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April 26, 2005

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 the stock acquisition rights to subscribe for shares of common stock of the Corporation 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 88th ordinary general meeting of shareholders to be held on June 22, 2005.
1.Reason for Issue of Stock Acquisition Rights to Persons Other Than Shareholders without Any Consideration

The Corporation will issue the stock acquisition rights (the"Stock Acquisition Rights") to subscribe for shares of common stock of the Corporation ("Common Stock") to directors, corporate 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, corporate 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, corporate executive officers or employees will receive correspond to the business performance of the Corporation.

2.Terms of Issue of Stock Acquisition Rights

(1) Persons to Whom Stock Acquisition Rights Will be Allocated
Directors, corporate executive officers and employees of the Corporation and its subsidiaries.
(2) Aggregate number of Stock Acquisition Rights
Not exceeding 27,500.
(3) Class and Number of Shares to be Issued or Transferred upon Exercise of Stock Acquisition Rights
Not exceeding 2,750,000 shares of Common Stock.

The number of shares to be issued or transferred upon exercise of each Stock Acquisition Right (the "Number of Granted Shares") shall be 100 shares of Common Stock.

However, in the case that the Number of Granted Shares is adjusted pursuant to (4) below, the number of shares to be issued or transferred upon exercise of the Stock Acquisition Rights shall be adjusted to the number obtained by multiplying the Number of Granted Shares after adjustment by the aggregate number of the Stock Acquisition Rights.
(4) Adjustment of Number of Granted Shares
In the case that the Corporation splits or consolidates the shares of Common Stock, the Number of Granted Shares shall be adjusted in accordance with the following formula.

Number of
Granted Shares
after adjustment
= Number of
Granted Shares
before adjustment
x Ratio of split
or consolidation


An adjustment above shall be made only with respect to the Number of Granted Shares for the Stock Acquisition Rights which have not been exercised at the time of the adjustment. Any fraction less than one (1) share resulting from the adjustment shall be disregarded.
(5) Issue Price of Stock Acquisition Rights
The Stock Acquisition Rights are issued without the payment to the Corporation of any consideration.
(6) Amount to be Paid In per Share to be Issued or Transferred upon Exercise of Stock Acquisition Rights
The amount to be paid in per share to be issued or transferred upon exercise of the Stock Acquisition Right (the "Exercise Price") shall be initially as follows.
1) Stock Acquisition Rights with Exercise Price Denominated in Yen
The Exercise Price shall be initially the average of the closing prices of Common Stock in the regular trading thereof on the Tokyo Stock Exchange (each the "Closing Price") for the ten (10) consecutive trading days (excluding days on which there is no Closing Price) immediately prior to the issue date of the 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 the thirty (30) consecutive trading days (excluding days on which there is no Closing Price) commencing forty-five (45) trading days immediately before the day that is immediately after the issue date of the 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 the 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 the 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) Stock Acquisition Rights with Exercise Price Denominated in U.S. Dollars
The Exercise Price shall be initially the U.S. dollar amount obtained by dividing the average of the Closing Prices for the ten (10) consecutive trading days (excluding days on which there is no Closing Price) immediately prior to the issue date of such Stock Acquisition Rights (hereinafter referred to as the "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 (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); provided, however, that if the Reference Yen Price is lower than any of (a) the average of the Closing Prices for the thirty (30) consecutive trading days (excluding days on which there is no Closing Price) commencing forty-five (45) trading days immediately before the day that is immediately after the issue date of the Stock Acquisition Rights, (b) the average of the Closing Prices for the thirty (30) consecutive days (excluding days on which there is no Closing Price) commencing forty-five (45) trading days immediately before the date (being he issue date of the Stock Acquisition Rights) on which the Corporation fixes the Exercise Price, or (c) the Closing Price on the issue date of the 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 U.S. dollar amount obtained by dividing the highest among (a), (b) and (c) 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).
(7) Adjustment of Exercise Price
In the case that the Corporation splits or consolidates the shares of Common Stock after the issue date of the Stock Acquisition Rights, the Exercise Price shall be adjusted in accordance with the following formula, and any fraction less than one (1) yen or one (1) cent resulting from the 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 the Stock Acquisition Rights, the Exercise Price shall be appropriately adjusted to the extent reasonable.
(8) Period during Which Stock Acquisition Rights may be Exercised
The period during which the Stock Acquisition Rights may be exercised will be sometime within the period from the issue date of the 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.
(9) Conditions for Exercise of Stock Acquisition Rights
1) Each Stock Acquisition Right may 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.
(10) Mandatory Cancellation of Stock Acquisition Rights
Not applicable.
(11) Restriction on Transfer of Stock Acquisition Rights
The Stock Acquisition Rights are non-transferable, unless such transfer is expressly approved by the Board of Directors of the Corporation.

Note: The issue of the stock acquisition rights mentioned above is subject to the approval by shareholders on issues of the Common Stock Acquisition Rights to be obtained at the Corporation's 88th ordinary general meeting of shareholders scheduled for June 22, 2005. In addition, respective issues of the stock acquisition rights are further subject to the resolutions of the Board of Directors or the determination by 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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