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76 Hitachi, Ltd. Annual Report 2005
29. STOCK OPTION PLANS
The Company and certain subsidiaries have stock option plans. Under the Company’s stock option plans, non-employee
directors, executive officers and certain employees have been granted stock options to purchase the Company’s common
stock. Under these stock option plans, options were granted at prices not less than market value at the date of grant and
are exercisable from one year after the date of grant and expire four or five years after the date of grant. The Company
and certain subsidiaries recognized no material stock-based compensation expense for the years ended March 31, 2005,
2004 and 2003.
A summary of the Company’s stock option plans activity for the years ended March 31, 2005, 2004 and 2003 is as follows:
2005 2004 2003 2005
Weighted- Weighted- Weighted- Weighted-
average average average average
Stock options exercised Stock options exercised Stock options exercised exercised
(shares) price (shares) price (shares) price price
Outstanding at beginning of year . . . 2,194,000 ¥ 866 1,165,000 ¥1,314 1,437,000 ¥1,314 $ 8
Granted . . . . . . . . . . . . . . . . . . . . . . 1,278,000 780 1,305,000 561 – – 7
Exercised . . . . . . . . . . . . . . . . . . . . (585,000) 561 –– –– 5
Forfeited . . . . . . . . . . . . . . . . . . . . . (196,000) 1,174 (276,000) 1,315 (272,000) 1,311 11
Outstanding at end of year . . . . . . . 2,691,000 ¥ 869 2,194,000 ¥ 866 1,165,000 ¥1,314 $ 8
Weighted-average remaining
contractual life . . . . . . . . . . . . . . . . 2.5 years 2.8 years 3.1 years
Options exercisable at end of year . . 1,413,000 shares 889,000 shares 1,165,000 shares
The exercise prices of the stock options outstanding as of March 31, 2005 are ¥1,451 ($13.56), ¥1,270 ($11.87), ¥561
($5.24), ¥782 ($7.31) and ¥705 ($6.59).
In addition, in April 2005, the Board of Directors decided to propose the adoption of stock option plans for non-employee
directors, executive officers and certain employees to the general shareholders’ meeting to be held in June 2005. In
accordance with the proposals, up to 1,500,000 options to purchase of the Company’s common stock will be granted at
exercise prices not less than market value at the date of grant, and are exercisable from one year after the date of grant
and expire four years after the date of grant.