Benesse : Notice Regarding Issuance of New Shares as Restricted Stock Compensation

July 21, 2017

Notice Regarding Issuance of New Shares as Restricted Stock Compensation

Benesse Holdings, Inc. (hereinafter "the Company") has announced the Board of Directors resolved at a meeting held today to issue new shares (hereinafter "the "Issuance of New Shares") of restricted stock as compensation, with details as follows:

1. Outline of the Issuance

   (1)	Payment date	August 18, 2017
   (2)	Class and number of shares to be issued	10,608 shares of the common stock of the Company
   (3)	Issue price	¥4,490 per share
   (4)	Total issue price of shares to be issued	¥47,629,920
   (5)	Planned allottees	Directors of the Company (excluding outside directors) 5 individuals 10,608 shares
   (6)	Other	In connection with the Issuance of New Shares, a securities notice has been filed in accordance with the Financial Instruments and Exchange Act.

2. Purpose and Reasons for the Issuance

   The Company resolved at the meeting of the Board of Directors held on May 9, 2017 to introduce a plan that grants restricted stock to the Company's directors (excluding outside directors; hereinafter the "Eligible Directors") as a new compensation plan (hereinafter the "Plan"). In doing so, the Company aims to strengthen the correlation with its medium- to long- term performance, provide directors with a further incentive to sustainably increase corporate value, and promote further shared values between directors and shareholders. At the Ordinary General Shareholders' Meeting for the 63rd Period, shareholders approved the Company's payment to Eligible Directors of monetary compensation receivables as compensation, which the Eligible Directors will contribute as payment for the restricted stock granted to them by the Company based on the Plan, with an upper limit of ¥70 million per year. In addition, at a Board of Directors meeting held today, the Company approved the total amount of monetary compensation receivables to be paid to each Eligible Director within the upper limit stipulated above, as monetary compensation to be contributed to acquire the restricted stock.

   The outline of the Plan is described as follows.

   【Outline of the Plan】

   The Eligible Directors will receive the issuance or disposal of the shares of common stock of the Company by making an in-kind contribution of all monetary compensation receivables to be granted by the Company under the Plan. The total number of shares to be issued or disposed of by the Company for the Eligible Directors shall not exceed 30,000 shares per year. (However, in case of an event that requires the total number of the Company's shares of common stock to be issued or disposed of as restricted stock to be adjusted (including a stock split or a stock consolidation of the Company's common shares), the total number of said shares may be adjusted within a reasonable range in proportion to the number of the Company's common shares that will increase or decrease due to such event.) The amount to be paid for each share shall be decided by the Board of Directors in a range that does not represent a particularly advantageous sum for the directors eligible for receiving the Company's common shares, based on the closing price for the Company's common shares on the Tokyo Stock Exchange on the business day preceding the date of the resolution of the Board of Directors involving the issuance or disposal (If there is no closing price on that day, then the closing price on the most recent day of trading before that).

   For the Issuance of New Shares under the Plan, considering the purpose of the Plan, as well as the scope of the duties of each Eligible Director, the Company has decided to grant monetary compensation receivables in a total amount of ¥47,629,920 and to grant a total of 10,608 shares of common stock of the Company. In addition, the Company plans to enter into a restricted stock allotment agreement that includes the outline and the details set forth below (the "Allotment Agreement") with each Eligible Director. The transfer restriction period set forth in

   3. (1) below has been set at 3 years. The length of this period has been set based on consideration of the purpose of the Plan, which is to strengthen the correlation with the Company's medium- to long-term performance, provide directors with a further incentive to sustainably increase corporate value, and promote further shared values between directors and shareholders. It also reflects comprehensive consideration of an appropriate period based on the current business environment surrounding the Company.

3. Outline of the Allotment Agreement

4. Transfer Restriction Period

   During the period from August 18, 2017 to August 18, 2020 (the "Transfer Restriction Period"), the Eligible Directors shall not transfer, create any security interest on, or otherwise dispose of the shares of common stock of the Company allotted pursuant to the

   Allotment Agreement (the "Allotted Shares") (the "Transfer Restriction").

