Document:

Exibit
4.2

 

(27th Series U.S. Participants)

 

 

AGREEMENT CONCERNING

ALLOCATION OF THE STOCK ACQUISITION
RIGHTS 

OF SONY CORPORATION

FOR THE FISCAL YEAR 2013

 

 

SONY CORPORATION (hereinafter
referred to as the “Corporation”) and ___________________ (hereinafter referred to as the “Qualified Person”)
enter into this Agreement as follows in connection with the allocation of the stock acquisition rights (hereinafter referred to
as the “Options”) to be issued by the Corporation pursuant to the provisions of the terms and conditions of the Options
(hereinafter referred to as the “Terms and Conditions”) set forth in Exhibit 1 attached hereto and pursuant to the
special resolution adopted at the 96th Ordinary General Meeting of Shareholders held on June 20, 2013 and the resolution adopted
at the meeting of the Board of Directors held on October 30, 2013:

 

 

Article
1(Purpose and Administration)

The primary purpose
of allocating the Options to the Qualified Person is to give the Qualified Person an incentive to contribute towards the improvement
of the business performance of the Sony Group (the Corporation and its group companies) and thereby improve such business performance
by making the economic interest, which the Qualified Person will receive, correspond to the business performance of the Corporation.
This Agreement and the Terms and Conditions shall be administered by the Corporation, and such representative corporate executive
officers or other persons as the Corporation may designate from time to time who represent the Corporation in respect of this Agreement,
the Terms and Conditions and the Options.

 

Article
2(Restrictions under the Terms and Conditions and this Agreement)

The Options shall
be subject to (1) the Terms and Conditions, which are attached to this Agreement as Exhibit 1, and (2) the conditions and restrictions
provided for in this Agreement. The Qualified Person agrees to be bound by the conditions and restrictions set forth in the Terms
and Conditions and this Agreement. Notwithstanding the provisions of the Terms and Conditions, the exercise of the Options is further
subject to such additional conditions as set forth herein. In particular, the exercise of the Options is subject to the restrictions
under Articles 5 and 7.

 

Article
3(Subscription for and Allocation of the Options)

The Qualified
Person hereby applies for the subscription for        Options issued in accordance with the Terms and Conditions, and pursuant
to this Agreement, the Corporation allocates such number of the Options to the Qualified Person in accordance with the following
terms on November 20, 2013 (hereinafter referred to as the “Allotment Date”).

    	 

    	 

    

		(1)	Number of the Options allocated to the Qualified Person:

(________
shares may be issued or transferred upon the exercise by the Qualified Person of all Options allocated to the Qualified Person
pursuant to this Agreement.)

		(2)	Class and number of shares to be issued or transferred upon exercise of each Option:

100 shares of common stock
of the Corporation

		(3)	Amount to be paid per share to be issued or transferred upon exercise of the Options (hereinafter
referred to as the “Exercise Price”) is initially as set forth in Exhibit 2 attached hereto.

		(4)	Period during which the Options may be exercised:

From and including November
20, 2014, to and including November 19, 2023 (hereinafter referred to as the “Term”). If the last day of such period
falls on a holiday of the Corporation, the immediately preceding business day shall be the last day of such period. However, exercise
of the Options is subject to the restrictions provided for in Article 5.

The number of
shares to be issued or transferred upon exercise of each Option and the Exercise Price may be adjusted pursuant to the provisions
of the Terms and Conditions.

 

Article
4 (Information on Corporation and its Shares)

		(1)	Trade name of the Corporation:

SONY CORPORATION

		(2)	Total number of shares authorized to be issued by the Corporation:

3,600,000,000 shares

		(3)	Number of shares constituting one (1) unit of shares:

			100 shares

		(4)	Transfer Agent

Mitsubishi UFJ Trust and
Banking Corporation

4-5, Marunouchi 1-chome,
Chiyoda-ku, Tokyo

(Business office)Mitsubishi
UFJ Trust and Banking Corporation

Corporate
Agency Division

4-5, Marunouchi
1-chome, Chiyoda-ku, Tokyo

    	- 2 -

    	 

    

		(5)	Application of the Act on Transfer of Bonds, Shares, etc.

The provisions of the Act on
Transfer of Bonds, Shares, etc. will apply to shares of common stock of Sony Corporation to be issued or transferred upon exercise
of each Option.

 

 

Article
5(Vesting, Conditions for Exercise of the Options and Prohibition of Disposition)

		(1)	Vesting and exercise of the Options are further subject to the restrictions as set forth in Exhibit
3 attached hereto.

		(2)	Except as provided in Article 7, the Options, whether vested or unvested, are nontransferable by
the Qualified Person.

		(3)	Exercise of the Options are further subject to any restriction on trading set forth under Sony
Corporation of America’s Policy Regarding Securities Trading or any other similar policy maintained by Sony group companies
(hereinafter referred to as the “Sony Group Companies”) and applicable to the Qualified Person, as in effect from time
to time.

		(4)	In no circumstances shall any Qualified Person request the Corporation to purchase the Options
held by him/her.

 

Article
6(Procedures for Exercising the Options)

Procedures for
exercising the Options shall be provided for in the Terms and Conditions, and in addition, detailed matters concerning such procedures
shall be provided for in a separate document to be separately provided and delivered by the Corporation or one of its subsidiaries
to the Qualified Person no later than the date on which the Options held by the Qualified Person first become exercisable pursuant
to Article 5.

 

Article
7(Inheritance of the Options)

Upon the death
of the Qualified Person, outstanding Options that are vested and exercisable and granted to such Qualified Person may be exercised
only by the executors or administrators of the Qualified Person’s estate or by any person or persons who shall have acquired
such right to exercise by will or by the laws of descent and distribution, provided that no transfer by will or the laws of descent
and distribution of any Option, or the right to exercise any Option, shall be effective to bind the Corporation unless the Corporation
shall have been furnished with (a) a written notice thereof and a copy of the will and/or such evidence as the Corporation may
deem necessary to establish the validity of the transfer and (b) an agreement by the transferee to comply with all the terms and
conditions of the Options that are or would have been applicable to the Qualified Person (other than any terms and conditions relating
to employment with the Corporation or one of its subsidiaries) and to be bound by the acknowledgements made by the Qualified Person
in connection with the grant

    	- 3 -

    	 

    

of the Options. Options that are
not vested and exercisable at the death of the Qualified Person will terminate.

 

Article
8(Issuance of ADRs)

The Corporation
currently maintains an American Depositary Receipt program in the United States pursuant to which American Depositary Receipts
or “ADRs” represent shares of common stock of the Corporation. During the time the Corporation maintains an American
Depositary Receipt program in the United States, the Qualified Persons who exercise the Options will generally receive ADRs in
lieu of shares of common stock of the Corporation as follows. Upon exercise of an Option, shares of common stock of the Corporation
acquired upon the exercise of such Option shall be issued in the name of the depositary or its nominee under the Sony American
Depositary Receipt Program for the benefit of the Qualified Person. Upon receipt of shares of common stock of the Corporation upon
the exercise of an Option, the depositary under the Sony American Depositary Receipt Program shall immediately and automatically
issue ADRs representing such shares of common stock of the Corporation in the name of the applicable Qualified Person and shall
deliver such ADRs to such Qualified Person (or to an account held for the benefit of such Qualified Person) as soon as practicable
following the effective date on which such issuance occurs. For simplicity, all references in this Agreement and the Terms and
Conditions to shares of common stock of the Corporation will be deemed to also refer to ADRs.

 

Article
9(Treatment in Events of Corporate Transaction)

1.In the event of any corporate
transaction excluding (a) a consolidation, amalgamation or merger in which the Corporation is not the continuing corporation, or
(b) share exchange (kabushiki-kokan) or share transfer (kabushiki-iten) pursuant to which the Corporation is to become
a wholly-owned subsidiary of another corporation involving the Corporation, including a dissolution or liquidation of the Corporation,
a sale of all or substantially all of the Corporation’s assets, a corporate split, or any other similar transaction, the
Corporation may (x) cause the entity resulting from such transaction to execute an agreement providing that a holder of the Options
shall have the right during the Term and upon the exercise of the Options to receive the class and amount of shares and other securities
and property receivable upon such transaction by a holder of the number of shares in respect of which the Options could have been
exercised immediately prior to such transaction or (y) prevent from being exercised, effective immediately upon the occurrence
of such transaction, each Option outstanding immediately prior to such transaction (whether or not then exercisable).

2.In the event that the Corporation
enters into a definitive agreement or makes a decision by board resolution or by shareholder approval at the shareholders’
meeting to effectuate one (1) or more of the transactions or events described in the immediately preceding Paragraph, the Corporation
may provide not less than twenty days advance notice to the Qualified Person from the consummation of such transaction or event
and give the Qualified Person the opportunity to exercise their Options (whether or not such Options are then vested or exercisable),
immediately prior to, and subject to, the consummation of such transaction or event.

    	- 4 -

    	 

    

 

Article
10(Withholding by the Corporation)

In connection
with Item (2) of Condition 13 of the Terms and Conditions, the Corporation or its designee is authorized to withhold from any payment
relating to an Option or from any payroll or other payment to the Qualified Person, amounts of withholding and other taxes or fees
due in connection with the Option, and to take any other action to the extent permissible under applicable law as the Corporation
may deem advisable to enable the Corporation and the Qualified Person to satisfy obligations for the payment of withholding taxes,
other tax obligations and other costs and fees relating to the Options. This authority shall include, either on a mandatory or
elective basis in the discretion of the Corporation, authority (a) to withhold or receive shares of common stock of the Corporation
or other property and (b) to make cash payments in respect thereof in satisfaction of the Qualified Person’s tax obligations
and other costs and fees relating to the Options.

 

Article
11(Condition Subsequent)

This Agreement
shall terminate, automatically, without any procedures being taken, in the event that the Qualified Person is not in the position
of director, corporate executive officer, or employee of the Corporation or of the Sony Group Companies on the Allotment Date.

 

Article
12(Compliance with the Applicable Securities Law, Etc.)

The Qualified
Person shall, in selling the shares of common stock of the Corporation acquired upon exercise of the Options, confirm in advance
with the Corporation that such proposed sale is permissible under any and all applicable policies, programs, arrangements or other
provisions relating to insider trading maintained by the Corporation or any of its subsidiaries and shall comply with any and all
applicable laws and regulations, including but not limited to U.S. and Japanese laws.

 

Article
13(Amendment to this Agreement and Treatment of Matters Not Provided for in this Agreement)

1.Except as otherwise provided
in this Agreement (including any Exhibit to this Agreement), this Agreement (including any Exhibit to this Agreement) cannot be
modified or amended in any manner except by a further agreement expressly stating the intention to modify this Agreement and which
is signed by both parties to this Agreement.

2.Notwithstanding the immediately
preceding Paragraph, if it is found out that this Agreement is not in compliance with the Companies Act, the Financial Instruments
and Exchange Act, the Income Tax Act, the Corporation Tax Act or any other related laws or regulations of Japan or any applicable
laws of any other jurisdiction, or if this Agreement becomes not in compliance therewith as a result of amendments thereto which
become effective after the conclusion of this Agreement, the Corporation may, without the consent of

    	- 5 -

    	 

    

the Qualified Person, with notice
to the Qualified Person, adequately establish, amend or eliminate the subject provisions.

3.With respect to matters not
provided for in this Agreement or documents provided under Article 6 of this Agreement, such matters shall be determined by consultation
in good faith between the Corporation and the Qualified Person. In the event that the Qualified Person rejects such consultation,
or in the event that such consultation fails to bring an agreement, such matters shall be decided by the Corporation and such representative
corporate executive officers or other persons as the Corporation may designate from time to time to represent the Corporation in
respect of the Terms and Conditions, the Options and this Agreement. Decisions of the Corporation or such representative corporate
executive officers or other persons as the Corporation may designate from time to time to represent the Corporation in respect
of the Terms and Conditions, the Options and this Agreement shall be final and binding on all parties. None of the Corporation
or such representative corporate executive officers or other persons as the Corporation may designate from time to time to represent
the Corporation in respect of the Terms and Conditions, the Options or this Agreement shall be liable to any Qualified Person for
any action, omission or determination relating to the Terms and Conditions, the Options or this Agreement.

 

Article
14(Manner of Notice)

Notices by the
Corporation to the Qualified Person under the Terms and Conditions and this Agreement shall be made in any of the following manners:

		(1)	delivering (including mailing) a written notice to the address of the Qualified Person set forth
in the register of the Options;

		(2)	sending documents to the Qualified Person at his/her department in the Corporation (including any
Sony Group Company) or sending electronic data to the e-mail address of the Qualified Person at the Corporation (including any
Sony Group Company); or

		(3)	giving notice on the web site of the Corporation (including any Sony Group Company) or its duly
authorized designee.

 

Article
15(Construction)

Nothing herein
shall be construed to give the Qualified Person any right or entitlement to receive options to purchase common stock of the Corporation
in the future from the Corporation or any of its subsidiaries. Nothing contained herein shall confer upon the Qualified Person
any right to continue in the employment of the Corporation or any of its subsidiaries or constitute any contract or agreement of
employment or interfere in any way with the right of the Corporation or its subsidiaries to reduce or modify a Qualified Person’s
compensation in existence at the time of the granting of any Option or otherwise, or to terminate a Qualified Person’s employment
or change the Qualified Person’s position or the terms of employment with or without cause. Nothing contained herein shall
prevent the Corporation from, and the Corporation expressly reserves the right to, modify the terms and conditions of options to purchase
common stock of the Corporation, if any, that are or may be granted in the future.

Article
16(Governing Law and Jurisdiction)

This Agreement
shall be governed by and construed in accordance with the laws of Japan. The Tokyo District Court shall have the exclusive jurisdiction
for settling any and all disputes that arise under or in connection with this Agreement.

    	- 6 -

    	 

    

 

 

IN WITNESS WHEREOF, this Agreement and
the grant of the Options provided for herein shall be effective as of the date that either: (i) two (2) originals of this Agreement
have been prepared and executed by seal impressions or signatures by the Corporation and the Qualified Person, each party retaining
one (1) original or (ii) the Qualified Person has accepted the grant of Options via electronic means, in accordance with procedures
specified by the Corporation (including any Sony Group Company) for such purpose, by providing a valid electronic signature.

 

	 	SONY CORPORATION
7-1, Konan 1-chome, Minato-ku, Tokyo

    
	 	 
	 	By:
	
	 	 	Kazuo Hirai
President and Chief Executive Officer,
Representative Corporate Executive Officer

                                                                    Date: November 19, 2013

 

 

	 	QUALIFIED PERSON

	 	 
	 	By:
	
	 	 	Name:
Address:

                                                                    Date: November 19, 2013

 

 

    	- 7 -

    	 

    

(27th Series Non-US Participants)

 

 

AGREEMENT CONCERNING

ALLOCATION OF THE STOCK ACQUISITION
RIGHTS 

OF SONY CORPORATION

FOR THE FISCAL YEAR 2013

 

 

SONY CORPORATION (hereinafter
referred to as the “Corporation”) and ___________________ (hereinafter referred to as the “Qualified Person”)
enter into this Agreement as follows in connection with the allocation of the stock acquisition rights (hereinafter referred to
as the “Options”) to be issued by the Corporation pursuant to the provisions of the terms and conditions of the Options
(hereinafter referred to as the “Terms and Conditions”) set forth in Exhibit 1 attached hereto and pursuant to the
special resolution adopted at the 96th Ordinary General Meeting of Shareholders held on June 20, 2013 and the resolution adopted
at the meeting of the Board of Directors held on October 30, 2013:

 

 

Article
1(Purpose and Administration)

The primary purpose
of allocating the Options to the Qualified Person is to give the Qualified Person an incentive to contribute towards the improvement
of the business performance of the Sony Group (the Corporation and its group companies) and thereby improve such business performance
by making the economic interest, which the Qualified Person will receive, correspond to the business performance of the Corporation.
This Agreement and the Terms and Conditions shall be administered by the Corporation, and such representative corporate executive
officers or other persons as the Corporation may designate from time to time who represent the Corporation in respect of this Agreement,
the Terms and Conditions and the Options.

 

Article
2(Restrictions under the Terms and Conditions and this Agreement)

The Options shall
be subject to (1) the Terms and Conditions, which are attached to this Agreement as Exhibit 1, and (2) the conditions and restrictions
provided for in this Agreement. The Qualified Person agrees to be bound by the conditions and restrictions set forth in the Terms
and Conditions and this Agreement. Notwithstanding the provisions of the Terms and Conditions, the exercise of the Options is further
subject to such additional conditions as set forth herein. In particular, the exercise of the Options is subject to the restrictions
under Articles 5 and 7.

 

Article
3(Subscription for and Allocation of the Options)

The Qualified
Person hereby applies for the subscription for       Options issued in accordance with the Terms and Conditions, and pursuant
to this Agreement, the Corporation allocates such number of the Options to the Qualified Person in accordance with the following
terms on November 20, 2013 (hereinafter referred to as the “Allotment Date”).

    	 

    	 

    

		(1)	Number of the Options allocated to the Qualified Person:

(________
shares may be issued or transferred upon the exercise by the Qualified Person of all Options allocated to the Qualified Person
pursuant to this Agreement.)

		(2)	Class and number of shares to be issued or transferred upon exercise of each Option:

100 shares of common stock
of the Corporation

		(3)	Amount to be paid per share to be issued or transferred upon exercise of the Options (hereinafter
referred to as the “Exercise Price”) is initially as set forth in Exhibit 2 attached hereto.

		(4)	Period during which the Options may be exercised:

From and including November
20, 2014, to and including November 19, 2023 (hereinafter referred to as the “Term”). If the last day of such period
falls on a holiday of the Corporation, the immediately preceding business day shall be the last day of such period. However, exercise
of the Options is subject to the restrictions provided for in Article 5.

The number of
shares to be issued or transferred upon exercise of each Option and the Exercise Price may be adjusted pursuant to the provisions
of the Terms and Conditions.

 

Article
4 (Information on Corporation and its Shares)

		(1)	Trade name of the Corporation:

SONY CORPORATION

		(2)	Total number of shares authorized to be issued by the Corporation:

3,600,000,000 shares

		(3)	Number of shares constituting one (1) unit of shares:

			100 shares

		(4)	Transfer Agent

Mitsubishi UFJ Trust and
Banking Corporation

4-5, Marunouchi 1-chome,
Chiyoda-ku, Tokyo

(Business office)Mitsubishi
UFJ Trust and Banking Corporation

Corporate
Agency Division

4-5, Marunouchi
1-chome, Chiyoda-ku, Tokyo

    	- 2 -

    	 

    

		(5)	Application of the Act on Transfer of Bonds, Shares, etc.

The provisions of the Act on
Transfer of Bonds, Shares, etc. will apply to shares of common stock of Sony Corporation to be issued or transferred upon exercise
of each Option.

 

Article
5(Vesting, Conditions for Exercise of the Options and Prohibition of Disposition)

		(1)	Vesting and exercise of the Options are further subject to the restrictions as set forth in Exhibit
3 attached hereto.

		(2)	Except as provided in Article 7, the Options, whether vested or unvested, are nontransferable by
the Qualified Person.

		(3)	Exercise of the Options are further subject to any restriction on trading set forth under Sony
Corporation of America’s Policy Regarding Securities Trading or any other similar policy maintained by Sony group companies
(hereinafter referred to as the “Sony Group Companies”) and applicable to the Qualified Person, as in effect from time
to time.

		(4)	In no circumstances shall any Qualified Person request the Corporation to purchase the Options
held by him/her.

 

Article
6(Procedures for Exercising the Options)

Procedures for
exercising the Options shall be provided for in the Terms and Conditions, and in addition, detailed matters concerning such procedures
shall be provided for in a separate document to be separately provided and delivered by the Corporation or one of its subsidiaries
to the Qualified Person no later than the date on which the Options held by the Qualified Person first become exercisable pursuant
to Article 5.

 

Article
7(Inheritance of the Options)

Upon the death
of the Qualified Person, outstanding Options that are vested and exercisable and granted to such Qualified Person may be exercised
only by the executors or administrators of the Qualified Person’s estate or by any person or persons who shall have acquired
such right to exercise by will or by the laws of descent and distribution, provided that no transfer by will or the laws of descent
and distribution of any Option, or the right to exercise any Option, shall be effective to bind the Corporation unless the Corporation
shall have been furnished with (a) a written notice thereof and a copy of the will and/or such evidence as the Corporation may
deem necessary to establish the validity of the transfer and (b) an agreement by the transferee to comply with all the terms and
conditions of the Options that are or would have been applicable to the Qualified Person (other than any terms and conditions relating
to employment with the Corporation or one of its subsidiaries) and to be bound by the acknowledgements made by the Qualified Person
in connection with the grant of the Options. Options that are not vested and exercisable at the death of the Qualified Person will
terminate.

    	- 3 -

    	 

    

 

Article
8(Issuance of ADRs)

The Corporation
currently maintains an American Depositary Receipt program in the United States pursuant to which American Depositary Receipts
or “ADRs” represent shares of common stock of the Corporation. During the time the Corporation maintains an American
Depositary Receipt program in the United States, the Qualified Persons who exercise the Options will generally receive ADRs in
lieu of shares of common stock of the Corporation as follows. Upon exercise of an Option, shares of common stock of the Corporation
acquired upon the exercise of such Option shall be issued in the name of the depositary or its nominee under the Sony American
Depositary Receipt Program for the benefit of the Qualified Person. Upon receipt of shares of common stock of the Corporation upon
the exercise of an Option, the depositary under the Sony American Depositary Receipt Program shall immediately and automatically
issue ADRs representing such shares of common stock of the Corporation in the name of the applicable Qualified Person and shall
deliver such ADRs to such Qualified Person (or to an account held for the benefit of such Qualified Person) as soon as practicable
following the effective date on which such issuance occurs. For simplicity, all references in this Agreement and the Terms and
Conditions to shares of common stock of the Corporation will be deemed to also refer to ADRs.

 

Article
9(Treatment in Events of Corporate Transaction)

1.In the event of any corporate
transaction excluding (a) a consolidation, amalgamation or merger in which the Corporation is not the continuing corporation, or
(b) share exchange (kabushiki-kokan) or share transfer (kabushiki-iten) pursuant to which the Corporation is to become
a wholly-owned subsidiary of another corporation involving the Corporation, including a dissolution or liquidation of the Corporation,
a sale of all or substantially all of the Corporation’s assets, a corporate split, or any other similar transaction, the
Corporation may (x) cause the entity resulting from such transaction to execute an agreement providing that a holder of the Options
shall have the right during the Term and upon the exercise of the Options to receive the class and amount of shares and other securities
and property receivable upon such transaction by a holder of the number of shares in respect of which the Options could have been
exercised immediately prior to such transaction or (y) prevent from being exercised, effective immediately upon the occurrence
of such transaction, each Option outstanding immediately prior to such transaction (whether or not then exercisable).

2.In the event that the Corporation
enters into a definitive agreement or makes a decision by board resolution or by shareholder approval at the shareholders’
meeting to effectuate one (1) or more of the transactions or events described in the immediately preceding Paragraph, the Corporation
may provide not less than twenty days advance notice to the Qualified Person from the consummation of such transaction or event
and give the Qualified Person the opportunity to exercise their Options (whether or not such Options are then vested or exercisable),
immediately prior to, and subject to, the consummation of such transaction or event.

 

    	- 4 -

    	 

    

Article
10(Withholding by the Corporation)

In connection
with Item (2) of Condition 13 of the Terms and Conditions, the Corporation or its designee is authorized to withhold from any payment
relating to an Option or from any payroll or other payment to the Qualified Person, amounts of withholding and other taxes or fees
due in connection with the Option, and to take any other action to the extent permissible under applicable law as the Corporation
may deem advisable to enable the Corporation and the Qualified Person to satisfy obligations for the payment of withholding taxes,
other tax obligations and other costs and fees relating to the Options. This authority shall include, either on a mandatory or
elective basis in the discretion of the Corporation, authority (a) to withhold or receive shares of common stock of the Corporation
or other property and (b) to make cash payments in respect thereof in satisfaction of the Qualified Person’s tax obligations
and other costs and fees relating to the Options.

 

Article
11(Condition Subsequent)

This Agreement
shall terminate, automatically, without any procedures being taken, in the event that the Qualified Person is not in the position
of director, corporate executive officer, or employee of the Corporation or of the Sony Group Companies on the Allotment Date.

 

Article
12(Compliance with the Applicable Securities Law, Etc.)

The Qualified
Person shall, in selling the shares of common stock of the Corporation acquired upon exercise of the Options, confirm in advance
with the Corporation that such proposed sale is permissible under any and all applicable policies, programs, arrangements or other
provisions relating to insider trading maintained by the Corporation or any of its subsidiaries and shall comply with any and all
applicable laws and regulations, including but not limited to U.S. and Japanese laws.

 

Article
13(Representations, Warranties, Covenants and Confirmations)

The Qualified
Person shall represent, warrant, covenant and confirm the matters set forth in Exhibit 4 attached hereto for the benefit of the
Corporation.

 

Article
14(Amendment to this Agreement and Treatment of Matters Not Provided for in this Agreement)

1.Except as otherwise provided
in this Agreement (including any Exhibit to this Agreement), this Agreement (including any Exhibit to this Agreement) cannot be
modified or amended in any manner except by a further agreement expressly stating the intention to modify this Agreement and which
is signed by both parties to this Agreement.

2.Notwithstanding the immediately
preceding Paragraph, if it is found out that this Agreement is not in compliance with the Companies Act, the Financial Instruments
and Exchange Act, the Income Tax Act, the Corporation Tax Act or any other related laws or regulations of Japan or any applicable
laws of any other jurisdiction, or if this Agreement

    	- 5 -

    	 

    

becomes not in compliance therewith
as a result of amendments thereto which become effective after the conclusion of this Agreement, the Corporation may, without the
consent of the Qualified Person, with notice to the Qualified Person, adequately establish, amend or eliminate the subject provisions.

