Document:

August 1, 2003

                            TOYOTA MOTOR CORPORATION

                                       and

                                   [EMPLOYEE]

================================================================================

         AGREEMENT FOR THE GRANT OF OPTIONS TO ACQUIRE COMMON SHARES OF
                            TOYOTA MOTOR CORPORATION

================================================================================

                            UNITED STATES OF AMERICA

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                                    CONTENTS

CLAUSE                                                                      PAGE

1.       INTERPRETATION........................................................1

2.       GRANT OF OPTIONS......................................................2

3.       INCENTIVE STOCK OPTIONS...............................................2

4.       EXERCISE, LAPSE AND REFUSAL OF OPTIONS................................3
         Exercise..............................................................3
         Lapse.................................................................3
         Refusal...............................................................4

5.       MANNER OF EXERCISE OF OPTIONS..........................................

6.       ADJUSTMENTS TO THE NUMBER OF COMMON SHARES............................6

7.       SECURITIES AND RELEVANT LEGISLATION...................................6

8.       NO GUARANTEE OF CONTINUING EMPLOYMENT OR OFFICE.......................7

9.       EMPLOYEE UNDERTAKING..................................................7

10.      DATA PROCESSING CONSENT...............................................7

11.      COSTS AND TAXES.......................................................8

12.      SECURITIES ACCOUNTS...................................................8

13.      GENERAL...............................................................9

14.      TERMINATION OF THIS AGREEMENT........................................10

15.      CLAIMS AGAINST THE COMPANY...........................................10

16.      NOTICES..............................................................11
         To the Grantee.......................................................11
         To the Company.......................................................11
         Receipt of Notice....................................................11

17.      AMENDMENTS AND WAIVERS...............................................11

18.      GOVERNING LAW........................................................12

19.      ENTIRE AGREEMENT.....................................................12

20.      SEVERABILITY...........................................................

APPENDIX 1  ADJUSTMENTS (ENGLISH TRANSLATION).................................14

1.       SHARE SPLIT OR SHARE CONSOLIDATION...................................14

2.       ISSUE OF NEW COMMON SHARES OR DISPOSAL OF TREASURY SHARES............15

3.       GENERAL..............................................................16

APPENDIX 2  FORM OF EXERCISE NOTICE - 2003 STOCK OPTION.......................18

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1.       WARRANTY.............................................................18

2.       EXERCISE OF STOCK OPTIONS............................................18

APPENDIX 3  FORMS OF NOTICE OF TERMINATION OF 2003 STOCK OPTION AGREEMENT.....20

         Termination of Agreement pursuant to Clause 14.1.....................20

         Termination of Agreement pursuant to Clause 14.2.....................21

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THIS OPTION AGREEMENT is made with effect from August 1, 2003

BETWEEN

(1)  TOYOTA MOTOR CORPORATION a company registered in Japan and whose registered
     office is at Toyota-Cho, Toyota, Aichi, 471-8571 Japan (the Company); and

(2)  [ ] of [ ] (the Grantee) and currently employed by [ ] (the Employing
     Company).

WHEREAS the Company intends to grant the Grantee options to acquire common
shares of the Company and set out the exercise conditions thereof.

IT IS AGREED as follows:

1.   INTERPRETATION

1.1  In this Agreement, unless the context otherwise requires, the following
words and expressions shall have the following meanings:

Agreement means this Option Agreement;

Appointed Bank has the meaning set forth in Clause 5.1(c);

Board means the board of directors of the Company from time to time or a duly
appointed committee thereof;

Bank Business Day means any day on which the Appointed Bank is open for business
in Japan;

Common Shares means the ordinary shares of the Company from time to time;

Company Business Day means any day on which the Company is open for business in
Japan;

Exercise Period means the period commencing on August 1, 2005 and ending on July
31, 2009, provided that if July 31, 2009 is not a Company Business Day, then the
final day of the Exercise Period shall be the Company Business Day immediately
preceding July 31, 2009;

Grant Date means, August 1, 2003, the date on which the Company grants the
Options to the Grantee;

Group means the Company and its Subsidiaries;

Option means a right to acquire 100 Common Shares under this Agreement (or such
number as may be increased or decreased pursuant to Clause 6) and Options shall
be construed accordingly; and

Reorganization means any capitalization or rights issue, split, consolidation,
or other reorganization or reduction of the share capital of the Company;

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Subsidiary means any entity in which the Company owns, directly or indirectly,
at least 50% of the issued share capital thereof; and

Yen means the lawful currency of Japan.

1.2  Any reference herein to the provisions of any statute or subordinate
legislation shall be deemed to refer to the same as 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 Appendices 1, 2 and 3 are to the clauses and the
appendices of this Agreement. Appendices 1, 2 and 3 form part of this Agreement.

2.   GRANT OF OPTIONS

2.1  The Company hereby grants to the Grantee on the Grant Date 20 Options
subject to the terms and conditions of this Agreement.

2.2  No consideration shall be payable by the Grantee on the grant of the
Options.

2.3  This Agreement represents the Grantee's right to the Options. The Grantee
shall not request the Company to issue any certificates representing the
Options.

2.4  The Options are personal to the Grantee and may not be transferred,
assigned, pledged, charged to or otherwise alienated or exercised by any other
person without the approval of the board of directors of the Company and any
attempt to do so without the approval of the board of directors of the Company
will result in the Options lapsing.

2.5  The benefit of the Options does not constitute part of the Grantee's base
salary or remuneration and will not be taken into account in determining any
other 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.   INCENTIVE STOCK OPTIONS

3.1 It is intended that the Options constitute incentive stock options as
defined in Section 422 of the United States Internal Revenue Code of 1986, as
amended and any regulations promulgated thereunder (the Code); provided,
however, that to the extent the Options do not satisfy one or more provisions of
Section 422 of the Code, they shall be treated as non-qualified stock options.

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4.   EXERCISE, LAPSE AND REFUSAL OF OPTIONS

Exercise

4.1  The Grantee may exercise all or some of the Options during the Exercise
Period in the manner set forth in Clause 5.

4.2  Each Option must be exercised in full and no Option may be partially
exercised.

4.3  Subject to Clause 6, the price to be paid for each Common Share to be
issued or transferred to the Grantee upon exercise of each Option shall be Yen
(in words, three-thousand, one-hundred and sixteen Yen), such amount having been
calculated by multiplying the closing price of the Common Shares listed on the
Tokyo Stock Exchange on the Grant Date by 1.025 (rounded up to the nearest whole
Yen) (the Exercise Price).

4.4  Options may only be exercised on a Company Business Day.

Lapse

4.5  Notwithstanding any other provision in this Agreement, the Options shall
lapse automatically and become of no effect on the earlier of:

(a)  the expiry of the Exercise 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;

(d)  a shareholders' meeting approving a merger agreement, a share-for-share
     agreement (kabushiki kokan) or a statutory share transfer (kabushiki iten),
     as a result of which the Company decides to invalidate the Options on the
     basis that the Company will cease as a legal entity or it will become a
     wholly-owned subsidiary of another company;

(e)  the Grantee becoming an officer or an employee of any company which
     competes with the Company or any of its Subsidiaries;

(f)  the dismissal of the Grantee for disciplinary reasons from his office or
     employment at the Employing Company or other member of the Group;

(g)  any date prior to the first day of the Exercise Period when the Grantee
     ceases to be employed by, or hold office with, the Employing Company or any
     other member of the Group; or

(h)  the termination of this Agreement in accordance with Clause 14.

4.6  The Options shall lapse automatically and become of no effect if, on any
date on or after the beginning of the Exercise Period, the Grantee ceases to be
an officer or an employee of a member of the Group for any reason other than:

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(a)  injury, disability or ill-health (as determined by the Board);

(b)  retirement at or after the date on which he is bound or entitled to retire
     under his contract of employment or otherwise;

(c)  resignation;

(d)  the company of which he is an officer or an employee ceasing to be a member
     of the Group;

(e)  the business (or part of a business) in which he is employed or of which he
     is an officer being transferred to a transferee which is not a member of
     the Group; or

(f)  any other reason at the Board's absolute discretion.

For the avoidance of doubt, the Grantee shall not be treated for such purposes
as ceasing to be an officer or an employee of a member of the Group if the
Grantee remains or simultaneously becomes an officer or an employee of another
member of the Group.

4.7  For the purposes of Clause 4.5(g) and Clause 4.6, a Grantee shall not be
treated as ceasing to be an officer or an employee of a member of the Group if
he is absent from work solely as a result of an authorized leave of absence
until such Grantee ceases to be entitled to exercise any statutory or
contractual right to return to work.

Refusal

4.8  The Company may refuse to accept exercise by the Grantee of the Options
within 30 days of the date of the Exercise Notice (as defined in Clause 5.1(a)
below) for any of the following reasons:

(a)  the Company determines in good faith that the exercise impedes the intended
     issuance by the Company of new securities regardless of the type or class,
     including, without limitation, shares or bonds with warrants;

(b)  the Company determines that the Options have lapsed pursuant to Clauses 4.5
     or 4.6;

(c)  there has been insufficient time to confirm the Adjusted Exercise Price
     stipulated in Appendix 1; or

(d)  the Company determines in good faith that the exercise of the Options may
     materially impede the business of the Company;

provided, however that the Company shall not refuse to accept exercise by the
Grantee of the Options on the final Company Business Day of the Exercise Period.

4.9  If the Company refuses to accept the exercise by the Grantee of the Options
for any one of Clauses 4.8(a) to 4.8(d)above:

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(a)  the Company shall give written notice to the Grantee of such refusal,
     provided, however, that the Company is not obliged to disclose the reasons
     for such refusal; and

(b)  the Options shall remain outstanding until the earlier of:

     (i) the Grantee's exercise of such Options pursuant to Clause 5; or

     (ii) lapse of the Options pursuant to Clauses 4.5 and 4.6.

