August 1, 2008 TOYOTA MOTOR CORPORATION and [GRANTEE]
August
1, 2008
TOYOTA
MOTOR CORPORATION
and
[GRANTEE]
AGREEMENT
FOR THE GRANT OF OPTIONS TO
ACQUIRE COMMON SHARES OF
TOYOTA MOTOR CORPORATION
ACQUIRE COMMON SHARES OF
TOYOTA MOTOR CORPORATION
UNITED
STATES OF AMERICA
CONTENTS
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CLAUSE
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PAGE
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1.
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INTERPRETATION
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1
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2.
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GRANT
OF OPTIONS
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2
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3.
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INCENTIVE
STOCK OPTIONS
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2
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4.
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EXERCISE,
ACQUISITION TRIGGER AND REFUSAL OF OPTIONS
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3
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Exercise
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3
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Acquisition
Trigger
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3
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Refusal
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5
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5.
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MANNER
OF EXERCISE OF OPTIONS
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6
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6.
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ADJUSTMENTS
TO THE NUMBER OF COMMON SHARES
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7
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7.
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SECURITIES
AND RELEVANT LEGISLATION
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7
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8.
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NO
GUARANTEE OF CONTINUING EMPLOYMENT OR OFFICE
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8
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9.
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EMPLOYEE
UNDERTAKING
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8
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10.
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DATA
PROCESSING CONSENT
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8
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11.
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COSTS
AND TAXES
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9
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12.
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SECURITIES
ACCOUNTS
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9
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13.
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GENERAL
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10
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14.
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TERMINATION
OF THIS AGREEMENT
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11
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15.
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CLAIMS
AGAINST THE COMPANY
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11
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16.
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NOTICES
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12
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To
the Grantee
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12
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To
the Company
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12
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Receipt
of Notice
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12
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17.
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AMENDMENTS
AND WAIVERS
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12
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18.
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GOVERNING
LAW
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13
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19.
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ENTIRE
AGREEMENT
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13
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20.
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SEVERABILITY
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13
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APPENDIX
1 ADJUSTMENTS (ENGLISH TRANSLATION)
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15
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1.
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SHARE
SPLIT OR SHARE CONSOLIDATION
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15
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2.
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ISSUE
OF NEW COMMON SHARES OR DISPOSAL OF TREASURY SHARES
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16
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3.
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GENERAL
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17
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APPENDIX
2 FORM OF EXERCISE NOTICE – 2008 STOCK
OPTION
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19
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1.
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WARRANTY
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19
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2.
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EXERCISE
OF STOCK OPTIONS
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19
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APPENDIX
3 FORMS OF NOTICE OF TERMINATION OF 2008 STOCK OPTION
AGREEMENT
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21
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Termination
of Agreement pursuant to Clause 14.1
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21
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Termination
of Agreement pursuant to Clause 14.2
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22
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BETWEEN
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(1)
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TOYOTA MOTOR CORPORATION a
company registered in Japan and whose registered office is at ▇
▇▇▇▇▇▇-▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇, ▇▇▇-▇▇▇▇ ▇▇▇▇▇ (the Company);
and
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(2)
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[EMPLOYEE] of [Home Address] (the
Grantee)
and currently employed by Toyota [ ]] (the
Employing
Company).
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WHEREAS the Company intends to
grant the Grantee options to acquire common shares of the Company and set out
the exercise conditions thereof.
IT IS AGREED as
follows:
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1.
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Interpretation
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1.1 In
this Agreement, unless the context otherwise requires, the following words and
expressions shall have the following meanings:
Agreement
means this Option Agreement;
Appointed Bank
has the meaning set forth in Clause 5.1(c);
Board
means the board of directors of the Company from time to time or a duly
appointed committee thereof;
Bank Business
Day means any day on which the Appointed Bank is open for business in
Japan;
Common Shares
means the ordinary shares of the Company from time to time;
Company Business
Day means any day on which the Company is open for business in
Japan;
Exercise Period
means the period commencing on August 1, 2010 and ending on
July 31, 2016, provided that if July 31, 2016 is not a Company Business
Day, then the final day of the Exercise Period shall be the Company Business Day
immediately preceding July 31, 2016;
Grant Date
means, August 1, 2008, the date on which the Company grants the Options
to the Grantee;
Group
means the Company, the Employing Company and the Subsidiaries;
Option
means a right to acquire 100 Common Shares under this Agreement (or such
number as may be increased or decreased pursuant to Clause 6) and Options shall
be construed accordingly;
Reorganization
means any capitalization or rights issue, share split, share consolidation, or
other reorganization or reduction of the share capital of the
Company;
Page
1
Subsidiary
means any entity, from time to time, in which the Company owns, directly or
indirectly, at least 50% of the issued share capital thereof; and
Yen means the lawful
currency of Japan.
1.2 Any
reference herein to the provisions of any statute or subordinate legislation
shall be deemed to refer to the same as in force from time to time including any
modification, amendment or re-enactment thereof.
1.3 Clause
headings are inserted for ease of reference only and shall not affect the
construction of this Agreement.
1.4 Where
the context permits, the singular shall include the plural and vice versa and
the masculine shall include the feminine. Words importing individuals
shall be treated as importing bodies corporate, corporations, unincorporated
associations and partnerships and vice-versa.
1.5 References
to Clauses, and Appendices 1, 2 and 3 are to the clauses and the appendices of
this Agreement. Appendices 1, 2 and 3 form part of this
Agreement.
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2.
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Grant
of Options
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2.1 The
Company hereby grants to the Grantee on the Grant Date [20] Options subject to
the terms and conditions of this Agreement.