3.With respect to matters not
provided for in this Agreement or documents provided under Article 6 of this Agreement, such matters shall be determined by consultation
in good faith between the Corporation and the Qualified Person. In the event that the Qualified Person rejects such consultation,
or in the event that such consultation fails to bring an agreement, such matters shall be decided by the Corporation and such representative
corporate executive officers or other persons as the Corporation may designate from time to time to represent the Corporation in
respect of the Terms and Conditions, the Options and this Agreement. Decisions of the Corporation or such representative corporate
executive officers or other persons as the Corporation may designate from time to time to represent the Corporation in respect
of the Terms and Conditions, the Options and this Agreement shall be final and binding on all parties. None of the Corporation
or such representative corporate executive officers or other persons as the Corporation may designate from time to time to represent
the Corporation in respect of the Terms and Conditions, the Options or this Agreement shall be liable to any Qualified Person for
any action, omission or determination relating to the Terms and Conditions, the Options or this Agreement.

 

Article
15(Manner of Notice)

Notices by the
Corporation to the Qualified Person under the Terms and Conditions and this Agreement shall be made in any of the following manners:

		(1)	delivering (including mailing) a written notice to the address of the Qualified Person set forth
in the register of the Options;

		(2)	sending documents to the Qualified Person at his/her department in the Corporation (including any
Sony Group Company) or sending electronic data to the e-mail address of the Qualified Person at the Corporation (including any
Sony Group Company); or

		(3)	giving notice on the web site of the Corporation (including any Sony Group Company) or its duly
authorized designee.

 

Article
16(Construction)

Nothing herein
shall be construed to give the Qualified Person any right or entitlement to receive options to purchase common stock of the Corporation
in the future from the Corporation or any of its subsidiaries. Nothing contained herein shall confer upon the Qualified Person
any right to continue in the employment of the Corporation or any of its subsidiaries or constitute any contract or agreement of
employment or interfere in any way with the right of the Corporation or its subsidiaries to reduce or modify a Qualified Person’s
compensation in existence at the time of the granting of any Option or otherwise, or to terminate a Qualified Person’s employment
or change the Qualified Person’s position or the terms of employment with or without cause. Nothing contained herein shall
prevent the Corporation from, and the Corporation expressly reserves the right to, modify the terms and conditions of options to purchase common stock of the Corporation, if any,
that are or may be granted in the future.

 

Article
17(Governing Law and Jurisdiction)

This Agreement
shall be governed by and construed in accordance with the laws of Japan. The Tokyo District Court shall have the exclusive jurisdiction
for settling any and all disputes that arise under or in connection with this Agreement.

    	- 6 -

    	 

    

 

IN WITNESS WHEREOF, this Agreement and
the grant of the Options provided for herein shall be effective as of the date that either: (i) two (2) originals of this Agreement
have been prepared and executed by seal impressions or signatures by the Corporation and the Qualified Person, each party retaining
one (1) original or (ii) the Qualified Person has accepted the grant of Options via electronic means, in accordance with procedures
specified by the Corporation (including any Sony Group Company) for such purpose, by providing a valid electronic signature.

 

	 	SONY CORPORATION
7-1, Konan 1-chome, Minato-ku, Tokyo

    
	 	 
	 	By:
	
	 	 	Kazuo Hirai
President and Chief Executive Officer,
Representative Corporate Executive Officer

                                                                    Date: November 19, 2013

 

 

	 	QUALIFIED PERSON

	 	 
	 	By:
	
	 	 	Name:
Address:

                                                                    Date: November 19, 2013

 

 

    	- 7 -

    	 

    

Exhibit 1

 

 

TERMS AND CONDITIONS OF THE TWENTY-SEVENTH
SERIES OF

STOCK ACQUISITION RIGHTS

FOR SHARES OF COMMON STOCK OF SONY
CORPORATION

 

 

These terms and
conditions of the stock acquisition rights shall apply to the Twenty-Seventh Series of Stock Acquisition Rights for Shares of Common
Stock (hereinafter referred to as the “Options”) of Sony Corporation (hereinafter referred to as the “Corporation”)
issued on November 20, 2013 by the Corporation in accordance with the special resolution adopted at the 96th Ordinary General Meeting
of Shareholders held on June 20, 2013 and the resolution adopted at the meeting of the Board of Directors held on October 30, 2013:

 

		1.	Aggregate Number of Options

 

11,277

 

		2.	Class and Number of Shares to be Issued or Transferred upon Exercise of Options

 

The class of shares to be
issued or transferred upon exercise of the Options shall be shares of common stock, and the number of shares to be issued or transferred
upon exercise of each Option (hereinafter referred to as the “Number of Granted Shares”) shall be 100 shares.

 

The aggregate number of
shares to be issued or transferred upon exercise of the Options shall be 1,127,700 shares of common stock of the Corporation (hereinafter
referred to as the “Common Stock”). However, in the event that the Number of Granted Shares is adjusted pursuant to
Condition 3 below, the aggregate number of shares to be issued or transferred upon exercise of the Options shall be adjusted to
the number obtained by multiplying the Number of Granted Shares after adjustment by the aggregate number of the Options as prescribed
in Condition 1 above.

 

		3.	Adjustment of Number of Granted Shares

 

		(1)	In the event that the Corporation conducts a stock split (including free distribution of shares
(musho-wariate)) or consolidation of the Common Stock, the Number of Granted Shares shall be adjusted in accordance with
the following formula:

 

	Number of Granted Shares after adjustment	=	Number of Granted Shares before adjustment	x	Ratio of split or consolidation

 

		(2)	An adjustment to the Number of Granted Shares under the immediately preceding Item shall be made
only with respect to the Number of Granted Shares for the Options which have not been exercised at the time of the adjustment.
Any fraction less than one (1) share resulting from the adjustment shall be disregarded.

 

		(3)	The effective date of the Number of Granted Shares after adjustment shall be the same day as the
date on which the Exercise Price after adjustment becomes effective as provided for in Item (2) of Condition 7 with regard to the
adjustment of the Exercise Price pursuant to Condition 7 for the same reason as the adjustment of the Number of Granted Shares.

 

		(4)	When the Number of Granted Shares is adjusted, the Corporation shall give notice of necessary matters
to each holder of the Options registered in the register of Options, no later than the day immediately preceding the effective
date of the Number of Granted Shares after adjustment; provided, however, that if the Corporation is unable to give such notice
no later than the day immediately preceding such effective date, the Corporation shall promptly give such notice on or after such
effective date.

 

		4.	Payment in exchange for Options

 

The Options are issued without
payment of any consideration to the Corporation.

    	 

    	 

    

 

		5.	Allotment Date of Options

 

November 20, 2013 (hereinafter
referred to as the “Allotment Date”)

 

		6.	Amount of Assets to be Contributed upon Exercise of Options

 

The amount of assets to
be contributed upon exercise of the Options shall be the amount obtained by multiplying the amount to be paid per share to be issued
or transferred upon exercise of the Options (hereinafter referred to as the “Exercise Price”) by the Number of Granted
Shares. The Exercise Price is initially as set forth in Exhibit 2 attached to the Agreement concerning Allocation of the Stock
Acquisition Rights of Sony Corporation for the Fiscal Year 2013 dated November 19, 2013.

 

		7.	Adjustment of Exercise Price

 

		(1)	In the event that the Corporation conducts a stock split (including free distribution of shares
(musho-wariate)) or consolidation of the Common Stock after the Allotment Date of the Options, the Exercise Price shall
be adjusted in accordance with the following formula, and any fraction less than one (1) cent resulting from the adjustment shall
be rounded up to the nearest one (1) cent:

 

	Exercise Price after adjustment	=	Exercise Price before adjustment	x	1
	Ratio of split or consolidation

 

		(2)	In the case that the Exercise Price is adjusted pursuant to the immediately preceding Item, the
effective date of the Exercise Price after adjustment shall be as set forth below:

 

The Exercise Price after
adjustment shall become effective, in the case of a stock split, on and after the day immediately following the record date for
such stock split, and in the case of a stock consolidation, on and after the effective date thereof.

 

 

		(3)	In addition to the cases in Item (1) of this Condition where the Exercise Price is required to
be adjusted, the Exercise Price shall be adjusted in a manner deemed to be appropriate by the Corporation in the following cases.

 

		(i)	When the Exercise Price is required to be adjusted due to a merger, corporate split (split by new
incorporation or by absorption) or reduction of the amount of capital of the Corporation.

 

		(ii)	In addition to Item (i) above, when the Exercise Price is required to be adjusted due to the occurrence
of an event that causes or may cause a change in the total number of the issued Common Stock.

 

		(4)	When the Exercise Price is adjusted, the Corporation shall give notice of necessary matters to
each holder of the Options registered in the register of Options, no later than the day immediately preceding the effective date
of the Exercise Price after adjustment; provided, however, that if the Corporation is unable to give such notice no later than
the day immediately preceding such effective date, the Corporation shall promptly give such notice on or after such effective date.

 

		8.	Period during which Options May be Exercised

 

From and including November
20, 2014, up to and including November 19, 2023. If the last day of such period falls on a holiday of the Corporation, the immediately
preceding business day shall be the last day of such period.

 

		9.	Conditions for Exercise of Options

 

		(1)	No Option may be exercised in part.

 

		(2)	In the event of a resolution being passed at a general meeting of shareholders of the Corporation
for an agreement for any consolidation, amalgamation or merger (other than a consolidation,

    	2

    	 

    

amalgamation or merger in
which the Corporation is the continuing corporation), or in the event of a resolution being passed at a general meeting of shareholders
of the Corporation (or, where a resolution of a general meeting of shareholders is not necessary, at a meeting of the Board of
Directors of the Corporation) for any agreement for share exchange (kabushiki-kokan) or any plan for share transfer (kabushiki-iten)
pursuant to which the Corporation is to become a wholly-owned subsidiary of another corporation, the Options may not be exercised
on and after the effective date of such consolidation, amalgamation or merger, such share exchange (kabushiki-kokan), or
such share transfer (kabushiki-iten).

 

		10.	Restrictions under the U.S. Securities Act and Other Matters

 

The Corporation shall not
be obligated to effect the registration pursuant to the U.S. Securities Act of 1933, as amended, of any Common Stock to be issued
or transferred upon exercise of the Options or to effect similar compliance under any state laws. Notwithstanding anything herein
to the contrary, the Corporation shall not be obligated to issue or cause to be issued or delivered any Common Stock pursuant to
these terms and conditions unless and until the Corporation is advised by its legal counsel that the issuance and delivery of such
Common Stock is in compliance with all applicable laws, regulations of governmental authorities and the requirements of any securities
exchange on which the Common Stock is traded. The Corporation may require, as a condition to the issuance and transfer of the Common
Stock pursuant to these terms and conditions, that the recipient of such Common Stock make such covenants, agreements and representations,
and that records and any other documentation of such Common Stock bear such legends, as the Corporation deems necessary or desirable.

 

The exercise of any Option
granted hereunder shall only become effective at such time as counsel to the Corporation shall have determined that the issuance
and transfer of the Common Stock pursuant to such exercise is in compliance with all applicable laws, regulations of governmental
authorities and the requirements of any securities exchange on which the Common Stock is traded. The Corporation may, in its sole
discretion, defer the effectiveness of the exercise of an Option granted hereunder to allow the issuance and transfer of the Common
Stock upon such exercise to be made pursuant to registration or an exemption from registration or other methods for compliance
available under federal or state securities laws. The Corporation shall inform the holder of such Option in writing of the decision
to defer the effectiveness of the exercise of such Option granted hereunder. During the period that the effectiveness of the exercise
of an Option has been deferred, the holder of such Option may, by a written notice, withdraw such exercise and obtain the refund
of any amounts paid in connection with such exercise.

 

		11.	Mandatory Repurchase of Options

 

Not applicable.

 

		12.	Restrictions on Acquisition of Options through Transfer

 

The Options cannot be acquired
through transfer (other than any transfer of Options that are vested and exercisable upon the death of a holder of the Options
to such holder’s estate or beneficiaries), unless such acquisition is expressly approved by the Board of Directors of the
Corporation.

 

		13.	Application for Exercise of Options and Manner of Payment

 

		(1)	In the case of exercise of the Options, the holder of the Options shall exercise the Options by
submitting an exercise request together with the information required by the Corporation either electronically or telephonically
through the process designated by the Corporation from time to time.

 

		(2)	With completion of the process for Exercise of the Options as provided in (1) above, the entire
amount of the Exercise Price to be paid in upon exercise of the Options, including any applicable taxes and all other costs or
fees associated with the exercise (hereinafter referred to as the “Amount of Payment”) shall be paid in cash to an
account designated by the Corporation at the payment handling place provided for in Condition 15 at or before the date and time
designated by the Corporation. The entitlement of a holder of the Options to the receipt of the Common Stock upon exercise of an
Option is subject to the payment in full of any federal, state, local and foreign taxes of any kind required to be withheld with
respect to the exercise of such Option, as well as the payment in full of any costs or fees (such as brokerage fees) associated
with the exercise of such Option.

    3	 

    	 

    

 

		(3)	Except as provided for in Condition 10, any holder of the Options who has completed the process
as provided in (1) above, may not cancel such exercise thereafter.

 

		14.	Place where Applications for Exercise of Options are Made

 

Sony Corporation of America,
Human Resources, or its duly authorized designee

 

15.Payment
Handling Place on Exercise of Options

 

Sumitomo Mitsui Banking
Corporation, Head Office (or any successor bank of such bank from time to time and/or any successor office of such office)

 

		16.	Effective Date and Time of Exercise of Options

 

Except
as provided for in Condition 10, the exercise of the Options shall become effective when the holder of the Options has duly completed
the process set forth in Items (1) and (2) of Condition 13 and the Corporation or its designee has accepted the exercise.

 

		17.	Matters concerning the Amount of Capital and the Additional Paid-in Capital Increased by the Issuance
of Shares upon Exercise of Options

 

		(1)	The amount of capital increased by the issuance of shares upon exercise of the Options shall be
the amount obtained by multiplying the maximum limit of capital increase, as calculated in accordance with the provisions of Paragraph
1, Article 17 of the Company Accounting Ordinance of Japan, by 0.5, 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.

 

		(2)	The amount of additional paid-in capital increased by the issuance of shares upon exercise of the
Options shall be the amount obtained by deducting the capital to be increased, as provided in (1) above, from the maximum limit
of capital increase, as also provided in (1) above.

 

		18.	Handling of Matters Relating to Abolition of Unit Share System

 

In the case that the Corporation
abolishes the unit share system after the Allotment Date of the Options, the Corporation may take necessary measures for handling
the related matters thereto in a manner deemed as appropriate by the Corporation in accordance with the provisions of the Companies
Act of Japan and consistent with these terms and conditions.

 

		19.	Handling of Matters Relating to Amendments to Companies Act, and other Laws and Regulations

 

In the case that provisions
of the Companies Act of Japan and/or other Japanese laws and regulations relating to the shares or the stock acquisition rights
are amended after the Allotment Date of the Options, the Corporation may take necessary measures for handling the matters relating
thereto in a manner deemed as appropriate by the Corporation in accordance with the provisions of the Companies Act of Japan and/or
other Japanese laws and regulations then in effect and consistent with these terms and conditions.

    	4

    	 

    

Exhibit 2

 

EXERCISE PRICE

 

Amount to be paid
per share to be issued or transferred upon exercise of the Options (hereinafter referred to as the “Exercise Price”)
is initially US$ 20.01.

Provided, however,
that if the U.S. dollar amount obtained by dividing the closing price of shares of common stock of the Corporation in the regular
trading thereof on the Tokyo Stock Exchange (hereinafter referred to as the “Closing Price”) on the Allotment Date
(as defined in Article 3 of the Agreement concerning Allocation of the Stock Acquisition Rights of Sony Corporation for the Fiscal
Year 2013 dated November 19, 2013) (if there is no Closing Price on such date, the Closing Price on the immediately preceding trading
day) 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 ten (10) consecutive trading days (excluding days on which there is no Closing Price) immediately prior
to the Allotment Date (hereinafter referred to as the “Reference Exchange Rate”) (any fraction less than one (1) cent
arising as a result of such calculation shall be rounded up to the nearest one (1) cent) is higher than US$ 20.01, then the amount
equal to the U.S. dollar amount obtained by dividing the Closing Price on the Allotment Date by the Reference Exchange Rate (any
fraction less than one (1) cent arising as a result of such calculation shall be rounded up to the nearest one (1) cent) shall
be the initial Exercise Price. In this case, the Corporation shall notify such initial Exercise Price to the Qualified Person by
sending a notice (hereinafter referred to as the “Notice”) on or about November 20, 2013. The provisions with respect
to the initial Exercise Price in the Notice shall automatically supersede the provisions in this Exhibit 2.

 

 

    	 

    	 

    

Exhibit 3

 

VESTING AND EXERCISE CONDITIONS FOR NON-US
PARTICIPANTS

 

Set forth below are
the provisions concerning the restrictions of vesting and exercise of the Options provided for in Item (1) of Article 5 of the
Agreement Concerning Allocation of the Stock Acquisition Rights of Sony Corporation for the Fiscal Year 2013 (hereinafter referred
to as the “Agreement”). Unless otherwise provided for, the terms used in this Exhibit 3 shall have the same meaning
as used in the Agreement.

 

Article
1 (Restrictions on and Conditions for Exercise of the Options and Prohibition of Disposition)

 

		(1)	Notwithstanding Item (4) of Article 3 of the Agreement, the Options shall be vested and become
exercisable in three approximately equal annual installments beginning on the first anniversary of the date of the grant.

		(2)	In case that the Qualified Person forfeits either status as a director, corporate executive officer
or employee of the Corporation or of the Sony Group Companies by falling under any of the following items, the exercise of the
Options shall be subject to the restrictions provided for in such following item; provided, however, that in no case may any Options
be exercised after the period provided for in Item (4) of Article 3 of the Agreement.

		(i)	If the Qualified Person is subject to punitive dismissal or resignation under instruction pursuant
to the rules of employment of the Corporation or of the Sony Group Companies or removed from office:

The Qualified Person may
not exercise the Options on and after the day on which he/she forfeits the status as a director, corporate executive officer or
employee of the Corporation or of the Sony Group Companies (hereinafter referred to as the “Status Forfeit Date”);

		(ii)	If the Qualified Person ceases to be a director, corporate executive officer or employee of the
Corporation or of the Sony Group Companies due to his/her death:

Subject to the provision
of Article 7 of the Agreement, the heir of the Qualified Person may exercise the Options which are exercisable pursuant to Item
(1) of this Article as of the Status Forfeit Date (hereinafter referred to as the “Exercisable Options”) until and
including the last day of the one (1) year period commencing on the date immediately following the Status Forfeit Date (if the
last day of this one (1) year period falls on a holiday of the Corporation, the immediately preceding business day shall be the
last day of such period), but may not exercise the Options which are not exercisable pursuant to Item (1) of this Article as of
the Status Forfeit Date (hereinafter referred to as the “Unexercisable Options”) on and after the Status Forfeit Date;
provided, however, that if the Corporation allows the heir of the Qualified Person to exercise the Unexercisable Options, all of
the Unexercisable Options shall become exercisable on the Status Forfeit Date (or the Commencement Date of Exercisable Period,
if the Status Forfeit Date falls on a day before the Commencement Date of Exercisable Period) and the heir of the Qualified Person

    	 

    	 

    

may exercise the Unexercisable
Options until and including the last day of the one (1) year period commencing on the date immediately following the Status Forfeit
Date (if the last day of this one (1) year period falls on a holiday of the Corporation, the immediately preceding business day
shall be the last day of such period), subject to the provision of Article 7 of the Agreement; and

		(iii)	If the Qualified Person forfeits the status as a director, corporate executive officer or employee
of the Corporation or of the Sony Group Companies due to any other events:

The Qualified Person may
exercise the Exercisable Options until and including the last day of the one (1) year period commencing on the date immediately
following the Status Forfeit Date (if the last day of this one (1) year period falls on a holiday of the Corporation, the immediately
preceding business day shall be the last day of such period), but may not exercise the Unexercisable Options on and after the Status
Forfeit Date; provided, however, that if the Corporation allows the Qualified Person to exercise the Unexercisable Options, all
of the Unexercisable Options shall become exercisable on the Status Forfeit Date (or the Commencement Date of Exercisable Period,
if the Status Forfeit Date falls on a day before the Commencement Date of Exercisable Period) and the Qualified Person may exercise
the Unexercisable Options until and including the last day of the one (1) year period commencing on the date immediately following
the Status Forfeit Date (if the last day of this one (1) year period falls on a holiday of the Corporation, the immediately preceding
business day shall be the last day of such period).

		(3)	The Qualified Person may not exercise the Options in any of the following cases:

		(i)	If the Qualified Person works for a competitor of the Corporation or of the Sony Group Companies
as such competitor’s officer, employee or consultant, and any of the designated Representative Corporate Executive Officer(s)
of the Corporation determines not to permit the exercise by such Qualified Person of the Options allocated to such Qualified Person.

		(ii)	If the Qualified Person is regarded by the Corporation to have performed any act of disloyalty
against the Corporation or the Sony Group Companies.

		(iii)	If the Qualified Person violates any provision of the Agreement.

		(4)	The Qualified Person is not authorized to transfer, pledge or otherwise dispose of all or part
of the Options.

 

    	- 2 -

    	 

    

Exhibit 4

 

REPRESENTATIONS AND WARRANTIES FOR NON-US
PARTICIPANTS

 

The Qualified Person confirms the following
matters pursuant to Article 13 of the Allocation Agreement.

 

1.(Employment Contract)

I understand that nothing
in the Sony Corporation Stock Acquisition Rights Plan (the “Plan”) terms form part of my employment contract, unless
my employment contract expressly states otherwise. Participation in the Plan does not create any right to continued employment.

 

I understand that neither
the participation in the Plan nor the grant of an Option creates any rights to participate in the Plan or to be granted any stock
acquisition right, Option or award in the future. The Plan may cease to be operated in the future although any existing Options
granted under the Plan will continue in accordance with the Allocation Agreement, Exhibits, and the Terms and Conditions.

 

I understand that I have
no claim or right of action in respect of any decision, omission or discretion which may operate to my disadvantage even if it
is unreasonable, irrational or might otherwise be regarded as being in breach of any duty, except as set out in the relevant Plan
documentation.

 

I understand I have no right
to compensation for any loss in relation to the Plan, including any loss in relation to:

		·	a reduction of rights or expectations under the Plan in any circumstances
(including lawful or unlawful termination of employment);

		·	any exercise of a discretion or a decision taken in relation to an
award or to the Plan, or any failure to exercise a discretion or take a decision; and

		·	the operation, suspension, termination or amendment of the Plan.

 

I understand that as the
grant by the Corporation is entirely discretionary, the benefits and rights acquired under the Plan do not constitzute “base
salary” or other regular employment earnings and that nothing in the rules or operation of the Plan forms part of my contract
of employment or employment relationship, which rights are separate from and not affected by, the Plan. I understand and agree
that under no circumstances will the benefits derived from the Plan be included as part of my employment earnings for purposes
of calculating any of the Corporation’s and/or the Sony group companies’ (including my employer) obligations to me
for bonus, retirement, severance, or any other such payments.

    	 

    	 

    

 

2.(Data Protection)

I consent to the collection,
use and disclosure by the Corporation and/or companies in the Sony group (including my employer) of any personal information or
data necessary for the administration of the Plan.

 

Subject to legislative requirements,
the information may be retained after my Options are exercised or cancelled. I understand that I can contact the Secretariat of
the Stock Option Plan, Corporate Human Resources, Sony Corporation or the Human Resources Department of Sony Corporation of America
(in accordance with the contact information provided to me under separate cover), if I have any queries in respect of this statement.

 

I understand that the information
provided to the Corporation, the companies in the Sony group (including my employer), and/or to their duly authorized third party
designee(s) retained for the purpose of assisting the Corporation or the Sony group companies with administration of the Options
and provided in relation to the Plan will be used in relation to the administration of my Options under the Plan.

 

The Corporation and/or any
of the companies in the Sony group (including my employer) may give information to others (including people acting as agents of
the Corporation and/or any of the companies in the Sony group) in connection with the administration of the Plan on the understanding
that they will keep the information secure.

 

In order to process the information
the Corporation and/or companies in the Sony group (including my employer) may transfer the information to other countries that
may have a different level of statutory protection for my information than in my home country.

 

I understand that I have
a right to access certain information that the Plan holds about me and in order to exercise this right, I can contact the Secretariat
of the Stock Option Plan, Corporate Human Resources, Sony Corporation or the Human Resources Department of Sony Corporation of
America (in accordance with the contact information provided to me under separate cover).

 

3.(Payment of Tax, Social Security
or Other Amounts)

I authorize the Corporation
and companies in the Sony group (including my employer) to withhold any amounts or make such arrangements as they consider necessary
to meet any liability due to taxation, social security or other amounts in respect of my participation in the Plan. These arrangements
may include the sale or reduction in number of any shares of the Corporation (hereinafter referred to as the “Shares”)
unless I, as the participant in the Plan, discharge the

    	2

    	 

    

liability myself.

 

4.(Tax Filings)

By signing the Allocation
Agreement, I agree to:

(1)make
all neccessary personal tax filings in the territory where I am tax resident in relation to this Plan;

 

(2)make
any required foreign exchange filings or notifications in relation to my holding of rights under the Plan in the territory where
I am foreign exchange resident; and

 

(3)comply
with any requirements to notify my employer of my interests in rights relating to the Shares (whether these requirements are based
on the internal rules of the Corporation, the Sony group, my employer or applicable law).

 

5.(Pensions)

I understand and agree that this
grant of Options to me will not affect my pension rights in any way. No additional contributions will be made by the Corporation
or by any other member of the Sony group (including my employer) as a result of my participation in this Plan. Any pension I may
receive will not be increased by my participation in this Plan.

