Building a friendly workplace

MERRY's performance appraisal system, through goal setting at the beginning of the period, implements corporate strategies and annual objectives from top to bottom, connecting departmental and individual work goals. At the end of the year, unit supervisors conduct interviews with employees to review KPI performance, provide encouragement and feedback for improvement, thereby promoting two-way communication,employee development,and strengthening organizational effectiveness. Except for new hires employed for less than three months, all other fulltime employees at headquarters, regardless of job level or gender, must undergo annual performance appraisal. In 2024, the actual implementation rate at headquarters was 100%. The results of the performance appraisal serve as the basis for job level promotion, remuneration adjustment,performance bonus, incentive systems, employee development, and training needs. Data collection for overseas plants is ongoing and is expected to be progressively disclosed in the future. To address global sustainable development trends, sustainable thinking is integrated into operational strategies and daily decision-making by incorporating ESG objectives—such as climate change response, social responsibility practices, and corporate governance optimization—into the Key Performance Indicators (KPIs) of senior executives. Through the organization's top-down ESG initiatives, the company's commitment to sustainability is strengthened, and each department is prompted to simultaneously consider environmental impact, social responsibility,and governance robustness during business development.This fosters a company-wide unified sustainability consensus and actionable drive, laying a solid foundation for long-term corporate value creation.

Taiwan Headquarters and other operating locations, in accordance with the relevant laws of their respective locations,for various types of social insurance, medical insurance, unemployment insurance, and other statutory benefits, withhold employee personal contributions during remuneration disbursement, and legally contribute the company's portion.

Taiwan Headquarters has established a retirement system in accordance with the Labor Standards Act and relevant regulations,and has formed a Labor Retirement Reserve Fund Supervision Committee, which has been approved by the Taichung City Government. Quarterly meetings of the Labor Retirement Reserve Fund Supervision Committee are held to further institutionalize the operation of the retirement fund. For pension contributions, employees under the old pension system have 5.1% of their total Remuneration contributed monthly to the Labor Pension Fund Special Account at the Trust Department of Bank of Taiwan. The reserve amount is fully allocated annually in accordance with the law, which is sufficient to meet the retirement needs of current employees. For employees under the new pension system, 6% of their total Remuneration is contributed monthly in accordance with the Labor Pension Act and deposited into their individual pension account at the Bureau of Labor Insurance. Employees may also, at their discretion, choose to contribute an additional 0 to 6% of their pension to their individual pension account. All overseas operating locations operate in compliance with local relevant regulations and regularly report to the Taiwan Headquarters.The Taiwan Headquarters deeply understands the unique value of each employee and is committed to enabling retired employees to continue leveraging their expertise in a familiar and beloved work environment; therefore,a special re-employment system for retirees has been established. For employees rehired after retirement, the company provides continuation of special leave seniority that exceeds legal requirements, and they are entitled to the same benefits as active employees, including employee profit distribution and year-end bonuses. In addition, each of the operating locations also adheres to the relevant pension systems of their respective localities, allocating legally mandated pension contributions to designated accounts,thereby safeguarding employees' future retirement lives.

Formal employees with seniority of 1 year or more may freely choose to join the employee stock trust program quarterly. Monthly, the Company provides an additional subsidy equivalent to 50% of the amount contributed by employees as an incentive, for systematic and regular purchases of company shares. These shares are vested and returned upon the employee's cessation of employment or retirement, thereby enabling employees to participate in the Company's profitability as shareholders. The target overall participation rate for 2024 was 50%. By year-end, the cumulative number of participants reached 439 individuals, resulting in an overall participation rate of 57.84% and an achievement rate of 100%.

To attract and retain professional talent, incentivize employees, and enhance cohesion by closely linking employee interests with the company's overall success, a mediumto-long-term incentive system, specifically Restricted Stock Units (RSUs), has been formulated. Through the phased granting of equity, this system aims to motivate employees to continuously invest their efforts in the company and achieve targets, fostering their growth alongside the company and ensuring the company's continuous innovation and effective retention of outstanding talent.

In addition to holidays stipulated by the Labor Standards Act, the Taiwan Headquarters provides policies that exceed statutory requirements, including no attendance required on make-up workdays for consecutive holidays announced by the government, paid family care leave, advance annual leave granted to new employees upon onboarding, long-term adoption of flexible working hours, provision of paid volunteer leave, paid leave for relatives' marriage, and return-to-Taiwan leave for expatriate employees. Benefit measures at other operating locations are standardized to comply with local government regulations. MERRY continuously optimizes its ''hybrid work model'', which integrates both remote and office modes, providing flexible work arrangements based on business nature to effectively achieve work-life balance.