August 1, 2001
[TOYOTA USA] INC.
and
[EMPLOYEE]
================================================================================
AGREEMENT FOR THE GRANT OF AN OPTION TO
ACQUIRE WARRANTS TO SUBSCRIBE FOR
COMMON STOCK OF TOYOTA MOTOR
CORPORATION
================================================================================
CONTENTS
CLAUSE PAGE
1. INTERPRETATION.............................................................1
2. GRANT OF OPTIONS...........................................................2
3. EXERCISE AND LAPSE OF OPTIONS..............................................3
4. MANNER OF EXERCISE OF OPTION...............................................4
5. IMMEDIATE EXERCISE OF THE WARRANTS UPON EXERCISE OF THE OPTION.............5
6. ADMINISTRATION.............................................................6
Notices....................................................................6
Securities Laws............................................................6
General....................................................................7
Data Processing Consent....................................................8
7. AMENDMENTS AND WAIVERS.....................................................8
8. GOVERNING LAW..............................................................9
9. ENTIRE AGREEMENT...........................................................9
10. SEVERABILITY...............................................................9
APPENDIX......................................................................11
Warrant Terms (English translation).......................................11
THIS OPTION AGREEMENT is made on August 1, 2001
BETWEEN
(1) [TOYOTA USA] INC. a company registered or organized in [state, USA] and
whose [registered office/principal place of business] is at [o] (the
Company) and
(2) [EMPLOYEE] of [Address] (the Grantee)
IT IS AGREED as follows:
1. INTERPRETATION
1.1 In this Agreement, the words and expressions set out below shall bear the
following meanings:
Board means the board of directors from time to time of the Company or a duly
authorized committee thereof;
Common Stock means common shares in the capital of Parent;
Date of Grant means the date on which the Option is granted by the Company to
the Grantee being the date of this Agreement;
Group means the Company, the Parent and any subsidiary (being a company in which
there is direct or indirect ownership of at least 50% of the issued share
capital) of the Company or the Parent and member of the Group shall be construed
accordingly;
Option means an option to acquire 20 Warrants (or such number as may be reduced
on exercise of the Option in part pursuant to Clause 4.1);
Option Period means the period from 1 August 2003 to 31 July 2005 during normal
business hours (Eastern Standard Time) and provided that the final date of the
period shall be the last normal business day of the Company preceding 31 July
2005;
Parent means Toyota Motor Corporation;
Warrant means a warrant issued by the Parent on 17 August 2001 containing the
right to subscribe for shares of Common Stock pursuant to the warrant terms set
out in the Appendix (as amended from time to time pursuant to such terms); and
Warrant Exercise Price means the price payable to exercise each Warrant in
accordance with the terms of the Warrant.
1.2 Any reference herein to the provisions of any statute or subordinate
legislation shall be deemed to refer to the same 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 the Appendix are to the clauses and appendix of
this Agreement.
1.6 The Appendix forms part of this Agreement.
2. Grant of Options
2.1 The Company hereby grants to the Grantee the Option subject to the terms
and conditions of this Agreement.
2.2 No payment is required for the grant of the Option.
2.3 The Option is personal to the Grantee and may not be transferred, assigned
or charged to or exercised by any other person and any attempt to do so will
result in the Option lapsing.
2.4 The benefit of the Option is not part of the Grantee's base salary or
remuneration and will not be taken into account in determining any other
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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.
3. EXERCISE AND LAPSE OF OPTIONS
3.1 The Grantee may exercise the Option only during the Option Period.
3.2 Notwithstanding any other provision in this Agreement, the Option shall
lapse automatically and become of no effect on the earlier of:
(a) the expiry of the Option Period;
(b) the death of the Grantee;
(c) the Grantee being declared bankrupt or entering into any general
composition with or for the benefit of his creditors; and
(d) the Warrants being declared void or becoming such that they may no longer
be exercised in accordance with the terms thereof, including, without
limitation, in the circumstance referred to in paragraph 1(1) of the terms
of the Warrant.
3.3 Subject to Clause 3.4, the Option shall lapse automatically and become of
no effect upon the Grantee ceasing to be a director or an employee of a member
of the Group. For the avoidance of doubt, the Grantee shall not be treated for
such purposes as ceasing to be a director or employee of a member of the Group
if the Grantee remains or simultaneously becomes a director or an employee of
another member of the Group.
