Sony 2003 Annual Report Download - page 200

Consolidated Financial Information 2003
- 114 -
and, thus, are entitled to participate and vote at any General Meeting of Shareholders in the same way as the
common stock holders. In addition, as each series of subsidiary tracking stock is a separate class of stock
different from common stock, if any resolution of the General Meeting of Shareholders would adversely affect
the rights of the shareholders of a particular class of subsidiary tracking stock, the shareholders of each class
of subsidiary tracking stock will have the right to approve or disapprove such resolution by a special
resolution of the meeting of shareholders of that class of subsidiary tracking stock.
In the event of distribution of residual assets to the shareholders of Sony Corporation where, as long as
such assets include shares of common stock of SCN, the number of shares of SCN common stock obtained
by multiplying the number of shares of the subsidiary tracking stock held by each holder by the Standard
Ratio or the net proceeds from the sale of the shares of SCN common stock so to be distributed will be
distributed to the holders of the subsidiary tracking stock.
The shares of subsidiary tracking stock may be subject to repurchase and retirement in the same manner
and under the same restriction as the shares of common stock. In addition, at any time after the passage of
three years from the date of the initial issuance of shares of a series of subsidiary tracking stock, it may retire
the entire amount of all outstanding shares of that series of subsidiary tracking stock upon paying to the
shareholders thereof an amount equal to the current market price of the subsidiary tracking stock out of Sony
Corporation’s retained earnings available for dividend payments. Sony Corporation may also retire the
shares of a series of subsidiary tracking stock in their entirety pursuant to the procedures prescribed by the
Japanese Commercial Code for the reduction of capital upon payment to the subsidiary tracking stock
holders an amount equal to the market value thereof as set forth above.
At any time after the passage of three years from the date of the initial issuance of shares of a series of
subsidiary tracking stock, it may convert the entire amount of all outstanding shares of the subsidiary tracking
stock into the shares of Sony Corporation’s common stock at the rate of the multiple of 1.1 of the market
value (as defined in the articles of incorporation) of shares of the subsidiary tracking stock divided by the
market value (as similarly defined) of the shares of Sony Corporation’s common stock.
If any events (as defined in the articles of incorporation) occur, the entire amount of all outstanding shares
of the subsidiary tracking stock will be either retired or converted into shares of Sony Corporation’s common
stock at the price or rate set forth above.
The number of shares of the subsidiary tracking stock issued and outstanding at March 31, 2003 was
3,072,000. At March 31, 2003, 90,500 shares of the subsidiary tracking stock would be issued upon exercise
of warrants and stock acquisition rights outstanding.