Remuneration Management System for Directors and Senior Management of Sichuan Baili Tianheng Pharmaceutical Co., Ltd.
Sichuan Baili Tianheng Pharmaceutical Co., Ltd.
Remuneration Management System for Directors and Senior Management
Chapter 1 General Provisions
Article 1 In order to further improve the incentive and restraint mechanism of Sichuan Baili Tianheng Pharmaceutical Co., Ltd. (hereinafter referred to as the "Company"), promote the company to establish an incentive and restraint mechanism that is compatible with the modern enterprise system, effectively mobilize the enthusiasm, initiative and creativity of the company's directors and senior managers, improve the level of corporate operation and management, and promote the sustainable growth of corporate benefits, this system is formulated in accordance with the "Articles of Association" and in conjunction with the actual situation of the company.
Article 2 The scope of application of this system:
(1) All directors of the company: including non-independent directors and independent directors. Non-independent directors include internal directors and external directors. Internal directors refer to directors who serve in the company, and external directors refer to non-independent directors who do not serve in the company.
(2) Senior management personnel: general manager (president), deputy general manager (vice president), financial controller (financial director) and secretary of the board of directors, other senior management personnel specified in the company's articles of association and other personnel identified by the company's board of directors.
Article 3 The remuneration of the company's directors and senior managers shall be determined based on the company's scale and performance, and shall be determined through a comprehensive evaluation based on the company's business plan and the responsibilities and objectives of the work in charge.
Article 4 The remuneration of the company’s directors and senior managers shall be determined in accordance with the following principles:
(1) The basic salary is mainly based on the position value and specific responsibilities, taking into account the market salary market for the same position, and reflects the unity of "responsibility, rights and interests" and the principles of fairness and justice;
(2) Performance-based compensation is consistent with market development, matches the company's operating performance and individual performance appraisals, is coordinated with the company's sustainable development, and has both constraints and incentives.
Chapter 2 Remuneration Management Organization
Article 5 The Remuneration and Assessment Committee of the company's board of directors is responsible for formulating the remuneration plan and assessment standards for the company's directors and senior managers, reviewing the performance of directors and senior managers and conducting annual assessments, and supervising the implementation of the remuneration of directors and senior managers.
Article 6 The remuneration plan for the company’s directors and senior managers shall be formulated by the Remuneration and Assessment Committee of the Board of Directors. Directors' remuneration plans are reviewed and approved by the shareholders' meeting and 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 shall be reviewed and approved by the board of directors before being 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 to carry out the annual assessment of directors and senior managers and the specific implementation of the remuneration plan.
Chapter 3 Standards and Composition of Remuneration
Article 8 Allowances for independent directors. An allowance system is implemented for independent directors, which is determined or adjusted based on the actual situation of the company, the principles stipulated in this system and the remuneration situation of independent directors of comparable listed companies.
Article 9 Remuneration of non-independent directors and senior managers. Except for independent directors, other directors and senior managers receive remuneration based on their management positions in the company, with reference to the salary levels of similar positions in the same industry and the same region, and based on the company's annual performance appraisal system and achievement of performance indicators. Its compensation plan consists of basic salary, performance compensation and medium- and long-term incentive income. In principle, the proportion of performance compensation should not be less than 50% of the total basic salary and performance compensation.
Article 10 In accordance with relevant laws, regulations and incentive needs, the company may implement medium and long-term incentives for core members including non-independent directors and senior managers through restricted stocks, options, employee stock ownership plans, etc.
Chapter 4 Assessment and Payment of Salary
Article 11 The Remuneration and Appraisal Committee of the Board of Directors is responsible for performance appraisal of the company’s directors and senior managers. The determination and payment of performance-based remuneration and medium- and long-term incentive income for company directors and senior managers should be based on performance appraisal.
Article 12 The allowances for independent directors and the basic remuneration of non-independent directors and senior managers shall be paid on a monthly/quarterly basis in accordance with the company's remuneration system; performance remuneration shall be paid in accordance with the remuneration plan for directors and senior managers after monthly, quarterly and annual performance appraisals and evaluations; medium and long-term incentive income shall be implemented in accordance with the incentive plan.
Article 13 The company carries out annual performance evaluation based on audited financial data and determines a certain proportion of performance remuneration to be paid after the disclosure of the annual report and performance evaluation.
Article 14 The remuneration and allowances of the company's directors and senior managers are pre-tax amounts. The company will withhold and pay the personal income tax, various social insurance fees, salaries deducted in accordance with the company's attendance regulations, and other funds stipulated by the country or the company in accordance with the relevant regulations of the country and the company, and the remainder will be paid to the individual.
Article 15 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 will be calculated and paid based on their actual term of office and actual performance.
Article 16 If a company's directors or senior managers resign, are dismissed from their posts, or leave their posts without approval during their term of office due to violations of my country's laws, regulations, rules or serious damage to the interests of the company, their performance bonuses will not be paid.
Chapter 5 Recourse for stop payment of remuneration
Article 17 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.
Article 18 If 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 6 Adjustment of Salary
Article 19 The remuneration system should serve the company's business strategy and make corresponding adjustments as the company's operating conditions continue to change to meet the needs of the company's further development.
Article 20 The remuneration of the company's directors and senior managers may be adjusted based on the salary increase level in the same industry, inflation level, company profitability, personal performance, organizational structure adjustments and job changes.
Chapter 7 Supplementary Provisions
Article 21 This system is formulated, interpreted and modified by the company's board of directors. Matters not covered by this system shall be implemented in accordance with the relevant national laws, regulations, normative documents (including but not limited to the provisions of the China Securities Regulatory Commission, Shanghai Stock Exchange Business Rules and other departmental rules and normative documents) and the "Articles of Association". If the content of this system conflicts with the provisions of the above-mentioned laws, regulations and articles of association due to the promulgation and revision of national laws and regulations as well as the modification of the Articles of Association, the aforementioned provisions of this system involving conflicting content will automatically become invalid and shall be implemented in accordance with the provisions of relevant national laws and regulations and the Articles of Association.
Article 22 This system shall take effect and be implemented from the date of review and approval by the company's shareholders' meeting, and the same shall apply when it is modified.
Sichuan Baili Tianheng Pharmaceutical Co., Ltd.
April 27, 2026