Xintiandi: Remuneration and Assessment Management System for Directors and Senior Management

Xintiandi Pharmaceutical Co., Ltd.

Directors and senior management

Salary and assessment management system

Chapter 1 General Provisions

Article 1 In order to improve the operation and management level of Xintiandi Pharmaceutical Co., Ltd. (hereinafter referred to as the "Company"), promote the company's profit growth, further improve the salary management of the company's directors and senior managers, establish an effective incentive and restraint mechanism, stimulate work enthusiasm and creativity, and ensure the completion of the company's annual business objectives, this system is formulated in accordance with the "Company Law of the People's Republic of China" and the "Articles of Association of Xintiandi Pharmaceutical Co., Ltd." (hereinafter referred to as the "Articles of Association") and other relevant regulations.

Article 2 The applicable objects of this system are company directors and senior managers, specifically including the following personnel:

(1) Independent directors: refers to directors who are hired by the company in accordance with the "Administrative Measures for Independent Directors of Listed Companies" and other regulations, do not hold other positions in the company other than directors, and have no direct or indirect interest relationship with the company where they are employed and its major shareholders and actual controllers, or other directors who may affect their independent and objective judgment;

(2) Internal directors: refers to the concurrent directors of the company’s senior managers or other employees who have signed an employment contract or labor contract with the company;

(3) Outside directors: refer to non-independent directors who do not hold other positions in the company other than directors;

(4) Senior management personnel: refers to the senior management personnel specified in the Articles of Association, including the general manager, deputy general manager, financial director, and board secretary.

Article 3 The remuneration management of the company’s directors and senior managers shall follow the following basic principles:

(1) Based on the principle of position value contribution;

(2) The principle of linking remuneration to performance;

(3) Principles of external competitiveness and internal fairness;

(4) The principle of correspondence between job benefits and job requirements.

Chapter 2 Organizational Structure

Article 4 The company's shareholders' meeting determines the remuneration of directors, and the board of directors determines the remuneration of senior managers.

Article 5 The Remuneration and Assessment Committee of the Company’s Board of Directors is responsible for the formulation, supervision and implementation of the remuneration management system for directors and senior managers under the authorization of the Board of Directors. Its main tasks are:

(1) Formulate remuneration standards and plans for the company’s directors and senior managers;

(2) Conduct annual evaluations based on the company’s operating performance and the performance of directors and senior managers;

(3) Supervise the implementation of the salary management system.

Chapter 3 Salary composition, assessment and payment

Article 6 The remuneration composition and payment of the company’s directors and senior managers:

(1) Independent directors: Independent directors receive fixed independent director allowances. The allowance standards are implemented in accordance with the resolutions of the shareholders' meeting. The independent director allowances are paid once a year;

(2) Outside directors: Outside directors do not receive allowances from the company;

(3) Inside directors: The remuneration of internal directors corresponds to the annual remuneration of different levels according to different ranks;

(4) Senior managers: Senior managers implement an annual salary system, and their remuneration consists of annual salary standards and incentive remuneration.

The reward remuneration of senior management personnel is determined based on the evaluation of the company's annual profit target completion, and the specific reward amount is approved by the company's board of directors and shareholders' meeting.

Article 7 The relevant social insurance, housing provident fund, etc. for directors and senior managers shall be implemented in accordance with relevant national regulations.

Article 8 The remuneration and assessment committee of the board of directors may make suggestions for adjusting the annual salary standards of internal directors and senior managers. Changes in annual salary standards that do not involve inside directors will take effect after being reviewed and approved by the board of directors, while changes in annual salary standards that involve inside directors must be reviewed by the shareholders' meeting before they can take effect.

Chapter 4 Constraint Mechanism

Article 9 If any of the following circumstances occurs to directors or senior managers during their term of office, the company may reduce or not pay incentive remuneration or allowances:

(1) Being publicly condemned or identified as an inappropriate candidate by the Shenzhen Stock Exchange;

(2) Being administratively punished by the China Securities Regulatory Commission due to major violations of laws and regulations;

(3) Seriously harming the interests of the company;

(4) Resigning, resigning or being dismissed without permission due to personal reasons;

(5) Other circumstances in which the company's board of directors determines that the company's relevant regulations have been seriously violated.

Chapter 5 Supplementary Provisions

Article 10 Matters not covered by this system shall be implemented in accordance with relevant national laws, regulations, normative documents and the Articles of Association.

Article 11 This system is formulated by the Remuneration and Appraisal Committee of the Company's Board of Directors, and will become effective and implemented upon review and approval by the Board of Directors.

Article 12 This system shall be interpreted by the Remuneration and Appraisal Committee of the Company’s Board of Directors.