3.4 Where a Grantee ceases to be a director or an employee of a member of the
Group by reason of:
(a) injury, disability or ill-health (as determined by the Board);
(b) retirement at or after the date on which he is entitled to retire under his
contract of employment or otherwise;
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(c) the company of which he is a director or employee ceasing to be a member of
the Group;
(d) the business (or part of a business) in which he is employed or of which he
is a director being transferred to a transferee which is not a member of
the Group; or
(e) any other reason at the Board's absolute discretion,
the Grantee may, subject always to the provisions of Clause 3.1, exercise the
Option during the period of six months following such cessation of office or
employment as set out in sub-clauses (a) to (e) above, and failing such exercise
the Option shall lapse automatically.
3.5 For the purposes of Clauses 3.3 and 3.4 a Grantee shall not be treated as
ceasing to be an employee of a member of the Group if absent from work solely as
a result of an authorized leave of absence until such time as such Grantee
ceases to be entitled to exercise any statutory or contractual right to return
to work.
4. MANNER OF EXERCISE OF OPTION
4.1 The Grantee may exercise the Option in whole or in part (provided that only
whole Warrants may be exercised as a result of a partial exercise of the
Option), by giving notice to the Company in such form as the Company may from
time to time prescribe. The Grantee may obtain the requisite form from the
Company at any time during the Option Period. The date of exercise shall be the
date of the receipt by the Company of such notice determined in accordance with
Clause 6.1. If the Option is exercised in respect of some only of the Warrants
comprised in the Option, the Company shall procure the issue of a notice to the
Grantee stating the balance of the Warrants in respect of which the Option may
subsequently be exercised.
4.2 The Company shall have the right to require the Grantee entitled to receive
Warrants or shares of Common Stock pursuant to the exercise of the Option and of
the Warrants to remit to the Company, prior to the delivery of any Warrants or
certificates evidencing such shares of Common Stock, any amount sufficient to
satisfy any income tax, capital gains tax, social security contributions or
other tax, charge or
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duty ("Taxation Liabilities"). In the case of exercise of Warrants, prior to the
Company's determination of such Taxation Liabilities, such Grantee may make an
irrevocable election to satisfy, in whole or in part, such obligation to remit
taxes, by directing the Company to cause shares of Common Stock to be withheld
(but not in excess of the Company's minimum statutory withholding) 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 Section 16(b) of the
Securities Exchange Act of 1934. The Grantee shall indemnify the Company and any
member of the Group in respect of any Taxation Liabilities payable in respect of
the Option and the Warrants and for which the Company or any member of the Group
is liable whether pursuant to any withholding obligations or otherwise.
5. IMMEDIATE EXERCISE OF THE WARRANTS UPON EXERCISE OF THE OPTION
5.1 Upon exercise of the Option, the Grantee shall forthwith exercise all of
the Warrants which he acquires pursuant to such exercise (the "Relevant
Warrants"), by delivery of such notice of exercise and the payment of the
aggregate Warrant Exercise Price payable in respect of such exercise, in such
manner and in accordance with such procedures and requirements as may be
prescribed by the Parent. For this purpose, the Grantee will be required to
appoint an individual within the Parent as the Grantee's attorney with full
power and authority on his behalf to exercise the Relevant Warrants forthwith.
Details of such procedures and requirements shall be made available to the
Grantee prior to the Option Period and any relevant forms or notices may be
obtained by the Grantee from the Company or the Parent at any time during the
Option Period.
5.2 Subject to the Grantee complying with the provisions of Clause 4 and 5.1
and also subject to the provisions of Clause 6.2, the Company shall procure that
the number of Warrants in respect of which the Option has been exercised are
duly delivered and transferred for exercise on behalf of the Grantee in the
manner prescribed by the Parent or the Company from time to time.
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5.3 On exercise of the Warrants, Common Stock will be issued to the Grantee in
accordance with the terms of the Warrants.
6. ADMINISTRATION
Notices
6.1 Any notice or other document required to be given under or in connection
with this Agreement may be delivered to the Grantee or sent by post to him at
his home address according to the records of the Company or such other address
as may appear to the Company or the Parent to be appropriate. Any notice or
other document required to be given to the Company or the Parent under or in
connection with the Agreement may be delivered or sent by post to it at its
registered office (or such other place or places as the Company or the Parent,
as the case may be, may from time to time determine and notify to the Grantee).
Notices sent by post shall be deemed to have been given on the day following the
date of posting.