5.   MANNER OF EXERCISE OF OPTIONS

5.1  Subject to Clause 4.2, the Grantee may exercise one or more of the Options
in whole, but not in part, during the Exercise Period in accordance with the
following procedure:

(a)  the Grantee is required to send to the Company a notice of its intention to
     exercise the Options (the Exercise Notice) in the form attached as Appendix
     2 (or in such other form as prescribed by the Company from time to time);

(b)  within five (5) Company Business Days the Company shall send to the Grantee
     an acknowledgement that such Exercise Notice has been received;

(c)  the Grantee shall, within four (4) Bank Business Days from the date on
     which the Company notifies the Grantee that the Company has received the
     Exercise Notice, pay an amount calculated by multiplying the Exercise Price
     by the number of Common Shares to be obtained upon exercise of the
     Option(s) (the Exercising Purchase Price) to UFJ Bank Limited or such other
     bank as shall be appointed by the Company from time to time (the Appointed
     Bank); provided, however, that if the last Bank Business Day is not also a
     Company Business Day, then the date for payment shall be the next Company
     Business Day which is also a Bank Business Day. The date of exercise shall
     be the date of receipt by the Company of payment of the Exercising Purchase
     Price.

(d)  Upon confirmation by the Company that the Grantee has fully paid the
     Exercising Purchase Price pursuant to this Clause 5.1 and any Tax
     Liabilities pursuant to Clause 11, the Company shall promptly issue or
     transfer (as the case may be) the relevant number of Common Shares to the
     Grantee's securities account in accordance with Clause 12. Upon payment of
     the Exercising Purchase Price by the Grantee to the Appointed Bank, the
     Grantee shall legally own the Common Shares acquired upon the exercise of
     the Options.

5.2  The Grantee may withdraw the Exercise Notice up until such time as the
Grantee pays the Exercising Purchase Price by giving written notice to the
Company to that effect; provided, however, that once the Grantee has paid the
Exercising Purchase Price in full, the Grantee cannot withdraw the Exercise
Notice.

5.3  Notwithstanding Clause 5.2 above, following payment by the Grantee of the
Exercising Purchase Price, the Exercise Notice shall be deemed withdrawn if the
Company notifies the Grantee of its refusal to accept the exercise of the
Options pursuant to Clauses 4.8 and 4.9. In such circumstances, the Company
shall repay the

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Exercising Purchase Price to the Grantee, provided, however, that the Company
shall not pay any interest with respect to any repayment to the Grantee.

6.   ADJUSTMENTS TO THE NUMBER OF COMMON SHARES

6.1  In the event of a Reorganization of the share capital of the Company, the
Exercise Price and the total number of Common Shares underlying an Option may be
adjusted in accordance with the formulae set out in Appendix 1.

7.   SECURITIES AND RELEVANT LEGISLATION

7.1  The Options may not be exercised if the exercise of the Options or the
issue of Common Shares thereafter would be contrary to any enactment or
regulation at the time being in force in any country having jurisdiction in
relation thereto. In particular, the Options shall not be exercisable unless the
offer and sale of the Common Shares subject to the Options have been registered
under the United States Securities Act of 1933, as amended 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. Neither the
Employing Company nor the Company shall be bound to take any action or obtain
the consent of any governmental authority to such acquisition, exercise or issue
or to take any action to ensure that any such acquisition, exercise or issue is
in accordance with any such enactment or regulation if such action would, in the
opinion of the Employing Company or the Company (as the case may be), be unduly
onerous and neither the Employing Company nor the Company shall have any
liability in respect thereof to the Grantee.

7.2  The Grantee hereby agrees to abide by the Securities and Exchange Law of
Japan, and all relevant securities laws, insider trading legislation, commercial
codes, tax laws, any other relevant laws, rules and regulations (including
relevant foreign, state and local laws) and relevant internal rules of the
Company and the Employing Company (including, without limitation, all insider
information and trading prohibition rules and the rules on buying and selling
Common Shares in relation to the exercise of any Options and the subsequent sale
of the Common Shares acquired upon exercise). The Company may, at its
discretion, impose such conditions on the exercise of the Options as it shall
deem necessary in order for such exercise to comply with any applicable
enactments or regulations, 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. If the Grantee has any questions about the application of relevant
laws and rules, the Grantee shall immediately contact the Company to discuss
them; provided, however, that the Grantee is solely responsible for obtaining
his own legal advice in connection with the grant and exercise of the Options.

8.   NO GUARANTEE OF CONTINUING EMPLOYMENT OR OFFICE

8.1  The rights, obligations and status of the Grantee under the terms and
conditions of his office or employment with the Employing Company shall not be
affected by this Agreement. Neither this Agreement nor any action taken or
omitted to be taken hereunder shall be construed as in any way:

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(a)  guaranteeing the Grantee's continued office or employment with the Company,
     Employing Company or any member of the Group; or

(b)  giving the Grantee the right to continue or be re-instated in his office or
     the employ of the Company, the Employing Company or any member of the Group
     whether before during or after the Exercise Period.

8.2  The Grantee hereby waives any and all rights to compensation or damages in
consequence of the termination of his office or employment with the Company, the
Employing Company or any member of the Group for any reason whatsoever insofar
as those rights arise, or may arise, from his ceasing to have rights under or
being entitled to exercise the Options pursuant to this Agreement as a result of
such termination or from the loss or diminution in value of such rights or
entitlements. If necessary, the Grantee's terms of employment shall be varied
accordingly.

9.   EMPLOYEE UNDERTAKING

In accordance with the purpose of this Agreement, the Grantee shall devote
himself to his work with integrity as an officer or an employee (as appropriate)
of the relevant member(s) of the Group.

10.  DATA PROCESSING CONSENT

10.1 The Company and the Employing Company may hold personal information
relating to the Grantee, including, without limitation, payroll, address,
service period, demographics and similar information in connection with this
Agreement and may at any time process and use such personal information in order
to perform and facilitate the implementation, management and administration of
the matters contemplated and set out in this Agreement provided that such use is
not prohibited by law. Subject to any applicable prohibitions, the Company may,
at any time to the extent required, make the Grantee's personal information
available to other persons within or outside the Group for such purposes,
including, but not limited, in connection with the exercise of the Options. The
Grantee hereby irrevocably consents to the processing, use, transfer and
registration of such personal information within or outside the Group. Before
transferring any data to a person or entity outside the Group, the Company or
the Employing Company (as the case may be) undertakes to inform the Grantee of:

(a)  the identity of any recipient or category of recipients of such personal
     information, the relevant data categories; and

(b)  the Grantee's rights to consult and to the extent necessary rectify and
     complete the registered personal information.

11.  COSTS AND TAXES

11.1 The Company shall have the right to require the Grantee to remit to the
Company, prior to the delivery of any certificates evidencing Common Shares
acquired upon exercise of an Option, an amount sufficient to satisfy any
applicable income tax, capital gains tax, social security contributions or other
tax charge or duty (the Tax Liabilities) which may be assessed or chargeable in
connection with the

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grant or exercise of the Options. In addition, prior to the Company's
determination of such Tax Liabilities, the Grantee may make an irrevocable
election to satisfy, in whole or in part, such obligation to remit taxes, by
directing the Company to cause Common Shares to be withheld (but not in excess
of a rate that the Company determines is necessary to avoid unfavorable
accounting treatment) 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 applicable laws. The Grantee shall indemnify the Company in respect of any
Tax Liabilities payable in respect of the Options and for which the Company is
liable whether pursuant to any withholding obligations or otherwise.

11.2 Except as provided for in Clause 11.1, the Grantee is responsible for:

(a)  the cost of opening an account at the Securities Company (as defined in
     Clause 12.1 below);

(b)  the relevant charges payable in connection with any money transfers;

(c)  all other charges of the Appointed Bank and/or Securities Company which may
     be imposed from time to time; and

(d)  all other expenses that are imposed on the exercise of Options.

11.3 The Company shall have the right to require the Grantee to remit to the
Company an amount sufficient to satisfy any such costs and expenses prior to the
delivery of any certificate evidencing Common Shares acquired upon exercise of
an Option. Such amount may be satisfied by directing the Company to withhold
Common Shares in the manner set forth in Clause 11.1.

12.  SECURITIES ACCOUNTS

12.1 Pursuant to Japanese laws and regulations, the Grantee is required to
appoint an agent and maintain a non-resident offshore account in Japan with
respect to the Common Shares to be acquired upon exercise of the Options. The
Grantee hereby agrees that it shall, through the Company, entrust the custody,
management and disposal of such Common Shares (the Services) to a securities
company or bank (the Securities Company); provided, however, that the Grantee
shall retain the right to determine and direct the Securities Company to sell,
transfer or dispose of all or any portion of the Common Shares on the Grantee's
behalf and the Securities Company may not sell, transfer or otherwise dispose of
the Common Shares without the Grantee's prior approval. The Company shall
determine and appoint such Securities Company (or change such appointment) in
its absolute discretion and notify the Grantee of such appointment (or change in
such appointment) in accordance with Clause 16.

12.2 Following the Grant Date and prior to the exercise of the Options the
Grantee is required to open an account in the Grantee's name at the Securities
Company and follow the necessary procedures set out separately by the Company in
order to enable the Securities Company to perform the Services.

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13.  GENERAL

13.1 The existence of the Options shall not affect in any way the right or power
of the Company or its shareholders to make or authorize any Reorganization or
other adjustment, recapitalization, reorganization or change in the Company's
capital structure, or any merger, corporate split, share-for-share exchange or
consolidation of the Company, or any issue of shares, bonds, debentures,
preferred or prior preference stocks ahead of or convertible into, or otherwise
affecting the Common Shares of the Company or the rights attaching thereto or
any other securities, or the dissolution or liquidation of the Company 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.

13.2 The grant of options under this Agreement or future agreement is a
discretionary benefit and does not create any entitlement to options or shares
in the future, even in the case of repeated grants of options.

13.3 The Grantee shall have no rights as a stockholder with respect to any
Common Shares issuable upon exercise of an Option until payment of the
Exercising Purchase Price for such Common Shares as provided in Clause 5.1(d),
and no adjustment shall be made for dividends or distributions or other rights
in respect of any Common Share for which the record date is prior to the date on
which the Grantee pays the Exercising Purchase Price therefor. 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 Shares.

