Granting of Stock Options as Compensation for Directors and Executive Officers

The Board of Directors of Promise Co., Ltd. approved a resolution today concerning the terms for the stock options to be granted as stipulated in Articles 236, 238 and 240 of the Corporation Law as compensation for directors, executive officers and advisers who are treated as executive officers and to distribute these stock options.

[A] Reason for Issuing Stock Acquisition Rights as Stock Options

The stock options will be issued to increase the motivation of individuals receiving these options to improve the performance of Promise and its corporate value over the medium-to long-term. The stock options will strengthen the link between the performance of Promise and the value of its stock. Individuals receiving these options will have the potential of benefiting from an increase in the stock price while also having exposure to the risk of a decline in the stock price.

[B] Summary of Terms for Granting Stock Options

1. Name of Stock Options

First Issue of Promise Stock Options for Compensation

2. Date of Stock Options Distribution

August 19, 2009

3. Individuals Receiving Stock Options

Eight directors, nine executive officers, and five advisers of Promise who are treated as executive officers

4. Number of Stock Options Issued

621 (Each stock option can be used to purchase 50 shares. However, if there is an adjustment in the number of shares as prescribed in item 7 below, the number of shares per option will be adjusted in the same manner.)

5. Stock Options Issue Price

The stock options are issued when they are allocated by using a fair calculation method, the Black-Scholes Model.

6. Amount Paid for Stock Options

The stock options are issued as compensation for directors and executive officers based on the fair value of the options as calculated using the Black-Scholes Model. Consequently, no payment is required when a stock option is received.

7. Type and Number of Shares to be Issued upon Exercise of Stock Options

31,050 shares of Promise common stock

If Promise conducts a stock split or consolidation, the number of shares issued upon exercise of the stock options will be adjusted using the following formula. However, this adjustment will be applicable only to the number of shares for the stock options that have not been exercised when the adjustment is made (“applicable number of shares"). Any fractions of one share will be discarded.

Adjusted applicable number of shares = Original applicable number of shares x Split/Consolidation ratio

If there is a merger, corporate divestiture, exchange of stock or transfer of stock (“merger, etc."), a gratis distribution of stock or any other event at Promise that requires an adjustment in the number of shares, the number of shares will be adjusted within a reasonable scope based on the terms of the merger, etc., or gratis distribution of stock.

8. Amount Paid upon Exercise of Stock Options

The amount paid upon the exercise of a stock option is the exercise price of one yen per share of stock received multiplied by the number of shares granted.

9. Exercise Period of Stock Options

The stock options can be exercised from August 20, 2009, until July 31, 2049. However, if the last day of the exercise period is a company holiday, the last day will instead be the prior business day.

10. Increases in Common Stock and Capital Reserve due to Issue of Stock upon Exercise of Stock Options

1)    If stock is issued upon the exercise of a stock option, the increase in common stock will be half of the limit for the increase in capital, etc. that is calculated pursuant to Article 17, Paragraph 1 of the company calculation rules. Any fractions of one yen will be rounded up.
2)    If stock is issued upon the exercise of a stock option, the increase in the capital reserve will be the limit for the increase in capital, etc. in item 1) above less the increase in common stock in item 1) above.

11. Conditions for Exercising of Stock Options

A stock option holder, which includes Promise directors, corporate auditors, executive officers and advisers who are treated as executive officers, can continue to exercise their stock options for a period of up to five years beginning on the day after their term of office or employment ends.

12. Conditions for Cancelation and Retirement of Stock Options

1)    A stock option will be canceled if a stock option holder has not exercised the option by the end of the stock option exercise period prescribed in items 9 and 11.
2)    With the approval of the Promise Board of Directors, Promise can acquire with no compensation and retire the stock option(s) of a stock option holder in any of the following cases:

(a)    When the stock option holder has committed a serious crime that is covered by criminal laws.
(b)    When a stock option holder commits a serious violation of the obligation to act in good faith with respect to Promise, a subsidiary or a related company; when there is serious damage to the public's trust in Promise due to a fraudulent or illegal action of a stock option holder, internally or externally, at Promise, a subsidiary or a related company; when a stock option holder is dismissed in accordance with the regulations of Promise, a subsidiary or a related company; or when any similar event occurs.
(c)    When a stock option holder is employed as an executive or employee of a competitor, or agrees to such employment, without the prior consent of Promise.
(d)    When a stock option holder asks Promise to allow the abandonment of all or part of the stock options held. (Approval of the Promise Board of Directors is not required in this case.)

13. Reasons for Acquisition of Stock Options by Promise and Terms for Acquisition

If any of the following items is approved at a shareholders meeting (or by the Board of Directors if not approved at a shareholders meeting), Promise can acquire all stock options not yet exercised with no compensation:
1)    When a merger contract is approved in which Promise is the company to be dissolved.
2)    When a contract for an exchange of stock or a plan for the transfer of stock in which Promise will become a wholly owned subsidiary is approved.

14. Inheritance of Stock Options

1)    If a stock option holder dies, only one legal heir who is either the spouse or a relative in the first degree (“heir") can exercise the stock option(s). However, the exercise period for the heir ends after the six-month period that begins on the day following the day that the stock option inheritance was decided.
2)    An heir cannot pass on stock options to another heir.
3)    The terms for the cancelation and retirement of stock options in item 12 apply to heirs just as to stock option holders.
4)    The Promise Board of Directors will determine other terms for the exercise of rights and these terms will be included in the stock option granting contract that is signed by Promise and each stock option holder.

15. Restriction on Transfer of Stock Options

Approval of the Board of Directors is required for the transfer of ownership of stock options.

16. Handling of Stock Options if Promise Is Reorganized

If there is a reorganization (merger, absorption and divestiture, divestiture forming a new company, exchange of stock, stock transfer, etc.) of Promise, irrespective of the terms of item 11, the stock options can be exercised starting on the day after the reorganization was decided until the day before the reorganization takes place.

17. Discarding of Fractional Shares when Exercising Stock Options

If the exercise of a stock option results in a fraction of one share, the fractional share will be discarded.

18. Location for Payment upon Exercise of Stock Options

Sumitomo Mitsui Banking Corporation, Head Office
1-2, Yurakucho 1-chome, Chiyoda-ku, Tokyo

19. Other Items

All other conditions shall follow the agreement on the granting of stock options between the Company and the recipient.