Tokyo, Japan - February 15, 2001 - Trend Micro Inc. (NASDAQ:TMIC, Tokyo TSE:4704), a leading provider of antivirus and Internet content security software, today adopted the following resolutions regarding the issuance of the bond with subscription warrant at the meeting of the Board of Directors of the Company held on February 15, 2001.

Pursuant to the Company's "Incentive Plan for the Year 2001," the purpose of the issuance of the bond with subscription warrant is to grant the subscription warrants to the Company's selected employees and the Subsidiary Company's directors and their selected employees.

The summary of the issuance of the bond with subscription warrant is as follows.

Trend Micro Incorporated

The Summary of the Issuance of the Sixth Unsecured Bonds with Subscription Warrants

1. Name of the bonds

Trend Micro Incorporated Sixth Unsecured Bonds with Subscription Warrants

2. Total amount of bonds to be issued

5 Billion Yen

3. Price of each bond

100 Million Yen

4. Type of bond

Only bearer type

5. Price of bond at issue

Undecided (It will be decided at the meeting of the Board of Directors on February 23, 2001).
(Of which, the bond issue price shall be 100 yen. As a tentative rule, subscription warrant issue price shall be 10 to 15 yen, and it will be decided at the meeting of the Board of Directors on February 23, 2001).

6. Interest rate

Undecided (As a tentative rule, it shall be 1.5% to 2.5% per year. It will be decided at the meeting of the Board of Directors on February 23, 2001).

7. Redemption price

100 yen par value of 100 yen

8. Term of redemption

March 19, 2004

9. Application period

From February 26, 2001 until March 15, 2001

10. Date of transfer

March 19, 2001

11. Registration method

Daiwa Shoken SB Capital Markets, Ltd. Shall purchase the total amount.

12. Security, guarantee

There is no collateral or guarantee, and there is no asset serving as a back up for the bond.

13. Special agreements

"Negative Pledge," "Net profit maintenance," and "Switching bond type from unsecured to secured."

14. Cancellation of the purchase

From the day after the date of the issuance, as long as the total value of the shares that can be obtained by the unexercised subscription warrant does not exceed the total value of the bond, cancellation of the purchase of the bond is allowed.

15. Method and period of interest payment

1. From the day after the date of the issuance until the redemption date, the interests will be paid first on September 19, 2001 for all the interest payments due by then, and from thereafter, six-months worth of interest will be paid on every March 19 and September 19.
2. If the banks are closed on the day interests are to be paid, then, the date of interest payment shall be moved to the prior bank working day.
3. When paying less-than-six-months worth of interests, interests should be calculated according to the calendar.
4. No interest will be paid after the redemption date.

 

16. Place where principal and interest shall be paid

Toyo Shintaku Ginko Ltd., Headquarter
Daiwa Shoken SB Capital Markets Ltd., Headquarter and Osaka Branch
Daiwa Shoken Ltd., Headquarter and Osaka Branch

17. Accepting Company

Daiwa Shoken SB Capital Markets Ltd.

18. Regarding subscription warrant

1. Ratio of the bond to the share obtained by the subscription warrant

For every 100 million yen par value bond price, total issue price of par value shares of common stock issuable upon exercise of the subscription warrant shall be granted 100%. Each subscription warrant certificate represents the right to obtain 100 million yen worth of new shares.

2. Total amount of the issue price of shares issuable upon exercise of the subscription warrant
5 Billion Yen

3. Type of shares issuable upon exercise of the subscription warrant
Par value shares of common stock (per value per share: 50 yen)
Unless the shares issued by the Company are to be non par value shares of common stock, in which case non par value shares shall be issued.

4. Conditions of exercise of the subscription warrant
Issue price of shares issuable upon exercise of the subscription right ("exercise price") is undecided. (As a tentative rule, the exercise price shall be the amount which is the closing price per share of the shares of common stock of the Company on the Tokyo Stock Exchange on the day on which the exercise price is decided (if no closing price is reported on such day, the the closing price of the immediately preceding such day should be used). It will be decided at the meeting of the Board of Directors on February 23, 2001). Furthermore, at the Board Directors meeting on February 15, it has been decided that the number of shares held by the shareholders whose names appear on the register of shareholders and the register of beneficial shareholders as at the close of March 31, 2001 (Saturday) [however, because it is a non business day, the actual date will be March 30, 2001 (Friday)] shall be split at the ratio of 2 shares for each share. For this reason, exercise price will be adjusted after April 1, 2001 (Sunday).
Number of shares issuable upon exercise of the subscription warrant is as follows:

Number of shares

=

The total value of subscription warrant certificates submitted by the warrant holder for the exercise of the warrant ------------------------------------------------------------------- Exercise price

Any fraction less than one share shall be disregarded. The adjustment of the exercise price will take the market-price format.

5. Exercise period of the subscription warrant:
From April 12, 2001 through March 12, 2004. If bond acceleration occurs, then the subscription warrant can no longer be exercised.

6. Partial exercise of the subscription warrant
The subscription warrant cannot be partially exercised.

7. Transfer of the subscription warrant
Subscription warrant detachable from the bond can be transferred. However, pursuant to the Company and/or Subsidiary's memorandum, the Company's employees as well as the Subsidiary's directors and employees cannot transfer the subscription warrant.

8. The portion of the issue price of the shares to be issued upon exercise of the subscription warrant which will not be transferred to stated capital
The balance of the exercise price (if adjusted pursuant to (14) above, the adjusted exercise price) remaining after deduction of the amount to be transferred to stated capital. The amount to be transferred to stated capital shall mean an amount obtained by multiplying the exercise price (if adjusted pursuant to (14) above, the adjusted exercise price) by 0.5, with any fraction of one Yen occurring as a result of such calculation to be rounded up to a full Yen. However, the amount to be so transferred to stated capital for each such share shall not be below the par value of a share of the par value common stock of the Company.

9. Payment in kind
Not applicable

10. Effectiveness of exercise of the subscription warrant
The exercise of the subscription warrant shall become effective if the certificate evidencing the relevant subscription warrant, documents required for exercise of the subscription warrant and cash payment get to the place for handling payments.

11. Dividends payable on shares to be issued upon exercise of the subscription warrant
Any annual dividend or interim dividend payable on shares issuable upon exercise of the subscription warrant with respect to the Dividend Accrual Period (as defined below), during which the relevant date of exercise falls, shall be paid for the full Dividend Accrual Period as if the exercise had taken effect at the beginning of such Dividend Accrual Period. The "Dividend Accrual Period" means each six-month period ending on June 30 and December 31 in each year.

12. Place for accepting the request for exercise of the subscription warrant
The registered office of the Company

13. Place for handling payments resulting from exercise of the subscription warrant
The registered office of The Toyo Trust and Banking Co., Ltd.

14. Method of delivery of share certificates
Share certificates will be delivered by the corporate agency department of The Toyo Trust and Banking Co., Ltd. as soon as after the relevant subscription warrant is exercised. No certificates will be issued for any fractional shares.

19. Registration agency

The Toyo Trust and Banking Co., Ltd.

20. Any other matters required for the issuance of the Bonds of Subscription Warrants will be decided at a meeting of the Company's board of directors to be held hereafter and entrusted to the representative director of the Company.
 

21. The subscription warrants to be issued by the Company will be fully repurchased by the Company from Daiwa SB Capital Markets Co., Ltd. and will be then offered to part of the Company's employees and the Company's subsidiaries.