8th May 2008 09:00
Toyota Motor Corporation08 May 2008 (Translation) May 8, 2008 To Whom It May Concern: Company Name: TOYOTA MOTOR CORPORATION Name and Title of Representative: Katsuaki Watanabe, President (Code Number: 7203 Securities exchanges throughout Japan) Name and Title of Contact Person: Takuo Sasaki General Manager, Accounting Division (Telephone Number: 0565-28-2121) Notice Concerning Stock Acquisition Rights for the Purpose of Granting Stock Options At a meeting held on May 8, 2008, 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") pursuant to Articles 236 and 238 of the Corporation Act ofJapan, without consideration, for the purpose of granting stock options, (ii)the authorization to delegate to the Board of Directors the determination of theterms and conditions of the offering of such rights pursuant to Article 239 ofthe Corporation Act, and (iii) the approval of the calculation method todetermine the value of the Stock Acquisition Rights allotted to the Directors ofTMC as remuneration other than cash in accordance with the provisions of Article361 of the Corporation Act. The proposal will be presented at its 104thOrdinary General Shareholders' Meeting of TMC ("104th Shareholders' Meeting") tobe held on June 24, 2008 and we hereby inform you as follows. In addition, ifthe agendum "Election of 30 Directors" is approved at the 104th Shareholders'Meeting, there will be 30 Directors who will receive allotment of the StockAcquisition Rights, and the maximum number of Stock Acquisition Rights to beallotted to the Directors of TMC shall be 10,100, considering the number ofStock Acquisition Rights granted for the purpose of existing stock options andother various factors. 1. Reason for Issuance 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 Issuance of Stock Acquisition Rights (1) Grantees of the Stock Acquisition Rights Directors, Managing Officers and employees, etc. of TMC and its affiliates. (2) Type and Number of Shares to be Issued or Transferred upon Exercise ofStock Acquisition Rights Up to 3,700,000 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 issued. (3) Total Number of Stock Acquisition Rights Up to 37,000 The number of shares to be issued or transferred upon exercise of each StockAcquisition Right (the "Number of Shares to be Granted") shall be 100; provided, however, that if TMC splits its shares (including the allotment of common stockto shareholders without consideration; hereinafter the same shall apply) orconsolidates its shares after the allotment date of the Stock Acquisition Rights("Allotment Date"), the Number of Shares to be Granted shall be adjustedaccording to the following formula. Number of Shares to be = Number of Shares to be x Ratio of splitGranted after adjustment Granted before (or consolidation) adjustment The adjustment above shall be made only to the unexercised Stock AcquisitionRights remaining at the relevant time. If any fraction less than one (1) sharearises as a result of such adjustment, such fraction shall be discarded. (4) Amount Paid for Issuance of Stock Acquisition Rights No monetary payment shall be required for Stock Acquisition Rights for which thedetermination of the terms and conditions of the offering of such rights can bedelegated to the Board of Directors at the 104th Shareholder's Meeting. (5) Amount of Assets to be Paid upon Exercise of Stock Acquisition Rights(Exercise Price) The amount of assets to be paid upon exercise of each Stock Acquisition Rightshall be the amount obtained by multiplying the amount to be paid per shareissued or transferred upon exercise of Stock Acquisition Rights (the "ExercisePrice") by the Number of Shares to be Granted. The Exercise Price shall be asfollows. The amount obtained by multiplying the closing price of TMC's common stock inregular trading on the Tokyo Stock Exchange on the Allotment Date (if there isno transaction made on that day, then the closing price of the latest date priorto the Allotment Date on which a transaction was made) by 1.025, and anyfraction less than one (1) yen arising therefrom shall be rounded up to thenearest 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, theExercise Price shall be adjusted according to the following formula, and anyfraction less than one (1) yen arising therefrom shall be rounded up to thenearest one (1) yen. Exercise Price = Exercise Price x 1 after adjustment before 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, the Exercise Priceshall be adjusted according to the following formula, and