2.2 No
consideration shall be payable by the Grantee on the grant of the
Options.
2.3 This
Agreement evidences the grant of the Options to the Grantee. The
Grantee shall not request the Company to issue any certificates representing the
Options.
2.4 The
Options are personal to the Grantee and may not be transferred, assigned,
pledged, charged to, or otherwise alienated or exercised by, any other
person.
2.5 The
benefit of the Options does not constitute part of the Grantee’s base salary or
remuneration and will not be taken into account in determining any other
employment-related rights that the Grantee may have, such as for the purpose of
calculating any pension entitlements, severance pay or notice for termination of
employment.
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3.
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Incentive
Stock Options
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3.1 It
is intended that the Options constitute incentive stock options as defined in
▇▇▇▇▇▇▇ ▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Internal Revenue Code of 1986, as amended
and any regulations promulgated thereunder (the Code);
provided, however, that to the extent
the Options do not satisfy one or more provisions of Section 422 of the Code,
they shall be treated as non-qualified stock options.
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2
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4.
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Exercise,
Acquisition Trigger and Refusal of
Options
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Exercise
4.1 The
Grantee may exercise all or some of the Options during the Exercise Period in
the manner set forth in Clause 5.
4.2 Each
Option, if exercised, must be exercised in full and no Option may be partially
exercised.
4.3 Subject
to Clause 6, the price to be paid for each Common Share to be issued or
transferred to the Grantee upon exercise of each Option shall be calculated by
multiplying the closing price of the Common Shares listed on the Tokyo Stock
Exchange on the Grant Date by 1.025 (rounded up to the nearest whole Yen) (the
Exercise
Price). The Company shall notify the Grantee of the Exercise
Price promptly after the Company has calculated the Exercise Price.
4.4 Options
may be exercised on any Company Business Day on which the Tokyo Stock Exchange
is open.
Acquisition
Trigger
4.5 Notwithstanding
any other provision in this Agreement, the Options shall be acquired
automatically by the Company (for nil consideration) on the earlier
of:
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(a)
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the
expiry of the Exercise Period;
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(b)
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the
death of the Grantee;
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(c)
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the
Grantee being declared bankrupt or entering into any general composition
with or for the benefit of his
creditors;
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(d)
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a
shareholders’ meeting approving a merger agreement, a share-for-share
agreement (kabushiki
kokan) or a statutory share transfer (kabushiki ▇▇▇▇), as a
result of which the Company decides to invalidate the Options on the basis
that the Company will cease as a legal entity or it will become a
wholly-owned subsidiary of another
company;
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(e)
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the
Grantee becoming a director, an officer or an employee of any company
which competes with the Company or any of its
Subsidiaries;
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(f)
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the
dismissal of the Grantee for disciplinary reasons from his office or
employment at the Employing Company or any other member of the
Group;
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(g)
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breach
of this Agreement by the Grantee or gross misconduct by the Grantee (as
determined by the Board);
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(h)
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any
date prior to the date of the annual general shareholders’ meeting of the
Company at which matters related to the fiscal year ending March 31, 2010
are presented to the shareholders on which the Grantee ceases to be
employed by, or hold office with, the Employing Company or any other
member of the Group; or
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3
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(i)
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the
termination of this Agreement in accordance with Clause
14.
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4.6 The
Options shall be acquired automatically by the Company (for nil consideration)
if, on any date on or after the beginning of the Exercise Period, the Grantee
ceases to be a director, an officer or an employee of any member of the Group
for any reason other than:
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(a)
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injury,
disability or ill-health (as determined by the
Board);
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(b)
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retirement
at or after the date on which he is bound or entitled to retire under his
contract of employment or
otherwise;
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(c)
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the
company of which he is a director, an officer or an employee ceasing to be
a member of the Group;
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(d)
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the
business (or part of a business) in which he is employed or of which he is
a director or an officer being transferred to a transferee which is not a
member of the Group; or
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(e)
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any
other reason at the Board’s absolute
discretion.
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In the
event of (a), (b), (c), (d) or (e), the Grantee may exercise the Options until
the second anniversary of the date when the Grantee ceased to be a director, an
officer or an employee of the Group.
For the
avoidance of doubt, the Grantee shall not be treated for such purposes as
ceasing to be a director, an officer or an employee of any member of the Group
if the Grantee remains or simultaneously becomes a director, an officer or an
employee of another member of the Group.
4.7 For
the purposes of Clause 4.5(h) and Clause 4.6, a Grantee shall not be treated as
ceasing to be a director, an officer or an employee of any member of the Group
if he is absent from work solely as a result of an authorized leave or absence
until such Grantee ceases to be entitled to exercise any statutory or
contractual right to return to work.
4.8 In
the event that the Company becomes a wholly-owned subsidiary of another company
(such company, the Holding
Company) as a result of a share-for-share exchange (kabushiki kokan) or a
statutory share transfer (kabushiki ▇▇▇▇), the Company
may, in its discretion, decide to acquire any Options which have not yet been
exercised. However, if the Company decides not to acquire the Options
in these circumstances:
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(a)
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the
obligations of the Company in connection with the Options shall be
transferred to the Holding Company;
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(b)
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the
number of shares in the Holding Company to be issued or transferred to the
Grantee upon the exercise of the Options shall be adjusted in accordance
with the relevant share-for-share exchange ratio or statutory share
transfer ratio, as the case may be, and shall be rounded down to the
nearest whole share; and
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4
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(c)
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subject
to paragraphs (a) and (b) above, the Holding Company may vary, to the
extent reasonable in all the
circumstances:
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(i)
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the
type or class of shares in the Holding Company to be issued or transferred
upon the exercise of the Options;
and
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(ii)
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the
terms and conditions of the Options, including but not limited
to:
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(A)
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the
exercise price of each Option;
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(B)
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the
exercise period of the Options;
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(C)
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the
terms and conditions for the exercise of the
Options;
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(D)
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the
terms and conditions for the acquisition of the Options;
and
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(E)
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the
restrictions on the transfer of the
Options.
