Share Exchange Agreement
[Translation]
Toyota Motor Corporation (“Toyota”) and Kanto Auto Works, Ltd. (“Kanto”) have entered into this Share Exchange Agreement (this “Agreement”) on July 13, 2011 (the “Execution Date”) as follows in order to implement Toyota’s global vision promptly and with certainty, and for the purpose of maximizing the Toyota group’s overall strength by promoting Kanto to an active role handling planning and development through to the production of vehicle types in which Kanto specializes.
Article 1. Share Exchange
Toyota and Kanto shall conduct a share exchange through which Toyota will become the wholly owning parent company of Kanto and Kanto will become a wholly owned subsidiary of Toyota (the “Share Exchange”), and through which Toyota shall acquire all of the issued shares of Kanto (except for the shares of Kanto already held by Toyota; this same exception shall apply hereinafter).
Article 2. Trade Names and Addresses of the Parties
The trade names and addresses of Toyota and Kanto are as follows:
| Toyota: |
Trade Name: | Toyota Motor Corporation | ||
| Address: | 1 Toyota-cho, Toyota City, Aichi Prefecture | |||
| Kanto: |
Trade Name: | Kanto Auto Works, Ltd. | ||
| Address: | Tauraminato-cho, Yokosuka City, Kanagawa Prefecture | |||
Article 3. Shares to be Delivered upon the Share Exchange and Allotment thereof
| 1 | Upon effectiveness of the Share Exchange, Toyota shall deliver to shareholders of Kanto common stock (excluding Toyota; this same exclusion shall apply hereinafter), in exchange for Kanto common stock, the number of Toyota common stock calculated by multiplying the total number of Kanto common stock held by the holders of Kanto common stock as of the time immediately preceding the Share Exchange (the “Reference Time”) by 0.25. |
| 2 | Upon effectiveness of the Share Exchange, Toyota shall allot to shareholders of Kanto common stock as of the Reference Time, 0.25 Toyota common stock for each of Kanto’s common stock held by such shareholders. |
| 3 | With respect to any fractional shares comprising less than one share of Toyota common stock that are required to be allotted and delivered under the preceding two Paragraphs, Toyota shall handle them in accordance with Article 234 of the Companies Act. |
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Article 4. Amounts of Stated Capital and Reserves of Toyota
The increases in the amounts of the stated capital, capital reserves and retained earnings reserves of Toyota due to the Share Exchange are as follows:
| (1) | Stated Capital: | JPY 0 | ||
| (2) | Capital Reserves: |
Minimum amount required to be increased pursuant to applicable laws and regulations. | ||
| (3) | Retained Earnings Reserves: |
JPY 0 | ||
Article 5. Effective Date
The date on which the Share Exchange takes effect (the “Effective Date”) shall be January 1, 2012; provided, however, that Toyota and Kanto may change such date as necessary in accordance with the progress of the Share Exchange, upon mutual consultation.
Article 6. Shareholders Meeting to Approve the Share Exchange Agreement
| 1 | Pursuant to the provisions of Article 796, main clause of Paragraph 3 of the Companies Act, Toyota shall conduct the Share Exchange without obtaining the approval at a shareholders meeting stipulated in Article 795, Paragraph 1 of the Companies Act; provided, however, that if, pursuant to the provisions of Article 796, Paragraph 4 of the Companies Act, approval of this Agreement at a shareholders meeting of Toyota becomes necessary, Toyota shall obtain the approval of this Agreement at a shareholders meeting no later than the day immediately preceding the Effective Date. |
| 2 | Kanto shall obtain shareholders’ approval of this Agreement pursuant to Article 783, Paragraph 1 of the Companies Act at the extraordinary meeting of shareholders scheduled to be convened in late November 2011. |
Article 7. Duty of Care, Other
| 1 | During the period commencing from the Execution Date until the Effective Date, each of Toyota and Kanto shall conduct its business and manage its assets with the due care of a prudent manager, and Toyota and Kanto shall consult with each other before either party takes any action that would materially affect such assets, rights or obligations. |
| 2 | By resolution of the Board of Directors of Kanto at a meeting of the Board of Directors to be held no later than the day immediately preceding the Effective Date, Kanto shall cancel, by the Reference Time, all of its treasury shares held by Kanto and those that will be held by Kanto by the Reference Time (including the treasury shares to be acquired through the purchases related to any dissenting shareholders’ exercise of their appraisal rights pursuant to Article 785, Paragraph 1 of the Companies Act in connection with the Share Exchange). |
| 3 | Kanto shall cancel all of its issued share acquisition rights no later than the Reference Time. |
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Article 8. Modification and Termination of this Agreement
Toyota and Kanto may, upon mutual consultation, modify or terminate this Agreement, if, during the period commencing from the Execution Date until the Effective Date, due to an act of god or other events, (i) a material change occurs to the assets or results of operations of Toyota or Kanto, (ii) a material burden arises in the implementation of the Share Exchange or (iii) it otherwise becomes difficult to achieve the purpose of this Agreement.
Article 9. Force and Effect of this Agreement
This Agreement shall cease to have any effect if (i) this Agreement is not approved at a shareholders meeting of Toyota no later than the day immediately preceding the Effective Date, if a shareholder holding the number of shares stipulated under Article 197 of the Ordinance of Enforcement of the Companies Act has submitted the notification pursuant to Article 000, Xxxxxxxxx 0 xx xxx Xxxxxxxxx Xxx, (xx) this Agreement is not approved at a shareholders meeting of Kanto no later than the day immediately preceding the Effective Date, (iii) any of the approvals from the relevant regulatory authorities that are required by the laws and regulations of Japan or any other jurisdiction are not obtained, including, but not limited to, failure of any filings submitted to the relevant regulatory authorities to take effect or (iv) this Agreement has been terminated pursuant to the preceding Article 8.
Article 10. Matters for Consultation
In addition to the matters set forth in this Agreement, matters necessary with respect to the Share Exchange shall be determined by consultation between Toyota and Kanto in accordance with the purpose of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement in duplicate, and upon signing hereof, each of Toyota and Kanto Auto Works retains one (1) original hereof.
July 13, 2011
| Toyota: | ||||
| 1 Toyota-cho, Toyota City, Aichi Prefecture |
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| Toyota Motor Corporation |
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| Director and President | ||||
| /s/ Xxxx Xxxxxx |
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| Kanto: | ||||
| Tauraminato-cho, Yokosuka City, Kanagawa Prefecture | ||||
| Kanto Auto Works, Ltd. | ||||
| Director and President | ||||
| /s/ Xxxxxx Xxxxxxx |
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