THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. PART II (EXPLANATORY STATEMENT) OF THIS DOCUMENT COMPRISES AN EXPLANATORY STATEMENT. IF YOU ARE IN ANY DOUBT ABOUT THE CONTENTS OF THIS DOCUMENT OR WHAT ACTION YOU SHOULD TAKE, YOU ARE RECOMMENDED TO SEEK YOUR OWN INDEPENDENT FINANCIAL ADVICE IMMEDIATELY FROM YOUR STOCKBROKER, BANK MANAGER, SOLICITOR, ACCOUNTANT OR OTHER INDEPENDENT FINANCIAL ADVISER DULY AUTHORISED UNDER THE FINANCIAL SERVICES AND MARKETS ACT 2000 (AS AMENDED) IF YOU ARE RESIDENT IN THE UNITED KINGDOM OR, IF NOT, FROM ANOTHER APPROPRIATELY AUTHORISED INDEPENDENT FINANCIAL ADVISER.

Old Phoenix Shareholders and Old Phoenix DI Holders should read the whole of this document. In addition, this document should be read in conjunction with the accompanying Forms of Proxy or Forms of Instruction (as applicable). Unless the context requires otherwise, capitalised terms used in this document are defined and set out in Part V (Definitions) of this document.

Phoenix Group Holdings

(incorporated in the Cayman Islands with registered number 202172)

Recommended proposals for

(i) the introduction of Phoenix Group Holdings plc, a company incorporated in England and Wales, as the new holding company of the Phoenix Group by means of a Scheme of Arrangement under section 86, and a reduction of capital under sections 14 to 16, of the Companies Law (2018 Revision) of the Cayman Islands and related proposals; and

(ii) a reduction of capital by Phoenix Group Holdings plc

Circular to Shareholders and Explanatory Statement Notices of Court Meeting and Scheme General Meeting

If you sell or have sold or otherwise transfer or have transferred all of your Old Phoenix Shares or Old Phoenix Depositary Interests, please forward this document, together with the accompanying documents, as soon as possible to the buyer or transferee or to the stockbroker, bank manager or other agent through whom the sale or transfer was made for onward delivery to the buyer or transferee. However, such documents should not be mailed, transmitted or distributed, in whole or in part, in, into or from any jurisdiction in which such act would constitute a violation of the relevant laws of such jurisdiction. If you have sold or otherwise transferred (or sell) part only of your holding of Old Phoenix Shares or Old Phoenix Depositary Interests, you should retain these documents and consult the stockbroker, bank manager or other agent through whom the sale or transfer was (or is) effected.

The distribution of this document in jurisdictions other than the United Kingdom and the Cayman Islands may be restricted by the laws of those jurisdictions and therefore persons into whose possession this document comes should inform themselves about and observe any such restrictions. Failure to comply with any such restrictions may constitute a violation of the securities laws of any such jurisdiction.

A Prospectus relating to New Phoenix and Admission, prepared in accordance with the Prospectus Rules made under Part VI of FSMA is available in accordance with Rule 3.2 of the Prospectus Rules in electronic form on the Phoenix Group's website at (http://www.thephoenixgroup.com), and may be inspected at either of Maples Corporate Services Limited, Ugland House, Grand Cayman, KY1-1104, Cayman Islands or Juxon House, 100 St. Paul's Churchyard, London, United Kingdom, EC4M 8BU from 2 November 2018. A copy of the Prospectus may also be obtained from such date until Admission on request, free of charge, by writing to The Company Secretary, Phoenix Group Holdings, Juxon House, 100 St. Paul's Churchyard, London, United Kingdom, EC4M 8BU.

Your attention is drawn to the letter from the Chairman of Old Phoenix on behalf of the Old Phoenix Directors, set out in Part I (Letter from the Chairman) of this document, which contains the unanimous recommendation of the Old Phoenix Directors that you vote in favour of the Scheme at the Court Meeting and that you vote in favour of all of the resolutions proposed at the Scheme General Meeting. An explanatory statement explaining the Scheme is set out in Part II (Explanatory Statement) of this document.

Meetings to consider the Proposals contained in this document will be held at Juxon House, 100 St. Paul's Churchyard, London, United Kingdom, EC4M 8BU on 28 November 2018. Notices of the Court Meeting and Scheme General Meeting are set out in Part VI and VII of this document. The Court Meeting will start at 1:00 p.m. and the Scheme General Meeting will start at 1:15 p.m. (or as soon thereafter as the Court Meeting has been concluded or adjourned).

The actions to be taken by Old Phoenix Shareholders and Old Phoenix DI Holders in respect of the meetings are set out on pages 10 and 11 and in paragraph 12 of Part II (Explanatory Statement) of this document.

Instructions to Old Phoenix Shareholders

You are an Old Phoenix Shareholder if you hold Old Phoenix Shares directly on the Register and not by way of Old Phoenix Depositary Interests. Old Phoenix Shareholders will find enclosed with this document a blue Form of Proxy for use in connection with the Court Meeting, and a white Form of Proxy for use in connection with the Scheme General Meeting.

Whether or not you intend to attend the Court Meeting and/or the Scheme General Meeting in person, please complete and return both of the Forms of Proxy, in accordance with the relevant instructions, as soon as possible and, in any event, so as to be received (whether submitted in hard copy form to the Old Phoenix Registrar at Computershare Investor Services PLC, The Pavilions, Bridgwater Road, Bristol BS99 6ZY or online via www.investorcentre.co.uk/eproxy), by no later than 1:00 p.m. on 26 November 2018 in respect of both the Court Meeting and the Scheme General Meeting (or, in the case of an adjourned meeting, not less than 48 hours prior to the time and date set for the adjourned meeting).

If the blue Form of Proxy for the Court Meeting is not returned by the above time, a hard copy may be handed to the Old Phoenix Registrar, on behalf of the Chairman of the Court Meeting, at the Court Meeting before the taking of the poll. However, in the case of the Scheme General Meeting, unless the white Form of Proxy is returned by the above time, it will be invalid. The completion and return of a Form of Proxy will not prevent you from attending and voting in person at the Court Meeting or the Scheme General Meeting, or any adjournments thereof, if you so wish and are so entitled.

Instructions to Old Phoenix DI Holders

You are an Old Phoenix DI Holder if you hold Old Phoenix Depositary Interests and are not recorded on the Register as holding Old Phoenix Shares directly. Old Phoenix DI Holders will find enclosed with this document a blue Form of Instruction for use in connection with the Court Meeting, and a white Form of Instruction for use in connection with the Scheme General Meeting. In both cases, the Form of Instruction is for use by you as an Old Phoenix DI Holder to direct the Old Phoenix Depositary as to how to vote the Old Phoenix Shares which are represented by your relevant Old Phoenix Depositary Interests.

Whether or not you intend to attend the Court Meeting and/or the Scheme General Meeting in person, please complete and return both of the Forms of Instruction, in accordance with the relevant instructions, as soon as possible and, in any event, so as to be received (whether submitted in hard copy form to the Old Phoenix Depositary at Computershare Investor Services PLC, The Pavilions, Bridgwater Road, Bristol BS99 6ZY, online via www.investorcentre.co.uk/eproxy or by casting a vote via the CREST voting service), no later than 1:00 p.m. on 23 November 2018 in respect of both the Court Meeting and the Scheme General Meeting (or, in the case of an adjourned meeting, not less than 72 hours prior to the time and date set for the adjourned meeting).

If you do not intend to attend the Court Meeting or the Scheme General Meeting but wish to vote at both of them both the blue and the white Form of Instruction must be submitted by no later than 1:00 p.m. on 23 November 2018 (or in the case of an adjourned meeting, not less than 72 hours prior to the time and date set for the adjourned meeting).

If you wish to attend and vote in person at the Court Meeting or the Scheme General Meeting in respect of the Old Phoenix Shares which are represented by your Old Phoenix Depositary Interests you must request a Letter of Representation from the Old Phoenix Depositary by no later than 1:00 p.m. on 23 November 2018 (or, in the case of an adjourned meeting, not less than 72 hours prior to the time and date set for the adjourned meeting) in accordance with the instructions set out in the Form of Instruction.

Instructions to both Old Phoenix Shareholders and Old Phoenix DI Holders

If you have any questions about this document, the Proposals, the Court Meeting, or the Scheme General Meeting or are in any doubt as to how to complete the Forms of Proxy and/or Forms of Instruction or how to request a Letter of Representation, as applicable, please call the Phoenix Shareholder helpline between 8:30 a.m. and 5:30 p.m. (London time) Monday to Friday (except United Kingdom public holidays) on 0370 707 4040 (from within the United Kingdom) or +44 370 707 4040 (from outside the United Kingdom). Please note that calls may be monitored or recorded and the helpline cannot provide financial, legal or tax advice or advice on the merits of the Proposals.

Application will be made to the UK Listing Authority for New Phoenix to be admitted to the premium segment of the Official List and to the London Stock Exchange for the New Phoenix Shares to be admitted to trading on the London Stock Exchange's main market. If the Scheme proceeds as presently envisaged, it is expected that dealings in Old Phoenix Depositary Interests will continue until 4:30 p.m. on 12 December 2018 and that Admission of the New Phoenix Shares will become effective, and that dealings in New Phoenix Shares on the London Stock Exchange's main market for listed securities will commence, at 8.00 a.m. on 13 December 2018.

NEW PHOENIX SHARES HAVE NEITHER BEEN MARKETED TO, NOR ARE AVAILABLE FOR PURCHASE OR EXCHANGE, IN WHOLE OR IN PART, BY, THE PUBLIC IN THE UNITED KINGDOM OR ELSEWHERE IN CONNECTION WITH THE INTRODUCTION OF THE NEW PHOENIX SHARES TO THE OFFICIAL LIST. THIS DOCUMENT IS A SHAREHOLDER CIRCULAR AND IS NOT A PROSPECTUS OR A PROSPECTUS EQUIVALENT DOCUMENT AND DOES NOT CONSTITUTE AN INVITATION OR OFFER TO SELL OR THE SOLICITATION OF AN INVITATION OR OFFER TO BUY ANY SECURITIES PURSUANT TO THIS DOCUMENT OR OTHERWISE. NONE OF THE SECURITIES REFERRED TO IN THIS DOCUMENT SHALL BE SOLD, ISSUED, SUBSCRIBED FOR, PURCHASED, EXCHANGED OR TRANSFERRED IN ANY JURISDICTION IN CONTRAVENTION OF APPLICABLE LAW.

No person has been authorised to give any information or make any representations other than those contained in this document and, if given or made, such information or representations must not be relied upon as having been so authorised. The contents of this document are not to be construed as legal, business or tax advice. You should consult your own independent legal, financial or tax adviser for legal, financial or tax advice.

The date of this document is 2 November 2018

IMPORTANT NOTICE

The release, publication or distribution of this document in jurisdictions other than the United Kingdom and the Cayman Islands may be restricted by law and therefore persons into whose possession this document comes should inform themselves about, and observe, any applicable restrictions or requirements. Any failure to comply with such restrictions may constitute a violation of the securities laws of any such jurisdiction. This document has been prepared for the purposes of complying with English law, Cayman Islands law and the Listing Rules and the information disclosed may not be the same as that which would have been disclosed if this document had been prepared in accordance with the laws and regulations of any jurisdiction outside of England and Wales or the Cayman Islands.

The availability of the Proposals to persons who are not resident in the United Kingdom or the Cayman Islands may be affected by the laws of the relevant jurisdictions. Persons who are not so resident should inform themselves about and observe any applicable requirements in those jurisdictions. The attention of Overseas Shareholders is drawn to paragraph 9 of Part II (Explanatory Statement) of this document.

This document is a shareholder circular and is not a prospectus or a prospectus equivalent document and does not constitute an invitation or offer to sell or the solicitation of an invitation or offer to buy any securities pursuant to this document or otherwise. None of the securities referred to in this document shall be sold, issued, subscribed for, purchased, exchanged or transferred in any jurisdiction in contravention of applicable law.

The statements contained herein are made as at the date of this document, unless some other time is specified in relation to them, and service of this document shall not give rise to any implication that there has been no change in the facts set forth herein since such date.

This document will only be updated or supplemented if, after the date of this document, new facts or information come to the attention of the Directors which, in the opinion of the Directors, would likely affect how a reasonable Old Phoenix Shareholder would vote or how a reasonable Old Phoenix DI Holder would direct the Old Phoenix Depositary to vote in relation to the Scheme as set out in this document.

Nothing contained in this document shall be deemed to be a forecast, projection or estimate of the future financial performance of any member of the Phoenix Group except where otherwise stated.

Notice to United States holders of Old Phoenix Shares and Old Phoenix Depositary Interests

The Scheme relates to the securities of a Cayman Islands incorporated company, traded on the London Stock Exchange in the United Kingdom and is subject to United Kingdom disclosure requirements, which are different from those of the United States.

This document is being furnished to Old Phoenix Shareholders and Old Phoenix DI Holders in the United States solely to explain the Proposals and describe the action recommended to be taken by Old Phoenix Shareholders and Old Phoenix DI Holders in relation to the Court Meeting and the Scheme General Meeting. This document is personal to each Old Phoenix Shareholder and Old Phoenix DI Holder and does not constitute an offer to any person or to the public generally to subscribe for or otherwise acquire New Phoenix Shares. This document is not an offer of securities for sale in the United States. The New Phoenix Shares to be issued to Old Phoenix Shareholders and Old Phoenix DI Holders in connection with the Scheme will not be, and are not required to be, registered with the SEC under the United States Securities Act of 1933, as amended (the US Securities Act), in reliance upon the exemption from the registration requirements of the US Securities Act provided by Section 3(a)(10) of that Act. For the purpose of qualifying for the Section 3(a)(10) exemption with respect to the New Phoenix Shares issued pursuant to the Scheme, Old Phoenix will advise the Court that it will rely on the Section 3(a)(10) exemption based on the Court's sanctioning of the Scheme, which will be relied upon by Old Phoenix as an approval of the Scheme following a hearing on its fairness to Old Phoenix Shareholders and Old Phoenix DI Holders at which hearing all such Old Phoenix Shareholders and Old Phoenix DI Holders will be entitled to attend in person or through counsel to support or oppose the sanctioning of the Scheme and with respect to which notification has been or will be given to all such Old Phoenix Shareholders and Old Phoenix DI Holders.

The New Phoenix Shares have not been and will not be registered on a United States securities exchange or quoted on any inter-dealer quotation system in the United States. The Proposals have not been and will not be approved or disapproved by the SEC, nor has the SEC or any US state securities commission passed upon the merits or fairness of the transaction nor upon the adequacy or accuracy of the information contained in this document. Any representation to the contrary is a criminal offence in the United States.

The New Phoenix Shares will not be registered under the securities laws of any state of the United States, and will be issued in the United States pursuant to the Scheme in reliance on available exemptions from such state law registration requirements.

Any discussion of taxation and related matters contained in this document does not purport to be a comprehensive description of all the tax considerations that may be relevant to a decision to acquire New Phoenix Shares and, in particular, does not address United States tax considerations. Shareholders resident in the United States should consult their own legal, financial and tax advisors with respect to the tax consequences of the Scheme.

Enforceability of judgments

Old Phoenix is an exempted company with limited liability incorporated under the laws of the Cayman Islands and New Phoenix is a public limited company incorporated under the laws of England and Wales. All of the directors of New Phoenix and Old Phoenix are citizens or residents of countries other than the United States. Substantially all or a significant portion of the assets of such persons and a significant proportion of the assets of the Phoenix Group are located outside the United States. As a result, it may not be possible to effect service of process within the United States upon such persons or New Phoenix and/or Old Phoenix, or to enforce against them judgments of US courts, including judgments predicated upon civil liabilities under the securities laws of the United States or any state or territory within the United States. There is substantial doubt as to the enforceability in the United Kingdom and the Cayman Islands in original actions or in actions for enforcement of judgments of US courts, based on the civil liability provisions of US federal securities laws.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This document includes forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties, many of which are beyond the Phoenix Group's control and all of which are based on the Directors' current beliefs and expectations about future events. Forward-looking statements are sometimes identified by the use of forward-looking terminology such as ''believe'', ''expects'', ''envisages'', ''may'', ''will'', ''could'', ''should'', ''shall'', ''risk'', ''intends'', ''estimates'', ''aims'', ''plans'', ''predicts'', ''continues'', ''assumes'', ''positioned'', ''anticipates'' or ''targets'' or the negative thereof, other variations thereon or comparable terminology. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this document and include any statements regarding the intentions, beliefs or current expectations of the Directors, New Phoenix or the Phoenix Group concerning, amongst other things, expectations in respect of the Proposals, the results of operations, financial condition, liquidity, prospects, growth, strategies and dividend policy of the Phoenix Group and the industries and markets in which it operates.

These forward-looking statements and other statements contained in this document regarding matters that are not historical facts involve predictions. No assurance can be given that such future results will be achieved; actual events or results may differ materially as a result of risks and uncertainties facing the Phoenix Group. Such risks and uncertainties could cause actual results to vary materially from the future results indicated, expressed, or implied in such forward-looking statements.

Such forward-looking statements contained in this document speak only as of the date of this document. The Phoenix Group and the Directors expressly disclaim any obligation or undertaking to update these forward-looking statements contained in the document to reflect any change in their expectations or any change in events, conditions, or circumstances on which such statements are based unless required to do so by applicable law, the Prospectus Rules, the Listing Rules, or the Disclosure Guidance and Transparency Rules of the FCA.

Publication of this document

A copy of this document has been made available on the Phoenix Group's website at http://www.thephoenixgroup.com/investor-relations/agm-and-egm/.

		Page
	EXPECTED TIMETABLE OF PRINCIPAL EVENTS	8
	ACTION TO BE TAKEN	9
	SUMMARY AND KEY QUESTIONS ANSWERED	11
PART I	LETTER FROM THE CHAIRMAN	17
PART II	EXPLANATORY STATEMENT	21
PART III	THE SCHEME OF ARRANGEMENT	34
PART IV	ADDITIONAL INFORMATION	41
PART V	DEFINITIONS	66
PART VI	NOTICE OF COURT MEETING	72
PART VII	NOTICE OF SCHEME GENERAL MEETING	76

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

Event	Expected time/date(1)
Publication of this Scheme Circular and the Prospectus	2 November 2018
Latest time for lodging blue Forms of Instruction for the Court Meeting (for use by Old Phoenix DI Holders)	1:00 p.m. on 23 November 2018
Latest time for lodging white Forms of Instruction for the Scheme General Meeting (for use by Old Phoenix DI Holders)	1:00 p.m. on 23 November 2018
Latest time for requesting a Letter of Representation for the Court Meeting (for use by Old Phoenix DI Holders)	1:00 p.m. on 23 November 2018
Latest time for requesting a Letter of Representation for the Scheme General Meeting (for use by Old Phoenix DI Holders)	1:00 p.m. on 23 November 2018
Voting Record Time for Old Phoenix DI Holders	6:00 p.m. on 23 November 2018
Latest time for lodging blue Forms of Proxy for the Court Meeting (for use by Old Phoenix Shareholders)	1:00 p.m. on 26 November 2018
Latest time for lodging white Forms of Proxy for the Scheme General Meeting (for use by Old Phoenix Shareholders)	1:00 p.m. on 26 November 2018
Voting Record Time for Old Phoenix Shareholders	6:00 p.m. on 26 November 2018
Court Meeting	1:00 p.m. on 28 November 2018
Scheme General Meeting	1:15 p.m. on 28 November 2018
The following dates are subject to change:
Cayman Islands Court Hearing to sanction the Scheme and to confirm the Old Phoenix Reduction of Capital	5 December 2018
Last day of dealings in, and registration of transfers of, Old Phoenix Depositary Interests	12 December 2018
Depositary Interest facility terminated and Old Phoenix DI Holders entered on the Register	6.30 p.m. on 12 December 2018
Scheme Record Time	8.00 p.m. on 12 December 2018
Scheme Effective Date	8:15 p.m. on 12 December 2018
Cancellation of listing of Old Phoenix Shares, New Phoenix Shares admitted to the Official List, and dealings in New Phoenix Shares commence on the London Stock Exchange(2)	8:00 a.m. on 13 December 2018
Crediting of New Phoenix Shares in uncertificated form to CREST accounts	As soon as possible after 8:00 a.m. on 13 December 2018
English Court Hearing to sanction the New Phoenix Reduction of Capital	18 December 2018
New Phoenix Reduction of Capital becomes effective	18 December 2018
Despatch of New Phoenix Share certificates for New Phoenix Shares in certificated form	No later than 24 December 2018

The Court Meeting and Scheme General Meeting will be held at Juxon House, 100 St. Paul's Churchyard, London, United Kingdom, EC4M 8BU at the times stated above (London time) on 28 November 2018.

Notes:

⁽¹⁾ All dates and times are (unless otherwise stated) the relevant time and date in London, United Kingdom. The dates and times given are indicative only and will depend, amongst other things, on the date and time at which the Court sanctions the Scheme and on the date and time at which the Court Order is delivered to the Cayman Islands Registrar of Companies. Old Phoenix or New Phoenix (as applicable) will give notice of any change by issuing an announcement through a Regulatory Information Service.

⁽²⁾ Subject to certain restrictions relating to Overseas Shareholders. See paragraph 9 of Part II (Explanatory Statement) of this document.

ACTION TO BE TAKEN

The Court Meeting will be held at Juxon House, 100 St. Paul's Churchyard, London, United Kingdom, EC4M 8BU at 1:00 p.m. on 28 November 2018.

The Scheme General Meeting will be held at Juxon House, 100 St. Paul's Churchyard, London, United Kingdom, EC4M 8BU at 1:15 p.m. on 28 November 2018 (or as soon thereafter as the Court Meeting has been concluded or adjourned).

Old Phoenix Shareholders

You are an Old Phoenix Shareholder if you hold Old Phoenix Shares directly on the Register and not by way of Old Phoenix Depositary Interests.

If you are an Old Phoenix Shareholder, please check that you have received with this document:

(a) A blue Form of Proxy for use at the Court Meeting; and
(b) A white Form of Proxy for use at the Scheme General Meeting.

Whether or not you plan to attend in person the Court Meeting and/or the Scheme General Meeting, or any adjournments thereof, you should complete and return the blue Form of Proxy (in relation to the Court Meeting) and the white Form of Proxy (in relation to the Scheme General Meeting), whether by submitting hard copies to the Old Phoenix Registrar at Computershare Investor Services PLC, The Pavilions, Bridgwater Road, Bristol BS99 6ZY or by lodging your proxy online via www.investorcentre.co.uk/eproxy, so as to be received by as soon as possible but in any event no later than 1:00 p.m. on 26 November 2018 (or, in the case of an adjourned meeting, not less than 48 hours prior to the time and date set for the adjourned meeting).

If the blue Form of Proxy is not returned so as to be received by the Old Phoenix Registrar by the above time, it may be handed to the Old Phoenix Registrar, on behalf of the Chairman of the Court Meeting, at the Court Meeting before the taking of the poll. To be valid, the white Form of Proxy for the Scheme General Meeting must be received by the time stated above (or, in the case of an adjourned meeting, not less than 48 hours prior to the time and date set for the adjourned meeting).

The completion and return of the Forms of Proxy will not prevent you from attending and voting at the Court Meeting and/or the Scheme Meeting, or any adjournments thereof, in person should you wish to do so and should you be so entitled.

Please refer to the notes to the notices convening the Meetings set out in Part VI (Notice of Court Meeting) and Part VII (Notice of Scheme General Meeting) of this document) for further information in relation to voting procedures for each Meeting.

Old Phoenix DI Holders

You are an Old Phoenix DI Holder if you hold Old Phoenix Depositary Interests and are not recorded on the Register as holding Old Phoenix Shares directly.

If you are an Old Phoenix DI Holder, please check that you have received with this document:

(a) A blue Form of Instruction for use at the Court Meeting; and
(b) A white Form of Instruction for use at the Scheme General Meeting.

Old Phoenix DI Holders who hold Old Phoenix Depositary Interests as at the Voting Record Time may not vote directly at the Court Meeting and/or the Scheme General Meeting but shall instead be entitled to either: (i) instruct the Old Phoenix Depositary to vote on the Scheme at the Court Meeting and/or the Scheme General Meeting in respect of the applicable number of Old Phoenix Depositary Interests representing Old Phoenix Shares held by them at the relevant time, or (ii) obtain an authorisation from the Old Phoenix Depositary to attend and vote at the Court Meeting and/or the Scheme General Meeting on behalf of the Old Phoenix Depositary on the Scheme, in respect of the applicable number of Old Phoenix Depositary Interests representing Old Phoenix Shares held by them at the relevant time.

If you are an Old Phoenix DI Holder and you wish to instruct the Old Phoenix Depositary on how to vote at the Court Meeting and/or the Scheme General Meeting, you must complete and return the blue Form of Instruction and the white Form of Instruction respectively, either by submitting hard copies to the Old Phoenix Depositary at Computershare Investor Services PLC, The Pavilions, Bridgwater Road, Bristol BS99 6ZY, by lodging your instruction online via www.investorcentre.co.uk/ eproxy or by using the CREST voting service in accordance with the procedures set out in the CREST Manual (under CREST participant ID 3RA50), so as to be received by as soon as possible but in any event by no later than 1:00 p.m. on 23 November 2018 (or, in the case of an adjourned meeting, 72 hours before the time and date set for the adjourned meeting).

To be valid, both the blue Form of Instruction (in relation to the Court Meeting) and the white Form of Instruction (in relation to the Scheme General Meeting) must be received by the time stated above (or, in the case of an adjourned meeting, 72 hours before the time and date set for the adjourned meeting).

In you are an Old Phoenix DI Holder and wish to attend and vote at the Court Meeting and/or the Scheme General Meeting in person in respect of the Old Phoenix Shares which are represented by your Old Phoenix Depositary Interests, you must request, by no later than 1:00 p.m. on 23 November 2018 (or, in the case of an adjourned meeting, 72 hours before the time and date set for the adjourned meeting) a Letter of Representation from the Old Phoenix Depositary in accordance with the instructions set out in the Form of Instruction.

Please refer to the notes to the notices convening the Meetings set out in Part VI] (Notice of Court Meeting) and Part VII (Notice of Scheme General Meeting) of this document for further information in relation to voting procedures for each Meeting.

IT IS IMPORTANT THAT AS MANY VOTES AS POSSIBLE ARE CAST AT THE COURT MEETING SO THAT THE COURT MAY BE SATISFIED THAT THERE IS A FAIR REPRESENTATION OF OLD PHOENIX SHAREHOLDER OPINION (INCLUDING AS INSTRUCTED OR REPRESENTED BY OLD PHOENIX DI HOLDERS).

YOU ARE THEREFORE STRONGLY URGED TO COMPLETE AND RETURN YOUR FORMS OF PROXY OR FORMS OF INSTRUCTION OR REQUEST YOUR LETTER OF REPRESENTATION (AS APPLICABLE) AS SOON AS POSSIBLE.

SUMMARY AND KEY QUESTIONS ANSWERED

THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to the action you should take, you are recommended to seek your own personal financial advice immediately from your stockbroker, bank manager, accountant or other independent financial adviser authorised under the FSMA if you are in the United Kingdom or, if not, from another appropriately authorised independent financial adviser.

This document tells you about:

(a) the proposals for a reorganisation of the Phoenix Group which will result in a new company, New Phoenix, which is incorporated in England and Wales and tax resident in the United Kingdom, becoming the holding company of the Phoenix Group in place of Old Phoenix;
(b) the proposals in respect of the employee share plans currently operated by Old Phoenix and the employee share plans proposed to be adopted by New Phoenix;
(c) the proposals in respect of the substitution of New Phoenix for Old Phoenix in respect of the Outstanding Subordinated Debt Securities; and
(d) the proposals for New Phoenix to reduce its share capital by cancelling its share premium account to create a reserve of profit in the accounts of New Phoenix.

Here is what you need to do now:

(a) Read this summary.
(b) Read the Chairman's letter set out at Part I on pages 19 to 23 of this document. This explains what is happening and why your Board recommends that you should vote in favour of the Proposals.
(c) Read the remainder of this document.
(d) Read the Prospectus relating to New Phoenix and its Admission.
(e) If you have any further queries, call the Phoenix Shareholder helpline, the number of which is below.

Old Phoenix Shareholders and Old Phoenix DI Holders should read the whole of this document and not just rely on this summary. This summary should not be regarded as a substitute for reading the whole document.

SHAREHOLDER HELPLINE TELEPHONE NUMBER:

0370 707 4040 if you are calling from the United Kingdom

+44 370 707 4040 if you are calling from outside the United Kingdom

Monday to Friday, 8:30 a.m. to 5:30 p.m. (London time) (except United Kingdom public holidays)

Note: For legal reasons, this helpline will only be able to provide practical information and will not provide advice on the merits of any of the Proposals or give any financial, legal or taxation advice. For financial, legal or taxation advice, you will need to consult an independent financial or legal adviser.

1. Why is the Phoenix Group proposing the Scheme?

The current Phoenix Group holding company structure was formed at the time of the Group's restructuring in 2009. Under the current structure, Old Phoenix is a Cayman Islands incorporated company which, with effect from 31 January 2018, is tax resident in the United Kingdom (having previously been tax resident in Jersey). This structure is complex for the Phoenix Group's shareholders, debt investors and regulators and imposes additional burdens on the Phoenix Group's internal governance processes. On 25 August 2016 Old Phoenix announced that, as part of an ongoing group simplification process, it intended to put in place a new holding company registered in England & Wales for the Phoenix Group. This Scheme is now the final step in the Group's onshoring journey which has delivered a streamlined and cost-efficient internal governance structure and will result in a clearer structure for the Phoenix Group's shareholders, debt investors and regulators.

