Fuji Media : Notice Regarding the Opinion of the Board of Directors on Shareholder Proposal

May 16, 2025

(Translation)

Company name: Fuji Media Holdings, Inc. Representative: Osamu Kanemitsu,

President and Representative Director (Stock Code No: 4676, Prime of Tokyo Stock Exchange) Contact: Kenji Shimizu,

Executive Vice President

Telephone: [phone]

Notice Regarding the Opinion of the Board of Directors on Shareholder Proposal

We received a written notice from a shareholder regarding the exercise of shareholder proposal rights in relation to the agenda of the 84th Annual General Meeting of Shareholders scheduled to be held on June 25, 2025 (hereinafter, the "General Meeting"). We hereby announce that, at a meeting of the Board of Directors held on May 16, 2025, the Board resolved to submit the proposed agenda item (hereinafter, the "Shareholder Proposal") to the General Meeting and to oppose the Shareholder Proposal for the reasons outlined below.

1. Proposing Shareholder

   Nippon Active Value Fund plc

2. Details of the Shareholder Proposal

   1. Proposed Agenda Item

      Election of 12 Directors (excluding Directors who are Audit & Supervisory Committee Members)

   2. Content of the Proposal

      As stated in the attached document titled "Details of the Shareholder Proposal." The relevant portion of the shareholder's proposal is presented in its original wording. (The attached document is omitted in this English translation.)

3. Opinion of the Board of Directors on the Shareholder Proposal (Conclusion)

   The opinion of our Board of Directors regarding the Shareholder Proposal was resolved after deliberations and recommendations by the Management Advisory Committee-an advisory body to the Board, consisting of five directors including three independent outside directors (with an outside director serving as chair)-as well as a review by the members of the Management Reform Subcommittee, which is composed of all seven independent outside directors. As a result, the Board of Directors, through a unanimous resolution of all directors, has decided to oppose this shareholder proposal.

4. Summary

   1. Progress on Reforms to Date

      In response to the recent incident at Fuji Television Network, Inc. (hereinafter, "Fuji Television"), our corporate group has announced and implemented a series of reform measures, including specific initiatives related to

      enhancements to our governance framework and human rights and compliance. We have also established new bodies such as the "Group Human Rights Committee" and Fuji Television's "Sustainability Management Committee" to ensure the steady execution of these reforms. Today, we resolved and disclosed the "Reform Action Plan" as our new management guideline going forward.

   2. Reform Action Plan

      This plan aims to promote human capital management that maximizes the value of human resources, while transitioning our business model centered on our strength in content planning and production capabilities. In doing so, we aim to build a foundation for sustainable growth and enhanced corporate value. Furthermore, we will focus resources on growth areas, actively invest by leveraging our assets, and enhance shareholder returns. We will also thoroughly implement governance reforms, such as strengthening the independence of the Board of Directors, increasing transparency in the executive nomination process, and reinforcing risk management.

      In line with the promotion of this plan, the Board of Directors decided and disclosed today the director candidates to be proposed at the upcoming General Meeting.

   3. Selection and Nomination of Director Candidates

      After deliberations and recommendations by the Management Advisory Committee, which consists of three independent outside directors and two internal directors, as well as review by all independent outside directors, the matter was discussed by the Board of Directors. As a result, the Board concluded that the 11 candidates proposed by management are best suited to execute our growth strategy, capital policy, and initiatives to strengthen governance and compliance frameworks.

   4. Twelve Shareholder-Proposed Candidates for Outside Director (Non-Audit & Supervisory Committee Members)

      With the exception of a few candidates, each agreed to individual interviews with our current directors (both internal and external). We confirmed that they are all outstanding individuals with unique expertise and accomplishments, and that they have a strong commitment to the revitalization of Fuji Television. The Board would like to express its sincere respect and gratitude for their engagement. However, after careful and sincere deliberation by the Board, and in light of the skills matrix that the Board deems necessary for directors, we have concluded that the company's proposed candidates are the most suitable. Moreover, considering the desirable size of the Board, we concluded that increasing the number of directors would not be appropriate. Accordingly, the Board has resolved to oppose the shareholder-proposed candidates.

