Measures for performance appraisal and salary management of directors and supervisors
general provisions
Article 1 in order to further optimize the Shandong Xinneng Taishan Power Generation Co.Ltd(000720) (hereinafter referred to as “the company”) governance system, improve the performance evaluation, incentive and restraint mechanism of directors and supervisors, and give full play to and mobilize the enthusiasm and creativity of directors and supervisors, in accordance with the company law of the people’s Republic of China and the securities law of the people’s Republic of China These measures are formulated in accordance with the guidelines for the standardized operation of listed companies of Shenzhen Stock Exchange and other laws, regulations, rules, normative documents and the relevant provisions of the Shandong Xinneng Taishan Power Generation Co.Ltd(000720) articles of Association (hereinafter referred to as the “articles of association”).
Article 2 the directors and supervisors referred to in these Measures refer to the members of the board of directors and the board of supervisors of the company, including internal directors, external non independent directors, independent directors, internal supervisors and external supervisors. (i) Internal directors refer to the directors held by the employees or managers of the company with whom the company has signed labor contracts;
（2） External non independent directors refer to non independent directors who do not hold other positions except directors in the company;
（3） Independent directors refer to the directors hired by the company in accordance with the guiding opinions on the establishment of independent directors in listed companies and who have no relationship with the company and its major shareholders that may hinder their independent and objective judgment;
（4） Internal supervisors refer to the supervisors (including employee supervisors) held by employees or managers of the company who have signed labor contracts with the company;
（5） External supervisors refer to supervisors who do not hold other positions except supervisors in the company. Article 3 the remuneration management of directors and supervisors of the company shall follow the following principles:
(i) The principle of combining remuneration with the long-term development of the company and the interests of shareholders;
（2） Adhere to the principle of distribution according to work and the combination of responsibility, power and benefit;
（3） The principle is that the salary level is consistent with the market value;
（4） The salary standard shall be open, fair and transparent.
Article 4 the assessment and salary management shall be adjusted accordingly with the development of the company and the change of business environment. The board of directors and the board of supervisors of the company may propose plans for the adjustment and optimization of this system, which shall be implemented after being approved by the general meeting of shareholders.
Chapter II management structure
Article 5 the remuneration and assessment committee of the board of directors of the company is responsible for organizing the performance evaluation and remuneration management of directors, and specifically implementing the work related to the performance evaluation of directors of the company.
Article 6 the board of supervisors of the company is responsible for refining the performance evaluation of supervisors, organizing the performance evaluation and salary assessment of supervisors, and supervising the legality and compliance of directors’ performance.
Article 7 the human resources department is the specific implementation Department of the company’s directors and supervisors’ relevant allowances, salary standards and performance appraisal schemes. The board of directors shall cooperate with the investor relations department and the financial department to do a good job in relevant work.
Chapter III Performance Assessment
Article 8 the directors and supervisors shall be assessed annually.
Article 9 the directors and supervisors of the company shall fulfill their duties and ensure that they have enough time and energy to perform their duties. The assessment contents of the directors and supervisors of the company include their diligence, ability to perform their duties, honest practice, compliance and good faith practice, whether they are punished by the regulatory authorities, whether they damage the interests of the company, whether they invest enough time to perform their duties, and whether they actively participate in the supervision, inspection and research activities organized by the board of directors and the board of supervisors, Independent directors shall also assess their independence.
Article 10 the performance of directors and supervisors of the company shall be evaluated by means of self-evaluation and mutual evaluation. “Incompetence” and “incompetence” are divided into “performance and evaluation results”.
Article 11 in case of any of the following circumstances during the performance of directors and supervisors, the performance evaluation of directors and supervisors in the current year shall not be rated as “competent”:
(i) Directors and supervisors fail to attend more than two-thirds (including) of the meetings of the board of directors and the board of supervisors in person during the year;
（2） The board of directors and the board of supervisors voted on major issues in violation of the articles of association, rules of procedure and decision-making procedures, and the directors and supervisors did not raise objections;
（3） Other violations of the duty of loyalty and diligence of directors and supervisors.