The Board believes that the proposed reorganisation of the Phoenix Group pursuant to the Scheme and the other Proposals will achieve a more appropriate structure for the Phoenix Group.

2. Why is the Phoenix Group implementing the Proposals by way of a scheme of arrangement?

The Scheme is a formal procedure under the Companies Law (2018 Revision) of the Cayman Islands, which is commonly used to carry out corporate reorganisations involving Cayman Islands companies.

The Scheme requires the approval of Old Phoenix Shareholders and the Court. If the relevant approvals are obtained, all Old Phoenix Shareholders will be bound by the Scheme regardless of whether or how they voted.

3. What will I end up with after the Scheme comes into effect?

If you currently hold Old Phoenix Shares directly on the Register and not by way of Old Phoenix Depositary Interests, when the Scheme becomes effective you will receive one New Phoenix Share in place of each Old Phoenix Share held by you at the Scheme Record Time, which is expected to be 8:00 p.m. on 12 December 2018.

If you currently hold Old Phoenix Depositary Interests, these will be cancelled and replaced with an equivalent number of Old Phoenix Shares shortly prior to the Scheme Record Time. If you currently hold Old Phoenix Depositary Interests, you will therefore participate in the Scheme as an Old Phoenix Shareholder, as described above. See paragraph 3 of Part II (Explanatory Statement) of this document for further details.

The registers of members of Old Phoenix and New Phoenix will be updated to reflect changes in your shareholding. If you hold your Old Phoenix Depositary Interests in a CREST account, the New Phoenix Shares will be credited to your CREST account, and if you hold your Old Phoenix Shares in certificated form, share certificates for the New Phoenix Shares will be sent to you in due course, in each case as explained in paragraph 6 of Part II (Explanatory Statement) and elsewhere in this document.

4. Do I have to pay anything under the Scheme?

No payment is required. All New Phoenix Shares to be issued as a result of the Scheme will be issued to Old Phoenix Shareholders to replace their existing Old Phoenix Shares (including Old Phoenix Depositary Interests which have been cancelled and replaced with an equivalent number of Old Phoenix Shares, as described in paragraph 3 above).

5. What is the New Phoenix Reduction Of Capital and why is it proposed?

The Directors expect that New Phoenix will undertake the New Phoenix Reduction of Capital shortly after the Scheme Effective Date in order to create a reserve of profit in the accounts of New Phoenix.

Pursuant to the New Phoenix Reduction of Capital, it is proposed that after the Scheme has become effective New Phoenix's share premium account be cancelled and the reserve arising be re-characterised as a distributable reserve to support the payment of dividends (and any potential share repurchases) by New Phoenix in the future as well as payments on the RT1 Notes.

The shareholder resolution required for New Phoenix to implement the New Phoenix Reduction of Capital was passed by the holders of the New Phoenix Subscriber Shares on 15 October 2018. A confirmatory approval relating to the New Phoenix Reduction of Capital is also being sought from Old Phoenix Shareholders (including as instructed by, or represented by, Old Phoenix DI Holders) as one of the special resolutions to be proposed at the Scheme General Meeting.

The New Phoenix Reduction of Capital will also require the confirmation of the English Court. In order to obtain the confirmation of the English Court to the New Phoenix Reduction of Capital, New Phoenix will need to satisfy the English Court that its creditors are not prejudiced. It is expected that New Phoenix will put into place appropriate arrangements (if required) to satisfy the English Court's requirements in this respect.

Subject to the Scheme becoming effective on 12 December 2018, the New Phoenix Reduction of Capital is expected to become effective on 18 December 2018.

6. What will the share capital of Old Phoenix be following the Scheme taking effect?

Pursuant to the Scheme, all of the existing Old Phoenix Shares (including those which replaced Old Phoenix Depositary Interests upon their cancellation as described in paragraph 3 above) will be cancelled by way of the Old Phoenix Reduction of Capital.

The reserve arising from the Old Phoenix Reduction of Capital will be used to ''pay up'' the same number of new ordinary shares in Old Phoenix to be issued to New Phoenix, to ensure that New Phoenix is the sole shareholder of the ordinary shares in Old Phoenix immediately following the Scheme Effective Date without New Phoenix needing to pay or transfer any further value to Old Phoenix in return.

7. What effect will the Scheme have on the Old Phoenix Share Plans?

In accordance with the terms of the Old Phoenix Share Plans, it is intended that on the Scheme Effective Date participants in those plans will be granted, in exchange for the cancellation their outstanding awards under the Old Phoenix Share Plans, equivalent awards over New Phoenix Shares on and subject to the rules of the respective Old Phoenix Share Plans (''Replacement Awards''). No new awards will be granted under the Old Phoenix Share Plans following the Scheme Effective Date. The terms of the Old Phoenix Share Plans which will govern the Replacement Awards are set out under the heading 'Old Phoenix Share Plans' in paragraph 10.1 of Part IX of the Prospectus.

Further details of the effect of the Scheme on the Old Phoenix Share Plans are set out in paragraph 7 of Part IV (Additional Information) of this document. Participants in the Old Phoenix Share Plans will also be written to separately about the effect of the Scheme on their awards under those plans.

The Directors understand that New Phoenix has resolved to adopt, with effect from Admission, the New Phoenix Share Plans (including the New Phoenix Long-Term Incentive Plan, the New Phoenix Sharesave Scheme, the New Phoenix SIP and the New Phoenix DBSS, the terms of which will be substantively the same as those of the respective Old Phoenix Share Plans, save for minor updates to reflect changes in regulatory, governance and market practices, and the New Phoenix Irish Share Incentive Plan and the New Phoenix Irish Sharesave Scheme, which are subject to approval by the Irish Revenue Commissioners). Advisory approvals relating to the New Phoenix Share Plans are being sought from Old Phoenix Shareholders (including as instructed by, or represented by, Old Phoenix DI Holders) as ordinary resolutions to be proposed at the Scheme General Meeting. Further details of the New Phoenix Share Plans are set out in paragraph 8 of Part IV (Additional Information) of this document.

8. Why am I being sent this document?

The Scheme and certain of the other Proposals require Old Phoenix Shareholders (including as instructed by, or represented by, Old Phoenix DI Holders) to vote on certain matters at both the Court Meeting and the Scheme General Meeting. This document contains information to assist you in making your voting decision for both the Court Meeting and the Scheme General Meeting in relation to the Proposals.

9. Will a prospectus relating to the New Phoenix Shares be issued?

The Prospectus, which contains prescribed information relating to New Phoenix and New Phoenix Shares, has been sent to Old Phoenix Shareholders and Old Phoenix DI Holders and is available on request up until Admission free of charge by writing to the registered office of Old Phoenix (at Maples Corporate Services Limited, PO Box 309, Ugland House, Grand Cayman KY1-1104 Cayman Islands), to the registered office of New Phoenix (at Juxon House, 100 St Paul's Churchyard, London EC4M 8BU, United Kingdom) or the offices of the New Phoenix Registrar (at The Pavilions, Bridgwater Road, Bristol BS13 8AE, United Kingdom).

The Prospectus is also available in electronic form on the Phoenix Group's website at http://www.thephoenixgroup.com/investor-relations/agm-and-egm/.

10. Why are there two meetings and do I need to attend both?

The two Old Phoenix Shareholder meetings, being the Court Meeting and the subsequent Scheme General Meeting, are being called for different purposes and will be held on 28 November 2018 at the same venue. The Scheme General Meeting will be held directly after the Court Meeting.

The sole purpose of the Court Meeting is to seek the approval of the Old Phoenix Shareholders (including as instructed by, or represented by, Old Phoenix DI Holders) to the Scheme in accordance with applicable Cayman Islands law.

The subsequent Scheme General Meeting, which will be held directly after the Court Meeting, is being called to enable Old Phoenix Shareholders (including as instructed by, or represented by, Old Phoenix DI Holders) to approve certain elements of, and other matters in connection with, the Scheme, the Old Phoenix Reduction of Capital, the New Phoenix Reduction of Capital, and the New Phoenix Share Plans, as described further in Parts II and IV of this document.

If you hold Old Phoenix Shares or Old Phoenix Depositary Interests, you are entitled and encouraged to attend the Meetings (in the case of the holders of Old Phoenix Depositary Interests, subject to having obtained a Letter of Representation from the Old Phoenix Depositary in accordance with the instructions set out in the Form of Instruction). If you do not attend, you are still entitled to vote at the Meetings by appointing a proxy or, in the case of Old Phoenix DI Holders, directing the Old Phoenix Depositary to vote on your behalf – see question 11 below.

11. Do I need to vote?

In particular, it is important that as many votes as possible are cast at the Court Meeting so as to demonstrate to the Court that there is a fair representation of Old Phoenix Shareholder and Old Phoenix DI Holder opinion.

Old Phoenix Shareholders

You are an Old Phoenix Shareholder if you hold Old Phoenix Shares directly on the Register and not by way of Old Phoenix Depositary Interests.

Whether or not you plan to attend in person the Court Meeting and/or the Scheme General Meeting, or any adjournments thereof, you should complete and return the blue Form of Proxy (in relation to the Court Meeting) and the white Form of Proxy (in relation to the Scheme General Meeting), either by submitting hard copies to the Old Phoenix Registrar at Computershare Investor Services PLC, The Pavilions, Bridgwater Road, Bristol BS99 6ZY or by lodging your proxy online via www.investorcentre.co.uk/eproxy, so as to be received by as soon as possible but in any event no later than 1:00 p.m. on 26 November 2018 (or, in the case of an adjourned meeting, no later than 48 hours prior to the time and date set for the adjourned meeting).

Please refer to the notes to the notices convening the Meetings set out in Part VI (Notice of Court Meeting) and Part VII (Notice of Scheme General Meeting) of this document for further information in relation to voting procedures for each Meeting. You are strongly encouraged to complete, sign and return your blue Form of Proxy and white Form of Proxy as soon as possible.

Old Phoenix DI Holders

You are an Old Phoenix DI Holder if you hold Old Phoenix Depositary Interests and are not recorded on the Register as holding Old Phoenix Shares directly.

Old Phoenix DI Holders who hold Old Phoenix Depositary Interests as at the Voting Record Time may not vote directly at the Court Meeting and/or the Scheme General Meeting but shall instead be entitled to either: (i) instruct the Old Phoenix Depositary to vote on the Scheme at the Court Meeting and/or the Scheme General Meeting in respect of the applicable number of Old Phoenix Depositary Interests representing Old Phoenix Shares held by them at the relevant time; or (ii) obtain an authorisation from the Old Phoenix Depositary to attend and vote at the Court Meeting and/or the Scheme General Meeting on behalf of the Old Phoenix Depositary on the Scheme, in respect of the applicable number of Old Phoenix Depositary Interests representing Old Phoenix Shares held by them at the relevant time, pursuant to the relevant Letter of Representation.

If you are an Old Phoenix DI Holder and wish to instruct the Old Phoenix Depositary on how to vote at the Court Meeting and/or the Scheme General Meeting, you must complete and return the blue Form of Instruction and the white Form of Instruction respectively, either by submitting hard copies to the Old Phoenix Depositary at Computershare Investor Services PLC, The Pavilions, Bridgwater Road, Bristol BS99 6ZY, by lodging your instruction online via www.investorcentre.co.uk/eproxy, or by using the CREST voting service in accordance with the procedures set out in the CREST Manual (under CREST participant ID 3RA50), so as to be received by as soon as possible but in any event by no later than 1:00 p.m. on 23 November 2018 (or, in the case of an adjourned meeting, no later than 72 hours before the time and date set for the adjourned meeting).

In you are an Old Phoenix DI Holder and wish to attend and vote at the Court Meeting or the Scheme General Meeting in respect of the Old Phoenix Shares which are represented by your Old Phoenix Depositary Interests, you must request, by no later than 1:00 p.m. on 23 November 2018 (or, in the case of an adjourned meeting, no later than 72 hours before the time and date set for the adjourned meeting) a Letter of Representation from the Old Phoenix Depositary in accordance with the instructions set out in the Form of Instruction.

You are strongly encouraged to complete, sign and return your blue Form of Instruction and white Form of Instruction, or to request a Letter of Representation to attend and vote in person, as soon as possible.

12. What about future dividends? Do I need to change my existing instructions so far as the payment of dividends is concerned?

The Directors expect New Phoenix to adopt a dividend policy equivalent to the current Old Phoenix policy, which reflects the Directors' view that, given the long-term run-off nature of the Phoenix Group's business, it is prudent to maintain a stable, sustainable dividend.

Regarding the mechanics for ensuring you receive dividends going forward, the Directors expect that your present dividend instructions will be continued for New Phoenix after the Scheme becomes effective, unless and until you revoke them. If you wish to change your instructions regarding the mechanics for ensuring you receive dividends going forward, you should contact the Phoenix Shareholder helpline between 8:30 a.m. and 5:30 p.m. (London time) Monday to Friday (except United Kingdom public holidays) on 0370 707 4040 (from within the United Kingdom) or +44 370 707 4040 (from outside the United Kingdom). Further details are included at the beginning of this summary.

13. What do I do with my old share certificates?

When the Scheme becomes effective, your holding of Old Phoenix Shares (including Old Phoenix Shares which replaced Old Phoenix Depositary Interests upon their cancellation shortly prior to the Scheme Record Time, as applicable) will be replaced by an equivalent holding of New Phoenix Shares.

Thus, all certificates for Old Phoenix Shares held in certificated form will cease to be valid. Upon receipt of your share certificates for New Phoenix Shares, you must destroy any share certificates you hold for Old Phoenix Shares and, if Old Phoenix requests you to do so, confirm to Old Phoenix that such certificates have been destroyed.

14. Will I receive share certificates for my New Phoenix Shares?

If you hold your Old Phoenix Shares in certificated form, it is expected that a share certificate in respect of your New Phoenix Shares will be despatched to you as soon as reasonably practicable after the Scheme Effective Date but, in any event, not later than 14 days after the Scheme Effective Date. Persons wishing to register transfers of New Phoenix Shares prior to the issue of the new share certificates can do so by forwarding a completed transfer form to the New Phoenix Registrar for certification and registration.

If you hold Old Phoenix Depositary Interests in uncertificated form in a CREST account, your New Phoenix Shares are expected to be credited to your CREST as soon as possible after 8:00 a.m. on the day following the Scheme Effective Date, but in any case, within 14 days after the Scheme Effective Date.

The settlement of New Phoenix Shares is subject to any prohibition or condition imposed by law.

15. Will I have to pay any tax as a result of the Scheme?

There should be no tax liabilities for UK-resident Old Phoenix Shareholders or Old Phoenix DI Holders arising from the Scheme.

Your attention is drawn to paragraph 10 of Part II (Explanatory Statement) of this document for further information on the UK tax consequences of the Scheme.

If you are in any doubt about your tax position, you should consult a professional adviser.

16. What happens if the Scheme does not proceed?

If the Scheme has not become effective by 29 March 2019 (or such later date as Old Phoenix and New Phoenix may agree and the Court may allow), it will lapse, in which event the Proposals will not result in a new holding company of Old Phoenix and Old Phoenix Shareholders will remain shareholders of Old Phoenix, Old Phoenix DI Holders will remain depositary interest holders of Old Phoenix, and the existing Old Phoenix Depositary Interests will continue to be listed on the Official List.

In this case, all certificates for Old Phoenix Shares held in certificated form will remain valid and should be retained.

17. Do I need to take further action?

It is important that as many Old Phoenix Shareholders (including as instructed by, or represented by, Old Phoenix DI Holders) as possible cast their votes at both the Court Meeting and the Scheme General Meeting (whether in person or by proxy or instruction to, or by representation of, the Old Phoenix Depositary, as applicable, in accordance with the procedures set out in this document). You are strongly encouraged to complete, sign and return your Forms of Proxy or Forms of Instruction (as applicable), as soon as possible in accordance with the instructions set out in this document.

For further information please see question 11 above and the instructions set out in paragraph 4 of Part I (Letter from the Chairman) and paragraph 12 of Part II (Explanatory Statement) of this document, and on the relevant Form of Proxy or Form of Instruction.

18. What if I still have questions?

If you have read this document and still have questions, please call the Phoenix Shareholder helpline, further details of which are included at the beginning of this summary.

Note: For legal reasons this helpline will only be able to provide practical information and will not provide advice on the merits of any of the Proposals or give any financial, legal or taxation advice. For financial, legal or taxation advice, you will need to consult an independent financial or legal adviser.

PART I: LETTER FROM THE CHAIRMAN

Registered Office: Maples Corporate Services Limited PO Box 309 Ugland House Grand Cayman KY1-1104 Cayman Islands Registered No. 202172

2 November 2018

Dear Shareholder,

Recommended proposals in connection with the introduction of a new holding company and related matters

1. Introduction

On 25 August 2016, Old Phoenix announced its intention to put in place a new United Kingdomincorporated and tax resident holding company for the Phoenix Group. It is intended that this new corporate structure will be implemented by means of the Scheme, being a scheme of arrangement pursuant to section 86 of the Cayman Islands Companies Law (2018 Revision) and involving a reduction of capital pursuant to sections 14 to 16 of the Cayman Islands Companies Law (2018 Revision).

If the Scheme is approved and becomes effective, it will result in Old Phoenix Shareholders and Old Phoenix DI Holders all holding New Phoenix Shares and in Old Phoenix becoming a wholly-owned subsidiary of New Phoenix.

If the Scheme is approved, all Old Phoenix Depositary Interests will be cancelled shortly before the Scheme Record Time, and each Old Phoenix DI Holder will be recorded on the Register as holding the same number of Old Phoenix Shares as they held Old Phoenix Depositary Interests immediately before those Old Phoenix Depositary Interests were cancelled. All holders of Old Phoenix Depositary Interests shortly prior to the Scheme Record Time will therefore participate in the Scheme as an Old Phoenix Shareholder by holding Old Phoenix Shares directly on the Register.

If the Scheme is implemented, Old Phoenix Shareholders (including those who formerly held Old Phoenix Depositary Interests) at the Scheme Record Time (expected to be 8:00 p.m. on 12 December 2018) will receive, in exchange for their Old Phoenix Shares, New Phoenix Shares on the following basis:

one New Phoenix Share for every one Old Phoenix Share

save that one fewer New Phoenix Share shall be allotted and issued to each of the two holders of the New Phoenix Subscriber Shares who are also Old Phoenix Shareholders, to reflect the shareholding in New Phoenix they acquired upon its incorporation.

With effect from the Scheme Effective Date, the rights attaching to the New Phoenix Shares will be substantially the same as those attaching to the Old Phoenix Shares. Upon the Scheme becoming effective, a New Phoenix Shareholder will have the same proportionate interest in the profits, net assets and dividends of the Phoenix Group as he, she or they had immediately prior to the Scheme Effective Date as an Old Phoenix Shareholder or Old Phoenix DI Holder.

The purpose of this document is to explain the Scheme and the other Proposals and why your Board considers the Scheme and the other Proposals to be on fair and reasonable terms and in the best interests of Old Phoenix and Old Phoenix Shareholders and Old Phoenix DI Holders as a whole. Your Board is recommending that you vote in favour of the Scheme and the other Proposals. A summary of the action recommended to be taken is set out in paragraph 4 of this letter, in the Notice of Court Meeting set out in Part VI of this document, in the Notice of Scheme General Meeting set out in Part VII of this document, and on the Forms of Proxy and Forms of Instruction accompanying this document.

2. Background to and reasons for the Proposals

The current Phoenix Group holding company structure was formed at the time of the Group's restructuring in 2009. Under the current structure, Old Phoenix is a Cayman Islands incorporated company which is, and from 31 January 2018 has been, tax resident in the United Kingdom (previously tax resident in Jersey). This structure is complex for the Phoenix Group's shareholders, debt investors and regulators and imposes additional burdens on the Phoenix Group's internal governance processes. On 25 August 2016 Old Phoenix announced that, as part of an ongoing group simplification process, it intended to put in place a new holding company registered in England & Wales for the Phoenix Group. This Scheme is now the final step in the Group's onshoring journey which has delivered a streamlined and cost-efficient internal governance structure and will result in a clearer structure for the Phoenix Group's shareholders, debt investors and regulators.

The Board believes that the proposed reorganisation of the Phoenix Group pursuant to the Scheme and the other Proposals will achieve a more appropriate structure for the Phoenix Group.

3. Impact of the Proposals

3.1 Business and Operations

It is expected that New Phoenix will have the same business and operations immediately after the Scheme Effective Date as Old Phoenix has immediately before the Scheme Effective Date. The Proposals will not result in any changes in the day-to-day operations of the business of the Phoenix Group or its strategy.

It is expected that New Phoenix will continue to report the Phoenix Group's financial results in sterling.

3.2 Corporate governance and Board of Directors

The Proposals are not expected to have any adverse impact on Old Phoenix Shareholders and/or Old Phoenix DI Holders as a whole. It is anticipated that New Phoenix will have the same board and management as Old Phoenix has on the Scheme Effective Date and will continue Old Phoenix's compliance with the UK Corporate Governance Code, retaining the Phoenix Group's strong commitment to high standards of governance and corporate responsibility.

Each Non-Executive Director has entered into a letter of appointment with New Phoenix on or around 1 November 2018, the terms of which (including the expiry date) are substantially the same as the terms of his or her appointment with Old Phoenix. The Scheme process will not directly result in a variation to the fees payable to each of those Non-Executive Directors.

The current service agreements and the overall level of remuneration of Executive Directors will remain unchanged.

It is intended that New Phoenix will comply with the terms of the Old Phoenix directors' remuneration policy, as approved by Old Phoenix shareholders at the 2017 annual general meeting, with any necessary modifications to reflect the Scheme. In accordance with legislative requirements, shareholder approval of New Phoenix's directors' remuneration policy will be sought at the 2019 annual general meeting. Further details on the specific effects of the Proposals on the Directors are set out in paragraph 4.1 of Part IV (Additional Information) of this document.

3.3 Admission to listing

Application will be made to the UK Listing Authority for the New Phoenix Shares to be admitted to the premium segment of the Official List and to the London Stock Exchange for the New Phoenix Shares to be admitted to trading on the London Stock Exchange's main market.

The last day of dealings in, and registration of transfers of, Old Phoenix Depositary Interests is expected to be 12 December 2018. It is expected that Admission of the New Phoenix Shares will become effective, and that dealings in New Phoenix Shares on the London Stock Exchange's main market for listed securities will commence, at 8:00 a.m. on 13 December 2018.

3.4 Dividends and New Phoenix Reduction of Capital

The Directors also expect that New Phoenix will undertake the New Phoenix Reduction of Capital shortly after the Scheme Effective Date, which will create a reserve of profit available for distribution in the accounts of New Phoenix.

3.5 Capital authorities

The Directors understand that New Phoenix has resolved to have capital authorities in place, with effect from the Scheme Effective Date, which are equivalent to those adopted by Old Phoenix at its general meeting on 25 June 2018, and that, to the extent any such authorities have been exercised by Old Phoenix as at the Scheme Effective Date, they will be treated by the Directors of New Phoenix as having been exercised to the same extent (subject to appropriate adjustments to reflect the different currency in which the respective nominal values are denominated), to ensure that New Phoenix becomes effectively subject to an equivalent level of authorities to that approved in respect of Old Phoenix.

3.6 Share Plans

In accordance with the terms of the Old Phoenix Share Plans, it is intended that on the Scheme Effective Date participants in those plans will be granted, in exchange for the cancellation of their outstanding awards under the Old Phoenix Share Plans, equivalent awards over New Phoenix Shares on and subject to the rules of the respective Old Phoenix Share Plans (''Replacement Awards''). No new awards will be granted under the Old Phoenix Share Plans following the Scheme Effective Date. Further details on the effect of the Scheme on the Old Phoenix Share Plans are set out in paragraph 7 of Part IV (Additional Information) of this document. Participants in the Old Phoenix Share Plans will also be written to separately about the effect of the Scheme on their awards under those plans.

The Directors expect that New Phoenix will adopt the New Phoenix Share Plans (including the New Phoenix Long-Term Incentive Plan, the New Phoenix Sharesave Scheme, the New Phoenix SIP and the New Phoenix DBSS, the terms of which will be substantively the same as those of the respective Old Phoenix Share Plans, save for minor updates to reflect changes in regulatory, governance and market practices, and the New Phoenix Irish Share Incentive Plan and the New Phoenix Irish Sharesave Scheme, which are subject to approval by the Irish Revenue Commissioners) with effect from Admission. Advisory approvals relating to the New Phoenix Share Plans are being sought from Old Phoenix Shareholders (including as instructed by, or represented by, Old Phoenix DI Holders) as ordinary resolutions to be proposed at the Scheme General Meeting. Further details of the New Phoenix Share Plans are set out in paragraph 8 of Part IV (Additional Information) of this document.

4. Action to be taken

The Scheme is conditional upon a number of matters which are set out in further detail in the Explanatory Statement contained in Part II of this document, including approval of the Scheme by the Old Phoenix Shareholders (including as instructed by, or represented by, Old Phoenix DI Holders) at the Court Meeting and of the resolutions at the Scheme General Meeting. Full particulars of the Court Meeting and the Scheme General Meeting, including the action to be taken by Old Phoenix Shareholders and Old Phoenix DI Holders, are also contained in Part II of this document.

In order that the Court can be satisfied that the votes cast fairly represent the views of Old Phoenix Shareholders (including as instructed by, or represented by, Old Phoenix DI Holders), it is important that as many votes as possible are cast at the Court Meeting. Old Phoenix Shareholders and Old Phoenix DI Holders are therefore urged to attend the Court Meeting, either in person (in the case of Old Phoenix DI Holders, subject to having obtained a Letter of Representation) or by proxy or instruction, as applicable. Separate Forms of Proxy and/or Forms of Instruction (as applicable) for use at the Court Meeting (blue) and the Scheme General Meeting (white) are enclosed. Whether or not you propose to attend in person at the meeting in question, you are strongly encouraged to complete, sign and return the appropriate Forms of Proxy and/or Instruction, as explained in paragraph 12 of the Explanatory Statement contained in Part II of and elsewhere in this document.

If you have any questions about this document, the Proposals, the Court Meeting, or the Scheme General Meeting or are in any doubt as to how to complete the Forms of Proxy or Forms of Instruction, please call the Phoenix Shareholder helpline between 8.30 a.m. and 5:30 p.m. Monday to Friday (except United Kingdom public holidays) on 0370 707 4040 (from within the United Kingdom) or +44 370 707 4040 (from outside the United Kingdom). Please note that calls may be monitored or recorded and the helpline cannot provide financial, legal or tax advice or advice on the merits of the Proposals.

5. Overseas Shareholders

If you are a citizen, resident or national of a jurisdiction outside the United Kingdom or the Cayman Islands, your attention is drawn to paragraph 9 of Part II (Explanatory Statement) of this document for further details concerning the Scheme.

6. Recommendation

The Board considers the Scheme and the other Proposals to be on fair and reasonable terms and in the best interests of Old Phoenix and Old Phoenix Shareholders and Old Phoenix DI Holders as a whole.

Accordingly, the Board unanimously recommends that Old Phoenix Shareholders and Old Phoenix DI Holders vote in favour of the Scheme at the Court Meeting and to vote in favour of all of the resolutions to be proposed at the Scheme General Meeting, in each case in accordance with the procedures set out in this document.

The Directors intend to vote or instruct the Old Phoenix Depositary to vote in respect of their own Old Phoenix Shares and/or Old Phoenix Depositary Interests, which represent approximately 0.27 per cent. of Old Phoenix Shares and Old Phoenix Depositary Interests (in aggregate) as at the Latest Practicable Date, in favour of the Scheme and all resolutions proposed at the Scheme General Meeting.

The Directors urge you to complete, sign and return the enclosed Forms of Proxy and/or Forms of Instruction, as applicable, as soon as possible, and, in any event, by no later than 1:00 p.m. on 26 November 2018 for Forms of Proxy or 1:00 p.m. on 23 November for Forms of Instruction, or, if the Court Meeting and Scheme General Meeting are adjourned, by the dates set out under the heading ''Expected timetable of principal events'' above.

Yours faithfully,

Nicholas Lyons Chairman

PART II: EXPLANATORY STATEMENT

1. Introduction

On 25 August 2016, Old Phoenix Old Phoenix announced its intention to put in place a new United Kingdom-incorporated and tax resident holding company for the Phoenix Group. It is intended that this new corporate structure will be implemented by means of the Scheme, being a scheme of arrangement pursuant to section 86 of the Cayman Companies Law and involving a reduction of capital pursuant to section 14 to 16 of the Cayman Companies.

If the Scheme is approved and becomes effective, New Phoenix will become the new holding company of the Phoenix Group. Shortly after the Scheme Effective Date, the existing holding company of the Phoenix Group, Old Phoenix, is expected to be renamed and to amend its articles of association to a form suitable for a wholly-owned subsidiary.

It is also proposed that, subject to the Scheme becoming effective, New Phoenix's share premium account be cancelled and the reserve arising upon the reduction be re-characterised as a distributable reserve to support the payment of dividends (and any potential share repurchases) by New Phoenix in future as well as payments on the RT1 Notes, as described further below.

Your attention is drawn to the letter from the Chairman of Old Phoenix set out in Part I of this document, which forms part of this Explanatory Statement. That letter contains, amongst other things, the unanimous recommendation by the Directors to Old Phoenix Shareholders and Old Phoenix DI Holders to vote in favour of the Scheme at the Court Meeting and to vote in favour of all the resolutions proposed at the Scheme General Meeting, in each case in accordance with the procedures set out in this document.

That letter also states that the Board considers the Scheme and the other Proposals to be on fair and reasonable terms and in the best interests of Old Phoenix and Old Phoenix Shareholders and Old Phoenix DI Holders as a whole.

