Under the terms of the Merger Agreement, at the effective time of the Merger (the
Effective Time), (a) each ordinary share, par value of $0.0001 per share (each, an Ordinary Share and collectively, the Ordinary Shares) of the Company, issued and outstanding immediately
prior to the Effective Time, other than (i) certain Ordinary Shares (including Ordinary Shares represented by American depositary shares (ADSs), each representing four Ordinary Shares) beneficially owned by the Rollover
Shareholders as set forth in the Support Agreement (as defined below) (including the Ordinary Shares subject to the Company Restricted Share Awards (as defined below) held by the Chairman and the Deputy Chairman) (such Ordinary Shares collectively,
the Rollover Shares); (ii) Ordinary Shares (including Ordinary Shares represented by ADSs) held by Parent, the Company, or their respective direct and indirect subsidiaries; (iii) Ordinary Shares (including Ordinary
Shares represented by ADSs) held by the ADS Depositary (as defined below) reserved for the issuance, settlement, and allocation upon exercise or vesting of Company Options and/or Company Restricted Share Awards (each as defined below) under the
Company Share Plans (as defined below); and (iv) Ordinary Shares that are issued immediately prior to the Effective Time and held by shareholders of the Company who have validly exercised and have not effectively withdrawn or lost their
dissenters rights under the Cayman Islands Companies Act (collectively, Dissenting Shares) (Ordinary Shares described under (i) through (iv) above are collectively referred to herein as the Excluded
Shares), will be cancelled in exchange for the right to receive $2.45 in cash without interest (the Per Share Merger Consideration), and (b) each ADS issued and outstanding immediately prior to the Effective Time,
together with the Ordinary Shares underlying such ADS (other than any ADS representing Excluded Shares), will be cancelled in exchange for the right to receive $9.80 in cash per ADS without interest (the Per ADS Merger
Consideration) (less $0.05 per ADS cancellation fees pursuant to the terms of the deposit agreement by and among the Company, Deutsche Bank Trust Company Americas (the ADS Depositary), and the holders and beneficial
owners of ADSs issued thereunder, dated as of June 29, 2008 (the Deposit Agreement), in each case, net of any applicable withholding taxes described in the Merger Agreement.
The Excluded Shares, other than Dissenting Shares, issued and outstanding immediately prior to the Effective Time (including the Excluded
Shares represented by ADSs) will be cancelled for no consideration. Dissenting Shares will be cancelled and cease to exist, but will not be converted into or exchangeable for or represent the right to receive the Per Share Merger Consideration
pursuant to the Merger Agreement, and holders (collectively, Dissenting Shareholders) of Dissenting Shares will be entitled only to payment of the fair value of Dissenting Shares in accordance with Section 238 of the Cayman
Islands Companies Act, and as of and after the Effective Time Dissenting Shareholders will cease to have any of the rights of a shareholder of the Company except the right to be paid the fair value of their Dissenting Shares.
Each outstanding share option to purchase Ordinary Shares (each, a Company Option) granted under the China Distance
Education Holdings Limited Share Incentive Plan and/or the China Distance Education Holdings Limited 2008 Performance Incentive Plan (collectively, the Company Share Plans), whether vested or unvested, that is issued and
outstanding as of immediately prior to the Effective Time, will be cancelled and exchanged for the holders right to receive, at or promptly after the Effective Time, an amount in cash determined by multiplying (i) the excess, if any, of
the Per Share Merger Consideration over the applicable exercise price of such Company Option by (ii) the number of Ordinary Shares underlying such Company Option, less applicable taxes required to be withheld pursuant to the Merger Agreement
(if any).
Each Ordinary Share subject to a Company restricted share award (each, a Company Restricted Share Award)
under any of the Company Share Plans, whether vested or unvested, that is issued and outstanding as of immediately prior to the Effective Time, except for Company Restricted Share Awards held by the Chairman and the Deputy Chairman, will be
cancelled and exchanged for the holders right to receive, at or promptly after the Effective Time, an amount in cash equal to the Per Share Merger Consideration, less applicable taxes required to be withheld pursuant to the Merger Agreement
(if any).
Under the terms of the support agreement entered into by and among Parent, the Company (solely with respect to Section 5.6
and Section 5.9 thereof), Xiaoshu Chen and the Rollover Shareholders (the Support Agreement) concurrently with the execution of the Merger Agreement, the Rollover Shares will be cancelled for
2