Securities Laws
6.2 No Option or Warrant may be granted or exercised at a time when such Option
or Warrant, or the granting or exercise thereof, may result in the violation of
any law or governmental order or regulation. In addition the Option and Warrants
shall not be exercisable unless the offer and sale of the shares of Common Stock
subject to the Warrants have been registered under the Securities Act of 1933
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. The
Company, may at its discretion, impose such conditions on the exercise of the
Options and Warrants as it shall deem necessary in order for such exercise to
comply with such U.S. securities laws, 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. Neither the Company nor the Parent shall be bound to
take any action or obtain the consent of any governmental authority to such
grant, exercise or issue or to take any action to ensure that any such grant,
exercise or issue is in accordance with any such enactment or regulation if such
action
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would, in the opinion of the Company or the Parent (as the case may be), be
unduly onerous and neither the Company nor the Parent shall have any liability
in respect thereof to the Grantee.
General
6.3 No Grantee shall have any claim or right to receive grants of Options or
Warrants under this Agreement.
6.4 The existence of the Option shall not affect in any way the right or power
of the Parent or its shareholders to make or authorize any or all adjustments,
recapitalisations, reorganizations or other changes in the Parent's capital
structure, or any merger or consolidation of the Parent, or any issue of shares,
bonds, debentures, preferred or prior preference stocks ahead of or convertible
into, or otherwise affecting the Common Stock of the Parent or the rights
thereof, or the dissolution or liquidation of the Parent 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.
6.5 The rights, obligations and status of the Grantee under the terms and
conditions of his office or employment with the Company shall not be affected by
this Agreement. Neither this Agreement nor any action taken or omitted to be
taken hereunder shall be deemed to create or confer any rights:
a) guaranteeing the Grantee's office or employment by the Company, which
may be terminated at any time; or
b) to continue or be re-instated in his office or the employ of the Company
whether before during or after the Option Period.
6.6 The Grantee hereby acknowledges that he waives all and any rights to
compensation or damages in consequence of the termination of his office or
employment with any company for any reason whatsoever insofar as those rights
arise, or may arise, from his ceasing to have rights under or be entitled to
exercise the Option pursuant to this Agreement as a result of such termination
or from the loss or
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diminution in value of such rights or entitlements. If necessary, the Grantee's
terms of employment shall be varied accordingly.
6.7 The Grantee shall have no rights as a stockholder with respect to any
Common Stock issuable upon exercise of a Warrant until a certificate or
certificates evidencing such shares shall have been issued to such Grantee, and
no adjustment shall be made for dividends or distributions or other rights in
respect of any share for which the record date is prior to the date upon which
the Grantee shall become the holder of record thereof. The Grantee acknowledges
that the Group has no duty to disclose confidential information to the Grantee
that is not generally available to holders of Common Stock.
6.8 The decisions of the Board shall be final and binding with respect to all
matters relating to this Agreement and the Option.
Data Processing Consent
6.9 The Company may retain payroll, address, demographic, service period and
similar personnel information relating to each Grantee under this Agreement, and
may at any time utilize such information as necessary for the proper
implementation, management and administration of this Agreement and the Option,
provided such use is not prohibited by law. Subject to any applicable
prohibitions of law, the Company may, at any time, make such information
available to other persons who are retained to assist in the administration of
this Agreement, but only as necessary for the proper administration of this
Agreement and the Option. The Grantee hereby irrevocably consents to such
utilization of such information for the purposes described above.
7. AMENDMENTS AND WAIVERS
7.1 No amendment to the provisions of this Agreement shall be effective unless
made in writing and signed by the parties hereto or their duly authorized
representatives.
7.2 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,
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remedies or powers now or hereafter conferred upon the parties hereto or either
of them by law or otherwise.
7.3 Any failure at any time to insist upon or enforce any such right, remedy or
power shall not be construed as a waiver thereof.
8. GOVERNING LAW
8.1 This Agreement shall be governed by and construed in all respects in
accordance with the laws of Japan.
8.2 Each of the parties hereto hereby irrevocably submits to the jurisdiction
of the courts of Japan.
9. ENTIRE AGREEMENT
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.
10. 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.
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IN WITNESS whereof this Agreement has been executed the day and year first
before written
[TOYOTA USA] INC.
by: _____ _____ _____
Name:
Title:
By [EMPLOYEE]
----- ----- -----
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APPENDIX
Warrant Terms (English translation)
[Note: The following English translation is not a literal translation but is
provided for convenience only and the original terms and conditions of the
Warrants in Japanese will prevail in all circumstances. All references to dates
in the following translation are to Tokyo time. Explanatory notes is italics and
square brackets are not part of the translation and are also provided for
convenience only.]