Article 12 in case of any of the following circumstances during the performance of the company’s directors and supervisors, the performance evaluation of the current year shall be “incompetent”:
(i) Divulging the company’s business secrets and seriously damaging the legitimate interests of the company;
（2） Obtaining illegitimate interests in the course of performing their duties, or taking advantage of the status of directors and supervisors to seek private interests;
（3） Subject to administrative punishment by the regulatory authority;
（4） Other serious dereliction of duty recognized by the company or regulatory authorities;
（5） Other circumstances stipulated by laws and regulations.
Article 13 the remuneration and assessment committee of the board of directors and the board of supervisors shall respectively inform the directors and supervisors of the performance evaluation results. If the directors and supervisors have objections to the evaluation results, they may apply for re evaluation. The remuneration and assessment committee of the board of directors and the board of supervisors have the right to make decisions to maintain or adjust the original evaluation results.
Article 14 the board of directors and the board of supervisors shall report the performance of directors and supervisors to the general meeting of shareholders every year.
Article 15 if the board of supervisors finds that a director violates laws and regulations or the articles of association, it shall perform its supervisory duties, notify the board of directors or report to the general meeting of shareholders, or directly report to the CSRC and its dispatched offices, stock exchanges or other departments.
Chapter IV salary management
Article 16 according to the identity and nature of work of directors and supervisors, their remuneration standards are as follows:
(i) External non independent directors and external supervisors: do not receive remuneration in the company;
（2） Internal directors and supervisors: receive remuneration according to their specific positions and work contents in the company and relevant regulations of the company;
（3） Independent directors: receive the allowance according to the allowance standard for independent directors approved by the general meeting of shareholders.
Article 17 the travel expenses, board and lodging expenses incurred by the directors and supervisors of the company in handling the company’s affairs shall be borne by the company.
Article 18 If the directors and supervisors of the company leave their posts due to change of office, re-election, resignation during their term of office and other reasons, the company shall pay their remuneration according to their actual tenure and performance of their duties.
Article 19 during the term of office, the company may not pay or partially pay allowances or performance remuneration under any of the following circumstances:
(i) Being disciplined by the stock exchange; Violating laws, administrative regulations or other regulatory provisions, being identified as inappropriate candidates by the CSRC and its dispatched offices, revoking their qualifications, imposing administrative penalties, or adopting market prohibition or permanent market prohibition within a certain period of time; （2） Divulging the company’s business secrets and seriously damaging the legitimate interests of the company;
（3） Obtaining illegitimate interests in the course of performing their duties, or taking advantage of the status of directors and supervisors to seek private interests;
（4） Failing to perform the obligation of diligence in accordance with laws and regulations and the articles of Association;
（5） Other circumstances in which the board of directors and the board of supervisors of the company determine serious violations of the relevant provisions of the company.
Article 20 the board of directors and the board of supervisors of the company shall put forward assessment opinions according to the performance evaluation results. (i) The directors and supervisors who are rated as “competent” shall receive full remuneration as required, and continue to perform the duties of directors and supervisors during their term of office;
（2） For the directors and supervisors who are rated as “basically competent”, the board of directors and the board of supervisors shall organize talks, put forward requirements for improvement within a time limit to the directors and supervisors themselves, and further strengthen organizational training to help them improve their ability to perform their duties. If there is still no effective improvement in the following year, the board of directors and the board of supervisors may put forward opinions on the replacement of candidates, and convene a meeting of the board of directors and the board of supervisors to replace the candidates of directors and supervisors;
（3） The annual salary of the directors and supervisors who are rated as “incompetent” may be appropriately deducted. The board of directors and the board of supervisors may put forward opinions on the replacement of candidates and convene a meeting of the board of directors and the board of supervisors to replace the candidates of directors and supervisors.
Article 21 the composition and standard of the remuneration of directors and supervisors of the company may be adjusted according to the changes of market environment and the company’s operation. The adjustment plan for the remuneration of directors and supervisors shall be reviewed and approved by the board of directors and the board of supervisors and submitted to the general meeting of shareholders for approval.
Chapter V supplementary provisions
Article 22 matters not covered in these Measures shall be implemented in accordance with relevant national laws, regulations, normative documents and the articles of Association; If the system conflicts with the laws, regulations and normative documents issued by the state, the national laws, regulations and normative documents shall be followed. Article 23 these Measures shall be formally implemented after being deliberated and adopted by the general meeting of shareholders of the company, and the same shall be true for amendment.