13.4 The Board shall have the right to interpret the provisions of this
Agreement and to make all rules and determinations which it deems necessary or
desirable for the administration of this Agreement. The decisions of the Board
or, in the case of matters requiring shareholder approval, resolutions of the
shareholders meeting (whichever is applicable), including without limitation all
calculations required hereunder, shall be final and binding with respect to all
matters relating to this Agreement and the Options.

13.5 Clauses 7.2, 8, 9, 10, 15, 16, 18 and 20 shall continue and remain in full
force and effect notwithstanding the exercise of all of the Options by the
Grantee.

14.  TERMINATION OF THIS AGREEMENT

14.1 If, by reason of imposition of Taxation Liabilities or a change in the
applicable laws or regulations, this Agreement is rendered illegal or otherwise
unenforceable, the Grantee may, before the Grantee has paid the Exercising
Purchase Price in respect of the first exercise of the Options, terminate this
Agreement with retroactive effect from the Grant Date by giving written notice
in the appropriate form attached in Appendix 3 (or as otherwise prescribed by
the Company from time to time); provided that Clauses 8, 10, 11, 15.1 16, 18 and
20 shall continue and remain in full force and effect notwithstanding the
termination of this Agreement.

14.2 The Grantee may only retroactively terminate this Agreement if he has not
exercised any of the Options. If the Grantee has exercised one or more Options
then the Grantee may at any time during the Exercise Period, in respect of any
outstanding

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Options, terminate this Agreement without retroactive application by giving
written notice in the form attached in Appendix 3 (or as otherwise prescribed by
the Company from time to time); provided that Clauses 7.2, 8, 9, 10, 11, 15 and
16 shall continue and remain in full force and effect notwithstanding the
termination of this Agreement.

15.  CLAIMS AGAINST THE COMPANY

15.1 The Grantee shall not make any claim against the Company, the Employing
Company or their respective directors, shareholders, affiliates,
representatives, auditors or employees for any compensation whatsoever in
connection with this Agreement.

15.2 If, following delivery by the Grantee to the Company of an Exercise Notice,
the Company fails or delays, due to its willful or gross negligence, to deliver
the Common Shares to the Grantee within 30 Company Business Days, and as a
direct result of such failure or delay the Grantee suffers damage or loss, the
Grantee may claim compensation limited to the difference between the Exercising
Purchase Price, which was paid by the Grantee to the Company, and the aggregate
market price of the Common Shares at the time of acquisition by the Grantee, if
the Exercising Purchase Price is higher than the aggregate market price of the
Common Shares. For the avoidance of doubt, refusal by the Company to accept the
exercise by the Grantee of the Options pursuant to Clause 4 shall not be grounds
for compensation under this Clause 15.

15.3 Nothing in this Clause 15 shall prohibit the Grantee from making a claim
against the Company, the Employing Company or their respective directors,
shareholders, affiliates, representatives, auditors or employees enforcing
rights expressly provided for under the provisions of this Agreement.

15.4 If the Grantee exercises Options or disposes of Common Shares in breach of
any provisions of this Agreement, the Grantee shall, upon the Company's request,
refund the greater of:

(a)  the difference between the Exercising Purchase Price, which was paid by the
     Grantee to the Company, and the aggregate market price of the Common Shares
     at the time of acquisition by the Grantee; or

(b)  the entire profit which the Grantee makes by the disposal of the Common
     Shares.

In either (a) or (b), the Grantee shall make such refund promptly in accordance
with the Company's instructions.

16.  NOTICES

To the Grantee

16.1 Any communication or notice to be given under or in connection with this
Agreement shall be in the English language and may be communicated by letter,
telex, facsimile transmission or email to the home address set out as first
written above or to such other address, telex or facsimile number or email
address as the

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Grantee may from time to time have notified (in accordance with this Clause
16.1) to the Company.

To the Company

16.2 Any communication or notice to be given under or in connection with this
Agreement shall be in the English language and may be communicated by letter,
telex, facsimile transmission or email to the business address set out as first
written above or to such other address, telex or facsimile number or email
address as the Company may from time to time have notified (in accordance with
this Clause 16.2) to the Grantee and should be addressed to the "Global Human
Resources Division".

Receipt of Notice

16.3 Any notice so served by letter, telex, facsimile transmission or email
shall be deemed to have been received:

(a)  in the case of telex, facsimile transmission or email, twelve (12) hours
     after the time of dispatch; and

(b)  in the case of post, special delivery or registered post, twelve (12)
     Company Business Days from the date of posting.

17. AMENDMENTS AND WAIVERS

17.1 No amendment to the provisions of this Agreement shall be effective unless
such amendments are:

(a)  consistent with the terms of the resolution of the Company's general
     shareholders meeting and Board meeting dated June 26, 2003, to grant
     options, as such resolutions may be modified or amended from time to time;
     and

(b)  made in writing and signed by the parties hereto or their duly authorized
     representatives.

17.2 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, remedies or powers now or hereafter conferred upon the parties hereto or
either of them by law or otherwise.

17.3 Any failure at any time to insist upon or enforce any such right, remedy or
power shall not be construed as a waiver thereof.

18.  GOVERNING LAW

18.1 This Agreement shall be governed by and construed in all respects in
accordance with the laws of Japan.

18.2 Each of the parties hereto hereby irrevocably submits to the
jurisdiction of the courts of Japan.

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19.      ENTIRE AGREEMENT

19.1 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.

19.2 The parties acting in good faith will determine any matter not set out
herein.

20.  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 with effective date of 1, August 2003 has been
executed in two originals, each party acknowledging receipt of one duly executed
original.

By: TOYOTA MOTOR CORPORATION

                                                    ----------------------------
                                                    By: FUJIO CHO
                                                    Title: President
                                                    Date:
By:  [GRANTEE]

                                                    ----------------------------
                                                    [GRANTEE]
                                                    Date:

Page 13

<PAGE>

                                   APPENDIX 1
                        ADJUSTMENTS (ENGLISH TRANSLATION)

Note: The following is an English translation of the terms and conditions
applying to the treatment of the Options in the event of a share split, share
consolidation, issue of new Common Shares or disposal of Common Shares held in
treasury by the Company, which were approved at the Company's shareholders'
meeting and the Board meeting on June 26, 2003. This is not a literal
translation and it is provided for reference only. The original of such terms
and conditions in the Japanese language will prevail in all circumstances. All
references to dates in the following translation are to Tokyo time.

1.   SHARE SPLIT OR SHARE CONSOLIDATION

1.1  If the Company splits or consolidates its Common Shares, the number of
Common Shares to be issued/transferred in satisfaction of the exercise of an
Option (the Adjusted Number of Shares) shall be adjusted in accordance with the
following formula, provided, however, that such adjustment shall be made only
with respect to Options that have not yet been exercised at the time of such
share split or share consolidation. The Adjusted Number of Shares shall be
rounded down to the nearest whole Common Share.

<TABLE>
<CAPTION>
<S>                           <C>                                       <C>
                              Number of Common Shares required
   Adjusted Number     =       to satisfy the exercise of an      x     Ratio of share split/consolidation
      of Shares                  Option prior to adjustment
</TABLE>

The Company shall promptly notify the Grantee in writing of the Adjusted Number
of Shares in the event of a share split or share consolidation by the Company.

1.2 If the Company splits or consolidates its Common Shares, the Exercise Price
shall be adjusted in accordance with the following formula:

<TABLE>
<CAPTION>
<S>                           <C>                                       <C>

  Adjusted Exercise    =      Pre-adjusted Exercise Price         x                    1
      Price                                                             ----------------------------------
                                                                                Ratio of share
                                                                              split/consolidation
</TABLE>

The Adjusted Exercise Price shall be rounded up to the nearest whole Yen.

1.3  The "Pre-adjusted Exercise Price" used in the formula in Clause 1.2 above
shall be the Exercise Price effective on the day prior to the date on which the
Adjusted Exercise Price is applied pursuant to 1.4 below.

1.4  The Adjusted Exercise Price shall be applied as follows:

(a)  if the Company splits its Common Shares, the Adjusted Exercise Price shall
     be applied from the date following the allotment date (wariate-bi) of the
     split shares; or

Page 14

<PAGE>

(b)  if the Company consolidates its Common Shares, the Adjusted Exercise Price
     shall be applied from the date following the expiry of the period provided
     for in Paragraph 1 of Article 215 of the Commercial Code (Law No. 48 of
     1899).

1.5  Where the Board decides that Common Shares will be issued pursuant to a
share split in exchange for a capitalization of distributable profits, and the
allotment date of the split shares is specified as being a date prior to the
date of the shareholders' meeting at which such capitalization is approved, from
the day following such shareholders' meeting, the Adjusted Exercise Price shall
be applied retroactively with effect from the day following the date of
allotment of the split shares. In such case, a number of additional Common
Shares calculated in accordance with the following formula shall be
issued/transferred to any Grantee who exercises an Option during the period
between the date following the allotment date of the split shares and the date
of the shareholders' meeting at which the capitalization of distributable
profits is approved:

                                                             Number of shares
                                                           which were issued or
Number of                                                  transferred upon the
additional                                                exercise of the Option
Common         [Pre-Adjusted          Adjusted      ]     without the adjustment
Shares    =    [Exercise Price   -    Exercise Price] x   of the Exercise Price
               -----------------------------------------------------------------
                                     Adjusted Exercise Price

The number of additional Common Shares accordingly issued or transferred to the
Grantee shall be rounded down to the nearest whole Common Share.

2.   ISSUE OF NEW COMMON SHARES OR DISPOSAL OF TREASURY SHARES

2.1  If the Company disposes of Common Shares held in treasury (Treasury Shares)
or issues new Common Shares for an amount which is less than the then current
market price from and including August 1, 2003 (excluding all instances where
options, warrants or other rights to acquire shares of the Company are exercised
or where the Company transfers its Treasury Shares in accordance with a
resolution of a shareholders' meeting pursuant to paragraph 2 of Article 210-2
of the former Commercial Code), the Exercise Price shall be adjusted in
accordance with the following formula:
<TABLE>
<CAPTION>

<S>       <C> <C>           <C> <C>            <C>  <C>              <C>   <C>
                                                    Number of new          Amount to be
Adjusted                        Number of           Common Shares          paid per new
Exercise      Pre-adjusted      issued and          to be issued or   x    Common Share
Price     =   Exercise      x   outstanding         Treasury Shares        to be issued
              Price             Common Shares  +    to be disposed         or Treasury
                                                                           Share to be
                                                                           disposed
                                                    -------------------------------------
                                                    Current market price per
                                                    Common Share

                                ----------------------------------------------------------
                                Number of issued and   +  Number of new Common
                                outstanding Common        Shares to be issued or
                                Shares                    Treasury Shares to be
                                                          disposed

</TABLE>

                                                                         Page 15

<PAGE>

The Adjusted Exercise Price shall be rounded up to the nearest whole Yen.