A description of the action recommended to be taken by Old Phoenix Shareholders and Old Phoenix DI Holders in relation to the Court Meeting and the Scheme General Meeting is set out in paragraph 12 of this Part II of this document. The full text of the Scheme is set out in Part III (The Scheme of Arrangement). The full text of each of the resolutions to be proposed at the Court Meeting and the Scheme General Meeting is set out in Parts VI (Notice of Court Meeting) and VII (Notice of Scheme Arrangement) respectively. Old Phoenix Shareholders and Old Phoenix DI Holders should read the whole of this document before deciding whether to vote in favour of the Scheme and the other Proposals at the Court Meeting and the Scheme General Meeting, in each case in accordance with the procedures set out in this document.

It is expected that, if the conditions to the Scheme (as described in paragraph 4 of this Part II below) have been satisfied, the Scheme will become effective on 12 December 2018 and trading of the New Phoenix Shares will begin on 13 December 2018.

2. Background to and reasons for the Scheme and related Proposals

The current Phoenix Group holding company structure was formed at the time of the Group's restructuring in 2009. Under the current structure, Old Phoenix is a Cayman Islands incorporated company which, with effect from 31 January 2018, is tax resident in the United Kingdom (having previously been tax resident in Jersey). This structure is complex for the Phoenix Group's shareholders, debt investors and regulators and imposes additional burdens on the Group internal governance processes. On 25 August 2016 Old Phoenix announced that, as part of an ongoing group simplification process, it intended to put in place a new holding company registered in England & Wales for the Phoenix Group. This Scheme is now the final step in the Group's onshoring journey which has delivered a streamlined and cost-efficient internal governance structure and will result in a clearer structure for the Phoenix Group's shareholders, debt investors and regulators.

The Proposals are not expected to have any adverse impact on Old Phoenix Shareholders or Old Phoenix DI Holders as a whole. New Phoenix is expected to have the same Board of Directors and management as Old Phoenix has on the Scheme Effective Date, and New Phoenix will continue to support the UK Corporate Governance Code, retaining the Phoenix Group's commitment to strong and robust governance structures.

New Phoenix and its group will have the same business and operations after the Scheme Effective Date as Old Phoenix and its group had before the Scheme Effective Date. The Proposals will not result in any changes in the day-to-day operations of the business of the Phoenix Group or its strategy.

3. Summary of the Proposals

3.1 The Scheme

The principal steps in relation to the Scheme are as follows:

(a) Amendments to Old Phoenix Articles

If the relevant resolutions are approved, certain amendments will be made to the Old Phoenix Articles to facilitate the Scheme. The amendments are intended to ensure that: (i) any Old Phoenix Shares that are allotted and issued to any person other than New Phoenix and/or its nominee or nominees before the Scheme Record Time (but after the amendment to the Old Phoenix Articles becomes effective) are allotted subject to the terms of the Scheme and that the holders of such shares and any subsequent holder other than New Phoenix and/or its nominee or nominees will be bound by the Scheme accordingly; and (ii) subject to the Scheme becoming effective, any Old Phoenix Shares that are allotted and issued to any person other than New Phoenix and/or its nominee or nominees after the Scheme Record Time will immediately be transferred to New Phoenix and/or its nominee or nominees in consideration of and conditional on the issue or transfer to the relevant allottees of one New Phoenix Share for every one Old Phoenix Share so transferred. These changes are necessary because, in some cases, Old Phoenix Shares may need to be allotted after the date of the Court Meeting and the Scheme General Meeting but before or after the Scheme Record Time (for example, because of the exercise of rights granted by Old Phoenix under the Old Phoenix Share Plans) which may put them outside the scope of the Scheme.

Further details of the proposed amendments to the Old Phoenix Articles are set out in paragraph 2 of Part IV (Additional Information) of this document.

(b) Cancellation of Old Phoenix Depositary Interests

If the Scheme is sanctioned by the Court, the Old Phoenix Depositary will terminate the facility in respect of the Old Phoenix Depositary Interests in accordance with the terms of the Trust Deed shortly prior to the Scheme Record Time, as a result of which the Old Phoenix Depositary Interests will be cancelled and each Old Phoenix DI Holder will be entered on the Register as holding the same number of Old Phoenix Shares as they held Old Phoenix Depositary Interests immediately before the Old Phoenix Depositary Interests were cancelled. Anyone holding Old Phoenix Depositary Interests shortly prior to the Scheme Record Time will therefore participate in the Scheme as an Old Phoenix Shareholder by holding Old Phoenix Shares directly on the Register as at the Scheme Record Time.

A formal notice of termination of the facility in respect of the Old Phoenix Depositary Interests is annexed to this document.

(c) Cancellation of Scheme Shares

Pursuant to the Scheme, all Old Phoenix Shares will be cancelled on the Scheme Effective Date. In consideration for the cancellation, Old Phoenix Shareholders at the Scheme Record Time (expected to be 8:00 p.m. on 12 December 2018) will receive in exchange for their Old Phoenix Shares, New Phoenix Shares on the following basis:

for each Old Phoenix Share cancelled: one New Phoenix Share

save that one fewer New Phoenix Share shall be allotted and issued to each of the holders of the New Phoenix Subscriber Shares who are also Old Phoenix Shareholders, to reflect the shareholding in New Phoenix they acquired upon its incorporation.

The rights attaching to the New Phoenix Shares will be substantially the same as those attaching to the Old Phoenix Shares. A summary of the rights attaching to the New Phoenix Shares is set out in paragraph 3 of Part IV (Additional Information) of this document.

(d) Establishing New Phoenix as the holding company of the Phoenix Group

Following the cancellation of the Old Phoenix Shares, the share capital of Old Phoenix will be increased to its former amount by the issue of the Old Phoenix New Ordinary Shares to New Phoenix. The credit arising in the accounts of Old Phoenix as a result of the Old Phoenix Reduction of Capital will be applied in paying up in full, at par, the Old Phoenix New Ordinary Shares. As a result of the issue of the Old Phoenix New Ordinary Shares, New Phoenix will become the holding company of Old Phoenix and the Phoenix Group.

3.2 Admission of New Phoenix Shares

The last day for dealings in, and registration of transfers of, Old Phoenix Depositary Interests is expected to be 12 December 2018 and trading of the New Phoenix Shares is expected to begin on 13 December 2018.

3.3 Effect on the Old Phoenix Share Plans and proposals in relation to the New Phoenix Share Plans

In accordance with the terms of the Old Phoenix Share Plans, it is intended that on the Scheme Effective Date participants in those plans will be granted, in exchange for the cancellation of their outstanding awards under the Old Phoenix Share Plans, equivalent awards over New Phoenix Shares on and subject to the rules of the respective Old Phoenix Share Plans (''Replacement Awards''). No new awards will be granted under the Old Phoenix Share Plans following the Scheme Effective Date. The terms of the Old Phoenix Share Plans which will govern the Replacement Awards are set out under the heading 'Old Phoenix Share Plans' in paragraph 10.1 of Part IX of the Prospectus.

Further details on the effect of the Scheme on the Old Phoenix Share Plans are set out in paragraph 7 of Part IV (Additional Information) of this document.

Paragraph 8 of Part IV (Additional Information) of this document sets out details of the New Phoenix Share Plans expected to be adopted by New Phoenix upon the Scheme becoming effective.

3.4 Proposals in relation to Outstanding Subordinated Debt Securities

It is intended that, on the occurrence of the Scheme Effective Date, New Phoenix will be substituted for Old Phoenix as the principal debtor in respect of the 2022 Notes, 2025 Notes, 2027 Notes, 2029 Notes and RT1 Notes (together, the ''Outstanding Subordinated Debt Securities'') (the ''Debt Substitution'') in accordance with their respective terms. Under the terms of the Debt Substitution:

(a) the terms and conditions of the Outstanding Subordinated Debt Securities will be amended to reflect the substitution of New Phoenix in place of Old Phoenix as issuer and sole obligor under the Outstanding Subordinated Debt Securities and also to make certain consequential amendments in order to effect the Debt Substitution;
(b) there will not be a public offering of the Outstanding Subordinated Debt Securities and no new securities will be issued or admitted to trading in connection with the Debt Substitution; and
(c) no additional disclosure regarding New Phoenix will be made available in respect of the Debt Substitution.

Old Phoenix will remain as issuer of the Senior Bonds following the Scheme Effective Date. The Phoenix Group may consider moving the Senior Bonds from Old Phoenix to New Phoenix.

New Phoenix will accede to, and become a borrower and a guarantor under, each of the Revolving Credit Agreement and the Acquisition Facility Agreement on or after the Scheme Effective Date, in each case in accordance with its existing terms. Following such date (and subject to the terms of the Revolving Credit Agreement and the Acquisition Facility Agreement), Old Phoenix may subsequently elect to resign as borrower and guarantor from each of the Revolving Credit Agreement and the Acquisition Facility Agreement.

3.5 New Phoenix Reduction of Capital

The Directors expect New Phoenix to adopt an equivalent dividend policy to the current Old Phoenix policy, which reflects the Directors' view that, given the long-term run-off nature of the Phoenix Group's business, it is prudent to maintain a stable, sustainable dividend.

The purpose of the New Phoenix Reduction of Capital is to create distributable reserves in the accounts of New Phoenix to support the payment of future dividends (and any potential share repurchases) by New Phoenix as well as payments on the RT1 Notes.

Pursuant to the New Phoenix Reduction of Capital, it is proposed that New Phoenix's share premium account be cancelled and the reserve arising be re-characterised as a distributable reserve that will be available to New Phoenix to be distributed as dividends or applied towards any other lawful purpose.

The shareholder resolution required for New Phoenix to implement the New Phoenix Reduction of Capital was passed by the holders of the New Phoenix Subscriber Shares on 15 October 2018.

The New Phoenix Reduction of Capital is conditional upon:

(a) an order of the English Court confirming the New Phoenix Reduction of Capital; and
(b) registration of the order of the English Court confirming the New Phoenix Reduction of Capital with the English Registrar of Companies.

The amount of the distributable reserves to be created by the New Phoenix Reduction of Capital will depend upon the price at which New Phoenix Shares are issued by New Phoenix pursuant to the Scheme. Such New Phoenix Shares will be issued at a price equal to the actual closing price of Old Phoenix Shares on the last day of dealings in Old Phoenix Depositary Interests (expected to be 12 December 2018).

As an example, based on the closing price of an Old Phoenix Share of 6.025 pence on 31 October 2018 and assuming (for the purposes of this indicative calculation) that no Old Phoenix Shares are issued after that date, the New Phoenix Reduction of Capital would create a distributable reserve of approximately £4.3 billion and leave New Phoenix with paid up share capital of approximately £72.1 million.

Subject to the conditions described above being fulfilled, the New Phoenix Reduction of Capital is expected to become effective on 18 December 2018.

The Directors expect that New Phoenix will have capital authorities in place after the Scheme Effective Date which are equivalent to those adopted by Old Phoenix at its General Meeting on 25 June 2018, provided that, to the extent any such authorities have been exercised by Old Phoenix as at the Scheme Effective Date, they will be treated by New Phoenix as having been exercised to the same extent (subject to appropriate adjustments to reflect the different currency in which the respective nominal values are denominated), to ensure that New Phoenix remains effectively subject to an equivalent level of authorities to that approved in respect of Old Phoenix.

4. Conditions to the implementation of the Proposals

The implementation of the Scheme is conditional on the following having occurred:

(a) the Scheme being approved by a majority in number, representing 75 per cent. in value or more, of the holders of Old Phoenix Shares who are on the Register at the Voting Record Time and who are present and voting, in person or by proxy (including as instructed, or represented, by Old Phoenix DI Holders), at the Court Meeting;
(b) resolutions 1 and 2 (as set out in the notice convening the Scheme General Meeting at Part VII (Notice of Scheme General Meeting) of this document), to approve the matters in connection with the Scheme and the Old Phoenix Reduction of Capital having been passed at the Scheme General Meeting;
(c) the PRA and FCA, as applicable, having given notice in accordance with either section 189(4)(a) or section 189(7) FSMA that they approve, whether conditionally or unconditionally, New Phoenix and any other person increasing or acquiring control (within the meaning of sections 181 and 182 FSMA) of the Regulated Group Entities pursuant to this Scheme, or in the absence of such notice, the PRA and FCA, as applicable, being treated under section 189(6) of FSMA as having approved the increase or acquisition of control over the Regulated Group Entities by New Phoenix and any other relevant person;
(d) the PRA having given notice in accordance with Regulation 48 of the Financial Service and Markets (The Solvency II Regulations) 2015 (implementing Article 112 of the Solvency II Directive (2009/138/EC)) that it approves, whether conditionally or unconditionally, the extension of the internal model to New Phoenix, or in the absence of such notice, six months having passed from the receipt of the complete application by the PRA;
(e) the CBI having given notice in accordance with Regulation 70(1)(c)(ii) of the European Union (Insurance and Reinsurance) Regulations 2015 (as amended) that it does not oppose, whether conditionally or unconditionally, New Phoenix and any other person increasing or acquiring a qualifying holding (within the meaning of Regulation 60 of the European Union (Insurance and

Reinsurance) Regulations 2015 (as amended)) in SLIDAC pursuant to this Scheme, or in the absence of such notice, the CBI being treated under Regulation 70(1)(c)(i) of the European Union (Insurance and Reinsurance) Regulations 2015 (as amended) as having not opposed the increase or acquisition of a qualifying holding in SLIDAC by New Phoenix and any other relevant person;

(f) the Scheme having been sanctioned (with or without modification) by the Cayman Islands Court at the Court Hearing;
(g) the Old Phoenix Reduction of Capital having been confirmed by the Cayman Islands Court at the Court Hearing;
(h) the court order sanctioning the Scheme and confirming the Old Phoenix Reduction of Capital having been duly delivered to, and registered by (as applicable), the Cayman Islands Registrar of Companies; and
(i) permission having been granted by the UK Listing Authority to admit the New Phoenix Shares to the premium segment of the Official List and by the London Stock Exchange to admit the New Phoenix Shares to trading on the London Stock Exchange's main market for listed securities.

The Board of Old Phoenix will not take the necessary steps to implement the Scheme unless the above conditions have been satisfied or waived (to the extent permitted by law) and, at the relevant time, the Board of Old Phoenix considers that it continues to be in Old Phoenix's and the Old Phoenix Shareholders' best interests that the Scheme should be implemented.

The Court Hearing to sanction the Scheme and to confirm the Old Phoenix Reduction of Capital is expected to be held at the Law Courts, George Town, Grand Cayman at 10:00 a.m. on 5 December 2018 (Cayman Islands time). Old Phoenix Shareholders and Old Phoenix DI Holders will have the right to attend the Court Hearing and to appear in person or be represented by counsel to support or oppose the sanction of the Scheme and in connection with the Old Phoenix Reduction of Capital.

The Scheme contains a provision for Old Phoenix and New Phoenix jointly to consent, on behalf of all persons concerned, to any modification of, or addition to, the Scheme, or to any condition that the Court may think fit to approve or impose. The Court would be unlikely to approve or impose any modification of, or addition or condition to, the Scheme which might be material to the interests of Old Phoenix Shareholders or Old Phoenix DI Holders, unless Old Phoenix Shareholders and Old Phoenix DI Holders were informed of any such modification, addition or condition. It will be a matter for the Court to decide, in its discretion, whether or not the consent of Old Phoenix Shareholders and Old Phoenix DI Holders should be sought at a further meeting. Similarly, if a modification, addition or condition is put forward which, in the opinion of the Old Phoenix Directors, is of such a nature or importance as to require the consent of the Old Phoenix Shareholders and Old Phoenix DI Holders at a further meeting, the Old Phoenix Directors will not take the necessary steps to enable the Scheme to become effective unless and until such consent is obtained.

If the Scheme is sanctioned at the Court Hearing and the other conditions to the implementation of the Scheme (as set out above) have been satisfied, the Scheme is expected to become effective on 12 December 2018 and dealings in New Phoenix Shares are expected to commence at 8.00 a.m. on 13 December 2018. If the Scheme has not become effective by 29 March 2019 (or such later date as Old Phoenix and New Phoenix may agree and the Court may allow), it will lapse, in which event the Proposals will not result in a new holding company of Old Phoenix and Old Phoenix Shareholders will remain shareholders of Old Phoenix, Old Phoenix DI Holders will remain depositary interest holders of Old Phoenix, and the existing Old Phoenix Depositary Interests will continue to be listed on the Official List.

4.1 Court Meeting

To become effective under the Cayman Companies Law, the Scheme will require approval by the requisite majority of Old Phoenix Shareholders (including as instructed by, or represented by, Old Phoenix DI Holders) under the Cayman Companies Law at the Court Meeting.

The Court Meeting has been convened for 1:00 p.m. on 28 November 2018 pursuant to an order of the Court granted on 31 October 2018. Notice of the Court Meeting is set out in Part VI (Notice of Court Meeting) of this document. At the Court Meeting, or any adjournment thereof, the Old Phoenix Shareholders (including as instructed by, or represented by, Old Phoenix DI Holders) will consider and, if thought fit, approve the Scheme.

The requisite majority required to approve the Scheme at the Court Meeting under the Cayman Companies Law is a majority in number representing 75 per cent. in value or more, of the holders of Old Phoenix Shares who are on the Register at the Voting Record Time and who are present and voting, in person or by proxy (including as instructed by, or represented by, Old Phoenix DI Holders), at the Court Meeting.

Old Phoenix Shareholders who hold Old Phoenix Shares directly on the Register (and not by way of Old Phoenix Depositary Interests) at the Voting Record Time will be entitled to vote directly at the Court Meeting in person or by proxy (including as instructed by, or represented by, Old Phoenix DI Holders).

Each Old Phoenix Shareholder (save for the Old Phoenix Depositary) holding Old Phoenix Shares directly on the Register (and not by way of Old Phoenix Depositary Interests) at the applicable time may vote or appoint a proxy to vote either ''for'' or ''against'' the Scheme, but not both. Any split votes received from such Old Phoenix Shareholders (save for the Old Phoenix Depositary) will be disregarded in their entirety for the purpose of the Court Meeting. Accordingly, such Old Phoenix Shareholders should note that appointing more than one proxy will not result in that Old Phoenix Shareholder being counted more than once for the purposes of determining that the Scheme has been approved by a majority in number of Old Phoenix Shareholders present and voting at the Court Meeting.

The Old Phoenix Depositary may vote both for and against the Scheme in accordance with the instructions received by it from the Old Phoenix DI Holders.

Old Phoenix DI Holders who hold Old Phoenix Depositary Interests as at the Voting Record Time may not vote directly at the Court Meeting but shall instead be entitled to either: (i) instruct the Old Phoenix Depositary to vote on the Scheme at the Court Meeting in respect of the applicable number of Old Phoenix Depositary Interests representing Old Phoenix Shares held by them at the relevant time; or (ii) obtain an authorisation from the Old Phoenix Depositary to attend and vote at the Court Meeting on behalf of the Old Phoenix Depositary on the Scheme, in respect of the applicable number of Old Phoenix Depositary Interests representing Old Phoenix Shares held by them at the relevant time.

For the purposes of calculating the ''majority in number'' requirement at the Court Meeting: (i) each holder of Old Phoenix Shares who holds Old Phoenix Shares directly on the Register (and not by way of Old Phoenix Depositary Interests) at the applicable time shall be counted as one Old Phoenix Shareholder voting for or against the Scheme (as applicable); and (ii) the Old Phoenix Depositary will be treated as casting one vote for each Old Phoenix DI Holder that instructs the Old Phoenix Depositary to vote for the Scheme and one vote for each Old Phoenix DI Holder that instructs the Old Phoenix Depositary to vote against the Scheme, and the Old Phoenix Depositary itself, as opposed to the voting Old Phoenix DI Holders, shall not be counted as a shareholder of the Company for the purpose of the calculation of the majority in number test and instead will be treated as a multi-headed shareholder casting votes in respect of each Old Phoenix DI Holder that instructs it to vote, or which it has authorised to vote on its behalf.

In accordance with the Cayman Companies Law, the ''majority in number'' requirement, as described above, will therefore be met if the total number of holders of Old Phoenix Shares (calculated as described above) voting ''for'' the Scheme exceeds the total number of holders of Old Phoenix Shares (also calculated as described above) voting ''against'' the Scheme at the Court Meeting.

In accordance with the Cayman Companies Law, the ''75 per cent. in value'' requirement, as described above, will be met if the total value of the Old Phoenix Shares (including those represented by Old Phoenix Depositary Interests) being voted in favour of the Scheme is at least 75 per cent. or more of the total value of the Old Phoenix Shares (also including those represented by Old Phoenix Depositary Interests) voted for or against the Scheme and the Court Meeting.

Voting at the Court Meeting will be by poll and not on a show of hands.

Further details of action to be taken in respect of voting at the Court Meeting by Old Phoenix Shareholders and Old Phoenix DI Holders is set out in paragraph 12 of this Part II (Explanatory Statement).

Old Phoenix Shareholders and Old Phoenix DI Holders have the right to raise any questions which they may have in respect of the Scheme at the Court Meeting.

The result of the vote will be posted on the Phoenix Group's website at http://www.thephoenixgroup.com/investor-relations/agm-and-egm/ and announced through a Regulatory Information Service.

In order that the Court can be satisfied that the votes cast constitute a fair representation of the views of the Old Phoenix Shareholders (including as instructed by Old Phoenix DI Holders), it is important that as many votes as possible are cast at the Court Meeting. Old Phoenix Shareholders and Old Phoenix DI Holders are therefore urged to take the action referred to in paragraph 12 of this Part II.

It is also particularly important for you to be aware that if the Scheme becomes effective, it will be binding on all Scheme Shareholders (including those who previously held Old Phoenix Depositary Interests immediately prior to the Scheme Record Time), including those who do not vote to approve the Scheme and/or the other Proposals and those who vote against the Scheme and/or the other Proposals at the Court Meeting and/or at the Scheme General Meeting).

4.2 Scheme General Meeting

The Scheme General Meeting has been convened for 1:15 p.m. on 28 November 2018 (or as soon thereafter as the Court Meeting has been concluded or adjourned). At the Scheme General Meeting or at any adjournment thereof, Old Phoenix Shareholders (including as instructed by, or represented by, Old Phoenix DI Holders) will consider and, if thought fit, pass the resolutions set out in the notice of the Scheme General Meeting contained in Part VII of this document.

(a) Special resolutions

The special resolutions set out in the notice of the Scheme General Meeting are proposed in order to approve the following matters:

(i) the Scheme;
(ii) the Old Phoenix Reduction of Capital;
(iii) the increase in the share capital of Old Phoenix to the amount existing prior to the Old Phoenix Reduction of Capital by the creation of Old Phoenix New Ordinary Shares to be issued to New Phoenix in accordance with the Scheme;
(iv) the allotment of such Old Phoenix New Ordinary Shares by the Directors pursuant to the Scheme;
(v) the amendment of the Old Phoenix Articles to facilitate the Scheme; and
(vi) as a confirmatory resolution, the New Phoenix Reduction of Capital;

The majority required for the passing of the special resolutions is not less than 75 per cent. of the votes cast (in person or by proxy) at the Scheme General Meeting. Voting on the special resolutions will be by poll and not on a show of hands.

(b) Ordinary resolutions

The ordinary resolutions set out in the notice of the Scheme General Meeting are proposed as advisory resolutions in order to approve the adoption by New Phoenix of the New Phoenix Share Plans, as described in paragraph 8 of Part IV of this document.

The majority required for the passing of each ordinary resolution is a simple majority of the votes cast (in person or by proxy) at the Scheme General Meeting. Voting on the ordinary resolutions will be by poll and not on a show of hands.

4.3 Court Hearing

Under the Cayman Companies Law, the Scheme requires the sanction of the Court, and the Old Phoenix Reduction of Capital requires the confirmation by the Court at the Court Hearing.

Subject to the conditions to the implementation of the Scheme set out above having been first satisfied or, to the extent permitted by law, waived by Old Phoenix, the Scheme will become effective as soon as the Court Order sanctioning the Scheme under the Cayman Companies Law is delivered to the Cayman Islands Registrar of Companies and the Old Phoenix Reduction of Capital will become effective upon the registration of the Court Order by the Cayman Islands Registrar of Companies.

If the Scheme becomes effective, it will be binding on all Old Phoenix Shareholders (including those who previously held Old Phoenix Depositary Interests immediately prior to the Scheme Record Time), including those who do not vote to approve the Scheme and/or the other Proposals and those who vote

against the Scheme and/or the other Proposals at the Court Meeting and/or at the Scheme General Meeting.

Unless the Scheme becomes effective on or before 29 March 2018 or such later date as Old Phoenix and New Phoenix may agree and the Court may allow, it shall lapse.

On the Scheme Effective Date, share certificates in respect of Old Phoenix Shares will cease to be valid. Upon receipt of share certificates for New Phoenix Shares, Old Phoenix Shareholders must destroy any share certificates held by them for Old Phoenix Shares and, if Old Phoenix requests you to do so, confirm to Old Phoenix that such certificates have been destroyed.

5. Effect of the Scheme

If the Scheme is approved, sanctioned by the Court and the other conditions to the implementation of the Scheme (as set out above) have been satisfied, the Old Phoenix Depositary will cancel all Old Phoenix Depositary Interests shortly before the Scheme Record Time, and each Old Phoenix DI Holder will be recorded on the Register as holding the same number of Old Phoenix Shares as they held Old Phoenix Depositary Interests immediately before those Old Phoenix Depositary Interests were cancelled. All holders of Old Phoenix Depositary Interests immediately prior to the Scheme Record Time will therefore participate in the Scheme as a holder of Scheme Shares holding Old Phoenix Shares directly on the Register at the Scheme Record Time in the same way as any other Old Phoenix Shareholder.

Pursuant to the Scheme, all holders of Scheme Shares will have their Old Phoenix Shares replaced by New Phoenix Shares on a one-for-one basis. New Phoenix Shares will be denominated in sterling.

Old Phoenix Shareholders' proportionate entitlement to participate in Old Phoenix's capital and income will not be affected by reason of the implementation of the Scheme or the New Phoenix Reduction of Capital. Old Phoenix Shareholders and Old Phoenix DI Holders will not receive any amount in cash pursuant to the terms of the Scheme (other than in the circumstances referred to in Clause 3.2 of the Scheme, as described in Part III (The Scheme of Arrangement) of this document).

The rights attaching to the New Phoenix Shares are described in Part IV (Additional Information) of this document.

New Phoenix is a newly incorporated company which has not traded since its incorporation and, prior to the Scheme becoming effective, will not own any material assets or have any material liabilities. As a result of the Scheme, New Phoenix will become the new holding company of the Phoenix Group and its assets, liabilities and earnings on a consolidated basis will be those of the Phoenix Group.

Old Phoenix will make announcements to Old Phoenix Shareholders and Old Phoenix DI Holders from time to time in relation to the progress of the Scheme, including upon the Scheme becoming effective. New Phoenix may also make certain announcements in relation to the anticipated Admission.

6. Settlement

Subject to the Scheme becoming effective, the issue of any New Phoenix Shares to which any Scheme Shareholder is entitled under the Scheme will be effected in the manner set out below.

6.1 Scheme Shares formerly represented by Depositary Interests

Where at the Scheme Record Time, a Scheme Shareholder holds Scheme Shares but immediately prior to the cancellation of Old Phoenix Depositary Interests, was an Old Phoenix DI Holder, that Scheme Shareholder will receive as soon as reasonably practicable after the Scheme Effective Date and, in any event, no later than 14 days after the Scheme Effective Date, the New Phoenix Shares to which they are entitled through CREST by Computershare, on behalf of New Phoenix, procuring that Euroclear is instructed to credit the appropriate CREST account with such Scheme Shareholder's entitlement to New Phoenix Shares at the commencement of dealings in New Phoenix Shares.

The provision by New Phoenix of such instructions to Euroclear shall be a complete discharge of the obligations of New Phoenix under the Scheme in relation to the credit of entitlement to New Phoenix Shares made through CREST. Settlement of the credit of entitlement to New Phoenix Shares will be made through CREST as soon as reasonably practicable after the Scheme Effective Date and, in any event, no later than 14 days after the Scheme Effective Date, in accordance with CREST arrangements.

With effect from the cancellation of the Old Phoenix Depositary Interests, each holding of Old Phoenix Depositary Interests credited to any stock account in CREST will be disabled and all Old Phoenix Depositary Interests will be removed from CREST in due course thereafter.

The Phoenix Group reserves the right to credit any entitlement to New Phoenix Shares referred to above to all or any Scheme Shareholder(s) who were Old Phoenix DI Holder(s) immediately prior to the cancellation of the Depositary Interests in the manner referred to in sub-paragraph 6.2 of this Part II (Explanatory Statement) if for any reason outside its control it is not able to effect settlement in accordance with this sub-paragraph 6.1.

6.2 Scheme Shares held in certificated form

Where at the Scheme Record Time, a Scheme Shareholder holds Scheme Shares in certificated form and did not hold such shares in the form of Old Phoenix Depositary Interests immediately prior to the cancellation of the Old Phoenix Depositary Interests, settlement of such Scheme Shareholder's entitlement to New Phoenix Shares will be made by issuing the relevant Scheme Shareholder New Phoenix Shares in certificated form.

Definitive certificates for the New Phoenix Shares will be despatched by pre-paid post as soon as reasonably practicable after the Scheme Effective Date but, in any event, not later than 14 days after the Scheme Effective Date to the address appearing on the Register (or in the case of joint holders, at the address of that joint holder whose name stands first in the Register of such joint holdings) or in accordance with any special instructions regarding communications received at the registered office of Old Phoenix before the Scheme Record Time. Such certificates shall be sent at the risk of the person entitled thereto and the Phoenix Group shall not be responsible for any loss or delay in the transmission of certificates sent in this way.

