Policy for Determining Officers’ Remuneration
In order to ensure that remuneration functions as a healthy incentive for the maximization ofcorporate value, Hokkan Holdings Limited (“the Company”) sets down the following policy for
determining the remuneration of directors and Audit & Supervisory Board members (henceforthreferred to collectively as “officers”).

1. Basic policy(1) Remuneration for officers will be set at a competitive level that secures and maintains
appropriate human resources considering the roles and duties of each officer.
(2) The compensation for individual officers will be determined according to a transparent
process, with the involvement of outside directors independent of the Company.
2. Types of remuneration
Remuneration for officers will consist of basic remuneration and share-based remuneration.
(1) Basic remuneration
A fixed amount of money will be paid monthly, to be determined on an individual
basis for each officer(2) Share-based remuneration
Share-based remuneration will be determined according to the share-based
remuneration system (“the system”) approved at the 94th ordinary generalshareholders’ meeting held on June 27, 2019.
Outline of the system
The system determines the share-based remuneration for all directors (notincluding outside directors; henceforth referred to as “eligible directors”) in officeduring the period from June 28 2019 until the final day of the ordinary generalshareholders’ meeting to be held in June 2024 (“the applicable period.”)
A trust established and funded by the Company will acquire shares in theCompany, and shares will be distributed through the trust to each eligible director
equivalent to the number of points assigned by the Company to each eligible director.
As a rule, eligible directors will receive shares in the Company only when their period
as director comes to an end.
During the applicable period, the maximum amount of money to be spent on
acquiring Company shares for the purpose of distributing them to an eligible director
will be 160 million yen, and the maximum number of points that may be paid to aneligible director shall be 25,000 points within any business year (with each point
equivalent to one share in the Company).

3. Content of officers’ remuneration(1) Remuneration for directors (not including outside directors) will consist of basicremuneration and share-based remuneration, taking into account directors’ roles in
improving short-term as well as medium- to long-term results, maximizing corporate
value, and other responsibilities.
(2) Remuneration for outside directors will consist of basic remuneration only, taking into
account their roles in encouraging the sustainable growth of the company, providing
advice from the perspective of improving medium- to long-term corporate value, andoverseeing the management of the company, from a position independent of theexecutive management of the company.
(3) Remuneration for Audit & Supervisory Board members shall consist of basic
remuneration only, taking into account their role of monitoring the executive
management of directors without being swayed by business results.
4. Procedures for determining remuneration for individual officers(1) Establishment of a remuneration review committee
In order to ensure transparency in the process of determining the amount of
remuneration to be paid to individual directors, the Company will establish a
remuneration review committee, a majority of whose members will be outside
directors independent of the Company.
The number of members and makeup of the remuneration committee will be
determined separately, and disclosed appropriately.
(2) Determination of directors’ basic remunerationi. The remuneration review committee will draw up a draft proposal outlining theamount of remuneration to be paid to individual directors, taking into consideration
the experience, expertise, and achievements of individual directors, within the total
amounts determined by a vote at a general shareholders’ meeting.
ii. The Board of Directors will determine remuneration following deliberations
carefully considering the draft proposal submitted by the remuneration review
committee.
(3) Determination of share-based remuneration for directors
In accordance with “regulations for the distribution of company shares” decided by theBoard of Directors, based on the content of resolutions relating to this system made ata general shareholders’ meeting, points for share-based remuneration according to hisor her role will be assigned to eligible directors in office during the applicable periodon the date of the general shareholders’ meeting each year as part of each director’s
remuneration for the applicable period.
(4) Determination of remuneration for Audit & Supervisory Board members
Remuneration for Audit & Supervisory Board members will be determined throughdeliberation of the Audit & Supervisory Board members within the limits of total
amount determined at a general shareholders’ meeting.
Established:
Revised:February 8, 2021
June 29, 2022