Press Releases 2004

Notice of the Issuance of Stock Acquisition Rights by Third Party Allotment

May 27, 2004

This is to announce that SOFTBANK CORP. (the “Company”)’s Board of Directors resolved to issue Stock Acquisition Rights by third party allotment at the board meeting held on May 27, 2004 in the following manner

1. Reason for issuance

The purpose of the issuance is to secure working capital for the Company’s broadband business and to strengthen its equity capital base. Specific amounts will be determined in light of the circumstances under which the payments are made upon exercise of the rights.

2. Outline of the issuance of the Stock Acquisition Rights

(1) Class and number of shares to be issued upon exercise of Stock Acquisition Rights

8,000,000 shares of common stock of the Company
(100 shares per each Stock Acquisition Right)

However, the number of shares will be subject to the adjustment provided under (22) below.

(2) Aggregate number of Stock Acquisition Rights to be issued

80,000 units

(3) Issuance price of Stock Acquisition Rights

20,750 yen per unit (207.50 yen per share)

(4) Aggregate amount of the issue price of Stock Acquisition Rights

1,660,000,000 yen

(5) Method of offering

Third party allotment

(6) Recipient of allotment and number to be allotted

JAPAN TELECOM HOLDINGS L.P.; 80,000 units

(7) Application period

Monday, June 14, 2004 through Monday, June 21, 2004

(8) Payment date

Tuesday, June 22, 2004

(9) Allotment date

Wednesday, June 23, 2004

(10) Base date for dividend calculation

The payment of initial dividend payable on the newly issued shares of the Company that are issued as a result of the exercise of the Stock Acquisition Rights shall be made considering as if the exercise of the Stock Acquisition Rights were effective as of the last day of the fiscal year immediately before the year when the Stock Acquisition Rights are exercised and the payment for such exercise is confirmed at the payment location.

(11) Amount payable upon the exercise of the Stock Acquisition Rights

470,000 yen per unit
(4,700 yen per share)

However, the amount will be subject to the adjustment provided under (22) below.

(12) Aggregate amount payable upon the exercise of the Stock Acquisition Rights

37,600,000,000 yen

(13) Issuance price of the shares to be issued upon the exercise of the Stock Acquisition Rights

490,750 yen per unit (4,907.50 yen per share)

(14) Aggregate amount of the issuance price of the shares issued upon the exercise of the Stock Acquisition Rights

39,260,000,000 yen

(15) Amount of equity to be capitalized upon the exercise of the Stock Acquisition Rights

19,632,000,000 yen
(245,400 yen per unit, 2,454 yen per share)

In the event of the adjustment provided under (22) below takes effect, the amount capitalized shall be the issue price of the shares post adjustment multiplied by 1/2. Any odd amounts under 1 yen shall be rounded up.

(16) Exercise period

July 27, 2004 through November 30, 2004

(17) Condition for the exercise of Stock Acquisition Rights

Any Stock Acquisition Rights under one unit shall not be exercisable. Other conditions of exercise shall require the approval of board of directors of the Company.

(18) Event and condition of cancellation of Stock Acquisition Rights

In the event where the Company does not acquire all issued and outstanding common shares of JAPAN TELECOM CO., LTD. by November 16, 2004, the Company shall be able to cancel the Stock Acquisition Rights from time to time by the resolution of the Board of Directors, with payment of an amount equivalent to the amount of issuance price provided under (3) above to the holder of the Stock Acquisition Rights.

(19) Transfer restrictions on Stock Acquisition Rights

Any transfer of the Stock Acquisition Rights shall require the approval of Board of Directors of the Company.

(20) Rationale behind the calculation of the amount payable as issuance price and upon the exercise of the Stock Acquisition Rights

The base share price shall be set at the closing price of common shares of the Company on May 24, 2004 as traded on the First Section of the Tokyo Stock Exchange. The Company has used the swap rate with a similar maturity to the period remaining in the exercise period, and for volatility, it has used 40% after considering market conditions and the level applicable to companies pursuing comparable businesses. The calculation was conducted based on the Black-Scholes option pricing model using the aforementioned assumptions to arrive at a 20,750 yen issuance price for each Stock Acquisition Right (207.50 yen per share).

(21) Location for claiming the right to exercise the Stock Acquisition Rights

Head office of the Company

(22) Others

In the event the Company decides to conduct a stock split or a stock consolidation, of the Stock Acquisition Rights that are not exercised at the time of the stock split or stock consolidation, the target stocks of the Stock Acquisition Rights shall be adjusted by the following formula. Any odd lots under one right shall be rounded off.