Temporary documents of title will not be issued pending the despatch by post of the new definitive share certificates. Persons wishing to register transfers of New Phoenix Shares prior to the issue of the new share certificates can do so by forwarding a completed transfer form to the New Phoenix Registrar for certification and registration.

With effect from and including the Scheme Effective Date, each certificate representing a holding of Scheme Shares will be cancelled and share certificates for such shares will cease to be valid. Upon receipt of share certificates for New Phoenix Shares, Old Phoenix Shareholders must destroy any share certificates held by them for Old Phoenix Shares and, if Old Phoenix requests you to do so, confirm to Old Phoenix that such certificates have been destroyed.

6.3 Infringement of laws

If, in respect of any Scheme Shareholder who is a citizen, resident or national of any jurisdiction outside the United Kingdom or the Cayman Islands, New Phoenix is advised that the allotment and issue of New Phoenix Shares pursuant to Clause 2.1 of the Scheme would infringe the laws of any jurisdiction outside the United Kingdom or Cayman Islands or would require New Phoenix to observe any governmental or other consent or effect any registration, filing or other formality with which, in the opinion of New Phoenix, it would be unable to comply or which it regards as unduly onerous, then New Phoenix may in its sole discretion either:

(a) determine that such New Phoenix Shares shall be sold, in which event the New Phoenix Shares shall be issued to such Scheme Shareholder and New Phoenix shall appoint a person to act pursuant to Clause 3.2(a) of the Scheme and such person shall be authorised on behalf of such Scheme Shareholder to procure that any shares in respect of which New Phoenix has made such a determination shall, as soon as practicable following the issuance of such New Phoenix Shares, be sold at the best price which can reasonably be obtained at the time of sale and the net proceeds of such sale (after the deduction of all expenses and commissions, including any amount in respect of value added tax payable thereon) shall be paid to such Scheme Shareholder by sending a cheque (or, if applicable, by making a payment through CREST) to such Scheme Shareholder in accordance with the provisions of Clause 4 of the Scheme. To give effect to any such sale, the person so appointed shall be authorised on behalf of such Scheme Shareholder to execute and deliver a form of transfer and to give such instructions and do all such things which he may consider necessary or expedient in connection with such sale. In the absence of fraud, none of Old Phoenix, New Phoenix or the person so appointed shall have any liability for any loss or damage arising as a result of the timing or terms of any such sale; or

(b) determine that no such New Phoenix Shares shall be allotted and issued to such Scheme Shareholder under Clause 2.1 of the Scheme but instead such shares shall be allotted and issued to a nominee appointed by New Phoenix as trustee for such Scheme Shareholder, on terms that they shall, as soon as practicable following the issuance of such New Phoenix Shares, be sold on behalf of such Scheme Shareholder at the best price which can reasonably be obtained at the time of sale and the net proceeds of such sale (after the deduction of all expenses and commissions, including any amount in respect of value added tax payable thereon) shall be paid to such Scheme Shareholder by sending a cheque (or, if applicable, by making a payment through CREST) to such Scheme Shareholder in accordance with the provisions of Clause 4 of the Scheme. In the absence of fraud, none of Old Phoenix, New Phoenix or any broker or agent of either of them shall have any liability for any loss arising as a result of the timing or terms of any such sale.

All cheques shall be made payable to the Scheme Shareholder or, in the case of joint holders to that one of the joint holders whose name stands first in the register in respect of the joint holding, in respect of the Scheme Shares concerned in sterling drawn on a United Kingdom clearing bank and the encashment of any such cheque shall be a complete discharge to New Phoenix for the monies represented thereby. On or after the day being six months after the posting of any cheques pursuant to the Scheme, New Phoenix shall have the right to cancel or countermand payment of any such cheque which has not then been cashed or has been returned uncashed. Any monies represented thereby shall be placed in an account in New Phoenix's name (which need not be separate from New Phoenix's own account) with a licensed bank in the United Kingdom selected by New Phoenix until the expiration of one year from the Scheme Effective Date. Such payment shall not constitute New Phoenix a trustee in respect of such monies. Any interest that may accrue on the monies deposited shall belong to New Phoenix absolutely. New Phoenix shall, prior to the expiration of one year from the Scheme Effective Date, make payments out of such account of the sums payable pursuant to the Scheme to persons who satisfy New Phoenix (in New Phoenix's absolute discretion) that they are respectively entitled thereto, and that the cheques referred to in this Scheme of which they are payees have not been cashed. In the absence of bad faith or wilful default a certificate of New Phoenix to the effect that any particular person is so entitled or not so entitled shall be conclusive and binding upon all persons claiming an interest in the relevant monies. On the expiration of one year from the Scheme Effective Date, New Phoenix shall be released from any further obligation to make any payments under this Scheme and the balance (if any) of the monies standing to the credit of New Phoenix pursuant to Clause 4.7 of the Scheme shall vest absolutely in New Phoenix.

7. Cancellation of Listing

Old Phoenix intends to seek the cancellation of listing of the Old Phoenix Shares on the Official List and of trading on the London Stock Exchange's main market for listed securities with effect from 8:00 a.m. on 13 December 2018. It is intended that dealings in Old Phoenix Shares will be suspended at 4:30 p.m. (London time) on the Scheme Effective Date. Immediately thereafter the London Stock Exchange and the UK Listing Authority will be requested respectively to cancel trading in Old Phoenix Shares on the London Stock Exchange's market for listed securities and the listing of the Old Phoenix Shares from the Official List. The last day of dealings in Old Phoenix Shares on the London Stock Exchange is expected to be the Scheme Record Date and no transfers will be registered after 4:30 p.m. (London time) on that date.

On the Scheme Effective Date, Old Phoenix will become a wholly-owned subsidiary of New Phoenix and share certificates in respect of Scheme Shares will cease to be valid. Upon receipt of share certificates for New Phoenix Shares, Old Phoenix Shareholders must destroy any share certificates held by them for Old Phoenix Shares and, if Old Phoenix requests you to do so, confirm to Old Phoenix that such certificates have been destroyed. In addition, on the Scheme Record Date, and prior to the Scheme Record Time, entitlements to Old Phoenix Depositary Interests held within CREST will be cancelled.

8. Directors' interests

Each of the Old Phoenix Directors is also a director of New Phoenix.

One of the Directors, James McConville, is the holder of one of the New Phoenix Subscriber Shares. Certain of the Directors also have interests in the share capital of Old Phoenix and, if the Scheme becomes effective, will acquire equivalent interests in the share capital of New Phoenix.

Further information on Directors' interests is set out in paragraph 4 of Part IV (Additional Information) of this document.

9. Overseas Shareholders

The implications of the Scheme and other Proposals for Overseas Shareholders may be affected by the laws of jurisdictions outside the United Kingdom and the Cayman Islands. Overseas Shareholders should inform themselves about, and observe, any applicable legal requirements. It is the responsibility of any Overseas Shareholders to satisfy themselves as to the full observance of the laws and regulatory requirements of the relevant jurisdiction in connection with the Scheme and other Proposals, including the obtaining of any governmental, exchange control or other consents which may be required, the compliance with other necessary formalities and the payment of any issue, transfer or other taxes or duties or payments due in such jurisdiction. The attention of United States holders of Old Phoenix Shares is drawn to the ''Notice to United States holders of Old Phoenix Shares'' contained in the Important Notice on page 4 of this document.

This document has been prepared for the purposes of complying with English law, Cayman Islands law and the Listing Rules and the information disclosed may not be the same as that which would have been disclosed if this document had been prepared in accordance with the laws and regulations of any jurisdiction outside of the United Kingdom and the Cayman Islands.

Old Phoenix Shareholders and Old Phoenix DI Holders who are citizens or residents of the United States or other jurisdictions outside of the United Kingdom and the Cayman Islands should consult their own legal and tax advisers with respect to the legal and tax consequences of the Scheme in their particular circumstances.

THIS DOCUMENT DOES NOT CONSTITUTE AN INVITATION OR OFFER TO SELL OR THE SOLICITATION OF AN INVITATION OR OFFER TO BUY ANY SECURITY. NONE OF THE SECURITIES REFERRED TO IN THIS DOCUMENT SHALL BE SOLD, ISSUED, SUBSCRIBED FOR, PURCHASED, EXCHANGED OR TRANSFERRED IN ANY JURISDICTION IN CONTRAVENTION OF APPLICABLE LAW.

The New Phoenix Shares to be issued to Scheme Shareholders in connection with the Scheme have not been, will not be, and are not required to be, registered under the US Securities Act in reliance upon the exemption from the registration requirements of the US Securities Act provided by Section 3(a)(10) of that Act. For the purpose of qualifying for the Section 3(a)(10) exemption with respect to the New Phoenix Shares issued pursuant to the Scheme, Old Phoenix and New Phoenix will advise the Court that it will rely on the Section 3(a)(10) exemption based on the Court's sanctioning of the Scheme, which will be relied upon by Old Phoenix as an approval of the Scheme following a hearing on its fairness to Old Phoenix Shareholders at which hearing all such Old Phoenix Shareholders and Old Phoenix DI Holders will be entitled to attend in person or through counsel to support or oppose the sanctioning of the Scheme and with respect to which notification has been or will be given to all such shareholders.

The New Phoenix Shares will not be registered under the securities laws of any state of the United States, and will be issued pursuant to the Scheme in reliance on available exemptions from such state law registration requirements or the pre-emption of such requirements by the US Securities Act.

Neither the SEC nor any other US federal or state securities commission or regulatory authority has approved or disapproved of the New Phoenix Shares or passed upon the accuracy or adequacy of this document. Any representation to the contrary is a criminal offence in the United States.

Old Phoenix Shareholders and Old Phoenix DI Holders who are citizens or residents of the United States should consult their own legal, financial and tax advisers with respect to the legal, financial and tax consequences of the Scheme and in their particular circumstances.

10. Taxation

It is intended that the Scheme should be generally neutral in tax terms for UK-resident Old Phoenix Shareholders and Old Phoenix DI Holders. Old Phoenix Shareholders and Old Phoenix DI Holders are referred to paragraph 9 of Part IV of this document for further information on the tax consequences of the Scheme and in relation to the UK taxation consequences of holding and disposing of New Phoenix Shares. Old Phoenix Shareholders and Old Phoenix DI Holders should note that any future purchaser of New Phoenix Shares will be liable to stamp duty or SDRT at 0.5 per cent. of the amount or value of the consideration given (rounded up to the next multiple of £5 in the case of stamp duty).

11. Prospectus

A Prospectus relating to New Phoenix and Admission, prepared for the purposes of Article 3 of the Prospectus Directive and in accordance with the Prospectus Rules of the FCA made under Section 73A of the FSMA, is available to the public in accordance with Rule 3.2 of the Prospectus Rules in electronic form on the Phoenix Group's website at http://www.thephoenixgroup.com/investor-relations/ agm-and-egm/. Copies may also be obtained up until Admission on request, free of charge by writing to the registered office of Old Phoenix (at Maples Corporate Services Limited, PO Box 309, Ugland House, Grand Cayman KY1-1104 Cayman Islands), to the registered office of New Phoenix (at Juxon House, 100 St Paul's Churchyard, London EC4M 8BU, United Kingdom) or the offices of the New Phoenix Registrar (at The Pavilions, Bridgwater Road, Bristol BS99 6ZY United Kingdom). A copy of the Prospectus will also be available upon request from the Phoenix Shareholder Helpline, further details of which are included on page 13 of this document.

The information in the Prospectus includes financial information and an operating and financial review in relation to the Phoenix Group, a business overview of the Phoenix Group and a section of additional information, including details of the remuneration and interests of the Directors, material contracts and capital resources of the Phoenix Group and details of litigation concerning the Phoenix Group, all of which will be relevant to New Phoenix as the new holding company of the Phoenix Group. Certain information will be incorporated into the Prospectus by reference.

12. Action to be taken

12.1 Old Phoenix Shareholders

You are an Old Phoenix Shareholder if you hold Old Phoenix Shares directly on the Register and not by way of Old Phoenix Depositary Interests.

Old Phoenix Shareholders will find enclosed with this document:

(a) A blue Form of Proxy for use at the Court Meeting; and
(b) A white Form of Proxy for use at the Scheme General Meeting.

Whether or not you plan to attend in person the Court Meeting and/or the Scheme General Meeting, or any adjournments thereof, you should complete and return a blue Form of Proxy for use at the Court Meeting and a white Form of Proxy for use at the Scheme General Meeting, either by submitting hard copies to the Old Phoenix Registrar at Computershare Investor Services PLC, The Pavilions, Bridgwater Road, Bristol BS99 6ZY or by lodging your proxy online via www.investorcentre.co.uk/eproxy, so as to be received by as soon as possible but in any event so that the Forms of Proxy are received by no later than 1:00 p.m. on 26 November 2018 (or, in the case of an adjourned meeting, no later than 48 hours prior to the time and date set for the adjourned meeting).

The completion and return of the Forms of Proxy will not prevent you from attending and voting at the Court Meeting, or any adjournments thereof, in person should you wish to do so and should you be so entitled.

12.2 Old Phoenix DI Holders

You are an Old Phoenix DI Holder if you hold Old Phoenix Depositary Interests and are not recorded on the Register as holding Old Phoenix Shares directly.

Old Phoenix DI Holders will find enclosed with this document:

(a) A blue Form of Instruction for use at the Court Meeting; and
(b) A white Form of Instruction for use at the Scheme General Meeting.

Old Phoenix DI Holders who hold Old Phoenix Depositary Interests as at the Voting Record Time may not vote directly at the Court Meeting and/or the Scheme General Meeting but shall instead be entitled to either: (i) instruct the Old Phoenix Depositary to vote on the Scheme at the Court Meeting and/or the Scheme General Meeting in respect of the applicable number of Old Phoenix Depositary Interests representing Old Phoenix Shares held by them at the relevant time; or (ii) obtain an authorisation from the Old Phoenix Depositary to attend and vote at the Court Meeting and/or the Scheme General Meeting on behalf of the Old Phoenix Depositary on the Scheme, in respect of the applicable number of Old Phoenix Depositary Interests representing Old Phoenix Shares held by them at the relevant time.

If you are an Old Phoenix DI Holder and wish to instruct the Old Phoenix Depositary on how to vote at the Court Meeting and/or the Scheme General Meeting, you must complete and return the blue Form of Instruction and the white Form of Instruction respectively, either by submitting hard copies to the Old Phoenix Depositary at Computershare Investor Services PLC, The Pavilions, Bridgwater Road, Bristol BS99 6ZY, by lodging your instruction online via www.investorcentre.co.uk/ eproxy or by using the CREST voting service in accordance with the procedures set out in the CREST Manual (under CREST participant ID 3RA50), so as to be received by as soon as possible but in any event so that the Forms of Instruction are received by no later than 1:00 p.m. on 23 November 2018 (or, in the case of an adjourned meeting, no later than 72 hours before the time and date set for the adjourned meeting).

In you are an Old Phoenix DI Holder and wish to attend and vote in person at the Court Meeting and/or the Scheme General Meeting in respect of the Old Phoenix Shares which are represented by your Old Phoenix Depositary Interests, you must request, by no later than 1:00 p.m. on 23 November 2018 (or, in the case of an adjourned meeting, no later than 72 hours before the time and date set for the adjourned meeting) a Letter of Representation from the Old Phoenix Depositary in accordance with the instructions set out in the Form of Instruction.

It is important that, for the Court Meeting in particular, as many votes as possible are cast so that the Court may be satisfied that there is a fair representation of Old Phoenix Shareholder opinion (including as instructed or represented by Old Phoenix DI Holders). Whether or not you plan to attend the meetings in person, you are strongly encouraged to sign and return your Forms of Proxy and/or Forms of Instruction or request your Letter of Representation (as applicable) as soon as possible.

13. Helpline

If you have any questions relating to this document, the Scheme, the other Proposals, the Court Meeting, or the Scheme General Meeting or are in any doubt about how to complete and return the Form of Proxy and/or Form of Instruction please contact Computershare on 0370 707 4040 or, if telephoning from outside the United Kingdom, on +44 370 707 4040 between 8:30 a.m. and 5:30 p.m. (London time) Monday to Friday. Calls to the helpline may be recorded and monitored for security and training purposes.] Please note that for legal reasons, the helpline cannot provide advice on the merits of the Scheme or give any legal, tax or financial advice.

14. Further Information

You should read the whole of this document.

Your attention is drawn, in particular, to the summary set out at the front of this document, to the letter from the Chairman in Part I, to the terms of the Scheme which are set out in full in Part III (The Scheme of Arrangement) of this document and to the notices of the Court Meeting and Scheme General Meeting in Part VI and Part VII. You should also read the Prospectus, which is available as set out in paragraph 11 above and elsewhere in this document.

The Scheme shall be governed by, and construed in accordance with, the laws of the Cayman Islands and be subject to the exclusive jurisdiction of the courts of the Cayman Islands and to the conditions set out above and in this document.

PART III: THE SCHEME OF ARRANGEMENT

IN THE GRAND COURT OF THE CAYMAN ISLANDS FINANCIAL SERVICES DIVISION

CAUSE NO: FSD 162 OF 2018 (RMJ)

IN THE MATTER OF PHOENIX GROUP HOLDINGS

AND

IN THE MATTER OF SECTIONS 14 TO 16 AND SECTION 86 OF THE COMPANIES LAW (2018 REVISION)

SCHEME OF ARRANGEMENT

(under section 86 of the Cayman Islands Companies Law (2018 Revision))

BETWEEN

PHOENIX GROUP HOLDINGS

AND

THE SCHEME SHAREHOLDERS

(as hereinafter defined)

PART 1: PRELIMINARY

1. DEFINITIONS

1.1 In this Scheme, unless inconsistent with the subject or context, the following expressions shall bear the meanings respectively set out opposite them:

''£'' or ''sterling''	the lawful currency of the United Kingdom
''Board''	the board of directors of Old Phoenix
''Business Day''	any day other than a Saturday or a Sunday on which banks in London and the Cayman Islands are open for the transaction of normal banking business
''CA'' or ''Companies Act''	the UK Companies Act 2006, as amended, modified or re-enacted from time to time
''Cayman Companies Law''	the Companies Law (2018 revision) of the Cayman Islands, as amended, modified or re-enacted from time to time
''Cayman Islands Registrar of Companies''	the Registrar of Companies in the Cayman Islands
''certificated'' or ''in certificated form''	in relation to a share or other security, a share or other security which is not in uncertificated form
''Court Hearing''	the hearing by the Court of the petition seeking the sanction of the Scheme under section 86 of the Cayman Companies Law and seeking the confirmation of the reduction of capital resulting from the cancellation of the Scheme Shares under sections 14 to 16 of the Cayman Companies Law
''Court Meeting''	the meeting of Old Phoenix Shareholders (including as instructed by, or represented by, Old Phoenix DI Holders) to be held at Juxon House, 100 St. Paul's Churchyard, London, United Kingdom, EC4M 8BU, at 1:00 p.m. on 28 November 2018, convened pursuant to an order of the Court for the purposes of considering, and, if thought fit, approving the Scheme (with or without amendment)

''Court Order''	the order of the Court sanctioning the Scheme under section 86 of the Cayman Companies Law and confirming the reduction of capital resulting from the cancellation of the Scheme Shares under sections 14 to 16 of the Cayman Companies Law
''Court''	the Grand Court of the Cayman Islands and any court capable of hearing appeals therefrom
''CREST''	the United Kingdom based system for the paperless settlement of trades in listed securities, of which Euroclear is the operator
''Euroclear''	Euroclear UK & Ireland Limited, the operator of CREST
''holder''	a registered holder, including any person entitled by transmission
''Latest Practicable Date''	31 October 2018, being the latest practicable date prior to publication of this document
''London Stock Exchange''	London Stock Exchange plc
''Longstop Date''	29 March 2019 or such later date as Old Phoenix and New Phoenix may agree and the Court may allow
''New Phoenix''	Phoenix Group Holdings plc, a company incorporated in England and Wales with registered number 11606773, whose registered office is at Juxon House, 100 St Paul's Churchyard, London EC4M 8BU, United Kingdom
''New Phoenix Subscriber Shares''	the ordinary shares of £0.10 each in the capital of New Phoenix issued upon incorporation of New Phoenix
''Official List''	the Official List maintained by the Financial Conduct Authority of the United Kingdom acting in its capacity as the UK Listing Authority in accordance with section 74(1) of the UK Financial Services and Markets Act 2000, as amended
''Old Phoenix'' or the ''Company''	Phoenix Group Holdings, a company incorporated in the Cayman Islands as an exempted company with limited liability with registration number 202172, whose registered office is at Maples Corporate Services Limited, PO Box 309, Ugland House, Grand Cayman, KY1-1104 Cayman Islands
''Old Phoenix Depositary''	Computershare Company Nominees Limited as nominee for Computershare Investor Services PLC, a company incorporated in England and Wales with registered number 3498808, whose registered office is at The Pavilions, Bridgwater Road, Bristol BS13 8AE
''Old Phoenix Depositary Interests''	the dematerialised depositary interests in respect of Old Phoenix Shares issued by the Old Phoenix Depositary which represent Old Phoenix Shares on a one for one basis
''Old Phoenix DI Holder''	a holder of an Old Phoenix Depositary Interest
''Old Phoenix New Ordinary Shares''	ordinary shares of A0.0001 each in the capital of Old Phoenix to be created following the cancellation of the Scheme Shares and to be issued credited as fully paid to New Phoenix pursuant to this Scheme
''Old Phoenix Shareholders''	the holders of Old Phoenix Shares
''Old Phoenix Shares''	ordinary shares of A0.0001 each in the capital of Old Phoenix
''Scheme Effective Date''	the date on which this Scheme becomes effective in accordance with Clause 7, expected to be 12 December 2018
''Scheme Record Time''	8:00 p.m. London time on the Scheme Effective Date
''Scheme Shareholders''	the holders of the Scheme Shares as appearing in the register of members of Old Phoenix

''Scheme Shares''	(a) all Old Phoenix Shares in issue at the date of this Scheme and remaining in issue at the Scheme Record Time (including those which were formerly Old Phoenix Depositary Interests);
	(b) all Old Phoenix Shares issued after the date of this Scheme and before the Voting Record Time and remaining in issue at the Scheme Record Time (including those which were formerly Old Phoenix Depositary Interests) (if any); and
	(c) all further Old Phoenix Shares which may be in issue at or after the Voting Record Time up to the Scheme Record Time (including those which were formerly Old Phoenix Depositary Interests) on terms that the shareholders will be bound by this Scheme (if any)
''Scheme''	this scheme of arrangement proposed to be made under section 86 of the Cayman Companies Law (2018 Revision) in its present form or with or subject to any modifications, additions or conditions which the Court may think fit to approve or impose and agreed to by Old Phoenix and New Phoenix
''UK Listing Authority'' or ''UKLA''	the Financial Conduct Authority of the United Kingdom acting in its capacity as the competent authority for listing in the United Kingdom for the purposes of Part VI of the Financial Services and Markets Act 2000, as amended
''uncertificated'' or ''in uncertificated form''	in relation to a share or other security, a share or other security title to which is recorded on the relevant register of the share or security concerned as being held in uncertificated form in CREST and title to which may be transferred by means of CREST
''Voting Record Time''	for Old Phoenix Shareholders, 6:00 p.m. on 26 November 2018 or, if the Court Meeting and/or the Scheme General Meeting is adjourned, 6.00 p.m. on day which is two Business Days before the date set for the adjourned meeting, and for Old Phoenix DI Holders, 6:00 p.m. on 23 November 2018 or, if the Court Meeting and/or the Scheme General Meeting is adjourned, 6.00 p.m. on the day which is three Business Days before the date set for the adjourned meeting

2. INTERPRETATION

(a) In this Scheme, unless the context otherwise requires or otherwise expressly provides:
(i) references to Parts, Clauses and Sub-Clauses are references to parts, clauses and subclauses respectively of this Scheme;
(ii) references to a ''person'' include references to an individual, firm, partnership, company, corporation, unincorporated body of persons or any state or state agency;
(iii) references to a statute, statutory provision, enactment or subordinate legislation include the same as subsequently modified, amended or re-enacted from time to time;
(iv) references to an agreement, deed or document shall be deemed also to refer to such agreement, deed or document as amended, supplemented, restated, verified, replaced and/or novated (in whole or in part) from time to time and to any agreement, deed or document executed pursuant thereto;
(v) the singular includes the plural and vice-versa and words importing one gender shall include all genders;
(vi) headings to Parts, Clauses and Sub-Clauses are for ease of reference only and shall not affect the interpretation of this Scheme; and
(vii) all references to time are references to London time.

3. THE COMPANY

3.1 Old Phoenix is a company incorporated in the Cayman Islands as an exempted company with limited liability with registration number 202172, whose registered office is at Maples Corporate Services Limited, PO Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands.

3.2 The authorised share capital of Old Phoenix is A120,000 divided into 1,200,000,000 shares with a par value of A0.0001 each. As at 31 October, being the Latest Practicable Date, 721,170,388 Old Phoenix Shares were issued and fully paid. These include 718,573,492 Old Phoenix Shares which are represented by way of Old Phoenix Depositary Interests.
3.3 Prior to the Scheme Record Time, the Old Phoenix Depositary will cancel the Old Phoenix Depositary Interests and holders of such Old Phoenix Depositary Interests will be registered as holders of Scheme Shares.
3.4 New Phoenix was incorporated in England and Wales on 5 October 2018, with registration number 11606773. The issued share capital of New Phoenix at the date of this Scheme is £50,000.20, divided into two New Phoenix Shares of £0.10 each and 50,000 New Phoenix Redeemable Shares of £1.00 each. The latter will be redeemed by New Phoenix prior to the Scheme Effective Date.
3.5 New Phoenix has undertaken to the Court to be bound by the Scheme, and will execute and do and procure to be executed and done all such documents, acts and things as may be necessary or desirable to be executed or done by it for the purpose of giving effect to this Scheme.

PART 2: THE SCHEME

1. CANCELLATION OF THE SCHEME SHARES

1.1 On the Scheme Effective Date:
(a) the issued share capital of Old Phoenix shall be reduced by cancelling and extinguishing the Scheme Shares;
(b) forthwith and contingent upon the reduction of capital referred to in Clause 1.1(a) above taking effect:
- (i) the reserve arising in the books of account of Old Phoenix as a result of the reduction of capital referred to in Clause 1.1(a) above be capitalised and applied in paying up in full at par such number of Old Phoenix New Ordinary Shares as is equal to the aggregate number of Scheme Shares cancelled pursuant to Clause 1.1(a) above; and
- (ii) such Old Phoenix New Ordinary Shares shall be allotted and issued credited as fully paid to New Phoenix and/or its nominee or nominees

2. CONSIDERATION FOR THE CANCELLATION OF THE SCHEME SHARES

2.1 In consideration of the cancellation of the Scheme Shares and the issue of the Old Phoenix New Ordinary Shares to New Phoenix and/or its nominee or nominees pursuant to Clause 1, New Phoenix shall (subject to the provisions of Clauses 3, 4 and 5), allot and issue credited as fully paid New Phoenix Shares to the Scheme Shareholders on the basis of one New Phoenix Share for each Scheme Share held by the relevant Scheme Shareholder at the Scheme Record Time, save that one fewer New Phoenix Share shall be allotted and issued to each of the two holders of the New Phoenix Subscriber Shares, to reflect the shareholding in New Phoenix they acquired upon its incorporation.

3. ALLOTMENT AND ISSUE OF NEW PHOENIX SHARES

3.1 The New Phoenix Shares to be issued pursuant to Clause 2.1 above shall rank in full for all dividends or distributions made, paid or declared after the Scheme Effective Date on the ordinary share capital of New Phoenix.
3.2 The provisions of Clause 2.1 shall be subject to any prohibition or condition imposed by law. Without prejudice to the generality of the foregoing, if, in respect of any Scheme Shareholder who is a citizen, resident or national of any jurisdiction outside the United Kingdom or the Cayman Islands, New Phoenix is advised that the allotment and issue of New Phoenix Shares pursuant to Clause 2.1 would infringe the laws of any jurisdiction outside the United Kingdom or Cayman Islands or would require New Phoenix to observe any governmental or other consent or effect any registration, filing or other formality with which, in the opinion of New Phoenix, it would be unable to comply or which it regards as unduly onerous, then New Phoenix may in its sole discretion either:
(a) determine that such New Phoenix Shares shall be sold, in which event the New Phoenix Shares shall be issued to such Scheme Shareholder and New Phoenix shall appoint a person to act pursuant to this Clause 3.2(a) and such person shall be authorised on behalf of such Scheme Shareholder to procure that any shares in respect of which New Phoenix has made such a determination shall, as soon as practicable following the issuance of such New Phoenix Shares, be sold at the best price which can reasonably be obtained at the time of sale and the net proceeds of such sale (after the deduction of all expenses and commissions, including any amount in respect of value added tax payable thereon) shall be paid to such Scheme Shareholder by sending a cheque (or, if applicable, by making a payment through CREST) to such Scheme Shareholder in accordance with the provisions of Clause 4. To give effect to any such sale, the person so appointed shall be authorised on behalf of such Scheme Shareholder to execute and deliver a form of transfer and to give such instructions and do all such things which he may consider necessary or expedient in connection with such sale. In the absence of fraud, none of Old Phoenix, New Phoenix or the person so appointed shall have any liability for any loss or damage arising as a result of the timing or terms of any such sale; or
(b) determine that no such New Phoenix Shares shall be allotted and issued to such Scheme Shareholder under Clause 2.1 but instead such shares shall be allotted and issued to a nominee appointed by New Phoenix as trustee for such Scheme Shareholder, on terms that they shall, as soon as practicable following the issuance of such New Phoenix Shares, be sold on behalf of such Scheme Shareholder at the best price which can reasonably be obtained at the time of sale and the net proceeds of such sale (after the deduction of all expenses and commissions, including any amount in respect of value added tax payable thereon) shall be paid to such Scheme Shareholder by sending a cheque (or, if applicable, by making a payment through CREST) to such Scheme Shareholder in accordance with the provisions of Clause 4. In the absence of fraud, none of Old Phoenix, New Phoenix or any broker or agent of either of them shall have any liability for any loss arising as a result of the timing or terms of any such sale.

