On May 22, 2024, Hokuetsu Corporation announced in its press release that it had received a shareholder proposal from Oasis Investment II Master Fund Ltd, for its 186th Annual General Meeting of Shareholders. The proposals are as follows, 1. Dismissal of 1 Representative Director: Dismissal of Mr. Sekio Kishimoto, 2. Dismissal of 4 external directors: Dismissal of Mr. Mitsuyasu Iwata, Mr. Kazuo Nakase, Mr. Hiromitsu Kuramoto, Ms. Hiroko Nihei , 3. Appointment of 5 outside directors: Appointment of Ms. Wendy Shiba, Mr. Kenneth Nysten, Mr. Michael Baisley, Mr. Yuichiro Nakajima, Mr. Osamu Watanabe, 4. Determination of the amount of basic remuneration for each individual outside director, 5. Determination of remuneration for the grant of restricted transferable shares to outside directors. The Board of Directors opposes all shareholder proposals for the following reason:- (1) The Company's sales growth, operating margin growth, net profit margin growth and ROE growth during Mr Kishimoto's tenure as President and CEO of the Company have all been above the average of its competitors, and its Total Shareholder Return (TSR) has also been above the average of the Tokyo Stock Exchange Stock Price Index (TOPIX) and its competitors, the company's business performance in terms of key financial indicators has been good.

Therefore, the criticism stated in the proposal that Mr. Kishimoto has maintained a one-man management control and that the Board of Directors has not been able to present growth prospects to shareholders, is completely untrue, (2) The company stated that each of its independent outside directors makes sensible decisions on their own insight and without any discovery to management in order to fulfil their duty of care, with a view to maximising the Company's medium- to long-term corporate value or the common interests of its shareholders. Further, the Oasis Group cannot be seriously considering the management of the Company as a major shareholder of Daio Paper. Making the Management Integration Proposal and seeking to pass the Director-related Shareholder Proposal, would effectively lead to it taking control of the Company's management, and would be detrimental to the common interests of the Company's shareholders, (3) The current Board of Directors of the Company, is considered to be an optimal team as a whole in terms of its size, skill set and balance, including diversity.

Additionally, all of the candidates nominated by Oasis stated that they were approached by Oasis in February or March 2024 about being candidates for the Company's external directorships, and with the exception of Mr Osamu Watanabe, none of the candidates have any experience at all as an external director in a listed company in Japan, and none of the candidates hold any fixed views on management of the Company, (4) The company stated that it would be difficult to design flexible remuneration based on changes in the external and market environment, which may inhibit flexibility in accordance with the roles and responsibilities required of non-executive directors, and may make it difficult to invite useful personnel due to the inability to set appropriate remuneration, (5) The purpose of proposing this shareholder proposal while aiming to replace the outside directors is understood to be to ensure that the amount of share-based remuneration for the OASIS-proposed directors is 7.5 million yen if the outside directors are successfully replaced. The Shareholder Proposal states that the purpose of allocating restricted share remuneration to outside directors of the Company is, to give them an incentive to continuously improve the Company's corporate value, but outside directors are required to ensure a high degree of independence and to strengthen their management supervision function. As such, the remuneration of the Company's Outside Directors consists solely of basic remuneration as fixed remuneration, and the Company does not consider it appropriate to include restricted stock remuneration linked to performance in the remuneration of Outside Directors.