any fraction less thanone (1) yen arising therefrom shall be rounded up to the nearest one (1) yen. Noadjustment shall be made, however, in the event that Stock Acquisition Rightsare exercised. Exercise Price Exercise Price Number of + Number of shares X Amount to be after adjustment before adjustment outstanding shares newly issued paid per share = X Market price Number of + Number of shares newly issued outstanding shares "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 case wherethe treasury stock is to be sold, "Number of shares newly issued" shall be readas "Number of shares of treasury stock to be sold." (iii) In the event that other class of stock is allotted without considerationto the holders of common stock, shares of another company are delivered to theholders of common stock of TMC as dividends, or in any other similar instancewhere an adjustment of the Exercise Price is required, in each case after theAllotment Date, an appropriate adjustment shall be made to the extentreasonable. (6) Exercise Period of the Stock Acquisition Rights From August 1, 2010 to July 31, 2016 (7) Conditions of Exercise of Stock Acquisition Rights (i) Each Stock Acquisition Right may not be partially exercised. (ii) The grantees of the Stock Acquisition Rights must, at the time of theclosing of the Ordinary General Shareholders' Meeting to be held for the lastfiscal year ending within two (2) years after the closing of the 104thShareholders' Meeting, be a Director, Managing Officer or an employee, etc. ofTMC or its affiliate to which he or she belongs at the time such rights aregranted. (iii) The grantee of the Stock Acquisition Rights may exercise his or her StockAcquisition Rights for up to two (2) years after the grantee loses his or herposition as a Director, Managing Officer or an employee, etc. of TMC or itsaffiliate to which the grantee belongs at the time such rights are granted.However, if the grantee loses such position due to retirement of office orresignation for personal reasons, or removal from office or dismissal, the StockAcquisition Rights will expire immediately. (iv) Stock Acquisition Rights may not be inherited. (v) Other exercise conditions shall be provided for by the resolution of the104th Shareholders' Meeting and the resolution of the meeting of the Board ofDirectors. (8) Events and Conditions of Acquisition of Stock Acquisition Rights by TMC Stock Acquisition Rights may be acquired by TMC without consideration, on a datethat shall be provided by the Board of Directors, if a proposal on a mergeragreement in which TMC will be dissolved, or a proposal on a share exchangeagreement or a share transfer by which TMC will become a wholly-owned subsidiaryof another company is approved at an Ordinary General Shareholders' Meeting. (9) Restriction on Transfer of Stock Acquisition Rights Transfer of Stock Acquisition Rights shall be subject to approval of the Boardof Directors. (10) Matters concerning the Paid-in Capital and Capital Reserve to be Increaseddue to the Issuance of Shares upon Exercise of Stock Acquisition Rights (i) Amount of paid-in capital to be increased due to the issuance of sharesupon exercise of the Stock Acquisition Rights shall be half of the maximumamount of paid-in capital increase and others which is calculated in accordancewith Article 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 of sharesupon exercise of the Stock Acquisition Rights shall be an amount determined bysubtracting the amount of paid-in capital to be increased provided in theimmediately preceding paragraph (i) from the maximum amount of increase inpaid-in capital set 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) Calculation Method of the Fair Value of Stock Acquisition Rights The fair value of the Stock Acquisition Rights shall be calculated by using theBlack-Scholes model based on the various conditions on the Allotment Date. Reference: The fair value of the Stock Acquisition Rights as of March 31, 2008,calculated in accordance with the Black-Scholes model, is 680 yen per share. (Note) The issuance of the Stock Acquisition Rights shall be subject to approvalof the proposal "Issuance of Stock Acquisition Rights for the Purpose ofGranting Stock Options" at the 104th Shareholders' Meeting scheduled to be heldon June 24, 2008. The details of the issuance and granting of the StockAcquisition Rights will be decided at the meeting of the Board of Directors tobe held after the104th Shareholders' Meeting. 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