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The following information is true and accurate at the time of publication.
April 25,2002
Sony Corporation will integrate its stock option plans
utilizing several different types of equity-related securities
into those utilizing stock acquisition rights following
the recent amendments to the Commercial Code of Japan
Sony Corporation (the "Corporation")
resolved at a meeting of its Board of Directors today to
propose an agenda asking for authorization to issue stock
acquisition rights, for the purpose of granting stock options,
pursuant to Articles 280-20 and 280-21 of the Commercial
Code of Japan. The proposal will be made at its 85th ordinary
general meeting of shareholders to be held on June 20, 2002.
The stock acquisition rights will replace such several different
types of equity-related securities as described below which
were granted for the purpose of providing stock incentives
to management and key employees of Sony group companies.
The Corporation has issued Bonds with Warrants every year
since 1995 for directors, corporate executive officers,
group executive officers and key employees, and in 2001
issued Bonds with Warrants for Shares of Subsidiary Tracking
Stock Linked to Sony Communication Network Corporation ("SCN")
for directors and corporate executive officers of SCN. In
addition, the Corporation has issued U.S. Dollar Denominated
Convertible Bonds every year since 2000 for officers and
key employees of its US group companies, and also introduced
various equity-related incentive plans for its overseas
group companies.
Following the recent amendments to the Commercial Code effective
this April, the Corporation will integrate the foregoing
different types of equity related securities issued for
the purpose of giving stock incentives into one unified
stock option rights, namely, stock acquisition rights.
Note: The implementation of the stock option plans mentioned
above is subject to the approval by shareholders of the
issues of common stock acquisition rights and tracking stock
acquisition rights to be obtained at the Corporation's 85th
ordinary general meeting of shareholders scheduled for June
20, 2002.
The summary terms of the issues of common stock acquisition
rights and tracking stock acquisition rights are as follows:
I Stock Acquisition Rights for Common Stock
1. Reason for Issue of Common Stock Acquisition Rights to
Persons Other Than Shareholders without Any Consideration
The Corporation will issue rights (the "Common Stock Acquisition
Rights") to subscribe for or purchase shares of common stock
of the Corporation ("Common Stock") to directors and employees
of the Corporation and its subsidiaries without any consideration
therefor pursuant to the provisions of Articles 280-20 and
280-21 of the Commercial Code of Japan upon the terms outlined
below for the purposes of giving directors and employees
of the Corporation and its subsidiaries an incentive to
contribute towards the improvement of the business performance
of the Corporation and its group companies (the "Group")
and thereby improving such business performance of the Group,
by making the economic interest which such directors or
employees will receive correspond to the business performance
of the Corporation.
2. Terms of Issue of Common Stock Acquisition Rights
(1) Persons to Whom Common Stock Acquisition Rights Will
be Allocated Directors and employees of the Corporation
and its subsidiaries.
(2) Class and Number of Shares to be Issued or Transferred
upon Exercise of Common Stock Acquisition Rights
Not exceeding 2,750,000 shares of Common Stock.
Provided, however, that if the number of shares to be issued
or transferred upon exercise of each Common Stock Acquisition
Right is adjusted in accordance with (3) below, such number
of shares to be issued or transferred shall be adjusted
to the number obtained by multiplying the number of shares
after adjustment by the total number of Common Stock Acquisition
Rights to be issued.
(3) Total Number of Common Stock Acquisition Rights to be
Issued
Not exceeding 27,500.
The number of shares to be issued or transferred upon exercise
of each Common Stock Acquisition Right shall be 100.
Provided, however, that if the Corporation splits or consolidates
its Common Stock, the number of shares to be issued or transferred
upon exercise of each Common Stock Acquisition Right shall
be adjusted according to the following formula.
| Number
of shares after adjustment |
= |
Number
of shares before adjustment |
x |
Ratio
of split |
The adjustment above shall be made only to those remain
unexercised at the relevant time. If any fraction less than
one (1) share arises as a result of such adjustment, such
fraction shall be discarded.
(4) Issue Price of Common Stock Acquisition Rights
No consideration shall be paid.
(5) Amount to be Paid In for Exercise of Common Stock Acquisition
Rights
The amount to be paid in per share to be issued or transferred
upon exercise of each Common Stock Acquisition Right (the
"Exercise Price") shall be as follows.
