Regarding the Determination of the Exercise Price of Stock Options

Stock Acquisition Rights (Shinkabu-Yoyaku-Ken)

Komatsu Ltd. (the "Company") hereby makes the following announcement: the Exercise Price of the stock acquisition rights to be issued as stock options (the "Stock Acquisition Rights") and other related items were decided on the date hereof pursuant to the resolution passed at the meeting of the board of directors held on June 25, 2004.

1. Issue Date of Stock Acquisition Rights:

August 2, 2004

2. Total Number of Stock Acquisition Rights to be Issued:

1,430 stock acquisition rights
(1,000 shares per stock acquisition right)

3. Type/Number of Shares under Stock Acquisition Rights:

1,430,000 shares of the Company's common stock

4. Amount to be Paid upon the Exercise of Stock Acquisition Rights:

Amount to be paid upon exercise of each stock acquisition right: 673,000 yen
Paid-in amount of each share to be issued upon the exercise of the stock acquisition rights (the "Exercise Price"): 673 yen

5. Total Amount of Issue Value of the Shares to be Issued by the Exercise of the Stock Acquisition Rights:

962,390,000 yen

6. Amount of Money to be Capitalized from the Issue Value of each Common Stock of the Company that will be Issued by the Exercise of the Stock Acquisition Rights:

337 yen per share

<Reference>

*(1) Date of the resolution of the board of directors pursuant to which it was decided to submit the proposal regarding Stock Acquisition Rights for shareholder approval at the 135th Annual General Meeting of Shareholders: May 7, 2004
*(2) Date of the resolution of shareholders at the 135th Annual General Meeting of shareholders approving the issuance of the Stock Acquisition Rights: June 25, 2004

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Information in the news releases is current on the date of the announcement and is subject to change without notice.

2004/08/02

Komatsu Corporate Communications
TEL: 03(5561)2616