PRESS RELEASE
June 11, 2024
To AllName of Company: Hokuetsu Corporation
Name of Representative: Sekio Kishimoto, President and CEO(Securities Code: 3865 (Prime Market, Tokyo Stock Exchange))
Inquiries: Yoshiharu Togawa, General Manager, Public Relations OfficeTel: +81 3-3245-4500

Additional Explanations Related to Daio Kaiun Endorsement Release

Hokuetsu Corporation (hereinafter, “Company”) has received shareholder proposals from the Oasis
Group and Daio Kaiun for the 186th Ordinary General Meeting of Shareholders to be held on June 27,2024. The Company has decided to restate its position in response to the release by Daio Kaiun dated June
10, 2024, titled “Exercise of Voting Rights at the Ordinary General Meeting of Shareholders of Hokuetsu
Corporation [Company note: translated into English by the Company],” (hereinafter, “Daio Kaiun
Endorsement Release”) in which Daio Kaiun expressed support for the proposals by the Oasis Group.
Therefore, the Company would like to explain its stance, as set forth below. Defined terms and expressions
used in this press release are the same as those used in the related materials below.

Related materials can be found at the links below.
Notice of the Board of Directors’ Opinion on the Shareholder Proposals (May 22, 2024)
https://www.hokuetsucorp.com/pdf/20240522_release03.pdf 1
Supplementary Explanatory Materials: Our Efforts to Enhance Corporate Value (May 22, 2024)
https://www.hokuetsucorp.com/pdf/20240522_release04.pdf 2
Notice of Additional Explanations Related to Proposals Made at General Meeting of Shareholders (June 3,2024)
https://www.hokuetsucorp.com/pdf/20240603_release01.pdf 3
Notice of Convocation of The 186th Ordinary General Meeting of Shareholders (June 10, 2024)

1

An English translation can be found at the link below.
https://www.hokuetsucorp.com/pdf/ogm2024_en.pdf
2
An English translation can be found at the link below.
https://www.hokuetsucorp.com/en/pdf/releases/20240606_release01_en.pdf
3
An English translation can be found at the link below.
https://www.hokuetsucorp.com/en/pdf/releases/20240606_release02_en.pdf
1https://www.hokuetsucorp.com/pdf/shareholders186_notice.pdf 4

Notes

Daio Kaiun et al. claimed in the Daio Kaiun Endorsement Release that the Company is distorting facts
and labeling their actions. However, all of the information the Company has disclosed to date is based onfacts with objective support, and is the result of verifying the risks associated with the actions of DaioKaiun et al., from the perspective of enhancing the interests of the Company’s general shareholders. DaioKaiun et al. claim that the Company has refused their request for a meeting with its four (4) Outside
Directors. However, when the Company informed Daio Kaiun et al. that matters related to management
policies should be explained by the executive directors first, Daio Kaiun declined the meeting; therefore,
Daio Kaiun et al. are making claims contrary to the facts. Both Daio Kaiun et al. and the Oasis Group are
major shareholders of the Company, as well as of Daio Paper, and have structural conflicts of interest with
the Company’s general shareholders. The Company merely is making decisions with the aim of enhancing
the interests of its general shareholders.

Moreover, Daio Kaiun et al. have been asserting that the Company is trying desperately to implement thetakeover defense measures, but this is not an objective claim. However, the Company is consulting thegeneral shareholders’ meeting about whether to implement the Countermeasures if Daio Kaiun et al.,which already hold 21.12% of the shares of the Company, engage in Large-Scale Acquisitions withoutcomplying with the Company’s Response Policy. If a Large-Scale Acquirer complies with the procedures
set forth in the Response Policy and then conducts Large-Scale Acquisitions, the Company will hold
another General Shareholders’ Meeting for Confirmation of the Shareholders’ Will and seek the approvalof the Company shareholders. Therefore, as long as Daio Kaiun et al. comply with the procedures set forthin the Response Policy, the Countermeasures will not be implemented, and it is clear that the claim by Daio
Kaiun et al. that the Company is eager to implement the Countermeasures is contrary to the facts. In addition,Daio Kaiun et al. acquired shares of the Company on a regular ongoing basis until the day before theCompany introduced the takeover defense measures, and the percentage of voting rights held by Daio Kaiun
et al. exceeds 20%, and in fact has reached 21.12%. In the Daio Kaiun Endorsement Release, Dasio Kaiun
et al. also argued that the Company’s position is unreasonable because the number of additional sharesacquired by Tokyo Pulp & Paper is small. However, it is not the quantity of additional shares acquired thatmatters, but the fact that Tokyo Pulp & Paper has acquired additional shares of the Company, which, as theCompany has pointed out, raises suspicions that a joint cooperative relationship exists.

As explained in the “Notice of Additional Explanations Related to Proposals Made at General Meeting ofShareholders” dated June 3, 2024, the main reasons the Company determined that the holding situation by4

An English translation can be found at the link below.
https://www.hokuetsucorp.com/pdf/ogm2024_en.pdf
2Daio Kaiun et al. is of a coercive nature are the rapid, large-scale purchases of the shares of the Companyby Daio Kaiun et al., and the holding and acquisition of shares of the Company by those who are likely to
be in a joint cooperative relationship with Daio Kaiun et al. Also, the potential impact and risks to thegeneral shareholders of the Company if the Oasis Group and Daio Kaiun act in concert already have been
described in the “Notice of Additional Explanations Related to Proposals Made at General Meeting ofShareholders,” and the endorsement by Daio Kaiun of the Oasis Group’s shareholder proposals indicatesthat the risk of coercion in the current holding situation involving Daio Kaiun et al. remains high. TheCompany believes that, at this ordinary general shareholders’ meeting, it is necessary to obtain the approvalof the shareholders for implementation of the Countermeasures in the event that Daio Kaiun et al. conduct
Large-Scale Acquisitions without complying with the Response Policy. While Daio Kaiun has expressed
support for the Oasis Group’s shareholder proposals, as stated in Daio Kaiun Endorsement Release, if allof the shareholder proposals by the Oasis Group and Daio Kaiun are approved, the Company’s Board ofDirectors will consist of five (5) Outside Directors nominated by the Oasis Group, and five (5) other Outside
Directors nominated by Daio Kaiun, out of a total of fifteen (15) directors (the maximum number of
directors permitted by the articles of incorporation is fifteen (15)). This would result in the management ofthe Company being controlled by the Oasis Group and Daio Kaiun et al., both of which are major
shareholders of Daio Paper, and it is hard to believe that this would lead to an enhancement of corporate
value and the interest of the Company’s shareholder.

In addition to the above, please refer to the related materials for an explanation of the details of the strategic
business alliance between the Company and Daio Paper, the Company’s policy on the reduction of theshares of Daio Paper held by the Company, and the other matters Daio Kaiun et al. mentioned in the DaioKaiun Endorsement Release.

End3