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Matsushita Electric to Submit Stock Acquisition Rights Proposal for Approval at Shareholders' Meeting

Matsushita Electric Industrial Co., Ltd. (NYSE and PCX symbol: MC) announced that its Board of Directors today resolved to submit a proposal at the ordinary general meeting of shareholders, to be held on June 27, 2002, regarding the issue of stock acquisition rights as stock options, pursuant to the provisions of Article 280-20 and Article 280-21 of the Japanese Commercial Code, as amended.
 

1. Reason for issuing stock acquisition rights with specially favorable conditions:
   The rights will be issued for the purpose of providing incentive to directors and employees of the company, and raising their morale, to help enhance the company's corporate value.
    
   
2. Directors and employees eligible to receive stock acquisition rights:
   27 directors of the company in office as of the close of the ordinary general meeting of shareholders, and 8 select senior executives in office as of July 1, 2002.
    
   
3. Terms and conditions of the stock acquisition rights:
   (1) Class and number of shares which will be issued upon exercise of stock acquisition rights:

   Up to 130,000 shares in aggregate of the company's common stock.
   

   (2) Total number of stock acquisition rights to be issued:
   

   Up to 130 stock acquisition rights (1,000 shares of common stock each).
   

   (3) Issue price of each stock acquisition right:
   

   Nil.

   (4) The amount to be paid upon exercise of each stock acquisition right:
   

   The amount to be paid upon exercise of each stock acquisition right will be the price paid per share (exercise price), as prescribed below, multiplied by the number of shares per stock acquisition right (see (2) above).
   The exercise price will be 1.05 times the average daily closing price of the company's common stock on the Tokyo Stock Exchange for the month immediately preceding the date on which the stock acquisition rights are to be issued. However, if the resulting exercise price is less than the closing price of the company's common stock on the date that stock acquisition rights are issued, the closing price for that day will be the exercise price. Any fractional yen amounts resulting from the above calculation will be rounded up to the nearest whole yen amount.
   In the event of a stock split, or the issue of new shares at a price less than the market price of the company's common stock, the exercise price shall be adjusted according to the following formula. Any fractional yen amounts resulting from the below calculation will be rounded up to the nearest whole yen amount.

                             Number of          Number of               Amount to be
                             shares already  +  newly issued shares  x  paid per share
   Adjusted   Exercise       issued                  Market price per share before
   exercise = price before x                         stock split or issue             
   price      adjustment           Number of shares     Number of shares increased
                                   already issued    +  due to stock split or issue
   

   (5) Period during which stock acquisition rights may be exercised (exercise period):
   

   July 1, 2004 through June 30, 2008.
   

   (6) Conditions for exercise of stock acquisition rights:
   

   1. Each stock acquisition right may not be exercised in part. However, if the company reduces the number of shares constituting one unit, under the Unit Share System, each stock acquisition right may be exercised in part to the extent of obtaining a whole unit of shares (after such reduction of the number of shares constituting one unit) or any integral multiples thereof.
      
   2. In the event that a director or a senior executive holding stock acquisition rights retires from an eligible position before the beginning of the exercise period, such person may exercise stock acquisition rights for the period of 1 year, beginning July 1, 2004.
      
   3. In the event that a director or a senior executive holding stock acquisition rights retires from an eligible position during the exercise period, such person may exercise stock acquisition rights for the period of 6 months from the time of retirement, but not after the exercise period.
      
   4. Conditions set forth in B. and C. above are not applicable in cases where a director holding stock acquisition rights retires to become a qualified senior executive assuming the position of a director of one of the company's wholly-owned or major unlisted subsidiaries, or in cases where a senior executive holding stock acquisition rights retires from such position to assume the position of a director of the company.
      
   5. Other conditions for the exercise of stock acquisition rights shall be provided for in an agreement to be entered into between the company and each eligible director or senior executive, pursuant to the resolutions to be adopted at the ordinary general meeting of shareholders, and the resolutions of the Board of Directors of the company.
       
      

   (7) Cancellation of stock acquisition rights:
   

   The company may cancel stock acquisition rights, free of charge, in any of the following cases:
   

   1. a holder of stock acquisition rights passes away between the date of issue of stock acquisition rights and June 30, 2008;
      
   2. the company acquires unexercised stock acquisition rights;
      
   3. stock acquisition rights become unexercisable pursuant to provisions set forth in (5) and (6) above;
      
   4. any other cases shall be provided for in an agreement to be entered into between the company and each eligible director or senior executive, pursuant to the resolutions to be adopted at the ordinary general meeting of shareholders and the resolutions of the Board of Directors of the company.
       
      

   (8) Restriction on the transfer of stock acquisition rights:
   

   Approval from the Board of Directors of the company is required for transfer of stock acquisition rights.

The above terms are subject to the shareholders' approval at the ordinary general meeting of shareholders, to be held on June 27, 2002. The details of issue and allotment of stock acquisition rights will be determined by a resolution of the Board of Directors of the company to be held after such meeting of shareholders.

 

Matsushita Electric Industrial Co., Ltd. is one of the world's leading producers of electronic and electric products for consumer, business and industrial use, which it markets around the world under the "Panasonic," "National," "Technics" and "Quasar" brand names. Matsushita's shares are listed on the Tokyo, Osaka, Nagoya, Fukuoka, Sapporo, Amsterdam, Dusseldorf, Frankfurt, New York, Pacific and Paris stock exchanges. For more information, visit the Matsushita web site at the following URL: http://www.panasonic.co.jp/global/

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