Top Management Message May 27, 2003

On Tuesday, May 27, Lawson held its 28th ordinary general meeting of shareholders. At the meeting, which was attended by a large number of shareholders, reports were given on the business report, balance sheet and statement of income for the 28th business term. Shareholders also approved seven proposals:

Item 1: The profit allocation plan for the 28th business term
Item 2: The parameters for acquisition of treasury stock
Item 3: Amendments to the Articles of Incorporation
Item 4: The appointment of 3 directors
Item 5: The appointment of 2 statutory auditors
Item 6: The issue of subscription rights as stock options to directors and executive officers
Item 7: Retirement allowances for directors and statutory auditors

More details can be found here

Further to my message on May 22, I would like to report more information on the incident concerning the breach by Sundelica Co., Ltd, one of our manufacturing vendors, of the JAS Law on standards and proper quality labeling of processed foods in the Miyagi and Yamagata regions. I would like to update you on what the effect of that incident has been on sales and actions we have taken since.

1.Sales and Sales Campaign

(Region Concerned)
As of Tuesday, May 27, there was no major effect apparent on sales of main dishes or other products at Lawson stores.
The rice ball campaign, which we had planned to launch on Sunday, May 25, to express our apologies to customers and to support franchise owners, will now be run over an 11-day period starting on Thursday, May 29. We took the decision to delay the start date of the campaign slightly to give us more time to consider how the campaign would be run and the products that would be included in it.
As of Tuesday, May 27, there had been no visible impact on sales of main dishes or other products.

2.Measures in Support of Franchise Owners in the Regions Concerned

On May 24 (Saturday) and May 25 (Sunday), executives from Lawson's head office and management of Sundelica visited franchise owners at around 200 stores in the regions affected by the mislabeling to express their apologies and report on the incident. We intend to reflect the opinions we received from franchise owners in our actions going forward.

Last evening, there was a strong earthquake centered off the coast of Miyagi. Although the intensity of the quake caused some products to fall from shelves at stores, there were no injuries reported. All stores are operating as normal with no reports of problems supplying products to stores.

I want to thank shareholders and other investors for their continued support and encouragement.

May 27, 2003

Takeshi Niinami
President and CEO

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