Regarding the Determination of the Exercise Price of Stock Acquisition Rights as Stock Options to Employees and Others

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") to employees and presidents of major subsidiaries 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 July 11, 2006.

[Description]

1. Amount of assets to be paid upon the exercise of the Stock Acquisition Rights:
Amount of assets to be paid upon the exercise of each Stock Acquisition Right: 2,325,000 yen
Paid-in amount of each share to be issued upon the exercise of the Stock Acquisition Rights (the "Exercise Price"): 2,325 yen

2. Total amount of issue value of the shares to be issued by the exercise of the Stock Acquisition Rights: 1,167,150,000 yen

[Reference]

(1) Date of the resolution of the Board of Directors pursuant to which it was decided to submit the proposal regarding the Stock Acquisition Rights for shareholders' approval at the 137th Ordinary General Meeting of Shareholders: May 11, 2006
(2) Date of the resolution of shareholders at the 137th Ordinary General Meeting of Shareholders approving the issuance of the Stock Acquisition Rights: June 23, 2006
(3) Date of the resolution of the Board of Directors resolving the details of the terms and conditions of the issuance of the Stock Acquisition Rights: July 11, 2006
(4) Allotment date of the Stock Acquisition Rights (Issue Date): August 1, 2006
(5) Total number of the Stock Acquisition Rights: 502 rights (The number of shares subject to each Stock Acquisition Right shall be 1,000 shares)
(6) Subscription amount to be paid for each Stock Acquisition Right: No consideration shall be paid.
(7) Exercise period for the Stock Acquisition Rights: From August 1, 2007 to July 31, 2014

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