4. CERTIFICATES AND PAYMENTS

4.1 Not later than 5 Business Days after the Scheme Effective Date, New Phoenix shall allot and issue all New Phoenix Shares which it is required to allot and issue to give effect to this Scheme pursuant to Clause 2.1.
4.2 As soon as reasonably practicable after the Scheme Effective Date, and, in any event, not later than 14 days after the Scheme Effective Date, New Phoenix shall send by post to the allottees of the New Phoenix Shares certificates in respect of such shares, save that where Scheme Shares were, immediately prior to the cancellation of the Old Phoenix Depositary Interests, represented by Old Phoenix Depositary Interests, New Phoenix will procure that Euroclear is instructed to cancel any remaining entitlement to Scheme Shares of each of the Scheme Shareholders concerned and to credit to the appropriate stock accounts in CREST of each such Scheme Shareholder the due entitlement to New Phoenix Shares as soon as reasonably practicable after the Scheme Effective Date, and, in any event, not later than 14 days after the Scheme Effective Date. The provision by New Phoenix of such instructions to Euroclear shall be a complete discharge of the obligations of New Phoenix in relation to the credit of entitlement to New Phoenix Shares made through CREST. Notwithstanding the foregoing, in the event it is not possible (as determined in New Phoenix's sole discretion) to make any such distribution through CREST, New Phoenix reserves the right to distribute certificated New Phoenix Shares to any former holders of Old Phoenix Depositary Interests in the same manner and on the same terms as certificated New Phoenix Shares are otherwise distributed pursuant to this Scheme.
4.3 Not later than 15 days following the sale of any relevant New Phoenix Shares pursuant to Clause 3.2, New Phoenix shall procure that such person appointed to act under Clause 3.2(a) or the nominee referred to in Clause 3.2(b) shall account for the cash payable by despatching to the persons respectively entitled thereto cheques by post (save that where Scheme Shares were, immediately prior to the cancellation of the Old Phoenix Depositary Interests, represented by Old Phoenix Depositary Interests, New Phoenix may instead procure the making of a CREST assured payment obligation in favour of the appropriate CREST account).
4.4 All certificates required to be sent by New Phoenix pursuant to Clause 4.2 and all cheques required to be sent pursuant to Clause 4.3 shall be sent through the post in pre-paid envelopes addressed to the persons respectively entitled thereto at their respective addresses appearing in the register of members of Old Phoenix at the Scheme Record Time (or, in the case of joint holders, to the address of that one of the joint holders whose name stands first in the register in respect of the joint holding) or in accordance with any special instructions regarding communications received at the registered office of Old Phoenix before the Scheme Record Time. All documents, certificates or other communications sent by, to, from or on behalf of Scheme Shareholders, or as such persons shall direct, will be sent at their own risk and may be sent by post.
4.5 If the New Phoenix Shares are consolidated or subdivided before the despatch of any certificates or the giving of any instructions in accordance with this Clause 4, the certificates or instructions shall relate to such New Phoenix Shares as so consolidated or subdivided (as the case may be).
4.6 None of Old Phoenix, New Phoenix or such person appointed to act under Clause 3.2(a) or any nominee referred to in Clause 3.2(b) or any agent of any of them shall be responsible for any loss or delay in transmission of certificates or cash sent (whether by post or CREST) in accordance with this Clause 4.
4.7 All cheques shall be made payable to the Scheme Shareholder or, in the case of joint holders to that one of the joint holders whose name stands first in the register in respect of the joint holding, in respect of the Scheme Shares concerned in sterling drawn on a United Kingdom clearing bank and the encashment of any such cheque shall be a complete discharge to New Phoenix for the monies represented thereby. On or after the day being six months after the posting of any cheques pursuant to the Scheme, New Phoenix shall have the right to cancel or countermand payment of any such cheque which has not then been cashed or has been returned uncashed. Any monies represented thereby shall be placed in an account in New Phoenix's name (which need not be separate from New Phoenix's own account) with a licensed bank in the United Kingdom selected by New Phoenix until the expiration of one year from the Scheme Effective Date. Such payment shall not constitute New Phoenix a trustee in respect of such monies. Any interest that may accrue on the monies deposited shall belong to New Phoenix absolutely. New Phoenix shall, prior to the expiration of one year from the Scheme Effective Date, make payments out of such account of the sums payable pursuant to the Scheme to persons who satisfy New Phoenix (in New Phoenix's absolute discretion) that they are respectively entitled thereto, and that the cheques referred to in this Scheme of which they are payees have not been cashed. In the absence of bad faith or wilful default a certificate of New Phoenix to the effect that any particular person is so entitled or not so entitled shall be conclusive and binding upon all persons claiming an interest in the relevant monies. On the expiration of one year from the Scheme Effective Date, New Phoenix shall be released from any further obligation to make any payments under this Scheme and the balance (if any) of the monies standing to the credit of New Phoenix pursuant to this Clause 4.7 shall vest absolutely in New Phoenix.
4.8 This Clause 4 shall be subject to any prohibition or condition imposed by law.

5. CERTIFICATES REPRESENTING SCHEME SHARES

5.1 With effect from and including the Scheme Effective Date, all certificates representing holdings of Scheme Shares shall cease to be valid in respect of such holdings. The shareholders in respect of such Scheme Shares shall be bound to destroy such certificates and, if Old Phoenix requests you to do so, to confirm to Old Phoenix that such certificates have been destroyed.

6. MANDATED PAYMENTS AND OTHER INSTRUCTIONS

6.1 Each mandate in force for certificated shareholders at the Scheme Record Time relating to the payment of dividends on Scheme Shares and each instruction then in force as to notices and other communications from Old Phoenix shall, unless and until varied or revoked, be deemed as from the Scheme Effective Date to be a valid and effective mandate or instruction to New Phoenix in relation to the corresponding New Phoenix Shares to be allotted and issued pursuant to this Scheme.

7. SCHEME EFFECTIVE DATE

7.1 This Scheme shall become effective as soon as the Court Order sanctioning this Scheme under section 86 of the Companies Law shall have been duly delivered to the Cayman Islands Registrar of Companies pursuant to section 86(3) of the Companies Law and the Court Order confirming the reduction of capital resulting from the cancellation of the Scheme Shares and the minute referred to in section 17(1) of the Companies Law are registered pursuant to section 17 of the Companies Law.
7.2 Unless this Scheme shall have become effective on or before the Longstop Date, it shall lapse.

8. MODIFICATION AND SEVERABILITY

8.1 Old Phoenix and New Phoenix may jointly consent for and on behalf of all persons concerned to any modification of or addition to this Scheme or to any condition which the Court may think fit to approve or impose.
8.2 If any provision (or any part of any provision) of this Scheme is found by the Court to be illegal or unenforceable, it shall be severed from this Scheme and the remaining provisions of this Scheme shall continue in force.

9. COSTS

9.1 Old Phoenix is authorised and permitted to pay all the costs and expenses relating to the negotiation, preparation and implementation of the Scheme.

10. GOVERNING LAW

10.1 The terms of this Scheme shall be governed by, and construed in accordance with, the laws of the Cayman Islands and the courts of the Cayman Islands shall have exclusive jurisdiction to hear and determine any proceeding and to settle any dispute which arises out of or in connection with the terms of this Scheme or its implementation or out of any action taken or omitted to be taken under this Scheme or in connection with the administration of this Scheme and for such purposes, the parties irrevocably submit to the jurisdiction of the courts of the Cayman Islands.

Dated: 2 November 2018

PART IV: ADDITIONAL INFORMATION

1. Information on Old Phoenix

Old Phoenix is a company incorporated in the Cayman Islands on 2 January 2008 as an exempted company with limited liability with registration number 202172, whose registered office is at Maples Corporate Services Limited, PO Box 309, Ugland House, Grand Cayman, KY1-1104 Cayman Islands. Old Phoenix Depositary Interests representing Old Phoenix Shares are currently listed on the London Stock Exchange.

Old Phoenix is the holding company of the Phoenix Group. The Phoenix Group is the largest specialist consolidator of heritage life assurance funds in Europe. Its main focus is on closed life fund consolidation, specialising in the acquisition and management of closed life insurance and pension funds. Measured by number of policyholders, the Phoenix Group is the UK's largest specialist consolidator of closed life insurance funds.

2. Proposed amendments to Old Phoenix Articles

If the relevant resolutions are approved, amendments will be made to the Old Phoenix Articles to facilitate the Scheme. The amendments are intended to ensure that: (i) any Old Phoenix Shares that are allotted and issued to any person other than New Phoenix and/or its nominee or nominees before the Scheme Record Time (but after the amendment to the Old Phoenix Articles becomes effective) are allotted subject to the terms of the Scheme and that the holders of such shares and any subsequent holder other than New Phoenix and/or its nominee or nominees will be bound by the Scheme accordingly, and (ii) subject to the Scheme becoming effective, any Old Phoenix Shares that are allotted and issued to any person other than New Phoenix and/or its nominee or nominees after the Scheme Record Time will immediately be transferred to New Phoenix and/or its nominee or nominees in consideration of and conditional on the issue or transfer to the relevant allottees to the relevant allottees.

These changes are necessary because, in some cases, Old Phoenix Shares may need to be allotted before the Scheme Record Time (for example, because of the exercise of rights granted by Old Phoenix under the Old Phoenix Share Plans) but the timing of their allotment could mean that they are not classified as Scheme Shares and are therefore outside the scope of the Scheme. In addition, Old Phoenix Shares may be issued (again, for example, under the Old Phoenix Share Plans) after the Scheme Record Time, which would also put them outside the scope of the Scheme.

The full text of the new Article which is proposed be adopted and included in the Old Phoenix Articles pursuant to the amendment is as follows:

277. Scheme of Arrangement

1. For the purpose of this Article 277, references to the Scheme are to the scheme of arrangement between the Company and the holders of the Scheme Shares dated 2 November 2018 under section 86 of the Cayman Companies Law in its original form or subject to such modifications, additions or conditions agreed, approved, or imposed by the Grand Court of the Cayman Islands and (save as defined in this article) expressions defined in the Scheme shall have the same meaning in this article.
1. Notwithstanding any other provisions in these Articles, if any Old Phoenix Shares are allotted and issued to any person (a ''New Member'') other than New Phoenix and/or its nominee or nominees after the time at which this Article becomes effective and before the Scheme Record Time, such Old Phoenix Shares shall be allotted and issued subject to the terms of the Scheme and shall be Scheme Shares for the purposes thereof and the New Member, and any subsequent holder other than New Phoenix and/or its nominee or nominees, shall be bound by the terms of the Scheme.
1. Subject to the Scheme becoming effective, if any Old Phoenix Shares are allotted and issued to a New Member after the Scheme Record Time, they will immediately be transferred to New Phoenix and/or its nominee or nominees in consideration of and conditional on the issue or transfer to the New Member of one New Phoenix Share for every one Old Phoenix Share so transferred. The New Phoenix Shares issued or transferred pursuant to this Article 277 to the New Member will be credited as fully paid and will rank equally in all respects with all New Phoenix Shares in issue at the time and be subject to the New Phoenix Articles.
1. The number of New Phoenix Shares to be issued or transferred to the New Member under this Article 277 may be adjusted by the directors of the Company in such manner as the Company's auditors may determine on any reorganisation or material alteration of the share capital of either

the Company or of New Phoenix or any other return of value to holders of New Phoenix Shares, provided always that any fractions of New Phoenix Shares shall be disregarded and shall be aggregated and sold for the benefit of New Phoenix.

1. In order to give effect to any such transfer required by this Article 277, the Company may appoint any person to execute and deliver a form of transfer on behalf of the New Member in favour of New Phoenix and/or its nominee or nominees and to agree for and on behalf of the New Member to become a member of New Phoenix. Pending the registration of New Phoenix as holder of any share to be transferred pursuant to this Article 277, New Phoenix shall be empowered to appoint a person nominated by the directors of the Company to act as attorney on behalf of any holder of such share in accordance with such directions as New Phoenix may give in relation to any dealings with or disposal of such share (or any interest therein), exercising any rights attached thereto or receiving any distribution or other benefit accruing or payable in respect thereof and any holder of such share shall exercise all rights attached thereto in accordance with the directions of New Phoenix but not otherwise. The Company shall not be obliged to issue a certificate to the New Member for the any Old Phoenix Shares allotted and issued after the Scheme Record Time.
1. If the Scheme shall not have become effective by the Longstop Date (as defined in the Scheme), this Article 277 shall cease to be of any effect.

3. Information on New Phoenix

New Phoenix was incorporated and registered in England and Wales on 5 October 2018 as a public company limited by shares under the Companies Act with the name Phoenix Group Holdings plc and with the registered number 11606773.

New Phoenix's registered office and principal place of business is at Juxon House, 100 St Paul's Churchyard, London EC4M 8BU, United Kingdom and its telephone number is 0203 567 9100.

The share capital of New Phoenix on incorporation was £50,000.20, divided into two ordinary shares of £0.10 each (the ''New Phoenix Subscriber Shares'') and 50,000 redeemable shares of £1.00 each.

No further shares have been issued since incorporation. The issued and fully paid share capital of New Phoenix as at the Latest Practicable Date is therefore as follows:

Class of Shares	Number	Nominal Amount
Ordinary shares of £0.10 each	2	£0.20
Redeemable shares of £1.00 each	50,000	£50,000

Following the Scheme becoming effective, the rights attaching to the New Phoenix Subscriber Shares and the New Phoenix Shares will be uniform in all respects and they will form a single class for all purposes, including with respect to voting and for all dividends and other distributions thereafter declared, made or paid on the ordinary share capital of New Phoenix.

On a show of hands, every holder of New Phoenix Shares who is present in person shall have one vote and on a poll every New Phoenix Shareholder present in person or by proxy shall have one vote per New Phoenix Share held by them.

Except as otherwise provided by the rights and restrictions attached to any class of New Phoenix Shares, New Phoenix Shareholders will be entitled under general law to participate in any surplus assets in a winding up in proportion to their shareholdings.

The rights attached to the New Phoenix Subscriber Shares and, following Admission, the New Phoenix Shares are more particularly described in the New Phoenix Articles which are summarised in paragraph 3 of this Part IV of this document.

The New Phoenix Redeemable Shares were issued for the purpose of satisfying the Companies Act minimum share capital requirements for public companies prior to the Scheme taking effect. They carry no rights to receive any dividend or distribution of profits, nor the right to attend, speak, or vote at any general meeting of New Phoenix.

Shortly prior to the Scheme Effective Date, the 50,000 redeemable shares will be redeemed and cancelled by New Phoenix. The New Phoenix Subscriber Shares will not be cancelled and the allocation of New Phoenix Shares to which the holders of the New Phoenix Subscriber Shares are each entitled pursuant to the Scheme will be reduced by one to reflect the New Phoenix Subscriber Shares they already hold.

The proposed issued and fully paid share capital of New Phoenix as it is expected to be immediately following the Scheme taking effect is as follows:

Class of Shares	Number	Nominal Amount
Ordinary shares of £0.10 each	721,170,388	£72,117,038.80

The Directors expect that New Phoenix will undertake the New Phoenix Reduction of Capital shortly after the Scheme Effective Date, as explained further in paragraph 3.5 of Part II (Explanatory Statement).

4. Information on New Phoenix directors

4.1 Intended directors

New Phoenix was incorporated with two directors, being Clive Bannister and James McConville, with the remainder of the directors being appointed on 15 October 2018. The board of New Phoenix as from the Scheme Effective Date will therefore be comprised as follows:

Name	Function: Old Phoenix	Function: New Phoenix
Nicholas Lyons	Chairman and Nomination Committee Chairman	Chairman and Nomination Committee Chairman
Clive Bannister	Group Chief Executive Officer	Group Chief Executive Officer
James McConville	Group Finance Director and Group Director, Scotland	Group Finance Director and Group Director, Scotland
Alastair Barbour	Senior Independent Non-Executive Director and Audit Committee Chairman	Senior Independent Non-Executive Director and Audit Committee Chairman
Campbell Fleming	Non-Executive Director	Non-Executive Director
Karen Green	Independent Non-Executive Director	Independent Non-Executive Director
Wendy Mayall	Independent Non-Executive Director	Independent Non-Executive Director
Barry O'Dwyer	Non-Executive Director	Non-Executive Director
John Pollock	Independent Non-Executive Director and Risk Committee Chairman	Independent Non-Executive Director and Risk Committee Chairman
Belinda Richards	Independent Non-Executive Director	Independent Non-Executive Director
Nicholas Shott	Independent Non-Executive Director	Independent Non-Executive Director
Kory Sorenson	Independent Non-Executive Director and Remuneration Committee Chairman	Independent Non-Executive Director and Remuneration Committee Chairman

Brief biographical details of the intended directors of New Phoenix are set out at paragraph 5.1.1 of Part IX (Additional Information) of the Prospectus.

4.2 Directors' interests

The interests of the Directors, and their immediate families, in the share capital of: (i) Old Phoenix (all of which, unless otherwise stated, are beneficial) as they are expected to be immediately prior to the Scheme Effective Date; and (ii) New Phoenix as they are expected to be immediately after the Scheme Effective Date, are as follows:

	Immediately prior to the Immediately following the Scheme Effective Date Scheme Effective Date
Director	Number of Old Phoenix Shares	Percentage of Old Phoenix issued share capital	Number of New Phoenix Shares	Percentage of New Phoenix issued share capital
Clive Bannister	827,178	0.21%	827,178	0.21%
Alastair Barbour	9,716	0.00%	9,716	0.00%
Campbell Fleming	0	—	0	—
Karen Green	0	—	0	—
Nicholas Lyons	20,000	0.00%	20,000	0.00%
Wendy Mayall	30,000	0.00%	30,000	0.00%
James McConville	253,227	0.06%	253,227	0.06%
Barry O'Dwyer	0	—	0	—
John Pollock	14,666	0.00%	14,666	0.00%
Belinda Richards	0	—	0	—
Nicholas Shott	7,333	0.00%	7,333	0.00%
Kory Sorenson	3,204	0.00%	3,204	0.00%
Total	1,145,324	0.27%	1,145,324	0.27%

5. Summary of New Phoenix Articles

New Phoenix was incorporated with articles of association suitable for a closely held company which is not admitted to trading. Accordingly, in anticipation of Admission, the initial shareholders of New Phoenix resolved on 15 October 2018 that, conditional upon and with effect from Admission, the New Phoenix Articles be adopted as the articles of association of New Phoenix.

The New Phoenix Articles include (amongst others) provisions to the following effect:

(a) Share rights

The liability of the members is limited to the amount, if any, unpaid on the shares held by them.

Subject to the provisions of the Act, and without prejudice to any rights attached to any existing shares or class of shares: (i) any share may be issued with such rights or restrictions as New Phoenix may by ordinary resolution determine or, subject to and in default of such determination, as the Board shall determine; and (ii) shares may be issued which are to be redeemed or are liable to be redeemed at the option of New Phoenix or the holder and the Board may determine the terms, conditions and manner of redemption of such shares provided that it does so before the shares are allotted.

(b) Voting rights

Subject to any rights or restrictions attached to any shares, on a show of hands every member who is present in person shall have one vote and on a poll every member present in person or by proxy shall have one vote for every share of which the person is the holder.

No member shall be entitled to vote at any general meeting in respect of a share unless all moneys presently payable by the member in respect of that share have been paid.

If at any time the Board is satisfied that any member, or any other person appearing to be interested in shares held by such member, has been duly served with a notice under section 793 of the Companies Act and is in default for the prescribed period in supplying to New Phoenix the information thereby required, or, in purported compliance with such a notice, has made a statement which is false or inadequate in a material particular, then the Board may, in its absolute discretion at any time thereafter by notice to such member direct that, in respect of the shares in relation to which the default occurred, the member shall not be entitled to attend or vote either personally or by proxy at a general meeting or at a separate meeting of the holders of that class of shares or on a poll.

(c) Dividends and other distributions

Subject to the provisions of the Companies Act, New Phoenix may by ordinary resolution declare dividends in accordance with the respective rights of the members, but no dividend shall exceed the amount recommended by the Board.

Subject to the provisions of the Companies Act, the Board may pay interim dividends if it appears to the Board that they are justified by the profits of New Phoenix available for distribution. If the share capital is divided into different classes, the Board may also pay interim dividends on shares which confer deferred or non-preferred rights with regard to dividends as well as on shares which confer preferential rights with regard to dividends (provided no interim dividend shall be paid on shares carrying deferred or non-preferred rights if, at the time of payment, any preferential dividend is in arrear); and pay at intervals settled by it any dividend payable at a fixed rate if it appears to the board that the profits available for distribution justify the payment.

Every dividend shall, at any point prior to its payment, be cancellable or deferrable by the board if such cancellation or deferral is required by an applicable law or regulation (including, without limitation, to meet any applicable capital requirement) or if the board considers, in its sole discretion, that it would be appropriate or prudent to cancel or defer any such dividend. If the Board acts in good faith it shall not incur any liability to the members of the Company or any of them in respect of any decision by the board to cancel or defer a dividend.

The Board may, before recommending or declaring any dividend, set aside out of the funds legally available for distribution such sums as they think proper as reserve or reserves which shall, in the absolute discretion of the board, be applicable for meeting contingencies, or for equalising dividends or for any other purpose to which those funds may be properly applied.

Except as otherwise provided by the rights and restrictions attached to shares, all dividends shall be declared and paid according to the amounts paid up on the shares on which the dividend is paid, but no amount paid on a share in advance of the date on which a call is payable shall be treated for these purposes as paid on the share.

A general meeting declaring a dividend may, on the recommendation of the board, by ordinary resolution direct that it shall be satisfied wholly or partly by the distribution of assets, including without limitation paid up shares or debentures of another body corporate. The board may make any arrangements it thinks fit to settle any difficulty arising in connection with the distribution.

The Board may, if authorised by an ordinary resolution of New Phoenix, offer any holder of shares the right to elect to receive shares, credited as fully paid, instead of cash in respect of the whole (or some part, to be determined by the Board) of all or any dividend.

Any dividend that has remained unclaimed for 12 years from the date when it became due for payment shall, if the Board so resolves, be forfeited and cease to remain owing by New Phoenix.

No dividend or other moneys payable in respect of a share shall bear interest against New Phoenix unless otherwise provided by the rights attached to the share.

Except as provided by the rights and restrictions attached to any class of shares, the holders of New Phoenix's shares will under general law be entitled to participate in any surplus assets in a winding up in proportion to their shareholdings. A liquidator may, with the sanction of a special resolution and any other sanction required by the Insolvency Act 1986, divide among the members in specie the whole or any part of the assets of New Phoenix and may, for that purpose, value any assets and determine how the division shall be carried out as between the members or different classes of members.

(d) Variation of rights

Subject to the provisions of the Act, the rights attached to any class of shares may be varied or abrogated with the written consent of the holders of three quarters in nominal value of the issued shares of the class, or the sanction of a special resolution passed at a separate general meeting of the holders of the shares of the class.

(e) Liens, calls on shares and forfeiture

New Phoenix shall have a first and paramount lien on every share (not being a fully paid share) for all moneys payable to New Phoenix (whether presently or not) in respect of that share.

New Phoenix may sell, in such manner as the Board determines, any share on which New Phoenix has a lien if a sum in respect of which the lien exists is presently payable and is not paid within 14 clear days after notice has been sent to the holder of the share demanding payment and stating that if the notice is not complied with the share may be sold.

Subject to the terms of allotment of a share, the Board may from time to time make calls on the members in respect of any moneys unpaid on their shares. Each member shall (subject to receiving at least 14 clear days' notice) pay to New Phoenix the amount called on his or her shares.

If a call or any instalment of a call remains unpaid in whole or in part after it has become due and payable the person from whom it is due and payable shall pay interest on the amount unpaid from the day it became due and payable until it is paid.

If a call or any instalment of a call remains unpaid in whole or in part after it has become due and payable, the Board may give the person from whom it is due not less than 14 clear days' notice requiring payment of the amount unpaid together with any interest which may have accrued and any costs, charges and expenses incurred by New Phoenix by reason of such nonpayment. The notice shall name the place where payment is to be made and shall state that if the notice is not complied with the shares in respect of which the call was made will be liable to be forfeited. If that notice is not complied with, any share in respect of which it was sent may, at any time before the payment required by the notice has been made, be forfeited by a resolution of the board.

(f) Transfer of shares

A member may transfer all or any of his or her certificated shares by an instrument of transfer in any usual form or in any other form which the Board may approve. An instrument of transfer shall be signed by or on behalf of the transferor and, unless the share is fully paid, by or on behalf of the transferee. An instrument of transfer need not be under seal.

The Board may, in its absolute discretion, refuse to register the transfer of a certificated share which is not a fully paid share, provided that the refusal does not prevent dealings in shares in New Phoenix from taking place on an open and proper basis.

The Board may also refuse to register the transfer of a certificated share unless the instrument of transfer:

(i) is lodged, duly stamped (if stampable), at the office or at another place appointed by the Board accompanied by the certificate for the share to which it relates and such other evidence as the Board may reasonably require to show the right of the transferor to make the transfer;
(ii) is in respect of one class of share only; and
(iii) is in favour of not more than four transferees.

If the Board refuses to register a transfer of a share in certificated form, it shall send the transferee notice of its refusal within two months after the date on which the instrument of transfer was lodged with New Phoenix.

No fee shall be charged for the registration of any instrument of transfer or other document relating to or affecting the title to a share.

Subject to the provisions of the Uncertificated Securities Regulations 2001, the Board may permit the holding of shares in any class of shares in uncertificated form and the transfer of title to shares in that class by means of a relevant system and may determine that any class of shares shall cease to be a participating security.

(g) Alteration of share capital

The New Phoenix Articles do not restrict New Phoenix's ability to increase, consolidate or subdivide its share capital. Therefore, subject to the Act, New Phoenix may by ordinary resolution increase, consolidate or sub-divide its share capital.

(h) Purchase of own shares

The New Phoenix Articles do not restrict New Phoenix's ability to purchase its own shares. Therefore, subject to the Companies Act and without prejudice to any relevant special rights attached to any class of shares, New Phoenix may purchase any of its own shares of any class in any way and at any price (whether at par or above or below par).

(i) General meetings

The Board shall convene and New Phoenix shall hold general meetings as annual general meetings in accordance with the requirements of the Act. The Board may call general meetings whenever and at such times and places as it shall determine. The New Phoenix Articles permit the Board to determine that a general meeting shall be held (wholly or partly) by electronic means.

(j) Directors

(i) Number of directors

Unless otherwise determined by ordinary resolution, the number of Directors shall be not less than five but shall not be subject to any maximum in number.

(ii) Appointment of Directors

Directors may be appointed by ordinary resolution of Shareholders or by the Board.

(iii) No share qualification

A Director shall not be required to hold any shares in the capital of New Phoenix by way of qualification.

(iv) Annual retirement of Directors

At every annual general meeting all the Directors at the date of notice convening the annual general meeting shall retire from office. A retiring Director shall be eligible for appointment.

(v) Remuneration of Directors

The emoluments of any Director holding executive office for his or her services as such shall be determined by the Board, and may be of any description.

The ordinary remuneration of the Directors who do not hold executive office for their services (excluding amounts payable under any other provision of the New Phoenix Articles) shall not exceed in aggregate £2,000,000 per annum or such higher amount as the members of New Phoenix may from time to time by ordinary resolution determine. Subject thereto, each such Director shall be paid a fee for that service (which shall be deemed to accrue from day to day) at such rate as may from time to time be determined by the Board.

In addition to any remuneration to which the Directors are entitled under the New Phoenix Articles, they may be paid all travelling, hotel and other expenses properly incurred by them in connection with their attendance at meetings of the Board or committees of the Board, general meetings or separate meetings of the holders of any class of shares or of debentures of New Phoenix or otherwise in connection with the discharge of their duties.

The Board may provide benefits, whether by the payment of gratuities or pensions or by insurance or otherwise, for any past or present Director or employee of New Phoenix or any of its subsidiary undertakings or any body corporate associated with, or any business acquired by, any of them, and for any member of his or her family or any person who is or was dependent on him or her.

