I. Reason for issuing stock options at advantageous conditions
The Company intends to issue the stock options without charge to directors and executive officers in the manner described in Item 3. below for the purpose of enhancing the motivation and morale of employees toward improved performance of the Company and to encourage further business deployment focusing on shareholders' interests.

II. Matters Pertaining to the Issue of Stock Option Rights
(1) Type of shares to be issued for the purpose of stock option rights:
Lawson common stock

(2) Class and number of the shares subject to stock options
120,000 common shares of Lawson, Inc.

In case of a stock split or a reverse stock split by the Company, the number of shares subject to stock options shall be adjusted according to the following formula. Provided that such adjustment shall be done only for the number of shares being subject to the stock options that have not been exercised as of the day of the stock split/reverse stock split, within all the stock options. The resulting fraction of shares below one (1) share shall be discarded.

Number of shares after adjustment = Number of shares before adjustment x Stock split/reverse stock split ratio

If the stock options are succeeded as a result of a merger or a consolidation of another corporation by the Company, or if a part of the Company is succeeded by a new corporation or an existing corporation due to a spin-off, the Company shall adjust the number of shares accordingly.

(3) Total number of stock options
1,200 units (100 shares per each stock option. However, similar adjustment shall be made if the adjustment set forth in Item (1) above is adopted.)

(4) Issue price of the stock options
To be issued without charge.

(5) Amount to be subscribed in exercising stock options
The amount to be subscribed by a qualified person in exercising stock option shall be determined by multiplying an amount to be paid per share determined in the following manner (hereinafter referred to as "exercise price") by the number of shares subject to such stock option set forth in Item (2) above.

The exercise price shall be the average amount (with fractions below one (1) yen to be rounded up) of the closing stock prices for ordinary transactions of the Company's common stock at the Tokyo Stock Exchange on all the trading days (excluding those on which no transactions were established) in the month preceding the month to which the issue date of the stock options belongs.

However, such amount to be subscribed shall be the closing price of the Company's common stock at the Tokyo Stock Exchange on the day preceding the issue date (or the closing price of the nearest day with transactions if such closing price was not established on the preceding day) of the stock options if such an amount to be subscribed is below the closing price.

When the Company conducts a stock split/reverse stock split, the exercise price shall be adjusted by applying the following formula, and the resulting fractions below one (1) yen due to the adjustment shall be rounded up.

Exercise price after adjustment = Exercise price before adjustment x 1/Stock split/reverse stock split ratio

When the Company issues new shares at a price lower than the market price or disposes of its treasury stock (excluding the stock issuance through the exercise of stock options), the exercise price shall be adjusted by applying the following formula, and the resulting fractions below one (1) yen due to the adjustment shall be rounded up.

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In the above formula, "Number of shares outstandin" shall exclude the number of treasury stock held by the Company from the Company's common shares issued and outstanding. In case of the disposal of the Company's treasury stock , "new stock issuanc" shall be read as "disposal of treasury stock" and "amount to be paid per share" as "disposal value per share" respectively.

Moreover, if any of the stock options are succeeded as a result of a merger or a consolidation of another corporation by the Company, or if a part of the Company is succeeded by a new corporation or an existing corporation due to a spin-off, the Company shall adjust the exercise price accordingly.

(6) Exercisable period of the stock options
From May 28, 2006, to December 31, 2009

(7) Exercise conditions of the stock options
1)The persons to whom the stock options are allocated shall be limited to those who have positions as directors, corporate auditors, executive officers or employees of the Company at the time of exercising the right, or those who have concluded a corporate advisor agreement with the Company. Provided, however, that this clause does not apply to cases where a qualified person retires from any post of the Company due to the expiry of term of office or when a person retires from the Company because of any such reasons as age-limit retirement that the Board of Directors deems reasonable.

2) In case of the death of a person who has stock options, the succession of such stock options by his or her heir is not authorized.

3) A person who has stock options may apply to exercise his or her right to the Company only when the Company's common stock price at the Tokyo Stock Exchange exceeds the amount set forth in Item above by 20% or more.

4) Other applicable conditions shall be as prescribed by the "Stock Option Subscription Certificat" and "Stock Option Granting Agreement" which shall be entered into by and between the subjected directors and executive officers and the Company, based on a resolution at this 28th Ordinary General Meeting of Shareholders and a resolution at the Board of Directors.

In granting stock options, the Company may enter into the "Stock Option Granting Agreement" which has integrated the provisions of the above conditions 1) to 3) are upgraded.

(8) Cancellation of the stock options
1) In case a consolidation agreement that determines the Company is to cease to exist is approved, or if a proposal on approval of a stock swap agreement to the effect that the Company would become a fully owned subsidiary of another corporation, or a proposal on stock transfer is approved by a general meeting of shareholders, then the Company may cancel these stock options without charge.

2) The Company may cancel the stock options without charge if a qualified person who has been allocated with the stock option loses such option because he or she no longer meets the conditions set forth in paragraph (7) 1), or in case of paragraph (7) 2) above. Provided that the Company may, in such a case, take the cancellation procedure for relevant stock options collectively after the exercisable period of the rights has expired.

(8) Restriction on transfer of stock options
The transfer of stock options shall require approval of the Board of Directors.

Note: The above-mentioned issue of subscription rights is subject to approval at Lawson's 29th Ordinary General Meeting of Shareholders scheduled for May 28, 2004.