2.2  The "Pre-adjusted Exercise Price" used in the formula in Clause 2.1 above
shall be the Exercise Price on the day prior to the date on which the Adjusted
Exercise Price is applied.

2.3  The "Number of issued and outstanding Common Shares" used in the formula in
Clause 2.1 above shall be the total number of issued and outstanding Common
Shares on the allotment date of the new Common Shares being issued or the date
on which the Treasury Shares are disposed, whichever is applicable (for the
avoidance of doubt, it does not include Treasury Shares). If such date is not
specified, the "Number of issued and outstanding Common Shares" shall be the
total number of issued and outstanding Common Shares on the date one month prior
to the date on which the Adjusted Exercise Price is applied; provided that where
two or more events, which require the adjustment of the Exercise Price, occur
within a short period of time of each other and the number of issued and
outstanding Common Shares which is used in calculating the Adjusted Exercise
Price triggered by one of those events can be calculated appropriately, such
number of issued and outstanding shares shall be used.

2.4  The "Current market price per Common Share" used in the formula in Clause
2.1 above shall be the average daily closing price (including the trend
quotations) of the Company's Common Shares 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 by
disregarding the third and successive decimal places of such number and then
correcting the resulting number to one decimal place.

2.5  The Adjusted Exercise Price calculated in accordance with the formula in
Clause 2.1 above shall be applied from the date following the date of disposal
of Treasury Shares or the allotment date of the Common Shares to be issued if
such date is specified, or from the date following the payment date for the
Common Shares to be issued or Treasury Shares to be disposed.

2.6  When calculating the Adjusted Exercise Price in accordance with the formula
in Clause 2.1, each of the numbers to be inserted in the formula shall be
calculated by disregarding the third and successive decimal places of such
number and then correcting the resulting number to one decimal place.

3.   GENERAL

3.1  If the difference between the Adjusted Exercise Price and the Pre-adjusted
Exercise Price is less than one 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 Clause 1 or 2
above shall be used as the Pre-adjusted Exercise Price on the subsequent
occasion that an adjustment occurs.

                                                                         Page 16

<PAGE>

3.2  Except as otherwise provided in Clauses 1 or 2 above, the Company shall
adjust the Exercise Price, as the Company considers appropriate:

(a)  in the event of capital decrease, merger or demerger of the Company; or

(b)  if an event occurs which otherwise causes a change (or potential change) in
     the number of issued shares of the Company.

3.3 If the Exercise Price is adjusted, the Company shall issue an individual
notice to the Grantee prior to the date that the Adjusted Exercise Price is
applied as specified in Clause 1 or 2 above; provided, however, that in the
event of a share split as set out in Clause 1.5 above or where the Company is
unable to issue an individual notice prior to the date that the Adjusted
Exercise Price is applied, the Company shall issue an individual notice to the
Grantee promptly after such date.

                                                                         Page 17

<PAGE>

                                   APPENDIX 2
                   FORM OF EXERCISE NOTICE - 2003 STOCK OPTION

[Date]

To:      Toyota Motor Corporation (the Company)

From:    [Employee name] (the Grantee)

Pursuant to Clauses 4 and 5 of the Agreement for the Grant of Options to Acquire
Common Shares of Toyota Motor Corporation, executed with effect from August 1,
2003 (the Agreement), I warrant and claim for the issue or transfer (at the
Company's discretion) of the Common Shares as follows:

1.   WARRANTY

I warrant that, as of June 26, 2003, the date on which the general shareholders'
meeting resolved to grant options, I was neither:

(a)  a "major shareholder" (oguchi kabunushi); nor

(b)  a "special related person" (tokubetsu kankeisya) to any "major
     shareholder",

as those terms are defined under Japanese laws and regulations.(1)

2.   EXERCISE OF STOCK OPTIONS

I hereby exercise the following Options in accordance with the terms of the
Agreement:

<TABLE>
<CAPTION>
<S>                           <C>                   <C>                 <C>
----------------------------- --------------- -----------------------------------------------------------
The Grantee                   Address                           [Grantee to complete]
----------------------------- --------------- -----------------------------------------------------------
                              Name,
                              Employing
                              Company                           [Grantee to complete]
                              and
                              position
----------------------------- --------------- -----------------------------------------------------------
Date of the general           June, 26 2003         Exercise
shareholder meeting at                              Period               From: August 1, 2005
which the grant of                                                       To: July 31, 2009
Options was approved                                                     (inclusive)
----------------------------- --------------------- -------------------- --------------------------------
Grant Date                    August 1, 2003
----------------------------- --------------------- -------------------- --------------------------------
</TABLE>

--------------------------------------------------------------------------------

(1)  Special Taxation Measures Law (Law No. 26 of 1957) Paragraph 1 of Article
     29-2; and Enforcement Regulation of the Special Taxation Measures Law
     Paragraphs 1 and 2 of Article 19-3.

                                                                         Page 18

<PAGE>

<TABLE>
<CAPTION>
<S>                           <C>         <C>                   <C>                   <C>
----------------------------- ----------- --------------------- --------------------- -------------------
Terms of the                  Right       Class of              Aggregate Number      Exercise Price
Options                                   underlying            of shares             per share
                                          Shares                underlying all
                                                                Options granted
                                                                under 2003 Stock
                                                                Option Plan
----------------------------- ----------- --------------------- --------------------- -------------------
                              Option      Common Shares         1,958,000             [insert price]
                                                                Common                Yen
                                                                Shares
----------------------------- ----------- --------------------- --------------------- -------------------
Details of the                Number of shares to be acquired upon this               Total
proposed exercise             exercise of Option(s)                                   Exercising
of Options                                                                            Purchase
                                                                                      Price
                              ------------------------------------------------------- -------------------
                              [] Common Shares                                        [insert price]
                              [Grantee to insert number]                              Yen
                                                                                      [Grantee to
                                                                                      complete]
----------------------------- ------------------------------------------------------- -------------------
Company                       Address      1 Toyota-machi, Toyota-shi, Aichi-ken
(Granting                     ------------ --------------------------------------------------------------
Company)                      Name         Toyota Motor Corporation
----------------------------- ------------ --------------------------------------------------------------
</TABLE>

-----------------------------
[Grantee's Name]

                                                                         Page 19

<PAGE>

                                   APPENDIX 3
                         FORMS OF NOTICE OF TERMINATION
                         OF 2003 STOCK OPTION AGREEMENT

                Termination of Agreement pursuant to Clause 14.1

[Date]

To:     Toyota Motor Corporation (the Company)

From:   [Employee's name] (the Grantee)

Pursuant to Clause 14.1 of the Agreement for the Grant of Options to Acquire
Common Shares of Toyota Motor Corporation, executed with effect from 1 August,
2003 (the Agreement), I notify you that I hereby retroactively terminate the
Agreement, such termination to be effective from the date of execution of the
Agreement.

I hereby acknowledge and agree that:

(a)  I shall continue to be bound by and to comply with Clauses 8, 10, 11, 15.1,
16, 18 and 20 of the Agreement; and

(b)  pursuant to Clause 15.1 of the Agreement, I have no claim, whether present
or future against the the Company, the Employing Company (as defined in the
Agreement) or their respective directors, shareholders, affiliates,
representatives, auditors or employees for any compensation whatsoever in
connection with this Agreement or the termination thereof.

-----------------------------
[Grantee's Name]

                                                                         Page 20

<PAGE>

                Termination of Agreement pursuant to Clause 14.2

[Date]

To:     Toyota Motor Corporation (the Company)

From:   [Employee's name] (the Grantee)

Pursuant to Clause 14.2 of the Agreement for the Grant of Options to Acquire
Common Shares of Toyota Motor Corporation, executed with effect from 1 August,
2003, I notify you that I hereby terminate the Agreement effective as of the
date of this notice.

I hereby acknowledge and agree that:

(a)  I shall continue to be bound by and to comply with Clauses 7.2, 8, 9, 10,
11, 15, 16, 18 and 20 of the Agreement; and

(b)  pursuant to Clause 15.1 of the Agreement, I have no claim, whether present
or future, against the the Company, the Employing Company (as defined in the
Agreement) or their respective directors, shareholders, affiliates,
representatives, auditors or employees for any compensation whatsoever in
connection with this Agreement or the termination thereof.

