The following information is true and accurate at the time of publication.
April 23, 2003
Stock Options (Stock Acquisition Rights)
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 outlined below,
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 86th ordinary general meeting of shareholders
to be held on June 20, 2003.
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, executive
officers 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, executive officers
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, executive officers 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 adjustmen |
= |
Number of shares before adjustment |
x |
Ratio of split or consolidation |
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 (each
"Closing Price") 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 Closing Price) immediately
prior to the issue date of such Common Stock Acquisition Rights
(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 any of (i)
the average of the Closing Prices for thirty (30) consecutive trading
days (excluding days on which there is no Closing Price) commencing
forty-five (45) trading days immediately before the day immediately
after the issue date of the Common Stock Acquisition Rights (any
fraction less than one (1) yen arising as a result of such calculation
shall be rounded up to the nearest one (1) yen), (ii) the average
of the Closing Prices for thirty (30) consecutive trading days (excluding
days on which there is no Closing Price) commencing forty-five (45)
trading days immediately before the date on which the Corporation
fixes the Exercise Price (any fraction less than one (1) yen arising
as a result of such calculation shall be rounded up to the nearest
one (1) yen), or (iii) the Closing Price on the issue date of such
Common Stock Acquisition Rights (if there is no Closing Price on
such date, the Closing Price on the immediately preceding trading
day), the Exercise Price shall be the highest price of (i), (ii)
and (iii) above.
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 for ten (10) consecutive trading days
(excluding days on which there is no Closing Price) immediately
prior to the issue date of such Common Stock Acquisition Rights
("Reference Yen Price") 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 ("Reference Exchange Rate")
(any fraction less than one (1) cent arising as a result of such
calculation shall be rounded up to the nearest one (1) cent); provided,
however, that if the Reference Yen Price is lower than any of (i)
the average of the Closing Prices for thirty (30) consecutive trading
days (excluding days on which there is no Closing Price) commencing
forty-five (45) trading days immediately before the day immediately
after the issue date of the Common Stock Acquisition Rights or (ii)
the average of the Closing Prices for thirty (30) consecutive trading
days (excluding days on which there is no Closing Price) commencing
forty-five (45) trading days immediately before the date on which
the Corporation fixes the Exercise Price, the Exercise Price shall
be the U.S. dollar amount obtained by dividing the highest price
of (i) and (ii) above by the Reference Exchange Rate (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 issue date 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.
Exercise Price after adjustment
|
=
|
Exercise Price before adjustment
|
x
|
1
|
|
|
Ratio of split or consolidation
|
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 issue date 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
issue date of Common Stock Acquisition Rights to the day on which
ten (10) years have passed from such issue date, which will be determined
by the Board of Directors of the Corporation or the Executive Officer
to whom the determination has been delegated by a resolution of
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 or the Executive Officer to whom
the determination has been delegated by a resolution of the Board
of Directors of the Corporation.
(8) Cancellation of Common Stock Acquisition Rights
Not applicable.
(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 ‡A 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 (each "Closing
Price") 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 Closing Price) immediately prior to the
issue date of such Tracking Stock Acquisition Rights (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 any of (i) the average of
the Closing Prices for thirty (30) consecutive trading days (excluding
days on which there is no Closing Price) commencing forty-five (45)
trading days immediately before the day immediately after the issue
date of the Tracking Stock Acquisition Rights (any fraction less
than one (1) yen arising as a result of such calculation shall be
rounded up to the nearest one (1) yen) or (ii) the Closing Price
on the issue date of such Tracking Stock Acquisition Rights (if
there is no Closing Price on such date, the Closing Price on the
immediately preceding trading day), the Exercise Price shall be
the highest price of (i) and (ii) above.
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 issue date 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.
Exercise Price after adjustment
|
=
|
Exercise Price before adjustment
|
x
|
1
|
|
|
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 issue date 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
issue date of Tracking Stock Acquisition Rights to the day on which
ten (10) years have passed from such issue date, which will be determined
by the Board of Directors of the Corporation or the Executive Officer
to whom the determination has been delegated by a resolution of
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 or the Executive Officer to whom
the determination has been delegated by a resolution of the Board
of Directors of the Corporation.
(8) Cancellation of Tracking Stock Acquisition Rights
Not applicable.
(9) Restriction on Transfer of Tracking Stock Acquisition Rights
Transfer of Tracking Stock Acquisition Rights shall require an approval
of the Board of Directors.
Note: The issue of the stock acquisition rights
mentioned above is subject to the approval by shareholders on issues
of Common Stock Acquisition Rights and Tracking Stock Acquisition
Rights to be obtained at the Corporation's 86th ordinary general
meeting of shareholders scheduled for June 20, 2003. In addition,
respective issues of the stock acquisition rights are further subject
to the resolutions of the Board of Directors or the Executive Officer
to whom the determination has been delegated by a resolution of
the Board of Directors on the specific terms and conditions of such
issues.
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