| Tokyo, April 28, 2005 - Mitsubishi Heavy Industries, Ltd. (the "Company") hereby gives notice that at a meeting of the Board of Directors held today, a resolution was passed to place before the Ordinary General Meeting of Shareholders of the Company to be held on June 28, 2005, a measure seeking approval to grant to directors and executive officers the stock acquisition rights as stock options, pursuant to the stipulations in Article 280-20 and Article 280-21 of the Commercial Code, as outlined below. |
| 1. |
The reasons for granting the stock acquisition rights on especially advantageous terms as stock options.
The stock acquisition rights will be granted with the aim of further increasing the motivation and morale to improve the business results of the Company and further enhancing management that places importance on the shareholders. The rights will be issued to directors and executive officers of the Company (hereinafter referred to as "recipients") based on the description in the following outline of issuance.
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| 2. |
Outline of issuance of the stock acquisition rights
| (1) |
Type and number of shares subject to the stock acquisition rights
Up to 510,000 shares of the Company's common stock.
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| (2) |
Total number of the stock acquisition rights to be issued
Up to 510.
The number of new shares subject to each stock acquisition right (hereinafter referred to as "number of shares granted") will be 1,000.
Further, in the event that the Company carries out a stock split or reverse stock split of the Company's common stock after the date of issuing the stock acquisition right (hereinafter referred to as "date of issuance"), the number of shares granted will be adjusted according to the following formula (disregarding fractions of less than one share) and the total number of shares subject to stock acquisition right after the date of such stock split or reverse stock split will be the number produced by multiplying the number of shares granted after adjustment by the total number of stock acquisition rights that at that time have not been exercised or cancelled.
Number of shares granted after adjustment = number of shares granted before adjustment x ratio of split or reverse split |
Further, if it becomes unavoidably necessary to adjust the number of shares granted after the date of issuance such as in a case of capital reduction, merger or corporate divestiture, the number of shares granted will be adjusted within a reasonable scope, taking into consideration matters such as the terms of the capital reduction, merger or corporate divestiture, and the total number of shares subject to stock acquisition right after such adjustment will be the number produced by multiplying the number of shares granted after adjustment by the total number of stock acquisition rights that at that time have not been exercised or cancelled.
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| (3) |
Issue price of the stock acquisition rights
Issued free of charge.
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| (4) |
Amount to be paid upon exercise of a stock acquisition right
The amount to be paid when a stock acquisition right is exercised will be the amount produced by multiplying the amount to be paid per share issued or transferred by the exercise of such stock acquisition right (hereinafter referred to as "exercise value") by the number of shares granted.
The exercise value will be the amount (rounding up all fractions of less than one yen) of the average value (except days without a closing price) of the closing price on the Tokyo Stock Exchange for regular transactions of common shares of the Company for each day of the month preceding the month of the date of issuance (except non-trading days) (hereinafter referred to as "closing price") or the closing price of the date of issuance (if there was no closing price on that day, the closing price of the closest day preceding that day), whichever is higher.
Further, if any of the following occurs after the date of issuance, the exercise value will be adjusted accordingly.
| 1) |
In the event that the Company carries out a stock split or reverse stock split of the Company's common stock, the exercise value will be adjusted according to the following formula and all fractions of less than one yen that result from the adjustment will be rounded up.
Exercise value
after adjustment |
= |
Exercise value
before adjustment |
x |
|
1 |
|
ratio of split or
reverse split |
|
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| 2) |
In the event that the Company issues new common shares or disposes of its own common shares at a value lower than the market price (except in a case of the exercise of a stock acquisition right), the exercise value will be adjusted according to the following formula and all fractions of less than one yen that result from the adjustment will be rounded up.
Exercise value
after adjustment |
= |
Exercise value
before adjustment |
x |
|
|
No. of shares
already
issued |
+ |
|
No. of new
shares issued |
x |
Amount paid per
share |
|
Market Price
|
|
|
|
No. of shares already issued + No. of new shares issued
|
|
Further, in the above formula, "number of shares already issued" is the number of shares that results from subtracting the total number of its own shares the Company holds from the total number of Company shares issued. In addition, in the event that the Company disposes of its own shares, the "number of new shares issued" shall be read as "the number of the Company's own shares disposed of."
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| 3) |
Further, if it becomes unavoidably necessary to adjust the exercise value such as in a case of capital reduction, merger or corporate divestiture, the exercise value will be adjusted within a reasonable scope, taking into consideration matters such as the terms of the capital reduction, merger or corporate divestiture.
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|
| (5) |
Period to exercise each stock acquisition right
The period will be from June 29, 2007 to June 28, 2011.
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| (6) |
Other conditions on the exercise of each stock acquisition right
| 1) |
There can be no partial exercise of a stock acquisition right. |
| 2) |
A recipient who has been allotted a stock acquisition right (hereinafter referred to as "stock option holder") may exercise the stock acquisition right even after losing his or her position as director or executive officer of the Company. In the event that the stock option holder dies, the stock option holder's successor may exercise the stock acquisition right. |
| 3) |
The stock acquisition right may not be transferred to a third party, pledged or otherwise disposed of without the approval of the Board of Directors of the Company. |
| 4) |
Other conditions shall be as prescribed in the "Agreement on Allotment of Stock Acquisition Rights " entered between the Company and recipients based on a resolution of a General Meeting of Shareholders of the Company and a resolution of the Board of Directors.
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| (7) |
Grounds and conditions for cancellation of a stock acquisition right
The Company may at any time cancel without compensation any unexercised stock acquisition right that the Company obtains and possesses.
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| (8) |
Restriction on transfer of stock acquisition rights
The approval of the Board of Directors of the Company is required for transfer of any stock acquisition right.
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| 3. |
Other
Specific allotment recipients, allotment quantities, dates of issuance and other matters prescribed in Article 280-20, Paragraph 2 of the Commercial Code that are not prescribed above shall be in accordance with a resolution of the Board of Directors after a resolution of General Meeting of Shareholders of the Company. |
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PRESS CONTACT:
Hideo Ikuno: h.ikuno@daiya-pr.co.jp
Tel: +813-6716-5277, Fax: +813-6716-5929
Daiya PR (in charge of public relations for Mitsubishi Heavy Industries, Ltd.) |