In the event the Company decides to issue new shares or divest its treasury stock (excluding any exercise of warrants or Stock Acquisition Rights, and/or warrants attached to warrant bonds) at a price below the price of the stock split, stock consolidation or the market price after the issuance of the Stock Acquisition Rights, the exercise price per share shall be adjusted using the following formula, and any amounts under 1 yen shall be rounded up to the nearest yen. Moreover, in the event the Company (1) issues securities that are convertible to the common shares of the Company at a price below market value, (2) issue Stock Acquisition Rights or securities with Stock Acquisition Rights that result in the issuance or transfer of the common shares of the Company at a price below market value, (3) in the event it becomes necessary to adjust the exercise price due to a capital decrease, merger or corporate division, (4) other than the above, in the event it becomes necessary to adjust the exercise price per share owing to the occurrence of an event that may result in a change or possible change in the number of outstanding shares in issuance, the exercise price per share may be adjusted within the scope deemed necessary and reasonable.

In the event of a stock split or a stock consolidation

In the event of new share issuance or divesture of treasury stock at a price below the market price

The “number of outstanding shares in issuance” provided above in the formula is derived by deducting the total number of treasury stock that the Company owns from the total number of outstanding shares in issuance. In the event the Company decides to divest a part of its treasury stock, the “number of new shares issued” shall be replaced by the “number of treasury stock to be divested” and “share price before the new share issuance” with “share price before the divesture”.

(23) The aforementioned paragraphs become valid when the filings conducted under the Securities and Exchange Law takes effect.

3. Status of equity financing, etc., conducted in the past three years

(1) Status of equity financing

i Capital increase through public offering

Issue date December 30, 2003
Number of shares issued 14,500,000 shares
Issue price 3,358 yen
Amount of capital increase 48,680 million yen
Capital after the increase 162,303 million yen

ii Issuance of Euro Yen Convertible Bond due 2013

Total issue amount 50,000 million yen
Initial conversion price 6,498 yen
Payment date December 30, 2003

iii Issuance of Euro Yen Convertible Bond due 2014

Total issue amount 50,000 million yen
Initial conversion price 5,957 yen
Payment date December 30, 2003

iv Issuance of Euro Yen Convertible Bond due 2015

Total issue amount 50,000 million yen
Initial conversion price 5,488 yen
Payment date December 30, 2003

(2) Share price, etc., performance for the past three years and thus far this fiscal year

  March 2002 March 2003 March 2004 March 2005
Opening price 4,700 yen 2,385 yen 1,360 yen 4,990 yen
High 5,670 yen 2,485 yen 7,370 yen 5,760 yen
Low 1,542 yen 827 yen 1,261 yen 3,310 yen
Closing price 2,375 yen 1,380 yen 4,870 yen 4,130 yen
PE Multiple N/A N/A N/A  
[Notes]
  • *1Share price levels for the fiscal year ending March 2005 are as of May 26, 2004.
  • *2PE multiples are derived by dividing the share price by the net income per share for the relevant period.
  • *3PE multiples for the years ended in March 2002 through 2004 are not provided as the Company reported a net loss for the years.

4. Stock Acquisition Rights issuance calendar (to be finalized)

Thursday, May 27, 2004 Board resolution to issue Stock Acquisition Rights
File securities report
Friday, May 28, 2004 Public notice of the board resolution to issue Stock Acquisition Rights
Saturday, June 12, 2004 Securities report filing takes effect
Monday, June 21, 2004 Application period
Tuesday, June 22, 2004 Payment date
Wednesday, June 23, 2004 Stock Acquisition Rights allotment date

5. Outline of the third party to which allotment is to be made

Name of the third party JAPAN TELECOM HOLDINGS L.P. JAPAN TELECOM HOLDINGS L.P.
Number of Stock Acquisition Rights to be allotted 80,000 rights 80,000 rights
Amount payable: 1,660,000,000 yen 1,660,000,000 yen
Information pertaining to the third party Address P.O.Box 908 George Town, Grand Cayman Cayman Islands
Name of representative [Christopher Menetian], Director
Amount of capital -
Nature of business Investment
Major shareholder -

Relationship with the Company

Capital relationship N/A
Trading relationship N/A
Human relationship N/A

JAPAN TELECOM HOLDINGS L.P. is a limited partnership and thus entries regarding its capital and major shareholders have been omitted.

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