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The following information is true and accurate at the time of publication.
May 15, 2001
Issuance of Shares of Subsidiary Tracking Stock Linked to Sony Communication Network Corporation
Sony Corporation will not register any portion of the offering
of Subsidiary Tracking Stock in the United States or offer any Subsidiary
Tracking Stock in the United States. The Subsidiary Tracking Stock or
other securities may not be offered for sale or sold in the United States
absent registration or an exemption from registration requirements under
the U.S. Securities Act of 1933, as amended.
These materials do not constitute an offer for sale of securities in the
United States or any other jurisdiction in which such an offer is restricted.
Sony Corporation (the "Corporation") resolved at a meeting of its Board
of Directors today to issue Shares of Subsidiary Tracking Stock, the economic
value of which is intended to be linked with the economic value of Sony
Communication Network Corporation, a wholly-owned Japanese subsidiary
engaged in the provision of internet related services. (Please see Annex
attached hereto for an outline of the terms of the Shares of Subsidiary
Tracking Stock.)
The following is an outline of the issuance of the Shares of Subsidiary
Tracking Stock.
| 1. Type of New Shares: |
Par value shares of Subsidiary Tracking
Stock (par value 50 yen per share) |
| 2. Number of Shares to be Issued: |
3,072,000 shares |
| 3. Issue Price: |
To be determined at a meeting of the
Board of Directors to be held hereafter. |
| 4. Portion of the Issue
Price which will not be accounted for as stated capital: |
| To be determined at a meeting
of the Board of Directors to be held hereafter. |
| 5. Method of Offering: |
| Public offering in Japan
|
| 6. Payment Date: |
June 19, 2001 |
| 7. Commencement Date for Dividend Accrual: |
April 1, 2001 |
Annex
-Outline of Terms of Shares of Subsidiary Tracking Stock-
- 1. Voting Right
- One (1) vote per one (1) share (subject to the restrictions under
the unit share system)
- 2. Name of Subsidiary to Which Subsidiary Tracking Stock Links
- Sony Communication Network Corporation (hereinafter referred to
as the "Subsidiary")
- 3. Dividends
- (1) Dividends for Subsidiary Tracking Stock
The dividends in an amount obtained by multiplying the amount of dividends
per share of common stock of the Subsidiary (hereinafter referred
to as the "Subsidiary Shares") proposed by the Board of Directors
of the Subsidiary included in the proposed appropriation of retained
earnings for the most recent accounting period of the Subsidiary ending
on or prior to the last day of each accounting period of the Corporation,
by the Standard Ratio (initially 0.01) (hereinafter referred to as
the "Dividends for Subsidiary Tracking Stock") shall be paid for such
accounting period of the Corporation in priority to the payment of
dividends to the holders of shares of common stock of the Corporation;
provided, however, that such amount shall not exceed the amount obtained
by multiplying one hundred thousand yen (100,000 yen) by the Standard
Ratio as of the end of the relevant accounting period of the Corporation
(hereinafter referred to as the "Maximum Dividend Amount of Subsidiary
Tracking Stock") per share.
(2) Non-Participation
No dividends other than the Dividends for Subsidiary Tracking Stock
shall be paid.
(3) Cumulation
If the amount of the Dividends for Subsidiary Tracking Stock paid
to the Shareholders of Subsidiary Tracking Stock is less than the
amount determined pursuant to Paragraph 3(1) above, such shortfall
shall be cumulated as dividends for the following terms (hereinafter
referred to as the "Cumulative Unpaid Dividends"). The Cumulative
Unpaid Dividends shall be paid for each subsequent accounting period,
subject to the limitation of the Maximum Dividend Amount of Subsidiary
Tracking Stock prior to the payment of the Dividends for Subsidiary
Tracking Stock for the relevant accounting period and in priority
to the payment of dividends to the holders of shares of common stock
of the Corporation. In the event that any Cumulative Unpaid Dividends
are paid for a certain accounting period, the amount obtained by deducting
such amount paid for the relevant Cumulative Unpaid Dividends from
the Maximum Dividend Amount of Subsidiary Tracking Stock shall be
deemed the Maximum Dividend Amount of Subsidiary Tracking Stock for
the purpose of determination of the amount of the Dividends for Subsidiary
Tracking Stock for such accounting period.