   5. Future Direction of the Company and Fuji Television

      Under the new Board of Directors structure with the candidates announced by the company today, we will work together with all stakeholders-including our shareholders, viewers and users, advertisers and other business partners, production and network station partners, as well as our employees and staff-to boldly pursue transformation and growth based on our "Reform Action Plan."

5. Reasons for the Opinion of the Board of Directors

   1. Selection Process of Director Candidates

      The selection of our directors is conducted in accordance with the appointment process set forth by the

      Corporate Governance Code of Japan. Our nomination policy is to select individuals who, in consideration of their character, insight, and other attributes, are deemed most suitable and able to fulfill their duties and responsibilities as officers of the company. This selection is made by the Board of Directors, based on advice and recommendations from the Management Advisory Committee.

      In addition, during this process, in response to recent human rights and compliance issues, the Management Renewal Subcommittee-established under the Board in January 2025 and composed of all independent outside directors-also conducted a review. Furthermore, candidates for directors who are Audit and Supervisory Committee members are determined by the Board of Directors with the consent of the Audit and Supervisory Committee.

   2. Approach to the Composition of Directors

      In considering director candidates, including director candidates included in the Shareholder Proposal, we conducted interviews and also sent and received questionnaires from potential candidates. (Please note that, in the case of some shareholder-proposed candidates, interviews and responses to questionnaires could not be carried out as they were declined by certain candidates.)

      Following these steps, the Management Advisory Committee, which serves as an advisory body to the Board of Directors, carefully reviewed the interview records and questionnaire responses, thoroughly deliberated, and made recommendations to the Board. The Board of Directors then discussed the matter and made the final decision. Interviews with candidates were also conducted by outside directors who are Management Reform Subcommittee members. In evaluating the candidates, we assessed not only independence and the number of concurrent posts but also our approach to Board composition (including diversity), the roles expected of outside directors, and the suitability of each candidate for these roles.

      Through this process, we continue to appropriately select qualified individuals and strive to enhance corporate value. With regard to the composition of the Board of Directors, as stated in the "Approach to the review of the management structure" of the "(Progress and Changes in Disclosed Matters) Changes in Representative Directors and Management Structures of Fuji Media Holdings, Inc. and Fuji Television Network, Inc." dated May 16, 2025, our policies are as follows:

      • Reduce the number of directors to strengthen the effectiveness of the Board of Directors and expedite its decision making (from 17 Directors in June 2024 to 11 Director candidates this time).

      • A majority of the Company's Board of Directors will be comprised of independent outside directors to enhance transparency and objectivity and strengthen governance (6 of 11 director candidates this time are independent outside directors).

      • Promote diversity within the Board of Directors by setting the ratio of female directors to at least 30% (the ratio of female director candidates is 45.5% this time).

      • Considering age diversity within the Board of Directors, newly appoint younger talents in their 50s or below, significantly reducing the average age of directors.

      • To accelerate the development of new business fields and reforms in operational processes, appoint personnel with expertise and experience in areas such as the future of media, internet/streaming businesses, business development and investment, corporate revitalization, urban development, AI/data science, global business and international accounting, human rights and compliance, and human capital management/HR, in accordance with a skills matrix.

   3. Reasons for the Selection of Full-Time Directors and Outside Directors, and Their Expected Roles

      Our policy is to select candidates for directors who, having fully considered their character, integrity, and insight, are deemed qualified to meet shareholders' expectations for management, fulfill their duties and responsibilities as directors, and possess a high level of expertise in business and related fields.

      For full-time directors (excluding directors who are Audit and Supervisory Committee members), our policy is to nominate experienced and capable individuals who are well-versed in the corporate culture of our group and possess specialized knowledge related to our business. For directors who are Audit and Supervisory Committee members, we select candidates who have extensive experience and expertise and are capable of conducting optimal audits for the company. In addition, for outside directors, our policy is to nominate individuals who are knowledgeable about our business, highly value public interest, and are expected to effectively fulfill the supervisory function over business execution. Furthermore, in light of recent incidents at Fuji Television, we also expect them to play a role in promoting respect for human rights and enhancing governance.

   4. Reform Action Plan

In response to the recent human rights and compliance incidents that occurred at Fuji Television, we have formulated the "Reform Action Plan" as our new management guideline to replace the "Medium-Term Group Vision 2023" announced in May 2023, which set forth the direction of management for the following three years. This plan precedes the next "Medium-Term Group Vision."

