10th May 2006 18:17
Toyota Motor Corporation10 May 2006 (Translation) To Whom It May Concern: May 10, 2006 Toyota Motor Corporation (Toyota Jidosha Kabushiki Kaisha) 1, Toyota-cho, Toyota City, Aichi Prefecture Notice Concerning Stock Options (Stock Acquisition Rights) At a meeting held on May 10, 2006, the Board of Directors of Toyota MotorCorporation ("TMC") resolved to propose an agenda asking for (i) theauthorization to issue rights to subscribe for or purchase shares of TMC ("StockAcquisition Rights") without consideration, for the purpose of granting stockoptions, (ii) the authorization to delegate the determination of terms andconditions of the offering to the Board of Directors pursuant to Article 236,Article 238 and Article 239 of the Corporation Act, and (iii) the approval ofthe calculation method to determine the value of the Stock Acquisition Rightsallotted to the Directors of TMC as remuneration other than cash in accordancewith the provisions of Article 361 of the Corporation Act. The proposal will bepresented at the 102nd Ordinary General Shareholders' Meeting of TMC to be heldon June 23, 2006 and we hereby inform you as follows. In addition, if theagendum "Election of Twenty-six (26) Directors" is approved at the same OrdinaryGeneral Shareholders' Meeting, there will be twenty-six (26) Directors who willreceive allotment of the Stock Acquisition Right, and the maximum number ofStock Acquisition Rights to be allotted to the Directors of TMC shall be 9,100,considering the number of Stock Acquisition Rights granted for existing stockoptions and various other factors. 1. Reason for Issue of Stock Acquisition Rights without Consideration TMC will issue Stock Acquisition Rights to Directors, Managing Officers andemployees, etc. of TMC and its affiliates in order to enhance enthusiasm andraise morale for improving business performance and thereby contribute tostrengthening TMC's international competitiveness. 2. Summary of Terms of Issue of Stock Acquisition Rights (1) Grantees of the Stock Acquisition Rights Directors, Managing Officers and employees, etc. of TMC and itsaffiliates. (2) Type and Number of Shares to be Issued or Transferred upon Exercise ofStock Acquisition Rights Up to 3,500,000 shares of common stock of TMC. Provided, however, that if the number of shares to be issued or transferred uponexercise of each Stock Acquisition Right is adjusted in accordance with (3)below, such number of shares to be issued or transferred shall be adjusted tothe number obtained by multiplying the number of shares after adjustment by thetotal number of Stock Acquisition Rights to be offered. (3) Total Number of Stock Acquisition Rights Up to 35,000 The number of shares for purposes of Stock Acquisition Right (the "Number ofShares Granted") shall be 100; provided, however, that if TMC splits its shares(including the allotment of common stock to shareholders without consideration;hereinafter the same shall apply) or consolidates its shares after the allotmentdate of the Stock Acquisition Rights, the Number of Shares Granted shall beadjusted according to the following formula. Number of shares = Number of shares x Ratio of splitafter adjustment before adjustment (or consolidation) The adjustment above shall be made only to the unexercised rights remaining atthe relevant time. If any fraction less than one (1) share arises as a resultof such adjustment, such fraction shall be discarded. (4) Monetary Amount Paid for Issuance of Stock Acquisition Rights Regarding Stock Acquisition Rights for which the authority to determinethe terms and conditions of the offering is delegated to the Board of Directors,in accordance with the resolution of this year's Ordinary General Shareholders'Meeting, no monetary payment shall be required. (5) Amount of Assets to be Paid upon Exercise of Stock Acquisition Rights The amount of assets to be paid upon exercise of each Stock AcquisitionRight shall be the amount obtained by multiplying the amount to be paid pershare issued or transferred upon exercise of Stock Acquisition Rights (the"Exercise Price") by the Number of Shares Granted. The Exercise Price shall beas follows. The amount obtained by multiplying the closing price of TMC's commonstock in regular trading on the Tokyo Stock Exchange on the allotment date ofthe Stock Acquisition Rights (if there is no transaction made on that day, thenthe closing price of the latest date prior to the allotment date of the StockAcquisition Rights on which a transaction was made) by 1.025, and any fractionless than one (1) yen arising therefrom shall be rounded up to the nearest one(1) yen. In addition, the Exercise Price shall be adjusted as follows: (i) If TMC splits or consolidates its shares after the allotment date of theStock Acquisition Rights, the Exercise Price shall be adjusted according to thefollowing formula, and any fraction less than one (1) yen arising therefromshall be rounded up to the nearest one (1) yen. Exercise Price after = Exercise Price before x 1 adjustment adjustment __________________ Ratio of split (or consolidation) (ii) If TMC issues common stock or sells treasury stock of the common stock ata price below the market price after the allotment date of the Stock