Remuneration management system for directors and senior managers of Aoxiang Pharmaceutical

Zhejiang Aoxiang Pharmaceutical Co., Ltd.

Remuneration Management System for Directors and Senior Management

Chapter 1 General Provisions

Article 1 In order to further improve the salary management of directors and senior managers of Zhejiang Aoxiang Pharmaceutical 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 managers, and improve the company's operating and management efficiency , This system is formulated in accordance with the provisions of the Company Law of the People's Republic of China (hereinafter referred to as the "Company Law"), the Code of Governance of Listed Companies and other relevant laws and regulations and the Articles of Association of Zhejiang Aoxiang Pharmaceutical Co., Ltd. (hereinafter referred to as the "Articles of Association") and in combination with the actual situation of the company.

Article 2 This system applies to company directors and senior managers specified in the Articles of Association.

Article 3 The company’s remuneration management system for directors and senior managers shall adhere to the following principles:

(1) Insist that the overall remuneration level matches the company's business scale and actual operating performance, and is consistent with the overall remuneration level of the industry and regional market;

(2) Adhere to the principle of unity of responsibilities, rights and interests, and the overall remuneration level matches the value of the position, the size of duty performance responsibilities, and personal performance contribution;

(3) Adhere to the principle of combining remuneration with the company's long-term development and interests, and the overall remuneration level is consistent with the company's sustainable and healthy development goals;

(4) Adhere to the principle of equal emphasis on incentives and constraints, and the overall salary level is linked to the assessment, reward and punishment, and incentive mechanisms.

Chapter 2 Remuneration Management Organization

Article 4 The company's board of directors is responsible for reviewing the remuneration of senior managers; the company's shareholders' meeting is responsible for reviewing the remuneration of directors. The Remuneration and Assessment Committee of the Company's Board of Directors, under the authorization of the Board of Directors, is responsible for formulating the remuneration plan for the Company's directors and senior managers, clarifying the basis and specific composition of the remuneration; responsible for reviewing the performance of the Company's directors and senior managers' duties and conducting annual assessments; and responsible for supervising the implementation of the Company's remuneration system.

Article 5 The relevant functional departments of the company shall cooperate with the Remuneration and Assessment Committee of the Board of Directors in the specific implementation of the remuneration plan for the company’s directors and senior managers.

Chapter 3 Salary Structure and Standards

Article 6 The remuneration standards for directors who hold positions in company operation and management shall be determined according to their positions and job responsibilities in the company. Non-independent directors who do not hold other positions in the company, in principle, do not receive remuneration, allowances or benefits from the company.

Article 7 A subsidy system is implemented for independent directors, and the subsidy standards shall be reviewed and approved by the shareholders' meeting.

Article 8 The remuneration of directors and senior managers who hold company operation and management positions shall consist of basic salary, performance remuneration and medium- and long-term incentive income. The calculation formula is: annual salary = basic salary + performance salary + medium and long-term incentive income. In principle, the proportion of performance remuneration shall not be less than 50% of the total basic salary and performance remuneration.

(1) Basic salary: mainly determined based on factors such as position, responsibility, ability, market salary trends, etc.;

(2) Performance compensation: determined comprehensively based on the company's annual operating performance, job performance appraisal, etc. The assessment cycle is an annual assessment, and the final payment will be calculated based on the assessment results of that year;

(3) Medium- and long-term incentive income: It is income related to the results of medium- and long-term assessment and evaluation, including but not limited to equity incentive plans, employee stock ownership plans, etc. The company formulates incentive plans based on actual conditions;

The remuneration of the company's directors and senior managers should be consistent with market development, match the company's operating performance and personal performance, and coordinate with the company's sustainable development.

Chapter 4 Payment of Salary and Recourse for Stopping Payment

Article 9 The remuneration of directors and senior managers who receive remuneration from the company shall be paid in accordance with the company’s internal management system for remuneration payment.

Article 10 The remuneration of directors and senior managers of the company is pre-tax. The company will deduct the following items from the salary and bonus in accordance with the relevant regulations of the country and the company, and distribute the remaining portion to the individual. The company's withholding and payment matters include but are not limited to the following:

(1) Personal income tax;

(2) Various social insurance fees and other portions borne by individuals;

(3) Other amounts stipulated by the state or the company should be borne by the individual.

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 and actual performance.

Article 12 When any of the following circumstances occurs to a company's directors or senior managers during their term of office, the remuneration and assessment committee of the board of directors shall consider and decide whether to deduct or withhold the salary of specific directors or senior managers for the current year, or recover part or all of the salary paid:

(1) Being publicly condemned or declared unsuitable by the stock exchange;

(2) Being administratively punished by the securities regulatory authority of the State Council due to major violations of laws and regulations;

(3) Other circumstances in which the company's board of directors or the remuneration and assessment committee determine that there has been a serious violation of relevant government or company regulations, or that has caused significant losses to the company.

Article 13 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. The performance evaluation shall be based on audited financial data.

Article 14 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 significant losses to the company, or are responsible for the company's 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 fully or partially recover the performance remuneration and medium- and long-term incentive income that have been paid during the period when the relevant behavior occurred.

Chapter 5 Salary Adjustment

Article 15 The salary system should serve the company's business strategy and make corresponding adjustments as the company's operating conditions continue to change to meet the company's further development needs.

Article 16 The basis for adjusting the remuneration of the company’s directors and senior managers is:

(1) Salary increase level in the same industry;

(2) Inflation level;

(3) The company’s profitability;

(4) Adjustment of the company’s development strategy or organizational structure;

(5) Individual adjustments when job functions change;

(6) Other matters deemed necessary by the company as the basis for salary adjustment.

Chapter 6 Supplementary Provisions

Article 17 Matters not covered by this system shall be implemented in accordance with the relevant national laws, regulations, normative documents and the Articles of Association.

Article 18 This system shall be implemented after approval by the company's shareholders' meeting. When this system is revised, the board of directors shall propose a revision plan and submit it to the shareholders' meeting for review and approval. It will not take effect until approved by the shareholders' meeting.

Article 19 The board of directors is responsible for interpreting this system.

Zhejiang Aoxiang Pharmaceutical Co., Ltd.

April 27, 2026