The Phoenix Holdings Ltd.

M&A Activity • Dec 29, 2022

Re: structural change - Phoenix Agencies - Subsidiary false

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THE PHOENIX HOLDINGS LTD
Corporation no: 520017450	10820
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	Israel Securities Authority			Tel Aviv Stock Exchange		�150 ( Public )		Reported via MAGNA:	29/12/2022
	www.isa.gov.il			www.tase.co.il				Reference:	2022-01-124071	Time of broadcast: 09:56 09:56

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English language report to Israeli corporateThis form is for reports that has been translated to English (convenience translation) and should be published alongside with the report in Hebrew in accordance with the Securities Regulations (Periodic and Immediate Reports), 5730 - 1970.

References of previous reports relating to this matter:   _________   _________   _________

Re: structural change - Phoenix Agencies - Subsidiary The Company is announcing on a structural change in the group in regard to its holding of insurance agencies as follows: On December 27 and December 28, 2022, the authorized organs of the The Phoenix Insurance Agencies 1989 Ltd. ("the Phoenix Agencies"), and of Agam Leaderim Holdings (2001) Ltd. ("Agam Holdings"), a company which 60% of its shares are held by the Phoenix Agencies, a merger offer of the two abovementioned companies according to a merger agreement in the framework of which Agam Holdings shall be liquidated and merged into the Phoenix Agencies, in return to allocation of regular shares of the Phoenix Agencies, which will be issued to the other shareholders of Agam Holdings, in a way that after the execution of the merger, the Company will hold 79.412% of the the Phoenix Agencies shares; Hagoz (2015) ("Hagoz") will hold 17.5% of the Phoenix Agencies shares; and Y.H.G. Sasson Ltd. ("YHG Sasson") will hold 3.088% of the Phoenix Agencies shares. After the merger the Phoenix Agencies will hold 100% of Agam Leaderim (Israel) Insurance Agency (2003) Ltd. ("Agam Israel") which concentrate, as an insurance agency, pension and provident activity. The completion of the merger is subject to the fulfillment (cumulatively) of suspending conditions, including an approval from the tax authorities that the merger is exempted from tax in accordance with the conditions of section 103 of the Tax Income Ordinance [new version], other regulatory approvals as needed and reception of a merger certificate from the Companies Registrar. In regard to the merger, a Term Sheet was signed between the Company, the Phoenix Agencies, the other shareholders of the Phoenix Agencies after the merger (Hagoz and YHG Sasson), Mr. Itzhak Oz and Mr. Moshe Sasson, in the framework of which the following issues were settled: 1.Options Agreement: The Option Agreement dated March 28, 2019 and its addendum dated December 31, 2019 between Itzhak Oz, Hagoz and Agam Holdings ("the Options Agreement"), in the framework of which PUT Option and CALL Option were granted (see relevant report dated December 31, 2019 reference number 126565-01-2019) regarding Agam Holdings shares, will be replaced by a new options agreement, according to which options regarding the Phoenix Agencies shares will be granted to the parties, and will be held by Hagoz and YHG Sasson, pursuant to the merger (instead of regarding their shares in Agam Holdings). The calculation of compensation as a result of realization of any of the options will be made according to a valuation of the Phoenix Agencies and in accordance with different consents regarding the valuation. The period during which it may be possible to announce the realization of the PUT Option will be from January 1, 2027 till January 1, 2028. The period during which it may be possible to announce the realization of the CALL Option will be from January 1, 2028 till January 1, 2029. The Company may pay for the realization of options in cash or by allocation of the Company shares, according to its own discretion. When realizing the CALL Option by allocating shares of the Company, the number of Company shares which will be allocated to the seller will be increased by 1%, in comparison to the number he would have been given were it not for this condition (this in comparison to an increase of 5% in case of realization of the PUT option by allocating shares as above mentioned). Other matters which will be settled in the new options agreement are: (1) the value of the Phoenix Agencies, which will be the floor price for shares held by Hagoz on the date of realization of the option, will be a multiplier of 5 of the annual average of the last 24 months of the EBITDA profit (profit excluding interest, taxes, depreciation and deductions), with deduction of the minority part, according to the financial reports of the Phoenix Agencies, without taking into account different income and expenses which were agreed between the parties; (2) in case of issuance of the Phoenix Agencies shares to the public, the CALL and PUT options will be cancelled (Hagoz will be allowed to realize the PUT option in its entirety, or in part, prior to the issuance). 2.An active chairman: Itzhak Oz will be appointed as an active chairman of the Phoenix Agencies and also of Agam Israel and Shekel Insurance Agency (2008) Ltd. and an agreement for granting management services to the Phoenix Agencies and other companies in the Phoenix Agencies group, will be signed, with compensation terms which are compatible with the current management agreement terms, related to Agam Israel. 3.Other conditions: the Term Sheet includes additional conditions among which: treatment of different events in the Phoenix Agencies, such as entrance of another investor to the Phoenix Agencies; Allocation of options of the Phoenix Agencies to members in the Phoenix group including the chairman of the Phoenix Agencies and the way the Phoenix Agencies is managed. It should be noted that the above said reflects principles which were approved, yet a full agreement has not been signed between the parties. The contents of this immediate report regarding the change in the holding structure of the Company holdings of insurance agencies in the Phoenix group, includes forward-looking information, as defined in The Securities Law, 1968, and is based on the intentions of the Phoenix Agencies and Agam Holdings. Completion of the process, including the described merger, are subject, among other things, to the approval of the tax authorities that the merger is exempt from tax, other regulatory approvals, if needed, and reviving a merger certificate from the Companies Registrar. Accordingly, the completion of the process is uncertain, and the information included in this report may not be realized, as a result of factors which are not under the control of the Phoenix Agencies and Agam Holdings, including the possibility of unfulfillment of the conditions specified in this report.

Attached hereto is a report on	Re: structural change - Phoenix Agencies - Subsidiary

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	Reference to parallel Hebrew report:	2022-01-124026
	This report was not reported in Hebrew.

Details of the authorized signatories to sign on behalf of the corporation:

	Name of the signer	Corporate Role
1	Meni Neeman	Other Chief Legal Officer & Company Secretary

Note: According to Rule 5 of the Periodic and Immediate Reports Regulations (1970), a report submitted under these Regulations will be signed by the authorized persons to sign on behalf of the corporation. For the ISA staff notice Click here .2 2

note that the attached report is a convenience translation only and the parallel Hebrew immediate report which was published is the binding report.
References of previous documents relating to this matter(the reference does not constitute incorporation by reference):
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Stock Exchange/Market: ������	Date of revision of form structure: 13/12/2022
Address: ��� ����� 53 , ������� 53454   , Tel: 03-7332997 , 03-7338174 Fax: 03-7238855
E-mail address: menin@fnx.co.il
Previous names of reporting entity: ������ ������� ���� ����� ��"�
Name of the Signatory: ���� ���� Position of Signatory in the reporting corporation: Name of Employer Company:
Address: ��� ����� 53 , ������� 53454 Telephone: 03-7332997 Facsimile: 03-7238831 E-mail: menin@fnx.co.il 1