Policy for Selection and Removal of Officers
Hokkan Holdings Limited (hereinafter referred to as “the Company”) hereby sets down its
policy on the selection and removal of directors and Audit & Supervisory Board members(henceforth collectively “officers”) as below, in order to increase transparency of management
and reinforce corporate governance, as well as planning for making provisions for speedierdecision-making and delegation of authority.

1. Size and composition of Board of Directors and Audit & Supervisory Board

The size and composition of the Company’s Board of Directors and Audit & SupervisoryBoard will be determined according to the policy below.
(1) In consideration for the business characteristics of the individual Group companies andthe role of the Company as a holding company, the Board of Directors of the Company
will be of a size necessary to allow for speedy decision making and delegation of authority,
and an appropriate number of directors will be chosen within the limit of ten as set out inthe articles of incorporation.
(2) In selecting candidates for directors, in addition to the knowledge and abilities
necessary to promote the healthy management of the Company, the selection process
will consider the need to ensure diversity within the board, including the ratio ofoutside directors and women directors. At least one third of the directors should beoutside directors independent of the Company.
(3) The Audit & Supervisory Board of the Company will consist of an appropriate numberof members, up to five, as laid down in the Articles of Incorporation. In the selection ofcandidates for Audit & Supervisory Board members, consideration will be given to theexperience and insight necessary to carry out auditing of the Company and Group
companies, as well as expertise in finance, accounting, and law, to ensure a goodbalance within the Audit & Supervisory Board as a whole.
2. Criteria for selection of candidates for officers(1) In selecting candidates to serve as officers of the Company, in addition to outstanding
character, expertise, ability, and experience, the candidate must possess excellent moral
values, and be a person who will work proactively to achieve sustainable growth for theCompany and improvement of medium- and long-term corporate value, while strictly
adhering to the code of conduct determined by the Board of Directors.
(2) Candidates for officers must be able to dedicate the time and energy necessary to fulfill
their roles and duties appropriately. Candidates may be directors concurrently in no
more than four other listed companies, and must in principle attend at least approx. 85
percent of Board of Directors meetings.
3. Selection criteria for outside directors
In selecting external directors and external Audit & Supervisory Board members(hereinafter referred to collectively as “outside officers”), candidates should be able to fulfil
the roles and responsibilities expected of them as described below, in addition to the criteria
listed above.
(1) To provide advice on management policy and improvements in the way theCompany’s business is managed, based on their own insights, in order to encourage

the sustainable growth of the Company, from a perspective of improving the mediumand long-term corporate value.
(2) To oversee the management of the company through important decisions at the Boardof Directors(3) To oversee any conflicts of interest between the Company and the management team*1of the Group as well as major shareholders*2(4) To reflect appropriately the opinions of stakeholders at the Board of Directors from aperspective independent of the Group’s management and major shareholders.
4. Decision criteria regarding the independence of outside officers
Outside directors and outside Audit & Supervisory Board members (hereinafter referred tocollectively as “outside officers”) and candidates for outside officers will be considered to
be independent if none of the following criteria applies.
(1) A business executor*3 or Audit & Supervisory Board member (not including outside
Audit & Supervisory Board members) of the Group, or has been in either of thesepositions within the past ten years(2) A person who has the Group as a major business partner*4 or is business executor ofsuch an entity(3) A major business partner of the Group or a business executor of such an entity(4) Any consultant, certified accountant, or legal professional who receives payments oflarge amounts of money or other assets*5 from the Group except directors
remuneration (or any member of a corporation, association, or other group receivingsuch payment)(5) Any person receiving substantial donations or assistance*6 from the Group, or businessexecutors of any corporation, association, or other organization receiving suchassistance(6) Any major shareholder or business executor of the Company(7) Any person for whom any of items (2) through (6) has applied within the past threeyears(8) Relatives within the second degree of persons listed below (limited to persons indepartment manager (bucho) positions and above for employees)i. Business executors and Audit & Supervisory Board members of the Group andpersons who have been business executors or Audit & Supervisory Board
members of the Group within the past three years
ii. Any person for whom any of items (2) through (7) listed above applies
5. Officer nomination review committee
In order to ensure transparency in processes relating to selection of candidates for officers
and removal of directors, and to verify the suitability of policies including those relating to
the diversity of the Board of Directors, selection and removal of directors, and knowledge
and abilities (skills) that directors are expected to demonstrate, as well as theimplementation status of succession plans, the Company will establish an officer nomination
review committee, a majority of whose members will be outside directors independent ofthe Company.
The number of members and makeup of the officer nomination review committee will
be determined separately, and disclosed appropriately.
6. Procedures relating to selection of candidates for officers(1) In selecting candidates for officers, the officer nomination review committee willcompile a personnel proposal in accordance with these criteria, the code of conductdetermined by the Board of Directors, and internal rules applying to the officer
nomination review committee and, after gaining the agreement of the Audit &Supervisory Board to the list of candidates for Audit & Supervisory Board members,
submit the proposal to the Board of Directors.
(2) The Board of Directors will determine selection following deliberations carefully
considering the personnel proposal submitted by the officer nomination reviewcommittee.
7. Criteria and procedures for dismissal of directors(1) If a director infringes any law or regulations or the Company’s articles of incorporation, or
any other situation arises in which it is felt that it will be difficult for the director to fulfil
his or her duties appropriately, following deliberations on measures to be taken with regard
to the director based on the regulations of the Board of Directors and the criteria fordismissal set out in items i. to v. below, the officer nomination review committee willcompile a proposal on measures to be taken and submit it to the Board of Directors.
i. If any of the causes for disqualification laid out in the Companies Act, Article
331, Clause 1 is applicable.
ii. Any inappropriate relationships with anti-social elements or criminalorganizations or involvement in conduct damaging to public order and morals
iii. Serious damage has been caused or is likely to be caused to corporate value owing
to negligence of duty
iv. When it is judged that it will be difficult for a director to continue his or her duties
for health reasonsv. If it is judged that a director does not meet the qualities required by these criteria
and the code of conduct as laid down by the Board of Directors.
(2) The Board of Directors will determine measures to be taken following deliberations
carefully considering the proposal submitted by the officer nomination review
committee.

*1 “Management team” refers to directors (not including outside directors) and executive
officers*2 “Major shareholder” refers to a person who holds directly or indirectly 10% or more of voting
rights in the Company*3 “Business executor” refers to directors (not including outside directors) and their employees*4 “Major business partner” refers to cases where the amount paid or received in businessdealings with the Group accounts for 2% or more of consolidated sales either for the Group orfor the business partner.
*5 “Large amount of money or other assets” refers to any amount exceeding 10 million yen in
the case of an individual in the most recent business year, or an amount exceeding 2% ofconsolidated sales or total revenue in the event that the entity receiving said assets is a
corporation, association, or similar organization.
*6 “Substantial donations or assistance” refers to any donation or other assistance exceeding 10
million yen in the most recent business year
Established: February 8, 2021
Revised:June 29, 2022