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4.9 The
Grantee shall not be entitled to any compensation from the Company or the
Employing Company in the event of any of the Options being acquired by the
Company for any reason under this Agreement.
Refusal
4.10 The
Company may refuse to accept exercise by the Grantee of the Options within 30
days of the date of receipt of an otherwise valid Exercise Notice (as defined in
Clause 5.1(a) below) for any of the
following reasons:
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(a)
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the
Company determines in good faith that the exercise impedes the intended
issuance by the Company of new securities regardless of the type or class,
including, without limitation, shares or bonds with
warrants;
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(b)
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the
Company determines that the Options have been acquired pursuant to Clauses
4.5 or 4.6;
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(c)
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there
has been insufficient time to confirm the Adjusted Exercise Price
stipulated in Appendix 1; or
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(d)
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the
Company determines in good faith that the exercise of the Options may
materially impede the business of the
Company;
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provided, however that the
Company shall not refuse to accept exercise by the Grantee of the Options on the
final Company Business Day of the Exercise Period.
4.11 If
the Company refuses to accept the exercise by the Grantee of the Options for any
one of the reasons set forth in Clauses 4.10(a) to 4.10(d)above:
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(a)
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the
Company shall give written notice to the Grantee of such refusal,
provided, however, that the Company is not obliged to disclose the reasons
for such refusal; and
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(b)
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the
Options shall remain outstanding until the earlier
of:
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Page
5
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(i)
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the
Grantee’s exercise of such Options pursuant to Clause 5;
or
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(ii)
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the
acquisition of the Options by the Company pursuant to Clauses 4.5 and
4.6.
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5.
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Manner
of Exercise of Options
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5.1 Subject
to Clause 4.2, the Grantee may exercise one or more of the Options in
whole, but not in part, during the Exercise Period in accordance with the
following procedure:
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(a)
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the
Grantee is required to send to the Company a notice of its intention to
exercise the Options (the Exercise
Notice) in the form attached as Appendix 2 (or in such other
form as prescribed by the Company from time to
time);
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(b)
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within
five (5) Company Business Days the Company shall send to the Grantee an
acknowledgement that such Exercise Notice has been
received;
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(c)
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the
Grantee shall, within four (4) Bank Business Days from the date on which
the Company notifies the Grantee that the Company has received the
Exercise Notice, pay an amount calculated by multiplying the Exercise
Price by the number of Common Shares to be obtained upon exercise of the
Option(s) (the Exercising
Purchase Price) to the Bank of Tokyo-Mitsubishi UFJ, Ltd. or such
other bank as shall be appointed by the Company from time to time (the
Appointed
Bank); provided,
however, that if the last Bank Business Day is not also a Company
Business Day, then the date for payment shall be the next Company Business
Day which is also a Bank Business Day. The date of exercise
shall be the date of receipt by the Company of payment of the Exercising
Purchase Price.
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(d)
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Upon
confirmation by the Company that the Grantee has fully paid the Exercising
Purchase Price pursuant to this Clause 5.1 and any Tax Liabilities
pursuant to Clause 11, the Company shall promptly issue or transfer (as
the case may be) the relevant number of Common Shares to the Grantee’s
securities account in accordance with Clause 12. Upon payment
of the Exercising Purchase Price by the Grantee to the Appointed Bank, the
Grantee shall legally own the Common Shares acquired upon the exercise of
the Options.
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5.2 The
Grantee may withdraw the Exercise Notice up until such time as the Grantee pays
the Exercising Purchase Price by giving written notice to the Company to that
effect; provided,
however, that once the Grantee has paid the Exercising Purchase Price in
full, the Grantee cannot withdraw the Exercise Notice.
5.3 Notwithstanding
Clause 5.2 above, following payment by the Grantee of the Exercising Purchase
Price, the Exercise Notice shall be deemed withdrawn if the Company notifies the
Grantee of its refusal to accept the exercise of the Options pursuant to Clauses
4.10 and 4.11. In such circumstances, the Company shall repay the
Exercising Purchase Price to the Grantee, provided, however, that the
Company shall not pay any interest with respect to any repayment to the
Grantee.
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6
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6.
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Adjustments
to the Number of Common Shares
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6.1 In
the event of a Reorganization of the share capital of the Company, the Exercise
Price and the total number of Common Shares underlying an Option may be adjusted
in accordance with the formulae set out in Appendix 1.
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7.
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Securities
and Relevant Legislation
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7.1 The
Options may not be exercised if the exercise of the Options or the issue of
Common Shares thereafter would be contrary to any enactment or regulation at the
time being in force in any country having jurisdiction in relation
thereto. In particular, the Options shall not be exercisable unless
the offer and sale of the Common Shares subject to the Options have been
registered under the United States Securities Act of 1933, as amended and
qualified under applicable state “blue sky” laws, or the Company has determined
that an exemption from registration under the Securities Act of 1933 and from
qualification under such state “blue sky” laws is available. Neither
the Employing Company nor the Company shall be bound to take any action or
obtain the consent of any governmental authority to such acquisition, exercise
or issue or to take any action to ensure that any such acquisition, exercise or
issue is in accordance with any such enactment or regulation if such action
would, in the opinion of the Employing Company or the Company (as the case may
be), be unduly onerous and neither the Employing Company nor the Company shall
have any liability in respect thereof to the Grantee.