The Reform Action Plan, was founded on sincere reflections regarding human rights and compliance issues, aims to promote human capital management that maximizes the value of our people and drive the transformation to a business model centered on our strengths in content planning and production, laying a solid foundation for sustainable growth and enhanced corporate value. Furthermore, we will focus resources on growth areas and strengthen our business portfolio, promote active investment and enhanced shareholder returns through the generation of cash and strategic utilization of assets. We will also thoroughly reinforce governance by increasing the transparency and independence of the executive nomination process as well as strengthening risk management across the Group, thereby striving to enhance trust in our management. The four concrete focal points of this plan are: "Promotion of human capital management," "Proactive business reform," "Capital restructuring to create mid- to long-term value," and "Transitioning to governance-oriented management."

1. Promotion of human capital management

   Since it is "people" who generate the value of our Group's businesses, human capital management within our Group is defined as a management approach that, with utmost respect for human rights as a fundamental premise, aims to maximize individual talents and thereby drive the company's medium- to long-term growth and increased value. To this end, we will invest in developing and improving workplace environments and training, so that everyone can make the most of their abilities and individuality and work securely over the long term.

   At Fuji Television, in response to human rights and compliance issues, we are renewing our corporate culture for the future. Departments that were integral to forming organizational culture, such as the Programming Department and Variety Department, will be dismantled and reorganized, and corporate functions will be strengthened to ensure proper business management. Under the direct supervision of the President, we will establish The Sustainability Management Committee to develop systems that incorporate a long-term perspective into management decision-making.

   In addition, to promote human capital management across the entire Group, we will incorporate indicators such as "human capital investment," "engagement score," and "employee satisfaction" into our management targets, and link the degree of achievement to executive compensation, thereby clarifying responsibility for driving transformation.

2. Proactive business reform

   We will fundamentally reform Fuji Television, which continues to record decreases in advertising revenue from terrestrial broadcasting. At the same time, in light of changes in the business environment, we will accelerate growth strategies for the group's media content business and promote the strengthening of the business portfolio.

   Fuji Television will evolve from being media company that relies mainly on advertising revenue to "a content company," that generates diverse revenue streams from its content. Since its founding, the TV station sought business opportunities based on each "media unit," but our strategy will shift to focus on each "content unit." By building a business structure centered on our strong content, we will pursue multiple revenue opportunities stemming from that content.

3. Capital restructuring to create mid- to long-term value

   To generate cash, we will utilize owned assets, liabilities, and operating cash flow. Regarding owned assets, we will sell more than 100 billion yen of strategic shareholdings within three years, reduce the ratio to 15% of net assets by the end of 2027, and aim for further reduction. Interest-bearing debts will be used effectively, with a consolidated capital adequacy ratio of 50% set as the lower limit. As for operating cash flow, we will work to secure it primarily through the recovery of Fuji Television's advertising revenue and improved profitability of existing businesses in the short term.

   The generated cash will be effectively used for growth investments and shareholder returns. Growth investments are expected to reach 250 billion yen over five years, which will be directed to the strengthening and expansion of existing businesses, investments in human capital, DX (Digital Transformation), development of new businesses, M&A, and among others. As for shareholder returns, subject to business recovery, we will continue to acquire own shares (over 100 billion yen by FY2029) and to pay stable dividends with a target consolidated payout ratio of 50% excluding extraordinary factors.

4. Transition to governance-oriented management

We are committed to strengthening our management oversight functions by implementing highly independent and objective decision-making structures and processes for executive nominations and by establishing a more robust risk management framework across the Group. The Nomination and Compensation Committee will be established with a majority of independent outside directors, and chaired by an independent outside director. This committee will be responsible for deliberating on the nomination of director candidates, submitting recommendations to the Board of Directors, and formulating a succession plan (leadership development plan). To clarify accountability for driving change, executive compensation will be linked to management targets such as the engagement score, and the proportion of stock-based compensation will be increased. We are also considering transitioning to a company with a Nomination Committee, etc. (as defined under the Companies Act of Japan) in June 2026. Additionally, our articles of incorporation will be amended to allow an independent outside director to serve as chairperson of the Board of Directors.

The succession plan (leadership development plan) will begin formulation by June 2025. From the standpoint of ensuring business continuity and sustainable growth, we will develop the next generation of