1. Exercise period and manner of exercise of the Warrant Rights(1)
(1) The holders of the Warrants(2) (the Holders) may exercise the Warrant
Rights at any time during the period from 1 August 2003 to 3 August
2005 pursuant to the conditions set out in these terms; provided,
however, that no Warrant Rights may be exercised after an acceleration
of the Bonds(3) occurs.
(2) The Warrants attached to the Bonds may be detached and transferred
separately. [Note: 194 warrants shall be attached to each Bond on issue
of the Bonds.]
(3) The aggregate amount of the issue price of the common shares to be
issued upon exercise of the Warrant Rights [in respect of all the 194
Warrants attached to each Bond shall be (Y)81,538,200 which] is 81.5382
% [of the principal amount of] each Bond (each Bond having a par value
of (Y)100 million each). [The amount of the issue price of the common
shares to be issued upon exercise of the Warrant Rights in respect of
each Warrant shall be (Y)420,300 as set out in paragraph 9.] (the
Allotment Amount of each Warrant)
(4) The Warrant Rights in respect of an individual Warrant may not be
partially exercised.(4)
--------------------------------------------------------------------------------
1 Defined in the Bond terms as "the pre-emptive right to subscribe for new
common shares of Toyota Motor Corporation with par value".
2 Defined in the Bond terms as "warrants representing the pre-emptive right to
subscribe for new common shares of Toyota Motor Corporation with par value".
3 Defined in the Bonds terms as The 6th Unsecured Bonds with Warrants of Toyota
Motor Corporation issued on 17 August 2001. [The circumstances in which an
acceleration of the Bonds will occur, include, but are not limited to, a
default in payment by the Company under the Bonds, the Company entering
various bankruptcy procedures and cross-default under other indebtedness of
the Company.]
4 [This provision does not prevent partial exercise of the Option, which grants
the rights to 20 warrants, but does mean that the Option must be exercised in
units that correspond to a whole number of warrants.]
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2. Shares issued pursuant to the exercise of the Warrant Rights
The shares issued pursuant to the exercise of the Warrant Rights shall be common
shares of the Company(5) with a par value of (Y)50, or if the Company issues
common shares with no par-value, the Warrant Rights shall be for common shares
with no par-value (the Common Shares).
3. Exercise Price
The exercise price in respect of each Common Share issued pursuant to the
exercise of a Warrant shall be (Y)4,203 [as adjusted from time to time pursuant
to paragraph 4] (the Exercise Price).
4. Adjustment of the Exercise Price
(1) (a) The Exercise Price shall be adjusted in accordance with the following
formula if the events set out in 4(2)(a)-(d) below occur after the Warrants
are issued:
Number
Number of of new Amount to
issued and shares be paid per
Adjusted Pre-adjusted outstanding to be [new]
Exercise = Exercise Price X shares + issued X share
Price -------------------------
Current market price per
share
--------------------------------------------
Number of issued + Number of new
and outstanding shares to be issued
shares
(b) The "Pre-adjusted Exercise Price" used in the formula above shall be
the Exercise Price effective on the day prior to the date on which the
Adjusted Exercise Price is applied pursuant to 4(2). The "Number of issued
and outstanding shares" used in the formula above shall be the total number
of issued and outstanding shares of the Company on the allotment date of
the new shares being issued. If such allotment date is not specified, the
"Number of issued and outstanding shares" shall be the total number of
issued and outstanding shares on the date one month prior to the date on
which the Adjusted Exercise Price is applied; provided, however, that in
the event of a stock split the "Number of issued and outstanding shares"
shall be the total number of issued and outstanding shares on the expiry of
the period provided for in clause 1 of Article 215 of the Commercial Code
as applied by Article 220 of the Commercial Code (Law No. 48 of 1899 as
amended).
--------------------------------------------------------------------------------
5 The term "Company" (when used in this Appendix only) refers to Toyota Motor
Corporation.
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(c) The "Current market price per share" used in the formula above shall be
the average daily closing price (including the trend quotations) 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 to two decimal places and rounded off to
one decimal place.
(d) The Adjusted Exercise Price shall be calculated to two decimal places
and rounded off to one decimal place.
(e) If the Adjusted Exercise Price calculated in accordance with the
formula above is lower than the par value of the Common Shares, such par
value shall be regarded as the Adjusted Exercise Price.