(4) Interim Dividends for Subsidiary Tracking Stock
The interim dividends in an amount obtained by multiplying the amount
of the interim dividends per share of the Subsidiary Shares resolved
by the Board of Directors of the Subsidiary to pay with respect to
the most recent record date for payment of the interim dividends of
the Subsidiary on or before the Record Date for Interim Dividends
of the Corporation (September 30 of each year) by the Standard Ratio
as of the relevant Record Date for Interim Dividends in priority to
the payment of dividends to the holders of shares of common stock
of the Corporation; provided, however, that such amount shall not
exceed the amount obtained by multiplying one hundred thousand yen
(100,000 yen) by the Standard Ratio as of the relevant Record Date
for Interim Dividends per share.
-
- 4. Distribution of Residual Assets
- In distributing the residual assets, as long as they include the
Subsidiary Shares, the Corporation shall distribute, per share of
the Subsidiary Tracking Stock, the number of shares of the Subsidiary
Shares obtained by multiplying one (1) by the Standard Ratio as of
the distribution date of the residual assets (in case there is any
shortfall in the total number of the Subsidiary Shares included in
the residual assets, the number of the Subsidiary Shares to be distributed
shall be adjusted in proportion to the number of the shares of the
Subsidiary Tracking Stock held by each holders thereof), or pay the
amount obtained by way of disposition of the Subsidiary Shares, in
proportion to the distribution of any residual assets to the holders
of shares of common stock of the Corporation.
No distribution of residual assets other than those prescribed above
shall be made with respect to the shares of the Subsidiary Tracking
Stock.
-
- 5. Retirement of Stock
- (1) Voluntary Retirement
The Corporation may, at any time, purchase the shares of the Subsidiary
Tracking Stock and retire them at the purchase price of such shares
with the profit distributable as dividends to shareholders.
(2) Compulsory Retirement - Part 1
After a lapse of three (3) years from the initial issuance date of
the shares of the Subsidiary Tracking Stock, the Corporation may,
by a resolution of the Board of Directors, compulsorily retire all
(but not part of) the shares of the Subsidiary Tracking Stock with
its profit distributable as dividends to shareholders, by paying to
the holders of the shares of Subsidiary Tracking Stock (hereinafter
referred to as the "Shareholders of Subsidiary Tracking Stock") the
amount equivalent to the market price of the shares of the Subsidiary
Tracking Stock to be determined in accordance with the method prescribed
in the Articles of Incorporation of the Corporation.
(3) Compulsory Retirement-Part 2
After a lapse of three (3) years from the initial issuance date of
the shares of the Subsidiary Tracking Stock, the Corporation may compulsorily
retire all (but not part of) the shares of the Subsidiary Tracking
Stock through the procedures prescribed for capital reduction, by
paying to the Shareholders of Subsidiary Tracking Stock the amount
equivalent to the market price of the shares of the Subsidiary Tracking
Stock to be determined in accordance with the method prescribed in
the Articles of Incorporation of the Corporation.
6. Compulsory Conversion
- After a lapse of three (3) years from the initial issuance date
of the shares of the Subsidiary Tracking Stock, the Corporation may
cause the compulsory conversion of each share of the Subsidiary Tracking
Stock into shares of common stock of the Corporation in the number
obtained by dividing the number obtained by multiplying the market
price of the shares of the Subsidiary Tracking Stock to be determined
in accordance with the method prescribed in the Articles of Incorporation
of the Corporation by 1.1 by the market price of the shares of common
stock of the Corporation to be determined in accordance with the method
prescribed in the Articles of Incorporation of the Corporation; provided,
however, that such conversion shall be implemented only in the case
where the common stock of the Corporation is listed on or registered
at any Stock Exchange.
