Sapporo : Notice Concerning Disposition of Treasury Stock through Third-party Allotment

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[Translation]

May 10, 2016

Company name	Sapporo Holdings Limited
Representative	Tsutomu Kamijo President and Representative Director
Securities code	2501
Listed on	Tokyo Stock Exchange,
Sapporo Securities Exchange
Contact	Toshihiko Umezato
Corporate Communications Department Tel.: +81-3-5423-7407

Notice Concerning Disposition of Treasury Stock through Third-party Allotment

Sapporo Holdings Limited (the "Company") hereby announces that the Company, at its Board of Directors' meeting held today, resolved a policy to dispose of its treasury stock by way of third-party allotment ("Disposition of Treasury Stock").

1. Outline of Disposition

   (1) Date of Disposition	Tuesday, May 31, 2016
   (2) Number of Shares to be Disposed	754,600 common shares
   (3) Price of Disposition	591 yen per share
   (4) Amount of Proceeds	445,968,600 yen
   (5) Method of Disposition	Disposition by way of third-party allotment
   (6)Subscriber	Trust & Custody Services Bank, Ltd. (Trust E Account)
   (7) Other	Not applicable

2. Purpose of and Reason for Disposition

   The Company announced, as of February 10, 2016, the introduction of the "Board Benefit Trust, or BBT" (the "System") (the trust established based on the trust agreement executed by and between the Company and Mizuho Trust & Banking Co., Ltd., in connection with the System is hereinafter referred to as the "Trust") and, thereafter, obtained the resolution on the

   compensation of directors for the System at the 92nd General Meeting of Shareholders held on March 30, 2016. (With respect to the outline of the System, please refer to the "Notice Concerning the Introduction (Determination of Details) of a Board Benefit Trust (BBT)" published as of today.)

   The Disposition of Treasury Stock will be conducted by way of third-party allotment to the Trust E Account of Trust & Custody Services Bank, Ltd. that will be created at the time of the introduction of the System in order to hold and dispose of the Company shares (Trust & Custody Services Bank, Ltd. is the re-trustee that has been created by Mizuho Trust & Banking Co., Ltd. as the trustee of the System).

3. Amount of Proceeds, Use thereof, and Expected Timing of Spending thereof

4. Amount of Proceeds (estimated net proceeds)

   (i) Total amount to be paid in	(ii) Estimated amount of expenses related to the offering	(iii) Estimated net proceeds
   445,968,600 yen	-	445,968,600 yen

5. Specific Use of Proceeds

The full amount of the above-stated estimated net proceeds is to be applied as funds for, among other things, the payment of various expenses arising on or after the date of payment.

The funds will be managed in the Company's bank account until they are to be used for any of the above-stated purposes.

6. Perspective on Reasonableness of Use of Proceeds

   The proceeds from the Disposition of Treasury Stock will contribute to the Company's management of its operations and the further improvement of its financial condition.

   Therefore, the Company believes that the use of such proceeds is reasonable.

7. Reasonableness of Terms of Disposition, etc.

8. Basis of calculation of the price of disposition in and specific details thereof

   The price of disposition has been fixed at 591 yen per share (rounded down to the nearest whole yen), which is the average closing price of the Company's shares on the Tokyo Stock Exchange, Inc. for the most recent one (1) month until the business day immediately prior to the day on which the resolution for the Disposition of Treasury Stock was passed at the Board of Directors' meeting (from April 11, 2016 through May 5, 2016).

   The reason why the Company has selected the average closing price of the Company's

   shares for the most recent one (1) month until just before the date of the resolution of the Board of Directors' meeting is that the Company believes it reasonable to determine the price of disposition as an average for a certain period immediately prior to the resolution date rather than to determine the price at a specific date prior to the resolution, because it can eliminate temporary stock price fluctuations or other special factors and, thus, such disposition price is highly objective and reasonable as a reliable calculation base. In addition, the reason why the Company has determined the most recent one (1) month as the

   calculation period is that the Company believes it is more reasonable to adopt a certain period, the average of which is closest to the most recent market price ,than to adopt the most recent three (3) or six (6) months.

   The price of disposition (591 yen) represents (i) the amount obtained by multiplying the closing price (594 yen) of the Company's shares as of the business day immediately prior to the date of resolution of the Board of Directors' meeting by 99.49%, (ii) the amount obtained by multiplying the closing price (556 yen) (rounded down to the nearest whole yen) of the Company's shares for the three (3)-month period immediately prior to the date of resolution of the Board of Directors' meeting by 106.29%, or (iii) the amount obtained by multiplying the closing price (541 yen) (rounded down to the nearest whole yen) of the Company's shares for the six (6)-month period immediately prior to the date of resolution of the Board of Directors' meeting by 109.24%. As a result of considering the above-stated matters, the Company believes that the price of disposition in the Disposition of Treasury Stock is not especially favorable to the subscriber, but is reasonable.

   In addition, four (4) Audit & Supervisory Board Members (including two (2) outside Audit

   & Supervisory Board Members), who attended the Board of Directors' meeting, have expressed that the price of disposition is not especially favorable to the subscriber.

9. Basis for believing that the number of shares to be disposed of, and the level of share dilution, is reasonable

The total number of shares of treasury stock to be disposed of is equal to the number of shares expected to be provided to the Company's Directors and Group Operating Officers and some of the directors of the Company's subsidiaries (excluding outside directors) (these directors and officers being hereinafter referred to as the "Group Target Officers"), pursuant to the officer stock benefit rules, and the ratio as against the total number of shares issued and outstanding as of December 31, 2015, will be 0.19% (rounded to the second decimal place)(the ratio as against the total number of voting rights (386,794) effective as of December 31, 2015 will be 0.19%). In addition, the System is aimed at providing the Company's shares, etc., to the Group Target Officers upon their retirement and it is not

expected that the shares subject to the Disposition of Treasury Stock will be sold in the stock market in one lump-sum. Moreover, the Disposition of Treasury Stock aims to make clearer the linkage between the compensation of the Group Target Officers and the Company's performance and stock value to ensure that the Group Target Officers will share not only the merit of the increase in the stock prices but also the risk of the decrease in the stock prices with the shareholders, thereby strengthening the Group Target Officers' awareness toward their contributions to the mid- to long-term improvement in the corporate performance and value. For these reasons, the Company believes that the extent of share dilution is reasonable and its effect on the secondary market will be insignificant.

10. Reason for Selecting Subscriber, and Other Related Matters

1. Overview of the subscriber

2. Company name: Trust & Custody Services Bank, Ltd. (Trust E Account)

3. Details of the trust agreement (the Board Benefit Trust (BBT) agreement)

Type of trust: Money trust other than cash trusts (third party benefit trust)

Purpose of trust: To provide the Company's shares, which are trust assets, to beneficiaries pursuant to the officer stock benefit rules

Trustor: The Company

Trustee: Mizuho Trust & Banking Co., Ltd.

Mizuho Trust & Banking Co., Ltd. will execute a comprehensive trust agreement with Trust & Custody Services, Bank Ltd., under which Trust & Custody Services, Bank Ltd. will become a

re-trustee.

Beneficiaries: Retired Group Target Officers who meet the beneficiary requirements set forth in the officer stock benefit rules

Date of the Trust Agreement: May 31, 2016 (tentative) Date of establishment of the Trust: May 31, 2016 (tentative)

Period of the Trust: From May 31, 2016 (tentative) until the Trust is