7.2 The
Grantee hereby agrees to abide by the Financial Instruments and Exchange Law of
Japan, and all relevant securities laws, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ legislation, corporate
act, tax laws, any other relevant laws, rules and regulations (including
relevant foreign, state and local laws) and relevant internal rules of the
Company and the Employing Company (including, without limitation, the rules on
all insider information, trading prohibition and buying and selling Common
Shares in
relation to the exercise of any Options and the subsequent sale of the Common
Shares acquired upon exercise). The Company may, at its discretion,
impose such conditions on the exercise of the Options as it shall deem necessary
in order for such exercise to comply with any applicable enactments or
regulations, including but not limited to, the requirement that an investment
representation be given by the Grantee or that certificates for shares of Common
Stock be subject to a legend describing restrictions on transfer. If
there is any possibility of violation of relevant laws and rules, the Grantee
shall immediately contact the Company to discuss them; provided, however, that the
Grantee is solely responsible for obtaining his own legal advice in connection
with the grant and exercise of the Options.
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8.
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No
Guarantee of Continuing Employment or
Office
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8.1 The
rights, obligations and status of the Grantee under the terms and conditions of
his office or employment with the Employing Company shall not be affected by
this Agreement. Neither this Agreement nor any action taken or
omitted to be taken hereunder shall be construed as in any way:
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(a)
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guaranteeing
the Grantee’s continued office or employment with the Company, Employing
Company or any other member of the Group;
or
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Page
7
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(b)
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giving
the Grantee the right to continue or be re-instated in his office or the
employ of the Company, the Employing Company or any other member of the
Group whether before during or after the Exercise
Period.
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For the
avoidance of doubt, nothing in this Agreement creates any form of employment
relationship between the Company and the Grantee.
8.2 The
Grantee hereby waives any and all rights to compensation or damages in
consequence of the termination of his office or employment with the Company, the
Employing Company or any other member of the Group for any reason whatsoever
insofar as those rights arise, or may arise, from his ceasing to have rights
under or being entitled to exercise the Options pursuant to this Agreement as a
result of such termination or from the loss or decrease in value of such rights
or entitlements. If necessary, the Grantee’s terms of employment
shall be varied accordingly.
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9.
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Employee
Undertaking
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In
accordance with the purpose of this Agreement, the Grantee shall devote himself
to his work with integrity as a director, an officer or an employee (as
appropriate) of the relevant member(s) of the Group.
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10.
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Data
Processing Consent
|
10.1 The
Company and the Employing Company may hold personal information relating to the
Grantee, including, without limitation, payroll, address, service period,
demographics and similar information in connection with this Agreement and may
at any time process and use such personal information in order to perform and
facilitate the implementation, management and administration of the matters
contemplated and set out in this Agreement provided that such use is not
prohibited by law. Subject to any applicable prohibitions, the
Company may, at any time to the extent required, make the Grantee’s personal
information available to other persons within or outside the Group for such
purposes, including, but not limited, in connection with the exercise of the
Options. The Grantee hereby irrevocably consents to the processing,
use, transfer and registration of such personal information within or outside
the Group. Before transferring any data to a person or entity outside
the Group, the Company or the Employing Company (as the case may be) undertakes
to inform the Grantee of:
|
(a)
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the
identity of any recipient or category of recipients of such personal
information, the relevant data categories;
and
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(b)
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the
Grantee’s rights to consult and to the extent necessary rectify and
complete the registered personal
information.
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The
Company will take reasonable steps to protect and defend the privacy interests
of the Grantee.
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11.
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Costs
and Taxes
|
11.1 The
Company shall have the right to require the Grantee to remit to the Company,
prior to the delivery of any certificates evidencing Common Shares acquired upon
exercise of an Option, an amount sufficient to satisfy any
applicable
Page
8
income
tax, capital gains tax, social security contributions or other tax charge or
duty (the Tax
Liabilities) which may be assessed or chargeable in connection with the
grant or exercise of the Options. In addition, prior to the Company’s
determination of such Tax Liabilities, the Grantee may make an irrevocable
election to satisfy, in whole or in part, such obligation to remit taxes, by
directing the Company to cause Common Shares to be withheld (but not in excess
of a rate that the Company determines is necessary to avoid unfavorable
accounting treatment) that would otherwise be received by such
Grantee. Such election may be denied by the Board at its discretion,
or may be made subject to certain conditions specified by the Board, including,
without limitation, conditions intended to avoid the imposition of liability
against the individual under applicable laws. The Grantee shall
indemnify the Company and any other member of the Group in respect of any Tax
Liabilities payable in respect of the Options and for which the Company or any
other member of the Group is liable whether pursuant to any withholding
obligations or otherwise.
11.2 Except
as provided for in Clause 11.1, the Grantee is responsible
for:
|
(a)
|
the
cost of opening an account at the Securities Company (as defined in Clause
12.1 below);
|
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(b)
|
the
relevant charges payable in connection with any money
transfers;
|
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(c)
|
all
other charges of the Appointed Bank and/or Securities Company which may be
imposed from time to time; and
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|
(d)
|
all
other expenses that are imposed on the exercise of
Options.
|
11.3 The
Company shall have the right to require the Grantee to remit to the Company an
amount sufficient to satisfy any such costs and expenses prior to the delivery
of any certificate evidencing Common Shares acquired upon exercise of an
Option. Such amount may be satisfied by directing the Company to
withhold Common Shares in the manner set forth in Clause 11.1.
