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.

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.

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.

     
   • (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.