----------------------------
[Grantee's Name]

                                                                         Page 21
<PAGE>August 2, 2004

                            TOYOTA MOTOR CORPORATION

                                       and

                                   [EMPLOYEE]

                   =========================================

                      AGREEMENT FOR THE GRANT OF OPTIONS TO
                            ACQUIRE COMMON SHARES OF
                            TOYOTA MOTOR CORPORATION

                            UNITED STATES OF AMERICA

                   =========================================

<PAGE>

                                    CONTENTS
CLAUSE                                                                      PAGE

1.   INTERPRETATION............................................................1

2.   GRANT OF OPTIONS..........................................................2

3.   INCENTIVE STOCK OPTIONS...................................................2

4.   EXERCISE, LAPSE AND REFUSAL OF OPTIONS....................................3
     Exercise..................................................................3
     Lapse.....................................................................3
     Refusal...................................................................5

5.   MANNER OF EXERCISE OF OPTIONS.............................................6

6.   ADJUSTMENTS TO THE NUMBER OF COMMON SHARES................................6

7.   SECURITIES AND RELEVANT LEGISLATION.......................................7

8.   NO GUARANTEE OF CONTINUING EMPLOYMENT OR OFFICE...........................7

9.   EMPLOYEE UNDERTAKING......................................................8

10.  DATA PROCESSING CONSENT...................................................8

11.  COSTS AND TAXES...........................................................8

12.  SECURITIES ACCOUNTS.......................................................9

13.  GENERAL...................................................................9

14.  TERMINATION OF THIS AGREEMENT............................................10

15.  CLAIMS AGAINST THE COMPANY...............................................11

16.  NOTICES..................................................................11
     To the Grantee...........................................................11
     To the Company...........................................................12
     Receipt of Notice........................................................12

17.  AMENDMENTS AND WAIVERS...................................................12

18.  GOVERNING LAW............................................................12

19.  ENTIRE AGREEMENT.........................................................13

20.  SEVERABILITY.............................................................13

APPENDIX 1  ADJUSTMENTS (ENGLISH TRANSLATION).................................15

1.   SHARE SPLIT OR SHARE CONSOLIDATION.......................................15

2.   ISSUE OF NEW COMMON SHARES OR DISPOSAL OF TREASURY SHARES................16

3.   GENERAL..................................................................17

APPENDIX 2  FORM OF EXERCISE NOTICE - 2004 STOCK OPTION.......................19

<PAGE>

1.   WARRANTY.................................................................19

2.   EXERCISE OF STOCK OPTIONS................................................19

APPENDIX 3  FORMS OF NOTICE OF TERMINATION OF 2004 STOCK OPTION AGREEMENT.....21

     Termination of Agreement pursuant to Clause 14.1.........................21

     Termination of Agreement pursuant to Clause 14.2.........................22

<PAGE>

THIS OPTION AGREEMENT is made with effect from August 2, 2004

BETWEEN

(1)    TOYOTA MOTOR CORPORATION a company registered in Japan and whose
       registered office is at 1 Toyota-Cho, Toyota, Aichi, 471-8571 Japan (the
       Company); and

(2)    [      ] of [   ] (the Grantee) and currently employed by [ ] (the
       Employing Company).

WHEREAS the Company  intends to grant the Grantee  options to acquire common
shares of the Company and set out the exercise conditions thereof.

IT IS AGREED as follows:

1.     INTERPRETATION

1.1    In this Agreement, unless the context otherwise requires, the following
words and expressions shall have the following meanings:

Agreement means this Option Agreement;

Appointed Bank has the meaning set forth in Clause 5.1(c);

Board means the board of directors of the Company from time to time or a duly
appointed committee thereof;

Bank Business Day means any day on which the Appointed Bank is open for business
in Japan;

Common Shares means the ordinary shares of the Company from time to time;

Company Business Day means any day on which the Company is open for business in
Japan;

Exercise Period means the period commencing on August 1, 2006 and ending on July
31, 2010, provided that if July 31, 2010 is not a Company Business Day, then the
final day of the Exercise Period shall be the Company Business Day immediately
preceding July 31, 2010;

Grant Date means, August 2, 2004, the date on which the Company grants the
Options to the Grantee;

Group means the Company and its Subsidiaries;

Option means a right to acquire 100 Common Shares under this Agreement (or such
number as may be increased or decreased pursuant to Clause 6) and Options shall
be construed accordingly;

Reorganization means any capitalization or rights issue, share split, share
consolidation, or other reorganization or reduction of the share capital of the
Company;

Page 1

<PAGE>

Subsidiary means any entity in which the Company owns, directly or indirectly,
at least 50% of the issued share capital thereof; and

Yen means the lawful currency of Japan.

1.2    Any reference herein to the provisions of any statute or subordinate
legislation shall be deemed to refer to the same as 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 Appendices 1, 2 and 3 are to the clauses and
the appendices of this Agreement. Appendices 1, 2 and 3 form part of this
Agreement.

2.     GRANT OF OPTIONS

2.1    The Company hereby grants to the Grantee on the Grant Date [ ] Options
subject to the terms and conditions of this Agreement.

2.2    No consideration shall be payable by the Grantee on the grant of the
Options.

2.3    This Agreement represents the Grantee's right to the Options. The Grantee
shall not request the Company to issue any certificates representing the
Options.

2.4    The Options are personal to the Grantee and may not be transferred,
assigned, pledged, charged to, or otherwise alienated or exercised by, any other
person without the approval of the board of directors of the Company and any
attempt to do so without the approval of the board of directors of the Company
will result in the Options lapsing.

2.5    The benefit of the Options does not constitute part of the Grantee's base
salary or remuneration and will not be taken into account in determining any
other 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.     INCENTIVE STOCK OPTIONS

3.1    It is intended that the Options constitute incentive stock options as
defined in Section 422 of the United States Internal Revenue Code of 1986, as
amended and any regulations promulgated thereunder (the Code); provided,
however, that to the extent the Options do not satisfy one or more provisions of
Section 422 of the Code, they shall be treated as non-qualified stock options.

                                                                          Page 2
<PAGE>

4.     EXERCISE, LAPSE AND REFUSAL OF OPTIONS

Exercise

4.1    The Grantee may exercise all or some of the Options during the Exercise
Period in the manner set forth in Clause 5.

4.2    Each Option, if exercised, must be exercised in full and no Option may be
partially exercised.

4.3    Subject to Clause 6, the price to be paid for each Common Share to be
issued or transferred to the Grantee upon exercise of each Option shall be
calculated by multiplying the closing price of the Common Shares listed on the
Tokyo Stock Exchange on the Grant Date by 1.025 (rounded up to the nearest whole
Yen) (the Exercise Price). The Company shall notify the Grantee of the Exercise
Price promptly after the Company has calculated the Exercise Price.

4.4    Options may only be exercised on a Company Business Day.

Lapse

4.5    Notwithstanding any other provision in this Agreement, the Options shall
lapse automatically and become of no effect on the earlier of:

(a)    the expiry of the Exercise 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;

(d)    a shareholders' meeting approving a merger agreement, a share-for-share
       agreement (kabushiki kokan) or a statutory share transfer (kabushiki
       iten), as a result of which the Company decides to invalidate the Options
       on the basis that the Company will cease as a legal entity or it will
       become a wholly-owned subsidiary of another company;

(e)    the Grantee becoming an officer or an employee of any company which
       competes with the Company or any of its Subsidiaries;

(f)    the dismissal of the Grantee for disciplinary reasons from his office or
       employment at the Employing Company or other member of the Group;

(g)    breach of this Agreement by the Grantee or gross misconduct by the
       Grantee (as determined by the Board);

(h)    any date prior to the first day of the Exercise Period when the Grantee
       ceases to be employed by, or hold office with, the Employing Company or
       any other member of the Group; or

(i)    the termination of this Agreement in accordance with Clause 14.

                                                                          Page 3
<PAGE>

4.6    The Options shall lapse automatically and become of no effect if, on any
date on or after the beginning of the Exercise Period, the Grantee ceases to be
an officer or an employee of a member of the Group for any reason other than:

(a)    injury, disability or ill-health (as determined by the Board);

(b)    retirement at or after the date on which he is bound or entitled to
       retire under his contract of employment or otherwise;

(c)    resignation;

(d)    the company of which he is an officer or an employee ceasing to be a
       member of the Group;

(e)    the business (or part of a business) in which he is employed or of which
       he is an officer being transferred to a transferee which is not a member
       of the Group; or

(f)    any other reason at the Board's absolute discretion.

For the avoidance of doubt, the Grantee shall not be treated for such purposes
as ceasing to be an officer or an employee of a member of the Group if the
Grantee remains or simultaneously becomes an officer or an employee of another
member of the Group.

4.7    For the purposes of Clause 4.5(h) and Clause 4.6, a Grantee shall not be
treated as ceasing to be an officer or an employee of a member of the Group if
he is absent from work solely as a result of an authorized leave of absence
until such Grantee ceases to be entitled to exercise any statutory or
contractual right to return to work.

4.8    In the event that the Company becomes a wholly-owned subsidiary of
another company (such company, the Holding Company) as a result of a share-for-
share exchange (kabushiki kokan) or a statutory share transfer (kabushiki iten),
the Company may, in its discretion, decide to invalidate any Options which have
not yet been exercised. However, if the Company decides not to invalidate the
Options in these circumstances:

(a)    the obligations of the Company in connection with the Options shall be
       transferred to the Holding Company;

(b)    the number of shares in the Holding Company to be issued or transferred
       to the Grantee upon the exercise of the Options shall be adjusted in
       accordance with the relevant share-for-share exchange ratio or statutory
       share transfer ratio, as the case may be, and shall be rounded down to
       the nearest whole share; and

(c)    subject to paragraphs (a) and (b) above, the Holding Company may vary, to
       the extent reasonable in all the circumstances:

         (i)  the type or class of shares in the Holding Company to be issued or
              transferred upon the exercise of the Options; and

                                                                          Page 4
<PAGE>

        (ii)  the terms and conditions of the Options, including but not limited
              to:

              (A)    the exercise price of each Option;

              (B)    the exercise period of the Options;

              (C)    the terms and conditions for the exercise of the Options;

              (D)    the terms and conditions for the lapse of the Options; and

              (E)    the restrictions on the transfer of the Options.

4.9    The Grantee shall not be entitled to any compensation from the Company or
the Employing Company in the event of any of the Options lapsing or becoming
invalid for any reason under this Agreement.

Refusal

4.10   The Company may refuse to accept exercise by the Grantee of the Options
within 30 days of the date of receipt of an otherwise valid Exercise Notice (as
defined in Clause 5.1(a) below) for any of the following reasons:

(a)    the Company determines in good faith that the exercise impedes the
       intended issuance by the Company of new securities regardless of the type
       or class, including, without limitation, shares or bonds with warrants;

(b)    the Company determines that the Options have lapsed pursuant to Clauses
       4.5 or 4.6;

(c)    there has been insufficient time to confirm the Adjusted Exercise Price
       stipulated in Appendix 1; or

(d)    the Company determines in good faith that the exercise of the Options may
       materially impede the business of the Company;

provided, however that the Company shall not refuse to accept exercise by the
Grantee of the Options on the final Company Business Day of the Exercise Period.