 

6.(Tax Treatment)

I understand and agree that neither
the Corporation nor any member of the Sony group (including my employer) has arranged for any special tax treatment to apply to
these Options. The Options are not tax qualified in any jurisdiction.

 

[European Union (excluding Austria):

The Qualified Person is being offered
participation in the Plan in order to provide an additional incentive and to encourage employee share ownership and so increase
the interest of the Qualified Person in the success of the Corporation. Further information about the Corporation can be obtained
from www.sony.com. The aggregate number of Shares to be issued or transferred upon exercise of the Options being offered under
the Plan will not exceed 1,127,700. The obligation to publish a prospectus under the EU Prospectus Directive does not apply to
the offer of the Plan because of Article 4(1)(e) of that directive.]

 

[Austria:

Options are offered
to the Qualified Person by the Corporation, a Japanese corporation with its principal place of business at 7-1, Konan 1-chome,
Minato-ku, Tokyo, Japan, in accordance with the terms of the Plan. More information about the Corporation
is available on www.sony.com. The

    	3

    	 

    

Qualified Person is being offered Options
under the Plan in order to provide an additional incentive and to encourage employee share ownership and so increase the interest
of the Qualified Person in the Corporation’s success. The aggregate number of Shares to be issued or transferred upon exercise
of the Options being offered under the Plan will not exceed 1,127,700.

 

This document was compiled in accordance
with s3 ss1 no12 of the Austrian Capital Market Act (KMG) and the corresponding Regulation of the Financial Market Authority (Finanzmarktaufsicht
– FMA) on the mandatory requirements as to the content of a document replacing a prospectus, as published in the Austrian
Federal Gazette BGBl II No. 236/2005. This document replaces a prospectus in accordance with the Austrian Capital Market Act.]

 

[Note regarding Argentina: Although
there is no grantee in Argentina under JPY/USD plan in 2013, we remained the disclaimer below to be in compliance with the requirement
in Argentina for remainder purpose.

This is a private offer. It is not subject
to the supervision of the Argentine Securities Exchange Commission (Comision Nacional de Valores (CNV)) or any other governmental
authority in Argentina.]

 

[Australia:

The Qualified Person confirms that he/she
acknowledges and understands the following matters.

 

		1.	The
                                                                                                     Exercise Price will be calculated
                                                                                                     in the future on the Allotment
                                                                                                     Date in accordance with Exhibit
                                                                                                     2 of the Agreement. By way
                                                                                                     of example only, if the Allotment
                                                                                                     Date was the date of the
                                                                                                     offer of the Options under
                                                                                                     the Agreement (being November
                                                                                                     19, 2013), the Exercise Price
                                                                                                     would be US$ 20.01,
                                                                                                     of which the Australian dollar
                                                                                                     equivalent is A$ 18.76
                                                                                                     (calculated
                                                                                                     at the rate of A$ 1 = US$
                                                                                                     1.0667,
                                                                                                     the rate of exchange at the
                                                                                                     closing of November 19, 2013).

 

		2.	The Corporation undertakes that upon request, the information about
the current market price of the Shares of the Corporation and the Exercise Price throughout the offer period (including information
about the Australian dollar equivalent of that price and of the Exercise Price) will be provided to the Qualified Person within
a reasonable time of such request being made to Sony Computer Entertainment Australia Pty Limited (Level 1, 63-73 Ann Street,
Surry Hills, NSW 2010 Australia, Tel: +61-2-9324-9500, Fax: +61-2-9324-9558) or Sony (Australia) Pty Limited (33-39 Talavera Road,
NORTH RYDE NSW, 2113, Tel:+61-29-887-6666,

    	4

    	 

    

Fax: +61-29-887-4351).

 

		3.	Any advice given by the Corporation in connection with the Options
is general advice only. Nothing in the documentation is to be taken to constitute a recommendation or statement of opinion that
is intended to influence a person or persons in making a decision to acquire any Options and the Qualified Person should consider
obtaining his/her own financial product and/or legal advice from an independent person. The documentation does not take into account
the objectives, financial situation or needs of any particular person. Before acting on the information contained in the documentation,
or making a decision to participate, the Qualified Person should seek professional advice as to whether such participation is appropriate
in light of his or her personal circumstances.

 

		4.	The Qualified person has no rights until the Exercise Price is determined
on the Allotment Date in accordance with Exhibit 2 of the Agreement.]

 

[Brazil:

This document is solely for the use and
information of persons to whom they are addressed and no other person. This document is addressed only to the Qualified Person
and may not be reproduced or copied in any form.

 

The Options granted under the Plan have
not been and will not be publicly issued, placed, distributed, offered or negotiated in the Brazilian capital markets and, as a
result, will not be registered with the Brazilian Securities Commission (Comissão de Valores Mobiliários, the CVM).
Therefore, the Options granted under the Plan will not be offered or sold in Brazil, except in circumstances which do not constitute
a public offering, placement, distribution or negotiation under the Brazilian capital markets regulation.

 

Investments carried out outside Brazil
by Brazilian individuals in an amount equal or higher than US$100,000.00 must be annually disclosed to the Central Bank of Brazil
in accordance with the procedures described from time to time by the Central Bank of Brazil.]

 

 

 

 

 

 

    	5

    	 

    

[Denmark:

 

 

 

 

 

	
        1Tildelingstidspunkt
        for aktieoptioner i Sony Corporation (”Optionerne”) 

         

         

        Aftale Vedrørende Tildeling af
        Aktieoptioner i Sony Corporation for Regnskabsåret 2013 (”Tildelingsaftalen”) er indgået mellem Sony Corporation
        og modtageren (den ”Kvalificerede Person”) pr 19. november 2013 Datoen for tildelingen af Optionerne er den 20. november
        2013.

         

         

        2Kriterier
        eller betingelser for tildelingen 

         

        Optioner tildeles direktionsmedlemmer
        og medarbejdere udvalgt af Sony Corporation (”Selskabet”), som underskriver Tildelingsaftalen af 19. november 2013.

         

        3Udnyttelsestidspunktet
        eller udnyttelsesperioden eller information om hvorledes udnyttelsestidspunkt fastsættes 

         

        Optionerne modnes og kan udnyttes i
        tre omtrent lige store årlige rater, fra og med årsdagen for tildelingen.

         

         

        4Tegningskursen
        eller information om hvorledes tegningskursen fastsættes 

         

        Beløbet
        som erlægges pr. aktie udstedt eller overdraget når Optionerne udnyttes (herefter ”Udnyttelseskursen”)
        er som udgangspunkt US$ 20.01.

         

        Det
        forudsættes dog, at såfremt det US-dollar beløb, der opnås ved at dele slutkursen for aktier i
        selskabet i den regulære handel hermed på Tokyo Stock Exchange (herefter ”Slutkursen”) den 20.
        november 2013 (”Tildelingsdatoen”) (såfremt der ikke er nogen Slutkurs denne dato, vil Slutkursen på
        den umiddelbart forudgående handelsdag være gældende) med den gennemsnitlige kursnotering hos en ledende
        erhvervsbank i Tokyo, som sælger spot US-dollar ved telegrafisk overførsel af yen i ti (1o) på hinanden
        følgende handelsdage (eksklusiv dage hvor der ikke er nogen Slutkurs) umiddelbart forud for Tildelingsdatoen (herefter
        ”Referencekursen”) (eventuelle decimaler efter en sådan beregning mindre end en (1) cent skal rundes op til
        nærmeste hele cent) er højere end US$ 20.01, så skal beløbet svarende til US-dollar beløbet
        beregnet ved at dele Slutkursen på Tildelingsdatoen med Referencekursen (eventuelle decimaler efter en sådan
        beregning mindre end en (1) cent skal rundes op til nærmeste hele cent) skal udgøre den
        første Udnyttelseskurs. I så fald skal Selskabet oplyse en sådan første Udnyttelseskurs til den
        Kvalificerede Person ved fremsendelse af meddelelse herom (herefter ”Meddelelsen”) på eller omkring den 20.
        november 2013.

         

         

         

         

        5Medarbejderens
rettigheder ved ansættelsesforholdets ophør 

         

        (1)I tilfælde af at den Kvalificerede
        Person mister sin position som bestyrelsesmedlem, direktionsmedlem eller medarbejder i Selskabet eller i Sony-koncernen på
        grund af en af følgende årsager, skal udnyttelsen af Optionerne være underlagt de begrænsninger, der er
        beskrevet nedenfor; dog forudsat at Optionerne under ingen omstændigheder kan udnyttes efter perioden angivet under punkt
        3 ovenfor.

         

         

        (i) Såfremt den Kvalificerede
        Person bortvises eller opsiges på grund af misligholdelse i henhold til Selskabets eller Sony Koncernens ansættelsesregler
        eller fjernes fra embedet:

         

         

        Den Kvalificerede Person kan ikke udnytte
        Optionerne på eller efter datoen på hvilken han/hun mister sin position som bestyrelsesmedlem, direktionsmedlem eller
        medarbejder i Selskabet eller Sony Koncernen (herefter “Fortabelsesdatoen”);

         

        (ii) Såfremt den Kvalificerede
        Person ophører med at være bestyrelsesmedlem, direktionsmedlem eller medarbejder i Selskabet eller i Sony Koncernen
        på grund af den Kvalificerede Persons død:

         

        I henhold til bestemmelse 7 i Tildelingsaftalen
        kan arvingerne til den Kvalificerede Person udnytte Optionerne, som kan udnyttes i henhold til punkt (1) i denne bestemmelse pr.
        Fortabelsesdatoen (herefter de “Modnede Optioner”) indtil og inklusive den sidste dag i et (1) års perioden som
        begynder dagen efter Fortabelsesdatoen (hvis den sidste dag af denne et (1) års periode er en feriedag i Selskabet, vil den
        efterfølgende bankdag udgøre den sidste dag i perioden), men kan dog ikke udnytte Optionerne, som ikke er modnede
        i henhold til afsnit 1 i denne bestemmelse pr. Fortabelsesdatoen (herefter de ”Ikke Modnede Optioner”), på og
        efter Fortabelsesdagen dog forudsat at såfremt Selskabet tillader arvingerne til den Kvalificerede Person at udnytte de Ikke
        Modnede Optioner, modner alle de Ikke Modnede Optioner på Fortabelsesdatoen (eller på Startdatoen for Udnyttelsesperioden,
        såfremt Fortabelsesdatoen falder på en dato før Startdatoen for Udnyttelsesperioden), og den Kvalificerede Person
        kan udnytte de Ikke Modnede Optioner til og med den sidste dag i et (1) års perioden, som begynder dagen efter Fortabelsesdagen
        (hvis den sidste dag af denne et (1) års periode er en feriedag i Selskabet, vil den efterfølgende bankdag udgøre
        den sidste dag i perioden) i henhold til bestemmelserne i bestemmelse 7 i Tildelingsaftalen; og

         

         

        (iii) Såfremt den Kvalificerede
        Person mister sin position som bestyrelsesmedlem, direktionsmedlem eller medarbejder i Selskabet eller i Sony Koncernen på
        grund af andre for-hold:

         

        Den Kvalificerede Person kan udnytte de
        Modnede Optioner indtil og inklusive den sidste dag i et (1) års perioden, som begynder dagen efter Fortabelsesdagen (hvis
        den sidste dag af denne et (1) års periode er en feriedag i Selskabet, vil den efterfølgende bankdag udgøre
        den sidste dag i perioden), men kan dog ikke udnytte de Ikke Modnede Optioner på og efter Fortabelsesdagen dog forudsat at
        såfremt Selskabet tillader den Kvalificerede Person at udnytte de Ikke Modnede Optioner, modner alle de Ikke Modnede Optioner
        på Fortabelsesdatoen (eller på Startdatoen for Udnyttelsesperioden, såfremt Fortabelsesdatoen falder på
        en dato før Startdatoen for Udnyttelsesperioden), og arvingerne til den Kvalificerede Person kan udnytte de Ikke Modnede
        Optioner til og med den sidste dag i et (1) års perioden, som begynder dagen efter Fortabelsesdagen (hvis den sidste dag
        af denne et (1) års periode er en feriedag i Selskabet, vil den efterfølgende bankdag udgøre den sidste dag
        i perioden).

         

         

         

         

         

        (2)Den Kvalificerede Person kan
        ikke udnytte Optionerne i følgende tilfælde:

         

        (i) Såfremt den Kvalificerede
        Person arbejder for en konkurrent til Selskabet eller Sony Koncernen som denne konkurrents direktionsmedlem, medarbejder eller
        konsulent, og en af de udvalgte Repræsentanter for Ledelsen i Selskabet vælger ikke at tillade en sådan Kvalificeret
        Persons udnyttelse af Optionerne tildelt til denne Kvalificerede Person.

         

        (ii) Såfremt den Kvalificerede
        Person af Selskabet anses for at have udøvet illoyale handlinger mod Selskabet eller Sony Koncernen.

         

        (iii) Såfremt den Kvalificerede
        Person misligholder bestemmelserne i denne Aftale.

         

        6Økonomiske
        aspekter af deltagelse i aktieoptionsprogrammet 

         

        Aktieoptioner
        er risikobetonede værdipapirer, der er afhængige af aktiemarkedet. Som følge heraf er der ingen garanti for,
        at udnyttelsen af Optionerne udløser en fortjeneste. Tildelingen af Optionerne har ingen økonomiske konsekvenser
        for den Kvalificerede Person.]
	
        1The
time of the grant of the stock acquisition rights of Sony Corporation (the “Options”) 

         

        The Agreement Concerning Allocation
        of the Stock Acquisition rights of Sony Corporation for the Fiscal Year 2013 (the “Allocation Agreement”) is entered
        into between Sony Corporation and the grantee (the “Qualified Person”) as of November 19, 2013. The date of the grant
        of the Options is November 20, 2013.

         

        2The
        criteria or conditions for the grant 

         

        Options are granted to officers and
        employees selected by Sony Corporation (the “Corporation”) who sign the Allocation Agreement as of November 19, 2013.

         

        3The
        exercise time or exercise period or information on how the exercise time is determined 

         

         

        The Options shall vest and become exercisable
        in three approximately equal annual installments beginning on the first anniversary of the date of the grant.

         

        4The
        subscription price or information on how the subscription price is fixed 

         

        Amount
        to be paid per Share to be issued or transferred upon exercise of the Options (hereinafter referred to as the “Exercise Price”)
        is initially US$ 20.01. 

         

        Provided,
        however, that if the U.S. dollar amount obtained by dividing the closing price of Shares of the Corporation in the regular
        trading thereof on the Tokyo Stock Exchange (hereinafter referred to as the “Closing Price”) on November 20, 2013
        (the “Allotment Date”) (if there is no Closing Price on such date, the Closing Price on the immediately preceding
        trading day) 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 ten (10) consecutive trading days (excluding days on which there is no
        Closing Price) immediately prior to the Allotment Date (hereinafter referred to as the “Reference Exchange Rate”)
        (any fraction less than one (1) cent arising as a result of such calculation shall be rounded up to the nearest one (1) cent)
        is higher than US$ 20.01, then the amount equal to the U.S. dollar amount obtained by dividing the Closing Price on the Allotment
        Date by the Reference Exchange Rate (any fraction less than one (1) cent arising as a result of such calculation shall be
        rounded up to the nearest one (1) cent) shall be the initial Exercise Price. In this case, the Corporation shall notify such
        initial Exercise Price to the Qualified Person by sending a notice (hereinafter referred to as the “Notice”) on
        or about November 20, 2013. 

         

        5The
        employee’s rights in connection with the termination of employment 

         

        (1)In case that the Qualified Person
        forfeits either status as a director, corporate executive officer or employee of the Corporation or of the Sony Group Companies
        by falling under any of the following items, the exercise of the Options shall be subject to the restrictions provided for in such
        following item; provided, however, that in no case may any Options be exercised after the period provided for in Item (4) of Article
        3 of the Allocation Agreement.

         

        (i) If the Qualified Person is subject
        to punitive dismissal or resignation under instruction pursuant to the rules of employment of the Corporation or of the Sony Group
        Companies or removed from office:

         

        The Qualified Person may not exercise
        the Options on and after the day on which he/she forfeits the status as a director, corporate executive officer or employee of
        the Corporation or of the Sony Group Companies (hereinafter referred to as the “Status Forfeit Date”);

         

        (ii) If the Qualified Person ceases
        to be a director, corporate executive officer or employee of the Corporation or of the Sony Group Companies due to his/her death:

         

         

        Subject to the provision of Article 7
        of the Allocation Agreement, the heir of the Qualified Person may exercise the Options which are exercisable pursuant to Item (1)
        of this Article as of the Status Forfeit Date (hereinafter referred to as the “Exercisable Options”) until and including
        the last day of the one (1) year period commencing on the date immediately following the Status Forfeit Date (if the last day of
        this one (1) year period falls on a holiday of the Corporation, the immediately preceding business day shall be the last day of
        such period), but may not exercise the Options which are not exercisable pursuant to Paragraph 1 of this Article as of the Status
        Forfeit Date (hereinafter referred to as the “Unexercisable Options”) on and after the Status Forfeit Date; provided,
        however, that if the Corporation allows the heir of the Qualified Person to exercise the Unexercisable Options, all of the Unexercisable
        Options shall become exercisable on the Status Forfeit Date (or the Commencement Date of Exercisable Period, if the Status Forfeit
        Date falls on a day before the Commencement Date of Exercisable Period) and the heir of the Qualified Person may exercise the Unexercisable
        Options until and including the last day of the one (1) year period commencing on the date immediately following the Status Forfeit
        Date (if the last day of this one (1) year period falls on a holiday of the Corporation, the immediately preceding business day
        shall be the last day of such period) subject to the provision of Article 7 of the Allocation Agreement; and

         

        (iii) If the Qualified Person forfeits
        the status as a director, corporate executive officer or employee of the Corporation or of the Sony Group Companies due to any
        other events:

         

         

        The Qualified Person may exercise the
        Exercisable Options until and including the last day of the one (1) year period commencing on the date immediately following the
        Status Forfeit Date (if the last day of this one (1) year period falls on a holiday of the Corporation, the immediately preceding
        business day shall be the last day of such period), but may not exercise the Unexercisable Options on and after the Status Forfeit
        Date; provided, however, that if the Corporation allows the Qualified Person to exercise the Unexercisable Options, all of the
        Unexercisable Options shall become exercisable on the Status Forfeit Date (or the Commencement Date of Exercisable Period, if the
        Status Forfeit Date falls on a day before the Commencement Date of Exercisable Period) and the Qualified Person may exercise the
        Unexercisable Options until and including the last day of the one (1) year period commencing on the date immediately following
        the Status Forfeit Date (if the last day of this one (1) year period falls on a holiday of the Corporation, the immediately preceding
        business day shall be the last day of such period). 

         

        (2)The Qualified Person cannot exercise
        the Options in any of the following cases:

         

        (i) If the Qualified Person works for
        a competitor of the Corporation or of the Sony Group Companies as such competitor’s officer, employee or consultant, and
        any of the designated Representative Corporate Executive Officer(s) of the Corporation determines not to permit the exercise by
        such Qualified Person of the Options allocated to such Qualified Person.

         

        (ii) If the Qualified Person is regarded
        by the Corporation to have performed any act of disloyalty against the Corporation or the Sony Group Companies.

         

        (iii) If the Qualified Person violates
        any provision of the Agreement.

         

        6The
        financial aspects of participating in the stock option program 

         

        Stock options are risky securities that are
        influenced by the share market. Consequently, there is no guarantee that the exercise of the Options will yield a profit. The grant
        of the Options has no financial consequences for the Qualified Person.

         

         

 

 

[Germany:

Options granted under the Plan are provided
on an ex-gratia basis and not in satisfaction of any right or expectation of the Qualified Person. The Qualified Person acknowledges
that he/she has no such right or expectation in relation to the Option or any future grant of options.]

 

    	 

    	 

    

[Hong Kong:
The contents of the Plan documents have not
been reviewed by any regulatory authority in Hong Kong. The Qualified Person is advised to exercise caution in relation to the
offer under the Plan. If the Qualified Person is in any doubt about any of the contents of this document, he/she should obtain
independent professional advice.]

 

[India:

No invitation, offer or sale to purchase
or subscribe to the shares of Sony Corporation (“Securities”) is made or intended to be made to the public in India
through the Allocation Agreement or any amendment or supplement thereto. Neither the Allocation Agreement nor any amendment or
supplement thereto is a prospectus, offer document or advertisement nor has it been or will be submitted or registered as a prospectus
or offer document under any applicable law or regulation in India. Neither the Allocation Agreement nor any amendment or supplement
thereto has been reviewed, approved, or recommended by any Registrar of Companies in India, the Securities and Exchange Board of
India, the Reserve Bank of India, any stock exchange in India or any other Indian regulatory authority.

Accordingly, no person may make any
invitation, offer or sale of any Securities, nor may the Allocation Agreement nor any amendment or supplement thereto nor any other
document, material, notice or circular in connection with the invitation, offer or sale for subscription or purchase of any Securities
("Offer") be circulated or distributed whether directly or indirectly to, or for the account or benefit of, any person
resident in India, other than strictly on a private and confidential basis and so long as any such Offer is not calculated to result,
directly or indirectly, in the Securities becoming available for subscription or purchase by persons other than those receiving
such offer or invitation. Notwithstanding the foregoing, in no event shall the Offer be made directly or indirectly, in any circumstances
which would constitute an offer to the public in India within the meaning of any applicable law or regulation.

Any Offer of Securities to a person
in India shall be made subject to compliance with all applicable Indian laws including, without limitation, the Foreign Exchange
Management Act, 1999, as amended, and any guidelines, rules, regulations, circulars or notifications issued by the Reserve Bank
of India, the Securities and Exchange Board of India and any other Indian regulatory authority.

Each investor in the Securities acknowledges,
represents and agrees that it is eligible to invest in the Company and the Securities under applicable laws and regulations in
India and that it is not prohibited or debarred under any law or regulation from acquiring, owning or selling the Securities.]

 

    	 

    	 

    

[Turkey:

No information in this document is provided
for the purpose of offering, marketing and sale by any means of any capital market instruments in the Republic of Turkey. Therefore,
this document may not be considered as an offer made or to be made to residents of the Republic
of Turkey.

The Plan has not been and will not be
registered with the Turkish Capital Market Board (the “CMB”) under the provisions of the Capital Market Law (Law No.
2499) (the “Capital Market Law”). Accordingly, neither this document nor any other material may be utilized in connection
with any offering to the public within the Republic of Turkey without the prior approval of the CMB. However, according to Article
15 (d) (ii) of the Decree No.32 there is no restriction on the purchase or sale of Shares by residents of the Republic of Turkey,
provided that: they purchase or sell such Shares in the financial markets outside of the Republic of Turkey; and such sale and
purchase is made through banks, and/or licensed brokerage institutions in the Republic of Turkey.]

    	 

    	 

    

[France:

 

 

 

 

	
        PRINCIPALES MODALITES DE LA VINGT-SEPTIÈME
        SERIE

        D’OPTIONS D’ACHAT D'ACTIONS

        CONCERNANT LES ACTIONS ORDINAIRES DE LA SONY CORPORATION

         

        Les présentes modalités
        concernant les options d’achat d'actions s'appliquent à la Vingt-septième Série d’Options d’Achat
        d'Actions Ordinaires (ci-après les « Options ») de la Sony Corporation (ci-après la « Société »)
        émis le 20 novembre 2013 par la Société:

         

         

        1.Nombre
        d'Options attribuées à la Personne Qualifiée (telle que définie dans le présent Article)

         

        (________ actions pourront être émises
        ou transférées lors de l'exercice, par la personne ayant signé le Contrat d'Attribution tel que définit
        ci-dessous à l'Article 16 (ci-après la « Personne Qualifiée »), de toutes les Options
        attribuées à la Personne Qualifiée.)

         

        2.Nombre
        total d'Options

         

        11,277 (le nombre maximum d'actions de
        la Société pouvant être émises lors de l'exercice de l'Option est de 1,127,700)

         

        3.Classe
        et nombre d'actions devant être émises ou cédées lors de l'exercice de chaque Option

         

        100 actions ordinaires de la Société
(ci-après les « Actions Ordinaires »)

         

        4.Montant
        à payer par action devant être émise ou cédée lors de l'exercice des Options (ci-après
        « Cours d'Exercice »)

         

         

        Le
Cours d'Exercice initial est de  20.01US$.

         

        Sous
        réserve, cependant, que si le montant en dollars US obtenu en divisant le cours de clôture des actions
        ordinaires de la Société dans le cadre des transactions régulières effectuées à la
        Bourse de Tokyo (ci-après le « Cours de Clôture ») à la Date d'Attribution (telle
        que définie à l'Article 6 des présentes Principales Modalités (ci-après les
        « Conditions »)) (en l'absence de Cours de Clôture à cette date, le Cours de Clôture
        du jour de bourse précédent) par la moyenne des taux de change cotés par une banque commerciale de
        premier plan à Tokyo pour la vente spot de dollars US par transfert télégraphique contre des yens
        pendant dix (10) jours de bourse consécutifs (à l'exclusion des jours n'ayant pas de Cours de Clôture)
        immédiatement avant la Date d'Attribution (ci-après le « Taux de Change de
        Référence ») (toute fraction inférieure à un (1) cent résultant de ce calcul
        sera arrondie au un (1) cent le plus proche) est supérieur à 20.01 US$, alors le montant égal au montant
        en dollars US obtenu en divisant le Cours de Clôture à la Date d'Attribution par le Taux de Change de
        Référence (toute fraction inférieure à un (1) résultant de ce calcul sera arrondie au un
        (1) cent) sera le Cours d'Exercice initial. Dans ce cas, la Société devra indiquer le Cours d'Exercice
        initial en question à la Personne Qualifiée en lui envoyant un avis (ci-après
        l'« Avis ») le ou aux alentours du, 20 novembre 2013. Les dispositions concernant le Cours d'Exercice
        initial indiqué dans l'avis annuleront et remplaceront automatiquement les dispositions des
        présentes.

