TMC to Commence Steps to Issue Model AA Class Shares for Medium to Long Term Investors | Toyota Motor Corporation Official Global Website

Toyota City, Japan, April 28, 2015—Toyota Motor Corporation (TMC) will commence steps for issuing Model AA Class Shares (named after Toyota’s first passenger car) with voting rights and transfer restrictions that assume a medium to long term holding period.

Based on the Toyota Global Vision announced in March 2011, TMC is committed to manufacturing “ever-better cars” and enriching the lives of communities. For the sake of sustainable growth and to further enhance competitiveness, TMC must solidify its foundation, growing steadily year by year and strengthening its ability to create new value. It is important for TMC to continue to innovate in order to reach these goals.

Beginning from product planning and development and progressing through to manufacturing and sales, the automotive industry does not operate on a short term business cycle. As innovation in the industry progresses, it is essential to fully undertake research and development, as well as development of infrastructure, to achieve the next generation of innovations that will support the industry’s future. TMC itself needs to conduct medium to long term research and development and to develop infrastructure. Aiming to raise capital to enable this business cycle, TMC has decided to commence steps for issuing class shares that assume a medium to long term holding period.

By issuing Model AA Class Shares, TMC will provide new opportunities for investors who wish to invest and exercise shareholder rights with a medium to long term perspective. By matching the interests of its business and shareholding cycles, TMC hopes to balance funding more effectively. Corporate governance should also be improved as an added benefit of giving a greater voice to shareholders with medium to long term holdings.

In order to issue multiple series of new voting class shares in the future, TMC will submit to shareholders an agendum to partially amend its articles of incorporation at its ordinary general meeting of shareholders in June. If the agendum is approved, TMC intends to issue First Series Model AA Class Shares. To avoid the dilution of its common shares as a result of the issuance of First Series Model AA Class Shares, TMC plans to repurchase common shares in roughly the same number as the number of the First Series Model AA Class Shares issued.

Outline of Model AA Class Shares and repurchase of common shares

Model AA Class Shares

Characteristics	Assume a medium to long term holding period Not listed and with perpetual transfer restrictions; with voting rights From a date falling approximately five years after the date of issuance, shareholders may convert shares into common shares or demand TMC to acquire shares at issue price; TMC may acquire shares in their entirety
Issuance schedule	First series: Following approval at the ordinary general meeting of shareholders in June 2015; details to be decided separately at a board of directors meeting Second and subsequent series: Undecided (In principle, not expected to exceed more than once a year)
Offering method	Public offering in Japan (unlisted)
Number of shares to be issued	First series: Up to 50 million shares ^{Note: Total number fixed at 150 million shares (less than 5% of total issued shares)}
Issue price	Lower limit of provisional range set at 120 percent of the closing price of regular trading of common stock on the Tokyo Stock Exchange on the date of determination of issue price, and final issue price to be determined through application of an approach similar to the book-building approach.
Dividends	0.5 percent in fiscal year of date of issuance, with gradual increase of 0.5 percent per year from the following fiscal year to the fifth fiscal year Note: 2.5% percent from the fifth fiscal year onward

Repurchase of common shares

Reason	To avoid dilution of common shares as a result of the issuance of First Series Model AA Class Shares
Class of shares to be repurchased	Common shares
Total number of shares to be repurchased	Roughly the same number as the number of First Series Model AA Class Shares issued
Timing of repurchase	Following the issuance of First Series Model AA Class Shares
Other	On or prior to repurchase, the board of directors will separately decide the period for repurchase, the amount to be repurchased, and the total number of shares to be repurchased.