On May 15, 2024, Fukuda Denshi Co., Ltd. announced in its press release that it had received a shareholder proposal from Japan Absolute Value Fund L.P. for its 77th Annual General Meeting of Shareholders. The proposals are as follows, i) Election of 2 Directors: Appointment of Ms. Madoka Sato and Mr. Yusuke Nakamura, ii) Revise the amount of remuneration for Directors, iii) Remove the maximum amount of remuneration for outside directors, iv) Increase the salary level of employees, v) Abolition of the "Basic Policy on Countermeasures to Large-Scale Purchases of Fukuda Denshi Shares (Takeover Defence Measures). The company has opposed the proposals for the following reasons, i) The knowledge that Ms. Madoka Sato and Mr Yusuke Nakamura have is already possessed by the directors and auditors proposed by the Company, there is no need to appoint them as directors separately from the ten director candidates proposed by the Company.

Further, the company does not believe that this is appropriate, as it could result in a loss of balance in the Board of Directors as a whole. The Nomination and Remuneration Advisory Committee has also reached the same conclusion after careful deliberations, ii) The amount of remuneration for the Company's Directors was approved by the 74th Annual General Meeting of Shareholders to no more than JPY 1 billion per annum. In addition, the Company's performance has reached record profits for eight consecutive terms from the financial year ended 31 March 2017 to the current financial year, and in light of these achievements, the Company believes that the above remuneration amount is a reasonable level of remuneration for Directors and should be maintained in order to secure competent personnel in the future, iii) Taking into account the number of outside directors, their roles and other factors, the Company has obtained shareholder approval to set the maximum amount of annual remuneration, for outside directors at 20 million yen.

The appropriateness of the said amount was again approved by the Nomination and Remuneration Advisory Committee. The four external directors proposed by the Company continue to provide useful opinions from a professional standpoint at meetings of the Board of Directors and are extremely capable individuals, iv) The General Meeting of Shareholders of the company can only pass resolutions on matters prescribed by law and the Articles of Incorporation, while the authority to decide on business affairs belongs to the Board of Directors. As this proposal relates to the execution of business affairs, it is an unlawful proposal that is not a matter for the purpose of the General Meeting of Shareholders, and therefore will not be taken up at this Annual General Meeting of Shareholders, v) As announced in the press release dated 15 May 2024 entitled "Notice of Partial Amendment and Continuation of Countermeasures to Large-Scale Purchases of the Company's Shares (Policy on Response to Takeovers)", the Company has resolved to partially amend and continue the Policy on Response to Takeovers subject to approval at the Ordinary General Meeting of Shareholders, and the relevant proposal will be submitted to this Annual General Meeting of Shareholders.

This shareholder proposal is exclusively about opposing the company's proposal, and since it is inextricably linked to the fact that if the company's proposal No. 4 is passed, it will be rejected, and there is no need to take it up as an independent proposal. It does not constitute a "proposal" (Article 305(1) of the Companies Act and Article 93(1) of the Enforcement Regulations of the Companies Act) and is therefore not a "proposal" (Article 305(1) of the Companies Act and Article 93(1) of the Enforcement Regulations of the Companies Act).

As an unlawful proposal, it shall not be taken up at this Ordinary General Meeting of Shareholders.