Remuneration management system for directors and senior managers of Zhongyuan Xiehe Cell Gene Engineering Co., Ltd.

Zhongyuan Xiehe Cell Gene Engineering Co., Ltd.

Remuneration Management System for Directors and Senior Management

Chapter 1 General Provisions

Article 1 In order to further establish and improve the remuneration system for the directors and senior managers of Zhongyuan Concord Cell Gene Engineering Co., Ltd. (hereinafter referred to as the company), fully mobilize the work enthusiasm of the company's directors and senior managers, and promote the company's sustainable, stable and healthy development, this system is formulated in accordance with the relevant provisions of the Company Law of the People's Republic of China, the Securities Law of the People's Republic of China, the Code of Governance of Listed Companies and other laws, regulations, normative documents and the Articles of Association of Zhongyuan Concord Cell Gene Engineering Co., Ltd. (hereinafter referred to as the "Articles of Association").

Article 2 This system applies to the following personnel:

(1) Directors, including non-independent directors and independent directors. Non-independent directors include directors who serve in the company and non-independent directors who do not serve in the company;

(2) Senior management personnel, including general manager, co-president, deputy general manager, financial controller, secretary of the board of directors and other senior management personnel confirmed by the company's articles of association and the board of directors.

Article 3 The company’s remuneration system follows the following principles:

(1) In accordance with the principle of fairness, the remuneration of the company’s directors and senior managers should be consistent with market development and match the company’s operating performance and personal performance;

(2) The principle of unity of responsibilities, rights and benefits reflects the consistency of remuneration with the value of the position and the fulfillment of responsibilities and obligations. At the same time, the determination and payment of performance-based remuneration and medium- and long-term incentive income for directors and senior managers should be based on performance evaluation;

(3) The principle of long-term development reflects the consistency of remuneration and performance appraisal with the company’s goal of sustainable and healthy development;

(4) The principle of equal emphasis on incentives and constraints reflects the linkage between salary payment and assessment, rewards and punishments, and incentive mechanisms.

Chapter 2 Total Salary Determination Mechanism

Article 4 The shareholders' meeting, the board of directors, the remuneration and assessment committee and the human resources department are responsible for organizing and implementing the remuneration and assessment of the company's directors and senior managers. The specific responsibilities are as follows:

(1) The company’s shareholders’ meeting is responsible for reviewing and approving the directors’ remuneration plan;

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(2) The company’s board of directors is responsible for reviewing and approving the remuneration plan for senior managers;

(3) The remuneration and assessment committee of the company's board of directors is a specialized working organization under the board of directors. It is responsible for formulating and evaluating the remuneration standards of directors and senior managers, formulating and reviewing the remuneration decision-making mechanism, decision-making process, payment and stop-payment recourse arrangements and other remuneration policies and plans for directors and senior managers;

(4) The company’s human resources department shall cooperate with the annual salary assessment of directors and senior managers in accordance with the requirements of the remuneration and assessment committee of the company’s board of directors.

Chapter 3 Salary Structure, Assessment, and Payment

Article 5 The remuneration of the company’s directors and senior managers consists of basic salary, performance remuneration and medium and long-term incentive income, among which the proportion of performance remuneration shall in principle be no less than 50% of the total basic remuneration and performance remuneration.

Article 6 The determination and payment of performance-based remuneration for directors and senior managers of a company shall be based on performance evaluation. The company shall determine a certain proportion of performance-based remuneration for directors and senior managers to be paid after the disclosure of the annual report and performance evaluation. Performance evaluation shall be based on audited financial data.

Article 7 The independent director's allowance shall be paid annually starting from the date when the shareholders' meeting passes the resolution on his appointment. The remuneration of non-independent directors and senior management personnel is paid in accordance with the company's relevant systems and remuneration plans.

Article 8 The company may establish a deferred payment mechanism for performance remuneration of directors and senior managers based on industry characteristics, business models and other factors, and clarify the specific circumstances, relevant personnel, deferral ratios and implementation arrangements applicable to the implementation of deferred payment.

