| (1) |
Kinds and number of stocks subject to stock subscription rights |
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The company's common stock: 48,000 stocks, as the upper limit
When SWS exercises a stock split or reverse-split, SWS will adjust the number of stocks subject to the stock subscription rights, using the following formula. However, such an adjustment is to be implemented for the number of stocks subject to the stock subscription rights that will be issued but have not yet been exercised at the time of the stock split/reverse-split. When fractions of less than one stock are produced, they will be dropped.
In the case SWS merges with another company or SWS separates its organization, or SWS decreases its capital, or in the case any other similar situation arises where an adjustment in the number of stocks is needed after the issue date of the stock subscription rights, the number of the stocks will be appropriately adjusted, within a reasonable range. |
| (2) |
Total number of stock subscription rights to be issued |
|
48 stock subscription rights, as the upper limit.
One stock subscription right means 1,000 SWS common stocks. When an adjustment in the number of the stocks stipulated in (1) has been made, the same adjustment will be applied to the number of stock subscription rights to be allocated. |
| (3) |
Amount to be paid in per stock subscription right |
|
Free of charge |
| (4) |
Calculation method of the asset value invested to exercise the stock subscription rights |
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The value of assets invested to exercise the stock subscription rights is a monetary amount, and the value is gained by multiplying the amount to be paid in per stock that is calculated with the following formula by the number of stocks for one stock subscription right.
The amount to be paid-in for one stock will be the amount gained by multiplying 1.05 by the mean value of the closing price of the company's common stock on the day of the month previous to the month of the issuance of the stock subscription rights at the Nagoya Stock Exchange, with fractions less than one yen being raised to one yen.
However, when the value gained in this way is less than the closing price on the issue date of the stock subscription rights (or the closing price of the closest day preceding the issue date when transactions were not concluded), the amount shall be the closing price of the company's common stocks on the issue date of the stock subscription rights.
When SWS splits or reverse-splits its stocks after the issuance of the stock subscription rights, SWS will adjust the amount to be paid-in with the following formula, with fractions less than one yen being raised to one yen.
When issuing new stocks or disposing of treasury stocks (excluding cases through the exercise of the stock subscription rights) at an amount less than the market price, the following formula is used to calculate the amount to be paid-in, with fractions less than one yen being raised to one yen.
In the formula above, the "Number of stocks already issued" means the number of SWS stocks already issued minus the number of treasury stocks SWS holds. When disposing of treasury stocks, the "Number of stocks newly issued" is equivalent to the "number of stocks disposed of."
In the case SWS merges with another company or SWS separates its organization or SWS decreases its capital, or in the case any other similar situation arises where an adjustment of the amount paid-in is needed after the issue date of the stock subscription rights, the amount to be paid-in will be appropriately adjusted, within a reasonable range. |
| (5) |
Exercisable period of the stock subscription rights |
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Within three years after the day after two years have elapsed from the next day of the stock subscription right allocation. |
| (6) |
Capital to be increased and capital reserve when stocks are issued through exercising the stock subscription rights |
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The capital to be increased is the amount gained by multiplying the amount to be paid in calculated by the method mentioned in (4) above by 0.5, with fractions less than one yen being raised to one yen. The remaining amount shall be incorporated into the capital reserve. |
| (7) |
Conditions for exercising the stock subscription rights |
|
| 1) |
When a person who has received an allocation of the stock subscription rights passes away, his or her heir has no right to exercise the person's stock subscription rights. |
| 2) |
Other conditions are to be stipulated in an agreement concluded between the company and the person who receives an allocation of the stock subscription rights, based on the resolutions of the shareholders' meeting and the meeting of the Board of Directors. |
|
| (8) |
Reasons and conditions that SWS can acquire the stock subscription rights |
|
| 1) |
When a person who has received an allocation of stock subscription rights cannot exercise the rights under conditions mentioned 1) or 2) in (7) mentioned above, SWS can acquire the stock subscription rights free of charge. |
| 2) |
When a merger agreement has been approved that will extinguish the company, or a shareholders' meeting has approved a stock exchange/transfer agreement stipulating the company will become a subsidiary totally owned by another company, SWS can acquire the stock subscription rights free of charge. |
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| (9) |
Limits on assigning the stock subscription rights |
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The Board of Directors of the company must approve any assignment of the stock subscription rights. |
| (10) |
Handling in case of an organizational reform |
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When the company that has been established as follows has determined the issuance of stock subscription rights stipulated in an agreement or a plan agreed at the time of an organizational reform, the stock subscription rights of the company mentioned below will be issued according to the ratio of the organizational reform.
| 1) |
Merger (Only when SWS will be extinguished)
Surviving company after the merger or the new company established through the merger |
| 2) |
Split to be succeeded by an existing company
Existing stock company that succeeds all or part of the rights and obligations in the business owned by the company that has been split |
| 3) |
Split to be succeeded by a newly established company
New company that is established through a split-off |
| 4) |
Stock swap
Stock company that acquires all issued stocks owned by the other stock company through stock exchange |
| 5) |
Stock transfer
Stock company that is established by transferring stocks |
|
| (11) |
Dropping fractions produced in the number of stocks when exercising stock subscription rights |
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When fractions of less than one stock are produced, they will be dropped. |
| (12) |
Other matters concerning the stock subscription rights |
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Other matters concerning the stock subscription rights will be determined at the Board of Directors' meetings to be held in the future related to the stock subscription right issuance, together with other subscription matters. |
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| (Note)The contents described above are based on the premise that the agenda item "Granting stock subscription rights as stock options to employees" will be approved at the 145th regular shareholders' meeting to be held on June 27, 2006. |
