Compensation and Assessment Management System for Directors and Senior Management of Entropy Technology Co., Ltd.

Chapter 1 General Principles

Article 1

To promote the establishment of an incentive and restraint mechanism compatible with modern enterprise systems at Entropy Technology Co., Ltd. (hereinafter referred to as "the Company"), effectively mobilizing the enthusiasm and creativity of the Company's directors and senior management, improving management levels, and promoting corporate profitability, this system is formulated based on the "Company Law of the People's Republic of China" (hereinafter referred to as "the Company Law"), the "Securities Law of the People's Republic of China" (hereinafter referred to as "the Securities Law"), the "Listing Rules for the Shenzhen Stock Exchange Growth Enterprise Market" (hereinafter referred to as "the Listing Rules"), and other relevant laws, administrative regulations, normative documents, and the "Articles of Association of Entropy Technology Co., Ltd." (hereinafter referred to as "the Articles of Association"), combined with the actual situation of the Company.

Article 2

This system applies to:

1. Directors of the Company (including non-independent directors elected by the shareholders' meeting and independent directors, as well as employee directors elected by employees; hereinafter, "non-independent directors" refers to all directors other than independent directors);
2. Senior management, including the general manager (president), deputy general manager (vice president), board secretary, and financial officer, etc.;
3. Other personnel deemed applicable by the Company's Board of Directors' Compensation and Assessment Committee.

Article 3

Salary Total Determination Mechanism The total salary for directors and senior management is included in the budget management. The compensation and assessment of directors and senior management are based on the Company's economic benefits, comprehensive assessments according to the annual business plan and work objectives of senior management, and the annual salary distribution is determined based on the assessment results.

Article 4

The determination of the compensation for directors and senior management follows these principles:

1. Adhere to the principle of combining labor distribution with responsibility, authority, and benefits;
2. Implement the principle of linking income levels with company performance and work objectives;
3. Combine individual compensation with the long-term interests of the Company to prevent short-term behavior and promote the long-term stable development of the Company;
4. Compensation standards are based on operational status, performance objectives, work capabilities, and other indicators, reflecting the principles of openness, fairness, and transparency, and are determined with reference to current actual income levels, ensuring they strengthen incentives and constraints while aligning with the Company's actual situation;
5. Compensation income adheres to the principle of "emphasizing both incentives and constraints," linking compensation distribution with assessments, rewards, and penalties, and incentive mechanisms;
6. Performance compensation and medium- to long-term incentive income adhere to the principle of "assessment first, then distribution."