1. Date of the Meeting: July 26, 2011Approximate time required: 30 minutes Presenters: Michael Lynton & Jim Underwood Attendants: Contact Person ： Jim Underwood Department: Corporate Development, SPE Tel: +1 310 244 3987 E-mail: jim_underwood@spe.sony.com Note: Please provide a concise summary in one page. Avoid using abbreviations. Submit to: GEC Secretariat/CEO Office email :hq-gec-emc@jp.sony.com Tel : +81-3-6748-2750 ＊必要且つ十分な内容を本申請書１枚にまとめて下さい。 ( 略称はできるだけ使用しないで下さい。） 【提出先】 GEC 事務局・ CEO 室 E-mail :gh-exec-committee@jp.sony.com Tel : 9-308-2750 Michael Lynton, Chairman & CEO, SPE David Hendler, Senor EVP & CFO, SPE Leah Weil, Senor EVP & General Counsel, SPE Jim Underwood, EVP, Corporate Development, SPE 1. Proposed Matter to be Deliberated: SPE seeks deliberation of the following transaction related to its license agreement with Marvel for rights to the Spider-Man property: The sale of SPE’s 25% interest in future Spider-Man merchandise revenues The acquisition of Marvel’s 5% interest in gross proceeds for all current and future Spider-Man films 2. Purpose, Background, Future Plan etc: SPE and Marvel’s relationship began in 1999, when SPE first obtained rights to the Spider-Man franchise. The economic terms of the current Spider-Man license agreement between SPE and Marvel call for, amongst other things: (1) Marvel to pay SPE 25% of all Spider-Man merchandise revenue and (2) SPE to pay Marvel 5% of gross proceeds from Spider-Man films. In addition, the agreement requires SPE to make a rights payment and gives each partner certain approval rights over the other’s Spider-Man related activity. SPE’s participation in Spider-Man merchandise revenue has been lucrative. However SPE’s role in generating merchandising revenues is largely passive and the revenue stream has risks and challenges. Furthermore, following Disney’s acquisition of Marvel at the end of 2009, Marvel has proven willing to “buy back” interests in key Marvel properties, creating an opportunity to monetize SPE’s participation at an attractive value and favorably restructure the Spider-Man operating relationship. SPE seeks approval to divest its 25% interest in Spider-Man merchandise and to eliminate Marvel’s 5% interest in Spider-Man films. As part of the proposed transaction, the parties will modify the license agreement to eliminate certain approvals and to generally improve the operating relationship between SPE and Marvel. The parties will also settle and dismiss certain arbitration proceedings currently in process. As part of the transaction, SPE will receive $175MM in cash after execution of the agreement and will receive up to $35MM per film for each future Spider-Man film released contingent upon box office performance. In FYE12, the deal is expected to yield $210MM - $225MM of incremental income (including $55MM - $65MM of non-cash consideration from the NPV of eliminating Marvel’s 5% interest in gross proceeds). For approval purposes we have assumed this could generate $280MM of gross cash consideration assuming 3 Spider-Man films are released ($175MM cash at close plus $105MM of per film payments (3x$35MM). Total consideration would be greater if additional films are released. 3. Due Review Process Prior to GEC: Sony Investment Committee review of this matter scheduled for July 25, 2011. Group Executive Committee Application Form - Approval request to propose to board of directors meeting- Management direction request - Advance deliberation of matters requiring CEO’s approval- Reporting (circle appropriate item) Officer in Charge: Sir Howard Stringer Manager in Charge: Name: Michael Lynton Department: SPE Agenda Item: SPE-Marvel Spider-Man Relationship: Restructuring and Monetization of Merchandise Interest