         

         

        5.Période
        durant laquelle les Options pourront être exercées

         

        A partir du 20 novembre 2014 inclus, jusqu'au
        19 novembre 2023 inclus (ci-après la « Durée »). Si le dernier jour de la période en
        question tombe un jour férié pour la Société, le jour ouvrable le précédant immédiatement
        sera le dernier jour de la période en question. Cependant, l'exercice des Options est assujetti aux restrictions prévues
        à l'Article 8 des Conditions.

         

        6.Paiement
        contre Options

         

        Les Options sont émises sans aucun
        paiement au profit de la Société.

         

        7.Date
        d'Enregistrement des Options

         

        19 novembre 2013

         

        8.Date
        d'Attribution des Options

         

        20 novembre 2013 (ci-après la « Date
        d'Attribution »)

         

         

        9.Acquisition
        des Droits

         

        Nonobstant l'Article 4 des Conditions,
        les Options seront acquises et deviendront exerçables en trois tranches annuelles approximativement équivalentes
        démarrant au premier anniversaire de la date d'octroi.

         

         

        10.Conditions
        à l'Exercice des Options

         

        (1)Aucune Option ne pourra être
        exercée en partie.

         

        (2)En cas de vote d'une résolution,
        lors d'une assemblée générale des actionnaires de la Société, en faveur d'un accord de consolidation
        ou de fusion (autre qu'une consolidation ou une fusion dont la société résultante est la Société),
        ou en cas de vote d'une résolution, lors d'une assemblée générale des actionnaires de la Société
        (ou, si une résolution d'une assemblée générale des actionnaires n'est pas nécessaire, lors
        d'une réunion du Conseil d'Administration de la Société) concernant un accord d'échange de parts (kabushiki-kokan)
        ou d'un plan de transfert de parts (kabushiki-iten) en vertu duquel la Société deviendrait filiale à 100%
        d'une autre société, les Options ne pourront pas être exercées à ou après la date de prise
        d'effet de la consolidation ou de la fusion en question, de l'échange de parts (kabushiki-kokan), ou du transfert de parts
        (kabushiki-iten).

         

         

        (3)Si la Personne Qualifiée
        renonce à l'un des statuts suivants : administrateur, CEO (Corporate Executive Officer) ou employé de la Société
        ou des Sociétés du Groupe Sony en tombant dans l'une des catégories suivantes, l'exercice des Options sera
        assujetti aux restrictions prévues pour la catégorie en question ; sous réserve, cependant, qu'en aucun
        cas les Options ne puissent être exercées après les Durées indiquées à l'Article 4 des
        Conditions.

         

        (i) Si la Personne Qualifiée
        fait l'objet d'un licenciement pour faute ou d'une démission par demande en vertu des règles sur l'emploi de la Société
        ou des Sociétés du Groupe Sony ou si elle est démise de ses fonctions :

        

        La Personne Qualifiée ne pourra pas exercer les Options à ou après la date à laquelle elle aura renoncé
        à son statut d'administrateur, de CEO ou d'employé de la Société ou des Sociétés du Groupe
        Sony (ci-après la « Date de Renoncement à Statut ») ;

         

         

        (ii) Si la Personne Qualifiée
        cesse d'être administrateur, CEO ou employé de la Société ou du Group Sony par suite de son décès :

        

        

        Sous réserve des dispositions de l'Article 9, Alinéa (2) des Conditions, l'héritier de la Personne Qualifiée
        pourra exercer les Options exerçables en vertu de l'Article 7 à compter de la Date de Renonciation à Statut
        (ci-après les « Options Exerçables ») jusques et y compris le dernier jour de la période
        d'un (1) an commençant à la date suivant immédiatement la Date de Renonciation à Statut (si le dernier
        jour de cette période d'un (1) an tombe un jour férié pour la Société, le jour ouvrable le précédant
        immédiatement sera le dernier jour de la période en question), mais ne pourra pas exercer les Options non exerçables
        en vertu de l'Article 7 à compter de la Date de Renonciation à Statut (ci-après les « Options Non
        Exerçables ») à la Date de Renonciation à Statut ou passé celle-ci ; sous réserve,
        toutefois, que si la Société autorise l'héritier de la Personne Qualifiée à exercer les Options
        Non Exerçables, l'ensemble de celles-ci deviendront exerçables à la Date de Renonciation à Statut (ou
        à la Date de Commencement de la Période d'Exercice, si la Date de Renonciation à Statut tombe un jour précédant
        la Date de Commencement de la Période d'Exercice) et l'héritier de la Personne Qualifiée pourra exercer les
        Options Non Exerçables jusques et y compris le dernier jour de la période d'un (1) an commençant à
        la date suivant immédiatement la Date de Renonciation à Statut (si le dernier jour de cette période d'un (1)
        an tombe un jour férié pour la Société, le jour ouvrable le précédant immédiatement
        sera le dernier jour de la période en question), sous réserve des dispositions de l'Article 9, Alinéa (2)
        des Conditions ; et

         

        (iii) Si la Personne Qualifiée
        renonce au statut d'administrateur, de CEO ou d'employé de la Société ou du Groupe Sony par suite d'autres
        événements :

         

         

        La Personne Qualifiée pourra
        exercer les Options Exerçables jusques et y compris le dernier jour de la période d'un (1) an commençant à
        la date suivant immédiatement la Date de Renonciation à Statut (si le dernier jour de cette période d'un (1)
        ans tombe un jour férié pour la Société, le jour ouvrable le précédant immédiatement
        sera le dernier jour de la période en question), mais ne pourra pas exercer les Options Non Exerçables à la
        Date de Renonciation à Statut ni par la suite; sous réserve, toutefois, que si la Société autorise
        l'héritier de la Personne Qualifiée à exercer les Options Non Exerçables, l'ensemble de celles-ci deviendront
        exerçables à la Date de Renonciation à Statut (ou à la Date de Commencement de la Période d'Exercice,
        si la Date de Renonciation à Statut tombe un jour précédant la Date de Commencement de la Période d'Exercice)
        et la Personne Qualifiée pourra exercer les Options Non Exerçables jusques et y compris le dernier jour de la période
        d'un (1) an commençant à la date suivant immédiatement la Date de Renonciation à Statut (si le dernier
        jour de cette période d'un (1) an tombe un jour férié pour la Société, le jour ouvrable le précédant
        immédiatement sera le dernier jour de la période en question).

         

        (4)La Personne Qualifiée ne
        pourra pas exercer les Options dans les cas suivants :

         

        (i) Si la Personne Qualifiée
        travaille pour un concurrent de la Société ou du Groupe Sony en qualité de cadre, d'employé ou de consultant
        du concurrent en question, et que l'un quelconque des CEO désignés pour représenter la Société
        décide de ne pas permettre l'exercice, par la Personne Qualifiée en question, des Options qui lui ont été
        attribuées.

         

        (ii) Si la Personne Qualifiée
        est considérée par la Société comme ayant commis un acte déloyal à l'égard de
        la Société ou du Groupe Sony.

         

        (iii) Si la Personne Qualifiée
        viole une quelconque disposition du Contrat.

         

        (5)La Personne Qualifiée n'est
        pas autorisée à céder, à nantir ni à se défaire d'une quelconque autre manière
        de tout ou partie des Options.

         

        (6)L'exercice des Options est en outre
        assujetti à toute restriction sur les transactions prévue par le Règlement de la Sony Corporation of America
        Concernant les Transactions sur Titres ou tout autre règlement semblable mis en œuvre par le Groupe Sony (ci-après
        le « Groupe Sony ») et applicable à la Personne Qualifiée, tel qu'il peut être en vigueur
        de manière ponctuelle.

         

         

        11.Interdiction de Cession

         

        (1)Sauf disposition contraire
de l'Alinéa (2) ci-dessous, les Options, acquises ou non, ne sont pas cessibles par la Personne Qualifiée.

         

        (2)En cas de décès de
        la Personne Qualifiée, les Options en circulation qui auront été acquises et sont exerçables et accordées
        à la Personne Qualifiée en question, ne pourront être exercées que par les exécuteurs ou les
        administrateurs testamentaires de la Personne Qualifiée ou par toute personne ayant acquis le droit de les exercer en vertu
        du testament ou de la législation sur les successions, sous réserve qu'aucun transfert par testament ou en vertu
        de législation sur les successions d'une quelconque Option, ou du droit d'exercer une quelconque Option, ne pourra contraindre
        la Société à moins que cette dernière ait reçu (a) un avis écrit dans ce sens et une
        copie du testament et/ou les preuves qu'elle jugera nécessaires pour établir la validité du transfert et (b)
        un accord par lequel le cessionnaire s'engage à se conformer à l'ensemble des modalités des Options qui s'appliquent
        ou se seraient appliquées à la Personne Qualifiée (autres que les modalités relatives à l'emploi
        au sein de la Société ou de l'une de ses filiales) et à être lié par les engagements de la Personne
        Qualifiée concernant l'octroi des Options. Les Options non acquises ni exerçables lors du décès de
        la Personne Qualifiée deviendront nulles.

         

        12.Rachat
        / Achat d'Options

         

        Le rachat obligatoire des Options ne s'applique
        pas. En outre, en aucun cas une quelconque Personne Qualifiée ne pourra demander à la Société d'acheter
        les Options qu'elle détient.

         

         

        13.Restrictions
        concernant l'Acquisition d'Options par l'intermédiaire d'un Transfert

         

        Les Options ne peuvent pas être acquises
        par le transfert (autre qu'un quelconque transfert d'Options acquises et exerçables au décès d'un détenteur
        des Options au profit de la succession ou des bénéficiaires du détenteur en question), à moins que
        cette acquisition soit expressément approuvée par le Conseil d'Administration de la Société.

         

        14.Lieu
        de Dépôt des Demandes d'Exercice des Options

         

        Sony Corporation of America, Ressources
        Humaines, ou son représentant dûment désigné

         

        15.Lieu
        de Traitement des Paiements lors de l'Exercice des Options

         

        Sumitomo Mitsui Banking Corporation, Siège
        (ou toute autre banque lui succédant de temps à autre et/ou tout bureau succédant à ce bureau)

         

         

        16.Emission des ADR (Certificats
        Américains de Dépôt)

         

        La Société gère actuellement
        un plan d'ADR aux Etats-Unis, en vertu duquel des Certificats Américains de Dépôt (American Depositary Receipts
        ou « ADR ») représentent des actions ordinaires de la Société. Durant la période
        où la Société gère ce programme d'ADR aux Etats-Unis, les Personnes Qualifiées exerçant
        les Options recevront des ADR au lieu d'actions ordinaires de la Société, et ce comme décrit ci-dessous. Lors
        de l'exercice d'une Option, les actions ordinaires de la Société acquises par suite de cet exercice seront émises
        au nom du dépositaire ou de la personne qu'il aura désignée dans le cadre du Plan d'ADR de Sony au profit
        de la Personne Qualifiée. A réception des actions ordinaires de la Société suite à l'exercice
        d'une Option, le dépositaire dans le cadre du plan d'ADR de Sony émettra immédiatement et de manière
        automatique les ADR représentant les actions ordinaires en question de la Société au nom de la Personne Qualifiée
        concernée et livrera les ADR en question à celle-ci (ou sur un compte détenu au profit de celle-ci) dès
        que possible suite à la date effective de l'émission. Par souci de simplicité, toute référence
        faite dans le Contrat d'Attribution (tel que défini ci-dessous à l'Article 16 des Conditions) et dans les Conditions
        aux actions ordinaires de la Société sera considérée comme étant une référence
        aux ADR.

         

         

          

        17.Traitement en Cas de Transaction
        d'Entreprise

         

        (1)En cas de quelconque transaction
        d'entreprise, à l'exclusion (a) d'une consolidation ou d'une fusion dont la société résultante n'est
        pas la Société ou (b) d'un échange de parts (kabushiki-kokan) ou d'un transfert de parts (kabushiki-iten)
        en vertu duquel la Société devient une filiale à 100% d'une autre société affectant la Société,
        y compris la dissolution ou la liquidation de la Société, la vente de tout ou d'une partie substantielle des actifs
        de la Société, de scission d'entreprise ou de toute autre transaction semblable, la Société pourra
        (x) exiger de l'entité résultant de la transaction en question qu'elle signe un accord prévoyant que tout
        détenteur des Options ait le droit, pendant la Durée et lors de l'exercice des Options, de recevoir la catégorie
        et la quantité d'actions et d'autres titres et actifs qui lui sont dus suite à ladite transaction par tout détenteur
        du nombre d'actions au titre desquelles les Options auraient pu être exercées immédiatement avant la transaction
        en question ou (y) empêcher l'exercice, avec prise d'effet immédiate lors de la réalisation de la transaction
        en question, de chaque Option en circulation immédiatement avant la transaction ou non (que l'option en question soit alors
        exerçable ou non).

         

        (2)Si la Société signe
        un contrat définitif ou prend une décision par résolution de son Conseil d'Administration ou par approbation
        de ses actionnaires lors de l'assemblée des actionnaires visant à effectuer une ou plusieurs des transactions ou
        opérations décrites dans le paragraphe qui précède, la Société pourra fournir un préavis
        d'au moins vingt jours à la Personne Qualifiée à compter de la réalisation de la transaction ou de
        l'opération en question et donner à cette Personne Qualifiée la possibilité d'exercer ses Options (que
        les Options en question soient alors ou non acquises et exerçables), immédiatement avant, et sous réserve
        de, la réalisation de la transaction ou de l'opération en question.

         

        18.Condition Résolutoire
        au Contrat d'Attribution conclu avec la Personne Qualifiée

         

        L'accord concernant l'attribution des Options
        d’Achat d'Actions Sony Corporation pour l'Exercice 2013 conclu entre la Personne Qualifiée et la Société
        en date du 19 novembre 2013 (ci-après le « Contrat d'Attribution »), expirera automatiquement, sans
        aucune procédure particulière, si la Personne Qualifiée n'occupe pas le poste d'administrateur, de CEO ou
        d'employé de la Société ou du Groupe Sony à la Date d'Attribution.

         

         

         19.Questions relatives
aux Montants de Capital et de Primes d'Emission supplémentaires générés par l'Emission d'Actions lors
de l'Exercice des Options

         

        (1)Le montant de capital supplémentaire
        généré par l'émission d'actions lors de l'exercice des Options sera le montant obtenu en multipliant
        le plafond d'augmentation de capital, calculé conformément aux dispositions de l'Alinéa 1, Article 17 des
        Règles Comptables de la Société, au Japon (Company Accounting Ordinance of Japan), par 0,5, et toute fraction
        inférieure à un (1) yen résultant de ce calcul sera arrondie au un (1) yen le plus proche.

         

        (2)Le montant de la prime d'émission
        supplémentaire générée par l'émission d'actions lors de l'exercice des Options sera le montant
        obtenu en déduisant le capital supplémentaire, visé en (1) ci-dessus, du plafond d'augmentation de capital,
        également visé en (1) ci-dessus.

         

         

        20.Déclarations, Garanties,
        Engagements et Confirmations

         

        La Personne Qualifiée émettra
        les déclarations, les garanties, les engagements et les confirmations énoncés dans l'Annexe aux présentes.

         

         

        21.Interprétation

         

        Rien de ce qui figure ici ni dans le Contrat
        d'Attribution ne saurait être interprété comme donnant à la Personne Qualifiée un quelconque
        droit de recevoir des options ou d'acheter des actions ordinaires de la Société à l'avenir auprès de
        la Société ou de l'une quelconque de ses filiales. Rien de ce qui figure ici ni dans le Contrat d'Attribution ne
        saurait conférer à la Personne Qualifiée de quelconque droit de rester employée par la Société
        ou l'une quelconque de ses filiales, ni ne saurait constituer de contrat de travail ni interférer, de quelque manière
        que ce soit, avec le droit de la Société ou de ses filiales de réduire ou de modifier la rémunération
        de la Personne Qualifiée en vigueur au moment de l'octroi d'une quelconque Option ou autrement, ni de dénoncer le
        contrat de travail d'une Personne Qualifiée ni de changer le poste de la Personne Qualifiée ou les conditions de
        son emploi, avec ou sans justification. Rien de ce qui figure ici ni dans le Contrat d'Attribution ne saurait empêcher la
        Société, et la Société se réserve expressément le droit, de modifier les modalités
        des options d'achat d'actions ordinaires de la Société, le cas échéant, qui sont ou pourraient être
        accordées à l'avenir.

         

         

        Annexe

         

        DECLARATIONS ET GARANTIES POUR LES PARTICIPANTS
        NON AMERICAINS

         

        La Personne Qualifiée émet
        les confirmations suivantes en vertu de l'Article 17 des Conditions.

         

        1.(Contrat de Travail)

        Je comprends que rien de ce qui figure
        dans les modalités du Plan d’Options d’Achat d'Actions de la Sony Corporation (le « Plan »)
        ne fait partie de mon contrat de travail, sauf indication contraire figurant explicitement dans ce dernier. La participation au
        Plan ne donne aucun droit au maintien de mon emploi.

         

        Je comprends que ni la participation au
        Plan, ni l'octroi d'une Option, ne crée pour moi le droit de participer au Plan ni de me voir accorder des Options ni d'autres
        avantages à l'avenir. Le Plan pourra cesser de fonctionner à l'avenir, bien que toute Option existante accordée
        en vertu de ce Plan continuera conformément au Contrat d'Attribution, aux Annexes au Contrat d'Attribution et aux Modalités.

         

        Je comprends que je ne peux revendiquer
        aucun droit d’agir suite à une quelconque décision, omission ou mesure discrétionnaire qui pourrait
        intervenir à mon détriment, même si celle-ci s'avérait déraisonnable, irrationnelle ou pouvait
        être autrement considérée comme constituant une violation d'une quelconque obligation, hormis ce qui est prévu
        dans la documentation du Plan considéré.

         

        Je comprends que je n'ai aucun droit à
        compensation en cas de perte résultant du Plan, y compris de perte due à :

        ·        
        une réduction de mes droits ou de mes attentes en vertu du Plan, quelles qu'en soient
        les circonstances (y compris la dénonciation, légitime ou non, de mon contrat de travail) ;

        ·        
        l'exercice d'une mesure discrétionnaire ou d'une décision prise concernant un
        avantage ou concernant le Plan, ou le non exercice d'une mesure discrétionnaire ou la non-prise de décision ;
        ou

        ·        
        l'exploitation, la suspension, la dénonciation ou l'amendement du Plan.

         

        Je comprends que l'octroi de droits par
        la Société est entièrement discrétionnaire et que, par conséquent, les avantages et les droits
        acquis en vertu du Plan ne constituent ni du « salaire de base » ni une quelconque autre rémunération
        régulière au titre de l'emploi, et qu'aucun aspect du règlement ni du fonctionnement du Plan ne fait partie
        de mon contrat de travail ni de ma relation avec mon employeur, les droits résultant de ce contrat et de cette relation
        étant distincts du Plan et n'en étant nullement affectés. Je comprends et je reconnais qu'en aucun cas les
        avantages tirés du Plan ne seront inclus dans la rémunération liée à mon emploi aux fins de
        calculer les obligations de la Société et/ou du Groupe Sony (y compris mon employeur) en termes de primes, de retraite,
        d'indemnités de départ ou d'autres paiements de même nature.

         

        2.(Protection des Données)

        Je consens à la collecte, à
        l'utilisation et à la divulgation, par la Société et/ou les sociétés du Groupe Sony (y compris
        mon employeur), de toutes informations ou données personnelles nécessaires à l'administration du Plan.

         

        Sous réserve des exigences légales,
        les informations pourront être conservées après exercice ou annulation de mes Options. Je comprends que je
        peux contacter le Secrétariat du Plan de Stock Options, les Ressources Humaines de la Société, la Sony Corporation
        ou le Service des Ressources Humaines de la Sony Corporation of America (en utilisant les coordonnées qui m’auront
        été communiquées sous pli séparé), si j'ai des questions concernant la présente déclaration.

         

        Je comprends que les informations fournies
        à la Société, aux sociétés du Groupe Sony (y compris mon employeur) et/ou à leurs représentants
        tiers dûment autorisés choisis aux fins d'aider la Société ou les sociétés du Groupe Sony
        à administrer les Options et fournies dans le cadre du Plan, seront utilisées pour l'administration de mes Options
        en vertu du Plan.

         

         

        La Société et/ou les sociétés
        du Groupe Sony (y compris mon employeur) pourront communiquer des informations à d'autres entités (y compris des
        personnes agissant en qualité d'agents de la Société et/ou l'une quelconque des sociétés du
        Groupe Sony) dans le cadre de l'administration du Plan, sous réserve que ces entités préservent la sécurité
        des informations en question.

         

        Pour traiter les informations, la Société
        et/ou les sociétés du Groupe Sony (y compris mon employeur) pourront transmettre les informations à d'autres
        pays qui pourront assurer un niveau de protection obligatoire de ces informations potentiellement différent de celui qui
        prévaut dans mon pays de résidence.

         

        Je comprends que j'ai le droit d'accéder
        à certaines informations que détient le Plan me concernant et que, pour exercer ce droit, je peux contacter le Secrétariat
        du Plan de Stock Options, les Ressources Humaines de la Société, la Sony Corporation ou le Service des Ressources
        Humaines de la Sony Corporation of America (en utilisant les coordonnées qui m’auront été communiquées
        sous pli séparé).

         

        3.(Paiement des Taxes, Charges
        de Sécurité Sociale et Autres Montants)

        J'autorise la Société et
        les sociétés du Groupe Sony (y compris mon employeur) à retenir tout montant ou à prendre toutes mesures
        qu'elles jugeront nécessaires pour honorer toute dette relative aux impôts, aux charges de sécurité
        sociale et aux autres montants se rapportant à ma participation au Plan. Ces mesures pourront comprendre la vente ou la
        réduction du nombre d'actions de la Société (ci-après les « Actions ») à
        moins qu'en ma qualité de participant au Plan, je n'honore la dette moi-même.

         

        4.(Déclarations Fiscales)

        En signant le Contrat d'Attribution, je
        m'engage à :

        (1)effectuer toutes les déclarations
        fiscales personnelles obligatoires sur le territoire où je suis résident fiscal au titre de ce Plan ;

         

        (2)effectuer toutes déclarations
        ou notifications relatives au contrôle des changes concernant les droits que je détiens en vertu du Plan sur le territoire
        où je suis résident assujetti au contrôle des changes ; et à

         

        (3)me conformer à toutes mes
        obligations d'informer mon employeur de mes avoirs en termes de droits relatifs aux Actions (que ces obligations soient basées
        sur le règlement interne de la Société, du Groupe Sony, de mon employeur ou de la législation en vigueur).

         

        5.(Retraites)

        Je comprends et reconnais que cet octroi
        d'Options en ma faveur n'affectera en aucune manière mes droits à la retraite. Aucune contribution supplémentaire
        ne sera faite par la Société ni par aucun autre membre du Groupe Sony (y compris mon employeur) par suite de ma participation
        à ce Plan. Toute retraite que je percevrai ne sera en aucun cas augmentée par ma participation à ce Plan.

         

        6.(Traitement Fiscal)

        Je comprends et accepte que ni la Société
        ni aucun membre du Groupe Sony (y compris mon employeur) n'a prévu de traitement fiscal particulier s'appliquant à
        ces Options. Les Options ne font l'objet d'aucune fiscalité particulière dans aucune juridiction quelle qu'elle soit.]

         
	
        PRINCIPAL TERMS AND CONDITIONS OF THE
        TWENTY-SEVENTH SERIES OF

        STOCK ACQUISITION RIGHTS

        FOR SHARES OF COMMON STOCK OF
SONY CORPORATION

         

        These terms and conditions of the stock
        acquisition rights shall apply to the Twenty-Seventh Series of Stock Acquisition Rights for Shares of Common Stock (hereinafter
        referred to as the “Options”) of Sony Corporation (hereinafter referred to as the “Corporation”) issued
        on November 20, 2013 by the Corporation:

         

        1.Number of the Options allocated
        to the Qualified Person (as defined in this Article)

         

        (________ shares may be issued or transferred
        upon the exercise by the person who entered into the Allocation Agreement as defined below in Article 16 (hereinafter referred
        to as the “Qualified Person”) of all Options allocated to the Qualified Person.)

         

        2.Aggregate number of Options

         

        11,277 (the maximum number of the shares
        of the Corporation to be issued upon exercise of the Option is 1,127,700)

         

        3.Class and number of shares
        to be issued or transferred upon exercise of each Option

         

         

         

        100 shares of common stock of the Corporation
        (hereinafter referred to as the “Common Stock”)

         

        4.Amount
        to be paid per share to be issued or transferred upon exercise of the Options (hereinafter referred to as the “Exercise Price”)

         

        The
Exercise Price is initially US$ 20.01.

         

        Provided,
        however, that if the U.S. dollar amount obtained by dividing the closing price of shares of common stock of the Corporation in
        the regular trading thereof on the Tokyo Stock Exchange (hereinafter referred to as the “Closing Price”) on the Allotment
        Date (as defined in Article 6 of this Principal Terms and Conditions (hereinafter referred to as the “Conditions”))
        (if there is no Closing Price on such date, the Closing Price on the immediately preceding trading day) 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 ten
        (10) consecutive trading days (excluding days on which there is no Closing Price) immediately prior to the Allotment Date (hereinafter
        referred to as the “Reference Exchange Rate”) (any fraction less than one (1) cent arising as a result of such calculation
        shall be rounded up to the nearest one (1) cent) is higher than US$ 20.01,
        then the amount equal to the U.S. dollar amount obtained by dividing the Closing Price on the Allotment Date by the Reference Exchange
        Rate (any fraction less than one (1) cent arising as a result of such calculation shall be rounded up to the nearest one (1) cent)
        shall be the initial Exercise Price. In this case, the Corporation shall notify such initial Exercise Price to the Qualified Person
        by sending a notice (hereinafter referred to as the “Notice”) on or about November 20, 2013. The provisions with respect
        to the initial Exercise Price in the Notice shall automatically supersede the provisions hereto.

