Implementation Rules of Remuneration and Appraisal Committee of the Board |
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Chapter 1 General Provisions |
| Article 1 |
In order to further enhance the management system on the remuneration and appraisal of the Company's directors, managers and other senior management members, and improve the corporate governance structure, the board of directors (the "Board")sets up the Remuneration and Appraisal Committee(the "Committee") and formulates these implementation rules("Rules") in accordance with the Company Law of the People's Republic of China, Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited, Articles of Association of the Company and other related regulations.
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| Article 2 |
The Committee is a body specifically set up according to the resolution of the Board meeting, mainly responsible to formulate the performance appraisal standard of the directors and the senior management members and carry out such appraisal; formulate and review the remuneration plan and proposal for the directors, managers and other senior management members and report to the Board.
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| Article 3 |
The directors referred to herein represent the directors who receive remuneration from the Company; senior management members represent persons mentioned in the Company's annual report, including directors of the Company's subsidiaries, general manager, deputy managers, Financial Controller and the Secretary to the Board appointed by the Board. |
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Chapter 2 Composition |
| Article 4 |
The Committee shall comprise five directors, a majority of which shall be independent non-executive directors. |
| Article 5 |
Members of Remuneration and Appraisal Committee shall be nominated by the Chairman of the Board, more than one half of the independent non-executive Directors or one third of all directors and shall be elected by the Board. |
| Article 6 |
The Committee shall have one chairman who shall be an independent non-executive Director, and be in charge of the work of the Committee; the chairman shall be elected among the members of the Committee and reported to the Board for approval. |
| Article 7 |
The term of office of members of Remuneration and Appraisal Committee shall be in congruence with the term of the Board and the members may be re-elected and re-appointed upon the expiry of the current term of office. If during the term, any member of Remuneration and Appraisal Committee no longer maintains the position as a director, he or she shall automatically lose the qualification as a member and the replacement shall be appointed by the Board in accordance with Articles 4 to 6 above. |
| Article 8 |
As a unit working for the Board, the Board Office shall co-ordinate the work of the Committee, provide information on the Company's operation and persons to be appraised, prepare meetings of the Committee and implement relevant resolutions of the Committee. |
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Chapter 3 Terms of Reference |
| Article 9 |
The major terms of reference of Remuneration and Appraisal Committee include: |
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1. to study the appraisal criteria for directors and managers, to perform the appraisal and provide suggestions;
2. to make recommendations to the Board on the remuneration policy and structure for all directors and senior management members and on the formulation of such remuneration policy for the purpose of a formal and transparent procedure;
3. to supervise the execution of remuneration system;
4. to determine the specific remuneration packages (including non-monetary benefit, pension right and compensation such as compensation for loss or termination of office or appointment) for all executive directors and senior management members and to make recommendations to the Board regarding the remuneration of non-executive directors. Factors considered by the Committee may include remuneration paid by the peers, time dedicated to duty by directors, terms of reference of directors, compensation of other positions within the Group and whether to determine the remuneration based on performance;
5. to review and approve the performance-based remuneration by reference to corporate goals resolved by the Board from time to time;
6. to review and approve the compensation payable to executive directors and senior management in connection with any loss or termination of their office or appointment to ensure such compensation are determined according to relevant agreement terms; and to ensure the fairness and reasonableness of compensation not determined according to relevant agreement terms without imposing excessive burden on the Company;
7. to review and approve compensation arrangements relating to dismissal or removal of directors for misconduct to ensure such compensation are determined according to relevant agreement terms; and to ensure the fairness and reasonableness of compensation not determined according to relevant agreement terms;
8. to ensure that no director or any of his associates is involved in determination of his own remuneration;
9. other matters authorised by the Board.
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| Article 10 |
The Committee shall be entitled to veto the remuneration plan and scheme that are contrary to the interests of Shareholders. |
| Article 11 |
Remuneration plan for directors proposed by the Committee shall be approved by the Board and be subject to the consideration and approval at the general meeting; Remuneration plan for managers and other senior management members shall be approved by the Board. |
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Chapter 4 Working rules and procedures |
| Article 12 |
The Committee shall hold at least one meeting each year and notify all members five days prior to the meeting. The meeting shall be presided over by the Chairman. |
| Article 13 |
The meeting of the Committee shall not be held unless all members attend the meeting. Each member shall have one vote and the resolutions made by the meeting must be approved by over half of all members. |
| Article 14 |
The voting method of the meeting of the Committee shall be voting by a show of hands or by poll. An extraordinary meeting may be held by way of voting by telecommunication. |
| Article 15 |
The Supervisors are entitled to attending the meetings of the Committee as non-voting participants; Directors and senior management members may be invited by the Committee to attend its meetings when necessary. |
| Article 16 |
The Committee shall consult with the Chairman and/or the CEO in respect of the remuneration proposals for other executive Directors. If necessary, the Committee may appoint intermediate institutions to provide professional advice for its decision-making at its meeting at the expense of the Company. |
| Article 17 |
When the remuneration and appraisal of members of the Committee is discussed at the meetings, the person concerned shall be absent from such discussion. |
| Article 18 |
The convening procedure and voting method of the meeting of the Committee and the remuneration policy and distribution scheme passed at such meetings shall comply with the relevant laws, regulations, Articles of Association and these Rules. |
| Article 19 |
The meeting of the Committee shall have minutes on which members of Remuneration and Appraisal Committee attending the meeting shall sign their names; the minutes of the meeting shall be kept by the secretary to the Board. |
| Article 20 |
Resolutions passed by and voting results of the meeting of the Committee shall be reported to the Board in written form. |
| Article 21 |
All members of the Committee attending the meeting shall have the obligation for keeping the discussed matters confidential and shall not disclose relevant information; otherwise, they shall assume legal responsibilities. |
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Chapter 5 Supplementary Provisions |
| Article 22 |
These Rules shall be executed on the date when being approved by the Board. |
| Article 23 |
For the matters which are not covered by these Rules, they shall be executed in accordance with the relevant laws and regulations of the State and the Articles of Association. In the event that these Rules are not in congruence with the laws and regulations promulgated by the PRC government in future or the Articles of Association amended through valid procedure, the relevant laws and regulations of the PRC government and the Articles of Association shall prevail, and these Rules shall be revised immediately and the revised Rules shall be reported to the Board for consideration and approval. |
| Article 24 |
The rights to interpret these Rules shall belong to the Board. |
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