Press Release


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November 30, 2001



Issues of Bonds with Warrants, Bonds with Warrants for Shares of Subsidiary Tracking Stock Linked to Sony Communication Network and U.S. Dollar Denominated Convertible Bonds for the Purpose of the Incentive Plan


Sony Corporation (the "Corporation") resolved at a meeting of its Board of Directors today to issue three different types of equity-related securities for the purpose of providing stock incentives to management and key employees of Sony group companies. Securities to be issued include:
1) Bonds with warrants to subscribe for shares of common stock of the Corporation for approximately 500 executives and key employees of the Corporation and its affiliated companies;
2) Bonds with warrants to subscribe for shares of Subsidiary Tracking Stock linked to Sony Communication Network for its seven key executives; and
3) U.S. dollar-denominated convertible bonds to replace a part of existing Stock Appreciation Rights for key executives in Sony's U.S. affiliated companies.

The terms of the issue are as follows:

1. The Thirteenth Series Unsecured Bonds with Warrants
1. Name of Bonds: The Thirteenth Series Unsecured Bonds with Warrants of Sony Corporation
2. Total amount of issue: 7,300,000,000 yen
3. Denomination of each Bond: 100,000,000 yen
4. Form of Bonds: Bearer Bonds with Coupons
5. Interest rate: The rate to be determined hereafter by the Representative Director, not exceeding 1.5% per annum
6. Issue price: 111.449944% of the principal amount of the Bonds (Bonds: 100% of the principal amount, Warrants: 12% of the Denominated Amount as defined below)
7. Redemption price: 100% of the principal amount of the Bonds
8. Maturity date: December 21, 2007
9. Offering period: December 10, 2001
10. Payment date: December 21, 2001
11. Method of offering: Subscription by Nomura Securities Co., Ltd.
12. Security or guarantee: The Bonds are not secured by any pledge, mortgage or other charge on any assets or revenues of the Corporation or of others nor guaranteed. There is no assets reserved for security for the Bonds.
13. Special covenants: The Bonds are subject to certain covenants relating to negative pledge.
14. Redemption prior to maturity: The Corporation may, at any time after the issue of the Bonds, purchase the Bonds and have such purchased Bonds canceled; provided, however, that no such cancellation shall cause the aggregate principal amount of all Bonds thereafter remaining outstanding to be less than the amount produced by multiplying the number of Warrants then remaining outstanding and unexercised by 603,900 yen.
15. Interest payment dates: June 21 and December 21 of each year
16. Place of payment: Payment of principal and interest in respect of the Bonds will be made at Tokyo Main Office of Sumitomo Mitsui Banking Corporation.
17. Underwriter: Nomura Securities Co., Ltd.
18. Matters concerning Warrants:
(1) Amount of Warrants: Aggregate amount of the Warrants is 95.4162% of the aggregate principal amount of the Bonds. Each Warrant represents the right to subscribe for the shares in an aggregate issue price of 603,900 yen. (Such amount per Warrant is hereinafter referred to as "Denominated Amount".)
(2) Aggregate amount of issue price of the shares to be issued upon exercise of the Warrants: 6,965,382,600 yen
(3) Shares to be issued upon exercise of the Warrants: Shares of common stock ("Shares") of the Corporation
(4) Conditions to exercise the Warrants: Issue price per Share to be issued upon exercise of the Warrants (the "Exercise Price") is initially 6,039 yen. The number of Shares to be issued upon exercise of the Warrants shall be obtained by dividing the aggregate Denominated Amount of the Warrants in respect of which exercise notice has been given, by the Exercise Price; provided, however, that any fraction of a share arising upon exercise of the Warrants will be disregarded. The Exercise Price will be adjusted in accordance with the market price formula.
(5) Period during which the Warrants may be exercised: From January 6, 2003 to December 20, 2007. Provided, however, that the Warrants cease to be exercisable when the Bonds become due and payable.
(6) Partial exercise of a Warrant: No Warrant may be exercised in part.
(7) Dividend on Shares issued upon exercise of the Warrants: With respect to the initial payment of dividends and cash distribution as provided in Article 293-5 of the Commercial Code of Japan ("interim dividends") on the Shares issued upon exercise of the Warrants, such exercises shall be deemed to have taken effect on April 1 in case an application for exercise was made during the period from April 1 to September 30, and on October 1 in case an application for exercise was made during the period from October 1 to March 31 of the following year.
(8) Transfer of the Warrants: The Warrants may be transferred separately from the Bonds subject to certain restrictions on the transfer thereof within the United States or to U.S. persons. Transfer of the Warrants by persons referred to in item 20 below including Directors and Corporate Executive Officers is restricted as a general rule pursuant to their undertaking to the Corporation or the relevant Affiliated Company.
(9) The portion of the Exercise Price which will not be accounted for as stated capital: The portion of the Exercise Price which will not be accounted for as stated capital shall be the amount of such Exercise Price (if adjusted, as adjusted) less the amount which will be accounted for as stated capital; the amount to be accounted for as stated capital shall be one-half of such Exercise Price (if adjusted, as adjusted) and any fraction less than 1 yen resulting from such calculation shall be rounded up to the nearest yen.
(10) Payment Handling Bank: Sumitomo Mitsui Banking Corporation, Head Office
(11) Place where applications for exercise of the Warrants may be made: Nomura Securities Co., Ltd., Head Office and other branches within Japan
19. Recording Agency: Sumitomo Mitsui Banking Corporation
20. All Warrants will be repurchased by the Corporation and granted, directly or through the Corporation's affiliated companies (the "Affiliated Companies"), to directors of the Corporation or the Affiliated Companies as part of their remuneration, and sold, directly or through the Affiliated Companies, to Corporate Executive Officers and key employees of the Corporation and executive officers and key employees of the Affiliated Companies.


