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Employee Benefit Plans-various

✓Provide employees with secure retirement
In order to encourage employees to plan their future retirement through long-term savings, KTB has formulated the "Regulations Governing Retirement of Employees" with reference to the "Labor Standards Act" and the "Labor Pension Act". Employees that can apply for retirement are those who have served in KTB for more than 15 years and have reached the age of 55, those who have served for more than 25 years, and those who have served for more than 10 years and have reached the age of 60. KTB has also set up the "Labor Retirement Reserve Supervisory Committee" to review, check, and supervise issues related to the employee's retirement reserves. A total of 7 Labor Retirement Reserve Supervisory Committee meetings were held in 2022.

With regards to the retirement system, for those who are subject to the "Labor Standards Act", KTB allocates 15% of the total salary of the employees to the "Company Pension Account" at the Bank of Taiwan every month starting 2012. When employees retire, the retirement pension is calculated based on the base unit of their service years and the approved average monthly salary for the final six months before their retirement. For the employees who are subject to the "Labor Pension Act", 6% of the individual employee's salary is allocated to their own individual labor pension account at the Bureau of Labor Insurance on a monthly basis. In 2022, NT$37.03 million was recognized and allocated to the retirement plan.

✓Care for important moments of employees
KTB has formulated the "King's Town Bank Co., Ltd. Working Rules", which specify the various benefits and leaves employees are entitled to. In addition, KTB has also set up the "Employee Welfare Committee" to be in charge of employee welfare matters and formulated the "King's Town Bank Enforcement Rules for Employee Benefits" as the basis for the utilization of employee welfare fund. Employee welfare fund, deposited in a special account, is exclusively for welfare purposes, and cannot be utilized unless approved by the Employee Welfare Committee. Benefit allocation is calculated in accordance with the following guidelines: 0.1% of the total monthly operating revenue and 0.5% of the monthly salary of each employee are allocated for employee benefits. All employees (including those who are on probation period) of KTB are entitled to the same rights and obligations. A total of 7 Employee Welfare Committee meetings was held in 2022.

✓Care for the daily needs of employees
We care for the actual needs of our employees. We provide our employees with perks, including biannual health check-up services that are more favorable than the statutory requirements, departmental gathering allowance, coupons for arts and entertainment activities, special discounts for nurseries and afterschool care centers, corporate discounts for purchases from e-commerce companies, discounts for mobile phone services, discounts for automobile purchases, free legal consultation services at specific law firms. The perks cover a wide range of aspects, including food, clothing, housing, transportation, education, and entertainment; we care for our employees wherever they go and with whatever they need in their everyday lives.

In April 2022, the epidemic situation in Taiwan was still serious. In order to encourage employees to receive the vaccine and increase the vaccination coverage rate, KTB offered an incentive payment of NT$2,000 for each employee who received two doses of the vaccine to increase the vaccination coverage rate to more than 99% by the end of August, hoping to encourage all employees to actively receive the COVID-19 vaccine to enhance their ability to prevent the epidemic. The target has been achieved smoothly in August that year. Up to now, the COVID-19 has deeply affected our economic activities and health. KTB understands that at such a time, enterprises should be the first to think about the needs of employees and society. From 2020 to 2022, we tried to make our employees feel “We care about your wellbeing!” by offering relief money and COVID-19 prevention payments and taking other measures.



Diversified Recruitment Channels

KTB proactively invests resources in recruiting outstanding talents with potential, with local residents as the main recruiting targets. In addition to general external recruitment, we put great emphasis on industry-academia cooperation, which includes campus recruitment, internship program, courses co-organization, career coaching programs, company visits, and seminars, to assist students in their career exploration, and at the same time, to find our future partners.

■ Promotion Program of “Friends to Comrades”
KTB values employee retention. A good retention rate not only reduces recruiting costs but also boosts organizational morale. However, we have also noticed that the highest turnover rate occurred during the probationary period, mainly due to incompatibility with the jobs or corporate culture. In order to encourage employees to recommend outstanding talents, expand the company's talent introduction channel, and reduce frictional turnover rate, we have launched the "Talent Recommendation Incentive" subsidy program in 2022, in which employees who recommend talents and apply for the job vacancies announced in the recruitment website will receive the recommendation incentive after the recommended talents being formally employees, and the employees who made the recommendations will be given the retention incentive again when the recommended employees have served for the company for two years. In 2022, there were five new recruits recommended by employees, with a retention rate of 100%; and the retention rate of new recruits after one year of service was 92.22%.