4.11   If the Company refuses to accept the exercise by the Grantee of the
Options for any one of the reasons set forth in Clauses 4.10(a) to 4.10(d)above:

(a)    the Company shall give written notice to the Grantee of such refusal,
       provided, however, that the Company is not obliged to disclose the
       reasons for such refusal; and

(b)    the Options shall remain outstanding until the earlier of:

         (i)  the Grantee's exercise of such Options pursuant to Clause 5; or

        (ii)  lapse of the Options pursuant to Clauses 4.5 and 4.6.

                                                                          Page 5
<PAGE>

5.     MANNER OF EXERCISE OF OPTIONS

5.1    Subject to Clause 4.2, the Grantee may exercise one or more of the
Options in whole, but not in part, during the Exercise Period in accordance with
the following procedure:

(a)    the Grantee is required to send to the Company a notice of its intention
       to exercise the Options (the Exercise Notice) in the form attached as
       Appendix 2 (or in such other form as prescribed by the Company from time
       to time);

(b)    within five (5) Company Business Days the Company shall send to the
       Grantee an acknowledgement that such Exercise Notice has been received;

(c)    the Grantee shall, within four (4) Bank Business Days from the date on
       which the Company notifies the Grantee that the Company has received the
       Exercise Notice, pay an amount calculated by multiplying the Exercise
       Price by the number of Common Shares to be obtained upon exercise of the
       Option(s) (the Exercising Purchase Price) to UFJ Bank Limited or such
       other bank as shall be appointed by the Company from time to time (the
       Appointed Bank); provided, however, that if the last Bank Business Day is
       not also a Company Business Day, then the date for payment shall be the
       next Company Business Day which is also a Bank Business Day. The date of
       exercise shall be the date of receipt by the Company of payment of the
       Exercising Purchase Price.

(d)    Upon confirmation by the Company that the Grantee has fully paid the
       Exercising Purchase Price pursuant to this Clause 5.1 and any Tax
       Liabilities pursuant to Clause 11, the Company shall promptly issue or
       transfer (as the case may be) the relevant number of Common Shares to the
       Grantee's securities account in accordance with Clause 12. Upon payment
       of the Exercising Purchase Price by the Grantee to the Appointed Bank,
       the Grantee shall legally own the Common Shares acquired upon the
       exercise of the Options.

5.2    The Grantee may withdraw the Exercise Notice up until such time as the
Grantee pays the Exercising Purchase Price by giving written notice to the
Company to that effect; provided, however, that once the Grantee has paid the
Exercising Purchase Price in full, the Grantee cannot withdraw the Exercise
Notice.

5.3    Notwithstanding Clause 5.2 above, following payment by the Grantee of the
Exercising Purchase Price, the Exercise Notice shall be deemed withdrawn if the
Company notifies the Grantee of its refusal to accept the exercise of the
Options pursuant to Clauses 4.10 and 4.11. In such circumstances, the Company
shall repay the Exercising Purchase Price to the Grantee, provided, however,
that the Company shall not pay any interest with respect to any repayment to the
Grantee.

6.     ADJUSTMENTS TO THE NUMBER OF COMMON SHARES

6.1    In the event of a Reorganization of the share capital of the Company, the
Exercise Price and the total number of Common Shares underlying an Option may be
adjusted in accordance with the formulae set out in Appendix 1.

                                                                          Page 6
<PAGE>

7.     SECURITIES AND RELEVANT LEGISLATION

7.1    The Options may not be exercised if the exercise of the Options or the
issue of Common Shares thereafter would be contrary to any enactment or
regulation at the time being in force in any country having jurisdiction in
relation thereto. In particular, the Options shall not be exercisable unless the
offer and sale of the Common Shares subject to the Options have been registered
under the United States Securities Act of 1933, as amended 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. Neither the
Employing Company nor the Company shall be bound to take any action or obtain
the consent of any governmental authority to such acquisition, exercise or issue
or to take any action to ensure that any such acquisition, exercise or issue is
in accordance with any such enactment or regulation if such action would, in the
opinion of the Employing Company or the Company (as the case may be), be unduly
onerous and neither the Employing Company nor the Company shall have any
liability in respect thereof to the Grantee.

7.2    The Grantee hereby agrees to abide by the Securities and Exchange Law of
Japan, and all relevant securities laws, insider trading legislation, commercial
codes, tax laws, any other relevant laws, rules and regulations (including
relevant foreign, state and local laws) and relevant internal rules of the
Company and the Employing Company (including, without limitation, all insider
information and trading prohibition rules and the rules on buying and selling
Common Shares in relation to the exercise of any Options and the subsequent sale
of the Common Shares acquired upon exercise). The Company may, at its
discretion, impose such conditions on the exercise of the Options as it shall
deem necessary in order for such exercise to comply with any applicable
enactments or regulations, 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. If the Grantee has any questions about the application of relevant
laws and rules, the Grantee shall immediately contact the Company to discuss
them; provided, however, that the Grantee is solely responsible for obtaining
his own legal advice in connection with the grant and exercise of the Options.

8.     NO GUARANTEE OF CONTINUING EMPLOYMENT OR OFFICE

8.1    The rights, obligations and status of the Grantee under the terms and
conditions of his office or employment with the Employing Company shall not be
affected by this Agreement. Neither this Agreement nor any action taken or
omitted to be taken hereunder shall be construed as in any way:

(a)    guaranteeing the Grantee's continued office or employment with the
       Company, Employing Company or any member of the Group; or

(b)    giving the Grantee the right to continue or be re-instated in his office
       or the employ of the Company, the Employing Company or any member of the
       Group whether before during or after the Exercise Period.

For the avoidance of doubt, nothing in this Agreement creates any form of
employment relationship between the Company and the Grantee.

                                                                          Page 7
<PAGE>

8.2    The Grantee hereby waives any and all rights to compensation or damages
in consequence of the termination of his office or employment with the Company,
the Employing Company or any member of the Group for any reason whatsoever
insofar as those rights arise, or may arise, from his ceasing to have rights
under or being entitled to exercise the Options pursuant to this Agreement as a
result of such termination or from the loss or diminution in value of such
rights or entitlements. If necessary, the Grantee's terms of employment shall be
varied accordingly.

9.     EMPLOYEE UNDERTAKING

In accordance with the purpose of this Agreement, the Grantee shall devote
himself to his work with integrity as an officer or an employee (as appropriate)
of the relevant member(s) of the Group.

10.    DATA PROCESSING CONSENT

10.1   The Company and the Employing Company may hold personal information
relating to the Grantee, including, without limitation, payroll, address,
service period, demographics and similar information in connection with this
Agreement and may at any time process and use such personal information in order
to perform and facilitate the implementation, management and administration of
the matters contemplated and set out in this Agreement provided that such use is
not prohibited by law. Subject to any applicable prohibitions, the Company may,
at any time to the extent required, make the Grantee's personal information
available to other persons within or outside the Group for such purposes,
including, but not limited, in connection with the exercise of the Options. The
Grantee hereby irrevocably consents to the processing, use, transfer and
registration of such personal information within or outside the Group. Before
transferring any data to a person or entity outside the Group, the Company or
the Employing Company (as the case may be) undertakes to inform the Grantee of:

(a)    the identity of any recipient or category of recipients of such personal
       information, the relevant data categories; and

(b)    the Grantee's rights to consult and to the extent necessary rectify and
       complete the registered personal information.

The Company will take reasonable steps to protect and defend the privacy
interests of the Grantee.

11.    COSTS AND TAXES

11.1   The Company shall have the right to require the Grantee to remit to the
Company, prior to the delivery of any certificates evidencing Common Shares
acquired upon exercise of an Option, an amount sufficient to satisfy any
applicable income tax, capital gains tax, social security contributions or other
tax charge or duty (the Tax Liabilities) which may be assessed or chargeable in
connection with the grant or exercise of the Options. In addition, prior to the
Company's determination of such Tax Liabilities, the Grantee may make an
irrevocable election to satisfy, in whole or in part, such obligation to remit
taxes, by directing the Company to cause Common Shares to be withheld (but not
in excess of a rate that the Company

                                                                          Page 8
<PAGE>

determines is necessary to avoid unfavorable accounting treatment) 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 applicable laws. The
Grantee shall indemnify the Company and any member of the Group in respect of
any Tax Liabilities payable in respect of the Options and for which the Company
or any member of the Group is liable whether pursuant to any withholding
obligations or otherwise.

11.2   Except as provided for in Clause 11.1, the Grantee is responsible for:

(a)    the cost of opening an account at the Securities Company (as defined in
       Clause 12.1 below);

(b)    the relevant charges payable in connection with any money transfers;

(c)    all other charges of the Appointed Bank and/or Securities Company which
       may be imposed from time to time; and

(d)    all other expenses that are imposed on the exercise of Options.

11.3   The Company shall have the right to require the Grantee to remit to the
Company an amount sufficient to satisfy any such costs and expenses prior to the
delivery of any certificate evidencing Common Shares acquired upon exercise of
an Option. Such amount may be satisfied by directing the Company to withhold
Common Shares in the manner set forth in Clause 11.1.

12.    SECURITIES ACCOUNTS

12.1   Pursuant to Japanese laws and regulations, the Grantee is required to
appoint an agent and maintain a non-resident offshore account in Japan with
respect to the Common Shares to be acquired upon exercise of the Options. The
Grantee hereby agrees that it shall, through the Company, entrust the custody,
management and disposal of such Common Shares (the Services) to a securities
company or bank (the Securities Company); provided, however, that the Grantee
shall retain the right to determine and direct the Securities Company to sell,
transfer or dispose of all or any portion of the Common Shares on the Grantee's
behalf and the Securities Company may not sell, transfer or otherwise dispose of
the Common Shares without the Grantee's prior approval. The Company shall
determine and appoint such Securities Company (or change such appointment) in
its absolute discretion and notify the Grantee of such appointment (or change in
such appointment) in accordance with Clause 16.

12.2   Following the Grant Date and prior to the exercise of the Options the
Grantee is required to open an account in the Grantee's name at the Securities
Company and follow the necessary procedures set out separately by the Company in
order to enable the Securities Company to perform the Services.

