Toyota 2005 Annual Report Download - page 104

102 >NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The weighted-average fair value per option at the date
of grant for options granted during the years ended March
31, 2003, 2004 and 2005 was ¥766, ¥769 and ¥1,139 ($11),
respectively. The fair value of options granted, which is
amortized over the option vesting period in determining
the pro forma impact in Note 2, is estimated on the date
of grant using the Black-Scholes option pricing model
with the following weighted-average assumptions:
19. EMPLOYEE BENEFIT PLANS
Pension and severance plans—
Upon terminations of employments, employees of the
parent company and subsidiaries in Japan are entitled,
under the retirement plans of each company, to lump-
sum indemnities or pension payments as described below,
based on current rates of pay and lengths of service. Under
normal circumstances, the minimum payment prior to
retirement age is an amount based on voluntary retire-
ment. Employees receive additional benefits on involun-
tary retirement, including retirement at the age limit.
Effective October 1, 2004, the parent company amended
its retirement plan to introduce a “point” based retire-
ment benefit plan. Under the new plan, upon termina-
tions of employment, employees are entitled to lump-sum
or pension payments determined based on accumulated
“points” vested in each year of service. Under the new
plan, there are three types of “points” that vest in each
year of service consisting of “service period points” which
are attributed to the length of service, “job title points”
which are attributed to the job title of each employee, and
2003 2004 2005
Dividend rate ......................................................................................................................... 1.3% 1.5% 1.5%
Risk-free interest rate ............................................................................................................ 0.7% 0.4% 1.2%
Expected volatility ................................................................................................................. 34% 34% 32%
Expected holding period (years)........................................................................................... 5.1 5.3 5.3
The following table summarizes Toyota’s stock option activity:
Yen
Weighted-average
remaining
Number of Weighted-average contractual
options excercise price life in years
Options outstanding at March 31, 2002 ............................................................................. 2,398,200 ¥4,237 2.62
Granted.............................................................................................................................. 1,876,000 2,958
Exercised............................................................................................................................ — —
Canceled ............................................................................................................................ (348,800) 3,895
Options outstanding at March 31, 2003 ............................................................................. 3,925,400 3,656 3.53
Granted.............................................................................................................................. 1,958,000 3,116
Exercised............................................................................................................................ — —
Canceled ............................................................................................................................ (987,000) 3,849
Options outstanding at March 31, 2004 ............................................................................. 4,896,400 3,401 3.83
Granted.............................................................................................................................. 2,021,000 4,541
Exercised............................................................................................................................ (810,300) 2,995
Canceled ............................................................................................................................ (606,800) 4,105
Options outstanding at March 31, 2005 ............................................................................. 5,500,300 ¥3,802 3.86
Options exercisable at March 31, 2003................................................................................. 625,000 ¥4,503 0.85
Options exercisable at March 31, 2004................................................................................. 1,371,400 ¥4,319 1.15
Options exercisable at March 31, 2005................................................................................. 1,740,300 ¥3,641 1.69
The following table summarizes information for options outstanding and options exercisable at March 31, 2005:
Outstanding Exercisable
Exercise Weighted-average Weighted-average Weighted-average Weighted-average Weighted-average
price range Number of exercise price exercise price remaining life Number of exercise price exercise price
Yen shares Yen Dollars Years shares Yen Dollars
¥2,958 – 4,000 2,538,900 ¥3,067 $29 4.02 785,900 ¥2,958 $28
4,001 – 4,541 2,961,400 4,432 41 3.72 954,400 4,203 39
2,958 – 4,541 5,500,300 3,802 35 3.86 1,740,300 3,641 34