(For reference)

Secondary distribution of Warrants
1. Pieces for offering: 9,164 pieces
2. Aggregate offering price: 664,096,752 yen
3. Offering price: 72,468 yen
4. Unit of offering: 1 piece
5. Offering period: December 10, 2001
6. Payment date: December 21, 2001
7. The warrants will be distributed by the Corporation to Corporate Executive Officers and key employees of the Corporation, and Affiliated Companies.



2. The Fourteenth Series Unsecured Bonds with Warrants for Shares of Subsidiary Tracking Stock Linked to Sony Communication Network Corporation

1. Name of Bonds: The Fourteenth Series Unsecured Bonds with Warrants for Shares of Subsidiary Tracking Stock Linked to Sony Communication Network Corporation
2. Total amount of issue: 150,000,000 yen
3. Denomination of each Bond: 50,000,000 yen
4. Form of Bonds: Bearer Bonds with Coupons
5. Interest rate: The rate to be determined hereafter by the Representative Director, not exceeding 1.5% per annum
6. Issue price: 100.46% of the principal amount of the Bonds (Bonds: 100% of the principal amount, Warrants: 0.46% of the Denominated Amount as defined below)
7. Redemption price: 100% of the principal amount of the Bonds
8. Maturity date: December 21, 2007
9. Offering period: December 10, 2001
10. Payment date: December 21, 2001
11. Method of offering: Subscription by Nomura Securities Co., Ltd.
12. Security or guarantee: The Bonds are not secured by any pledge, mortgage or other charge on any assets or revenues of the Corporation or of others nor guaranteed. There is no assets reserved for security for the Bonds.
13. Special covenants: The Bonds are subject to certain covenants relating to negative pledge.
14. Redemption prior to maturity: The Corporation may, at any time after the issue of the Bonds, purchase the Bonds and have such purchased Bonds canceled; provided, however, that no such cancellation shall cause the aggregate principal amount of all Bonds thereafter remaining outstanding to be less than the amount produced by multiplying the number of Warrants then remaining outstanding and unexercised by 250,000 yen.
15. Interest payment dates: June 21 and December 21 of each year
16. Place of payment: Payment of principal and interest in respect of the Bonds will be made at Tokyo Main Office of Sumitomo Mitsui Banking Corporation.
17. Underwriter: Nomura Securities Co., Ltd.
18.Matters concerning Warrants:
(1) Amount of Warrants: Aggregate amount of the Warrants is 100% of the aggregate principal amount of the Bonds. Each Warrant represents the right to subscribe for the shares in an aggregate issue price of 250,000 yen. (Such amount per Warrant is hereinafter referred to as "Denominated Amount".)
(2) Aggregate amount of issue price of the shares to be issued upon exercise of the Warrants:

