EFTA Document EFTA01382746

I/A •fable of Contents market value of the shares of stock or cash payment received in tespa.t of the SAR. We will be able to deduct this same amount for federal income tax purposes, but such deduction may be limited under Sections 2806 and 162(m) of the Code for compensation paid to certain executives designated in those Sections. Any gain or loss recognized upon a subsequent sale or exchange of the shares is treated as capital gain or loss, as applicable, for which we arc not entitled to a deduction. Restricted Stock A holder will not have any federal income tax liability upon the grant of an award of restricted stock unle . the holder otherwise elects to be taxed at the time of grant pursuant to Section 83(b) of the Code. On the date an award of restricted stock becomes transferable or is no longer subject to a substantial risk of forfeiture, the holder will have ordinary• income equal to the difference between the fair market value of the shares on that date over the amount the holder paid for sueh shares, if any, unless the holder made an election under Section 83(b) of the Code to be taxed at the time of grant. If the holder makes an election under Section 83(b) of the Code, the holder will have ordinary income at the time of grant equal to the difference between the fair market value of the shares on the date of grant over the amount the holder paid for such shares, if any. Special rules apply to the receipt and disposition of restricted stock received by officers and directors who arc subject to Section 16(h) of the Exchange Act. Any future appreciation in the common stock will be taxable to the holder at capital gains rates. However, if the restricted stock award is later forfeited. the holder will not be able to recover the tax previously paid pursuant to his Section 83(b) election. We will be able to deduct, at the same time as it is recognized by the holder, the amount of ordinary income to the holder for federal income tax purposes, but such deduction may be limited under Sections 2806 and 162(m) of the Code for compensation paid to certain executives designated in those Sections. Restricted Stock Units A holder will not have any federal income tax liability at the time a restricted stock unit is granted. Rather, upon the delivery of shares (or cash) pursuant to a restricted stock unit award, the holder will have ordinary income equal to the fair market value of the number of shares (or the amount of cash) the holder actually receives with respect to the award. We will be able to deduct the amount of ordinary income to the holder for federal income tax purposes. but the deduction may be limited under Sections 2806 and 162(m) of the Code for ordinary income paid to certain executives designated in those Sections. Any gain or loss recognized upon a subsequent sale or exchange of the stock (if settled in stock) is treated as capital gain or loss for which we am not entitled to a deduction. Other Stock-Btued Awards A holder will have ordinary income equal to the differ between the fair market value of the shares on the date the conunon stock subject to an other stock-based award is transferred to the holder over the amount the holder paid for such shares. if any. We will be able to deduct, at the same time as it is recognized by the holder. the amount of ordinary income to the holder for federal income tax purposes. but such deduction may be limited under Sections 2806 and 162(m) of the Code for compensation paid to certain executives designated in those Sections. Any gain or loss recognized upon a subsequent sale or exchange of the stock is treated as capital gain or loss for which we are not entitled to a deduction. Other Cash-Based Awards A holder will not have any federal income tax liability, and we will not be allowed a tax deduction, at the time an other cash-based award is granted. Upon receipt of cash in settlement of the award, the holder will recognize ordinary income equal to the cash reeeived, and we will be allowed a corresponding federal income tax deduction at that time, but such deduction may be limited under Sections 280G and 162(m) of the Code for compensation paid to certain executives designated in those Sections. 200 httplAnnv. see. gov/Archi vecledgaddataht83980/00011 93 1251 5334479/d31022ds la.htmi 1 0/14/201 5 9:06:38 AM] CONFIDENTIAL - PURSUANT TO FED. R. CRIM. P. 6(e) CONFIDENTIAL DB-SDNY-0082219 SONY GM_00228403 EFTA01382746