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 At a meeting of the Board of Directors on May 10, 2005, Benesse Corporation passed a resolution seeking approval at the 51st Ordinary General Meeting of Shareholders, scheduled for June 24, 2005, for the issue of stock acquisition rights for the purpose of giving stock options, pursuant to Articles 280-20 and 280-21 of the Commercial Code of Japan and based on the terms of issue set out below.

[1] Reasons for Issue of Stock Acquisition Rights
The Company will issue stock acquisition rights gratis in accordance with the terms set out in [2] to directors, auditors, corporate executive officers, and employees of the Company, and directors and corporate executive officers of the Company’s subsidiaries, as an incentive to contribute towards the improvement of business performance, and to further increase the corporate value of the Company by linking the interests of individuals eligible for stock acquisition rights with those of shareholders.

[2] Terms of Issue

(1)Individuals to be Issued Stock Acquisition Rights
Directors, auditors, corporate executive officers, and employees of the Company, and directors and corporate executive officers of the Company’s subsidiaries

(2) Class and Number of Shares to be Issued or Transferred Upon Exercise of Stock Acquisition Rights:
No more than 600,000 shares of common stock

Provided, however, that if the number of shares to be issued or transferred upon exercise of each stock acquisition right is adjusted in accordance with (3) below, such number of shares shall be adjusted by multiplying the number of shares after adjustment by the total number of stock acquisition rights to be issued.

(3) Total Number of Stock Acquisition Rights to be Issued:
No more than 6,000

The number of shares to be issued or transferred upon exercise of each stock acquisition right shall be 100.

Provided, however, that if the Company splits or consolidates its common stock after the issue date of stock acquisition rights, the number of shares to be issued or transferred upon exercise of each stock acquisition right shall be adjusted according to the following formula:

Number of shares after adjustment = Number of shares before adjustment x Ratio of split or consolidation

In addition, in the case of a merger/consolidation with any other company, corporate split or capital reduction of the Company, or in any other case similar thereto where an adjustment of the number of shares shall be required, in each case after the issue date of stock acquisition rights, the number of shares to be issued or transferred upon exercise of each stock acquisition right shall be appropriately adjusted to the extent reasonable.

The adjustment above shall be made only to those shares to be issued or transferred for stock acquisition rights that remain unexercised at the relevant time. If any fraction less than one share arises as a result of such adjustment, such fraction shall be discarded.

(4) Issue Price of Stock Acquisition Rights:
Gratis.

(5) Amount to be Paid Upon Exercise of Stock Acquisition Rights
The amount to be paid per share to be issued or transferred upon exercise of each stock acquisition right (the “exercise price”) shall be 1.05 times the amount of the higher price* between a) or b): a) the average of closing prices (each “closing price” including quotations) of common stock in the regular trading thereof on the Osaka Stock Exchange for all the trading days (excluding days on which there is no closing price) during the month preceding the month in which such stock acquisition rights are issued; or b) the closing price on the trading day immediately prior to the issue date of such stock acquisition rights (if there is no closing price on such date, the closing price on the immediately preceding trading day).
*Any fraction less than one yen arising as a result of such calculation shall be rounded up to the nearest one yen.

If the Company splits or consolidates its common stock after the issue date of stock acquisition rights, the exercise price shall be adjusted according to the following formula, and any fraction less than one yen resulting from this adjustment shall be rounded up to the nearest one yen.

Exercise price after adjustment
= Exercise price before adjustment x 1 / Ratio of split or consolidation

In addition, in the case of a merger with any other company, corporate split or capital reduction of the Company, or in any other case similar thereto where an adjustment of exercise price shall be required, in each case after the issue date of stock acquisition rights, the exercise price shall be appropriately adjusted to the extent reasonable.

(6) Exercise Period of Stock Acquisition Rights
From July 1, 2007 to June 30, 2011.

(7) Conditions for Exercise of Stock Acquisition Rights:

1.Each stock acquisition right shall not be exercised in part.

2.Each stock acquisition right may not be exercised until the closing price of the common stock in regular trading on a stock exchange to be determined by the Board of Directors, continues to be equal to or exceed the amount 1.10 times the effective exercise price (any fraction less than one yen arising as a result of such calculation shall be rounded up to the nearest one yen) for any five consecutive trading days (excluding days on which there is no closing price) after the issue date of such stock acquisition rights.

3. In the event that the Ordinary General Meeting of Shareholders of the Company resolves to approve a) any merger agreement under which the Company shall cease to exist, or b) any share exchange agreement or share transfer under which the Company shall become a wholly owned subsidiary of another company, any stock acquisition right may not be exercised on and after the date of such merger, share exchange or share transfer.

4. Other conditions regarding the exercise of stock acquisition rights shall be determined by the Board of Directors.

(8) Cancellation of Stock Acquisition Rights:
Not applicable.

(9) Restriction on Transfer of Common Stock Acquisition Rights:
Transfer of stock acquisition rights shall require approval of the Board of Directors.

(10) Other
The issue of stock acquisition rights shall also be subject to the conditions below and other conditions deemed necessary by the Board of Directors for the purpose of issuing stock acquisition rights, determined by the Stock Acquisition Right Agreement to be concluded between the Company and each person to whom stock acquisition rights are given.
(i)Stock acquisition right holders must maintain their positions as directors, auditors, corporate executive officers or employees of the Company, its subsidiaries or affiliates at the time of the exercise of their rights, except where such persons have retired due to the expiration of their term in office, reaching the mandatory retirement age or for other valid reasons.
(ii)Notwithstanding the conditions in (i), in the event of the death of a stock acquisition right holder, eligibility for the exercise of the stock acquisition rights shall pass to the heir, as determined by the Stock Acquisition Right Agreement.

Note: The above is subject to approval at the 51st Ordinary General Meeting of Shareholders, scheduled for June 24, 2005, under the proposal “Issue of Stock Acquisition Rights for the Purpose of Granting Stock Options.”