         

        5.Period
        during which the Options may be exercised

         

        From and including November 20, 2014, up
        to and including November 19, 2023 (hereinafter referred to as the “Term”). If the last day of such period falls on
        a holiday of the Corporation, the immediately preceding business day shall be the last day of such period. However, exercise of
        the Options is subject to the restrictions provided for in Article 8 of the Conditions.

         

        6.Payment
        in exchange for Options

         

        The Options are issued without payment
        of any consideration to the Corporation.

         

        7.Enrollment
        Date of Options

         

        November 19, 2013

         

        8.Allotment
        Date of Options

         

        November 20, 2013 (hereinafter referred
        to as the “Allotment Date”)

         

        9.Vesting

         

        Notwithstanding Article 4 of the Conditions,
        the Options shall be vested and become exercisable in three approximately equal annual installments beginning on the first anniversary
        of the date of the grant.

         

        10.Conditions
        for Exercise of Options

         

        (1)No Option may be exercised in part.

         

         

        (2)In the event of a resolution being
        passed at a general meeting of shareholders of the Corporation for an agreement for any consolidation, amalgamation or merger (other
        than a consolidation, amalgamation or merger in which the Corporation is the continuing corporation), or in the event of a resolution
        being passed at a general meeting of shareholders of the Corporation (or, where a resolution of a general meeting of shareholders
        is not necessary, at a meeting of the Board of Directors of the Corporation) for any agreement for share exchange (kabushiki-kokan)
        or any plan for share transfer (kabushiki-iten) pursuant to which the Corporation is to become a wholly-owned subsidiary of another
        corporation, the Options may not be exercised on and after the effective date of such consolidation, amalgamation or merger, such
        share exchange (kabushiki-kokan), or such share transfer (kabushiki-iten).

         

        (3)In case that the Qualified Person
        forfeits either status as a director, corporate executive officer or employee of the Corporation or of the Sony Group Companies
        by falling under any of the following items, the exercise of the Options shall be subject to the restrictions provided for in such
        following item; provided, however, that in no case may any Options be exercised after the Terms set forth in Article 4 of the Conditions.

         

         

        (i) If the Qualified Person is subject
        to punitive dismissal or resignation under instruction pursuant to the rules of employment of the Corporation or of the Sony Group
        Companies or removed from office:

        

        The Qualified Person may not exercise the Options on and after the day on which he/she forfeits the status as a director, corporate
        executive officer or employee of the Corporation or of the Sony Group Companies (hereinafter referred to as the “Status Forfeit
        Date”);

         

        (ii) If the Qualified Person ceases
        to be a director, corporate executive officer or employee of the Corporation or of the Sony Group Companies due to his/her death:

        

        Subject to the provision of Article 9, Paragraph (2) of the Conditions, the heir of the Qualified Person may exercise the Options
        which are exercisable pursuant to Article 7 as of the Status Forfeit Date (hereinafter referred to as the “Exercisable Options”)
        until and including the last day of the one (1) year period commencing on the date immediately following the Status Forfeit Date
        (if the last day of this one (1) year period falls on a holiday of the Corporation, the immediately preceding business day shall
        be the last day of such period), but may not exercise the Options which are not exercisable pursuant to Article 7 as of the Status
        Forfeit Date (hereinafter referred to as the “Unexercisable Options”) on and after the Status Forfeit Date; provided,
        however, that if the Corporation allows the heir of the Qualified Person to exercise the Unexercisable Options, all of the Unexercisable
        Options shall become exercisable on the Status Forfeit Date (or the Commencement Date of Exercisable Period, if the Status Forfeit
        Date falls on a day before the Commencement Date of Exercisable Period) and the heir of the Qualified Person may exercise the Unexercisable
        Options until and including the last day of the one (1) year period commencing on the date immediately following the Status Forfeit
        Date (if the last day of this one (1) year period falls on a holiday of the Corporation, the immediately preceding business day
        shall be the last day of such period) subject to the provision of Article 9, Paragraph (2) of the Conditions; and

         

         

         

        

        (iii) If the Qualified Person forfeits
        the status as a director, corporate executive officer or employee of the Corporation or of the Sony Group Companies due to any
        other events:

        

        

        The Qualified Person may exercise the
        Exercisable Options until and including the last day of the one (1) year period commencing on the date immediately following the
        Status Forfeit Date (if the last day of this one (1) year period falls on a holiday of the Corporation, the immediately preceding
        business day shall be the last day of such period), but may not exercise the Unexercisable Options on and after the Status Forfeit
        Date; provided, however, that if the Corporation allows the Qualified Person to exercise the Unexercisable Options, all of the
        Unexercisable Options shall become exercisable on the Status Forfeit Date (or the Commencement Date of Exercisable Period, if the
        Status Forfeit Date falls on a day before the Commencement Date of Exercisable Period) and the Qualified Person may exercise the
        Unexercisable Options until and including the last day of the one (1) year period commencing on the date immediately following
        the Status Forfeit Date (if the last day of this one (1) year period falls on a holiday of the Corporation, the immediately preceding
        business day shall be the last day of such period).

         

         

         

        (4)The Qualified Person may not exercise
        the Options in any of the following cases:

         

        (i) If the Qualified Person works for
        a competitor of the Corporation or of the Sony Group Companies as such competitor’s officer, employee or consultant, and
        any of the designated Representative Corporate Executive Officer(s) of the Corporation determines not to permit the exercise by
        such Qualified Person of the Options allocated to such Qualified Person.

         

        (ii) If the Qualified Person is regarded
        by the Corporation to have performed any act of disloyalty against the Corporation or the Sony Group Companies.

         

        (iii) If the Qualified Person violates
        any provision of the Agreement.

         

        (5)The Qualified Person is not authorized
        to transfer, pledge or otherwise dispose of all or part of the Options.

         

         

        (6)Exercise of the Options are further
        subject to any restriction on trading set forth under Sony Corporation of America’s Policy Regarding Securities Trading or
        any other similar policy maintained by Sony group companies (hereinafter referred to as the “Sony Group Companies”)
        and applicable to the Qualified Person, as in effect from time to time.

         

        11.Prohibition of Disposition

         

        (1)Except as provided in Paragraph
        (2) below, the Options, whether vested or unvested, are nontransferable by the Qualified Person.

         

         

        (2)Upon the death of the Qualified
        Person, outstanding Options that are vested and exercisable and granted to such Qualified Person may be exercised only by the executors
        or administrators of the Qualified Person’s estate or by any person or persons who shall have acquired such right to exercise
        by will or by the laws of descent and distribution, provided that no transfer by will or the laws of descent and distribution of
        any Option, or the right to exercise any Option, shall be effective to bind the Corporation unless the Corporation shall have been
        furnished with (a) a written notice thereof and a copy of the will and/or such evidence as the Corporation may deem necessary to
        establish the validity of the transfer and (b) an agreement by the transferee to comply with all the terms and conditions of the
        Options that are or would have been applicable to the Qualified Person (other than any terms and conditions relating to employment
        with the Corporation or one of its subsidiaries) and to be bound by the acknowledgements made by the Qualified Person in connection
        with the grant of the Options. Options that are not vested and exercisable at the death of the Qualified Person will terminate.

         

        12.Repurchase/Purchase
        of Options

         

        Mandatory repurchase of the Options
        is not applicable. In addition, in no circumstances shall any Qualified Person request the Corporation to purchase the Options
        held by him/her.

         

         

        13.Restrictions
        on Acquisition of Options through Transfer

         

         

        The Options cannot be acquired through
        transfer (other than any transfer of Options that are vested and exercisable upon the death of a holder of the Options to such
        holder’s estate or beneficiaries), unless such acquisition is expressly approved by the Board of Directors of the Corporation.

         

         

        14.Place
        where Applications for Exercise of Options are Made

         

        Sony Corporation of America, Human Resources,
        or its duly authorized designee

         

         

        15.Payment
        Handling Place on Exercise of Options

         

        Sumitomo Mitsui Banking Corporation,
        Head Office (or any successor bank of such bank from time to time and/or any successor office of such office)

         

        16.Issuance of ADRs

         

         

        The Corporation currently maintains
        an American Depositary Receipt program in the United States pursuant to which American Depositary Receipts or “ADRs”
        represent shares of common stock of the Corporation. During the time the Corporation maintains an American Depositary Receipt program
        in the United States, the Qualified Persons who exercise the Options will generally receive ADRs in lieu of shares of common stock
        of the Corporation as follows. Upon exercise of an Option, shares of common stock of the Corporation acquired upon the exercise
        of such Option shall be issued in the name of the depositary or its nominee under the Sony American Depositary Receipt Program
        for the benefit of the Qualified Person. Upon receipt of shares of common stock of the Corporation upon the exercise of an Option,
        the depositary under the Sony American Depositary Receipt Program shall immediately and automatically issue ADRs representing such
        shares of common stock of the Corporation in the name of the applicable Qualified Person and shall deliver such ADRs to such Qualified
        Person (or to an account held for the benefit of such Qualified Person) as soon as practicable following the effective date on
        which such issuance occurs. For simplicity, all references in the Allocation Agreement (as defined below in Article 16 of the Conditions)
        and the Conditions to shares of common stock of the Corporation will be deemed to also refer to ADRs.

         

        17.Treatment in Event of Corporate
        Transaction

         

        (1)In the event of any corporate
        transaction excluding (a) a consolidation, amalgamation or merger in which the Corporation is not the continuing corporation, or
        (b) share exchange (kabushiki-kokan) or share transfer (kabushiki-iten) pursuant to which the Corporation is to become a wholly-owned
        subsidiary of another corporation involving the Corporation, including a dissolution or liquidation of the Corporation, a sale
        of all or substantially all of the Corporation’s assets, a corporate split, or any other similar transaction, the Corporation
        may (x) cause the entity resulting from such transaction to execute an agreement providing that a holder of the Options shall have
        the right during the Term and upon the exercise of the Options to receive the class and amount of shares and other securities and
        property receivable upon such transaction by a holder of the number of shares in respect of which the Options could have been exercised
        immediately prior to such transaction or (y) prevent from being exercised, effective immediately upon the occurrence of such transaction,
        each Option outstanding immediately prior to such transaction (whether or not then exercisable).

         

         

         

        (2)In the event that the Corporation
        enters into a definitive agreement or makes a decision by board resolution or by shareholder approval at the shareholders’
        meeting to effectuate one or more of the transactions or events described in the immediately preceding paragraph, the Corporation
        may provide not less than twenty days advance notice to the Qualified Person from the consummation of such transaction or event
        and give the Qualified Person the opportunity to exercise their Options (whether or not such Options are then vested or exercisable),
        immediately prior to, and subject to, the consummation of such transaction or event.

         

         

        18.Condition Subsequent of the
        Allocation Agreement with the Qualified Person

         

        The agreement concerning the allocation
        of the Stock Acquisition Rights of Sony Corporation for the Fiscal Year 2013 between the Qualified Person and the Corporation dated
        November 19, 2013 (hereinafter referred to as the “Allocation Agreement”), shall terminate, automatically, without
        any procedures being taken, in the event that the Qualified Person is not the position of director, corporate executive officer,
        or employee of the Corporation or of the Sony Group Companies on the Allotment Date.

         

        19.Matters
concerning the Amount of Capital and the Additional Paid-in Capital Increased by the Issuance of Shares upon Exercise of Options 

         

        (1)The amount of capital increased
        by the issuance of shares upon exercise of the Options shall be the amount obtained by multiplying the maximum limit of capital
        increase, as calculated in accordance with the provisions of Paragraph 1, Article 17 of the Company Accounting Ordinance of Japan,
        by 0.5, 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.

         

         

        (2)The amount of additional paid-in
        capital increased by the issuance of shares upon exercise of the Options shall be the amount obtained by deducting the capital
        to be increased, as provided in (1) above, from the maximum limit of capital increase, as also provided in (1) above.

         

        20.Representations, Warranties,
        Covenants and Confirmations

         

        The Qualified Person shall represent,
        warrant, covenant and confirm the matters set forth in the Exhibit hereto.

         

         

        21.Construction

         

        Nothing herein or the Allocation
Agreement shall be construed to give the Qualified Person any right or entitlement to receive options to purchase common stock
of the Corporation in the future from the Corporation or any of its subsidiaries. Nothing contained herein or the Allocation Agreement
shall confer upon the Qualified Person any right to continue in the employment of the Corporation or any of its subsidiaries or
constitute any contract or agreement of employment or interfere in any way with the right of the Corporation or its subsidiaries
to reduce or modify a Qualified Person’s compensation in existence at the time of the granting of any Option or otherwise,
or to terminate a Qualified Person’s employment or change the Qualified Person’s position or the terms of employment
with or without cause. Nothing contained herein or the Allocation Agreement shall prevent the Corporation from, and the Corporation
expressly reserves the right to, modify the terms and conditions of options to purchase common stock of the Corporation, if any,
that are or may be granted in the future.

         

         

         

         

        Exhibit

         

        REPRESENTATIONS AND WARRANTIES FOR NON-US
        PARTICIPANTS

         

        The Qualified Person confirms the following
        matters pursuant to Article 17 of the Conditions.

         

        1.(Employment Contract)

        I understand that nothing in the Sony Corporation
        Stock Acquisition Rights Plan (the “Plan”) terms form part of my employment contract, unless my employment contract
        expressly states otherwise. Participation in the Plan does not create any right to continued employment.

         

        I understand that neither the participation
        in the Plan nor the grant of an Option creates any rights to participate in the Plan or to be granted any stock acquisition right,
        Option or award in the future. The Plan may cease to be operated in the future although any existing Options granted under the
        Plan will continue in accordance with the Allocation Agreement, Exhibits to the Allocation Agreement, and the Terms and Conditions.

         

        I understand that I have no claim
or right of action in respect of any decision, omission or discretion which may operate to my disadvantage even if it is unreasonable,
irrational or might otherwise be regarded as being in breach of any duty, except as set out in the relevant Plan documentation. 

         

         

        I understand I have no right to compensation
        for any loss in relation to the Plan, including any loss in relation to:

        ·        
        a reduction of rights or expectations under the Plan in any circumstances (including lawful
        or unlawful termination of employment);

         

        ·        
        any exercise of a discretion or a decision taken in relation to an award or to the Plan, or
        any failure to exercise a discretion or take a decision; and

         

        ·        
the operation, suspension, termination or amendment of the Plan. 

         

        I understand that as the grant by the Corporation
        is entirely discretionary, the benefits and rights acquired under the Plan do not constitute “base salary” or other
        regular employment earnings and that nothing in the rules or operation of the Plan forms part of my contract of employment or employment
        relationship, which rights are separate from and not affected by, the Plan. I understand and agree that under no circumstances
        will the benefits derived from the Plan be included as part of my employment earnings for purposes of calculating any of the Corporation’s
        and/or the Sony group companies’ (including my employer) obligations to me for bonus, retirement, severance, or any other
        such payments.

         

         

         

        2.(Data Protection)

        I consent to the collection, use and disclosure
        by the Corporation and/or companies in the Sony group (including my employer) of any personal information or data necessary for
        the administration of the Plan.

         

        Subject to legislative requirements, the
        information may be retained after my Options are exercised or cancelled. I understand that I can contact the Secretariat of the
        Stock Option Plan, Corporate Human Resources, Sony Corporation or the Human Resources Department of Sony Corporation of America
        (in accordance with the contact information provided to me under separate cover), if I have any queries in respect of this statement.

         

         

         

        I understand that the information provided
        to the Corporation, the companies in the Sony group (including my employer), and/or to their duly authorized third party designee(s)
        retained for the purpose of assisting the Corporation or the Sony group companies with administration of the Options and provided
        in relation to the Plan will be used in relation to the administration of my Options under the Plan.

         

        The Corporation and/or any of the companies
        in the Sony group (including my employer) may give information to others (including people acting as agents of the Corporation
        and/or any of the companies in the Sony group) in connection with the administration of the Plan on the understanding that they
        will keep the information secure.

         

         

        In order to process the information the
        Corporation and/or companies in the Sony group (including my employer) may transfer the information to other countries that may
        have a different level of statutory protection for my information than in my home country.

         

         

        I understand that I have a right to access
        certain information that the Plan holds about me and in order to exercise this right, I can contact the Secretariat of the Stock
        Option Plan, Corporate Human Resources, Sony Corporation or the Human Resources Department of Sony Corporation of America (in accordance
        with the contact information provided to me under separate cover).

         

        3.(Payment of Tax, Social Security
        or Other Amounts)

        I authorize the Corporation and companies
        in the Sony group (including my employer) to withhold any amounts or make such arrangements as they consider necessary to meet
        any liability due to taxation, social security or other amounts in respect of my participation in the Plan. These arrangements
        may include the sale or reduction in number of any shares of the Corporation (hereinafter referred to as the “Shares”)
        unless I, as the participant in the Plan, discharge the liability myself.

         

        4.(Tax Filings)

        By signing the Allocation Agreement, I
        agree to:

        (1)make all neccessary personal tax
        filings in the territory where I am tax resident in relation to this Plan;

         

         

        (2)make any required foreign exchange
        filings or notifications in relation to my holding of rights under the Plan in the territory where I am foreign exchange resident;
        and

         

        (3)comply with any requirements to
        notify my employer of my interests in rights relating to the Shares (whether these requirements are based on the internal rules
        of the Corporation, the Sony group, my employer or applicable law).

         

        5.(Pensions)

        I understand and agree that this grant
        of Options to me will not affect my pension rights in any way. No additional contributions will be made by the Corporation or by
        any other member of the Sony group (including my employer) as a result of my participation in this Plan. Any pension I may receive
        will not be increased by my participation in this Plan.

         

         

        6.(Tax Treatment)

        I understand and agree that neither
        the Corporation nor any member of the Sony group (including my employer) has arranged for any special tax treatment to apply to
        these Options. The Options are not tax qualified in any jurisdiction.ex10-114.htm

Exhibit 10.11.4

ROCKVILLE FINANCIAL, INC.

ROCKVILLE BANK

Employment Agreement for William H.W. Crawford, IV

THIS EMPLOYMENT AGREEMENT (the “Agreement”) is made this 14th day of November, 2013, effective on the Effective Date defined below, by and among ROCKVILLE FINANCIAL, INC., a Connecticut corporation (the “Company”), ROCKVILLE BANK, a Connecticut savings bank and a wholly-owned subsidiary of the Company (the “Bank”), and William H.W. Crawford, IV (“Executive”).

WITNESSETH

WHEREAS, the Bank and the Company have previously entered into an employment agreement with Executive; and

WHEREAS, the Bank and the Company have entered into an agreement on this date to merge with UNION BANK and UNION (the “Merger”), respectively; and

WHEREAS, the parties wish to secure the Executive’s services as Chief Executive Officer of the Bank and Company as survivor institutions from the Merger; and

WHEREAS, the parties have determined that certain modifications to the prior agreement are necessary and appropriate; and

WHEREAS, Executive is willing to provide services to the Company and the Bank on the terms and conditions hereinafter set forth, contingent upon closing of the Merger.

NOW, THEREFORE, in consideration of the foregoing, the mutual covenants contained herein, and other good and valuable consideration the receipt and adequacy of which the Company, the Bank and Executive each hereby acknowledge, the Company, the Bank and Executive hereby agree as follows:

1. Employment.

Each of the Bank and Company hereby agree to employ Executive as its Chief Executive Officer (with the principal executive duties set forth below in Section 3), and Executive hereby agrees to accept such employment and serve in such capacities, during the Term as defined in Section 2 (subject to Section 7(c) and 7(e)) and upon the terms and conditions set forth in this Agreement. The parties agree that no Change of Control payments from the prior agreement will be due in connection with the Merger if this Agreement goes into effect.

  

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2. Term.

The term of employment of Executive under this Agreement (the “Term”) shall be the period commencing on the date of the consummation of the Merger (the “Effective Date”) and ending on the third anniversary of the said Effective Date, and any period of extension thereof in accordance with this Section 2, except that the Term will end at a date, prior to the end of such period or extension thereof, specified in Section 6 or 7 in the event of termination of Executive’s employment. If the Term is not extended beyond the Third Anniversary, then Executive shall be paid a severance payment as described in Section 7(d) “Termination by Executive for Good Reason Prior to or More than Two Years after a Change of Control” at a two and one-half times (2.5) multiplier.

 

The Term, if not previously ended, shall be extended by one additional year (added to the end of the Term) first on the third anniversary of the Effective Date (extending the term to the fourth anniversary of the Effective Date) and again on each subsequent anniversary of the Effective Date, but only in the event the Bank serves written notice in accordance with Section 12(d) upon Executive at least six (6) months preceding such anniversary, in any case subject to earlier termination of Executive’s employment and earlier termination of the Term in accordance with Section 6 or 7.   If the Term is not extended beyond the Fourth Anniversary (or any succeeding Anniversary to which the Term has been extended), then Executive shall be paid a severance payment as described in Section 7(d) “Termination by Executive for Good Reason Prior to or More than Two Years after a Change of Control” at a two and one-quarter times (2.25) multiplier.

 

The foregoing notwithstanding, in the event there occurs a Potential Change in Control during the Term, the Term shall be extended automatically until the day after the earlier of: (a) the second anniversary of the date the Change in Control is consummated; or (b) the date the Change in Control contemplated by the Potential Change in Control is fully and finally abandoned.

3. Offices and Duties.

The provisions of this Section 3 will apply during the Term, except as otherwise provided in Section 7(c) or 7(e):

(a) Generally. Executive shall, as set forth in Section 1, serve as the Chief Executive Officer of the Bank and Company. Executive shall, in collaboration with the Boards of Directors of the Bank and Company (the “Boards”), define and articulate the strategic direction of the Bank and Company; shall develop and execute operating plans to support this strategic direction; and shall execute and monitor strategies for ensuring and enhancing the long-term financial viability of the Bank and Company.  He shall have and perform such duties, responsibilities, and authorities as are prescribed by or under the Bylaws of the Bank and Company and as are customarily associated with such position or, irrespective of the office, title or other designation, if any, a position with responsibilities and powers substantially identical to such position with the Bank and Company. In addition, Executive shall have and perform such additional duties, responsibilities, and authorities consistent with the office of Chief Executive Officer as may be from time to time assigned by the Boards based on their assessment of the 

  

2

  

business needs of the Bank and Company, and the Bank and Company reserve their right to change or modify these assignments and any positions and titles associated therewith.

(b) Directorship.  In addition, Executive shall continue as a Director of each of the Boards following the Effective Date, and shall be nominated for re-election to the Board during the Term, subject to the Board’s fiduciary duties. Executive agrees to resign as a member of the Boards, in the event his employment under this Agreement terminates for any reason, effective as of the date of such termination.

(c) Commitment. Executive shall devote his full business time and attention, and his best efforts, abilities, experience, and talent, to the position of Chief Executive Officer and other assignments hereunder, and for the business of the Bank, without commitment to other business endeavors, except that Executive (i) may make personal investments which are not in conflict with his duties to the Bank and manage personal and family financial and legal affairs, (ii) may undertake public speaking engagements, and (iii) may, with prior written consent of the Chairman of the Boards, serve as a director of (or similar position with) any other business or an educational, charitable, community, civic, religious, or similar type of organization, so long as such activities (i.e., those listed in clauses (i) through (iii)) do not preclude or render unlawful Executive’s employment or service to the Bank or otherwise materially inhibit the performance of Executive’s duties under this Agreement or materially impair the business of the Bank or its affiliates.

(d) Place of Employment. Executive’s principal place of employment shall be at the administrative offices of the Bank or other location as agreed by the Executive and the Boards.

4. Salary and Annual Incentive Compensation.

As partial compensation for the services to be rendered hereunder by Executive, the Bank agrees to pay to Executive during the Term the compensation set forth in this Section 4.

(a) Base Salary. The Bank will pay to Executive during the Term a base salary, the annual rate of which shall initially be $476,000 ($500,000 if the Effective Date is after December 31, 2013), payable in accordance with the Bank’s usual payroll practices with respect to senior executives (except to the extent deferred under Section 5(d)). Executive’s annual base salary shall be reviewed by the Compensation Committee or its successor (the “Committee”) of the Boards at least once in each calendar year, and may be increased above, but may not be reduced below, the then-current rate of such base salary. For purposes of this Agreement, “Base Salary” means Executive’s then-current base salary.

(b) Annual Incentive Compensation. The Bank will pay to Executive during the Term annual incentive compensation which shall offer to Executive an opportunity to earn additional compensation based upon performance in amounts determined by the Committee in accordance with the applicable plan and consistent with past practices of the Bank, with the nature of the performance and the levels of performance triggering 

  

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payments of such annual target incentive compensation for each year to be established and communicated to Executive during the first quarter of such year by the Committee. In addition, the Committee (or the Boards) may determine, in its discretion, to increase Executive’s annual target incentive opportunity or provide an additional annual incentive opportunity, in excess of the annual target incentive opportunity, payable for performance in excess of or in addition to the performance required for payment of the annual target incentive amount. Any annual incentive compensation payable to Executive shall be paid in accordance with the applicable plan (except to the extent deferred under Section 5(d)).

	
 5.  

	
Long-Term Compensation, Including Stock Plan Awards, Benefits, Deferred Compensation, and Expense Reimbursement.