5. Conditions for Removing the Transfer Restriction

6. In Principle:

   The Company shall remove the Transfer Restriction on all of the Allotted Shares upon expiration of the Transfer Restriction Period, upon the condition that the relevant Eligible Director has held the post of director of the Company continuously throughout the Transfer Restriction Period.

7. Retirement Due to Expiry of Term of Office or Any Other Reason Judged to Be Legitimate by the Board of Directors of the Company:

   In cases where an Eligible Director retires due to the expiry of his or her term of office before the expiration of the Transfer Restriction Period or to any other reason judged to be legitimate by the Board of Directors, the Company shall remove the Transfer Restriction Period on all of the Allotted Shares held by the Eligible Director at the time of his or her retirement upon expiration of the Transfer Restriction Period. However, in cases where there are less than 12 months from July 2017 (including that month) to the month in which the retirement date of the Eligible Director falls, the number of Allotted Shares for which the Transfer Restriction will be removed will be the number of Allotted Shares held by the Eligible Director at the time of his or her retirement, multiplied by a factor determined by dividing the number of months passed from July 2017 (including that month) to the month including the Eligible Director's retirement date by 12.

8. Loss of Post Due to Death:

   In cases where an Eligible Director ceases to hold his or her post due to death before the expiration of the Transfer Restriction Period, the Company shall remove the Transfer Restriction for all of the Allotted Shares held by the Eligible Director as of the time of his or her death. The Transfer Restriction shall be removed when it is approved separately by a meeting of the Board of Directors held after the death of the Eligible Director.

   However, in cases where there are less than 12 months from July 2017 (including that month) to the month in which the Eligible Director dies, the number of Allotted Shares for which the Transfer Restriction will be removed will be the number of Allotted Shares held by the Eligible Director

   as of the time of his or her death, multiplied by a factor determined by dividing the number of months passed from July 2017 (including that month) to the month including the Eligible Director's date of death by 12.

9. Gratis Acquisition by the Company

   In cases where the Transfer Restriction is removed in accordance with (2) above, the Company will, as a matter of course, acquire gratis the Allocated Shares that are not subject to the removal of the Transfer Restriction when the Transfer Restriction is removed. In addition, if certain events occur, including cases where an Eligible Director retires from his or her post as director of the Company before the expiration of the Transfer Expiration Period (except where the Eligible Director retires due to the expiry of his or her term of office, his or her death, or to any other reason judged to be legitimate by the Board of Directors of the Company), the Company will, as a matter of course, acquire gratis all of the Allotted Shares.

10. Management of Shares

    In order to prevent the Allotted Shares from being transferred, having any security interest created thereupon or otherwise being disposed of during the Transfer Restriction Period, the Allotted Shares will be managed using dedicated accounts that will be opened at Nomura Securities Co., Ltd. by the Eligible Directors. To ensure the effectiveness of the Transfer Restriction and other matters related to the Allotted Shares, the Company shall enter into an agreement with Nomura Securities Co., Ltd. regarding the management of the accounts for the Allotted Shares to be held by each Eligible Director.

11. Treatment in Case of Organizational Restructuring

During the Transfer Restriction Period, if matters related to a merger agreement under which the Company will become the dissolving company, a share exchange agreement or a share transfer plan under which the Company will become a wholly owned subsidiary, or other forms of organizational restructuring are approved at a General Shareholders' Meeting of the Company (However, if an approval at a General Shareholders' Meeting of the Company is not required regarding the aforementioned organizational restructuring, then the approval of the Board of Directors of the Company), the Transfer Restriction shall, at a time immediately prior to the business day preceding the effective date of such organizational restructuring, be removed for the number of Allotted Shares held by the Eligible Directors as of the aforementioned date of approval. However, in cases where there are less than 12 months from

July 2017 (including that month) to the month in which the date of approval falls, the number of Allotted Shares for which the Transfer Restriction will be removed will be the number of