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12.
|
Securities
Accounts
|
12.1 Pursuant
to Japanese laws and regulations, the Grantee is required to appoint an agent
and maintain a non-resident offshore account in Japan with respect to the Common
Shares to be acquired upon exercise of the Options. The Grantee
hereby agrees that it shall, through the Company, entrust the custody,
management and disposal of such Common Shares (the Services)
to a securities company or bank (the Securities
Company); provided, however, that the Grantee
shall retain the right to determine and direct the Securities Company to sell,
transfer or dispose of all or any portion of the Common Shares on the Grantee’s
behalf and the Securities Company may not sell, transfer or otherwise dispose of
the Common Shares without the Grantee’s prior approval. The Company
shall determine and appoint such Securities Company (or change such appointment)
in its absolute discretion and notify the Grantee of such appointment (or change
in such appointment) in accordance with Clause 16.
12.2 Following
the Grant Date and prior to the exercise of the Options the Grantee is required
to open an account in the Grantee’s name at the Securities Company
and
Page
9
follow
the necessary procedures set out separately by the Company in order to enable
the Securities Company to perform the Services.
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13.
|
General
|
13.1 The
existence of the Options shall not affect in any way the right or power of the
Company or its shareholders to make or authorize any Reorganization or other
adjustment, recapitalization, reorganization or change in the Company’s capital
structure, or any merger, corporate split, share-for-share exchange or
consolidation of the Company, or any issue of shares, bonds, debentures,
preferred or prior preference stocks ahead of or convertible into, or otherwise
affecting the Common Shares of the Company or the rights attaching thereto or
any other securities, or the dissolution or liquidation of the Company or any
sale or transfer of all or any part of its assets or business, or any other
corporate act or proceeding, whether of a similar character or
otherwise.
13.2 The
grant of options under this Agreement or future agreement is a voluntary and
discretionary benefit and does not create any entitlement to options or shares
in the future, even in the case of repeated grants of options.
13.3 The
Grantee shall have no rights as a stockholder with respect to any Common Shares
issuable upon exercise of an Option until payment of the Exercising Purchase
Price for such Common Shares as provided in Clause 5.1(d), and no adjustment
shall be made for dividends or distributions or other rights in respect of any
Common Share for which the record date is prior to the date on which the Grantee
pays the Exercising Purchase Price therefor. The Grantee acknowledges
that no member of the Group has any duty to disclose confidential information to
the Grantee that is not generally available to holders of Common
Shares.
13.4 The
Board shall have the right to interpret the provisions of this Agreement and to
make all rules and determinations which it deems necessary or desirable for the
administration of this Agreement. The decisions of the Board or, in
the case of matters requiring shareholder approval, resolutions of the
shareholders meeting (whichever is applicable), including without limitation all
calculations required hereunder, shall be final and binding with respect to all
matters relating to this Agreement and the Options.
13.5 Clauses
7.2, 8, 9, 10, 15, 16, 18 and 20 shall continue and remain in full force and
effect notwithstanding the exercise of all of the Options by the
Grantee.
|
14.
|
Termination
of this Agreement
|
14.1 If,
by reason of imposition of Taxation Liabilities or a change in the applicable
laws or regulations, this Agreement is rendered illegal or otherwise
unenforceable, the Grantee may, before the Grantee has paid the Exercising
Purchase Price in respect of the first exercise of the Options, terminate this
Agreement with retroactive effect from the Grant Date by giving written notice
in the appropriate form attached in Appendix 3 (or as otherwise prescribed by
the Company from time to time); provided that Clauses 8, 10, 11, 15.1 16, 18 and
20 shall continue and remain in full force and effect notwithstanding the
termination of this Agreement.
Page
10
14.2 The
Grantee may only retroactively terminate this Agreement if he has not exercised
any of the Options. If the Grantee has exercised one or more Options
then the Grantee may at any time during the Exercise Period, in respect of any
outstanding Options, terminate this Agreement without retroactive application by
giving written notice in the form attached in Appendix 3 (or as otherwise
prescribed by the Company from time to time); provided that Clauses 7.2, 8, 9,
10, 11, 15, 16, 18 and 20 shall continue and remain in full force and effect
notwithstanding the termination of this Agreement.
|
15.
|
Claims
Against the Company
|
15.1 Subject
to Clauses 15.1 and 15.2 below, the Grantee shall not make any claim against any
member of the Group or any of its respective directors, officers, shareholders,
affiliates, representatives, auditors or employees for any compensation
whatsoever in connection with this Agreement.
15.2 If,
following delivery by the Grantee to the Company of an Exercise Notice, the
Company fails or delays, wilfully or due to its gross negligence, to deliver the
Common Shares to the Grantee within 30 Company Business Days, and as a direct
result of such failure or delay the Grantee suffers damage or loss, the Grantee
may claim compensation limited to the difference between the Exercising Purchase
Price, which was paid by the Grantee to the Company, and the aggregate market
price of the Common Shares at the time of acquisition by the Grantee, if the
Exercising Purchase Price is higher than the aggregate market price of the
Common Shares. For the avoidance of doubt, refusal by the Company to
accept the exercise by the Grantee of the Options pursuant to Clause 4.10 shall
not be grounds for compensation under this Clause 15.