(a) Executive Compensation Plans. Executive shall be entitled during the Term to participate, without discrimination or duplication, in executive compensation plans and programs intended for general participation by senior executives of the Bank, as presently in effect or as they may be modified or added to by the Bank from time to time, subject to the eligibility and other requirements of such plans and programs, including without limitation any stock option plans, plans under which restricted stock/restricted stock units, performance-based restricted stock/restricted stock units or performance-accelerated restricted stock/restricted stock units (collectively, “stock plans”) may be awarded, other annual and long-term cash and/or equity incentive plans, and deferred compensation plans. The Bank makes no commitment under this Section 5(a) to provide participation opportunities to Executive in all plans and programs or at levels equal to (or otherwise comparable to) the participation opportunity of any other executive.

(b) Employee and Executive Benefit Plans. Executive shall be entitled during the Term to participate, without discrimination or duplication, in employee and executive benefit plans and programs of the Bank, as presently in effect or as they may be modified or added to by the Bank from time to time, subject to the eligibility and other requirements of such plans and programs, including without limitation plans providing pensions, supplemental pensions, supplemental and other retirement benefits, medical insurance, life insurance, disability insurance, and accidental death or dismemberment insurance, as well as savings, profit-sharing, and stock ownership plans. The Bank makes no commitment under this Section 5(b) to provide participation opportunities to Executive in all benefit plans and programs or at levels equal to (or otherwise comparable to) the participation opportunity of any other executive.

In furtherance of and not in limitation of the foregoing, during the Term:

 

            (i)           Executive will participate as Chief Executive Officer in all executive and employee vacation and time-off programs;

 

            (ii)           The Bank will provide Executive with coverage as Chief Executive Officer with respect to long-term disability insurance;

  

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            (iii)           Executive will be covered by Bank-paid group term life insurance; and

 

            (iv)           Executive shall be entitled to participate in a supplemental executive retirement plan in accordance with such terms as the Committee shall determine based on emerging and best practices. In addition, subject to meeting eligibility requirements, Executive shall be entitled to participate in the Supplemental Savings and Retirement Plan.

(c) Acceleration of Awards Upon Termination Within Two Years After a Change in Control. In the event of termination of the employment of Executive simultaneously with or within two years after a Change in Control (as defined in Section 8(b)), other than for Cause, all outstanding stock options, restricted stock, and other equity-based awards then held by Executive shall become vested and exercisable. The time and form of payment of such equity-based awards shall be governed by the plans and programs and the agreements and other documents pursuant to which such equity-based awards were granted.

 

(d) Deferral of Compensation. If the Bank has in effect or adopts any deferral program or arrangement permitting executives to elect to defer any compensation, Executive will be eligible to participate in such program. Any plan or program of the Bank which provides benefits based on the level of salary, annual incentive, or other compensation of Executive shall, in determining Executive’s benefits, take into account the amount of salary, annual incentive, or other compensation prior to any reduction for voluntary contributions made by Executive under any deferral or similar contributory plan or program of the Bank (excluding compensation that would not be taken into account even if not deferred), but shall not treat any payout or settlement under such a deferral or similar contributory plan or program to be additional salary, annual incentive, or other compensation for purposes of determining such benefits, unless otherwise expressly provided under such plan or program.

(e) Company Registration Obligations. The Company will use its best efforts to file with the Securities and Exchange Commission and thereafter maintain the effectiveness of one or more registration statements registering under the Securities Act of 1933, as amended (the “1933 Act”), the offer and sale of shares by the Company to Executive pursuant to stock options or other equity-based awards granted to Executive under Company plans or otherwise or, if shares are acquired by Executive in a transaction not involving an offer or sale to Executive but resulting in the acquired shares being “restricted securities” for purposes of the 1933 Act, registering the reoffer and resale of such shares by Executive.

(f) Reimbursement of Expenses. The Bank will promptly reimburse Executive for all reasonable business expenses and disbursements incurred by Executive in the performance of Executive’s duties during the Term in accordance with the Bank’s reimbursement policies as in effect from time to time and the provisions of Section 7(g) of this Agreement.

  

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(g) Club Dues. The Bank shall reimburse Executive or pay for the cost of an individual membership at a country club determined by the Bank in its discretion for use by Executive, including all membership bonds or surety, initiation or membership fees, annual dues, capital assessments and all business-related expenses incurred at such club. Executive shall not be entitled to a tax gross-up for reimbursements or payments under this Section 5(g).

(h) Car Allowance. The Bank shall provide Executive with a car allowance of up to a maximum amount of $750 per month during the Term. The car allowance shall be used to pay for the costs associated with the Executive’s primary automobile; including but not limited to, lease payments, insurance, registration, and maintenance costs. Executives shall not be entitled to a tax gross-up for the allowance under this Section 5(h).

 

(i) Limitations Under Code Section 409A. Anything in this Section 5 to the contrary notwithstanding, with respect to any payment otherwise required hereunder, in the event of any delay in the payment date as a result of Section 7(g) of this Agreement (relating to the six-month delay in payment of certain benefits to Specified Employees as required by Section 409A of the Code), the Bank will adjust the payment in accordance with Section 7(g)(viii) of this Agreement.

6. Termination Due to Retirement, Death, or Disability.

(a) Retirement. Executive may elect to terminate employment hereunder by retirement at or after age 65 (“Retirement”). At the time Executive’s employment terminates due to Retirement, the Term will terminate, all obligations of the Bank and Executive under Sections 1 through 5 of this Agreement will immediately cease except for obligations which expressly continue after termination of employment due to Retirement, and the Bank will pay Executive at the time specified in Section 6(d), and Executive will be entitled to receive, the following:

 

 (i)           Executive’s Compensation Accrued at Termination (as defined in Section 8(c));

 

 (ii)           In lieu of any annual incentive compensation under Section 4(b) for the year in which Executive’s employment terminated, a lump sum amount equal to the portion of annual incentive compensation that would have become payable in cash to Executive (i.e., excluding the portion payable in stock or in other non-cash awards) for that year if his employment had not terminated, based on performance actually achieved in that year (determined by the Committee following completion of the performance year and paid at the time specified in the applicable plan), multiplied by a fraction the numerator of which is the number of days Executive was employed in the year of termination and the denominator of which is the total number of days in the year of termination;

  

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 (iii)           The vesting and exercisability of stock options held by Executive at termination and all other terms of such options shall be governed by the plans and programs and the agreements and other documents pursuant to which such options were granted (subject to Section 10(f) hereof);

 

 (iv)           All restricted stock and deferred stock awards, including outstanding stock plan awards, all other long-term incentive awards, and all deferral arrangements under Section 5(d), shall be governed by the plans and programs under which the awards were granted or governing the deferral, and all rights under the SERP and any other benefit plan shall be governed by such plans; and

 

 (v)           Upon Retirement, if Executive is not eligible for retiree coverage under the Bank’s health plan (the “Health Plan”) or Medicare and provided that Executive shall be in compliance with the conditions set forth in Section 10, the Bank shall pay to Executive a lump sum amount equal on an after-tax basis to the present value of the total cost of medical coverage under the Health Plan that would have been incurred by both Executive and the Bank on behalf of Executive (and his spouse and eligible dependents, if any, for whom coverage had been provided under the Health Plan immediately prior to Executive’s Retirement) from the date of Executive’s Retirement until Executive’s attainment of Social Security retirement age had Executive remained employed by the Bank during such period, calculated on the assumption that the cost of such coverage would remain unchanged from that in effect for the year of Executive’s Retirement. Such lump sum amount shall be calculated by an actuary selected by the Bank and paid in cash at the time specified in Section 6(d). Such amount shall not be subject to reduction or forfeiture by reason of any coverage for which Executive may thereafter become eligible by reason of subsequent employment or otherwise. For purposes of this Section, present value shall be calculated on the basis of the discount rate set forth in the Bank’s qualified retirement plan for the determination of lump sum payments, or, if the Bank’s qualified retirement plan is terminated, the discount rate that would apply for the determination of lump sum payments had the qualified retirement plan not been terminated.

(b) Death. In the event of Executive’s death which results in the termination of Executive’s employment, the Term will terminate, all obligations of the Bank and Executive under Sections 1 through 5 of this Agreement will immediately cease except for obligations which expressly continue after death, and the Bank will pay Executive’s beneficiary or estate at the time specified in Section 6(d), and Executive’s beneficiary or estate will be entitled to receive, the following:

 

 (i)           Executive’s Compensation Accrued at Termination;

 

(ii)           In lieu of any annual incentive compensation under Section 4(b) for the year in which Executive’s death occurred, a lump sum amount equal to the portion of annual incentive compensation that would have become payable in 

  

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cash to Executive (i.e., excluding the portion payable in stock or in other non-cash awards) for that year if his employment had not terminated, based on performance actually achieved in that year (determined by the Committee following completion of the performance year and paid at the time specified in the applicable plan), multiplied by a fraction the numerator of which is the number of days Executive was employed in the year of his death and the denominator of which is the total number of days in the year of death;

 

 (iii)           The vesting and exercisability of stock options held by Executive at death and all other terms of such options shall be governed by the plans and programs and the agreements and other documents pursuant to which such options were granted;

 

 (iv)           All restricted stock and deferred stock awards, including outstanding stock plan awards, all other long-term incentive awards, and all deferral arrangements under Section 5(d), shall be governed by the plans and programs under which the awards were granted or governing the deferral, and all rights under the SERP and any other benefit plan shall be governed by such plans;

 

 (v)           If Executive’s surviving spouse (and eligible dependents, if any) elects continued coverage under the Bank’s Health Plan in accordance with the applicable provisions of COBRA, the Bank shall pay to Executive’s surviving spouse (and eligible dependents, if any) on a monthly basis during such COBRA continuation period and in accordance with Section 7(g) of this Agreement an amount equal on an after-tax basis to the total cost of such coverage. No further benefits shall be paid under this Section after the expiration of the maximum COBRA continuation period available to Executive’s surviving spouse (and eligible dependents, if any).

(c) Disability. The Bank may terminate the employment of Executive hereunder due to the Disability (as defined in Section 8(d)) of Executive. Upon termination of employment, the Term will terminate, all obligations of the Bank and Executive under Sections 1 through 5 of this Agreement will immediately cease except for obligations which expressly continue after termination of employment due to Disability, and the Bank will pay Executive at the time specified in Section 6(d), and Executive will be entitled to receive, the following:

 

 (i)           Executive’s Compensation Accrued at Termination;

 

 (ii)           In lieu of any annual incentive compensation under Section 4(b) for the year in which Executive’s employment terminated, a lump sum amount equal to the portion of annual incentive compensation that would have become payable in cash to Executive (i.e., excluding the portion payable in stock or in other non-cash awards) for that year if his employment had not terminated, based on performance actually achieved in that year (determined by the Committee following completion of the performance year and paid at the time specified in the applicable plan), multiplied by a fraction the numerator of which is the number of days Executive was employed in the year of termination and the denominator of which is the total number of days in the year of termination;

  

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 (iii)           Stock options held by Executive at termination shall be governed by the plans and programs and the agreements and other documents pursuant to which such options were granted;

 

 (iv)           Any performance objectives upon which the earning of performance-based restricted stock and deferred stock awards, including outstanding stock plan awards, and other long-term incentive awards is conditioned shall be deemed to have been met at target level at the date of termination, and restricted stock and deferred stock awards, including outstanding stock plan awards, and other long-term incentive awards (to the extent then or previously earned, in the case of performance-based awards) shall become fully vested and non-forfeitable at the date of such termination, and, in other respects, such awards shall be governed by the plans and programs and the agreements and other documents pursuant to which such awards were granted;

 (v)           Disability benefits shall be payable in accordance with the Bank’s plans, programs and policies, including the SERP, and all deferral arrangements under Section 5(d) will be settled in accordance with the plans and programs governing the deferral;

 

 (vi)           Upon termination of Executive’s employment due to Disability, if Executive is not eligible for retiree coverage under the Bank’s Health Plan or Medicare and provided that Executive shall be in compliance with the conditions set forth in Section 10, the Bank shall pay to Executive a lump sum amount equal on an after-tax basis to the present value of the total cost of medical coverage under the Health Plan that would have been incurred by both Executive and the Bank on behalf of Executive (and his spouse and eligible dependents, if any, for whom coverage had been provided under the Health Plan immediately prior to Executive’s termination of employment) from the date of Executive’s termination of employment until Executive’s attainment of Social Security retirement age had Executive remained employed by the Bank during such period, calculated on the assumption that the cost of such coverage would remain unchanged from that in effect for the year of Executive’s termination of employment. Such lump sum amount shall be calculated by an actuary selected by the Bank and paid in cash at the time specified in Section 6(d). Such amount shall not be subject to reduction or forfeiture by reason of any coverage for which Executive may thereafter become eligible by reason of subsequent employment or otherwise. In addition, provided that Executive shall be in compliance with the conditions set forth in Section 10, the Bank shall pay to Executive at the time specified in Section 6(d) a lump sum amount equal on an after-tax basis to the present value of the sum of (A) the amount that Executive and the Bank would have paid, had he remained employed, for coverage under the Bank’s group long-term disability policy from 

  

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the date of Executive’s termination of employment until Executive’s attainment of Social Security retirement age, calculated on the assumption that the cost of such coverage would remain unchanged from that in effect for the year in which Executive’s termination occurred; and (B) the amount that Executive and the Bank would have paid to continue Executive’s group life insurance coverage, had he remained employed, from the date of Executive’s termination of employment until Executive’s attainment of Social Security retirement age, calculated on the assumption that the cost of such coverage would remain unchanged from that in effect for the year in which Executive’s termination occurred. For purposes of this Section, present value shall be calculated on the basis of the discount rate set forth in the Bank’s qualified retirement plan for the determination of lump sum payments, or, if the Bank’s qualified retirement plan is terminated, the discount rate that would apply for the determination of lump sum payments had the qualified retirement plan not been terminated.

(d) Other Terms of Payment Following Retirement, Death, or Disability. Nothing in this Section 6 shall limit the benefits payable or provided in the event Executive’s employment terminates due to Retirement, death, or Disability under the terms of plans or programs of the Bank more favorable to Executive (or his beneficiaries) than the benefits payable or provided under this Section 6 (except in the case of annual incentives in lieu of which amounts are paid hereunder), including plans and programs adopted after the date of this Agreement. Amounts payable under this Section 6 following Executive’s termination of employment, other than those expressly payable following determination of performance for the year of termination for purposes of annual incentive compensation or otherwise expressly payable on a deferred basis, will be paid in the payroll period next following the payroll period in which termination of employment occurs; subject, however, to the provisions of Section 7(g) of this Agreement relating to the six-month delay in payment of certain benefits to Specified Employees as required by Section 409A of the Code.

7. Termination of Employment For Reasons Other Than Retirement, Death or Disability.

(a) Termination by the Bank for Cause. The Bank may, subject to Section 7(h) below, terminate the employment of Executive hereunder for Cause (as defined in Section 8(a)) at any time. At the time Executive’s employment is terminated for Cause, the Term will terminate, all obligations of the Bank and Executive under Sections 1 through 5 of this Agreement will immediately cease except for obligations which expressly continue after termination of employment by the Bank for Cause, and the Bank will pay Executive at the time specified in Section 7(g), and Executive will be entitled to receive, the following:

 (i)           Executive’s Compensation Accrued at Termination (as defined in Section 8(c));

 

 (ii)           All stock options, restricted stock and deferred stock awards, including outstanding stock plan awards, and all other long-term incentive awards will be governed by the terms of the plans and programs under which the awards were granted; and

  

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 (iii)           All deferral arrangements under Section 5(d) will be settled in accordance with the plans and programs governing the deferral, and all rights, if any, under the SERP and any other benefit plan shall be governed by such plans.

(b) Termination by Executive Other Than For Good Reason. Executive may terminate his employment hereunder voluntarily for reasons other than Good Reason (as defined in Section 8(e)) at any time upon 90 days’ written notice to the Bank. An election by Executive not to extend the Term pursuant to Section 2 hereof shall be deemed to be a termination of employment by Executive for reasons other than Good Reason at the date of expiration of the Term, unless a Change in Control (as defined in Section 8(b)) occurs prior to, and there exists Good Reason at, such date of expiration; provided, however, that, if Executive has attained age 60 at such date of termination, such termination shall be deemed a Retirement of Executive, which shall instead be governed by Section 6(a) above. At the time Executive’s employment is terminated by Executive other than for Good Reason the Term will terminate, all obligations of the Bank and Executive under Sections 1 through 5 of this Agreement will immediately cease, and the Bank will pay Executive at the time specified in Section 7(g), and Executive will be entitled to receive, the following:

 

 (i)           Executive’s Compensation Accrued at Termination;

 

 (ii)           All stock options, restricted stock and deferred stock awards, including outstanding stock plan awards, and all other long-term incentive awards will be governed by the terms of the plans and programs under which the awards were granted;

 

 (iii)           All deferral arrangements under Section 5(d) will be settled in accordance with the plans and programs governing the deferral, and all rights under the SERP and any other benefit plan shall be governed by such plans.

(c) Termination by the Bank Without Cause Prior to or More than Two Years After a Change in Control. The Bank may, subject to Section 7(h) below, terminate the employment of Executive hereunder without Cause, if at the date of termination no Change in Control has occurred or such date of termination is at least two years after the most recent Change in Control, upon at least 60 days’ written notice to Executive. The foregoing notwithstanding, the Bank may elect, by written notice to Executive, to terminate Executive’s positions specified in Sections 1 and 3 and all other obligations of Executive and the Bank under Section 3 at a date earlier than the expiration of such 60-day period, if so specified by the Bank in the written notice, provided that Executive shall be treated as an employee of the Bank (without any assigned duties) for all other purposes of this Agreement, including for purposes of Sections 4 and 5, from such specified date until the expiration of such 60-day period. At the time Executive’s employment is terminated by the Bank (i.e., at the expiration of such notice period), the Term will terminate, all remaining obligations of the Bank and Executive under Sections 1 through 5 of this Agreement will immediately cease (except for obligations which continue after termination of employment as expressly provided herein), and the Bank will pay Executive at the time specified in Section 7(g), and Executive will be entitled to receive, the following:

  

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 (i)           Executive’s Compensation Accrued at Termination;

 (ii)           Cash in an aggregate amount equal to (A) if the termination occurs before the third year anniversary of the Effective Date three (3) times: (B) if the termination occurs between the third year anniversary and the fourth year anniversary of the Effective Date two and one-half time (2.5); and (C) if the termination occurs at or following the fourth year anniversary of the Effective Date two and one-quarter (2.25) times the sum of (X) Executive’s Base Salary under Section 4(a) immediately prior to termination plus (Y) an amount equal to the portion of Executive’s annual target incentive compensation potentially payable in cash to Executive (i.e., excluding the portion payable in stock or in other non-cash awards) for the year of termination. The amount determined to be payable under this Section 7(c)(ii) shall be payable in a lump sum;

 

 (iii)           In lieu of any annual incentive compensation under Section 4(b) for the year in which Executive’s employment terminated, a lump sum amount equal to the portion of Executive’s annual target incentive compensation potentially payable in cash to Executive (i.e., excluding the portion payable in stock or in other non-cash awards) for the year of termination, multiplied by a fraction the numerator of which is the number of days Executive was employed in the year of termination and the denominator of which is the total number of days in the year of termination;

 

 (iv)           Stock options held by Executive at termination, if not then vested and exercisable, will become fully vested and exercisable at the date of such termination, and, in other respects, such options shall be governed by the plans and programs and the agreements and other documents pursuant to which such options were granted;

 

 (v)           Any performance objectives upon which the earning of performance-based restricted stock and deferred stock awards, including outstanding stock plan awards, and other long-term incentive awards is conditioned shall be deemed to have been met at target level at the date of termination, and restricted stock and deferred stock awards, including outstanding stock plan awards, and other long-term incentive awards (to the extent then or previously earned, in the case of performance-based awards) shall become fully vested and non-forfeitable at the date of such termination, and, in other respects, such awards shall be governed by the plans and programs and the agreements and other documents pursuant to which such awards were granted;

  

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 (vi)           All deferral arrangements under Section 5(d) will be settled in accordance with the plans and programs governing the deferral;

 

 (vii)           All rights under the SERP shall be governed by such plan;

 

 (viii)           Upon termination of Executive’s employment hereunder, if Executive is not eligible for retiree coverage under the Bank’s Health Plan or Medicare and provided that Executive shall be in compliance with the conditions set forth in Section 10, the Bank shall pay to Executive a lump sum amount equal on an after-tax basis to the present value of the total cost of medical coverage under the Health Plan that would have been incurred by both Executive and the Bank on behalf of Executive (and his spouse and eligible dependents, if any, for whom coverage had been provided under the Health Plan immediately prior to Executive’s termination of employment) from the date of Executive’s termination of employment to the date one and one-half years following the date of Executive’s termination of employment, calculated on the assumption that the cost of such coverage would remain unchanged from that in effect for the year of Executive’s termination of employment. Such lump sum amount shall be calculated by an actuary selected by the Bank and paid in cash at the time specified in Section 7(g). Such amount shall not be subject to reduction or forfeiture by reason of any coverage for which Executive may thereafter become eligible by reason of subsequent employment or otherwise. In addition, provided that Executive shall be in compliance with the conditions set forth in Section 10, the Bank shall pay to Executive at the time specified in Section 7(g) a lump sum amount equal on an after-tax basis to the present value of the sum of (A) the amount that Executive and the Bank would have paid, had he remained employed, for coverage under the Bank’s group long-term disability policy from the date of Executive’s termination of employment until the third anniversary of Executive’s termination of employment, calculated on the assumption that the cost of such coverage would remain unchanged from that in effect for the year in which Executive’s termination occurred; and (B) the amount that Executive and the Bank would have paid to continue Executive’s group life insurance coverage, had he remained employed, from the date of Executive’s termination of employment until the third anniversary of Executive’s termination of employment, calculated on the assumption that the cost of such coverage would remain unchanged from that in effect for the year in which Executive’s termination occurred. For purposes of this Section, present value shall be calculated on the basis of the discount rate set forth in the Bank’s qualified retirement plan for the determination of lump sum payments, or, if the Bank’s qualified retirement plan is terminated, the discount rate that would apply for the determination of lump sum payments had the qualified retirement plan not been terminated.

 

(d) Termination by Executive for Good Reason Prior to or More than Two Years After a Change in Control. Executive may terminate his employment hereunder for Good Reason, prior to a Change in Control or after the second anniversary of the most recent Change in Control, upon 90 days’ written notice to the Bank; provided, however, that, if 

  

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the Bank has corrected the basis for such Good Reason within 30 days after receipt of such notice, Executive may not terminate his employment for Good Reason, and therefore Executive’s notice of termination will automatically become null and void. At the time Executive’s employment is terminated by Executive for Good Reason (i.e., at the expiration of such notice period), the Term will terminate, all obligations of the Bank and Executive under Sections 1 through 5 of this Agreement will immediately cease (except for obligations which continue after termination of employment as expressly provided herein), and the Bank will pay Executive at the time specified in Section 7(g), and Executive will be entitled to receive, the following:

 

 (i)           Executive’s Compensation Accrued at Termination;

 

 (ii)           Cash in an aggregate amount equal to (A) if the termination occurs before the third year anniversary of the Effective Date three (3) times; (B) if the termination occurs between the third year anniversary and the fourth year anniversary of the Effective Date two and one-half time (2.5); and (C) if the termination occurs at or following the fourth year anniversary of the Effective Date two and one-quarter (2.25) times the sum of (X) Executive’s Base Salary under Section 4(a) immediately prior to termination plus (Y) an amount equal to the portion of Executive’s annual target incentive compensation potentially payable in cash to Executive (i.e., excluding the portion payable in stock or in other non-cash awards) for the year of termination. The amount determined to be payable under this Section 7(d)(ii) shall be payable in a lump sum;

 

 (iii)           In lieu of any annual incentive compensation under Section 4(b) for the year in which Executive’s employment terminated, a lump sum amount equal to the portion of Executive’s annual target incentive compensation potentially payable in cash to Executive (i.e., excluding the portion payable in stock or in other non-cash awards) for the year of termination, multiplied by a fraction the numerator of which is the number of days Executive was employed in the year of termination and the denominator of which is the total number of days in the year of termination;

 (iv)           Stock options held by Executive at termination, if not then vested and exercisable, will become fully vested and exercisable at the date of such termination, and, in other respects, such options shall be governed by the plans and programs and the agreements and other documents pursuant to which such options were granted;

 

 (v)           Any performance objectives upon which the earning of performance-based restricted stock and deferred stock awards, including outstanding stock plan awards, and other long-term incentive awards is conditioned shall be deemed to have been met at target level at the date of termination, and restricted stock and deferred stock awards, including outstanding stock plan awards, and other long-term incentive awards (to the extent then or previously earned, in the case of performance-based awards) shall become fully vested and non-forfeitable at the date of such termination, and, in other respects, such awards shall be governed by the plans and programs and the agreements and other documents pursuant to which such awards were granted;

  

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 (vi)           All deferral arrangements under Section 5(d) will be settled in accordance with the plans and programs governing the deferral;

 

 (vii)           All rights under the SERP shall be governed by such plan; and

 

 (viii)           Upon termination of Executive’s employment hereunder, if Executive is not eligible for retiree coverage under the Bank’s Health Plan or Medicare and provided that Executive shall be in compliance with the conditions set forth in Section 10, the Bank shall pay to Executive a lump sum amount equal on an after-tax basis to the present value of the total cost of medical coverage under the Health Plan that would have been incurred by both Executive and the Bank on behalf of Executive (and his spouse and eligible dependents, if any, for whom coverage had been provided under the Health Plan immediately prior to Executive’s termination of employment) from the date of Executive’s termination of employment to the date one and one-half years following the date of Executive’s termination of employment, calculated on the assumption that the cost of such coverage would remain unchanged from that in effect for the year of Executive’s termination of employment. Such lump sum amount shall be calculated by an actuary selected by the Bank and paid in cash at the time specified in Section 7(g). Such amount shall not be subject to reduction or forfeiture by reason of any coverage for which Executive may thereafter become eligible by reason of subsequent employment or otherwise. In addition, provided that Executive shall be in compliance with the conditions set forth in Section 10, the Bank shall pay to Executive at the time specified in Section 7(g) a lump sum amount equal on an after-tax basis to the present value of the sum of (A) the amount that Executive and the Bank would have paid, had he remained employed, for coverage under the Bank’s group long-term disability policy from the date of Executive’s termination of employment to the date one and one-half years following the date of Executive’s termination of employment, calculated on the assumption that the cost of such coverage would remain unchanged from that in effect for the year in which Executive’s termination occurred; and (B) the amount that Executive and the Bank would have paid to continue Executive’s group life insurance coverage, had he remained employed, from the date of Executive’s termination of employment to the date one and one-half years following the date of Executive’s termination of employment, calculated on the assumption that the cost of such coverage would remain unchanged from that in effect for the year in which Executive’s termination occurred. For purposes of this Section, present value shall be calculated on the basis of the discount rate set forth in the Bank’s qualified retirement plan for the determination of lump sum payments, or, if the Bank’s qualified retirement plan is terminated, the discount rate that would apply for the determination of lump sum payments had the qualified retirement plan not been terminated.