■ College and University Internship Programs
Since 2017, KTB has been promoting internship programs in colleges and universities, including semester internship program and summer holiday internship program. In the internship, senior employees are assigned to work together with students to complete daily tasks, so as to facilitate the student's understanding of the outlook of the finance industry through practical experience. The internship also helps students combine theoretical knowledge and practical experience to reduce their inability to adapt to the workplace after they are formally recruited in the future. In 2022, there were 13 semester interns and 5 summer holiday interns. We hope that our internship program can effectively assist students in adapting to the workplace, and the company can also recruit outstanding talents earlier through the internship programs.

■ The Youth's Employment Ultimate Program
Since August 2020, KTB has responded to the Ministry of Labor's "The Youth's Employment Ultimate Program", providing not only employment opportunities for youth, but also practical vocational training. We assigned senior employees to act as training instructors to lead and guide students to familiarize themselves with skill sets, on a one-on-one basis, and regularly track and provide feedback to them. In this way, these students may have a less steep learning curve in their future work and acquire useful skills. By the end of 2022, we have hired a total of 125 employees under this program.



Talent Retention Measures

Hiring outstanding talents is the foundation of a company's growth. Creating a place that attracts talents and allows them to demonstrate their strengths is a key value of a company's existence. Only in this way can we move forward together with a common goal and become a prosperous company.

■ Comprehensive Remuneration Structure
Based on the position and responsibilities of the employees and the operating performance of KTB, the departments, and the individuals, KTB has formulated a comprehensive remuneration structure and system. Performance evaluation and remuneration are carried out in accordance with the "Regulations on the Annual Employee Performance Evaluation", "Regulations on the Employee Benefit Payment", and "Regulations on the Distribution of Annual Bonus", approved by the Board of Directors. Remuneration includes base salary, additional pay, allowance, and annual bonus. In addition, with reference to the salary and remuneration level of peer companies in the same industry, we adjust the base salary in a timely manner to provide our employees with competitive and motivating salary and remuneration.

In 2022, KTB's total compensation expense was NT$901 million, and the highest individual total compensation (Note) is 15.9 times the median total compensation of employees; and the percentage increase in the highest individual total compensation is 22.1 times the median percentage increase in the average total compensation of employees.

Regarding the implementation of salary equality, KTB complies with labor acts, including Labor Standards Act, Gender Equality at Work Act, and Employment Services Act, and provides fair and reasonable salary and remuneration based on the ability and experience required by the position, without gender discrimination. The salary and related performance assessment of managers are also proposed to the "Compensation Committee" every year for discussions to examine the reasonableness of the correlation between personal performance, company operational performance, and future risks. The ratio of female to male employees at all levels of KTB for total salary and remuneration and for the regular salary and remuneration ratio (female: male) in 2022 are shown below:

Note: For the highest individual total salary, employees changed in 2022 and therefore it is calculated by combining the total compensation of the former and successor personnel of the position.



Long-term Reward Mechanism

In addition to the salary mentioned above, KTB regards every employee as its partner and believes that KTB's steady growth lies in the team's cooperation and profit-sharing. In 2010, we launched the employee stock ownership trust, and the employees formed the "King's Town Bank Employee Stock Ownership Association". It has been agreed upon that KTB allocates a certain amount from each member's salary and deposits it to the trust organization for long-term investment and management of KTB's stocks. Also, KTB allocates an additional amount as reward based on the members' performance evaluation of the previous year and their voluntary contribution. Through "from employees to shareholders", KTB gives its employees a sense of value in the workplace and the meaning of their hard work. As KTB grows and appreciates, we also assist our employees to build up their own assets so that they can enjoy a secure retirement in the future. The employee stock ownership trust participation rate for 2022 was 88.13%, with employee participation increasing by 7.28% over last year. However, total assets and compensation rates decreased due to the poor performance of the financial market in 2022.



Employee Benefit Plans

As employees devote most of their time and efforts to work, it is the responsibility of KTB to help employees achieve a work-life balance. In addition to the statutory labor and health insurance, KTB has introduced a number of measures and programs to take care of the employees in multiple aspects, such as the important moments of their lives, daily needs, emergency assistance, and retirement. The average welfare expense in 2022 was NT$1.0108 million(Note).

Note: The benefits for part-time employees and interns are determined according to individual contracts.