AcquisitionRights, the Exercise Price shall be adjusted according to the following formula,and any fraction less than one (1) yen arising therefrom shall be rounded up tothe nearest one (1) yen. No adjustment shall be made, however, in the event thatStock Acquisition Rights are exercised. Exercise Price Exercise Price Number of + Number of shares X Amount to be after adjustment before adjustment outstanding newly issued paid per share = X shares _____________________________________ Market price _________________________________________________________ Number of + Number of shares outstanding shares newly issued "Number of outstanding shares" provided for in the above formula does notinclude the number of shares held by TMC as treasury stock, and in the casewhere the treasury stock is to be sold, "Number of shares newly issued" shall beread as "Number of shares of treasury stock to be sold." (iii) In the event that other class of stock is allotted without considerationto the common shareholders, shares of other company are delivered to the commonshareholders of TMC as dividends, or in any other similar instance where anadjustment of the Exercise Price is required, in each case after the allotmentdate of the Stock Acquisition Rights, an appropriate adjustment shall be made tothe extent reasonable. (6) Exercise Period of the Stock Acquisition Rights From August 1, 2008 to July 31, 2014 (7) Conditions of Exercise of Stock Acquisition Rights (i) Each Stock Acquisition Right may not be partially exercised. (ii) The grantee of the Stock Acquisition Rights must, at the time of theclosing of the Ordinary General Shareholder's Meeting to be held for the lastfiscal year ending within two (2) years after the closing of the 102nd OrdinaryGeneral Shareholders' Meeting of TMC, be a Director, Managing Officer or anemployee, etc. of TMC or its affiliate to which he or she belongs at the timesuch right is granted. (iii) The grantee of the Stock Acquisition Rights may exercise his or herStock Acquisition Rights for up to two (2) years after the grantee loses his orher position as a Director, Managing Officer or an employee, etc. of TMC or itsaffiliate to which the grantee belongs at the time of grant. However, if thegrantee loses such position due to retirement or resignation for personalreasons, or removal from office or dismissal, the Stock Acquisition Rights willexpire immediately. (iv) Stock Acquisition Rights may not be inherited. (v) Other exercise conditions shall be provided for by the resolution of the102nd Ordinary General Shareholders' Meeting and the resolution of a meeting ofthe Board of Directors. (8) Events and Conditions of Acquisition of Stock Acquisition Rights by TMC Stock Acquisition Rights may be acquired by TMC without consideration, ona date that shall be provided by the Board of Directors, if a GeneralShareholders' Meeting approves a proposal on a merger agreement in which TMCwill be dissolved, or a proposal on a share exchange agreement or a sharetransfer by which TMC will become a wholly-owned subsidiary of another company. (9) Restriction on Transfer of Stock Acquisition Rights Transfer of Stock Acquisition Rights shall be subject to an approval ofthe Board of Directors. (10) Matters concerning the Capital and Capital Reserve to be Increased due tothe Issuance or Transfer of Shares upon Exercise of Stock Acquisition Rights (i) Amount of capital to be increased due to the issuance or transfer ofshares upon exercise of the Stock Acquisition Rights shall be half of themaximum amount of capital increase etc. which is calculated in accordance withArticle 40, Paragraph 1 of the Corporation Accounting Regulations, and anyfraction less than one (1) yen arising therefrom shall be rounded up to thenearest one (1) yen. (ii) Amount of capital reserve to be increased due to the issuance or transferof shares upon exercise of the Stock Acquisition Rights shall be an amountdetermined by subtracting the capital amount to be increased provided for in theimmediately preceding paragraph (i) from the maximum amount of capital increaseset forth in the immediately preceding paragraph (i). (11) Handling of Fraction In the case where the number of shares to be issued or transferred to thegrantee includes any fraction less than one (1) share, such fraction shall berounded down. (12) Calculate Method of the Fair Value of Stock Acquisition Rights The fair value of Stock Acquisition Rights shall be calculated by usingthe Black-Scholes model based on the various conditions of the allotment date. Reference: The current fair value calculated by using the Black-Scholesmodel is 1,431 yen per share. (Note) The issue of the Stock Acquisition Rights shall be conditional upon theagendum "Issue of Stock Acquisition Rights without Consideration to Directors,Managing Officers and Employees, Etc., of TMC and Its Affiliates" being approvedat the 102nd Ordinary General Shareholders' Meeting of TMC scheduled to be heldon June 23, 2006. The details of the issuance and granting of the StockAcquisition Rights will be decided by the resolution of the Board of Directorsto be held after this year's Ordinary General Shareholders' Meeting. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Toyota Motor