Article 9 The remuneration of the company's directors and senior managers is a pre-tax amount. The company will bear the withholding and repayment obligations in accordance with the relevant regulations of the state and the company. From the pre-tax remuneration issued, the portion borne by the individual such as personal income tax, various social insurance fees, and other payments stipulated by the state or the company will be deducted from the issued pre-tax remuneration, and the remaining portion will be distributed to the individual.

Article 10 Medium- and long-term incentive income for directors and senior managers refers to incentive methods such as restricted stocks and employee stock ownership plans implemented by the company based on actual operating performance. The specific plan will be formulated separately by the company in accordance with relevant national laws and regulations.

Article 11 If a company's directors or senior managers leave office due to reasons such as change of term, re-election, resignation during the term, etc., their remuneration shall be calculated and paid based on their actual term of office.

Chapter 4 Salary Adjustment

Article 12 The remuneration system should serve the company’s business strategy and should be adjusted as the company’s operating conditions continue to change.

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Make corresponding adjustments according to changes to meet the needs of the company's further development.

Article 13 The basis for adjusting the remuneration of the company’s directors and senior managers is:

(1) Salary increase level in the same industry. From time to time, we collect salary data from the same industry through market salary reports or public salary data, and conduct summary analysis as a reference for the company's salary adjustments;

(2) Inflation level. Refer to the inflation level so that the actual purchasing power level of the salary does not decrease as a reference for the company's salary adjustment;

(3) The company’s profitability;

(4) Adjustment of the company’s development strategy, changes in organizational structure or positions;

(5) Factors such as changes in scope of responsibilities, changes in knowledge and skills, past performance achievements, and changes in ranks.

Article 14 If a company turns from profit to loss or its losses expand compared with the previous fiscal year, and the average performance remuneration of directors and senior managers does not decrease accordingly, the reasons shall be disclosed.

Chapter 5 Recourse for stop payment of salary

Article 15 If any of the following circumstances occurs to a company's directors or senior managers during their term of office, the board of directors has the right to decide whether to deduct or not pay the performance-based remuneration of the director or senior management for the current year, or to recover part or all of the performance-based remuneration that has been paid:

(1) Being administratively punished by the China Securities Regulatory Commission or publicly condemned by the Shanghai Stock Exchange or declared unfit to serve as a director or senior manager of a listed company due to serious violations of laws and regulations;

(2) Seriously harming the company’s interests or causing significant economic losses to the company;

(3) The company's board of directors determines that the director or senior manager has seriously violated laws, administrative regulations, normative documents, the Articles of Association, and the company's internal management system.

Article 16 When a company retrospectively restates its financial report due to financial fraud or other misstatements, it shall promptly reassess the performance remuneration and medium- and long-term incentive income of directors and senior managers and recover the excess payment accordingly.

If a company's directors or senior managers violate their obligations and cause losses to the company, or are at fault for financial fraud, misappropriation of funds, illegal guarantees and other illegal activities, the company shall reduce or stop paying unpaid performance remuneration and medium- and long-term incentive income according to the severity of the case, and recover all or part of the performance remuneration and medium- and long-term incentive income that have been paid during the period when the relevant behavior occurred.

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Chapter 6 Supplementary Provisions

Article 17 If there are any matters not covered in this system, they shall be implemented in accordance with relevant national laws, regulations, normative documents and the relevant provisions of the Articles of Association. If this system is inconsistent with the relevant provisions of laws, regulations, normative documents and the Articles of Association, the provisions of the relevant laws, regulations, normative documents and the Articles of Association shall prevail. Detailed authorization for remuneration management of directors and senior management personnel shall be determined by the Remuneration and Appraisal Committee of the Board of Directors.

Article 18 This system shall be interpreted and revised by the company's board of directors.

Article 19 This system shall take effect from the date of review and approval by the company's shareholders' meeting, and the same shall apply when it is revised.

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