Notice is hereby given that Sony Corporation ("Sony") and Aiwa Co., Ltd. ("Aiwa") have resolved at the meeting of the Board of Directors of each company held today that Aiwa shall become a wholly-owned subsidiary of Sony by way of stock exchange, and have concluded the memorandum of understanding for stock exchange.

Officially, the stock exchange agreement is scheduled to be concluded in late April 2002, and, upon approval at the ordinary general meeting of shareholders of Aiwa to be held in mid-June 2002, the stock exchange will become effective on October 1, 2002.

1. Purpose of going private

Please refer to the attached document "Accelerating Structural Reform of the Sony Group's Electronics Business".

2. Conditions of stock exchange, etc.

(1) Schedule of stock exchange

• February 28, 2002
  Board meetings to approve memorandum of understanding for stock exchange
  
• February 28, 2002
  Conclusion of memorandum of understanding for stock exchange
  
• Late April 2002
  Board meetings to approve stock exchange agreement
  
• Late April 2002
  Conclusion of stock exchange agreement
  
• Mid-June 2002
  Shareholders meeting to approve stock exchange agreement (Aiwa)
  
• September 30, 2002
  Last day of submission period of share certificates (Aiwa)
  
• October 1, 2002
  Effective date of stock exchange
  

• *Sony shall perform the stock exchange with Aiwa without the approval of a shareholders meeting to approve the stock exchange agreement pursuant to the provisions of Paragraph 1 of Article 358 of the Commercial Code of Japan.

(2) Stock exchange ratio

Sony retained Merrill Lynch Japan Securities Co., Ltd., and Aiwa retained Morgan Stanley Japan Limited, respectively for advice on the valuation method of the stock exchange ratio and other relevant matters.
Based on such advice and other relevant matters, Sony and Aiwa negotiated and came to an agreement of the stock exchange ratio as follows.

The stock exchange ratio shown below may be changed through discussions between Sony and Aiwa, if there are any material changes in any of the various conditions based on which the ratio has been determined.

(Note)

• 1.
  Sony obtained from Merrill Lynch Japan Securities Co., Ltd. the opinion to the effect that the above-shown stock exchange ratio is fair to Sony from a financial standpoint under the certain qualifications and assumptions as described in the opinion letter that is planned to be attached to the statement of reason for determination of the stock exchange ratio to be kept at the head office pursuant to Article 358, Paragraph 9 of the Commercial Code. This opinion was rendered from overall consideration through various analysis methods such as evaluating the shareholders' intrinsic values of Sony and Aiwa on the consolidated basis principally through the discounted cash flow (DCF) method, evaluating the synergies expected from the transaction of Sony's having Aiwa as its wholly-owned subsidiary, examining the market prices of Sony's and Aiwa's shares, and analyzing the estimated financial impacts of the transaction on Sony and other relevant matters.
  
• 2.
  Morgan Stanley Japan Limited, as a financial advisor to Aiwa, rendered its opinion to the Aiwa Board of Directors that the stock exchange ratio is fair, from a financial point of view, to the holders other than Sony of Aiwa common stock. In connection with analyzing the fair values of Sony and Aiwa respectively, Morgan Stanley performed Discounted Cash Flow Analysis, Comparative Stock Price Performance Analysis, Comparable Company Analysis and selected Comparable Transactions Analysis. In arriving at its opinion, Morgan Stanley considered the results of all of its analysis or factors considered by it.
  
• 3.
  Number of shares to be issued upon stock exchange:2,502,491 shares of common stock of Sony
  (For each share of Aiwa common stock, Sony shall issue 0.049 shares of its common stock.)

(Note) Sony split its shares at the ratio of 2 shares for each share as of May 19, 2000.