Notice Concerning Introduction of a Restricted Share Compensation Plan and Revision to the Amount of Compensation for Directors
[Translation]
Toyota Industries Corporation announces that, at a meeting of the Board of Directors held on April 26, 2024, it reviewed its executives' compensation system and resolved to introduce a restricted share compensation plan (the "Plan") and to revise the amount of compensation for Directors. A proposal regarding the Plan and the revision to the amount of compensation for Directors will be proposed to the 146th Ordinary General Meeting of Shareholders scheduled to be held on June 11, 2024 (the "Shareholders' Meeting") as follows.
1. Introduction of the Plan
| 1) | Purpose of introducing the Plan |
| The purpose of the Plan is to provide the Company's Directors (excluding Outside Directors, etc. who do not engage in the execution of business; the "Eligible Directors") with incentives to enhance the Group's medium- to long-term business performance and corporate value, and to promote the further sharing of value with shareholders. | |
| 2) | Conditions for the introduction of the Plan |
| The introduction of the Plan is subject to gaining approval for the payment of restricted share compensation from shareholders at the Shareholders' Meeting. | |
| 3) | Overview of the Plan |
| Eligible Directors will make in-kind contribution of all monetary compensation claims to be provided by the Company according to the Plan, and will, in return, receive the Company's common shares that will be issued or disposed of by the Company. |
| Eligible persons | Directors of the Company (excluding Outside Directors, etc. who do not engage in the execution of business) |
|---|---|
| Total amount of Share Compensation |
Maximum of 200 million yen per year in total for Eligible Directors |
| Amount of share compensation for each Director |
To be set each year considering factors such as Company's business performance |
| Type of shares to be allotted and method of allotment |
Issuance or disposal of common shares (with transfer restrictions under an allotment agreement) |
| Total number of shares to be allotted |
Maximum of 60,000 shares in total for Eligible Directors. However, if the total number of issued shares of the Company increases or decreases due to a split or a reverse split of shares (including the gratis allotment of shares), the maximum number will be adjusted according to such ratio |
| Amount to be paid | An amount determined by the Board of Directors of the Company based on the closing price of the Company's common shares on the Tokyo Stock Exchange on the business day immediately preceding the date of resolution of each Board of Directors meeting, in an amount that is not particularly favorable to the Eligible Directors |
| Restricted transfer period | A period to be determined in advance by the Board of Directors between 3 and 30 years from the date of allotment |
| Conditions for lifting transfer restrictions |
Restrictions will be lifted upon the expiration of the restricted transfer period. However, restrictions will also be lifted upon the expiration of term of office, death, or retirement for other legitimate reasons |
| Acquisition by Company without consideration |
The Company may acquire all or a portion of the allotted shares without consideration if the Eligible Director violates laws and regulations or meets any other criteria established by the Board of Directors during the restricted transfer period |
| Payment timing and allocation to each Director |
To be determined by the Board of Directors based on deliberations by the Executive Appointment and Compensation Committee |
| Adjustment in event of a reorganization | Transfer restrictions will be lifted in the event of a merger in which the Company becomes an absorbed company, a reorganization in which the Company becomes a wholly owned subsidiary, etc. |
In addition, subject to the approval of the proposal for the Plan at the Shareholders' Meeting, the same restricted share compensation plan as above will be applied to the Executive Vice President and Senior Executive Officers who do not concurrently serve as Directors of the Company, and common shares will be issued or disposed of.
2. Revision to the Amount of Compensation for Directors
At the 144th Ordinary General Meeting of Shareholders held on June 10, 2022, the amount of compensation for Directors of the Company was approved as an amount not exceeding 900 million yen per year (including 150 million yen for Outside Directors). In conjunction with the introduction of the Plan, the Company plans to ask for the approval of shareholders to limit the amount of cash compensation to an amount not exceeding 700 million yen per year (including 150 million yen for Outside Directors), and the amount of share compensation to an amount not exceeding 200 million yen per year.
Overview of the revision of the compensation system for Directors
