6. Stock-for-Stock Exchange

NEC aims to make the Target Companies its wholly-owned subsidiaries. Accordingly, in the event it is unable to acquire all of the issued shares of NEC SOFT or NECST (excluding treasury stock held by NEC SOFT or NECST), NEC intends to proceed with a stock-for-stock exchange effective on June 1, 2005 to accomplish such objective. However, the exchange date may be set for a later date if the short-form stock-for-stock exchange procedure is not available to NEC. In the stock-for-stock exchange, all shares of the Target Companies not previously tendered in these tender offers will be exchanged with the shares of NEC and the shareholders of the Target Companies who are allotted one or more shares of NEC will become NEC's shareholders. Further, after the completion of the stock-for-stock exchange, the Target Companies will become wholly-owned subsidiaries of NEC and therefore the Target Companies will be delisted pursuant to the delisting criteria of the Tokyo Stock Exchange. However, depending on the results of the tender offers, the Target Companies may be delisted as a result of the tender offers.
The share exchange ratio for the stock-for-stock exchange will be determined by the end of February 2005 through discussions between NEC and each of the Target Companies, taking into full consideration the interests of their shareholders, the tender offer prices and NEC's closing price on the Tokyo Stock Exchange on December 2, 2004, together with the results of valuation, due diligence and other factors. There is no guarantee that the consideration offered in the stock-for-stock exchange (that is, shares of NEC and in case shareholders of the Target Companies who are allotted less than one share of NEC, cash proceeds resulting from the sale of such fractional shares) would be of the same value with the consideration to be received by shareholders tendering shares of the Target Companies (that is, cash) in the tender offers. The tender offers enable shareholders of the Target Companies by tendering their shares to receive cash consideration earlier than in case where shareholders of the Target Companies receives shares of NEC in the stock-for-stock exchange (or in case shareholders of the Target Companies are allotted less than one share of NEC, cash proceeds resulted from the sale of such fractional shares). Further, dissenting shareholders of the Target Companies, who object to the stock-for-stock exchange at the Target Companies' shareholders' meetings to be convened to approve stock-for-stock exchange agreements, may demand that their shares be purchased by the Target Companies in accordance with the Commercial Code of Japan. The purchase prices, however, may not be the same as the tender offer prices.
NEC and the Target Companies have also agreed to the stock-for-stock exchanges, which will be implemented in accordance with the schedule provided below. The stock-for-stock exchange ratios and the status after the stock-for-stock exchange will be announced when determined.

(Note)

For the calculation of the ownership ratio and other items, the figures are rounded off to two decimal places.

CAUTIONARY STATEMENTS:

The statements in this material with respect to the plans, strategies and forecasts of NEC Corporation and its consolidated subsidiaries (collectively "NEC") are forward-looking statements involving risks and uncertainties. Moreover, the management targets included in this material are not projections, and do not represent management's current estimates of future performance. Rather, they represent targets that management will strive to achieve through the successful implementation of NEC's business strategies.

NEC cautions you in advance that actual results could differ materially from such forward-looking statements due to several factors. The important factors that could cause actual results to differ materially from such statements include, but are not limited to, general economic conditions in NEC's markets, which are primarily Japan, North America, Asia and Europe; fluctuating demand for, and competitive pricing pressure on, NEC's products and services in the marketplace; NEC's ability to continue to win acceptance of its products and services in these highly competitive markets; NEC's ability to expand into foreign markets such as China; regulatory change and uncertainty and potential legal liability relating to NEC's businesses and operations; and movements in currency exchange rates, particularly the rate between the yen and the U.S. dollar. Among other factors, a worsening of the world economy resulting from the downturn in the IT and telecommunications industries, a worsening of financial conditions in the world markets, and a deterioration in the domestic and overseas stock markets, would cause actual results to differ from the forward-looking statements, including management's targets.

You should keep in mind that any forward-looking statement made by NEC speaks only as of the date on which NEC makes it. New risks and uncertainties come up from time to time, and it is impossible for NEC to predict these events or how they may affect NEC. In light of these risks and uncertainties, you should keep in mind that any forward-looking statement might not occur. Therefore, you should not place undue reliance on any forward-looking statements. Finally, NEC cautions you that the statements made in this material are not an offer of securities for sale. The securities may not be offered or sold in any jurisdiction in which registration is required absent registration or an exemption from registration under the applicable securities laws. For example, any public offering of securities to be made in the United States must be registered under the U.S. Securities Act of 1933 and made by means of an English language prospectus that contains detailed information about NEC and management, as well as NEC's financial statements.