directors is responsible for formulating, reviewing, and approving the compensation decision-making mechanisms, decision-making processes, payment and clawback arrangements, and other compensation policies and plans for directors and senior management. It formulates the assessment standards for directors and senior management, organizes performance evaluations and assessments for directors and senior management, and can propose recommendations to the Board of Directors regarding the compensation of directors and senior management, while continuously supervising the implementation of this System.
Article 5 The Compensation and Assessment Committee of the Board of Directors shall formulate the compensation plan for directors and senior management annually, clarifying the basis and specific composition of compensation determination. The compensation plan for directors shall be decided by the shareholders' meeting and disclosed. When the Board of Directors or the Compensation and Assessment Committee evaluates or discusses the remuneration of a director, that director shall recuse himself. The compensation plan for senior management shall be approved by the Board of Directors, explained to the shareholders' meeting, and fully disclosed.
Article 6 If the Company's performance incurs losses, the Company shall specifically explain in all stages of the review of compensation for directors and senior management whether the changes in compensation for directors and senior management meet the requirements of performance linkage.