Haili Biotechnology Salary Management System
Shanghai Haili Biotechnology Co., Ltd.
Salary management system
Chapter 1 General Provisions
Article 1 In order to standardize the salary management of directors and senior managers of Shanghai Haili Biotechnology Co., Ltd. (hereinafter referred to as the "Company"), establish a scientific and effective incentive and restraint mechanism, improve the level of corporate operation and management, and promote the company's stable operation and sustainable development, in accordance with the "Company Law of the People's Republic of China" and "Listing" "Corporate Governance Code" and other relevant laws, regulations, normative documents as well as the relevant provisions of the "Articles of Association of Shanghai Haili Biotechnology Co., Ltd." (hereinafter referred to as the "Articles of Association"), combined with the actual situation of the company, a remuneration management system for directors and senior managers (hereinafter referred to as the "System") has been formulated.
Article 2 This system applies to company directors and senior managers. The company's senior managers include the company's general manager, board secretary, financial director and other personnel selected in accordance with the Articles of Association.
Article 3 The remuneration of the company's directors and senior managers is based on the company's operation and comprehensive management, and is determined through a comprehensive assessment based on the completion of the business plan, the completion of assigned work responsibilities and work goals, and personal performance and development.
Article 4 The company’s remuneration system follows the following principles:
(1) Responsibility principle: Determine the salary standard for each position based on the responsibilities, value, qualifications and other factors of the position. If the position changes, the salary will change accordingly;
(2) Performance principle: embodying the linkage between salary standards and performance appraisal, and the goal of combining personal income with company benefits;
(3) Incentive principles: Based on the market competition environment and the company's development goals, use positive, diverse, and effective incentive methods to stimulate work enthusiasm and ensure the realization of the company's goals;
(4) Competition principle: The company's salary level should better attract and retain talents, ensure that the salary system is in line with the same and related industries, implement the people-oriented concept, and ensure that the salary level is competitive in the external market.
Chapter 2 Remuneration Management Organization
Article 5 The Remuneration and Assessment Committee of the Company's Board of Directors, under the authorization of the Board of Directors, is responsible for formulating and reviewing the salary management system for the Company's directors and senior managers, as well as the salary standards and plans for the Company's directors and senior managers; responsible for formulating performance standards and organizing performance evaluations for the Company's directors and senior managers; and responsible for supervising the implementation of the Company's salary system.
Article 6 The director's remuneration plan shall be determined by the shareholders' meeting and shall be disclosed. When the board of directors or the remuneration and appraisal committee evaluates an individual director or discusses his remuneration, the director shall recuse himself. The senior management remuneration plan is approved by the board of directors, explained to the shareholders' meeting, and fully disclosed.
Article 7 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 Performance Appraisal
Article 8 The composition and standards of the remuneration and allowances of the company’s directors and senior managers are as follows:
(1) The remuneration of independent directors adopts the independent director allowance system and does not participate in the company's performance appraisal linked to remuneration, and is subject to review and decision by the company's shareholders' meeting.
(2) Non-independent directors and senior managers: Remuneration consists of two parts: basic salary and performance remuneration. In principle, the proportion of performance remuneration shall not be less than 50% of the total basic remuneration and performance remuneration. Basic salary is determined based on their educational background, professional experience, working years, job responsibilities and industry salary levels; performance salary is based on the company's business objectives and the completion of individual performance assessment indicators as the assessment basis, and is assessed based on their assessment results.
Article 9 The remuneration of the company’s directors and senior managers shall be consistent with market development, match the company’s operating performance and personal performance, and coordinate with the company’s sustainable development.
Article 10 The company implements a medium- and long-term incentive mechanism to provide long-term returns and rewards to senior managers who have made sustained and important contributions to the development of the enterprise. Medium- and long-term incentives include but are not limited to equity, options, employee stock ownership plans, and other medium- and long-term special bonuses, incentives or rewards issued by the company based on actual conditions.
Chapter 4 Salary Payment and Stop Payment Recourse
Article 11 The remuneration of directors and senior managers who receive remuneration from the company shall be paid in accordance with the company’s internal management rules for remuneration payment.
Article 12 The company shall withhold and pay personal income tax on the remuneration of the company's directors and senior managers in accordance with relevant national regulations.
Article 13 If the company's directors and senior managers leave office due to reasons such as change of term, re-election, resignation during the term, etc., their remuneration will be calculated and paid based on their actual term of office and actual performance.
Article 14 During the term of office, directors and senior managers shall not be paid performance-based remuneration if any of the following circumstances occurs:
(1) Seriously harming the interests of the company;
(2) Serious dereliction of duty or abuse of power;
(3) Being publicly condemned by the China Securities Regulatory Commission or the Shanghai Stock Exchange due to major violations of laws and regulations, declared unfit to serve as a relevant candidate for a listed company, or punished by the competent authorities of securities and other departments;
(4) Other circumstances in which the company's board of directors determines that the company's relevant regulations have been seriously violated.
Article 15 The determination and payment of performance-based remuneration for company directors and senior managers shall be based on performance evaluation. The company conducts performance evaluation based on audited financial data and determines a certain proportion of performance remuneration to be paid after the annual report disclosure and performance evaluation.
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.
Chapter 5 Salary Adjustment
Article 17 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 18 The remuneration of directors and senior managers stipulated in this system does not include incentive rights obtained through equity incentive plans, employee stock ownership plans, etc.
Article 19 With the approval of the Remuneration and Appraisal Committee of the company's board of directors, special rewards or penalties may be temporarily established for special matters as a supplement to the specific position remuneration of directors and senior managers serving in the company.
Chapter 6 Supplementary Provisions
Article 20 Matters not covered by this system shall be implemented in accordance with relevant national laws, regulations, normative documents, the Articles of Association and other relevant provisions.
Article 21 If this system conflicts with the relevant laws, regulations and normative documents promulgated by the country in the future, the relevant laws, regulations and normative documents of the country will be implemented and this system will be revised in a timely manner.
Article 22 This system is formulated by the board of directors and will take effect from the date of review and approval by the company's shareholders' meeting. The same applies to modifications.
Article 23 The company’s board of directors is responsible for interpreting this system.
Shanghai Haili Biotechnology Co., Ltd.
April 28, 2026