13.    GENERAL

13.1   The existence of the Options shall not affect in any way the right or
power of the Company or its shareholders to make or authorize any Reorganization
or other

                                                                          Page 9
<PAGE>

adjustment, recapitalization, reorganization or change in the Company's
capital structure, or any merger, corporate split, share-for-share exchange or
consolidation of the Company, or any issue of shares, bonds, debentures,
preferred or prior preference stocks ahead of or convertible into, or otherwise
affecting the Common Shares of the Company or the rights attaching thereto or
any other securities, or the dissolution or liquidation of the Company 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.

13.2   The grant of options under this Agreement or future agreement is a
voluntary and discretionary benefit and does not create any entitlement to
options or shares in the future, even in the case of repeated grants of options.

13.3   The Grantee shall have no rights as a stockholder with respect to any
Common Shares issuable upon exercise of an Option until payment of the
Exercising Purchase Price for such Common Shares as provided in Clause 5.1(d),
and no adjustment shall be made for dividends or distributions or other rights
in respect of any Common Share for which the record date is prior to the date on
which the Grantee pays the Exercising Purchase Price therefor. 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 Shares.

13.4   The Board shall have the right to interpret the provisions of this
Agreement and to make all rules and determinations which it deems necessary or
desirable for the administration of this Agreement. The decisions of the Board
or, in the case of matters requiring shareholder approval, resolutions of the
shareholders meeting (whichever is applicable), including without limitation all
calculations required hereunder, shall be final and binding with respect to all
matters relating to this Agreement and the Options.

13.5   Clauses 7.2, 8, 9, 10, 15, 16, 18 and 20 shall continue and remain in
full force and effect notwithstanding the exercise of all of the Options by the
Grantee.

14.    TERMINATION OF THIS AGREEMENT

14.1   If, by reason of imposition of Taxation Liabilities or a change in the
applicable laws or regulations, this Agreement is rendered illegal or otherwise
unenforceable, the Grantee may, before the Grantee has paid the Exercising
Purchase Price in respect of the first exercise of the Options, terminate this
Agreement with retroactive effect from the Grant Date by giving written notice
in the appropriate form attached in Appendix 3 (or as otherwise prescribed by
the Company from time to time); provided that Clauses 8, 10, 11, 15.1 16, 18 and
20 shall continue and remain in full force and effect notwithstanding the
termination of this Agreement.

14.2   The Grantee may only retroactively terminate this Agreement if he has not
exercised any of the Options. If the Grantee has exercised one or more Options
then the Grantee may at any time during the Exercise Period, in respect of any
outstanding Options, terminate this Agreement without retroactive application by
giving written notice in the form attached in Appendix 3 (or as otherwise
prescribed by the Company from time to time); provided that Clauses 7.2, 8, 9,
10, 11, 15 and 16 shall

                                                                         Page 10
<PAGE>

continue and remain in full force and effect notwithstanding the termination of
this Agreement.

15.    CLAIMS AGAINST THE COMPANY

15.1   Subject to Clauses 15.1 and 15.2 below, the Grantee shall not make any
claim against the Company, the Employing Company or their respective directors,
officers, shareholders, affiliates, representatives, auditors or employees for
any compensation whatsoever in connection with this Agreement.

15.2   If, following delivery by the Grantee to the Company of an Exercise
Notice, the Company fails or delays, wilfully or due to its gross negligence, to
deliver the Common Shares to the Grantee within 30 Company Business Days, and as
a direct result of such failure or delay the Grantee suffers damage or loss, the
Grantee may claim compensation limited to the difference between the Exercising
Purchase Price, which was paid by the Grantee to the Company, and the aggregate
market price of the Common Shares at the time of acquisition by the Grantee, if
the Exercising Purchase Price is higher than the aggregate market price of the
Common Shares. For the avoidance of doubt, refusal by the Company to accept the
exercise by the Grantee of the Options pursuant to Clause 4 shall not be grounds
for compensation under this Clause 15.

15.3   Nothing in this Clause 15 shall prohibit the Grantee from making a claim
against the Company, the Employing Company or their respective directors,
officers, shareholders, affiliates, representatives, auditors or employees
enforcing rights expressly provided for under the provisions of this Agreement.

15.4   If the Grantee exercises Options or disposes of Common Shares in breach
of any provisions of this Agreement, the Grantee shall, upon the Company's
request, refund the greater of:

(a)    the difference between the Exercising Purchase Price, which was paid by
       the Grantee to the Company, and the aggregate market price of the Common
       Shares at the time of acquisition by the Grantee; or

(b)    the entire profit which the Grantee makes by the disposal of the Common
       Shares.

If either (a) or (b) above applies, the Grantee shall make such refund promptly
in accordance with the Company's instructions.

16.    NOTICES

To the Grantee

16.1   Any communication or notice to be given under or in connection with this
Agreement shall be in the English language and may be communicated by letter,
telex, facsimile transmission or email to the home address set out as first
written above or to such other address, telex or facsimile number or email
address as the Grantee may from time to time have notified (in accordance with
this Clause 16.1) to the Company.

                                                                         Page 11
<PAGE>

To the Company

16.2   Any communication or notice to be given under or in connection with this
Agreement shall be in the English language and may be communicated by letter,
telex, facsimile transmission or email to the business address set out as first
written above or to such other address, telex or facsimile number or email
address as the Company may from time to time have notified (in accordance with
this Clause 16.2) to the Grantee and should be addressed to the "Global Human
Resources Division".

Receipt of Notice

16.3   Any notice so served by letter, telex, facsimile transmission or email
shall be deemed to have been received:

(a)    in the case of telex, facsimile transmission or email, twelve (12) hours
       after the time of dispatch; and

(b)    in the case of post, special delivery or registered post, twelve (12)
       Company Business Days from the date of posting.

17.    AMENDMENTS AND WAIVERS

17.1   No amendment to the provisions of this Agreement shall be effective
unless such amendments are:

(a)    consistent with all applicable Japanese laws and regulations and the
       terms of the resolutions of the Company's general shareholders meeting
       and Board meeting dated June 23, 2004, to grant options, as such
       resolutions may be modified or amended from time to time; and

(b)    made in writing and signed by the parties hereto or their duly authorized
       representatives.

17.2   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, remedies or powers now or hereafter conferred upon the parties hereto or
either of them by law or otherwise.

17.3   Any failure at any time to insist upon or enforce any such right, remedy
or power shall not be construed as a waiver thereof.

18.    GOVERNING LAW

18.1   This Agreement shall be governed by and construed in all respects in
accordance with the laws of Japan.

18.2   Each of the parties hereto hereby irrevocably submits to the jurisdiction
of the courts of Japan.

                                                                         Page 12
<PAGE>

19.    ENTIRE AGREEMENT

19.1   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.

19.2   The parties acting in good faith will determine any matter not set out
herein.

20.    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.

                                                                         Page 13
<PAGE>

IN WITNESS whereof this Agreement with effective date of 2 August, 2004 has been
executed in two originals, each party acknowledging receipt of one duly executed
original.

By: TOYOTA MOTOR CORPORATION

                                                 _______________________________
                                                 By: FUJIO CHO
                                                 Title: President
                                                 Date:

By:  [GRANTEE]

                                                 _______________________________
                                                 [GRANTEE]
                                                 Date:

Page 14

<PAGE>

                                   APPENDIX 1
                        ADJUSTMENTS (ENGLISH TRANSLATION)

Note: The following is an English translation of the terms and conditions
applying to the treatment of the Options in the event of a share split, share
consolidation, issue of new Common Shares or disposal of Common Shares held in
treasury by the Company, which were approved at the Company's shareholders'
meeting and the Board meeting on June 23, 2004. This is not a literal
translation and it is provided for reference only. The original of such terms
and conditions in the Japanese language will prevail in all circumstances. All
references to dates in the following translation are to Tokyo time.

1.     SHARE SPLIT OR SHARE CONSOLIDATION

1.1    If the Company splits or consolidates its Common Shares, the number of
Common Shares to be issued/transferred in satisfaction of the exercise of an
Option (the Adjusted Number of Shares) shall be adjusted in accordance with the
following formula, provided, however, that such adjustment shall be made only
with respect to Options that have not yet been exercised at the time of such
share split or share consolidation. The Adjusted Number of Shares shall be
rounded down to the nearest whole Common Share.

                     Number of Common Shares required
Adjusted Number   =    to satisfy the exercise of an   X  Ratio of share split/
   of Shares            Option prior to adjustment            consolidation

The Company shall promptly notify the Grantee in writing of the Adjusted Number
of Shares in the event of a share split or share consolidation by the Company.

1.2    If the Company splits or consolidates its Common Shares, the Exercise
Price shall be adjusted in accordance with the following formula:

                                                                    1
Adjusted Exercise   =   Pre-adjusted Exercise Price   x  _______________________
      Price                                               Ratio of share split/
                                                              consolidation

The Adjusted Exercise Price shall be rounded up to the nearest whole Yen.

1.3    The "Pre-adjusted Exercise Price" used in the formula in Clause 1.2 above
shall be the Exercise Price effective on the day prior to the date on which the
Adjusted Exercise Price is applied pursuant to 1.4 below.

1.4    The Adjusted Exercise Price shall be applied as follows:

(a)    if the Company splits its Common Shares, the Adjusted Exercise Price
       shall be applied from the date following the allotment date (wariate-bi)
       of the split shares; or

Page 15

<PAGE>

(b)    if the Company consolidates its Common Shares, the Adjusted Exercise
       Price shall be applied from the date following the expiry of the period
       provided for in Paragraph 1 of Article 215 of the Commercial Code
       (Law No. 48 of 1899).

1.5    Where the Board decides that Common Shares will be issued pursuant to a
share split in exchange for a capitalization of distributable profits, and the
allotment date of the split shares is specified as being a date prior to the
date of the shareholders' meeting at which such capitalization is approved, from
the day following such shareholders' meeting, the Adjusted Exercise Price shall
be applied retroactively with effect from the day following the date of
allotment of the split shares. In such case, a number of additional Common
Shares calculated in accordance with the following formula shall be
issued/transferred to any Grantee who exercises an Option during the period
between the date following the allotment date of the split shares and the date
of the shareholders' meeting at which the capitalization of distributable
profits is approved (the Interim Period):

                                                             Number of shares
                                                           which were issued or
                                                           transferred upon the
               [ Pre-Adjusted           Adjusted   ]     exercise of the Option
 Number of     [Exercise Price   -   Exercise Price]  x  without the adjustment
additional                                                 of the Exercise Price
  Common                                                    during the Interim
  Shares                                                          Period
            =
                ________________________________________________________________

                                    Adjusted Exercise Price

The number of additional Common Shares accordingly issued or transferred to the
Grantee shall be rounded down to the nearest whole Common Share.

