ࡱ> lnkq` RVbjbjqPqPB::M%tttttttPPP8$!2DD"fff2 $Sh`tttff4Xtftfttf8 EPDt,0!dt@X!D tttttt Shandong Xinhua Pharmaceutical Co., Ltd.Detailed Rules for the Work of the Remuneration and Appraisal Committee under the Board of Directors(This detailed rules for the work has been prepared in both Chinese and English. In the event of any discrepancy between the two versions, the Chinese version shall prevail.)Chapter I General ProvisionsArticle 1 The Company hereby establishes the Remuneration and Appraisal Committee under the Board of Directors (hereinafter referred to as the Remuneration and Appraisal Committee) and formulates these Detailed Rules in accordance with the Company Law of the Peoples Republic of China, the Code of Governance for Listed Companies, the Articles of Association and other relevant provisions, and for the purposes of further setting up and perfecting the systems on the appraisal and remuneration management of the Companys directors (non-independent directors) and senior management staff, and perfecting the corporate governance structure. Article 2 The Remuneration and Appraisal Committee is a permanent operating mechanism set up by the Board of Directors. It is mainly responsible for formulating the appraisal criteria for the Companys directors and senior management staff and carrying out the appraisal; it is also responsible for formulating and examining the remuneration policies and plans for the Companys directors and senior management staff; and it is responsible to the Board of Directors. Article 3 As referred to in these Detailed Rules, directors means Chairman and Vice-chairman of the Board of Directors and directors whose remuneration is paid by the Company, and senior management staff means General Manager and Deputy General Manager(s) appointed by the Board of Directors, Secretary of the Board of Directors, the senior management staff mentioned in the annual report of the Company, and other senior management staff appointed by the Board of Directors with the recommendation of General Manager. Chapter II MembersArticle 4 The Remuneration and Appraisal Committee consists of four to six directors, at least half of whom shall be independent directors. Article 5 Members of the Remuneration and Appraisal Committee shall be nominated by Chairman of the Board of Directors, more than half independent directors or more than one third of all directors and be elected by the Board of Directors. Article 6 The Remuneration and Appraisal Committee has one Director (Convener), who shall be an independent director and be in charge of the Remuneration and Appraisal Committee; Director of the Remuneration and Appraisal Committee shall be appointed by the Board of Directors. The working body of the Remuneration and Appraisal Committee is the Office of the Board of Directors, and the Office of the Board of Directors shall be responsible for the daily affairs of the Remuneration and Appraisal Committee. Secretary the Board of Directors shall act as Secretary of the Remuneration and Appraisal Committee. Article 7 The term of office of the Remuneration and Appraisal Committee is the same as that of the Board of Directors, and members of the Remuneration and Appraisal Committee may be reelected when their term of office expires. Where any member of the Remuneration and Appraisal Committee is unable to resume his post as director of the Company during his term of office, he shall be disqualified as a member of the Remuneration and Appraisal Committee automatically, and his vacancy shall be filled by the Remuneration and Appraisal Committee according to the provisions in the above Article 4 to Article 6. Article 8 Members of the Remuneration and Appraisal Committee shall meet the following conditions:(1) being familiar with relevant laws and regulations of the State; having professional knowledge in the field of remuneration and appraisal; being familiar with the operation and management of the Company; (2) following the principle of good faith, being honest and self-disciplined, being devoted to duties, working proactively to safeguard the interests and rights of the Company and its shareholders; (3) having strong comprehensive analysis and judgment capacity, having independent working ability. However, no member of the Remuneration and Appraisal Committee may involve in the decision of his own remuneration. Article 9 The Remuneration and Appraisal Committee shall have a Working Group, and Deputy General Manager for labor and personnel of the Company shall act as Head of the Working Group. The Working Group shall specially be responsible for providing the materials related to the Companys operation and the appraised personnel, making preparations for meetings of the Remuneration and Appraisal Committee, and implementing relevant resolutions of the Remuneration and Appraisal Committee. Chapter III Terms of ReferenceArticle 10 The major terms of reference of the Remuneration and Appraisal Committee are as follows:(1) to formulate the remuneration plans or schemes and major