150,000,000 yen
(3) Shares to be issued upon exercise of the Warrants: a) Shares of Subsidiary Tracking Stock Linked to Sony Communication Network Corporation ("Tracking Stock") of the Corporation
b) Provided that in case the Corporation causes the compulsory conversion ("Compulsory Conversion") of each Tracking Stock into shares of common stock ("Shares") of the Corporation, shares to be issued upon exercise of the Warrants on and after the compulsory conversion date shall be the Shares of the Corporation.
(4) Conditions to exercise the Warrants: a) Issue price per shares of Tracking Stock or Shares of the Corporation to be issued upon exercise of the Warrants (the "Exercise Price") is initially 3,300 yen.
b) The number of Shares to be issued upon exercise of the Warrants shall be obtained by dividing the aggregate Denominated Amount of the Warrants in respect of which exercise notice has been given, by the Exercise Price; provided, however, that any fraction of a share arising upon exercise of the Warrants will be disregarded. The Exercise Price will be adjusted in accordance with the market price formula.
c) If the Compulsory Conversion is made, the Exercise Price will be adjusted appropriately in proportion to the conversion ratio applicable to the Compulsory Conversion.
(5) Period during which the Warrants may be exercised: From June 20, 2002 to June 20, 2007. Provided, however, that the Warrants cease to be exercisable when the Bonds become due and payable or all the Tracking Stock are compulsory retired. (Provided that in case of all the Tracking Stock are compulsory retired, the Corporation may restrict the exercise of Warrants during a certain period.)
(6) Partial exercise of a Warrant: No Warrant may be exercised in part.
(7) Dividend on shares of Tracking Stock or Shares issued upon exercise of the Warrants:

a) With respect to the initial payment of dividends and cash distribution as provided in Article 293-5 of the Commercial Code of Japan ("interim dividends") on the Shares issued upon exercise of the Warrants, such exercises shall be deemed to have taken effect on April 1 in case an application for exercise was made during the period from April 1 to September 30, and on October 1 in case an application for exercise was made during the period from October 1 to March 31 of the following year.
b) Provided that in case the Cumulative Unpaid Dividends (as defined in the Tracking Stock) for the Tracking Stock exist with respect to the already issued shares of Tracking Stock, the amount equivalent to the Cumulative Unpaid Dividends per already issued share of Tracking Stock at the time of such issuance of new shares shall be deemed to be the Cumulative Unpaid Dividends per share of such newly issued Tracking Stock; provided, however, that if the Corporation newly issues the Tracking Stock during the period from the day immediately following the last day of an accounting period of the Corporation through the day of the ordinary general meeting of shareholders of the Corporation for such accounting period, the appropriation of retained earnings for such accounting period adopted at such meeting shall be taken into account in calculating the deemed Cumulative Unpaid Dividends of the newly issued shares of the Tracking Stock.
(8) Transfer of the Warrants: The Warrants may be transferred separately from the Bonds subject to certain restrictions on the transfer thereof within the United States or to U.S. persons. Transfer of the Warrants by persons referred to in item 20 below including Directors and Corporate Executive Officers of Sony Communication Network Corporation is restricted as a general rule pursuant to their undertaking to the Corporation and Sony Communication Network Corporation.
(9) The portion of the Exercise Price which will not be accounted for as stated capital:

The portion of the Exercise Price which will not be accounted for as stated capital shall be the amount of such Exercise Price (if adjusted, as adjusted) less the amount which will be accounted for as stated capital; the amount to be accounted for as stated capital shall be one-half of such Exercise Price (if adjusted, as adjusted) and any fraction less than 1 yen resulting from such calculation shall be rounded up to the nearest yen.
(10) Payment Handling Bank: Sumitomo Mitsui Banking Corporation, Head Office
(11) Place where applications for exercise of the Warrants may be made:

Nomura Securities Co., Ltd., Head Office and other branches within Japan
19. Recording Agency: Sumitomo Mitsui Banking Corporation
20. All Warrants will be repurchased by the Corporation and sold to Sony Communication Network Corporation and granted from Sony Communication Network Corporation to Directors of Sony Communication Network Corporation as part of their remuneration, and sold to Corporate Executive Officers of Sony Communication Network Corporation.


3. U.S. Dollar Denominated Convertible Bonds Due 2006

1. Name of Bonds: Sony Corporation U.S. Dollar Denominated Convertible Bonds Due 2006
2. Total amount of issue: U.S.$57,307,476 plus an amount equal to the principal amount of the replacement Bond certificates that may be issued upon obtaining appropriate evidence and indemnity in case of loss, theft or destruction of Bond certificates
3. Denomination of each Bond: U.S.$4,794 only
4. Form of Bonds: Registered Bonds
5. Issue price: 100% of the principal amount of the Bonds
6. Interest rate: The Bonds bear no interest.
7. Redemption price: 100% of the principal amount of the Bonds
8. Maturity date: October 6, 2006
9. Payment date: December 17, 2001
10. Method of offering: Upon the registration of the Bonds with the U.S. Securities and Exchange Commission under the U.S. Securities Act, Sony Corporation of America will purchase the aggregate principal amount of the Bonds.