15.3 Nothing
in this Clause 15 shall prohibit the Grantee from making a claim against the
Company, the Employing Company or their respective directors, officers,
shareholders, affiliates, representatives, auditors or employees enforcing
rights expressly provided for under the provisions of this
Agreement.
15.4 If
the Grantee exercises Options or disposes of Common Shares in breach of any
provisions of this Agreement, the Grantee shall, upon the Company’s request,
refund the greater of:
|
(a)
|
the
difference between the Exercising Purchase Price, which was paid by the
Grantee to the Company, and the aggregate market price of the Common
Shares at the time of acquisition by the Grantee;
or
|
|
(b)
|
the
entire profit which the Grantee makes by the disposal of the Common
Shares.
|
If either
(a) or (b) above applies, the Grantee shall make such refund promptly in
accordance with the Company’s instructions.
Page
11
|
16.
|
Notices
|
To
the Grantee
16.1 Any
communication or notice to be given under or in connection with this Agreement
shall be in the English language and may be
communicated by letter, telex, facsimile transmission or email to the home
address set out as first written above or to such other address, telex or
facsimile number or email address as the Grantee may from time to time have
notified (in accordance with this Clause 16.1) to the Company.
To
the Company
16.2 Any
communication or notice to be given under or in connection with this Agreement
shall be in the English language and may be communicated by letter, telex,
facsimile transmission or email to the business address set out as first written
above or to such other address, telex or facsimile number or email address as
the Company may from time to time have notified (in accordance with this Clause
16.2) to the Grantee and should be addressed to the “Human Resources
Division.”
Receipt
of Notice
16.3 Any
notice so served by letter, telex, facsimile transmission or email shall be
deemed to have been received:
|
(a)
|
in
the case of telex, facsimile transmission or email, twelve (12) hours
after the time of dispatch; and
|
|
(b)
|
in
the case of post, special delivery or registered post, twelve (12) Company
Business Days from the date of
posting.
|
|
17.
|
Amendments
and Waivers
|
17.1 No
amendment to the provisions of this Agreement shall be effective unless such
amendments are:
|
(a)
|
consistent
with all applicable Japanese laws and regulations and the terms of the
resolutions of the Company’s general shareholders meeting dated June 24,
2008, and Board meeting dated July 15, 2008, to grant options, as such
resolutions may be modified or amended from time to time;
and
|
|
(b)
|
made
in writing and signed by the parties hereto or their duly authorized
representatives.
|
17.2 All
rights, remedies and powers conferred upon the parties hereto are cumulative and
shall not be deemed or construed to be exclusive of any other rights, remedies
or powers now or hereafter conferred upon the parties hereto or either of them
by law or otherwise.
17.3 Any
failure at any time to insist upon or enforce any such right, remedy or power
shall not be construed as a waiver thereof.
Page
12
|
18.
|
Governing
Law
|
18.1 This
Agreement shall be governed by and construed in all respects in accordance with
the laws of Japan.
18.2 Each
of the parties hereto hereby irrevocably submits to the jurisdiction of the
courts of Japan.
|
19.
|
Entire
Agreement
|
19.1 This
Agreement constitutes the entire agreement between the parties relating to the
subject matter of this Agreement and supersedes all prior representations,
writings, negotiations and understandings with respect hereto.
19.2 The
parties acting in good faith will determine any matter not set out
herein.
|
20.
|
Severability
|
Any
provision of this Agreement that is invalid, illegal or unenforceable in any
jurisdiction shall as to that jurisdiction, be ineffective to the extent of such
invalidity, illegality or unenforceability, without affecting in any way the
remaining provisions hereof in such jurisdiction or rendering that or any other
provision of this Agreement invalid, illegal or unenforceable in any other
jurisdiction.
Page
13
IN WITNESS whereof this
Agreement with effective date of August 1, 2008 has been executed in two
originals, each party acknowledging receipt of one duly executed
original.
|
By:
TOYOTA MOTOR
CORPORATION
|
||||
| By: | ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ | |||
| Title: | President and Representative Director | |||
|
By:
[GRANTEE’S
NAME]
|
||||
| [GRANTEE’S NAME] | ||||
Page
14
APPENDIX
1
ADJUSTMENTS
(ENGLISH TRANSLATION)
Note: The
following is an English translation of the terms and conditions applying to the
treatment of the Options in the event of a share split, share consolidation,
issue of new Common Shares or disposal of Common Shares held in treasury by the
Company, which were approved at the Company’s general shareholders’ meeting on
June 24, 2008, and the Board meeting on July 15, 2008. This is not a
literal translation and it is provided for reference only. The
original of such terms and conditions in the Japanese language will prevail in
all circumstances. All references to dates in the following
translation are to Tokyo time.
|
1.
|
Share
Split or Share Consolidation
|
1.1 If
the Company splits (including the case that the Common Shares of the Company are
allotted to existing shareholders for free) or consolidates its Common Shares
after the Grant Date, the number of Common Shares to be issued/transferred in
satisfaction of the exercise of an Option (the Adjusted Number
of Shares) shall be adjusted in accordance with the following formula,
provided, however, that such adjustment shall be made only with respect to
Options that have not yet been exercised at the time of such share split or
share consolidation. The Adjusted Number of Shares shall be rounded
down to the nearest whole Common Share.
|
Adjusted
Number
of Shares |
=
|
Number
of Common Shares required
to satisfy the exercise of an Option prior to adjustment |
×
|
Ratio
of share split/
consolidation
|
The
Company shall promptly notify the Grantee in writing of the Adjusted Number of
Shares in the event of a share split or share consolidation by the
Company.
