Benesse : Notice Regarding Issuance of Stock Options (Stock Acquisition Rights)

August 1, 2016 Benesse Holdings, Inc.

Notice Regarding Issuance of Stock Options (Stock Acquisition Rights)

Benesse Holdings, Inc. (hereinafter "the Company") has announced that a Board of Directors' meeting held on August 1, 2016 resolved to issue stock acquisition rights as stock options to the Company's directors (excluding independent and part-time directors), pursuant to the provisions of the Article 236, Article 238, and Article 240 of the Companies Act. Details of the issuance are as follows.

1. Reason for the Issuance of Stock Acquisition Rights as Stock Options

   Stock options (stock acquisition rights) will be issued to provide additional incentive and motivation for the Company's directors to improve earnings performance and contribute to the enhancement of shareholder value over the medium to long term. This will be accomplished by linking the income gained by the Company's directors with improvements in the Company's earnings performance.

2. Summary of Issuance of Stock Acquisition Rights (Benesse Holdings, Inc. 2nd Series of Stock Acquisition Rights)

1. Name of stock acquisition rights

   Benesse Holdings, Inc. 2nd Series of Stock Acquisition Rights

2. Total number of stock acquisition rights 1,000 rights

   The above total number is the number planned for allotment. In cases

   where the total number of stock acquisition rights for allotment is reduced, such as when eligible recipients do not apply for the stock options, the total number of stock acquisitions allotted shall be the total number of stock options.

3. Eligible recipients for stock acquisition right allotment, their number, and the number of allotted stock acquisition rights

   The eligible recipients for stock acquisition right allotment, their number, and the number of allotted stock acquisition rights shall be as follows. If the number of applications for stock acquisition rights from eligible recipients is less than the number of stock acquisition rights for allotment to each eligible recipient as determined at the Board of Directors' meeting today, the number of stock acquisition rights for allotment to eligible recipients shall be reduced to the number of applications.

   3 of the Company's directors 1,000 stock acquisition rights

4. Class and number of shares to be issued or transferred upon execise of stock aquisition rights

   The class of shares to be issued or transferred upon execise of stock aquisition rights shall be the Company's common stock. The number of shares underlying each stock acquisition right (hereinafter, "the number of shares to be granted") shall be 100 shares.

   However, in the event that the Company conducts a stock split of its common stock (including the gratis allotment of common stock) or a stock consolidation on or after the date the stock acquisition rights are allotted (hereinafter, "the allotment date "), the Company shall adjust the number of shares to be granted according to the formula below.

   Moreover, the adjustment shall apply only to the number of shares to be granted pertaining to stock acquisition rights that have yet to be exercised

   as of the stock split or consolidation, and any fraction under one (1) share resulting from such adjustment shall be rounded down.

   Number of shares to be granted after adjustment = Number of shares to be granted before adjustment × Stock split or stock consolidation ratio

   In the case of a stock split, the number of shares to be granted after adjustment shall apply from the day after the record date of the stock split (or if no record date is determined, the effective date) and in the case of a stock consolidation, from the day after the effective date. However, in the case where the Company conducts a stock split on condition that its Ordinary General Shareholders' Meeting passes a resolution to reduce the amount of retained earnings in order to increase common stock or capital reserves, wherein the record date for the stock split is a day before the date of the conclusion of the shareholders' meeting, the number of shares to be granted after adjustment shall be applied from the day following the date of the conclusion of the shareholders' meeting.

   In addition to the foregoing, in the event that the Company conducts a merger, company split, or exchange of shares, or in any other equivalent cases that require the adjustment of the number of shares to be granted after the allotment date, the Company shall be able to adjust the number of shares to be granted as deemed necessary by its Board of Directors.

5. Value of assets to be invested upon exercise of a stock acquisition right

   The value of assets to be invested upon exercise of a stock acquisition right shall be the amount payable for each share received upon exercise of the stock acquisition right (hereinafter, the "exercise price,") multiplied by the number of shares to be granted per stock acquisition right.

   The exercise price of a stock acquisition right shall be the higher of the average closing price of the underlying common stock on the Tokyo Stock Exchange for the days of the month prior to the month of the allotment date

   (excluding days when the stock fails to trade) or the closing price on the exchange on the allotment date of the right (the most recent previous closing price in the event that the stock fails to trade on that date), multiplied by 1.05 (with any fraction less than one (1) yen of the resulting amount rounded up).

6. Adjustment of per-share exercise price

In the event that a split or consolidation of the Company's common stock takes place after the allotment date, the exercise price shall be adjusted according to the following formula, with any fraction less than one (1) yen resulting from the adjustment rounded up.

Exercise price after adjustment

Exercise price

＝ before

adjustment

１

× Stock split or stock consolidation ratio

Furthermore, if the Company issues new stock or disposes of treasury stock at a price below market price (excluding cases of exercising call and put options and stock acquisition rights), the exercise price shall be adjusted according to the following formula, with any fraction less than one (1) yen resulting from the adjustment rounded up.

Number of existing

Number of newly issued shares of ×

Amount payable per share

Exercise price after

Exercise

＝ price

issued

× shares

＋ common stock

Share price of common stock before new

adjustment

before

adjustment

issuance Number of existing issued shares + Number of newly issued shares of common stock

In the above formula, the number of existing issued shares shall be the total number of issued shares of common stock of the Company less the number of common shares held by the Company as treasury stock. Moreover, in the case where the Company disposes of treasury stock, the number of newly