11. Matters concerning conversion:
(1) Terms of conversion: The price at which each share of Common Stock of the Corporation to be issued upon conversion of the Bonds (the "Conversion Price") shall be initially 5,952.23 yen, and the number of shares of Common Stock of the Corporation to be issued upon conversion shall be determined by the following formula. No request for the conversion of the Bonds may be made in respect of part only of the principal amount of a Bond or a Bond already called for redemption.




Amount obtained by translating the aggregate of the principal amount of the Bonds surrendered for conversion by the holder thereof into yen at the rate of exchange of U.S.$ 1 = 124.16 yen
Number of shares =


Conversion Price

Provided, however, that any fraction of a full share arising upon conversion will be disregarded and no cash adjustment will be made therefor.
(2) Adjustment of the Conversion Price:
The Conversion Price will be adjusted by the following formula in case the Corporation issues new shares of the Corporation after the issue of the Bonds at a consideration per share less than the current market price per share of common stock of the Corporation:





Number of shares already issued
Number of new shares to be issued x Amount to be paid per share
+

Current market price per s

Number of shares
already issued
+
Number of newshares to be issued
Conversion Price after adjustment = Conversion Price before adjustment x





The Conversion Price will also be appropriately adjusted in cases of stock split or consolidation of shares, issuance of convertible bonds or bonds with warrants convertible into or exercisable at an initial conversion or exercise price less than the current market price per share of the Corporation, and in certain other cases as provided for in the terms and conditions of the Bonds.
(3) The portion of the issue price of the shares issued upon conversion which will not be accounted for as stated capital:
The portion of the issue price of the shares issued upon conversion of the Bonds which will not be accounted for as stated capital shall be the amount of such issue price less the amount which will be accounted for as stated capital; the amount to be accounted for as stated capital shall be one-half of such issue price and any fraction less than 1 yen resulting from such calculation shall be rounded up to the nearest yen.
(4) Class of shares to be issued upon conversion:
Shares of Common Stock of the Corporation
(5) Period during which applications for conversion may be made:
From December 18, 2001 to September 30, 2006
(6) Place at which applications for conversion may be accepted:
Sony Corporation of America
(7) Effectiveness of the conversion:
The conversion will become effective on the Conversion Date (Japan time) specified as such in the Conversion Notice.
(8) Dividends on shares issued upon conversion:
The first dividends or interim dividends on shares issued upon conversion of the Bonds will be paid on the assumption that such conversion took place on April 1 in case the conversion of the Bonds becomes effective during the period from April 1 to September 30 or on October 1 in case the conversion of the Bonds becomes effective during the period from October 1 to March 31 of the following year.
(9) Payment for shares less than one unit of shares arising from conversion:
In case any shares less than one unit of shares arise as a result of conversion and the Corporation does not issue the shares in accordance with the Commercial Code of Japan or the Articles of Incorporation of the Corporation, the payment therefor shall be made in cash equivalent to current market price for the shares less than one unit arising as a results of conversion calculated based upon (1) above.
(10) Method of delivery of share certificates:
Share certificates will be delivered at the Corporate Agency Department of the Head Office of The Toyo Trust and Banking Company, Limited promptly after all procedures for conversion of the Bonds are completed. No share certificate shall be issued in respect of shares less than one unit pursuant to (9) above.
12. Method of redemption
(1) The aggregate principal amount of the Bonds shall be redeemed on October 6, 2006.
(2) The Corporation may, at any time on or after the date immediately following the issue date of the Bonds, purchase the Bonds and have such purchased Bonds canceled.
13. Security or guarantee:
The Bonds are not secured by any mortgage, pledge or other security interest nor by any assets reserved for security for the Bonds and are not guaranteed.
14. The Bonds purchased by Sony Corporation of America will be sold to officers and employees of Sony Corporation of America and its affiliated companies under the Sony Corporation of America Stock Incentive Plan as a substitution for the Stock Incentive Plan utilizing SAR (Stock Appreciation Rights) already introduced and implemented.