(vi) Permitted interests of Directors

Provided that he or she has disclosed to the Board the nature and extent of his or her interest (unless the circumstances referred to in section 177(5) or section 177(6) of the Companies Act apply, in which case no such disclosure is required), a Director notwithstanding his or her office:

(A) may be a party to, or otherwise interested in, any transaction or arrangement with New Phoenix or in which New Phoenix is otherwise (directly or indirectly) interested;
(B) may act by himself or herself or for his or her firm in a professional capacity for New Phoenix (otherwise than as auditor), and he or she or his or her firm shall be entitled to remuneration for professional services as if he or she were not a Director;
(C) may be a director or other officer of, or employed by, or a party to any transaction or arrangement with, or otherwise interested in, any body corporate in which New Phoenix is (directly or indirectly) interested as a shareholder or otherwise or with which he or she has such relationship at the request or direction of New Phoenix; and
(D) shall not, by reason of his or her office, be accountable to New Phoenix for any remuneration or other benefit which he or she derives from any such office or employment or from any such transaction or arrangement or from any interest in any such body corporate the acceptance, entry into or existence of which has been approved by the Board or which he or she is permitted to hold or enter into by virtue of the New Phoenix Articles.
(vii) Restrictions on voting

Except as provided otherwise by the New Phoenix Articles, a Director shall not vote at a meeting of the Board or a committee of the Board on any resolution of the Board concerning a matter in which he or she has an interest (other than by virtue of interests in securities of the Company) which can reasonably be regarded as likely to give rise to a conflict with the interests of New Phoenix, unless that interest arises only because the resolution concerns one or more of the following matters:

(A) the giving of a guarantee, security or indemnity in respect of money lent or obligations incurred by him or her or any other person at the request of, or for the benefit of, New Phoenix or any of its subsidiary undertakings;
(B) the giving of a guarantee, security or indemnity in respect of a debt or obligation of New Phoenix or any of its subsidiary undertakings for which the Director has assumed responsibility (in whole or part and whether alone or jointly with others) under a guarantee or indemnity or by the giving of security;
(C) a contract, arrangement, transaction or proposal concerning an offer of shares, debentures or other securities of New Phoenix or any of its subsidiary undertakings for subscription or purchase, in which offer he or she is or may be entitled to participate as a holder of securities or in the underwriting or sub underwriting of which he or she is to participate;
(D) a contract, arrangement, transaction or proposal concerning any other body corporate in which he or she or any person connected with him or her is interested, directly or indirectly, and whether as an officer, shareholder, creditor or otherwise, if he or she and any persons connected with him or her do not to his or her knowledge hold an interest (as that term is used in sections 820 to 825 of the Act) representing one per cent. or more of either any class of the equity share capital (excluding any shares of that class held as treasury shares) of such body corporate (or any other body corporate through which his or her interest is derived) or of the voting rights available to members of the relevant body corporate (any such interest being deemed for the purpose of this Article to be likely to give rise to a conflict with the interests of New Phoenix in all circumstances):
(E) a contract, arrangement, transaction or proposal for the benefit of employees of New Phoenix or of any of its subsidiary undertakings which does not award him or her any privilege or benefit not generally accorded to the employees to whom the arrangement relates; and

(F) a contract, arrangement, transaction or proposal concerning any insurance which New Phoenix is empowered to purchase or maintain for, or for the benefit of, any Directors or for persons who include Directors.

(k) Indemnity of Directors and officers

Subject to the provisions of the Act, but without prejudice to any indemnity to which the person concerned may otherwise be entitled, every Director or other officer of New Phoenix (other than any person (whether an officer or not) engaged by New Phoenix as auditor) shall be indemnified out of the assets of New Phoenix against any liability incurred by him or her for negligence, default, breach of duty or breach of trust in relation to the affairs of New Phoenix, provided that this Article shall be deemed not to provide for, or entitle any such person to, indemnification to the extent that it would cause this Article, or any element of it, to be treated as void under the Act.

6. Comparison of rights of holders of Old Phoenix Shares and New Phoenix Shares

Old Phoenix is incorporated in and subject to the laws of the Cayman Islands, whereas New Phoenix is incorporated in and subject to the laws of England and Wales. Because of the differences between the laws of the Cayman Islands and the laws of England and Wales, Scheme Shareholders will be subject to a new legal regime if the Scheme becomes effective. There are also some differences in the rights of shareholders under the New Phoenix Articles as compared to the Old Phoenix Articles.

A summary of the principal differences between the rights of holders of Old Phoenix Shares and New Phoenix Shares is set out below. This summary sets out the position as at the Latest Practicable Date, and is subject to the complete text and interpretation of the relevant provisions of the Companies Act, the Cayman Companies Law, the Old Phoenix Articles, the New Phoenix Articles, the Listing Rules, and all other applicable law, rules and regulations.

This summary is intended to be illustrative only, does not purport to be exhaustive (and for instance does not anticipate potential future changes, including as a result of Brexit), and does not constitute legal advice. Any Scheme Shareholder wishing to obtain further information regarding his, her or its rights under English law or the New Phoenix Articles should consult his, her or its English legal advisors.

Old Phoenix position New Phoenix position

(under the laws of the Cayman Islands and the Old Phoenix Articles)

(under the laws of England and Wales and the New Phoenix Articles)

Principal statute

The Companies Act.

The Cayman Companies Law.

Many provisions originate from the Companies Act 1948 of the United Kingdom though certain statutory provisions differ substantially. Generally speaking, common law principles of English company law apply.

Authorised share capital

The Cayman Companies Law recognises a concept of an authorised (maximum) share capital. Under the Old Phoenix Articles, the authorised share capital of Old Phoenix is A120,000 divided into 1,200,000,000 shares with a par value of A0.0001 each.

There is now no concept of ''authorised share capital'' under English law. The authority of the board to allot shares will be provided for by resolution of shareholders from time to time, but is not limited by an overall constitutional cap.

Authority to allot shares

Under the Old Phoenix Articles, any share may be issued as Old Phoenix may, by ordinary resolution determine, or subject to and in default of such determination, as the Old Phoenix Board shall determine.

The Old Phoenix Articles state that the Old Phoenix

Under the New Phoenix Articles, the New Phoenix Board has general authority to exercise all the powers of the company to allot shares and to grant rights to subscribe for and to convert any security into shares.

Under the New Phoenix Articles and English

(under the laws of the Cayman Islands and the Old Phoenix Articles)

Board has general and unconditional authority (for each prescribed period) to exercise all the powers of Old Phoenix to allot and issue shares or to grant rights to subscribe for or to convert any security into shares up to an aggregate nominal amount.

This is subject to other provisions in the Old Phoenix Articles regarding pre-emption rights, redeemable shares, and allotment after expiry.

(under the laws of England and Wales and the New Phoenix Articles)

company law, the New Phoenix Board is authorised to allot shares for such period prescribed by a shareholder resolution of New Phoenix and up to an aggregate nominal amount equal to that prescribed by such shareholder resolution.

This is subject to other provisions in the New Phoenix Articles regarding pre-emption rights, redeemable shares, and allotment after the expiry of a given shareholder authority.

Pre-emption rights

The Cayman Companies Law does not provide shareholders in Cayman Islands companies with pre-emption rights in connection with any allotment and issue of shares in the Cayman Islands company. However under the Old Phoenix Articles, Old Phoenix incorporated pre-emption rights such that Old Phoenix could not allot and issue any equity securities without first having offered them to members holding ordinary shares on a pro rata basis to the number of ordinary shares held by such member in such manner as the board may determine.

The Old Phoenix Articles set out various exceptions to this restriction.

English company law and the Listing Rules provide shareholders in a public company with pre-emption rights such that a company which allots shares and grants rights to subscribe for and to convert any security into shares for cash, must first offer existing ordinary shareholders of the company, on the same or more favourable terms, a proportion of those securities as nearly as practicable equal to proportion in nominal value held by him of the ordinary share capital.

There are some circumstances in which the statutory pre-emption rights do not apply. These include the allotment of shares under an employees' share scheme, the allotment of bonus shares and the allotment of equity securities that are paid up wholly or partly otherwise than in cash.

English company law allows a public company to disapply or modify such rights either by a special resolution (i.e. 75 per cent. of votes cast) or by a power given to the directors in the articles of the company.

Transfer and registration of shares

Under Cayman Companies Law, the register of members is prima facie evidence of the shareholders of record of a Cayman Islands company. Under the Old Phoenix Articles the instrument of transfer of a certificated share may be in any usual form or in any other form which the Old Phoenix Board may approve.

The Old Phoenix Articles contain provisions allowing for the registration of transfers of shares to be suspended at such times and for such periods as the directors of Old Phoenix may from time to time determine, provided always that such registration shall not be suspended for more than 45 consecutive days in any year.

No stamp duty is payable in the Cayman Islands on transfers of shares of Cayman Islands companies except those which hold interests in land in the Cayman Islands.

The Old Phoenix Depositary is the holder of record

Under English company law, a company's register of members is evidence of who the members of the company are and what shares they hold. Under the New Phoenix Articles the instrument of transfer of a certificated share may be in any usual form or in any other form which the New Phoenix Board may approve.

The New Phoenix Articles allow the New Phoenix Board to refuse to register the transfer of a certificated share: (a) which is not fully paid, provided that the refusal does not prevent dealings in shares in New Phoenix from taking place on an open and proper basis; and/or (b) unless the instrument of transfer: (i) is lodged, duly stamped (if stampable), at the office or at another place appointed by the board accompanied by the certificate for the share to which it relates and such other evidence as the board may reasonably require to show the right of the transferor to make the transfer; (ii) is in respect of only one class of

(under the laws of the Cayman Islands and the Old Phoenix Articles)

of shares represented by Old Phoenix Depositary Interests. Holders of Old Phoenix Depositary Interests are not listed on the register of members and the relationship between a holder of an Old Phoenix Depositary Interest and the Old Phoenix Registrar is governed by Trust Deed. Accordingly, a transfer of shares from a person who holds an Old Phoenix Depositary Interest in place of shares, to a person who also holds such Old Phoenix Depositary Interests in place of shares, through the same Depositary or other nominee, is not registered in Old Phoenix's register of members as the Depositary or other nominee remains the holder of record of such shares.

(under the laws of England and Wales and the New Phoenix Articles)

shares; and (iii) is in favour of not more than four transferees.

Stamp duty is generally payable under English law on transfers of shares in English companies – see paragraph 9(d) of Part IV (Additional Information) of this document for further information.

No depositary interests in New Phoenix will be issued at Admission.

Share repurchases / redemptions

Under the Old Phoenix Articles, subject to the provisions of the Cayman Companies Law and specific provisions of the Old Phoenix Articles, Old Phoenix may issue redeemable shares.

Under English law, a company may issue redeemable shares if authorised to do so in its articles of association. The New Phoenix Articles contain such an authorisation.

Shareholder approval must be obtained before a company purchases any of its own shares. A company may redeem or repurchase shares only if the shares are fully paid and, in the case of public companies, only out of distributable profits or from the proceeds of a new issue of shares made for the purpose of the repurchase or redemption.

Distributions and dividends

Under the Old Phoenix Articles, subject to any rights and restrictions attached to any shares and Cayman Islands law, the Old Phoenix Directors may declare dividends (including interim dividends) and other distributions on shares and pay the same out of funds lawfully available to Old Phoenix (including from the share premium account). Further, subject to any rights and restrictions attached to any shares, Old Phoenix may declare dividends (including interim dividends) by ordinary resolution, but no dividend shall exceed the amount recommended by the Directors.

Based on English case law, which is regarded as persuasive in the Cayman Islands, dividends may be paid only out of profits. Section 34 of the Cayman Companies Law permits, subject to a solvency test and the provisions, if any, of the company's memorandum and articles of association, the payment of dividends and distributions out of the share premium account. Otherwise, there are no statutory provisions relating to the payment of dividends.

Under the New Phoenix Articles, New Phoenix Shareholders may by ordinary resolution declare dividends, in accordance with the respective rights of the shareholders, but no dividend shall exceed the amount recommended by the New Phoenix Board. The New Phoenix Board may pay interim dividends if it appears to them that they are justified by the profits of the company available for distribution.

Under English law, New Phoenix must have sufficient distributable profits before paying a dividend. New Phoenix can only make a distribution if at the time the distribution is made, the amount of its net assets is not less than the total of its called-up share capital and undistributable reserves and if the distribution does not reduce the amount of the net assets to less than that total.

(under the laws of the Cayman Islands and the Old Phoenix Articles)

(under the laws of England and Wales and the New Phoenix Articles)

Anti-takeover measures

There are no statutory takeover protections under Cayman Islands law.

The Old Phoenix Articles adopt certain of the provisions of the City Code, including provisions dealing with compulsory takeover offers and shareholder treatment along the lines of the General Principles of the City Code (including ''equal treatment'') which are to be administered by the Board. These provisions have effect only during such times as the City Code does not directly apply to Old Phoenix.

New Phoenix will be directly subject to the City Code, which is regulated by the UK Panel on Takeovers and Mergers.

The City Code provides that during the course of an offer, or even before the date of the offer if the New Phoenix Board has reason to believe that an offer might be imminent, the New Phoenix Board must not, without the approval of the shareholders in a general meeting, take any action which may result in any offer or possible offer being frustrated or in shareholders being denied the opportunity to decide on its merits, or: (a) issue any shares or transfer or sell, or agree to transfer or sell, any shares out of treasury or effect any redemption or purchase by the company of its own shares; (b) issue or grant options in respect of any unissued shares; (c) create or issue, or permit the creation or issue of, any securities carrying rights of conversion into or subscription for shares; (d) sell, dispose of or acquire, or agree to sell, dispose of or acquire, assets of a material amount; or (e) enter into contracts otherwise than in the ordinary course of business.

Where shareholder approval is to be sought in general meeting: (a) the New Phoenix Board must obtain competent independent advice as to whether the financial terms of the proposed action are fair and reasonable; (b) the UK Panel on Takeovers and Mergers must be consulted regarding the date of the general meeting; and (c) the New Phoenix Board must send a circular to shareholders containing certain details as soon as practicable after the announcement of the proposed action.

Financial assistance

There is no statutory restriction in the Cayman Islands on the provision of financial assistance by a company to another person for the purchase of, or subscription for, its own or its holding company's or a subsidiary company's shares. Accordingly, a company may provide financial assistance if the Directors of the company consider, in discharging their duties of care and acting in good faith, for a proper purpose and in the interests of the company, that such assistance can properly be given. Such assistance should be on an arm's-length basis.

Subject to certain exceptions, English law prohibits a public company (such as New Phoenix) and its UK subsidiaries from providing financial assistance (which may be cash or other forms of assistance), directly or indirectly, to a person acquiring or proposing to acquire shares in that public company.

Election of directors

Cayman Islands law does not prescribe a minimum nor a maximum number of directors save that each Cayman Islands company must have at least one director. The Old Phoenix Articles do however provide that unless otherwise determined by The New Phoenix Articles replicate the provisions of the Old Phoenix Articles in relation to election of directors.

(under the laws of the Cayman Islands and the Old Phoenix Articles)

ordinary resolution, the number of directors (other than alternate directors) shall be not less than five. There is no maximum number.

Directors may be appointed by the Old Phoenix Board, or by Old Phoenix by way of ordinary resolution, either to fill a vacancy or as an additional director. Such appointments take effect from the end of the meeting.

The Old Phoenix Articles further provide that at every annual general meeting all the directors at the date of the notice of the annual general meeting shall retire from office. If Old Phoenix does not fill the vacancy at the meeting, the retiring director shall, if willing to act, be deemed to have been reappointed unless at the meeting it is resolved not to fill the vacancy or unless a resolution for the reappointment of the director is put to the meeting and lost.

Management and Duties of directors

In the absence of a developed body of Cayman Islands law in this regard, the principles outlined by English and Commonwealth common law are persuasive in the Cayman Islands courts (see the ''New Phoenix position'' column opposite for a brief description).

Directors may delegate management functions and particular functions may be further delegated to others in the company. However, delegation does not absolve a director from the duty to supervise.

(under the laws of England and Wales and the New Phoenix Articles)

Under English company law, the standard of care required of a director is that which would be exercised by a reasonably diligent person with both: (a) the general knowledge, skill and experience that may reasonably be expected of a person carrying out the functions carried out by the director in relation to the company; and (b) the general knowledge, skill and experience the director actually has.

The Companies Act sets out the general and fiduciary duties of directors: (a) to act within their powers; (b) to promote the success of the company for the benefit of its members as a whole; (c) to exercise independent judgement; (d) to exercise reasonable care, skill and diligence; (e) to avoid conflicts of interest; (f) not to accept benefits from third parties; and (g) declare any interest in a proposed transaction or arrangement.

The New Phoenix Articles permit directors to delegate any of the powers, authorities and discretions exercisable by the New Phoenix Board, with power to sub-delegate. However, delegation does not absolve a director from the duty to supervise.

Limitations on directors' liability to the appointing company

Cayman Islands law, in certain circumstances, permits a company to limit the liability of a director to the company. In summary, a Cayman Islands court will enforce such a limitation except to the extent that enforcement of the relevant provision may be held to be contrary to public policy.

Generally, and subject to certain exceptions (for instance permitting the obtaining of certain insurance cover), English company law does not permit a company to exempt any director of the company from any liability arising for breach of one or more of their duties to the company.

However English company law provides two

(under the laws of the Cayman Islands and the Old Phoenix Articles)

The Old Phoenix Articles provide that, to the fullest extent permitted by law, no director or officer will be personally liable to Old Phoenix or to its shareholders for any loss arising or liability attaching to such director or officer in respect of any negligence, default, breach of duty or breach of trust of which such director or officer may be guilty in relation to Old Phoenix unless the same shall happen through such director or officer's own dishonesty, willful default or fraud.

(under the laws of England and Wales and the New Phoenix Articles)

methods by which a director can be relieved from liability for conduct amounting to negligence, default, breach of duty or breach of trust: (a) a company may by a shareholders' ordinary resolution ratify such conduct (the director concerned and any shareholders connected with him are not entitled to vote on the resolution) and (b) the court may relieve a director if it considers that the director acted honestly and reasonably and considering all the circumstances, they ought fairly to be excused.

Insurance and indemnification of directors / officers

Cayman Islands law does not limit the extent to which a company may indemnify its directors, officers, employees and agents except to the extent that such provision may be held by the Cayman Islands courts to be contrary to the public policy.

The Old Phoenix Articles provide that subject to Cayman Companies Law and any other applicable law or regulation, but without prejudice to any indemnity to which the person concerned may already be properly entitled as at the date of the adoption of the Old Phoenix Articles, every director, secretary, assistant secretary or other officer of Old Phoenix and the personal representatives of the same (each an 'Indemnified Person') shall be indemnified and secured harmless out of the assets and funds of Old Phoenix against all actions, proceedings, costs, charges, claims, expenses, losses, damages or liabilities incurred or sustained by such Indemnified Person, other than by reason of such Indemnified Person's own dishonesty, willful default or fraud, in or about the conduct of Old Phoenix's business or affairs (including as a result of any mistake of judgment) or in the execution, exercise or discharge of his duties, powers, authorities or discretions, including without prejudice to the generality of the foregoing, any costs, expenses, losses or liabilities incurred by such Indemnified Person in defending (whether successfully or otherwise) any civil proceedings concerning Old Phoenix or its affairs in any court whether in the Cayman Islands or elsewhere.

The Old Phoenix Articles provide that the Old Phoenix Board may purchase and maintain insurance for or for the benefit of any person who is or was (a) a director, officer or employee of Old Phoenix or certain other connected companies of Old Phoenix; or (b) a trustee of any pension fund in which employees of Old Phoenix or any other body referred to in paragraph (a) are or have been interested.

English company law does not permit a company to provide an indemnity for a director of the company, or of an associated company, against any liability attaching to the director in connection with any negligence, default, breach of duty or breach of trust in relation to the company of which he or she is a director.

However, the Companies Act permits a company to purchase and maintain insurance for directors of the company or an associated company against any liability arising from negligence, default, breach of duty or breach of trust in relation to the company. The New Phoenix Articles allow New Phoenix to purchase and maintain insurance for or for the benefit of any director, officer or employee of New Phoenix or its holding company or direct / indirect subsidiary, or a trustee of any pension fund in which employees of New Phoenix or its holding company or direct / indirect subsidiary are or have been interested. This includes insurance against any liability incurred when discharging the director's duties, powers or offices of the company or fund.

English company law also permits a company to indemnify directors in respect of liabilities arising from proceedings brought by third parties, subject to certain costs that must not be covered by the indemnity (such as the defence costs of criminal proceedings where the director is found guilty).

The New Phoenix Articles provide that subject to and to the extent permitted by English company law, but without prejudice to any indemnity to which the person concerned may otherwise be entitled, every director or other officer of the company (other than the company's auditor) shall be indemnified out of the assets of the company against any liability incurred by him or her for negligence, default, breach of duty or breach of trust in relation to the affairs of the company.

(under the laws of the Cayman Islands and the Old Phoenix Articles)

(under the laws of England and Wales and the New Phoenix Articles)

Conflicts of Interest

Under Cayman Islands law, the director of a Cayman Islands company should seek to avoid placing himself in a position where there is a conflict, or a possible conflict, between the duties he owes to the company and either his personal interest or other duties that he owes to a third party, and if a director is in any way, directly or indirectly, interested in a proposed transaction or arrangement with the company, he must declare the nature and extent of that interest to the other directors at the first opportunity.

Under the Old Phoenix Articles, the Old Phoenix Board may authorise matters where a director has or can have an interest that conflicts or may conflict with that of Old Phoenix. The authorisation is only effective if the quorum is met without counting the interested director and the interested director's vote was not counted.

Under English company law, directors have a similar duty to avoid situations in which they have, or can have, a direct or indirect interest that conflicts with, or possibly may conflict, with the company's interests. Directors must also declare to the other directors the nature and extent of any interest, direct or indirect, in a proposed transaction or arrangement with the company.

The provisions currently applicable to Old Phoenix under Cayman Islands law for authorisation of conflicts and approval of transactions in which a director is interested are replicated by the New Phoenix Articles and the Companies Act.

Annual meetings of shareholders

Under Cayman Islands law there is no statutory requirement to hold annual general meetings. The Old Phoenix Articles do however provide that Old Phoenix is required to call an annual general meeting each year to be held within six months following its financial year end and shall call it by at least 21 clear days' notice. All other general meetings shall be called by at least 14 clear days' notice. The notice of general meeting will be sent to every member, director and Old Phoenix's auditors.

Under Cayman Islands law, there is no general right for a shareholder to put items on the agenda of a shareholder meeting other than as set out in the articles of association of a company. However, the Old Phoenix Articles provide for shareholders to demand that a resolution be voted on at an annual general meeting if the demand is made: (a) by shareholders holding at least 5 per cent of the total voting power of shares having a right to vote on the resolution; or (b) by at least 100 shareholders holding shares on which there has been paid up an average sum per shareholder of at least £100.

The New Phoenix Articles and English company law replicate the provisions currently applicable to Old Phoenix under Cayman Islands law in relation to calling an annual general meeting and other general meetings.

A similar procedure for shareholders demanding that a resolution be voted on at an annual general meeting under the Old Phoenix Articles is also provided for under English company law.

Voting rights

All shares in Old Phoenix carry with them the right to vote pursuant to the Old Phoenix Articles. On a vote on a show of hands, every shareholder who is present in person shall have one vote and every proxy present who has been duly appointed by one or more members entitled to vote on the resolution has one vote (unless they have been instructed to vote for the resolution by one or more of those shareholders and to vote against by one or more Broadly speaking, the New Phoenix Articles and English company law replicate the voting provisions currently applicable to Old Phoenix under Cayman Islands law, other than in relation to votes cast in advance of a meeting on a resolution on a poll.

Under English company law, a special resolution is required for matters relating to (among other things) amendments to the articles of association, reductions of capital, disapplication of pre-emption

(under the laws of the Cayman Islands and the Old Phoenix Articles)

other of those shareholders, in which case they will have two votes). On a vote on a resolution on a poll, every member present in person or by proxy shall have one vote for every share of which he is the holder and the votes may include votes cast in advance of that meeting.

Ordinary resolutions require an affirmative vote of a simple majority of the votes cast, special resolutions require an affirmative vote of not less than 75 per cent. of the votes cast.

Old Phoenix may alter its memorandum and articles of association by passing a special resolution of its shareholders to effect such amendment.

In the Cayman Islands, the decision to institute proceedings on behalf of a company is generally taken by the company's board of directors.

However, the Cayman Islands courts have recognised derivative suits by shareholders on an exceptional basis, generally following English judicial precedent which would permit a minority shareholder to commence an action against, or a derivative action in the name of, the company in limited circumstances as follows (a) where the act complained of is alleged to be beyond the corporate power of the company or illegal; (b) where the transaction complained of could be validly done or sanctioned only by a special resolution or special majority of shareholders (i.e., a majority which is more than a simple majority of over 50 per cent); (c) where the act complained of is alleged to constitute a fraud against the minority perpetrated by those in control of the company; or (d) where the act complained of infringes a personal right of the shareholder seeking to bring the action.

A shareholder may also be permitted to bring an action in his or her own name against a Cayman Islands company or the directors in respect of a direct loss suffered by such shareholder in respect of the breach of any right held by, or any duty owed to, the shareholder personally (rather than to the company). However, a loss claimed by a shareholder that is merely reflective of a loss suffered by the company is not recoverable by the shareholder personally.

The laws of the Cayman Islands do not provide a discrete and standalone oppression or unfair prejudice remedy but a shareholder does have the right to petition the court to wind-up a company on

Old Phoenix position New Phoenix position

(under the laws of England and Wales and the New Phoenix Articles)

rights, and re-registration of a public company as private and vice versa.

Under English company law, shareholders may amend the company's articles by special resolution. The New Phoenix Board does not have the power to amend the articles of association without shareholder approval.

Shareholders' suits

Amendment of constitutional documents

English company law permits a shareholder whose name is on the register of members of New Phoenix to apply by petition for a court order: (a) when the New Phoenix's affairs are being or have been conducted in a manner unfairly prejudicial to the interests of all or some shareholders, including the shareholder making the claim; or (b) when any actual or proposed act or omission of New Phoenix is or would be so prejudicial.

If the court is satisfied that the petition is well founded, it may make such order as it thinks fit to grant relief to the shareholders including regulating the conduct of the company's affairs in the future and authorising civil proceedings to be brought in the name of the company by a shareholder on terms that the court directs.

English company law also permits actions by shareholders on behalf of the company or on behalf of other shareholders in circumstances where there is an actual or proposed act or omission involving negligence, default, breach of duty or breach of trust by a director of the company. Before such proceedings can be brought, the claim can only proceed with the court's permission and the applicant is required to show a prima facie case against the defendant.

(under the laws of the Cayman Islands and the Old Phoenix Articles)

just and equitable grounds and one of the established grounds for presenting such a petition is where there has been oppressive management or conduct.

Access to information

There is no requirement under the Cayman Companies Law for a Cayman Islands exempted company (such as Old Phoenix) to make any returns of members to the Registrar of Companies of the Cayman Islands. The names and addresses of the members are, accordingly, not a matter of public record and are not available for public inspection. As a result of recent amendments to the Cayman Companies Law, the Company may (unless exempt) be required to maintain a nonpublic beneficial ownership register in the Cayman Islands.

Under the Old Phoenix Articles, any shareholder may inspect the register of members of Old Phoenix. A shareholder also has the right to inspect the statutory accounts of Old Phoenix during normal business hours.

Cayman Islands law requires that the register of mortgages and charges of Old Phoenix be open to inspection by any shareholder or creditor of Old Phoenix at all reasonable times.

A Cayman Islands company may be wound up by: (i) an order of the court; (ii) voluntarily by its members; or (iii) under the supervision of the court.

The court has authority to order winding up in a number of specified circumstances including where, in the opinion of the court, it is just and equitable that such company be so wound up and also where the company is unable to pay its debts.

The Old Phoenix Articles provide that if Old Phoenix is to be wound up, the liquidator may, with the sanction of an ordinary resolution, divide among the members all or any part of Old Phoenix's assets and may value any assets and determine how the division shall be carried out; vest all or any part of the assets in trustees for the benefit of the members; and determine the scope and terms of those trusts. No member shall be compelled to accept any asset on which there is a liability.

open for inspection by any shareholder without charge and by any other person on payment of any prescribed fee. A shareholder of New Phoenix is entitled to be

Under English company law, the register and index of names of shareholders of New Phoenix must be

provided, on demand and without charge, a copy of: (i) New Phoenix's last annual accounts; (ii) the last directors' remuneration report; (iii) the last directors' report; and (iv) the last auditor's report on those accounts.

English company law also entitles New Phoenix shareholders to inspect the terms of directors' service agreements, the terms of directors' indemnity provisions, records and resolutions of general meetings and contracts relating to share buyback.

Winding up

Under English law, upon a company's insolvency, after all creditors have been paid the company's assets shall be distributed among the shareholders according to their rights and interests in the company and as described in the articles.

The New Phoenix Articles provide that if New Phoenix is wound up, the liquidator may, with the sanction of a special resolution of New Phoenix and any other sanction required under English law, divide among the members the whole or any part of New Phoenix's assets and may, for that purpose, value any assets and determine how the division shall be carried out as between the members or different classes of members; vest the whole or any part of the assets in trustees for the benefit of the members; and determine the scope and terms of those trusts, but no member shall be compelled to accept any asset on which there is a liability.

Mergers and Consolidations

The Cayman Companies Law permits mergers and consolidations between Cayman Islands companies and between Cayman Islands companies and non-Cayman Islands companies (noting mergers A merger or consolidation (as distinct from an acquisition by one company of another company's shares or assets) is not generally available as a specific corporate process under English law, save to

(under the laws of England and Wales and the New Phoenix Articles)

(under the laws of the Cayman Islands and the Old Phoenix Articles)

or consolidations between Cayman Islands companies and non-Cayman Islands companies require, amongst other things, that the laws of the relevant foreign jurisdiction of the non-Cayman Islands company do not prohibit the merger).

(under the laws of England and Wales and the New Phoenix Articles)

the extent permitted under the Companies (Cross-Border Mergers Regulations 2007.

Arrangements and Court Approved Schemes

Court approved schemes of arrangement are contemplated and permitted under the Cayman Companies Law. Court approved schemes of arrangement are contemplated and permitted under English law.

7. Effect of the Scheme on Old Phoenix Share Plans

Participants in the Old Phoenix Share Plans will be written to separately about the effect of the Scheme on their awards under those plans.

