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American Depositary Receipt (ADR)

Establishment of the Sponsored American Depositary Receipts (ADR) Program

Mori Seiki established the American Depositary Receipts (ADR) Program on 26th January, 2006 (U.S.A. Eastern Standard Time), to allow the distribution of Mori Seiki shares in the United States in the form of ADRs.

1.Purpose of establishing the ADR program

The purpose is to develop new investors and expand the base of investors, by enhancing investor service and broadening the choices in available investment instruments in the United States capital market. This sponsored program is the first of its kind in the machine tool industry.

2.Details of ADR program
  • （1） Type of ADR Program: Sponsored Level 1
  • （2） Trading Market: OTC (over-the-counter) in the United States
  • （3） Start Date: January 26, 2006 (United States Eastern Standard Time)
  • （4） Conversion Rate: 1 ADR = 1 ordinary share (1:1)
  • （5） U.S. CUSIP Number: 617578109
  • （6） Ticker Symbol ： MRSKY
  • （7） Depositary Bank: The Bank of New York Mellon
  • （8） Local Custodian Bank: Sumitomo Mitsui Banking Corporation
ADR program

※1. What is an ADR?
ADR is the acronym for American Depositary Receipts, which are U.S. dollar-denominated transferable registered securities that foreign companies can distribute in the United States instead of the underlying stock. They facilitate investment in foreign stock by United States investors. The underlying stock is held in custody（deposit） in the issuing company's home country, and ADRs are issued by the depositary bank in the United States based on the underlying stock.

※2. Types of ADR
ADRs are divided into Levels 1-3, depending on whether new stock is issued, whether the stock is listed on United States stock markets, and other conditions. Level 1 offers a convenient means for foreign companies to distribute securities in the United States market, although new stock is not issued and since the company is not listed, stock is traded on the over-the-counter market. By submitting an application for exemption from disclosure to the SEC, as outlined in the 1934 Securities Exchange Act, Rule 12g3-2（b）, the company can issue ADRs through disclosure in accordance with Japan's disclosure standards. It is also easy for non-Japanese investors to invest, because disclosure information is filed with the SEC in English.

※3. Sponsored ADRs
The company issuing the underlying stock（sponsor） concludes a depositary agreement with a specific depositary bank, and ADRs are issued by the depositary bank once the issuer, depositary bank and investor rights and obligations have been clarified. In contrast, unsponsored ADRs are issued by the depositary bank based on investor demand, without any involvement at all from the company issuing the underlying stock.