1.Common Stock Acquisition Rights with Exercise Price Denominated
in Yen
The Exercise Price shall be the average of closing prices
of Common Stock in the regular trading thereof on the Tokyo
Stock Exchange for ten (10) consecutive trading days (excluding
days on which there is no such closing price) prior to the
issue of such Common Stock Acquisition Rights, and any fraction
less than one (1) yen arising as a result of such calculation
shall be rounded up to the nearest one (1) yen; provided,
however, that if such calculated price is lower than such
closing price on the day of issue of such Common Stock Acquisition
Rights (if there is no such closing price on such date,
the closing price on the immediately preceding trading day),
the Exercise Price shall be the closing price on the day
of issue of such Common Stock Acquisition Rights (or the
closing price on the immediately preceding trading day).
2.Common Stock Acquisition Rights with Exercise Price Denominated
in U.S. Dollars
The Exercise Price shall be the U.S. dollar amount obtained
by dividing the average of closing prices of Common Stock
in the regular trading thereof on the Tokyo Stock Exchange
for ten (10) consecutive trading days (excluding days on
which there is no such closing price) prior to the issue
of such Common Stock Acquisition Rights by the average of
the exchange rate quotations by a leading commercial bank
in Tokyo for selling spot U.S. dollars by telegraphic transfer
against yen for such ten (10) consecutive trading days,
and any fraction less than one (1) cent arising as a result
of such calculation shall be rounded up to the nearest one
(1) cent.
3.Adjustment of Exercise Price
If the Corporation splits or consolidates its Common Stock
after the day of issue of Common Stock Acquisition Rights,
the Exercise Price shall be adjusted according to the following
formula, and any fraction less than one (1) yen or one (1)
cent resulting from this adjustment shall be rounded up
to the nearest one (1) yen or one (1) cent.
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Exercise Price before adjustment |
x |
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Ratio of split or consolidation
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In addition, in the case of a merger with any other company,
corporate split or capital reduction of the Corporation,
or in any other case similar thereto where an adjustment
of Exercise Price shall be required, in each case after
the day of issue of Common Stock Acquisition Rights, the
Exercise Price shall be appropriately adjusted to the extent
reasonable.
(6) Exercise Period of Common Stock Acquisition Rights
The exercise period will be sometime within the period from
the day of issue of Common Stock Acquisition Rights to the
day on which ten (10) years have passed from such day of
issue, which will be determined by the Board of Directors
of the Corporation.
(7) Conditions for Exercise of Common Stock Acquisition
Rights
1.Each Common Stock Acquisition Right shall not be exercised
in part.
2.Other conditions for exercise shall be determined by the
Board of Directors of the Corporation.
(8) Cancellation of Common Stock Acquisition Rights
The Corporation may at any time purchase or acquire Common
Stock Acquisition Rights and cancel them without any consideration.
(9) Restriction on Transfer of Common Stock Acquisition
Rights
Transfer of Common Stock Acquisition Rights shall require
an approval of the Board of Directors.
II Stock Acquisition Rights for Tracking Stock
1. Reason for Issue of Tracking Stock Acquisition Rights
to Persons Other Than Shareholders without Any Consideration
The Corporation will issue rights (the "Tracking Stock Acquisition
Rights") to subscribe for or purchase shares of subsidiary
tracking stock of the Corporation ("Tracking Stock") to
directors and employees of Sony Communication Network Corporation
("SCN") without any consideration therefor pursuant to the
provisions of Articles 280-20 and 280-21 of the Commercial
Code of Japan upon the terms outlined below for the purposes
of giving directors and employees of SCN an incentive to
contribute towards the improvement of the business performance
of SCN and thereby improving such business performance of
SCN, by making the economic interest which such directors
or employees will receive correspond to the business performance
of SCN.
2. Terms of Issue of Tracking Stock Acquisition Rights
(1) Persons to Whom Tracking Stock Acquisition Rights Will
be Allocated
Directors and employees of SCN.
(2) Class and Number of Shares to be Issued or Transferred
upon Exercise of Tracking Stock Acquisition Rights
1.Class of Shares to be Issued or Transferred
Tracking Stock.
Provided, on and after the Compulsory Conversion Date (as
defined in Article 10-9 of the Company's Articles of Incorporation,
the "Compulsory Conversion Date") for the compulsory conversion
(as defined in Article 10-9 of the Company's Articles of
Incorporation, the "Compulsory Conversion") of Tracking
Stock into Common Stock, the class of shares to issued or
transferred shall be Common Stock.
2.Number of Shares to be Issued or Transferred
Not exceeding 45,000 shares.