  

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If any payment or benefit under this Section 7(d) is based on Base Salary or other level of compensation or benefits at the time of Executive’s termination and if a reduction in such Base Salary or other level of compensation or benefit was the basis for Executive’s termination for Good Reason, then the Base Salary or other level of compensation in effect before such reduction shall be used to calculate payments or benefits under this Section 7(d).

(e) Termination by the Bank Without Cause Within Two Years After a Change in Control. The Bank may, subject to Section 7(h) below, terminate the employment of Executive hereunder without Cause, simultaneously with or within two years after a Change in Control, upon at least 60 days’ written notice to Executive. The foregoing notwithstanding, the Bank may elect, by written notice to Executive, to terminate Executive’s positions specified in Sections 1 and 3 and all other obligations of Executive and the Bank under Section 3 at a date earlier than the expiration of such 60-day notice period, if so specified by the Bank in the written notice, provided that Executive shall be treated as an employee of the Bank (without any assigned duties) for all other purposes of this Agreement, including for purposes of Sections 4 and 5, from such specified date until the expiration of such 60-day period. At the time Executive’s employment is terminated by the Bank (i.e., at the expiration of such notice period), the Term will terminate, all remaining obligations of the Bank and Executive under Sections 1 through 5 of this Agreement will immediately cease (except for obligations which continue after termination of employment as expressly provided herein), and the Bank will pay Executive at the time specified in Section 7(g), and Executive will be entitled to receive, the following:

 

 (i)           Executive’s Compensation Accrued at Termination;

 (ii)           Cash in an aggregate amount equal to three times the sum of (A) Executive’s Base Salary under Section 4(a) immediately prior to termination plus (B) an amount equal to the portion of Executive’s annual target incentive compensation potentially payable in cash to Executive (i.e., excluding the portion payable in stock or in other non-cash awards) for the year of termination. The amount determined to be payable under this Section 7(e)(ii) shall be paid by the Bank in a lump sum;

 

 (iii)           In lieu of any annual incentive compensation under Section 4(b) for the year in which Executive’s employment terminated, a lump sum amount equal to the portion of Executive’s annual target incentive compensation potentially payable in cash to Executive (i.e., excluding the portion payable in stock or in other non-cash awards) for the year of termination, multiplied by a fraction the numerator of which is the number of days Executive was employed in the year of termination and the denominator of which is the total number of days in the year of termination;

  

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 (iv)           Stock options held by Executive at termination, if not then vested and exercisable, will become fully vested and exercisable at the date of such termination, and any such options granted on or after the Effective Date shall remain outstanding and exercisable until the stated expiration date of the Option as though Executive’s employment did not terminate, and, in other respects, such options shall be governed by the plans and programs and the agreements and other documents pursuant to which such options were granted;

 

 (v)           Any performance objectives upon which the earning of performance-based restricted stock and deferred stock awards, including outstanding stock plan awards, and other long-term incentive awards is conditioned shall be deemed to have been met at target level at the date of termination, and restricted stock and deferred stock awards, including outstanding stock plan awards, and other long-term incentive awards (to the extent then or previously earned, in the case of performance-based awards) shall become fully vested and non-forfeitable at the date of such termination, and, in other respects, such awards shall be governed by the plans and programs and the agreements and other documents pursuant to which such awards were granted;

 

(vi)           All deferral arrangements under Section 5(d) will be settled in accordance with the plans and programs governing the deferral;

 

(vii)           All rights under the SERP shall be governed by such plan; and

 

(viii)           Upon termination of Executive’s employment hereunder, if Executive is not eligible for retiree coverage under the Bank’s Health Plan or Medicare and provided that Executive shall be in compliance with the conditions set forth in Section 10, the Bank shall pay to Executive a lump sum amount equal on an after-tax basis to the present value of the total cost of medical coverage under the Health Plan that would have been incurred by both Executive and the Bank on behalf of Executive (and his spouse and eligible dependents, if any, for whom coverage had been provided under the Health Plan immediately prior to Executive’s termination of employment) from the date of Executive’s termination of employment until the third anniversary of such date, calculated on the assumption that the cost of such coverage would remain unchanged from that in effect for the year of Executive’s termination of employment. Such lump sum amount shall be calculated by an actuary selected by the Bank and paid in cash at the time specified in Section 7(g). Such amount shall not be subject to reduction or forfeiture by reason of any coverage for which Executive may thereafter become eligible by reason of subsequent employment or otherwise. In addition, provided that Executive shall be in compliance with the conditions set forth in Section 10, the Bank shall pay to Executive at the time specified in Section 7(g) a lump sum amount equal on an after-tax basis to the present value of the sum of (A) the amount that Executive and the Bank would have paid, had he remained employed, for coverage under the Bank’s group long-term disability policy from the date of Executive’s termination of employment until the third anniversary of 

  

17

  

 

Executive’s termination of employment, calculated on the assumption that the cost of such coverage would remain unchanged from that in effect for the year in which Executive’s termination occurred; and (B) the amount that Executive and the Bank would have paid to continue Executive’s group life insurance coverage, had he remained employed, from the date of Executive’s termination of employment until the third anniversary of Executive’s termination of employment, calculated on the assumption that the cost of such coverage would remain unchanged from that in effect for the year in which Executive’s termination occurred. For purposes of this Section, present value shall be calculated on the basis of the discount rate set forth in the Bank’s qualified retirement plan for the determination of lump sum payments, or, if the Bank’s qualified retirement plan is terminated, the discount rate that would apply for the determination of lump sum payments had the qualified retirement plan not been terminated.

(f) Termination by Executive for Good Reason Within Two Years After a Change in Control. Executive may terminate his employment hereunder for Good Reason, simultaneously with or within two years after a Change in Control, upon 90 days’ written notice to the Bank; provided, however, that, if the Bank has corrected the basis for such Good Reason within 30 days after receipt of such notice, Executive may not terminate his employment for Good Reason, and therefore Executive’s notice of termination will automatically become null and void. At the time Executive’s employment is terminated by Executive for Good Reason (i.e., at the expiration of such notice period), the Term will terminate, all obligations of the Bank and Executive under Sections 1 through 5 of this Agreement will immediately cease (except for obligations which continue after termination of employment as expressly provided herein), and the Bank will pay Executive at the time specified in Section 7(g), and Executive will be entitled to receive, the following:

 

 (i)           Executive’s Compensation Accrued at Termination;

 

 (ii)           Cash in an aggregate amount equal to three times the sum of (A) Executive’s Base Salary under Section 4(a) immediately prior to termination plus (B) an amount equal to the portion of Executive’s annual target incentive compensation potentially payable in cash to Executive (i.e., excluding the portion payable in stock or in other non-cash awards) for the year of termination. The amount determined to be payable under this Section 7(f)(ii) shall be paid by the Bank in a lump sum;

 

 (iii)           In lieu of any annual incentive compensation under Section 4(b) for the year in which Executive’s employment terminated, a lump sum amount equal to the portion of Executive’s annual target incentive compensation potentially payable in cash to Executive (i.e., excluding the portion payable in stock or in other non-cash awards) for the year of termination, multiplied by a fraction the numerator of which is the number of days Executive was employed in the year of termination and the denominator of which is the total number of days in the year of termination;

  

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 (iv)           Stock options held by Executive at termination, if not then vested and exercisable, will become fully vested and exercisable at the date of such termination, and any such options granted on or after the Effective Date shall remain outstanding and exercisable until the stated expiration date of the Option as though Executive’s employment did not terminate, and, in other respects, such options shall be governed by the plans and programs and the agreements and other documents pursuant to which such options were granted;

 

(v)           Any performance objectives upon which the earning of performance-based restricted stock and deferred stock awards, including outstanding stock plan awards, and other long-term incentive awards is conditioned shall be deemed to have been met at target level at the date of termination, and restricted stock and deferred stock awards, including outstanding stock plan awards, and other long-term incentive awards (to the extent then or previously earned, in the case of performance-based awards) shall become fully vested and non-forfeitable at the date of such termination, and, in other respects, such awards shall be governed by the plans and programs and the agreements and other documents pursuant to which such awards were granted;

 

 (vi)           All deferral arrangements under Section 5(d) will be settled in accordance with the plans and programs governing the deferral;

 

 (vii)           All rights under the SERP shall be governed by such plan; and  

 

(viii)           Upon termination of Executive’s employment hereunder, if Executive is not eligible for retiree coverage under the Bank’s Health Plan or Medicare and provided that Executive shall be in compliance with the conditions set forth in Section 10, the Bank shall pay to Executive a lump sum amount equal on an after-tax basis to the present value of the total cost of medical coverage under the Health Plan that would have been incurred by both Executive and the Bank on behalf of Executive (and his spouse and eligible dependents, if any, for whom coverage had been provided under the Health Plan immediately prior to Executive’s termination of employment) from the date of Executive’s termination of employment until the third anniversary of such date, calculated on the assumption that the cost of such coverage would remain unchanged from that in effect for the year of Executive’s termination of employment. Such lump sum amount shall be calculated by an actuary selected by the Bank and paid in cash at the time specified in Section 7(g). Such amount shall not be subject to reduction or forfeiture by reason of any coverage for which Executive may thereafter become eligible by reason of subsequent employment or otherwise. In addition, provided that Executive shall be in compliance with the conditions set forth in Section 10, the Bank shall pay to Executive at the time specified in Section 7(g) a lump sum amount equal on an after-tax basis to the present value of the sum of 

  

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(A) the amount that Executive and the Bank would have paid, had he remained employed, for coverage under the Bank’s group long-term disability policy from the date of Executive’s termination of employment until the third anniversary of Executive’s termination of employment, calculated on the assumption that the cost of such coverage would remain unchanged from that in effect for the year in which Executive’s termination occurred; and (B) the amount that Executive and the Bank would have paid to continue Executive’s group life insurance coverage, had he remained employed, from the date of Executive’s termination of employment until the third anniversary of Executive’s termination of employment, calculated on the assumption that the cost of such coverage would remain unchanged from that in effect for the year in which Executive’s termination occurred. For purposes of this Section, present value shall be calculated on the basis of the discount rate set forth in the Bank’s qualified retirement plan for the determination of lump sum payments, or, if the Bank’s qualified retirement plan is terminated, the discount rate that would apply for the determination of lump sum payments had the qualified retirement plan not been terminated.

If any payment or benefit under this Section 7(f) is based on Base Salary or other level of compensation or benefits at the time of Executive’s termination and if a reduction in such Base Salary or other level of compensation or benefit was the basis for Executive’s termination for Good Reason, then the Base Salary or other level of compensation in effect before such reduction shall be used to calculate payments or benefits under this Section 7(f).

 

(g) Other Terms Relating to Certain Terminations of Employment; Reimbursements; Section 409A Exemptions; Delayed Payments under Section 409A.

 

 (i)           Whether the Executive has had a termination of employment shall be determined on the basis of all relevant facts and circumstances and with reference to Regulations Section 1.409A-1(h).

 

 (ii)           Whether a termination is deemed to be at or within two years after a Change in Control for purposes of Sections 7(c), (d), (e), or (f) is determined at the date of termination, regardless of whether the Change in Control had occurred at the time a notice of termination was given. In the event Executive’s employment terminates for any reason set forth in Section 7(b) through (f), Executive will be entitled to the benefit of any terms of plans or agreements applicable to Executive which are more favorable than those specified in this Section 7 (except in the case of annual incentives in lieu of which amounts are paid hereunder).

 

 (iii)           Amounts payable under this Section 7 following Executive’s termination of employment, other than those expressly payable on a deferred basis, will be paid in the payroll period next following the payroll period in which termination of employment occurs except as otherwise provided in this Section 7.

  

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 (iv)           Any reimbursements made or in-kind benefits provided under this Agreement shall be subject to the following conditions:

 

            (A)           the amount of expenses eligible for reimbursement or in-kind benefits provided in any one taxable year of Executive shall not affect the amount of expenses eligible for reimbursement or in-kind benefits provided in any other taxable year of Executive;

 

            (B)           the reimbursement of any expense shall be made each calendar quarter not later than the last day of Executive’s taxable year following Executive’s taxable year in which the expense was incurred (unless this Agreement specifically provides for reimbursement by an earlier date);

 

            (C)           the right to reimbursement of an expense or payment of an in-kind benefit shall not be subject to liquidation or exchange for another benefit.

In addition, with respect to any reimbursement made under Section 6(b)(v) for expenses for medical coverage purchased by Executive’s spouse, any such reimbursement made during the period of time Executive’s spouse (or eligible dependents, if any) would be entitled to continuation coverage under the Bank’s Health Plan pursuant to COBRA if Executive’s spouse (or eligible dependents, if any) had elected such coverage and paid the applicable premiums shall be exempt from Section 409A of the Code and the six-month delay in payment described hereinbelow pursuant to Section 1.409A-1(b)(9)(v)(B) of the Regulations.

 

 (v)           Executive’s right to reimbursements under this Agreement shall be treated as a right to a series of separate payments under Section 1.409A-2(b)(2)(iii) of the Regulations.

 

 (vi)           Any tax gross-up payments made under this Agreement, within the meaning provided by Section 1.409A-3(i)(1)(v) of the Regulations, shall be made by the end of Executive’s taxable year next following Executive’s taxable year in which he remits the related taxes (unless this Agreement specifically provides for payment by an earlier date).

 

 (vii)           It is intended that payments made under this Agreement due to Executive’s termination of employment which are paid on or before the 15th day of the third month following the end of Executive’s taxable year in which his termination of employment occurs shall be exempt from compliance with Section 409A of the Code pursuant to the exemption for short-term deferrals set forth in Section 1.409A-1(b)(4) of the Regulations (the “Exempt Short-Term Deferral Payments”); and that payments under this Agreement, other than Exempt Short-Term Deferral Payments, that are made on or before the last day of the second taxable year following the taxable year in which Executive terminates employment in an aggregate amount not exceeding two times the lesser of: (A) the sum of Executive’s annualized compensation based on his annual rate of 

  

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pay for the taxable year preceding the taxable year in which he terminates employment (adjusted for any increase during that year that was expected to continue indefinitely if he had not terminated employment); or (B) the maximum amount that may be taken into account under a qualified plan pursuant to Section 401(a)(17) of the Code for the year in which Executive terminates employment shall be exempt from compliance with Section 409A of the Code pursuant to the exception for payments under a separation pay plan as set forth in Section 1.409A-1(b)(9)(iii) of the Treasury Regulations. If, under the terms of this Agreement, it is possible for a payment that is subject to Section 409A to be made in two separate taxable years, payment shall be made in the later taxable year.

 

 (viii)           Anything in this Agreement to the contrary notwithstanding, payments to be made under this Agreement upon termination of Executive’s employment which are subject to Section 409A of the Code shall be delayed for six months following such termination of employment if Executive is a Specified Employee as defined in Section 8(g) on the date of his termination of employment. Any payment or reimbursement due within such six-month period shall be delayed to the end of such six-month period. The Bank will adjust the payment or reimbursement to reflect the deferred payment date by multiplying the payment or reimbursement by the product of the six-month CMT Treasury Bill annualized yield rate as published by the U.S. Treasury for the date on which such payment or reimbursement would have been made but for the delay multiplied by a fraction, the numerator of which is the number of days by which such payment or reimbursement was delayed and the denominator of which is 365. In the event of a reimbursement that is required by other terms of this Agreement to be made on an after-tax basis and which is subject to the six-month delay provided herein, the reimbursement as adjusted in accordance with this Section 7(g) to reflect the deferred payment date shall be paid to Executive on an after-tax and fully grossed-up basis so that Executive is held economically harmless. The Bank will pay the adjusted payment or reimbursement at the beginning of the seventh month following Executive’s termination of employment. Notwithstanding the foregoing, if calculation of the amounts payable by any payment date specified in this Section 7(g) is not administratively practicable due to events beyond the control of Executive (or Executive’s beneficiary or estate) and for reasons that are commercially reasonable, payment will be made as soon as administratively practicable in compliance with Section 409A of the Code and the Regulations thereunder. In the event of Executive’s death during such six-month period, payment will be made in the payroll period next following the payroll period in which Executive’s death occurs.

(h) Board Approval Required for Certain Involuntary Terminations. Except in the case of death or Disability, no involuntary termination of the Executive prior to the third anniversary of the Effective Date shall be effective unless and until made by resolution of the Board of Directors of the Bank, which resolution shall have been duly passed and approved by not less than two-thirds of the Directors of the Bank (excluding Executive himself).

  

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8. Definitions Relating to Termination Events.

(a) “Cause.” For purposes of this Agreement, “Cause” shall mean:

 

 (i)           engaging in any act or acts of dishonesty or morally reprehensible conduct or committing any act or acts that constitute a felony, whether or not relating to the Company, the Bank or their affiliates;

 

 (ii)           attempting to obtain personal gain, profit or enrichment at the expense of the Company, the Bank or their affiliates, or from any transaction in which Executive has an interest which is adverse to the interest of the Company, the Bank or their affiliates, unless Executive shall have obtained the prior written consent of the Chairman of the Boards;

 

 (iii)           willful and continued failure to perform the reasonable duties assigned to Executive within the scope of Executive’s responsibilities hereunder, the reasonable policies, standards or regulations of the Company, the Bank or their affiliates as the same shall from time to time exist, provided Executive shall have received at least one written notice in writing from the Company, the Bank or their affiliates of such failure and such failure shall continue or recur 10 or more days after such notice;

 

 (iv)           acting in a manner that Executive intends, believes or reasonably should foresee to be materially detrimental or damaging to the Company’s, the Bank’s or their affiliates’ reputation, business operations or relations with their employees, suppliers or customers; or

 

 (v)           committing any material breach of this Agreement or any other written agreement between Executive and either the Company, the Bank or their affiliates. To the extent that the Boards of Directors wish to terminate the Executive for Cause and the action or actions giving rise to Cause may be cured by the Executive, the Boards of Director will provide the Executive a thirty (30) day period within which he may cure such action or actions and avoid a termination for Cause.

(b) “Change in Control.” For purposes of this Agreement, a “Change in Control” shall be deemed to have occurred if, during the term of this Agreement:

 

 (i)           the Company merges into or consolidates with another corporation, or merges another corporation into the Company, and as a result, with respect to the Company, less than a majority of the combined voting power of the resulting corporation immediately after the merger or consolidation is held by “Persons” as such term is used for purposes of Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) who were stockholders of the Company immediately before the merger or consolidation;

  

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 (ii)           any Person (other than any trustee or other fiduciary holding securities under an employee benefit plan of the Bank or the Company), becomes the “Beneficial Owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the resulting corporation representing 50% or more of the combined voting power of the resulting corporation’s then-outstanding securities;

 

 (iii)           during any period of twenty-four months (not including any period prior to the Effective Date of this Agreement), individuals who at the beginning of such period constitute the Board of Directors of the Company, and any new director (other than (A) a director nominated by a Person who has entered into an agreement with the Company to effect a transaction described in Sections (8)(b)(i), (ii) or (iv) hereof, (B) a director nominated by any Person (including the Company) who publicly announces an intention to take or to consider taking actions (including, but not limited to, an actual or threatened proxy contest) which if consummated would constitute a Change in Control or (C) a director nominated by any Person who is the Beneficial Owner, directly or indirectly, of securities of the Company representing 50% or more of the combined voting power of the Company’s securities) whose election by the Board of Directors of the Company or nomination for election by the Company’s stockholders was approved in advance by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute at least a majority thereof;

 

 (iv)           the stockholders of the Company approve a plan of complete liquidation of the Company or an agreement for the sale or disposition by the Company of all or substantially all of the Company’s assets; or

 

 (v)           the Board of Directors of the Company adopts a resolution to the effect that, for purposes of this Agreement, a Change in Control has occurred.

(c) “Compensation Accrued at Termination.” For purposes of this Agreement, “Compensation Accrued at Termination” means the following:

 

 (i)           The unpaid portion of annual base salary at the rate payable, in accordance with Section 4(a) hereof, at the date of Executive’s termination of employment, pro-rated through such date of termination, payable in a lump sum at the time specified in Section 6(d) or 7(g) as the case may be;

 

 (ii)           All vested, nonforfeitable amounts owing or accrued at the date of Executive’s termination of employment under any compensation and benefit plans, programs, and arrangements set forth or referred to in Sections 4(b) and 5(a) and 5(b) hereof (including any earned and vested annual incentive compensation and long-term incentive award) in which Executive theretofore participated, payable in accordance with the terms and conditions of the plans, programs, and arrangements (and agreements and documents thereunder) pursuant to which such compensation and benefits were granted or accrued; and

  

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 (iii)           Reasonable business expenses and disbursements incurred by Executive prior to Executive’s termination of employment, to be reimbursed to Executive, as authorized under Section 5(f), in accordance the Company’s reimbursement policies as in effect at the date of such termination, and payable in a lump sum in accordance with Section 7(g).

 

(d) “Disability.” For purposes of this Agreement, “Disability” shall have the meaning ascribed to it by Section 409A of the Code and the Regulations.

(e) “Good Reason.” For purposes of this Agreement, “Good Reason” shall mean, without Executive’s express written consent, the occurrence of any of the following circumstances provided that Executive shall have given notice of such circumstance(s) to the Bank within a period not to exceed 90 days of the initial existence of such circumstance(s) and the Bank shall not have remedied such circumstance(s) within 30 days after receipt of such notice:

 

 (i)           the assignment to Executive of duties materially inconsistent with Executive’s position and status as Chief Executive Officer, or an alteration, materially adverse to Executive, in Executive’s position and status as Chief Executive Officer or in the nature of Executive’s duties, responsibilities, and authorities or conditions of Executive’s employment from those relating to Executive position and status as Chief Executive Officer (excluding changes in assignments permitted under Section 3); except the foregoing shall not constitute Good Reason if occurring in connection with the termination of Executive’s employment for Cause, Disability, Retirement, as a result of Executive’s death, or as a result of action by or with the consent of Executive;

 

 (ii)           (A) a material reduction by the Bank in Executive’s Base Salary, (B) the setting of Executive’s annual target incentive opportunity or payment of earned annual incentive not in material conformity with Section 4 hereof, (C) a change in compensation or benefits not in material conformity with Section 5, or (D) a material reduction, after a Change in Control, in perquisites from the level of such perquisites as in effect immediately prior to the Change in Control or as the same may have been increased from time to time after the Change in Control, except for across-the-board perquisite reductions similarly affecting all senior executives of the Bank and all senior executives of any Person in control of the Company;

 

 (iii)           the relocation of the principal place of Executive’s employment to a site that is outside of a fifty mile radius of his principal place of employment prior to such relocation; for this purpose, required travel on the Bank’s business will not constitute a relocation so long as the extent of such travel is substantially consistent with Executive’s customary business travel obligations in periods prior to the Effective Date;

  

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 (iv)           the failure by the Bank to pay to Executive any material portion of Executive’s compensation or to pay to Executive any material portion of an installment of deferred compensation under any deferred compensation program of the Bank within a reasonable time after the date such compensation is due;

 

 (v)           the failure by the Bank to continue in effect any material compensation or benefit plan in which Executive participated immediately prior to a Change in Control, unless an equitable arrangement (embodied in an ongoing substitute or alternative plan) has been made with respect to such plan, or the failure by the Bank to continue Executive’s participation therein (or in such substitute or alternative plan) on a basis not materially less favorable, both in terms of the amounts of compensation or benefits provided and the level of Executive’s participation relative to other participants, as existed at the time of the Change in Control;

 

 (vi)           the failure of the Bank to obtain a satisfactory agreement from any successor to the Bank or the Company to fully assume the Bank’s and the Company’s obligations and to perform under this Agreement, as contemplated in Section 12(b) hereof, in a form reasonably acceptable to Executive; or

 

 (vii)           any other failure by the Bank or the Company to perform any material obligation under, or breach by the Bank or the Company of any material provision of, this Agreement; provided, however, that a forfeiture under Section 10(f), (g), or (h) shall not constitute “Good Reason.”

(f) “Potential Change in Control.” For purposes of this Agreement, a “Potential Change in Control” shall be deemed to have occurred if, during the term of this Agreement:

 

 (i)           the Company enters into an agreement, the consummation of which would result in the occurrence of a Change in Control;

 

 (ii)           any Person (including the Company) publicly announces an intention to take or to consider taking actions which if consummated would constitute a Change in Control; or

 

 (iii)           the Boards adopt a resolution to the effect that, for purposes of this Agreement, a Potential Change in Control has occurred.

