Today I read the above word from a UK-based source as it relates to an award for scholastic achievement. We don't use the word like that in the US, so what's the source of its use in the UK and Australia?

Not a usage I'm familiar with. Can you quote the context?

I it means 'scholarship' essentially. It's rare; I think it is only used in public (US: private) schools and the older universities.

See definition 4 in Oxford Dictionaries

Interesting. We definitely don't use it that way.

Thanks, arnie. Once the etymology is explained, as in example 4, it makes sense. Indeed, it makes more sense etymologically than do our current uses of "exhibition," IMHO.