1.2 If
the Company splits or consolidates its Common Shares, the Exercise Price shall
be adjusted in accordance with the following formula:
|
Adjusted
Exercise
Price |
=
|
Pre-adjusted
Exercise Price
|
×
|
1
|
|
Ratio
of share
split/consolidation
|
1.3 The
“Pre-adjusted Exercise Price” used in the formula in Clause 1.2 above shall be
the Exercise Price effective on the day prior to the date on which the Adjusted
Exercise Price is applied pursuant to 1.4 below.
1.4 The
Adjusted Exercise Price shall be applied as follows:
Page
15
|
(a)
|
if
the Company splits its Common Shares, the Adjusted Exercise Price shall be
applied from the date following the allotment date (wariate-bi) of the
split shares; or
|
|
(b)
|
if
the Company consolidates its Common Shares, the Adjusted Exercise Price
shall be applied from the date following the date on which the
shareholders meeting of the Company decides the consolidation to be
effective provided for in Item 2 of Paragraph 2 of Article 180 of the
Corporate Act (Law No. 86 of 2005).
|
1.5 Where
the Board decides that Common Shares will be issued pursuant to a share split in
exchange for a capitalization of distributable profits, and the allotment date
of the split shares is specified as being a date prior to the date of the
shareholders’ meeting at which such capitalization is approved, from the day
following such shareholders’ meeting, the Adjusted Exercise Price shall be
applied retroactively with effect from the day following the date of allotment
of the split shares. In such case, a number of additional Common
Shares calculated in accordance with the following formula shall be
issued/transferred to any Grantee who exercises an Option during the period
between the date following the allotment date of the split shares and the date
of the shareholders’ meeting at which the capitalization of distributable
profits is approved (the Interim
Period):
|
Number
of
additional Common Shares |
=
|
 |
Pre-Adjusted
Exercise Price |
-
|
Adjusted
Exercise Price |
 |
×
|
Number
of shares
which were issued or transferred upon the exercise of the Option without the adjustment of the Exercise Price during the Interim Period |
|
Adjusted
Exercise
Price
|
||||||||
|
2.
|
Issue
of New Common Shares or Disposal of Treasury
Shares
|
2.1 If
the Company disposes of Common Shares held in treasury (Treasury
Shares) or issues new Common Shares for an amount which is less than the
then current market price from and including August 1, 2008 (excluding all
instances where options, warrants or other rights to acquire shares of the
Company are exercised or where the Company transfers its Treasury Shares in
accordance with a resolution of a shareholders’ meeting pursuant to paragraph 1
of Article 156 of the Companies Act), the Exercise Price shall be adjusted in
accordance with the following formula:
|
Adjusted
Exercise Price |
=
|
Pre-
adjusted Exercise Price |
×
|
Number
of
issued and outstanding Common Shares |
+
|
Number
of new
Common Shares to be issued or Treasury Shares to be disposed |
×
|
Amount
to be paid
per new Common Share to be issued or Treasury Share to be disposed |
|
|
||||||||
|
|
|
|
||||||
Page
16
|
|
|
|
||
|
Current
market price per Common Share
|
||||
|
Number
of issued and
outstanding Common Shares |
+
|
Number
of new Common
Shares to be issued or Treasury Shares to be disposed |
||
The
Adjusted Exercise Price shall be rounded up to the nearest whole
Yen.
2.2 The
“Pre-adjusted Exercise Price” used in the formula in Clause 2.1 above shall be
the Exercise Price on the day prior to the date on which the Adjusted Exercise
Price is applied.
2.3 The
“Number of issued and outstanding Common Shares” used in the formula in Clause
2.1 above shall be the total number of issued and outstanding Common Shares on
the allotment date of the new Common Shares being issued or the date on which
the Treasury Shares are disposed, whichever is applicable (for the avoidance of
doubt, it does not include Treasury Shares). If such date is not
specified, the “Number of issued and outstanding Common Shares” shall be the
total number of issued and outstanding Common Shares on the date one month prior
to the date on which the Adjusted Exercise Price is applied; provided that where
two or more events, which require the adjustment of the Exercise Price, occur
within a short period of time of each other and the number of issued and
outstanding Common Shares which is used in calculating the Adjusted Exercise
Price triggered by one of those events can be calculated appropriately, such
number of issued and outstanding shares shall be used.
2.4 The
“Current market price per Common Share” used in the formula in Clause 2.1 above
shall be the average daily closing price in Yen (including the trend quotations)
of the Company’s Common Shares on the Tokyo Stock Exchange for the 30 day period
starting on the 45th dealing
day before the date on which the Adjusted Exercise Price is applied, excluding
any days on which the closing price is not reported. The average
daily closing price shall be calculated by disregarding the third and successive
decimal places of such number and then correcting the resulting number to one
decimal place.
2.5 The
Adjusted Exercise Price calculated in accordance with the formula in Clause 2.1
above shall be applied from the date following the date of disposal of Treasury
Shares or the allotment date of the Common Shares to be issued if such date is
specified, or from the date following the payment date for the Common Shares to
be issued or Treasury Shares to be disposed.
2.6 When
calculating the Adjusted Exercise Price in accordance with the formula in Clause
2.1, each of the numbers to be inserted in the formula shall be calculated by
disregarding the second and successive decimal places of such
number.
|
3.
|
General
|
3.1 If
the difference between the Adjusted Exercise Price and the Pre-adjusted Exercise
Price is less than one Yen, the Exercise Price shall not be adjusted on that
occasion; provided, however, that the exact Adjusted Exercise Price
originally
Page
17
calculated
in accordance with the formula set out in Clause 1 or 2 above shall be used as
the Pre-adjusted Exercise Price on the subsequent occasion that an adjustment
occurs.