reward & punishment schemes and systems for directors and senior management staff according to the main scope, duties and importance of their management posts and by referring to remuneration level in the market. The determined remuneration level shall be sufficient to keep directors and senior management staff needed by the successful operation of the Company, but it shall be avoided that the Company pays excessive remuneration; (2) to formulate the standard performance evaluation procedures and major evaluation systems for the appraisal of directors and senior management staff, to examine the performance of duties by the Companys directors (including independent directors) and senior management staff, and to carry out the annual performance appraisal on them; (3) to formulate the Companys Appraisal and Evaluation System for Directors and its detailed rules; (4) to formulate the Companys Appraisal, Incentive and Reward System for Senior Management Staff and its detailed rules; (5) to accept the entrustment of the Board of Directors and report matters related to remuneration to the shareholders meeting; (6) to be responsible for supervising the implementation of the Companys remuneration and appraisal systems; (7) to be responsible for the management and specific implementation of the Companys option plan according to the authorization; (8) to carry out investigation and analysis of the implementation of the Companys remuneration structure and short-term, middle-term and long-term incentive plans, and to put forward suggestions and plans; (9) to put forward suggestions to the Board of Directors on the remuneration policies and structure for all directors and senior management staff of the Company, and on the formulation of such remuneration policies through regular and transparent procedures; (10) to perform the following duties authorized by the Board of Directors: deciding the particular remuneration and treatment for all executive directors and senior management staff, including non-pecuniary interests, right to pension and compensation (including the compensation for the bereavement or termination of post or commission), and putting forward suggestions to the Board of Directors on the remuneration of non-executive directors. The factors that the Remuneration and Appraisal Committee should take into consideration include the remuneration paid by similar companies, the directors necessary time of work and their duties, the employment conditions of other posts in the Company, and whether the remuneration shall be decided according to the performance; (11) to review and approve the remuneration decided according to the performance by referring to the Companys goals passed by the Board of Directors from time to time; (12) to review and approve the compensation paid to directors and senior management staff for the bereavement or termination of post or commission, so as to ensure such compensation is decided in accordance with the clauses of relevant contracts; if such compensation is not decided in accordance with the clauses of relevant contracts, it must be fair and reasonable and will not cause too much burden to the Company; (13) to review and approve the arrangement of compensation related to the dismissal or removal of relevant directors due to their improper behaviors, so as to ensure such arrangement is decided in accordance with the clauses of relevant contracts; if such arrangement is not decided in accordance with the clauses of relevant contracts, the relevant compensation must be reasonable and appropriate; (14) to ensure that no director nor any of his related persons can not decide his remuneration by himself; and(15) other matters related to remuneration and appraisal authorized by the Board of Directors. Article 11 The remuneration plan for the Companys directors suggested by the Remuneration and Appraisal Committee can only be implemented after being submitted to, discussed and adopted by the shareholders meeting with the approval of the Board of Directors; the remuneration distribution plan for the Companys senior management staff must be reported to the Board of Directors for approval. Article 12 The system for the Remuneration and Appraisal Committee to submit work reports to the Board of Directors shall be established. The contents of the work report shall at least include:(1) the appraisal and evaluation of directors and senior management staff; (2) the remuneration of the Companys directors and senior management staff during the period of the final reporting; (3) the analysis and evaluation of the reward systems for directors and senior management staff and the implementation of such systems; (4) other matters required to be reported by the Board of Directors.Article 13 The expenditure of the Remuneration and Appraisal Committee shall be included in the Companys budget. If necessary, the Remuneration and Appraisal Committee may employ intermediate organs or professionals to provide professional opinions for its decision-making, the reasonable cost