Chacha Food Company Limited(002557)
Remuneration management system for directors, supervisors and senior managers
Chapter I General Provisions
Article 1 in order to establish and improve the incentive and restraint mechanism in line with the requirements of modern enterprise management system, fully mobilize the enthusiasm and creativity of directors, supervisors and senior managers, improve the overall management level of the company and ensure the realization of the company’s development strategic objectives, this system is formulated in accordance with the company law, other relevant national laws and regulations, as well as the relevant provisions of the articles of association and in combination with the actual situation of the company.
Article 2 this system is applicable to the directors, supervisors and senior managers of the company, including the following personnel: (I) independent directors and non independent directors;
(II) supervisors;
(III) senior managers: general manager, deputy general manager, chief financial officer and Secretary of the board of directors.
Article 3 the remuneration management of directors, supervisors and senior managers of the company shall follow the following principles:
(I) the principle of fairness, reflecting the principle that the income level conforms to the company’s scale and performance, and taking into account the market salary level;
(II) the principle of unity of responsibility, right and benefit, reflecting that the salary is consistent with the value of the post and the performance of responsibilities and obligations;
(III) the principle of long-term development, reflecting that the salary is consistent with the goal of sustainable and healthy development of the company;
(IV) the principle of paying equal attention to incentive and restraint, reflecting the linkage between salary payment and assessment, reward and punishment, and incentive mechanism.
Chapter II remuneration management organization of directors, supervisors and senior managers
Article 4 the remuneration and assessment committee of the board of directors is a special organization for the management, assessment and supervision of the remuneration of directors and senior managers, which is mainly responsible for the following work:
(I) formulate the salary plan or scheme according to the main scope, responsibilities and importance of the management positions of directors and senior managers and the salary level of relevant positions in other relevant enterprises;
(II) the salary plan or scheme mainly includes (but is not limited to) performance evaluation standards, procedures and main evaluation systems, main schemes and systems of rewards and punishments, etc;
(III) review the performance of duties of directors and senior managers of the company and conduct annual performance evaluation;
(IV) supervise the implementation of the company’s salary system;
(V) other matters authorized by the board of directors.
Article 5 the board of supervisors shall review the performance evaluation results and remuneration of supervisors.
Article 6 the human resources and financial departments of the company shall cooperate with the remuneration and assessment committee of the board of directors and the board of supervisors in the specific implementation of the remuneration scheme for directors, supervisors and senior managers.
Article 7 the remuneration scheme of directors shall be reviewed by the remuneration and assessment committee of the board of directors, submitted to the board of directors for deliberation and approval, and implemented after being submitted to the general meeting of shareholders for approval. The remuneration scheme of senior managers shall be implemented after being reviewed by the remuneration and assessment committee of the board of directors and submitted to the board of directors for deliberation and approval. The remuneration scheme of supervisors shall be submitted to the board of supervisors for deliberation and approval, and then implemented after being approved by the general meeting of shareholders.
Article 8 the responsibilities and authorities of the remuneration and assessment committee shall refer to the working rules of the remuneration and assessment committee of the board of directors of the company.
Chapter III salary standards and performance appraisal procedures
Article 9 the remuneration standards of directors, supervisors and senior managers are as follows:
(I) the remuneration standard of independent directors shall be paid annually after being deliberated and approved by the general meeting of shareholders. Directors of the company who hold management positions in the company shall receive remuneration according to their management positions. Directors who do not hold management positions shall not receive remuneration in the company;
(II) supervisors of the company who hold positions in the company will be paid according to their actual positions, and supervisors who participate in the company’s excellence incentive bonus policy will be rewarded according to their value creation; The remuneration standard of supervisors who do not work in the company shall be paid monthly after being deliberated and approved by the general meeting of shareholders.
(III) the annual salary system is adopted for senior managers. The salary standard is determined according to their positions and job responsibilities in the company. The basic annual salary = basic salary + performance salary. Senior managers participating in the company’s excellence incentive bonus policy can receive awards according to their value creation.
If the directors, supervisors and senior managers of the company leave their posts due to change of office, re-election, resignation during their term of office and other reasons, they shall be calculated and paid according to their actual term of office. The travel expenses of directors, supervisors and senior managers for attending the board of directors, the board of supervisors and the general meeting of shareholders of the company and the expenses required for exercising their functions and powers in accordance with the articles of association shall be borne by the company.
Article 10 the procedures of performance evaluation are as follows:
(I) after the end of the assessment year, the chairman, the personnel of the human resources center and the financial center form a performance assessment team to assess the performance of the company’s directors, supervisors and senior managers, organize and complete the performance assessment, and determine the performance salary and bonus scheme of relevant managers.
(II) the remuneration and assessment committee of the board of directors shall assess the directors and senior managers in accordance with the working rules of the remuneration and assessment committee of the board of directors and in combination with the company’s operating conditions and operating results, and review their performance-based salary and bonus schemes.
(III) the board of supervisors shall review the remuneration and assessment scheme of supervisors.
Article 11 in case of any of the following circumstances during the term of office of the company’s directors, supervisors and senior managers, their salaries shall be reduced or deducted:
(I) seriously violating the company’s rules and regulations and being punished by more than a serious written warning within the company; (II) seriously damaging the interests of the company or causing major economic losses to the company;
(III) major violations of laws and regulations are subject to administrative punishment by the CSRC, publicly condemned or declared as improper candidates by the stock exchange, or dereliction of duty or dereliction of duty, resulting in major decision-making mistakes and serious impact on the company; (IV) leave their posts or no longer have the qualification of directors, supervisors and senior managers or are unable to perform the duties of directors, supervisors and senior managers.
Chapter IV payment and adjustment of salary
Article 12 the remuneration paid by the company is the amount before tax, and the individual income tax involved shall be uniformly withheld and paid by the company.
Article 13 the salary standard shall serve the company’s business strategy and be adjusted accordingly with the continuous changes of the company’s business conditions to meet the needs of the company’s further development.
Article 14 the basis for adjusting the remuneration standards of directors, supervisors and senior managers of the company is:
(I) salary increase level of the same industry. The HR center collects the salary data of the same industry through the market salary report or public salary data every year, and makes summary and analysis as the reference basis for the company’s salary adjustment.
(II) inflation level. Refer to the inflation level so that the actual purchasing power level of salary will not be reduced as the reference basis for salary adjustment of the company.
(III) profitability of the company.
(IV) adjustment of the company’s development strategy or organizational structure.
Chapter V supplementary provisions
Article 15 matters not covered in this system shall be implemented in accordance with relevant national laws and regulations, normative documents and the relevant provisions of the articles of association. If the system is inconsistent with relevant laws and regulations, normative documents and the articles of association, the provisions of relevant laws and regulations, normative documents and the articles of association shall prevail.
Article 16 the system shall be interpreted and revised by the board of directors of the company.
Article 17 the system shall come into force after being deliberated and approved by the board of directors and the date of being deliberated and approved by the general meeting of shareholders of the company, and the same is true for revision.
Chacha Food Company Limited(002557) April 11, 2022
