[Before]

1．Aim of company splits

As explained in its news release dated August 4, 2016 entitled “Lawson and Poplar agree joint convenience store operation in the San’in region,” Lawson signed a joint-operation contract for the San’in region with convenience store operator Poplar Co., Ltd. to promote the joint operation of Lawson-chain convenience stores in the area.
The San’in region has witnessed significant social change with an ageing population and increase in the number of nuclear families. Against that background, on December 8, 2014, Lawson and Poplar signed a capital and business alliance contract covering areas such as joint procurement of ingredients and products, and the sharing of distribution infrastructure. After signing a subsequent basic business alliance at the store level on September 18, 2015, Poplar Project began operating two LAWSON POPLAR double-brand stores in November 2015, which have proved a successful precursor for the development of a new brand in the region.
To further promote joint convenience store operations with Poplar and develop a full-fledged LAWSON POPLAR brand for the San’in region, Lawson has agreed to inherit a portion of the rights and obligations linked to the Poplar convenience store business, both directly and indirectly through its Lawson San’in subsidiary company.
Lawson San’in will start operations as a regional franchise from November 2016. The franchise operation will manage a total of 289 stores comprising 54 franchise and directly operated POPLAR stores that intend to switch to the LAWSON POPLAR brand, and 235 LAWSON stores currently operated by Lawson’s Tottori and Shimane branch offices. The new area franchise will draw on the inherent strengths of both companies to create community-focused stores that local people can rely on.

2．Overview of company splits

(3) Financial payments relating to the company splits

Company split No.1

No financial payment will be extended given that Lawson San’in is a fully owned subsidiary of Lawson.

Company split No.2

The succeeding company Lawson will pay the split company Poplar 676 million yen.

Company split No.3

The succeeding company Lawson San’in plans to transfer 4,183 Lawson San’in shares as payment to the split company Poplar, equivalent to 29.28% of outstanding shares post company splits.

Company split No.4

The succeeding company Lawson San’in plans to transfer 102 Lawson San’in shares as payment to the split company Poplar Project, equivalent to 0.71% of all outstanding shares post company splits.

5. Summary of inherited business segments

(1) Business operations of inherited segments

Company split No.1

The assets, rights and obligations relating to convenience store operations of 235 stores inherited from Lawson.

Company split No.2

The land titles and lease contracts for 52 stores inherited from Poplar and two experimental double-brand stores, any rights to claim return of security deposit relating to those contracts (claims for return of security payments for cooperative building sinking funds, etc.), and the right to claim return of security deposit relating to rolling contracts for a portion of the stores inherited from Poplar.

Company split No.3

A portion of convenience store operations pertaining to 52 stores inherited from Poplar.

Company split No.4

Convenience store operations pertaining to the two experimental double-brand stores inherited from Poplar Project.

[After]

1．Aim of company splits

As explained in its news release dated August 4, 2016 entitled “Lawson and Poplar agree joint convenience store operation in the San’in region,” Lawson signed a joint-operation contract for the San’in region with convenience store operator Poplar Co., Ltd. to promote the joint operation of Lawson-chain convenience stores in the area.
The San’in region has witnessed significant social change with an ageing population and increase in the number of nuclear families. Against that background, on December 8, 2014, Lawson and Poplar signed a capital and business alliance contract covering areas such as joint procurement of ingredients and products, and the sharing of distribution infrastructure. After signing a subsequent basic business alliance at the store level on September 18, 2015, Poplar Project began operating two LAWSON POPLAR double-brand stores in November 2015, which have proved a successful precursor for the development of a new brand in the region.
To further promote joint convenience store operations with Poplar and develop a full-fledged LAWSON POPLAR brand for the San’in region, Lawson has agreed to inherit a portion of the rights and obligations linked to the Poplar convenience store business, both directly and indirectly through its Lawson San’in subsidiary company.
Lawson San’in will start operations as a regional franchise from November 2016. The franchise operation will manage a total of 286 stores comprising 51 franchise and directly operated POPLAR stores that intend to switch to the LAWSON POPLAR brand, and 235 LAWSON stores currently operated by Lawson’s Tottori and Shimane branch offices. The new area franchise will draw on the inherent strengths of both companies to create community-focused stores that local people can rely on.

2．Overview of company splits

(3)Financial payments relating to the company splits

Company split No.1

No financial payment will be extended given that Lawson San’in is a fully owned subsidiary of Lawson.

Company split No.2

The succeeding company Lawson will pay the split company Poplar 663 million yen.

Company split No.3

The succeeding company Lawson San’in plans to transfer 4,140 Lawson San’in shares as payment to the split company Poplar, equivalent to 29.06% of outstanding shares post company splits.

Company split No.4

The succeeding company Lawson San’in plans to transfer 102 Lawson San’in shares as payment to the split company Poplar Project, equivalent to 0.71% of all outstanding shares post company splits.

5. Summary of inherited business segments

(1) Business operations of inherited segments

Company split No.1

The assets, rights and obligations relating to convenience store operations of 235 stores inherited from Lawson.

Company split No.2

The land titles and lease contracts for 51 stores inherited from Poplar and two experimental double-brand stores, any rights to claim return of security deposit relating to those contracts (claims for return of security payments for cooperative building sinking funds, etc.), and the right to claim return of security deposit relating to rolling contracts for a portion of the stores inherited from Poplar.

Company split No.3

A portion of convenience store operations pertaining to 51 stores inherited from Poplar.

Company split No.4

Convenience store operations pertaining to the two experimental double-brand stores inherited from Poplar Project.