for the employment of intermediate organs or professionals shall be shouldered by the Company. The reasonable expenses for members of the Remuneration and Appraisal Committee to attend meetings of the Remuneration and Appraisal Committee shall be paid by the Company. Article 14 Director of the Remuneration and Appraisal Committee shall perform the following duties in accordance with law:(1) to convene and preside over meetings of the Remuneration and Appraisal Committee; (2) to approve and sign reports of the Remuneration and Appraisal Committee; (3) to examine the implementation of the resolutions of the Remuneration and Appraisal Committee; (4) to report the work of the Remuneration and Appraisal Committee to the Board of Directors on behalf of the Remuneration and Appraisal Committee; (5) other duties that should be performed by Director of the Remuneration and Appraisal Committee. If Director of the Remuneration and Appraisal Committee is unable to perform his duties for some reasons, he shall appoint another member of the Remuneration and Appraisal Committee to execute his functions and powers. Article 15 When executing its functions and powers, the Remuneration and Appraisal Committee may take the following measures as to the problems it discovers:(1) to notify the Board of Directors orally or in writing, requiring it to take correction measures; (2) to require functional departments of the Company to make verification; (3) to put forward suggestions to the Board of Directors on the punishment, removal or dismissal from employment of the Companys senior management staff who violates laws, administrative regulations or Articles of Association, harms the interests of the Company, or fails to fulfill the tasks assigned by the Board of Directors. Article 16 Members of the Remuneration and Appraisal Committee shall fulfill the following obligations:(1) to perform their duties in a faithful manner in accordance with laws, administrative regulations and Articles of Association, and to protect the interests of the Company; (2) not to disclose the Companys secrets unless in accordance with the provisions of laws or with the consent of the shareholders meeting or the Board of Directors; to be responsible for the trueness and compliance of the reports submitted or documents produced to the Board of Directors. However, the Remuneration and Appraisal Committee shall, in accordance with the provisions of the Listing Rules and the Code on Corporate Governance Practices, make public its terms of reference, and explain its roles and the powers authorized to it by the Board of Directors. Chapter IV Rules of ProcedureArticle 17 The Remuneration and Appraisal Committee adopts the system of periodic meetings and provisional meetings. According to the contents of subjects under discussion, the meetings may adopt multiple forms, such as telephones, faxes and documents. Director of the Remuneration and Appraisal Committee shall preside over the meetings; if Director of the Remuneration and Appraisal Committee is unable to attend a meeting, he may entrust another member of the Remuneration and Appraisal Committee (independent director) to preside over the meeting. Article 18 The Remuneration and Appraisal Committee shall convene at least one meeting every year. The main contents of the meeting is to examine the implementation of the appraisal and remuneration incentive schemes for directors and senior management staff in the previous year; to put forward relevant reward proposals for directors and senior management staff according to the actual operation situation of the Company; to study and draft the remuneration and appraisal plans for the next year; and other matters related to remuneration and appraisal that need to be submitted to the Remuneration and Appraisal Committee for discussion. Article 19 The information about the time and place of the meeting and major matters recommended to be discussed in the meeting shall be sent to members of the Remuneration and Appraisal Committee by means of fax, express mail, registered mail or personal service ten days before the convention of a periodic meeting and two days before the convention of a provisional meeting. Article 20 The Working Group under the Remuneration and Appraisal Committee shall be responsible for making advance-phase preparations for the decision-making of the Remuneration and Appraisal Committee and for providing relevant materials of the Company:(1) major financial targets of the Company and the accomplishment of the Companys operational objectives; (2) the scope of work for the Companys senior management staff and their major duties; (3) the accomplishment of targets involved in the post performance evaluation systems for directors and senior management staff; (4) the operation performance information about the business innovation ability and profit-earning capability of directors and senior management staff; (5) relevant calculation basis for drafting the Companys remuneration distribution planning and distribution