eAccess Rights Plan

eAccess Rights Plan: What is the purpose of introducing this plan?; What would the Company consider when it receives a proposal of acquisition?; What are the special features of this plan?; What does "Rights Plan" mean?; Please outline the trust arrangement for the stock options.; What would happen when the plan is activated?; What will be the impact to shareholders when the plan is activated?; How do you obtain the consent of shareholders for the introduction of the plan?

What is the purpose of introducing this plan?: The purpose of this plan is to procure sufficient information and time to enable a thorough study of a proposal for the acquisition of the Company and any alternative scheme when the Company receives such a proposal of acquisition that may adversely affect the corporate value of the Company.

What would the Company consider when it receives a proposal of acquisition?: 1. The impact of the acquisition to the corporate value and on the interests of the shareholders and other stakeholders of the Company.
2. We, as a public telecommunication service provider, have an obligation to provide stable and reliable services to consumers. We will also consider the impact of the proposed acquisition to the Company's ability to fulfill such obligations.

What are the special features of this plan?: 1. This is the first plan, adopted by a company listed in the Tokyo Stock Exchange, to prepare for a proposal for acquisition by way of issue of stock options in advance..
2. The plan will be subject to shareholders approval immediately after the introduction, and thereafter reviewed by the shareholders meeting every three years so that this plan will continue to be a plan supported by the shareholders..
3. The corporate value enhancement committee, which will consist solely of independent directors of the Company, who will act for the benefit of the Company and shareholders, will determine whether to activate the plan. The majority of the members of eAccess board of directors consist of independent directors, and this plan is not intended to protect the management..
4. When the plan is activated, stock options will be delivered to the shareholders as of a record date to be determined when the plan is activated (excluding the specific acquirer and his affiliates etc.) rather than shareholders at the introduction of the plan. Therefore, the shareholders interest will not be diluted by this plan.

What does "Rights Plan" mean?: The formal name of the plan is "Corporate Value Enhancement Stock Options". The purpose of the plan is not to avoid acquisitions, but rather to secure sufficient time and information to evaluate any proposal for acquisition of the Company.

Please outline the trust arrangement for the stock options.: The Company will issue 1,800,000 units of the stock options to Minato Rights Management Limited Liability Intermediate Company ("Minato"). Minato shall entrust the stock options to a trust bank under a securities trust arrangement. The trust bank shall keep and administer the stock options thereafter.

What would happen when the plan is activated?: The plan will be activated when the Company recognizes and announces to the public that there is a specific acquirer* and the corporate value enhancement committee does not recommend the cancellation of the stock options within sixty (60) days after the announcement..
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* A Specific acquirer is a person who is either a shareholder or a tender offerer of the Company shares and who holds, together with his affiliates and co-acquirers, more than one-fifth of the outstanding voting shares of the Company.

What will be the impact to shareholders when the plan is activated?: When the plan is activated, the shareholders as of a record date to be fixed upon the activation of the plan (except for the specific acquirer and his affiliates and co-acquirers) shall receive stock options in the proportion of one unit of stock options per one share held by such shareholders as of the record date..
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1. One unit of stock options will enable a shareholder to acquire 1.5 shares of common stock in the Company..
2. The exercise price per share shall be one fifth of the average of the closing prices over the five consecutive trading days ending and including on the Friday immediately prior to the date when the stock options become exercisable..
3. The exercise period shall be from June 23, 2005 through June 22, 2015, provided, however, that stock options shall be actually exercisable only in the case where the Company recognizes and announces that there is a specific acquirer, and shall be actually exercisable from sixtieth (60th) day following the date of announcement until ninetieth (90th) day following from the date of announcement..
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By way of the above scheme, the shareholding ratio or economic value of shareholders (other than the specific acquirer) would not be diluted by the activation of the plan and the shareholders rights will be protected.

How do you obtain the consent of shareholders for the introduction of the plan?: On the shareholders meeting which was held June 22, 2005, the Company received shareholders' approval for the necessary amendments to the articles of incorporation and approval for introduction of the plan. The plan includes the sunset clause which the plan is revisited and approved every three years of the annual shareholders meeting.