2.     ISSUE OF NEW COMMON SHARES OR DISPOSAL OF TREASURY SHARES

2.1    If the Company disposes of Common Shares held in treasury (Treasury
Shares) or issues new Common Shares for an amount which is less than the then
current market price from and including August 2, 2004 (excluding all instances
where options, warrants or other rights to acquire shares of the Company are
exercised or where the Company transfers its Treasury Shares in accordance with
a resolution of a shareholders' meeting pursuant to paragraph 2 of Article 210-2
of the former Commercial Code), the Exercise Price shall be adjusted in
accordance with the following formula:

                                         Number of new       Amount to be paid
                                       Common Shares to        per new Common
                        Number of        be issued or   x  Share to be issued or
                        issued and    Treasury Shares to    Treasury Share to be
                       outstanding       be disposed             disposed
             Pre-     Common Shares +
Adjusted   adjusted x                 __________________________________________
Exercise = Exercise                     Current market price per Common Share
  Price      Price
                     ___________________________________________________________
                       Number of issued and      +       Number of new Common
                        outstanding Common              Shares to be issued or
                              Shares                     Treasury Shares to be
                                                               disposed

                                                                         Page 16
<PAGE>

The Adjusted Exercise Price shall be rounded up to the nearest whole Yen.

2.2    The "Pre-adjusted Exercise Price" used in the formula in Clause 2.1 above
shall be the Exercise Price on the day prior to the date on which the Adjusted
Exercise Price is applied.

2.3    The "Number of issued and outstanding Common Shares" used in the formula
in Clause 2.1 above shall be the total number of issued and outstanding Common
Shares on the allotment date of the new Common Shares being issued or the date
on which the Treasury Shares are disposed, whichever is applicable (for the
avoidance of doubt, it does not include Treasury Shares). If such date is not
specified, the "Number of issued and outstanding Common Shares" shall be the
total number of issued and outstanding Common Shares on the date one month prior
to the date on which the Adjusted Exercise Price is applied; provided that where
two or more events, which require the adjustment of the Exercise Price, occur
within a short period of time of each other and the number of issued and
outstanding Common Shares which is used in calculating the Adjusted Exercise
Price triggered by one of those events can be calculated appropriately, such
number of issued and outstanding shares shall be used.

2.4    The "Current market price per Common Share" used in the formula in Clause
2.1 above shall be the average daily closing price in Yen (including the trend
quotations) of the Company's Common Shares 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 by
disregarding the third and successive decimal places of such number and then
correcting the resulting number to one decimal place.

2.5    The Adjusted Exercise Price calculated in accordance with the formula in
Clause 2.1 above shall be applied from the date following the date of disposal
of Treasury Shares or the allotment date of the Common Shares to be issued if
such date is specified, or from the date following the payment date for the
Common Shares to be issued or Treasury Shares to be disposed.

2.6    When calculating the Adjusted Exercise Price in accordance with the
formula in Clause 2.1, each of the numbers to be inserted in the formula shall
be calculated by disregarding the second and successive decimal places of such
number.

3.     GENERAL

3.1    If the difference between the Adjusted Exercise Price and the Pre-
adjusted Exercise Price is less than one 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 Clause 1
or 2 above shall be used as the Pre-adjusted Exercise Price on the subsequent
occasion that an adjustment occurs.

                                                                         Page 17

<PAGE>

3.2    Except as otherwise provided in Clauses 1 or 2 above, the Company shall
adjust the Exercise Price, as the Company considers appropriate:

(a)    in the event of capital decrease, merger or demerger of the Company; or

(b)    if an event occurs which otherwise causes a change (or potential change)
       in the number of issued shares of the Company.

3.3    If the Exercise Price is adjusted, the Company shall issue an individual
notice to the Grantee prior to the date that the Adjusted Exercise Price is
applied as specified in Clause 1 or 2 above; provided, however, that in the
event of a share split as set out in Clause 1.5 above or where the Company is
unable to issue an individual notice prior to the date that the Adjusted
Exercise Price is applied, the Company shall issue an individual notice to the
Grantee promptly after such date.

                                                                         Page 18

<PAGE>

                                   APPENDIX 2
                   FORM OF EXERCISE NOTICE - 2004 STOCK OPTION

[Date]

To:    Toyota Motor Corporation (the Company)

From:  [Employee name] (the Grantee)

Pursuant to Clauses 4 and 5 of the Agreement for the Grant of Options to Acquire
Common Shares of Toyota Motor Corporation, executed with effect from August 2,
2004 (the Agreement), I warrant and claim for the issue or transfer (at the
Company's discretion) of the Common Shares as follows:

1.     WARRANTY

I warrant that, as of June 23, 2004, the date on which the general shareholders'
meeting resolved to grant options, I was neither:

(a)    a "major shareholder" (oguchi kabunushi); nor

(b)    a "special related person" (tokubetsu kankeisya) to any "major
       shareholder",

as those terms are defined under Japanese laws and regulations.(1)

2.     EXERCISE OF STOCK OPTIONS

I hereby exercise the following Options in accordance with the terms of the
Agreement (see over):

________________________________________________________________________________

(1) Special Taxation Measures Law (Law No. 26 of 1957) Paragraph 1 of Article
    29-2; and Enforcement Regulation of the Special Taxation Measures Law
    Paragraphs 1 and 2 of Article 19-3.

                                                                         Page 19
<PAGE>

--------------------------------------------------------------------------------
|                        | Address   |                                         |
|                        |           |            [Grantee to complete]        |
|                        |-----------|-----------------------------------------|
|                        | Name,     |                                         |
| The Grantee            | Employing |                                         |
|                        | Company   |            [Grantee to complete]        |
|                        | and       |                                         |
|                        | position  |                                         |
|                        |           |                                         |
|------------------------------------------------------------------------------|
| Date of the general    |                |          |                         |
| shareholder meeting at |                |          |                         |
| which the grant of     | June 23, 2004  | Exercise | From: August 1, 2006    |
| Options was approved   |                | Period   | To: July 31, 2010       |
|                        |                |          | (inclusive)             |
|-----------------------------------------|          |                         |
| Grant Date             | August 2, 2004 |          |                         |
|------------------------------------------------------------------------------|
|                        |        |            | Aggregate Number   |          |
|                        |        |            | of shares          |          |
|                        |        | Class of   | underlying all     |Exercise  |
|                        | Right  | underlying | Options granted to |Price     |
| Terms of the           |        | Shares     | Grantee under      |per       |
| Options                |        |            | 2004 Stock Option  |share     |
|                        |        |            | Plan on Grant      |          |
|                        |        |            | Date               |          |
|                        |--------|------------|-------------------------------|
|                        |        |            | [     ]            |[insert   |
|                        | Option | Common     | Common             |price] Yen|
|                        |        | Shares     | Shares             |[Grantee  |
|                        |        |            |                    |to        |
|                        |        |            |                    |complete] |
|------------------------------------------------------------------------------|
|                        |                                          |Total     |
|                        | Number of shares to be acquired upon this|Exercising|
| Details of the         | exercise of Option(s)                    |Purchase  |
| proposed exercise      |                                          |Price     |
| of Options             |-----------------------------------------------------|
|                        | [           ] Common Shares              |[insert   |
|                        | [Grantee to insert number]               |price]    |
|                        |                                          |Yen       |
|                        |                                          |[Grantee  |
|                        |                                          |to        |
|                        |                                          |complete] |
|-------------------------------------------------------------------------------
|                        | Address | 1 Toyota-cho, Toyota-shi, Aichi-ken       |
| The Company            |---------|-------------------------------------------|
|                        | Name    | Toyota Motor Corporation                  |
--------------------------------------------------------------------------------

_______________________________
[Grantee's Name]

                                                                         Page 20
<PAGE>

                                   APPENDIX 3
                         FORMS OF NOTICE OF TERMINATION
                         OF 2004 STOCK OPTION AGREEMENT

                Termination of Agreement pursuant to Clause 14.1

[Date]

To:       Toyota Motor Corporation (the Company)

From:     [Employee's name] (the Grantee)

Pursuant to Clause 14.1 of the Agreement for the Grant of Options to Acquire
Common Shares of Toyota Motor Corporation, executed with effect from 2 August,
2004 (the Agreement), I notify you that I hereby retroactively terminate the
Agreement, such termination to be effective from the date of execution of the
Agreement.

I hereby acknowledge and agree that:

(a)   I shall continue to be bound by and to comply with Clauses 8, 10, 11,
15.1, 16, 18 and 20 of the Agreement; and

(b)   pursuant to Clause 15.1 of the Agreement, I have no claim, whether present
or future against the Company, the Employing Company (as defined in the
Agreement) or their respective directors, officers, shareholders, affiliates,
representatives, auditors or employees for any compensation whatsoever in
connection with this Agreement or the termination thereof.

_______________________________
[Grantee's Name]

                                                                         Page 21
<PAGE>

                Termination of Agreement pursuant to Clause 14.2

[Date]

To:       Toyota Motor Corporation (the Company)

From:     [Employee's name] (the Grantee)

Pursuant to Clause 14.2 of the Agreement for the Grant of Options to Acquire
Common Shares of Toyota Motor Corporation, executed with effect from 2 August,
2004, I notify you that I hereby terminate the Agreement effective as of the
date of this notice.

I hereby acknowledge and agree that:

(a)   I shall continue to be bound by and to comply with Clauses 7.2, 8, 9, 10,
11, 15, 16, 18 and 20 of the Agreement; and

(b)   pursuant to Clause 15.1 of the Agreement, I have no claim, whether present
or future, against the Company, the Employing Company (as defined in the
Agreement) or their respective directors, officers, shareholders, affiliates,
representatives, auditors or employees for any compensation whatsoever in
connection with this Agreement or the termination thereof.

_______________________________
[Grantee's Name]

                                                                         Page 22

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