manners according to the Companys performance. Article 21 The appraisal procedures of the Remuneration and Appraisal Committee for directors and senior management staff: (1) the Companys directors and senior management staff report their work and self-evaluation to the Remuneration and Appraisal Committee; (2) the Remuneration and Appraisal Committee carries out the performance evaluation of directors and senior management staff according to the performance evaluation criteria and procedures; (3) the Remuneration and Appraisal Committee puts forward the amount of remuneration and reward manners for directors and senior management staff according to the post performance evaluation results and remuneration contribution policies, which shall be reported to the Board of Directors after passing the voting. Article 22 Meetings of the Remuneration and Appraisal Committee shall adopt resolutions, and the voting for resolutions shall adopt the manner of vote by show of hands or vote by ballot; the manner of vote by communication may be adopted for provisional meetings. Article 23 Meetings of the Remuneration and Appraisal Committee can only be convened with the attendance of more than two thirds of all members of the Remuneration and Appraisal Committee; each member may cast one vote; the resolutions of the meetings must be passed by more than half of all members. If the number of dissenting votes is equal to that of affirmative votes, Director of the Remuneration and Appraisal Committee shall have the right to cast one more vote. Members of the Remuneration and Appraisal Committee shall attend the meetings of the Remuneration and Appraisal Committee as scheduled, sufficiently express their opinions on the matters proposed for discussion or deliberation, and make clear their attitudes. If any member is unable to attend a meeting for reasons, he may entrust another member in writing to execute his functions and powers, the Letter of Authorization shall specify the name of trustee, the matter entrusted, the limits of authority and the period of validity, and shall be signed by the trustor. If a member fails to attend two consecutive meetings and fails to entrust another member to execute his functions and powers, he shall be replaced by the Board of Directors according to the application of the Remuneration and Appraisal Committee. Article 24 When a meeting of the Remuneration and Appraisal Committee is discussing any topic related to any member of the Remuneration and Appraisal Committee, the member shall not attend the meeting. Article 25 The non-director Head of the Working Group may be present at meetings of the Remuneration and Appraisal Committee. When necessary, the Companys directors, supervisors and other senior management staff other than the relevant parties may be invited to be present at the meetings. Article 26 Minutes of the meetings of the Remuneration and Appraisal Committee shall be kept; the contents of the minutes shall include the time and place of the meeting, host, participants, subject under discussion, discussion process and voting result (the number of affirmative votes, dissenting votes and abstention shall be specified in the voting result), and the members attending the meeting shall sign the minutes; the minutes of meetings shall be kept by Secretary of the Board of Directors. Article 27 The resolutions adopted by the meetings of the Remuneration and Appraisal Committee and the voting results shall be reported to the Board of Directors in writing. Article 28 The remuneration policies and distribution policies adopted by meetings of the Remuneration and Appraisal Committee must conform to the provisions of relevant laws, regulations and Articles of Association. Article 29 All members attending the meetings of the Remuneration and Appraisal Committee shall be obliged to keep confidential the matters discussed in the meetings, and shall not disclose relevant information without authorization. Chapter V Supplementary ProvisionsArticle 30 These Detailed Rules shall be put into trial implementation after it is adopted by the resolution of the Board of Directors. Article 31 The provisions of relevant laws and regulations of the State and the Articles of Association shall apply to the matters not covered in these Detailed Rules; if there is any contradiction between these Detailed Rules and laws and regulations promulgated by the State in the future or the Articles of Association amended through lawful procedures, the corresponding amendment to these Detailed Rules shall be timely made by the Board of Directors in accordance with relevant laws and regulations of the State or the Articles of Association amended through lawful procedures.PAGE PAGE 1()w; < = F G Y Z c ɷ~lZHZ7 h9khgCJOJQJ^JaJ#h9kh5CJOJQJ^JaJ#h9kh1 5CJOJQJ^JaJ#h9khDF5CJOJQJ^JaJhAh%?5OJQJ^JhAh%?OJQJ^JhAhAOJQJ^J hg5CJ OJQJ^JaJ o(#hgoh85CJ OJQJ^JaJ #hgoh5CJ OJQJ^JaJ #hgohg5CJ OJQJ^JaJ #hgohg5CJ OJQJ^JaJ )= Z ^NvFrRBwh WD`gdgo$a$gd9k$a$gd<=UVc d {    ! 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