Provided, however, that if the number of shares to be issued
or transferred upon exercise of each Tracking Stock Acquisition
Right is adjusted in accordance with (3) below, such number
of shares to be issued or transferred shall be adjusted
to the number obtained by multiplying the number of shares
after adjustment by the total number of Tracking Stock Acquisition
Rights to be issued.
(3) Total Number of Tracking Stock Acquisition Rights to
be Issued
Not exceeding 455.
The number of shares to be issued or transferred upon exercise
of each Tracking Stock Acquisition Right shall be 100.
Provided, however, that if adjustment of the Exercise Price
provided for in 2. of (5) below is made for any reason,
the number of shares to be issued or transferred upon exercise
of each Tracking Stock Acquisition Right shall be appropriately
adjusted so that the amount obtained by multiplying the
number of shares after adjustment by the Exercise Price
after adjustment shall be equal to the amount obtained by
multiplying the number of shares before adjustment by the
Exercise Price before adjustment.
The adjustment above shall be made only to those remain
unexercised at the relevant time. If any fraction less than
one (1) share arises as a result of such adjustment, such
fraction shall be discarded.
(4) Issue Price of Tracking Stock Acquisition Rights
No consideration shall be paid.
(5) Amount to be Paid In for Exercise of Tracking Stock
Acquisition Rights
1.The amount to be paid in per share to be issued or transferred
upon exercise of each Tracking Stock Acquisition Right (the
"Exercise Price") shall be the average of closing prices
of Tracking Stock in the regular trading thereof on the
Tokyo Stock Exchange for ten (10) consecutive trading days
(excluding days on which there is no such closing price)
prior to the issue of such Tracking Stock Acquisition Rights,
and any fraction less than one (1) yen arising as a result
of such calculation shall be rounded up to the nearest one
(1) yen; provided, however, that if such calculated price
is lower than such closing price on the day of issue of
such Tracking Stock Acquisition Rights (if there is no such
closing price on such date, the closing price on the immediately
preceding trading day), the Exercise Price shall be the
closing price on the day of issue of such Tracking Stock
Acquisition Rights (or the closing price on the immediately
preceding trading day).
2.Adjustment of Exercise Price
(i) Adjustment due to events which become effective prior
to the Compulsory Conversion Date
If the Corporation splits or consolidates its Tracking Stock
after the day of issue of Tracking Stock Acquisition Rights
but prior to the Compulsory Conversion Date (excluding such
date), the Exercise Price shall be adjusted according to
the following formula, and any fraction less than one (1)
yen resulting from this adjustment shall be rounded up to
the nearest one (1) yen.
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1
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| Exercise
Price after adjustment |
= |
Exercise
Price before adjustment |
x |
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Ratio
of split or consolidation |
(ii) Adjustment due to events which become effective after
the Compulsory Conversion Date
When the Compulsory Conversion is made, the Excise Price
shall be appropriately adjusted in proportion to the conversion
ratio. In addition to the foregoing, any adjustment of the
Exercise Price after Compulsory Conversion Date shall be
made in the same manner as described in (i) above with any
necessary amendment.
(iii) In addition, in the case of a merger with any other
company, corporate split or capital reduction of the Corporation,
or in any other case similar thereto where an adjustment
of Exercise Price shall be required, in each case after
the day of issue of Tracking Stock Acquisition Rights, the
Exercise Price shall be appropriately adjusted to the extent
reasonable.
(6) Exercise Period of Tracking Stock Acquisition Rights
The exercise period will be sometime within the period from
the day of issue of Tracking Stock Acquisition Rights to
the day on which ten (10) years have passed from such day
of issue, which will be determined by the Board of Directors
of the Corporation.
Provided, however, that when the Compulsory Retirement of
Tracking Stock referred to in Articles 10-7 and 10-8 of
the Company's Articles of Incorporation is made, no Tracking
Stock Acquisition Right may be exercised after the Termination
Date for such Compulsory Retirement.
(7) Conditions for Exercise of Tracking Stock Acquisition
Rights
1.Each Tracking Stock Acquisition Right shall not be exercised
in part.
2.Other conditions for exercise shall be determined by the
Board of Directors of the Corporation.
(8) Cancellation of Tracking Stock Acquisition Rights
The Corporation may at any time purchase or acquire Tracking Stock Acquisition Rights and cancel them without any consideration.
(9) Restriction on Transfer of Tracking Stock Acquisition Rights
Transfer of Tracking Stock Acquisition Rights shall require an approval of the Board of Directors.
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