HITACHI : News Releases : April 28, 2000

Introduction of a Stock Option Plan

-- Also establish the Hitachi Executives' Shareholding Association, and
modify the allowance system of the Hitachi Employees' Shareholding Association --

Tokyo, Japan, April 28, 2000 -- Hitachi, Ltd. (TSE: 6501, "Company") today announced that, as a measure intended to contribute to the maximization of corporate value by heightening the motivation of directors and employees, the Board of Directors of the Company, at the meeting held today, resolved to grant stock options to directors and certain employees under Article 280-19 of the Japanese Commercial Code, as set forth below.

From the viewpoint of consolidated management, consideration will also be given to the introduction at subsidiaries of incentive programs linked to the Company's stock price.

In parallel with the implementation of the stock option plan, the Hitachi Executives' Shareholding Association will be newly established to enhance the awareness of Group executives regarding consolidated management, and the Hitachi Employees' Shareholding Association will be modified to encompass a new system for allowance for its participants linked to consolidated business results of the Company.

1. Outline of the Stock Option Plan

(1) Qualified persons to be granted the rights to subscribe for new shares of the Company:
71 persons in total consist of 14 directors and 57 executive officers who shall be at the office on the date ("Granting date") on which the rights ("Rights") to subscribe for new shares ("Shares") of the Company are granted.

(2) Par value/non-par value and type of Shares to be issued upon exercise of the Rights:
Par value shares of common stock of the Company

(3) Number of Shares to be issued upon exercise of the Rights:
Not more than 527,000 shares in total. The number of Shares to be granted to each person is as follows;

  Chairman of the Board and Director, Vice Chairman of the Board and Director,
  President and Director: 20,000 shares
  Executive Vice President and Director: 15,000 shares
  Senior Vice President and Director: 10,000 shares
  Senior Corporate Officer: 8,000 shares
  Corporate Officer: 7,000 shares
  Managing Officer, Corporate Fellow: 5,000 shares

(4) Issue Price of Shares to be issued upon exercise of the Rights:
Issue Price of Shares shall be 1.05 times of the average of the Closing Price (including indication of any bid or offer) of an Ordinary Share of the Company on the Tokyo Stock Exchange on each of the thirty consecutive trading days commencing on the forty-fifth trading day preceding the Granting date (excluding the number of days on which no Closing Price is quoted), any fraction less than one yen shall be rounded up to the nearest one yen. However, in the event that the price is less than the Closing Price of the Granting date (or if no Closing Price is quoted on the Granting date, the latest Closing Price before the Granting date shall be applied), Issue Price shall be 1.05 times of the Closing Price of the Granting date.

In the event that the Company issues new Shares at price less than the market price (excluding the issuance of Shares resulting from the exercise of the Rights granted to directors or employees) after the Granting date, Issue Price will be subject to adjustment in accordance with the following formula, and any fractions less than one yen derived in consequence of adjustment shall be rounded up to the nearest one yen. Upon the issuance of securities which are convertible to Shares or securities with the warrants, convertible or exercisable at an initial conversion or exercise price less than the market price, Issue Price will also be adjusted with the following formula.

Upon stock split or consolidation of Shares, Issue Price will be subject to adjustment in accordance with the following formula, and any fraction less than one yen derived in consequence of adjustment shall be rounded up to the nearest one yen.

(5) Period during which the Rights may be exercised:
The Rights will be exercisable within a four-year period following one year from the Granting date.

(6) Terms of exercising the Rights:

Notes: The resolution above is under the condition that the amendment of Articles of Incorporation and granting of the Rights are approved in the 131st Ordinary General Meeting of Shareholders to be held on June 28, 2000.

2. Establishment of the Hitachi Executives' Shareholding Association

The Hitachi Executives' Shareholding Association is being established to enhance the awareness of Group executives regarding consolidated management by making it easier for them to purchase the Company's stocks. It will be open to executives of the Company and its domestic subsidiaries (around 150 companies).

3. Modification of the allowance system of the Hitachi Employees' Shareholding Association

Under the Hitachi Employees' Shareholding Association's allowance system in effect up to now, a fixed amount of allowance (5%) has been paid relative to total annual deposits. Under the new system, this will be supplemented by an additional allowance (1 to 10%) linked to the level of consolidated operating income of the Company. Accordingly, the allowance for participants will range from 5 to 15% relative to total deposits. The new system is aimed both at encouraging members to build their assets and at raising their awareness and motivation regarding consolidated business performance.

WRITTEN BY Secretary's Office
(C) Hitachi, Ltd. 2000. All rights reserved.