(g) “Specified Employee.” For purposes of this Agreement, a “Specified Employee” shall mean an employee of the Bank, at a time when any stock of the Company is publicly traded on an established securities market or otherwise, who 

  

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satisfies the requirements for being designated a “key employee” under Section 416(i)(1)(A)(i), (ii) or (iii) of the Code without regard to Section 416(i)(5) of the Code at any time during a calendar year, in which case such employee shall be considered a Specified Employee for the twelve-month period beginning on the first day of the fourth month immediately following the end of such calendar year. In the event of any corporate spinoff or merger, the determination of which employees meet the requirements of Section 416(i)(1)(A)(i), (ii) or (iii) of the Code without regard to Section 416(i)(5) of the Code for any calendar year shall be determined in accordance with Regulations Section 1.409A-1(i)(6).

9. Limitation on Change in Control Payments.

In the event that:

(a) the aggregate payments or benefits to be made to Executive pursuant to this Agreement, together with other payments and benefits which Executive has a right to receive from the Company or the Bank, which are deemed to be parachute payments as defined in Section 280G of the Code (the “Termination Benefits”), would be deemed to include an “excess parachute payment” under Section 280G of the Code; and

(b) if such Termination Benefits were reduced to an amount (the “Non-Triggering Amount”), the value of which is one dollar ($1.00) less than an amount equal to three times Executive’s “base amount,” as determined in accordance with said Section 280G, and the Non-Triggering Amount less the product of the marginal rate of any applicable state and federal income tax and the Non-Triggering Amount would be greater than the aggregate value of the Termination Benefits (without such reduction) minus (A) the amount of tax required to be paid by Executive by Section 4999 of the Code and further minus (B) the product of the Termination Benefits and the marginal rate of any applicable state and federal income tax, then the Termination Benefits shall be reduced to the Non-Triggering Amount. The reduction required hereby among the Termination Benefits shall be allocated to the payments and benefits set forth in Sections 7(c), 7(d), 7(e), and 7(f), as applicable, in the following order until the reduction is fully accomplished: Subsection (ii), (iii) and (viii) of Sections 7(c), 7(d), 7(e), and 7(f), as applicable. If, however, the reduction cannot be fully accomplished after using the order in the prior sentence, the reduction shall be allocated to any other remaining payments or benefits at the Bank’s discretion.

10. Non-Competition and Non-Disclosure; Executive Cooperation; Non-Disparagement; Certain Forfeitures.

(a) Non-Competition. In consideration for the compensation and benefits provided under this Agreement, including without limitation, the compensation and benefits provided under Sections 7(e) and (f), without the consent in writing of the Boards, Executive will not, at any time during the Term and for a period of two years following termination of Executive’s employment for any reason, acting alone or in conjunction with others, directly or indirectly (i) engage (either as owner, investor, partner, stockholder, employer, employee, consultant, 

  

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advisor, or director) in any business of any savings bank, savings and loan association, savings and loan holding company, bank, bank holding company, or other institution engaged in the business of accepting deposits or making loans, or any direct or indirect subsidiary or affiliate of any such entity, that conducts business in any county in which the Company or the Bank maintains an office as of Executive’s date of termination or had plans to open an office within six months after Executive’s date of termination; (ii) induce any customers of the Bank or any of its affiliates with whom Executive has had contacts or relationships, directly or indirectly, during and within the scope of his employment with the Bank, to curtail or cancel their business with the Bank or any such affiliate; (iii) induce, or attempt to influence, any employee of the Bank or any of its affiliates to terminate employment; or (iv) solicit, hire or retain as an employee or independent contractor, or assist any third party in the solicitation, hire, or retention as an employee or independent contractor, any person who during the previous twelve months was an employee of the Bank or any affiliate; provided, however, that activities engaged in by or on behalf of the Bank are not restricted by this covenant. The provisions of subparagraphs (i), (ii), (iii), and (iv) above are separate and distinct commitments independent of each of the other subparagraphs. It is agreed that the ownership of not more than one percent of the equity securities of any company having securities listed on an exchange or regularly traded in the over-the-counter market shall not, of itself, be deemed inconsistent with clause (i) of this Section 10(a).

(b) Non-Disclosure; Ownership of Work. Executive shall not, at any time during the Term and thereafter (including following Executive’s termination of employment for any reason), disclose, use, transfer, or sell, except in the course of employment with or other service to the Bank or the Company, any proprietary information, secrets, organizational or employee information, or other confidential information belonging or relating to the Bank or the Company and its affiliates and customers so long as such information has not otherwise been disclosed or is not otherwise in the public domain, except as required by law or pursuant to legal process. In addition, upon termination of employment for any reason, Executive will return to the Company or its affiliates all documents and other media containing information belonging or relating to the Bank and the Company or its affiliates.

(c) Cooperation With Regard to Litigation. Executive agrees to cooperate with the Bank and the Company, during the Term and thereafter (including following Executive’s termination of employment for any reason), by making himself available to testify on behalf of the Bank or the Company or any subsidiary or affiliate of the Bank or the Company, in any action, suit, or proceeding, whether civil, criminal, administrative, or investigative, and to assist the Bank and the Company, or any subsidiary or affiliate of the Company, in any such action, suit, or proceeding, by providing information and meeting and consulting with the Boards or their representatives or counsel, or representatives or counsel to the Bank or the Company, or any subsidiary or affiliate of the Company, as requested. The Bank agrees to reimburse Executive, on an after tax basis each calendar quarter, for all expenses actually incurred in connection with his provision of testimony or assistance in accordance with the provisions of Section 7(g) of this Agreement but not later than the last day of the year in which the expense was incurred.

 

(d) Non-Disparagement. Executive shall not, at any time during the Term and thereafter, make statements or representations, or otherwise communicate, directly or indirectly, in writing, 

  

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orally, or otherwise, or take any action which may, directly or indirectly, disparage the Bank or the Company or any of its subsidiaries or affiliates or their respective officers, directors, employees, advisors, businesses or reputations. Notwithstanding the foregoing, nothing in this Agreement shall preclude Executive from making truthful statements that are required by applicable law, regulation or legal process.

(e) Release of Employment Claims. Executive agrees, as a condition to receipt of any termination payments and benefits provided for in Sections 6 and 7 herein (other than Compensation Accrued at Termination), that he will execute a general release agreement, in substantially the form set forth in Attachment A to this Agreement, releasing any and all claims arising out of Executive’s employment other than enforcement of this Agreement and rights to indemnification under any agreement, law, Bank or Company organizational document or policy, or otherwise. The Bank will provide Executive with a copy of such release simultaneously with or as soon as administratively practicable following the delivery of the notice of termination provided in Sections 6 and 7 of this Agreement, but not later than 21 days before (45 days before if Executive’s termination is part of an exit incentive or other employment termination program offered to a group or class of employees) Executive’s termination of employment. Executive shall deliver the executed release to the Bank eight days before the date provided in Section 7(g) of this Agreement for the payment of the termination payments and benefits payable under Sections 6 and 7 of this Agreement.

(f) Forfeiture of Outstanding Options. The provisions of Sections 6 and 7 notwithstanding, if Executive willfully and materially fails to substantially comply with any restrictive covenant under this Section 10 or willfully and materially fails to substantially comply with any material obligation under this Agreement, all options to purchase common stock granted by the Company and then held by Executive or a transferee of Executive shall be immediately forfeited and thereupon such options shall be cancelled. Notwithstanding the foregoing, Executive shall not forfeit any option unless and until there shall have been delivered to him, within six months after the Boards (i) had knowledge of conduct or an event allegedly constituting grounds for such forfeiture and (ii) had reason to believe that such conduct or event could be grounds for such forfeiture, a copy of a resolution duly adopted by a majority affirmative vote of the membership of the Boards (excluding Executive) at a meeting of the Boards called and held for such purpose (after giving Executive reasonable notice specifying the nature of the grounds for such forfeiture and not less than 30 days to correct the acts or omissions complained of, if correctable, and affording Executive the opportunity, together with his counsel, to be heard before the Boards) finding that, in the good faith opinion of the Boards, Executive has engaged and continues to engage in conduct set forth in this Section 10(f) which constitutes grounds for forfeiture of Executive’s options; provided, however, that if any option is exercised after delivery of such notice and the Boards subsequently make the determination described in this sentence, Executive shall be required to pay to the Company an amount equal to the difference between the aggregate value of the shares acquired upon such exercise at the date of the Boards’ determination and the aggregate exercise price paid by Executive. Any such forfeiture shall apply to such options notwithstanding any term or provision of any option agreement. In addition, options granted to Executive on or after the Effective Date, and gains resulting from the exercise of such options, shall be subject to forfeiture in accordance with the Company’s standard policies relating to such forfeitures and clawbacks, as such policies are in effect at the time of grant of such options.

  

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(g) Forfeiture of Certain Bonuses and Profits. If the Company is required to prepare an accounting restatement due to the material noncompliance of the Company, as a result of misconduct, with any financial reporting requirement under the securities laws, Executive shall reimburse the Bank for (i) any bonus or other incentive based or equity-based compensation received by Executive during the 12-month period following the first public issuance or filing with the Securities and Exchange Commission (whichever first occurs) of the financial document embodying such financial reporting requirement; and (ii) any profits realized from the sale of securities of the Company during that 12-month period.

(h) Forfeiture Due to Regulatory Restrictions. Anything in this Agreement or the SERP to the contrary notwithstanding, (i) any payments made pursuant to this Agreement or the SERP shall be subject to and conditioned upon compliance with 12 U.S.C. §1828(k) and any regulations promulgated thereunder; and (ii) payments contemplated to be made by the Bank pursuant to this Agreement or the SERP shall not be immediately payable to the extent such payments are barred or prohibited by an action or order issued by the Connecticut Banking Commissioner or the Federal Deposit Insurance Corporation.

(i) Survival. The provisions of this Section 10 shall survive the termination of the Term and any termination or expiration of this Agreement.

11. Governing Law; Disputes.

(a) Governing Law. This Agreement and the rights and obligations of the Company, the Bank and Executive are governed by and are to be construed, administered, and enforced in accordance with the laws of the State of Connecticut, without regard to conflicts of law principles. If under the governing law, any portion of this Agreement is at any time deemed to be in conflict with any applicable statute, rule, regulation, ordinance, or other principle of law, such portion shall be deemed to be modified or altered to the extent necessary to conform thereto or, if that is not possible, to be omitted therefrom. The invalidity of any such portion shall not affect the force, effect, and validity of the remaining portion thereof. If any court determines that any provision of Section 10 of this Agreement is unenforceable because of the duration or geographic scope of such provision, it is the parties’ intent that such court shall have the power to modify the duration or geographic scope of such provision, as the case may be, to the extent necessary to render the provision enforceable and, in its modified form, such provision shall be enforced. Anything in this Agreement to the contrary notwithstanding, the terms of this Agreement shall be interpreted and applied in a manner consistent with the requirements of Section 409A of the Code and the Regulations so as not to subject Executive to the payment of any tax penalty or interest which may be imposed by Section 409A of the Code and the Bank shall have no right to accelerate or make any payment under this Agreement except to the extent such action would not subject Executive to the payment of any tax penalty or interest under Section 409A of the Code. If all or a portion of the benefits and payments provided under this Agreement constitute taxable income to Executive for any taxable year that is prior to the taxable year in which 

  

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such payments and/or benefits are to be paid to Executive as a result of the Agreement’s failure to comply with the requirements of Section 409A of the Code and the Regulations, the applicable payment or benefit shall be paid immediately to Executive to the extent such payment or benefit is required to be included in income. If Executive becomes subject to any tax penalty or interest under Section 409A of the Code by reason of this Agreement, the Bank shall reimburse Executive on a fully grossed-up and after-tax basis for any such tax penalty or interest (so that Executive is held economically harmless) ten business days prior to the date such tax penalty or interest is due and payable by Executive to the government.

(b) Reimbursement of Expenses in Enforcing Rights. Upon submission of invoices, the Bank shall promptly pay or reimburse all reasonable costs and expenses (including fees and disbursements of counsel and pension experts) incurred by Executive or Executive’s surviving spouse in seeking to interpret this Agreement or enforce rights pursuant to this Agreement or in any proceeding in connection therewith brought by Executive or Executive’s surviving spouse, whether or not Executive or Executive’s surviving spouse is ultimately successful in enforcing such rights or in such proceeding; provided, however, that no reimbursement shall be owed with respect to expenses relating to any unsuccessful assertion of rights or proceeding if and to the extent that such assertion or proceeding was initiated or maintained in bad faith or was frivolous, as determined in accordance with Section 11(c) or a court having jurisdiction over the matter. Any such payment or reimbursement shall be made on an after-tax basis each calendar quarter for all costs and expenses actually incurred as provided in this Section 11(b) and in accordance with the provisions of Section 7(g) of this Agreement, but not later than the last day of the year in which the expense was incurred.

(c) Dispute Resolution.

 

 (i)           Negotiation. The Bank and the Company (collectively, the “Employer”) and Executive shall attempt in good faith to resolve any dispute arising out of or relating to this Agreement promptly by negotiation between the Chairman of the Board of the Bank and Executive. Any party may give the other party written notice of any dispute in accordance with the notice procedures set forth in Section 12(d). Within 15 days after delivery of the notice, the receiving party shall submit to the other, in accordance with the notice procedures set forth in Section 12(d), a written response. The notice and response shall include a statement of that party’s position and summary of arguments supporting that position. Within 30 days after delivery of the initial notice, the parties shall meet at a mutually acceptable time and place, and thereafter as often as they reasonably deem necessary, to attempt to resolve the dispute. All negotiations pursuant to this clause (i) are confidential and shall be treated as compromise and settlement negotiations for purposes of applicable rules of evidence.

 

 (ii)           Mediation. If the dispute has not been resolved by negotiation as provided herein within 45 days after delivery of the initial notice of negotiation, or if the parties failed to meet within 30 days after delivery, the parties shall endeavor to settle the dispute by mediation under the CPR Mediation Procedure then currently in effect; provided, however, that if one party fails to participate in the negotiation as provided herein, the other party can initiate mediation prior to the expiration of the 45 days. Unless otherwise agreed, the parties will select a mediator from the CPR Panels of Distinguished Neutrals.

  

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 (iii)           Arbitration. Any dispute arising under or in connection with this Agreement which has not been resolved by mediation as provided herein within 45 days after initiation of the mediation procedure, shall be finally resolved by arbitration in accordance with the CPR Rules for Non-Administered Arbitration then currently in effect, by three independent and impartial arbitrators, of whom each party shall designate one; provided, however, that if one party fails to participate in either the negotiation or mediation as agreed herein, the other party can commence arbitration prior to the expiration of the time periods set forth above. The arbitration shall be governed by the Federal Arbitration Act, 9 U.S.C. §§1-16, and judgment upon the award rendered by the arbitrators may be entered by any court having jurisdiction thereof. The place of arbitration shall be Hartford, Connecticut. For purposes of entering any judgment upon an award rendered by the arbitrators, the Company, the Bank and Executive hereby consent to the jurisdiction of any or all of the following courts: (i) the United States District Court for the District of Connecticut, (ii) any of the courts of the State of Connecticut, or (iii) any other court having jurisdiction. The Company, the Bank and Executive hereby agree that a judgment upon an award rendered by the arbitrators may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Subject to Section 11(b) of this Agreement, the Bank shall bear all costs and expenses arising in connection with any arbitration proceeding pursuant to this Section 11(c) in accordance with the provisions of Section 7(g) of this Agreement, but not later than the last day of the year in which the expense was incurred. Notwithstanding any provision in this Section 11(c), Executive shall be entitled to seek specific performance of Executive’s right to be paid during the pendency of any dispute or controversy arising under or in connection with this Agreement.

 

 (d) Interest on Unpaid Amounts. Any amount which has become payable pursuant to the terms of this Agreement or any decision by arbitrators or judgment by a court of law pursuant to this Section 11 but which has not been timely paid shall bear interest at the prime rate in effect at the time such amount first becomes payable, as quoted by the Bank, except as otherwise provided in Sections 5(g), 6(d) and 7(g) of this Agreement (concerning interest payable with respect to certain delayed payments that are subject to Section 409A of the Code).

12. Miscellaneous.

(a) Integration. This Agreement cancels and supersedes any and all prior employment agreements and understandings between the parties hereto with respect to the employment of Executive by the Bank, any parent or predecessor company, and the Company’s subsidiaries during the Term, except for contracts relating to compensation under executive compensation 

  

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and employee benefit plans of the Bank. This Agreement constitutes the entire agreement among the parties with respect to the matters herein provided, and no modification or waiver of any provision hereof shall be effective unless in writing and signed by the parties hereto. Executive shall not be entitled to any payment or benefit under this Agreement which duplicates a payment or benefit received or receivable by Executive under any prior agreements and understandings or under any benefit or compensation plan of the Bank which are in effect.

(b) Successors; Transferability. The Bank and the Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Bank or the Company to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Bank and the Company would be required to perform it if no such succession had taken place.

As used in this Agreement, “Bank” and “Company” shall mean the Bank and the Company respectively as hereinbefore defined and any successor to its or their business and/or assets as aforesaid which assumes and agrees to perform this Agreement by operation of law, or otherwise and, in the case of an acquisition of the Bank or the Company in which the corporate existence of the Bank or the Company, as the case may be, continues, the ultimate parent company following such acquisition. Subject to the foregoing, the Bank and the Company may transfer and assign this Agreement and the Bank’s and the Company’s rights and obligations hereunder. Neither this Agreement nor the rights or obligations hereunder of the parties hereto shall be transferable or assignable by Executive, except in accordance with the laws of descent and distribution or as specified in Section 12(c).

(c) Beneficiaries. Executive shall be entitled to designate (and change, to the extent permitted under applicable law) a beneficiary or beneficiaries to receive any compensation or benefits provided hereunder following Executive’s death.

 

(d) Notices. Whenever under this Agreement it becomes necessary to give notice, such notice shall be in writing, signed by the party or parties giving or making the same, and shall be served on the person or persons for whom it is intended or who should be advised or notified, by Federal Express or other similar overnight service or by certified or registered mail, return receipt requested, postage prepaid and addressed to such party at the address set forth below or at such other address as may be designated by such party by like notice:

 

	
  

	
If to the Bank or the Company:

	
  

	
ROCKVILLE BANK

	
  

	
45 Glastonbury Ave.

	
  

	
Glastonbury, CT 06033

	
  

	
Att: Chair, Compensation Committee

  

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If to Executive:

	
  

	
William H. W. Crawford, IV

	
  

	
c/o Barry P. Taff, P.C.

	
  

	
Silver, Freedman & Taff, LLP

	
  

	
3299 K Street, N.W. Suite 100

	
  

	
Washington, DC 20007-4444

If the parties by mutual agreement supply each other with telecopier numbers for the purposes of providing notice by facsimile, such notice shall also be proper notice under this Agreement. In the case of Federal Express or other similar overnight service, such notice or advice shall be effective when sent, and, in the cases of certified or registered mail, shall be effective two days after deposit into the mails by delivery to the U.S. Post Office.

(e) Reformation. The invalidity of any portion of this Agreement shall not be deemed to render the remainder of this Agreement invalid.

(f) Headings. The headings of this Agreement are for convenience of reference only and do not constitute a part hereof.

(g) No General Waivers. The failure of any party at any time to require performance by any other party of any provision hereof or to resort to any remedy provided herein or at law or in equity shall in no way affect the right of such party to require such performance or to resort to such remedy at any time thereafter, nor shall the waiver by any party of a breach of any of the provisions hereof be deemed to be a waiver of any subsequent breach of such provisions. No such waiver shall be effective unless in writing and signed by the party against whom such waiver is sought to be enforced.

 

(h) No Obligation To Mitigate. Executive shall not be required to seek other employment or otherwise to mitigate Executive’s damages upon any termination of employment, and any compensation or benefits received from any other employment of Executive shall not mitigate or reduce the obligations of the Bank and the Company or the rights of Executive hereunder.

(i) Offsets; Withholding. The amounts required to be paid by the Bank to Executive pursuant to this Agreement shall not be subject to offset other than with respect to any amounts that are owed to the Bank by Executive due to his receipt of funds as a result of his fraudulent activity. The foregoing and other provisions of this Agreement notwithstanding, all payments to be made to Executive under this Agreement, including under Sections 6 and 7, or otherwise by the Bank, will be subject to withholding to satisfy required withholding taxes and other required deductions.

(j) Successors and Assigns. This Agreement shall be binding upon and shall inure to the benefit of Executive, his heirs, executors, administrators and beneficiaries, and shall be binding upon and inure to the benefit of the Bank and the Company and their successors and assigns.

  

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(k) Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument.

(l)  162(m). The Executive acknowledges that the Company, a public company, should be cognizant of and attempt to have compensation practices consistent with best practices. Compliance with 162(m) of the Internal Revenue Code concerning the income tax deductibility of incentive compensation to Company executives is one such area that the Company intends to consider with the involvement of Executive in the future. Accordingly, notwithstanding anything to the contrary in this Agreement, Executive agrees that in the event any terms of this Agreement concerning incentive compensation are inconsistent with the terms of incentive plans adopted by the Company during the term of this Agreement that are in compliance with 162(m), then the terms of such adopted incentive plans shall control.

13. Indemnification.

All rights to indemnification by the Bank or the Company now existing in favor of Executive as provided in the Bank’s and the Company’s Certificate of Incorporation or By-laws or pursuant to other agreements in effect on or immediately prior to the Effective Date shall continue in full force and effect from the Effective Date (including all periods after the expiration of the Term), and the Bank and the Company shall also advance expenses for which indemnification may be ultimately claimed as such expenses are incurred to the fullest extent permitted under applicable law and in accordance with Section 7(g); provided, however, that any determination required to be made with respect to whether Executive’s conduct complies with the standards required to be met as a condition of indemnification or advancement of expenses under applicable law and the Bank’s or the Company’s Certificate of Incorporation, By-laws, or other agreement shall be made by independent counsel mutually acceptable to Executive and the Company (except to the extent otherwise required by law). After the date hereof, the Bank and the Company shall not amend its Certificate of Incorporation or By-laws or any agreement in any manner which adversely affects the rights of Executive to indemnification thereunder. Any provision contained herein notwithstanding, this Agreement shall not limit or reduce any rights of Executive to indemnification pursuant to applicable law. In addition, the Company will maintain directors’ and officers’ liability insurance in effect and covering acts and omissions of Executive during the Term and for a period of six years thereafter on terms substantially no less favorable than those in effect on the date of execution of this Agreement.

[Signature Page Follows]

  

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IN WITNESS WHEREOF, Executive has hereunto set his hand and the Bank and the Company have each caused this instrument to be duly executed this 14th day of November, 2013.

 

ROCKVILLE BANK

By: /s/ Kristen Johnson

Name: Kristen Johnson

Chairman, Compensation Committee

 

ROCKVILLE FINANCIAL, INC.

By: /s/ Kristen Johnson

Name: Kristen Johnson

Chairman, Compensation Committee

 

 

/s/ William H.W. Crawford, IV

William H.W. Crawford, IV 

 

  

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ATTACHMENT A

RELEASE

We advise you to consult an attorney before you sign this Release. You have until the date which is seven (7) days after the Release is signed and returned to Rockville Bank to change your mind and revoke your Release. Your Release shall not become effective or enforceable until after that date.

In consideration for the benefits provided under your Employment Agreement with Rockville Financial, Inc. and Rockville Bank (the “Employment Agreement”), and more specifically enumerated in Exhibit 1 hereto, by your signature below, you, for yourself and on behalf of your heirs, executors, agents, representatives, successors and assigns, hereby release and forever discharge the Rockville Financial, Inc., its past and present parent corporations, subsidiaries, divisions, subdivisions, affiliates and related companies (collectively, the “Company”) and the Company’s past, present and future agents, directors, officers, employees, representatives, successors and assigns (hereinafter “those associated with the Company”) with respect to any and all claims, demands, actions and liabilities, whether in law or equity, which you may have against the Company or those associated with the Company of whatever kind, including but not limited to those arising out of your employment with the Company or the termination of that employment. You agree that this release covers, but is not limited to, claims arising under the Age Discrimination in Employment Act of 1967, 29 U.S.C. § 621 et seq., Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq., the Americans with Disabilities Act of 1990, 42 U.S.C. § 12101 et seq., the Fair Labor Standards Act, 29 U.S.C. § 201 et seq., the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1001 et seq., the Connecticut Fair Employment Practices Act, C.G.S. § 46a-51 et seq., and any other local, state or federal law, regulation or order dealing with discrimination in employment on the basis of sex, race, color, national origin, veteran status, marital status, religion, disability, handicap, or age. You also agree that this release includes claims based on wrongful termination of employment, breach of contract (express or implied), tort, or claims otherwise related to your employment or termination of employment with the Company and any claim for attorneys’ fees, expenses or costs of litigation.

This Release covers all claims based on any facts or events, whether known or unknown by you, that occurred on or before the date of this Release. Except to enforce this Release, you agree that you will never commence, prosecute, or cause to be commenced or prosecuted any lawsuit or proceeding of any kind against the Company or those associated with the Company in any forum and agree to withdraw with prejudice all complaints or charges, if any, that you have filed against the Company or those associated with the Company.

Anything in this Release to the contrary notwithstanding, this Release does not include a release of: (i) your rights under the Employment Agreement or your right to enforce the Employment Agreement; (ii) any rights you may have to indemnification under any agreement, law, Company organizational document or policy, or otherwise; (iii) any rights you may have to benefits under the Company’s benefit plans; or (iv) your right to enforce this Release.

 

By signing this Release, you further agree as follows:

i. You have read this Release carefully and fully understand its terms;

  

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ii. You have had at least twenty-one (21) days to consider the terms of the Release;

iii. You have seven (7) days from the date you sign this Release to revoke it by written notification to the Company. After this seven (7) day period, this Release is final and binding and may not be revoked;

iv. You have been advised to seek legal counsel and have had an opportunity to do so;

v. You would not otherwise be entitled to the benefits provided under your Employment Agreement had you not agreed to execute this Release; and

vi. Your agreement to the terms set forth above is voluntary.

 

Name:  _____________________________

Signature: __________________________     Date:  __________________________

 

Received By: ________________________    Date:  __________________________

 

 

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