(2) If the Exercise Price is adjusted in accordance with the formula above, the
date on which the Adjusted Exercise Price shall be applied shall be as follows:
(a) If Common Shares are issued at an amount which is less than the current
market price used in the formula above:
the Adjusted Exercise Price shall be applied from the date following the
allotment date of the Common Shares if such allotment date is specified, or
from the date following the payment date for the Common Shares.
(b) If Common Shares are issued pursuant to a stock split:
The Adjusted Exercise Price shall be applied from the date following the
allotment date if an allotment date is specified. If an allotment date is
not specified, the Adjusted Exercise Price shall be applied from the date
following the expiry of the period provided for in clause 1 of Article 215
of the Commercial Code as applied by Article 220 of the Commercial Code
(Law No. 48 of 1899 as amended).
Provided, however, that where the Board of Directors decides that the
Common Shares issued pursuant to a stock split will be issued on the
condition that the distributable profit will be counted as capital and the
allotment date for the stock split is specified as a date prior to the date
of a shareholders' meeting which approves such capitalisation, the Adjusted
Exercise Price shall be applied from the date following the date of such
shareholders' meeting.
If the proviso immediately above applies, the number of additional Common
Shares calculated in accordance with the following formula shall be issued
to any Holder who has exercised its Warrant Rights during the period
between the allotment date specified for the stock split and the date of
the shareholders' meeting which approves the capitalisation of the
distributable profit:
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Number of shares
issued at the pre-
( ) adjusted exercise
( Pre-adjusted Adjusted ) price pursuant to
( Exercise Price - Exercise ) X the exercise of
( Price ) warrant rights for
Number of a period
shares = ----------------------------------------------------------------
Adjusted Exercise
Price
If a fraction of less than one share arises under the formula above, the
amount calculated by multiplying such fraction by the Adjusted Exercise
Price as set out above shall be paid in cash to the Holder. Share
certificates shall be issued pursuant to the provision set out in 7(3)
below.
(c) If convertible debt securities are issued which may be converted into
Common Shares at a conversion price which is less than the "Current market
price per share" used in the formula as set out in 4(1)(a) above:
The "Amount to be paid per [new] share" in that formula shall be deemed to
be the conversion price of the debt securities and the "Number of new
shares to be issued" shall be calculated on the assumption that all the
debt securities have been converted at the end of the issuing date or at
the end of the allotment date, if such allotment date is specified. The
Adjusted Exercise Price shall be applied from the date following the
issuing date or allotment date.
(d) If new warrants are issued with an exercise price which is less than
the "Current market price per share" used in the formula as set out in
4(1)(a) above:
The "Amount to be paid per [new] share" to be used in that formula shall be
the exercise price of the shares specified in the new warrants and the
"Number of new shares to be issued" shall be calculated on the assumption
that all the warrants have been exercised at the end of the issue date of
the warrants or at the end of the allotment date if such allotment date for
subscription is specified. The Adjusted Exercise Price shall be applied on
and after the date following the issuing date or allotment date.
(3) If the difference between the Adjusted Exercise Price and the Pre-adjusted
Exercise Price is less than 1 yen, the Exercise Price shall not be adjusted on
that occasion; provided, however, that the exact Adjusted Exercise Price
originally calculated in accordance with the formula set out in 4(1)(a) above
shall be used as the Pre-adjusted Exercise Price on the subsequent occasion that
an adjustment occurs.
(4) Save as otherwise provided in 4(2) above, the Company shall adjust the
Exercise Price, as the Company considers appropriate:
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(a) in the event of a stock split, share consolidation, capital decrease or
merger; or
(b) if an event occurs which otherwise causes a change (or potential
change) in the number of issued and outstanding shares.
(5) If the Exercise Price is adjusted, the Company shall issue a public notice
or an individual notice (as appropriate) prior to the date that the Adjusted
Exercise Price is applied as specified in 4(2) above. Provided, however, that in
the event of a stock split as set out in the proviso to 4(2)(b) or where the
Company is unable to issue a public notice prior to the date that the Adjusted
Exercise Price is applied, the Company shall issue a public notice or an
individual notice (as appropriate) promptly after such date.
(6) A public notice shall be issued in the manner set out in paragraph 18 of
the Bond terms [which sets out that all public notices shall be published in the
newspapers stipulated in the Articles of Incorporation of the Company unless
otherwise provided by law].