In accordance with the terms of the Old Phoenix Share Plans, it is intended that on the Scheme Effective Date, participants in those plans will be granted, in exchange for the cancellation of their outstanding awards under the Old Phoenix Share Plans, equivalent awards over New Phoenix Shares on and subject to the rules of the respective Old Phoenix Share Plans (''Replacement Awards''). As a result, at the Scheme Effective Date, participants in the Old Phoenix Share Plans will be granted Replacement Awards by New Phoenix over New Phoenix Shares which will have substantially the same value as the Old Phoenix Shares which were subject to the original awards under their respective Old Phoenix Share Plans prior to the Scheme Effective Date. Further details on the effect of the Scheme on each of the Old Phoenix Share Plans are set out below.

The terms of the Old Phoenix Share Plans which will govern the Replacement Awards, with all previous references to Old Phoenix Shares read as references to New Phoenix Shares, are set out under the heading 'Old Phoenix Share Plans' in paragraph 10.1 of Part IX (Additional Information) of the Prospectus.

No new awards will be granted under the Old Phoenix Share Plans following the Scheme Effective Date.

7.1 Old Phoenix Long-Term Incentive Plan (''Old Phoenix LTIP'')

Pursuant to the rules of the Old Phoenix LTIP, the outstanding Old Phoenix awards under the Old Phoenix LTIP will be automatically exchanged for equivalent awards over New Phoenix Shares.

7.2 Old Phoenix Deferred Bonus Share Scheme (''Old Phoenix DBSS'')

Pursuant to the rules of the Old Phoenix DBSS, the outstanding Old Phoenix awards under the Old Phoenix DBSS will be automatically exchanged for equivalent awards over New Phoenix Shares.

7.3 Old Phoenix Sharesave Scheme (''Old Phoenix SAYE'')

Pursuant to the rules of Old Phoenix SAYE, the remuneration committee of Old Phoenix has determined that the outstanding Old Phoenix options will not become exercisable early as a result of the Scheme, as the purpose and effect of the Scheme is to create a new holding company having substantially the same shareholders and proportionate shareholdings as Old Phoenix. Instead, participants of the Old Phoenix SAYE will be permitted to exchange their options over Old Phoenix Shares for options of equivalent value over New Phoenix Shares.

Alternatively, if any participants choose not to exchange their options, they will be entitled to exercise their Old Phoenix options within six months from the date of the Court Order, to the extent vested in the ordinary course, and any Old Phoenix options that remain unexercised at the end of the sixmonth period will lapse. Old Phoenix Shares which are issued on exercise of Old Phoenix options after the Scheme Effective Date will be automatically acquired by New Phoenix in consideration for an issue of New Phoenix Shares on the same terms as the Scheme by virtue of the proposed amendment to the Old Phoenix Articles. The proposed amendment is set out in paragraph 2 of Part IV (Additional Information) of this document.

7.4 Old Phoenix Share Incentive Plan (''Old Phoenix SIP'')

Old Phoenix Shares which are currently held on trust for eligible employees under the Old Phoenix SIP will be replaced by New Phoenix Shares. The trustees of the Old Phoenix SIP will hold New Phoenix Shares on behalf of the participants until the normal release date.

7.5 Trust arrangements

Phoenix Group has an employee benefit trust which may acquire and hold Old Phoenix Shares for the benefit of some or all of the employees of Phoenix Group. Pursuant to the Scheme, the trust will acquire New Phoenix Shares which may be used in connection with some or all of the share plans of Phoenix Group following the Scheme.

8. Proposed New Phoenix Share Plans

The terms of the New Phoenix Share Plans (other than the New Phoenix Irish Share Incentive Plan and the New Phoenix Irish Sharesave Scheme) are expected to be substantively the same as those of the respective Old Phoenix Share Plans (the terms of which are set out under the heading 'Old Phoenix Share Plans' in paragraph 10.1 of Part IX (Additional Information) of the Prospectus), except for the minor differences set out in paragraphs 8.1 to 8.5 below.

The terms of the New Phoenix Irish Share Incentive Plan and the New Phoenix Irish Sharesave Scheme are also set out in paragraphs 8.6 and 8.7 below.

The terms that apply to all the Share Plans are set out in paragraph 10 of Part IX (Additional Information) of the Prospectus.

8.1 The New Phoenix Long-Term Incentive Plan

Awards (if any) will be granted on the fourth Dealing Day after the date on which New Phoenix announces its results for the full financial year, notwithstanding that a dealing restriction may then apply.

For the purpose of determining the aggregate market value of the shares under awards, market value is based on the average of the lower of the two prices shown in the Daily Official List as the closing price of the shares on the day plus one half of the difference between those two figures for the three Dealing Days prior to the date of grant. Where the Remuneration Committee cannot grant or considers it inappropriate to grant an award to a particular employee during any financial year as a result of any dealing restrictions, the maximum total value of shares over which awards may be granted to that employee may be carried forward and be available for the next grants that the Remuneration Committee decides to make to that employee.

Buy-out awards may be granted to individuals (including Executive Directors) to replace elements of remuneration forfeited on leaving a previous employment in order to take up employment with the Group, without such award being subject to performance conditions or a holding period.

8.2 The New Phoenix Sharesave Scheme

For the purpose of determining the exercise price, market value will be the average of the lower of the two prices shown in the Daily Official List as the closing price of the shares on the day plus one half of the difference between those two figures for the three Dealing Days prior to the date of grant.

8.3 The New Phoenix Share Incentive Plan

For the purpose of determining the number of shares appropriated by an employee, market value will be the average of the lower of the two prices shown in the Daily Official List as the closing price of the shares on the day plus one half of the difference between those two figures for the three Dealing Days prior to the date of grant.

8.4 The New Phoenix Deferred Bonus Share Scheme

8.5 The New Phoenix Irish Share Incentive Plan

Overview

The New Phoenix Irish SIP enables Irish resident employees to acquire shares in a tax-efficient manner. It is subject to approval by the Irish Revenue Commissioners.

Eligibility

All of New Phoenix's employees who are Irish resident taxpayers will be eligible to participate in the New Phoenix Irish SIP provided they satisfy any minimum service requirement that is imposed. New Phoenix may set a minimum service requirement but that requirement cannot exceed three years' service. All eligible employees must be invited to participate on similar terms.

Awards

In summary, the New Phoenix Irish SIP allows participants to acquire shares under the terms of four types of awards: (i) an award of free shares (''Free Shares''); (ii) if Free Shares are awarded, New Phoenix may, but is not required to, offer employees the opportunity to purchase additional shares with deductions from their pre-tax salary (''Salary Forgone Shares''); (iii) the opportunity for employees to purchase shares with deductions from their post-tax earnings (''Partnership Shares''); and (iv) an automatic award of free shares (''Matching Shares'') to those employees who have purchased Partnership Shares.

Any shares acquired under the New Phoenix Irish SIP must be held in a special trust on participants' behalf for a minimum period of time.

(a) Free Shares

An award of Free Shares can be based on objective appraisal of individual performance under an employee-wide performance appraisal scheme or on the achievement of, team, divisional or corporate performance targets which must be notified to all relevant employees. Otherwise, Free Shares must be awarded to eligible employees on the same terms subject only to variation according to an employee's remuneration or length of service.

(b) Salary Forgone Shares

In tandem with an award of Free Shares, New Phoenix may provide eligible employees with the opportunity to acquire Salary Forgone Shares from their pre-tax salary. Salary for these purposes is base salary (excluding any bonus). Salary deductions may not exceed 7.5% of salary, and in all events may not exceed the value of the Free Shares awarded. New Phoenix may set a minimum monthly deduction that may not exceed the lesser of A127 or 1% of salary. New Phoenix Shares are acquired on behalf of employees at the same time or after the related Free Share have been allocated. Deductions may be accumulated for up to 12 months. In this case, shares are acquired on behalf of employees at the end of the accumulation period. Shares are acquired by reference to the market value of the shares at the time they are acquired.

New Phoenix may provide eligible employees with the opportunity to acquire Partnership Shares from their post-tax earnings. Deductions may not exceed 7.5% of base salary (excluding any bonus). New Phoenix may set a minimum monthly deduction that may not exceed the lesser of A127 or 1% of salary. New Phoenix Shares are acquired on behalf of employees within 30 days after each deduction. Alternatively, deductions can be accumulated for up to 12 months. In this case, shares are acquired on behalf of employees within 30 days of the end of the accumulation period. Shares are acquired by reference to the market value of the shares at the time they are acquired.

Matching Shares

New Phoenix must award Matching Shares to employees who have purchased Partnership Shares. The Matching Shares must be offered on the same basis to all employees in such ratio as New Phoenix may determine, but that ratio must be at least one Matching Share for each Partnership Share purchased.

Annual Individual Limit

The aggregate value, at the time of award, of all Free Shares, Salary Forgone Shares and Matching Shares allocated to an employee in a tax year may not exceed A12,700.

Holding periods

Free Shares, Salary Forgone Shares and Matching Shares generally must held in the New Phoenix Irish SIP trust for a minimum period of three years in order to benefit from the favourable tax treatment offered by the New Phoenix Irish SIP. Partnership Shares must be held in the New Phoenix Irish SIP trust for two years.

Leavers

Employees who are awarded shares under the New Phoenix Irish SIP will retain them if they cease employment with the Group.

Corporate events

In the event of any reconstruction or takeover of New Phoenix, employees may direct the trustee of the New Phoenix Irish SIP how to act in respect of any shares held on their behalf.

Capital raisings

Whenever rights to acquire shares or other rights of any nature are granted by New Phoenix in respect of its New Phoenix Shares held in the New Phoenix Irish SIP on behalf of participants, participants may instruct the trustee to take up all or part of the rights, to sell the rights and/or to allow all or part of the rights to lapse.

8.6 The New Phoenix Irish Sharesave Scheme

Overview

The New Phoenix Irish Sharesave Scheme enables options over shares to be granted to Irish resident employees. The plan is subject to approval of the Irish Revenue Commissioners.

Eligibility

All of New Phoenix's employees and full-time Directors who are Irish resident taxpayers are eligible to participate provided that the Remuneration Committee may require any such person to have completed a qualifying period of employment of up to three years, but may allow other employees to participate.

Grant of options

Options can only be granted to employees who enter into a certified contractual savings scheme with a qualifying savings institution under which monthly savings are made as deductions from pay. The participant must select the date on which his or her savings will be repaid to him (the maturity date) which may be three or five years after the start of the contract provided that the Board may choose to offer only one of those repayment dates.

Invitations to participate in the New Phoenix Irish Sharesave Scheme may be issued only during the period of 42 days commencing on any of the following: (i) Admission, (ii) the day following the announcement of New Phoenix's results for any financial period; (iii) any changes to the legislation affecting savings-related share option schemes being announced, made or coming into effect; or (iv) a resolution by the Directors that exceptional circumstances have arisen which justify the grant of options.

Individual limits

A participant's aggregate monthly savings under all savings contracts linked to options granted under any approved share save scheme must not exceed the statutory maximum (currently A500). The Remuneration Committee can set a lower limit in relation to any particular grant.

The number of shares over which an option is granted is such that the total exercise price payable will correspond to the proceeds on maturity of the related savings contract (i.e., the total savings plus accrued interest).

Exercise price

Under the relevant legislation, the price per share payable upon the exercise of an option must not be less than 75 per cent. of the market value of a share on a date which is determined by the Board. For the purpose of determining the exercise price, market value will be the average of the two prices shown in the Daily Official List as the closing price of the shares on the day plus one half of the difference between those two prices, for the three Dealing Days prior to the date of grant. If the option relates to new issue shares, the exercise price must not be less than the nominal value of a share.

Exercise of options

Options are normally only exercisable during the six month period following the maturity date of the relevant savings contract. Earlier exercise is permitted if the participant leaves employment in certain specified circumstances, otherwise options will lapse on the cessation of employment.

Leaving employment

Options lapse on cessation of employment with New Phoenix or any subsidiary of New Phoenix which has been nominated by the Board as a participating company for the purposes of the New Phoenix Irish Sharesave Scheme unless the participant ceases employment for a specified reason. The participant may exercise options within six months of ceasing employment by reason of injury or disability, redundancy, retirement, the sale of the business or subsidiary company in which the participant is employed or, if the option has been held for at least three years, ceasing employment for any other reason. The personal representatives of a participant who dies may exercise his or her options within 12 months of the date of his or her death or if he or she dies within six months after the maturity of the relevant savings contract, 12 months from that maturity.

Corporate events

In the event of a change of control of New Phoenix as a result of a general offer, or if a court approves a compromise or scheme of arrangement of New Phoenix, or if there is a winding-up, options will become exercisable within limited specified periods of such events to the extent that they are exercisable with accrued savings. New Phoenix will notify participants of the relevant corporate event so as to enable them to exercise their options or take other action. Alternatively, participants may be offered equivalent new options over shares in a new holding company in exchange for their existing options.

Variation of share capital

In the event of any variation of share capital or reserves of New Phoenix (including, without limitation, by way of capitalisation issue, rights issue, sub-division, consolidation or reduction), the number of New Phoenix Shares under option and/or the exercise price may be adjusted as the Board (or a duly authorised committee thereof) may determine, provided that: (i) the adjustment does not result in the requirements of the legislation under which the New Phoenix Irish Sharesave Scheme is approved ceasing to be satisfied; (ii) after the adjustment, the aggregate market value of the shares comprised in any option and the aggregate exercise price of any option are substantially the same as they were immediately before the adjustment; (iii) the adjustment does not have the effect of reducing the exercise price to less than the nominal value of a share; and (iv) where an option subsists over unissued and issued shares, any adjustment must only be made if it can be made to both unissued and issued shares to the same extent.

9. United Kingdom Taxation

The following statements are intended only as a general guide to certain UK tax considerations and do not purport to be a complete analysis of all potential UK tax consequences of acquiring, holding or disposing of New Phoenix Shares. They are based on current UK law and what is understood to be the current practice of HMRC as at the date of this document, both of which may change, possibly with retroactive effect. They apply only to Old Phoenix Shareholders and Old Phoenix DI Holders who are resident and, in the case of individuals domiciled, for tax purposes in (and only in) the UK (except insofar as express reference is made to the treatment of non-UK residents), who hold their New Phoenix Shares as an investment (other than in an individual savings account or pension arrangement) and who are the absolute beneficial owner of both the New Phoenix Shares and any dividends paid on them. The tax position of certain categories of Old Phoenix Shareholders and Old Phoenix DI Holders who are subject to special rules (such as persons acquiring their New Phoenix Shares in connection with employment, dealers in securities, insurance companies and collective investment schemes) is not considered.

The statements summarise the current position and are intended as a general guide only. Prospective investors who are in any doubt as to their tax position or who may be subject to tax in a jurisdiction other than the UK are strongly recommended to consult their own professional advisers.

(a) Consequences of the Scheme

(i) Taxation of Income

The Scheme should not be treated as involving a distribution subject to UK tax as income.

(ii) Taxation of Chargeable Gains

For the purposes of UK taxation of chargeable gains (''CGT''), the issue of New Phoenix Shares to Old Phoenix Shareholders (including Old Phoenix Shareholders whose Old Phoenix Shares were previously represented by Old Phoenix Depositary Interests) in consideration for the cancellation of their Old Phoenix Shares should be treated as a reorganisation of share capital. A number of conditions must be met in order for such treatment to apply. In particular, the Scheme must be a scheme carried out in pursuance of a compromise or arrangement under a provision which ''corresponds'' to Part 26 of the Companies Act. HMRC have confirmed that this condition is satisfied. Accordingly, Old Phoenix Shareholders should not be treated as making a disposal of all or part of their holding of Old Phoenix Shares or Old Phoenix Depositary Interests and no liability to CGT should arise. Instead, the New Phoenix Shares acquired and the Old Phoenix Shares cancelled will, for CGT purposes, be treated as the same asset and as having been acquired at the same time as the Old Phoenix Shares.

(iii) New Phoenix Reduction of Capital

The New Phoenix Reduction of Capital should not have any UK tax consequences for Old Phoenix Shareholders or Old Phoenix DI Holders. It should not result in a disposal by any Old Phoenix Shareholders or Old Phoenix DI Holders of any of their New Phoenix Shares, either on the basis that there is no disposal as a general matter or because the New Phoenix Shares Reduction of Capital is treated as a reorganisation of the share capital of New Phoenix.

(iv) Stamp Duty and Stamp Duty Reserve Tax (''SDRT'')

No stamp duty or SDRT will be payable by Old Phoenix Shareholders or Old Phoenix DI Holders in relation to the cancellation of the Old Phoenix Shares and Old Phoenix Depositary Interests and the issue of New Phoenix Shares under the Scheme.

(b) Income from New Phoenix Shares

New Phoenix is not required to withhold tax when paying a dividend. Liability to tax on dividends will depend upon the individual circumstances of an Old Phoenix Shareholder or Old Phoenix DI Holder.

(i) UK resident individual Old Phoenix Shareholders and Old Phoenix DI Holders

Under current UK tax rules specific rates of tax apply to dividend income. These include a nil rate of tax (the ''nil rate band'') for the first £2,000 of dividend income in any tax year and different rates of tax for dividend income that exceeds the nil rate band. For these purposes ''dividend income'' includes UK and non UK source dividends and certain other distributions in respect of shares.

An individual Old Phoenix Shareholder or Old Phoenix DI Holder who is resident for tax purposes in the UK and who receives a dividend from New Phoenix will not be liable to UK tax on the dividend to the extent that (taking account of any other dividend income received by the Old Phoenix Shareholder or Old Phoenix DI Holder in the same tax year) that dividend falls within the nil rate band.

To the extent that (taking account of any other dividend income received by the Old Phoenix Shareholder or Old Phoenix DI Holder in the same tax year) the dividend exceeds the nil rate band, it will be subject to income tax at 7.5% to the extent that it falls below the threshold for higher rate income tax. To the extent that (taking account of other dividend income received in the same tax year) it falls above the threshold for higher rate income tax then the dividend will be taxed at 32.5% to the extent that it is within the higher rate band, or 38.1% to the extent that it is within the additional rate band. For the purposes of determining which of the taxable bands dividend income falls into, dividend income is treated as the highest part of an Old Phoenix Shareholder or Old Phoenix DI Holder's income. In addition, dividends within the nil rate band which would otherwise have fallen within the basic or higher rate bands will use up those bands respectively and so will be taken into account in determining whether the threshold for higher rate or additional rate income tax is exceeded.

(ii) UK resident corporate Old Phoenix Shareholders and Old Phoenix DI Holders

It is likely that most dividends paid on the New Phoenix Shares to UK resident corporate shareholders would fall within one or more of the classes of dividend qualifying for exemption from corporation tax. However, it should be noted that the exemptions are not comprehensive and are also subject to anti-avoidance rules.

(iii) UK resident exempt Old Phoenix Shareholders and Old Phoenix DI Holders

UK resident Old Phoenix Shareholders and Old Phoenix DI Holders who are not liable to UK tax on dividends, including exempt pension funds and charities, are not entitled to any tax credit in respect of dividends paid by New Phoenix.

(iv) Non-UK resident Old Phoenix Shareholders and Old Phoenix DI Holders

No tax credit will attach to any dividend paid by New Phoenix. An Old Phoenix Shareholder or Old Phoenix DI Holder resident outside the UK may also be subject to non-UK taxation on dividend income under local law. An Old Phoenix Shareholder or Old Phoenix DI Holder who is resident outside the UK for tax purposes should consult his own tax adviser concerning his tax position on dividends received from New Phoenix.

(c) Disposal of New Phoenix Shares

(i) UK resident Old Phoenix Shareholders and Old Phoenix DI Holders

A disposal or deemed disposal of New Phoenix Shares by an Old Phoenix Shareholder or Old Phoenix DI Holder may, depending upon the Old Phoenix Shareholder or Old Phoenix DI Holder's circumstances and subject to any available exemption or relief (such as the annual exempt amount for individuals and indexation for corporate shareholders), give rise to a chargeable gain or an allowable loss for the purposes of UK taxation of capital gains.

(ii) Non-UK resident Old Phoenix Shareholders and Old Phoenix DI Holders

Old Phoenix Shareholders and Old Phoenix DI Holders who are not resident in the UK will not generally be subject to CGT on the disposal or deemed disposal of New Phoenix Shares unless they are carrying on a trade, profession or vocation in the UK through a branch or agency (or, in the case of a corporate Old Phoenix Shareholder or Old Phoenix DI Holder, a permanent establishment) in connection with which the New Phoenix Shares are used, held or acquired. Non-UK tax resident Old Phoenix Shareholders and Old Phoenix DI Holders may be subject to non-UK taxation on any gain under local law.

An individual Old Phoenix Shareholder or Old Phoenix DI Holder who has been resident for tax purposes in the UK but who ceases to be so resident or becomes treated as Treaty nonresident for a period of five years or less (or, for departures before 6 April 2013, ceases to be resident or ordinarily resident or becomes Treaty non-resident for a period of less than five tax years) and who disposes of all or part of his or her New Phoenix Shares during that period may be liable to capital gains tax on his return to the UK, subject to any available exemptions or reliefs.

(d) Stamp Duty and SDRT

(i) Subsequent transfers

Stamp duty at the rate of 0.5 per cent. (rounded up to the next multiple of £5) of the amount or value of the consideration given will generally be payable on an instrument transferring New Phoenix Shares. A charge to SDRT will also arise on an unconditional agreement to transfer New Phoenix Shares (at the rate of 0.5 per cent. of the amount or value of the consideration payable). However, if within six years of the date of the agreement becoming unconditional an instrument of transfer is executed pursuant to the agreement, and stamp duty is paid on that instrument, any SDRT already paid will be refunded (generally, but not necessarily, with interest) provided that a claim for repayment is made, and any outstanding liability to SDRT will be cancelled. The liability to pay stamp duty or SDRT is generally satisfied by the purchaser or transferee. An exemption from stamp duty is available on an instrument transferring New Phoenix Shares where the amount or value of the consideration is £1,000 or less, and it is certificated on the instrument that the transaction effected by the instrument does not form part of a larger transaction or series of transactions for which the aggregate consideration exceeds £1,000.

(ii) New Phoenix Shares transferred through paperless means including CREST

Paperless transfers of New Phoenix Shares, such as those occurring within CREST, are generally liable to SDRT rather than stamp duty, at the rate of 0.5 per cent. of the amount or value of the consideration. CREST is obliged to collect SDRT on relevant transactions settled within the system. The charge is generally borne by the purchaser. Under the CREST system, no stamp duty or SDRT will arise on a transfer of New Phoenix Shares into the system unless such a transfer is made for a consideration in money or money's worth, in which case a liability to SDRT (usually at a rate of 0.5 per cent.) will arise.

(iii) New Phoenix Shares held through Clearance Systems or Depositary Receipt Arrangements

Special rules apply where New Phoenix Shares are issued or transferred to, or to a nominee or agent for, either a person whose business is or includes issuing depositary receipts or a person providing a clearance service, under which SDRT or stamp duty may be charged at a rate of 1.5 per cent. On such issue or transfer (with subsequent transfers within the clearance service or transfers of depositary receipts then being free from stamp duty or SDRT). Following litigation HMRC confirmed that they will no longer seek to apply the 1.5 per cent. SDRT charge on an issue of shares into a clearance service or depositary receipt arrangement on the basis that the charge is not compatible with EU law. This view has not yet been reflected in a change in the UK rules, but it was confirmed in the Autumn 2017 Budget that the Government intend to continue this approach following Brexit. HMRC's view has been that the 1.5% SDRT or stamp duty charge will continue to apply to transfers of shares into a clearance service or depositary receipt arrangement unless they are an integral part of an issue of share capital. Further litigation indicates that this view is not correct (at least in respect of certain transfers of legal title to clearance services), but HMRC have not yet confirmed whether they will cease applying the charge. Accordingly, specific professional advice should be sought before incurring a 1.5 per cent. stamp duty or stamp duty reserve tax charge in any circumstances.

The statements in this paragraph (d) apply to any holders of New Phoenix Shares irrespective of their residence, summarise the current position and are intended as a general guide only. Special rules apply to agreements made by, amongst others, intermediaries.

(e) Inheritance Tax

The New Phoenix Shares will be assets situated in the UK for the purposes of UK inheritance tax. A gift of such assets by, or the death of, an individual holder of such assets may (subject to certain exemptions and reliefs) give rise to a liability to UK inheritance tax even if the holder is neither domiciled in the UK nor deemed to be domiciled there under certain rules relating to long residence or previous domicile. For inheritance tax purposes, a transfer of assets at less than full market value may be treated as a gift and particular rules apply to gifts where the donor reserves or retains some benefit.

Special rules also apply to close companies and to trustees of settlements who hold New Phoenix Shares, bringing them within the charge to inheritance tax. Old Phoenix Shareholders and Old Phoenix DI Holders should consult an appropriate tax adviser if they make a gift or transfer at less than market value or intend to hold any New Phoenix Shares through trust arrangements.

THE DISCUSSION ABOVE IS A GENERAL SUMMARY. IT DOES NOT COVER ALL TAX MATTERS THAT MAY BE OF IMPORTANCE TO A PARTICULAR INVESTOR. EACH PROSPECTIVE INVESTOR IS URGED TO CONSULT ITS OWN TAX ADVISOR ABOUT THE TAX CONSEQUENCES TO IT OF AN INVESTMENT IN THE SHARES IN LIGHT OF THE INVESTOR'S OWN CIRCUMSTANCES.