7. Compulsory Termination
- (1) Compulsory Termination - Part 1
The Corporation shall, without delay, compulsorily retire all (but
not part of) the shares of the Subsidiary Tracking Stock or compulsorily
convert them into the shares of common stock of the Corporation if
any of the events described in Items (i) through (vi) below shall
occur:
(i) If the Subsidiary disposes of, by way of transfer, succession
under the provisions of corporate split under the Commercial Code
or other methods, assets having a value not less than eighty percent
(80%) of the consolidated total assets in the Subsidiary's consolidated
balance sheet as of the last day of the most recent accounting period
or businesses the disposition of which is anticipated to reduce not
less than eighty percent (80%) of the consolidated net sales appearing
on the Subsidiary's consolidated statement of income for the most
recent accounting period;
(ii) If the Subsidiary ceases to be a subsidiary of the Corporation;
(iii) If a situation continues for at least three (3) months in which
the total number of the shares of the Subsidiary directly owned by
the Corporation is less than the number obtained by multiplying the
total number of the shares of the Subsidiary Tracking Stock held by
the Shareholders of Subsidiary Tracking Stock by the Standard Ratio;
(iv) If the Subsidiary adopts a resolution to dissolve;
(v) If the Subsidiary files a petition for bankruptcy or for commencement
of a corporate reorganization procedure, rehabilitation procedure
or corporate arrangement procedure, or if a declaration of bankruptcy,
a court decision to commence a reorganization procedure or rehabilitation
procedure or a court order to commence a corporate arrangement is
made with respect to the Subsidiary; or
(vi) If an event that falls within the requirements for the de-listing
or de-registration of the shares of the Subsidiary Tracking Stock
occurs at all the Stock Exchanges where the shares of the Subsidiary
Tracking Stock are listed or registered.
(2) Compulsory Termination - Part 2
The Corporation shall, without delay, compulsorily retire all the
shares of the Subsidiary Tracking Stock or compulsorily convert them
into the shares of common stock of the Corporation if the listing
of the Subsidiary Shares on, or the registration of the Subsidiary
Shares at, a Stock Exchange is approved by the competent authorities
of such Stock Exchange. In this case, the Corporation may retire all
the shares of the Subsidiary Tracking Stock by means of delivering
for each share of the Subsidiary Tracking Stock the Subsidiary Shares
in the number obtained by multiplying one (1) by the Standard Ratio
to the Shareholders of Subsidiary Tracking Stock.
8. Adjustment of Standard Ratio
- If it is necessary to adjust the Standard Ratio due to the issuance
of shares of Subsidiary Tracking Stock or Subsidiary Shares at a price
less than the respective market price thereof (including the issuance
of convertible bonds, bonds with warrants, etc.), the split or consolidation
of shares of Subsidiary Tracking Stock or Subsidiary Shares, or the
reduction of capital of the Corporation or the Subsidiary or a merger,
consolidation, corporate split, share exchange or share transfer by
the Corporation or the Subsidiary, the Standard Ratio shall be adjusted
in accordance with the method prescribed for in the Articles of Incorporation
of the Corporation and as determined by the Board of Directors of
the Corporation.
9. Stock Split, Stock Consolidation and Granting of Share Subscription
Rights
- The Corporation may split or consolidate the shares of common stock
and/or the shares of the Subsidiary Tracking Stock. In addition, the
Corporation may grant, in respect of the shares of common stock and/or
the shares of the Subsidiary Tracking Stock, the right to subscribe
for the relevant shares.
The Corporation may make stock splits in respect of the shares of
common stock and the shares of the Subsidiary Tracking Stock at the
same time in different split ratios. In addition, the Corporation
may grant the right to subscribe for the respective shares of common
stock and the Subsidiary Tracking Stock at the same time on different
terms.
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