5. The total number of Common Shares issued pursuant to the exercise of the
Warrant Rights [in respect of each Warrant] shall be calculated as follows:
Aggregate amount of the "Allotment Amount of
each Warrant" submitted by the Holder for exercise
Total [see also paragraph 9 below]
number of ----------------------------------------------------
Common =
Shares Exercise Price
Any fractions, which result from the application of this formula, shall be
disregarded.
6. Request for exercise of the Warrant Rights and method of payment
(1) The amount to be paid pursuant to the exercise of each Warrant by the
Holder (the Payment) shall be determined by multiplying the total
number of shares (determined pursuant to paragraph 5) by the Exercise
Price (determined pursuant to paragraphs 3 and 4). Any fraction
resulting from such calculation that amounts to less than 1 Yen shall
be disregarded.
(2) No payment in connection with the redemption of a Bond may be set off
against the Payment required in the preceding paragraph.
(3) The Payment shall be handled by Sumitomo Mitsui Banking Corporation
(the Payment Handling Bank) and the conditions and procedures of that
appointment shall be provided for separately.
(4) Requests for exercise of the Warrant Rights shall be accepted at the
headquarters of The Nomura Securities Co., Ltd. (the Place Handling
Applications). The conditions and procedures of that appointment shall
be provided for separately.
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(5) In order to exercise a Warrant, a Holder must complete and sign the
exercise notice as prescribed by the Company and submit such form
together with the Warrant and the Payment to the Place Handling
Applications during the period set out in paragraph 1(1).
(6) Once a Holder submits the necessary documents for exercise of the
Warrant Rights such exercise shall be irrevocable.
7. Effectiveness of exercise of the Warrant Rights
(1) The exercise of a Warrant becomes effective when the Warrant and the
Payment are delivered to the Payment Handling Bank.
(2) The first annual dividends (and any interim dividends declared pursuant
to Article 293-5 of the Japanese Commercial Code) shall be paid on the
Common Shares issued upon exercise of the Warrant on the assumption
that the Warrant Rights were exercised and the relevant Common Shares
issued and registered: (a) on 1 April if the exercise is made (in
accordance with paragraph 7(1)) during the period from 1 April to 30
September; or (b) on 1 October if the exercise is made (in accordance
with paragraph 7(1)) during the period from 1 October to 31 March of
the following year.
(3) The Company shall issue share certificates through the head office of
The Toyo Trust and Banking Co., Ltd, once the procedures for the
exercise of a Warrant are completed; provided, however, that no share
certificates shall be issued for any fraction of a full share arising
upon such exercise.
8. Amount not accounted for as paid-in capital
The portion of the issue price of the shares issued upon exercise of the Warrant
Rights which will not be accounted for as paid-in capital shall be the amount of
the Exercise Price (or the Adjusted Exercise Price where the Exercise Price is
adjusted pursuant to paragraph 4) less the amount which will be accounted for as
paid-in capital.
The amount to be accounted for as paid-in capital shall be the amount calculated
by multiplying the Exercise Price (or the Adjusted Exercise Price in case the
Exercise Price is adjusted) by 0.5 and any fraction less than 1 Yen resulting
from such calculation shall be rounded up to the nearest yen; provided, however,
that if the Company issues par-value Common Shares the minimum amount that is
accounted for as paid-in capital shall be the par-value if the calculation above
results in an amount below such par-value.
9. The Warrants
Each Warrant represents the right to subscribe for Common Shares up to an amount
in Yen equal to (Y)420,300 at a price per Common Share equal to the Exercise
Price.
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10. Loss of Warrants
(1) If a Holder loses a Warrant, the Company may issue a replacement
warrant upon request, provided that the Company is notified of the
details of the loss and such request is submitted together with a copy
of an official "confirmation of the judgment of nullification",
following which the Holder completes the process for the official
announcement, notification and the declaration of nullification.
(2) If a warrant is damaged or stained, the Company may issue a replacement
warrant upon the request of the Holder and the submission of the
relevant Warrant; provided, however, that the procedures provided for
in 10(1) above shall apply if the validity of such Warrant is difficult
to establish.
11. Fees and expenses for the issuance of a replacement warrant
If the Company issues a replacement warrant, the Company may charge and the
Holder shall pay any fees in connection therewith.
12. Share fractions
In the event that clause 1 of Article 230-2 of the Japanese Commercial Code
applies to any fractions of Common Shares after the Warrants are issued, the
Company may take any reasonable and appropriate action in accordance with the
provisions of the Commercial Code and terms of these Warrants.