3.2 Except
as otherwise provided in Clauses 1 or 2 above, the Company shall adjust the
Exercise Price, as the Company considers appropriate:
|
(a)
|
in
the event of capital decrease, merger or demerger of the Company;
or
|
|
(b)
|
if
an event occurs which otherwise causes a change (or potential change) in
the number of issued shares of the
Company.
|
3.3 If
the Exercise Price is adjusted, the Company shall issue an individual notice to
the Grantee prior to the date that the Adjusted Exercise Price is applied as
specified in Clause 1 or 2 above; provided, however, that in the event of a
share split as set out in Clause 1.5 above or where the Company is unable to
issue an individual notice prior to the date that the Adjusted Exercise Price is
applied, the Company shall issue an individual notice to the Grantee promptly
after such date.
Page
18
APPENDIX
2
FORM
OF EXERCISE NOTICE – 2008 STOCK OPTION
[Date]
To: Toyota
Motor Corporation (the Company)
From:
[Employee name] (the
Grantee)
Pursuant
to Clauses 4 and 5 of the Agreement for the Grant of Options to Acquire Common
Shares of Toyota Motor Corporation, executed with effect from August 1, 2008
(the Agreement),
I warrant and claim for the issue or transfer (at the Company’s discretion) of
the Common Shares as follows:
|
1.
|
Warranty
|
I warrant
that, as of June 24, 2008, the date on which the general shareholders’ meeting
resolved to grant options, I was neither:
(a) a
“major shareholder” (oguchi
kabunushi); nor
(b) a
“special related person” (tokubetsu kankeisha) to any
“major shareholder”,
as those
terms are defined under Japanese laws and regulations.1
|
2.
|
Exercise
of Stock Options
|
1 Special
Taxation Measures Law (Law No. 26 of 1957) Paragraph 1 of Article 29-2; and
Enforcement Regulation of the Special Taxation Measures Law Paragraphs 1 and 2
of Article 19-3.
Page
19
| Address |
[Grantee to
complete]
|
||||
|
The
Grantee
|
Name,
Employing Company
and
position
|
[Grantee to
complete]
|
|||
|
Date
of the general
shareholder meeting at which the grant of Options was approved |
June 24, 2008 |
Exercise
Period
|
From: August
1, 2010
To: July 31, 2016
(inclusive)
|
||
|
Grant Date
|
August 1, 2008 | ||||
|
Terms of
the
Options |
Right |
Class
of
underlying
Shares
|
Aggregate
Number
of
shares
underlying
all
Options
granted to
Grantee
under
2008
Stock Option
Plan
on Grant
Date |
Exercise
Price
per
share
|
|
| Option |
Common
Shares
|
[ ]
Common
Shares |
[insert price]
Yen
[Grantee
to complete] |
||
|
Details
of the
|
Number
of shares to be acquired upon this
exercise of
Option(s)
|
Total
Exercising
Purchase
Price
|
|||
|
proposed
exercise
of
Options
|
[
] Common
Shares
[Grantee
to insert number]
|
[insert price]
Yen
[Grantee to
complete]
|
|||
| The Company | Address |
1
Toyota-Cho, Toyota City, Aichi, 471-8571
|
|||
| Name |
Toyota
Motor Corporation
|
||||
[Grantee’s
Name]
Page
20
APPENDIX
3
FORMS
OF NOTICE OF TERMINATION
OF
2008 STOCK OPTION AGREEMENT
Termination
of Agreement pursuant to Clause 14.1
[Date]
To: Toyota
Motor Corporation (the Company)
From: [Employee’s name] (the Grantee)
Pursuant
to Clause 14.1 of the Agreement for the Grant of Options to Acquire Common
Shares of Toyota Motor Corporation, executed with effect from August 1, 2008
(the Agreement),
I notify you that I hereby retroactively terminate the Agreement, such
termination to be effective from the date of execution of the
Agreement.
I hereby
acknowledge and agree that:
(a) I
shall continue to be bound by and to comply with Clauses 8, 10, 11, 15.1, 16, 18
and 20 of the Agreement; and
(b) pursuant
to Clause 15.1 of the Agreement, I have no claim, whether present or future
against any member of the Group (as defined in the Agreement) or any of its
respective directors, officers, shareholders, affiliates, representatives,
auditors or employees for any compensation whatsoever in connection with this
Agreement or the termination thereof.
[Grantee’s Name]
Page
21
Termination
of Agreement pursuant to Clause 14.2
[Date]
To: Toyota
Motor Corporation (the Company)
From: [Employee’s name] (the Grantee)
Pursuant
to Clause 14.2 of the Agreement for the Grant of Options to Acquire Common
Shares of Toyota Motor Corporation, executed with effect from August 1, 2008, I
notify you that I hereby terminate the Agreement effective as of the date of
this notice.
I hereby
acknowledge and agree that:
(a) I
shall continue to be bound by and to comply with Clauses 7.2, 8, 9, 10, 11, 15,
16, 18 and 20 of the Agreement; and
(b) pursuant
to Clause 15.1 of the Agreement, I have no claim, whether present or future,
against any member of the Group (as defined in the Agreement) or any of its
respective directors, officers, shareholders, affiliates, representatives,
auditors or employees for any compensation whatsoever in connection with this
Agreement or the termination thereof.
[Grantee’s Name]
Page
22