PART V: DEFINITIONS

The following definitions apply throughout this document unless the context requires otherwise:

''£'' or ''sterling''	the lawful currency of the United Kingdom
''2022 Notes''	the £450,000,000 4.125 per cent. Tier 3 subordinated notes due 2022, of which £300,000,000 were originally issued by PGH Capital P.L.C
''2025 Notes''	the £428,113,000 6.625 per cent. subordinated bonds due 2025 originally issued by PGH Capital P.L.C
''2027 Notes''	the US\$500,000,000 5.375 per cent. Tier 2 notes due 2027
''2029 Notes''	the A500,000,000 4.375 per cent. Tier 2 Notes due 2029
''Admission''	admission of New Phoenix Shares to the premium segment of the Official List in accordance with the Listing Rules and the admission of the New Phoenix Shares to trading on the London Stock Exchange's main market for listed securities, expected to occur on 13 December 2018
''Acquisition Facility Agreement''	the facility agreement between Old Phoenix (as guarantor and as borrower) and Natwest Markets plc (formerly known as The Royal Bank of Scotland plc) (as agent), among others, dated 23 February 2018, as amended and restated on 18 July 2018
''Board''	the board of directors of Old Phoenix
''Brexit''	the vote by the people of the United Kingdom to leave the EU in the referendum held on 23 June 2016
''Business Day''	any day other than a Saturday or a Sunday on which banks in London and the Cayman Islands are open for the transaction of normal banking business
''CA'' or ''Companies Act''	the UK Companies Act 2006, as amended, modified or re-enacted from time to time
''Cayman Companies Law''	the Companies Law (2018 revision) of the Cayman Islands, as amended, modified or re-enacted from time to time
''Cayman Islands Registrar of Companies''	the Registrar of Companies in the Cayman Islands
''CBI''	Central Bank of Ireland
''certificated'' or ''in certificated form''	in relation to a share or other security, a share or other security which is not in uncertificated form
''City Code''	the UK City Code on Takeovers and Mergers issued by the Panel on Takeovers and Mergers, as amended from time to time
''Court Hearing''	the hearing by the Court of the petition seeking the sanction of the Scheme under section 86 of the Cayman Companies Law and seeking the confirmation of the reduction of capital resulting from the cancellation of the Scheme Shares under sections 14 to 16 of the Cayman Companies Law
''Court Meeting''	the meeting of Old Phoenix Shareholders (including as instructed by, or represented by, Old Phoenix DI Holders) to be held at Juxon House, 100 St. Paul's Churchyard, London, United Kingdom, EC4M 8BU, at 1:00 p.m. on 28 November 2018, convened pursuant to an order of the Court for the purposes of considering, and, if thought fit, approving the Scheme (with or without amendment), notice of which is set out in Part VI (Notice of Court Meeting) of this document
''Court Order''	the order of the Court sanctioning the Scheme under section 86 of the Cayman Companies Law and confirming the reduction of

	capital resulting from the cancellation of the Scheme Shares under sections 14 to 16 of the Cayman Companies Law
''Court''	the Grand Court of the Cayman Islands and any court capable of hearing appeals therefrom
''CREST Manual''	the document entitled 'CREST Manual' issued by Euroclear from time to time
''CREST''	the United Kingdom based system for the paperless settlement of trades in listed securities, of which Euroclear is the operator
''Daily Official List''	the daily record setting out the price of all trades in shares and other securities conducted on the London Stock Exchange
''Dealing Day''	any day on which the London Stock Exchange is open for business in the trading of securities admitted to the Official List
''Directors''	the Executive Directors and the Non-Executive Directors of Old Phoenix
''English Court Hearing''	the hearing by the English Court to sanction the New Phoenix Reduction of Capital
''English Court''	the Companies List of the High Court of Justice of England and Wales
''English Registrar of Companies''	the Registrar of Companies in England and Wales
''EU''	the European Union
''Euroclear''	Euroclear UK & Ireland Limited, the operator of CREST
''Executive Directors''	the executive Directors of Old Phoenix
''Explanatory Statement''	this document, and in particular Part II of this document, which constitutes the explanatory statement relating to the Scheme
''FCA''	the Financial Conduct Authority of the United Kingdom
''Form(s) of Instruction''	the form(s) of instruction which may be used by Old Phoenix DI Holders to instruct how the Old Phoenix Depositary should cast its vote at the Court Meeting and/or the Scheme General Meeting (as the context requires) as an Old Phoenix Shareholder in respect of Old Phoenix Shares held by the Old Phoenix Depositary but which are represented by Old Phoenix Depositary Interests, which may be lodged in hard copy, online via www.investorcentre.co.uk/proxy, or electronically via the CREST voting service
''Form(s) of Proxy''	The form(s) of proxy which may be used by Old Phoenix Shareholders (including as instructed by, or represented by, Old Phoenix DI Holders) to vote at the Court Meeting and/or the Scheme General Meeting (as the context requires), which may be lodged in hard copy or online via www.investorcentre.co.uk/proxy
''FSMA''	the UK Financial Services and Markets Act 2000, as amended
''HMRC''	HM Revenue and Customs, the tax authority of the United Kingdom
''holder''	a registered holder, including any person entitled by transmission
''Latest Practicable Date''	31 October 2018, being the latest practicable date prior to publication of this document
''Letter of Representation''	the letter of representation which an Old Phoenix DI Holder, who wishes to attend and vote at the Court Meeting and/or the Scheme General Meeting in person in respect of the Old Phoenix Shares which are represented by the Old Phoenix DI Holder's Old Phoenix Depositary Interests, may request from the Old Phoenix Depositary in accordance with the instructions set out in the Form of Instruction

''Listing Rules''	the listing rules of the FCA acting in its capacity as the UK Listing Authority made under section 74(4) the FSMA
''London Stock Exchange''	London Stock Exchange plc
''Longstop Date''	29 March 2019 or such later date as Old Phoenix and New Phoenix may agree and the Court may allow
''Meetings''	the Court Meeting and the Scheme General Meeting, and ''meeting'' shall be construed accordingly
''New Phoenix''	Phoenix Group Holdings plc, a company incorporated in England and Wales with registered number 11606773, whose registered office is at Juxon House, 100 St Paul's Churchyard, London EC4M 8BU, United Kingdom
''New Phoenix Articles''	the articles of association adopted by the holders of the New Phoenix Subscriber Shares to take effect as the articles of association of New Phoenix upon Admission, as amended from time to time
''New Phoenix Redeemable Shares''	the 50,000 redeemable preference shares of £1.00 each in the capital of New Phoenix issued upon its incorporation
''New Phoenix Reduction of Capital''	the reduction of capital of New Phoenix which the Directors expect New Phoenix will undertake pursuant to the Companies Act shortly after the Scheme Effective Date in order to create a reserve of profit in the accounts of New Phoenix
''New Phoenix Registrar''	Computershare Investor Services PLC, an English company with registered number 3498808 having its registered office is at The Pavilions, Bridgwater Road, Bristol BS13 8AE
''New Phoenix Share Plans''	The New Phoenix Long-Term Incentive Plan, the New Phoenix Deferred Bonus Share Scheme, the New Phoenix Sharesave Scheme, the New Phoenix Share Incentive Plan, the New Phoenix Irish Share Incentive Plan, and the New Phoenix Irish Sharesave Scheme, in each case, as more particularly defined in paragraph 8 of Part IV (Additional Information) of this document
''New Phoenix Shares''	ordinary shares of £0.10 each in the capital of New Phoenix to be issued to the Scheme Shareholders credited as fully paid in accordance with Clause 2.1 of the Scheme
''New Phoenix Subscriber Shares''	the ordinary shares of £0.10 each in the capital of New Phoenix issued upon incorporation of New Phoenix
''Non-Executive Directors''	the non-executive Directors of Old Phoenix
''Official List''	the Official List maintained by the FCA acting in its capacity as the UK Listing Authority in accordance with section 74(1) of the FSMA
''Old Phoenix'' or the ''Company''	Phoenix Group Holdings, a company incorporated in the Cayman Islands as an exempted company with limited liability with registration number 202172, whose registered office is at Maples Corporate Services Limited, PO Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands
''Old Phoenix Articles''	the articles of association of Old Phoenix in force as at the date of this document
''Old Phoenix Depositary''	Computershare Company Nominees Limited as nominee for Computershare Investor Services PLC, a company incorporated in England and Wales with registered number 3498808, whose registered office is at The Pavilions, Bridgwater Road, Bristol BS13 8AE
''Old Phoenix Depositary Interests''	the dematerialised depositary interests in respect of Old Phoenix Shares issued by the Old Phoenix Depositary which represent Old Phoenix Shares on a one for one basis

''Old Phoenix DI Holder''	a holder of an Old Phoenix Depositary Interest
''Old Phoenix Directors''	the directors of Old Phoenix as at the date of publication of this document
''Old Phoenix New Ordinary Shares''	ordinary shares of A0.0001 each in the capital of Old Phoenix to be created following the cancellation of the Scheme Shares and to be issued credited as fully paid to New Phoenix pursuant to this Scheme
''Old Phoenix Reduction of Capital''	the reduction of Old Phoenix's share capital associated with the cancellation and extinguishing of the Scheme Shares pursuant to Clause 1.1(a) of the Scheme
''Old Phoenix Registrar''	Computershare Investor Services (Cayman) Limited, a company incorporated in the Cayman Islands whose registered office is at The R&H Trust Co. Ltd., One Capital Place, George Town, PO Box 897, Cayman Islands
''Old Phoenix Share Plans''	the Old Phoenix Long-Term Incentive Plan, the Old Phoenix Deferred Bonus Share Scheme, the Old Phoenix Sharesave Scheme, and the Old Phoenix Share Incentive Plan, in each case, as more particularly defined in paragraph 7 of Part IV (Additional Information) of this document
''Old Phoenix Shareholders''	the holders of Old Phoenix Shares
''Old Phoenix Shares''	ordinary shares of A0.0001 each in the capital of Old Phoenix
''Outstanding Subordinated Debt Securities''	the 2022 Notes, 2025 Notes, 2027 Notes, 2029 Notes and RT1 Notes
''Overseas Shareholders''	Old Phoenix Shareholders or Old Phoenix DI Holders who are ordinarily resident in, or citizens or nationals of, jurisdictions outside the United Kingdom or the Cayman Islands
''Phoenix Group'' or ''Group''	(i) prior to the Scheme Effective Date, Old Phoenix and its subsidiaries and subsidiary undertakings; and (ii) after the Scheme Effective Date, New Phoenix and its subsidiaries and subsidiary undertakings
''PRA''	the Prudential Regulation Authority of the United Kingdom
''Proposals''	the proposals:
	(i) for a reorganisation of the Phoenix Group which will result in New Phoenix becoming the holding company of the Phoenix Group;
	(ii) in respect of the Old Phoenix Share Plans and the New Phoenix Share Plans;
	(iii) in respect of the substitution of New Phoenix for Old Phoenix in respect of the Outstanding Subordinated Debt Securities; and
	(iv) for New Phoenix to undertake the New Phoenix Reduction of Capital,
	in each case, as more particularly described in this document.
''Prospectus Directive''	Directive 2003/71/EC and amendments thereto, including any relevant implementing measure in each Relevant Member State
''Prospectus Rules''	the rules and regulations made by the FCA in its capacity as the UK Listing Authority under Part VI of the FSMA, and contained in the UK Listing Authority's publication of the same name
''Prospectus''	the final prospectus approved by the FCA in its capacity as the UK Listing Authority as a prospectus prepared by New Phoenix in relation to Admission in accordance with the Prospectus Rules made under section 73A of the FSMA

''Register''	the register of members of Old Phoenix in respect of the Old Phoenix Shares
''Regulated Group Entities''	any entity within the Phoenix Group prior to the Scheme Effective Date which is authorised pursuant to FSMA
''Remuneration Committee''	the remuneration committee of the board of New Phoenix
''Revolving Credit Agreement''	the credit agreement entered into by Old Phoenix (as guarantor and, from 28 February 2017, as borrower), PGH Capital P.L.C (formerly known as PGH Capital Limited) (as borrower) and Commerzbank Finance & Covered Bond S.A. (formerly known as Commerzbank International S.A.) (as agent), among others, dated 23 July 2014, as amended and/or restated from time to time, including on 21 March 2016, 24 October 2016, 20 February 2017, 30 March 2017 and 2 May 2018
''RT1 Notes''	the £500,000,000 fixed rate reset perpetual restricted tier 1 write down notes issued by Old Phoenix
''Scheme Effective Date''	the date on which the Scheme becomes effective in accordance with its terms, expected to be 12 December 2018
''Scheme General Meeting''	The general meeting of Old Phoenix Shareholders (including as instructed by, or represented by, Old Phoenix DI Holders) to be held at Juxon House, 100 St. Paul's Churchyard, London, United Kingdom, EC4M 8BU at 1:15 p.m. on 28 November 2018 (or as soon thereafter as the Court Meeting has been concluded or adjourned)
''Scheme Record Date''	the record date of the Scheme, expected to be 12 December 2018
''Scheme Record Time''	8:00 p.m. London time on the Scheme Effective Date
''Scheme Shareholders''	the holders of the Scheme Shares, as appearing in the register of members of Old Phoenix
''Scheme Shares''	(i) all Old Phoenix Shares in issue at the date of this Scheme and remaining in issue at the Scheme Record Time (including those which were formerly Old Phoenix Depositary Interests);
	(ii) all Old Phoenix Shares issued after the date of this Scheme and before the Voting Record Time and remaining in issue at the Scheme Record Time (including those which were formerly Old Phoenix Depositary Interests) (if any); and
	(iii) all further Old Phoenix Shares which may be in issue at or after the Voting Record Time up to the Scheme Record Time (including those which were formerly Old Phoenix Depositary Interests) on terms that the shareholders will be bound by the Scheme
''Scheme''	the scheme of arrangement between Old Phoenix and holders of Scheme Shares proposed to be made under section 86 of the Companies Law (2018 Revision) of the Cayman Islands, details of which are set out in this document (subject to any modifications, additions or conditions which the Court may think fit to approve or impose and agreed to by Old Phoenix and New Phoenix)
''SDRT''	stamp duty reserve tax
''SEC''	U.S. Securities and Exchange Commission
''Senior Bonds''	the £300 million senior unsecured bond at a coupon of 5.75 per cent. per annum originally issued by PGH Capital P.L.C. (of which £122 million remain outstanding as at the date of this document)
''Share Plans''	the Old Phoenix Share Plans and the New Phoenix Share Plans
''SLIDAC''	Standard Life International Designated Activity Company

''UK Listing Authority'' or ''UKLA''

''uncertificated'' or ''in uncertificated form''

''Trust Deed'' the deed made on 2 June 2010 by the Old Phoenix Depositary in respect of the Old Phoenix Depositary Interests

''UK Corporate Governance Code'' the UK Corporate Governance Code published by the Financial Reporting Council, as amended from time to time

the FCA acting in its capacity as the competent authority for listing in the United Kingdom for the purposes of Part VI of the FSMA

''UK'' or ''United Kingdom'' the United Kingdom of Great Britain and Northern Ireland

in relation to a share or other security, a share or other security title to which is recorded on the relevant register of the share or security concerned as being held in uncertificated form in CREST and title to which may be transferred by means of CREST

''US Securities Act'' United States Securities Act of 1933, as amended

''Voting Record Time'' for Old Phoenix Shareholders, 6:00 p.m. on 26 November 2018 or, if the Court Meeting and/or the Scheme General Meeting is adjourned, 6.00 p.m. on the day which is two Business Days before the date set for the adjourned meeting, and for Old Phoenix DI Holders, 6:00 p.m. on 23 November 2018 or, if the Court Meeting and/or the Scheme General Meeting is adjourned, 6.00 p.m. on the day which is three Business Days before the date set for the adjourned meeting

PART VI: NOTICE OF COURT MEETING

IN THE GRAND COURT OF THE CAYMAN ISLANDS FINANCIAL SERVICES DIVISION

CAUSE NO: FSD 162 OF 2018 (RMJ)

IN THE MATTER OF PHOENIX GROUP HOLDINGS AND IN THE MATTER OF SECTIONS 14 TO 16 AND SECTION 86 OF THE COMPANIES LAW (2018 REVISION)

NOTICE OF COURT MEETING

NOTICE IS HEREBY GIVEN that, by an order dated 31 October 2018 (the ''Order'') made in the above matter, the Grand Court of the Cayman Islands (the ''Court'') has directed a meeting (the ''Court Meeting'') to be convened of the registered holders of ordinary shares of Phoenix Group Holdings (''Old Phoenix'') for the purpose of considering and, if thought fit, approving (with or without modification) a scheme of arrangement (the ''Scheme of Arrangement'') pursuant to section 86 of the Companies Law (2018 Revision) of the Cayman Islands proposed to be made between Old Phoenix and the holders of the Scheme Shares (in accordance with the provisions set out in the Scheme Circular) and that such Court Meeting will be held at Juxon House, 100 St. Paul's Churchyard, London, United Kingdom, EC4M 8BU at 1:00 p.m. (London Time) on 28 November 2018, at which place and time all Old Phoenix Shareholders (as defined in the Scheme of Arrangement) are requested to attend. Voting will be by way of poll. To be approved, the Scheme of Arrangement requires approval by a majority in number representing 75 per cent. in value or more, of the holders of the Old Phoenix Shares present and voting, whether in person or by proxy, at the Court Meeting. Voting at the Court Meeting will be by poll and not on a show of hands.

A copy of the Scheme of Arrangement and a copy of the Explanatory Statement explaining the effect of the Scheme of Arrangement are incorporated into the composite document of which this notice forms part (the ''Scheme Circular''). A copy of the Scheme Circular has been made available on the Old Phoenix website at http://www.thephoenixgroup.com/investor-relations/agm-and-egm/. Defined terms used in this Notice of Court Meeting shall, unless otherwise provided, have the same meanings as in the Scheme Circular.

At the Court Meeting the following resolution will be proposed:

''THAT the Scheme of Arrangement, a print of which has been submitted to this Court Meeting and, for the purpose of identification, signed by the Chairman of this Court Meeting, be approved subject to any modification, addition or condition which the Grand Court of the Cayman Islands may think fit to approve or impose and as may be jointly agreed by Old Phoenix and New Phoenix.''

Voting Procedures

Old Phoenix Shareholders

You are an Old Phoenix Shareholder if you hold Old Phoenix Shares directly on the Register and not by way of Old Phoenix Depositary Interests.

A blue Form of Proxy for use at the Court Meeting accompanies this notice. Completion and return of a Form of Proxy will not prevent an Old Phoenix Shareholder from attending and voting at the Court Meeting, or any adjournment thereof, in person if he, she or they wish to do so.

Each Old Phoenix Shareholder (save for the Old Phoenix Depositary) holding Old Phoenix Shares directly on the Register (and not by way of Old Phoenix Depositary Interests) at the applicable time may vote or appoint a Proxy to vote either ''for'' or ''against'' the Scheme, but not both. Any split votes received from such Old Phoenix Shareholders (save for the Old Phoenix Depositary) will be disregarded in their entirety for the purpose of the Court Meeting. Accordingly, such Old Phoenix Shareholders should note that appointing more than one proxy will not result in that Old Phoenix Shareholder being counted more than once for the purposes of determining that the Scheme has been approved by a majority in number of Old Phoenix Shareholders present and voting at the Court Meeting.

In respect of the Old Phoenix Depositary, the Old Phoenix Depositary may vote both for and against the Scheme in accordance with the instructions received by it from the Old Phoenix DI Holders and in accordance with the provisions set out in the Scheme Circular.

It is requested that the hard copy blue Form of Proxy be lodged with the Old Phoenix Registrar at Computershare Investor Services PLC, The Pavilions, Bridgwater Road, Bristol BS99 6ZY or by lodging your proxy online via www.investorcentre.co.uk/eproxy so as to be received by as soon as possible but in any event so that the Forms of Proxy are received by no later than 1:00 p.m. (London time) on 26 November 2018 or, in the case of an adjourned meeting, not less than 48 hours before the time and date appointed for the adjourned meeting. If the blue Form of Proxy is not returned so as to be received by the Old Phoenix Registrar by the above time, it may be handed to the Old Phoenix Registrar, on behalf of the Chairman of the Court Meeting, at the Court Meeting before the taking of the poll.

In the case of joint holders of Old Phoenix Shares, the vote of the senior joint holder who tenders a vote, whether in person or by proxy shall prevail. Seniority will be determined by the order in which the names stand in the Register of Old Phoenix in respect of the joint holding.

Old Phoenix DI Holders

You are an Old Phoenix DI Holder if you hold Old Phoenix Depositary Interests and are not recorded on the Register as holding Old Phoenix Shares directly.

If you are an Old Phoenix DI Holder and wish to instruct the Old Phoenix Depositary on how to vote at the Court Meeting and/or the Scheme General Meeting, you must complete and return the blue Form of Instruction and the white Form of Instruction respectively, either by submitting hard copies to the Old Phoenix Depositary at Computershare Investor Services PLC, The Pavilions, Bridgwater Road, Bristol BS99 6ZY, by lodging your instruction online via www.investorcentre.co.uk/ eproxy, or by using the CREST voting service in accordance with the procedures described further below, so as to be received by as soon as possible but in any event by no later than 1:00 p.m. on 23 November 2018 (or, in the case of an adjourned meeting, no later than 72 hours before the time and date set for the adjourned meeting).

Old Phoenix DI Holders who are CREST members and who wish to issue an instruction through the CREST electronic voting appointment service may do so by using the procedures described in the CREST manual (available from www.euroclear.com). CREST personal members or other CREST sponsored members, and those CREST members who have appointed a voting service provider(s), should refer to their CREST sponsor or voting services provider(s), who will be able to take the appropriate action on their behalf.

In order for instructions made using the CREST service to be valid, the appropriate CREST message (a ''CREST Voting Instruction'') must be properly authenticated in accordance with the specifications of Euroclear UK & Ireland Limited (''Euroclear'') and must contain the information required for such instructions, as described in the CREST Manual.

The message, regardless of whether it relates to the voting instruction or to an amendment to the instruction given to the Old Phoenix Depositary, must in order to be valid, be transmitted so as to be received by the Old Phoenix Depositary (participant ID 3RA50) by no later than 1:00 p.m. on 23 November 2018 (or, in the case of an adjourned meeting, not less than 72 hours before the time and date appointed for the adjourned meeting). For this purpose, the time of receipt will be taken to be the time (as determined by the time stamp applied to the CREST Voting Instruction by the CREST applications host) from which the Old Phoenix Depositary is able to retrieve the CREST Voting Instruction by enquiry to CREST in the manner prescribed by CREST. After this time, any change of instructions to proxies appointed through CREST should be communicated to the appointee through other means.

CREST members and, where applicable, their CREST sponsors or voting service providers should note that Euroclear does not make available special procedures in CREST for any particular messages. Normal system timings and limitations will therefore apply in relation to the transmission of CREST Voting Instructions. It is the responsibility of the CREST member concerned to take (or, if the CREST member is a CREST personal member or sponsored member or has appointed a voting service provider(s), to procure that the CREST sponsor or voting service provider(s) take(s)) such action as shall be necessary to ensure that a CREST Voting Instruction is transmitted by means of the CREST system by any particular time. In this connection, CREST members and, where applicable, their CREST sponsors or voting service providers are referred, in particular, to those sections of the CREST Manual concerning practical limitations of the CREST system and timings.

Old Phoenix may treat as invalid a CREST Voting Instruction in the circumstances set out in regulation 35(5)(a) of the Uncertificated Securities Regulations 2001.

Voting Record Time

Entitlement to attend and vote at the Court Meeting (or, in the case of Old Phoenix DI Holders, entitlement to direct the Old Phoenix Depositary how to vote at the Court Meeting, or to request a Letter of Representation to attend and vote at the Court Meeting on behalf of the Old Phoenix Depositary) (and the number of votes which may be cast thereat) will be determined:

* in the case of Old Phoenix Shareholders, by reference to the Register at 6:00 p.m. on 26 November 2018, or in the case of an adjourned meeting, 6.00 p.m. on the day which is two Business Days before the date of the adjourned meeting. In each case, changes to the Register of Old Phoenix after such time on the relevant date will be disregarded; and
* in the case of Old Phoenix DI Holders, by reference to the Old Phoenix Depositary Interest register at 6:00 p.m. on 23 November 2018, or in the case of an adjourned meeting, 6.00 p.m. on the day which is three Business Days before the date of the adjourned meeting. In each case, changes to the Old Phoenix Depositary Interest register after such time on the relevant date will be disregarded.

Chairman of the Court Meeting

By the said Order, the Court has appointed Nicholas Lyons, a director of Old Phoenix, or failing him any other person who is a director of Old Phoenix as at the date of the Order, to act as the Chairman of the Court Meeting and has directed the Chairman of the Court Meeting to report the result thereof to the Court within seven days of the Court Meeting.

The Scheme of Arrangement will be subject to a subsequent application seeking the sanction of the Court at a hearing to be listed for 10:00 a.m. (Cayman Islands time) on 5 December 2018 or as soon as practicable thereafter.

Dated: 2 November 2018

PHOENIX GROUP HOLDINGS

Registered Office: Maples Corporate Services Limited PO Box 309 Ugland House Grand Cayman KY1-1104 Cayman Islands Registered No. 202172

PART VII: NOTICE OF SCHEME GENERAL MEETING

PHOENIX GROUP HOLDINGS

(a company incorporated under the laws of the Cayman Islands with registered number 202172 as an exempted company with limited liability)

Notice is hereby given that a general meeting of Phoenix Group Holdings (the Company or Old Phoenix) will be held at Juxon House, 100 St. Paul's Churchyard, London, United Kingdom, EC4M 8BU at 1:15 p.m. on 28 November 2018 (or as soon thereafter as the Court Meeting convened for 1:00 p.m. on the same day and in the same place shall have been concluded or adjourned). You will be asked to consider, and, if thought fit, pass the resolutions below relating to the proposed scheme of arrangement under section 86 of the Cayman Companies Law (2016 Revision) (the Scheme) between Old Phoenix and the holders of the Scheme Shares (as defined in the Scheme), a copy of which will be produced to the meeting and for the purposes of identification signed by the Chairman of the Company, in its original form or subject to such modifications, additions or conditions agreed, approved, or imposed by the Grand Court of the Cayman Islands. Resolutions 1 and 2 will be proposed as special resolutions. For the special resolutions to be passed at least 75% of the votes cast must be in favour of the relevant resolution. All other resolutions will be proposed as ordinary resolutions requiring a simple majority of votes cast in favour of the resolutions for the resolutions to be passed. Voting will be by way of poll.

SPECIAL RESOLUTIONS

THAT for the purpose of giving effect to the Scheme:
(a) the Scheme be approved and the directors of the Company be authorised to take all such action as they may consider necessary or appropriate for carrying the Scheme into effect;
(b) in connection with the Scheme:
(i) on the Scheme Effective Date (as defined in the Scheme) the share capital of the Company be reduced by cancelling and extinguishing the Scheme Shares; and
(ii) forthwith and contingently upon such reduction of capital taking effect:
- (A) the reserve arising in the books of account of the Company as a result of the reduction of capital referred to in paragraph 1(b)(i) above be capitalised and applied in paying up in full at par such number of new ordinary shares with a par value of A0.0001 each in the capital of the Company (''Old Phoenix New Ordinary Shares'') as is equal to the aggregate number of Scheme Shares cancelled pursuant to paragraph 1(b)(i) above, and such Old Phoenix New Ordinary Shares be allotted and issued credited as fully paid to Phoenix Group Holdings plc (''New Phoenix'') and/or its nominee or nominees; and
- (B) the directors of the Company be and they are hereby generally and unconditionally authorised to allot and issue the Old Phoenix New Ordinary Shares (provided that: (1) the maximum nominal amount of share capital which may be allotted hereunder shall be A72,500; (2) this authority shall expire (unless previously revoked, varied or renewed) on the Longstop Date; and (3) this authority shall be in addition to any subsisting authority conferred on the directors of the Company pursuant to the resolutions of the shareholders at the Company's general meeting on 25 June 2018);
(c) with effect from the passing of this resolution, the articles of association of the Company be hereby amended by the adoption and inclusion of the following new article:
1. Scheme of Arrangement
1. For the purpose of this Article 277, references to the Scheme are to the scheme of arrangement between the Company and the holders of the Scheme Shares dated 2 November 2018 under section 86 of the Cayman Companies Law in its original form or subject to such modifications, additions or conditions agreed, approved, or imposed by the Grand Court of the Cayman Islands and (save as defined in this article) expressions defined in the Scheme shall have the same meaning in this article.
1. Notwithstanding any other provisions in these Articles, if any Old Phoenix Shares are allotted and issued to any person (a ''New Member'') other than New Phoenix and/or its nominee or nominees after the time at which this Article becomes effective and before the Scheme Record

Time, such Old Phoenix Shares shall be allotted and issued subject to the terms of the Scheme and shall be Scheme Shares for the purposes thereof and the New Member, and any subsequent holder other than New Phoenix and/or its nominee or nominees, shall be bound by the terms of the Scheme.

1. Subject to the Scheme becoming effective, if any Old Phoenix Shares are allotted and issued to a New Member after the Scheme Record Time, they will immediately be transferred to New Phoenix and/or its nominee or nominees in consideration of and conditional on the issue or transfer to the New Member of one New Phoenix Share for every one Old Phoenix Share so transferred. The New Phoenix Shares issued or transferred pursuant to this Article 277 to the New Member will be credited as fully paid and will rank equally in all respects with all New Phoenix Shares in issue at the time and be subject to the New Phoenix Articles.
1. The number of New Phoenix Shares to be issued or transferred to the New Member under this Article 277 may be adjusted by the directors of the Company in such manner as the Company's auditors may determine on any reorganisation or material alteration of the share capital of either the Company or of New Phoenix or any other return of value to holders of New Phoenix Shares, provided always that any fractions of New Phoenix Shares shall be disregarded and shall be aggregated and sold for the benefit of New Phoenix.
1. In order to give effect to any such transfer required by this Article 277, the Company may appoint any person to execute and deliver a form of transfer on behalf of the New Member in favour of New Phoenix and/or its nominee or nominees and to agree for and on behalf of the New Member to become a member of New Phoenix. Pending the registration of New Phoenix as holder of any share to be transferred pursuant to this Article 277, New Phoenix shall be empowered to appoint a person nominated by the directors of the Company to act as attorney on behalf of any holder of such share in accordance with such directions as New Phoenix may give in relation to any dealings with or disposal of such share (or any interest therein), exercising any rights attached thereto or receiving any distribution or other benefit accruing or payable in respect thereof and any holder of such share shall exercise all rights attached thereto in accordance with the directions of New Phoenix but not otherwise. The Company shall not be obliged to issue a certificate to the New Member for the any Old Phoenix Shares allotted and issued after the Scheme Record Time.
1. If the Scheme shall not have become effective by the Longstop Date (as defined in the Scheme), this Article 277 shall cease to be of any effect.
1. THAT the resolution of New Phoenix's shareholders to cancel New Phoenix's share premium account (which will take effect subject to the confirmation of the English Court) be approved.

ORDINARY RESOLUTIONS

1. THAT, subject to the Scheme becoming effective, the New Phoenix Long-Term Incentive Plan, as defined and described in the composite document of which this notice forms part (the Circular), be adopted by New Phoenix with effect from Admission and the directors of New Phoenix be authorised to take all such action as they may consider necessary or appropriate for carrying the New Phoenix Long-Term Incentive Plan into effect.
1. THAT, subject to the Scheme becoming effective, the New Phoenix Deferred Bonus Share Scheme, as defined and described in the Circular, be adopted by New Phoenix with effect from Admission and the directors of New Phoenix be authorised to take all such action as they may consider necessary or appropriate for carrying the New Phoenix Deferred Bonus Share Scheme into effect.
1. THAT, subject to the Scheme becoming effective, the New Phoenix Sharesave Scheme, as defined and described in the Circular, be adopted by New Phoenix with effect from Admission and the directors of New Phoenix be authorised to take all such action as they may consider necessary or appropriate for carrying the New Phoenix Sharesave Scheme into effect.
1. THAT, subject to the Scheme becoming effective, the New Phoenix Share Incentive Plan, as defined and described in the Circular, be adopted by New Phoenix with effect from Admission and the directors of New Phoenix be authorised to take all such action as they may consider necessary or appropriate for carrying the New Phoenix Share Incentive Plan into effect.
1. THAT, subject to the Scheme becoming effective, the New Phoenix Irish Share Incentive Plan, as defined and described in the Circular, be adopted by New Phoenix with effect from Admission and the directors of New Phoenix be authorised to take all such action as they may consider necessary or appropriate for carrying the New Phoenix Irish Share Incentive Plan into effect.
1. THAT, subject to the Scheme becoming effective, the New Phoenix Irish Sharesave Scheme, as defined and described in the Circular, be adopted by New Phoenix with effect from Admission and the directors of New Phoenix be authorised to take all such action as they may consider necessary or appropriate for carrying the New Phoenix Irish Sharesave Scheme into effect.

2 November 2018 By order of the Board

Gerald Watson Company Secretary

Registered Office:

Maples Corporate Services Limited PO Box 309 Ugland House Grand Cayman KY1-1104 Cayman Islands Registered No. 202172

Voting Procedures

Old Phoenix Shareholders

You are an Old Phoenix Shareholder if you hold Old Phoenix Shares directly on the Register and not by way of Old Phoenix Depositary Interests.

A white Form of Proxy for use at the Scheme General Meeting accompanies this notice. Completion and return of a Form of Proxy will not prevent an Old Phoenix Shareholder from attending and voting at the Scheme General Meeting, or any adjournment thereof, in person if he, she or they wish to do so.

In respect of the Old Phoenix Depositary, the Old Phoenix Depositary may vote both for and against the resolutions proposed at the Scheme General Meeting, in accordance with the instructions received by it from the Old Phoenix DI Holders and in accordance with the provisions set out in the Scheme Circular.

It is requested that the hard copy white Form of Proxy be lodged with the Old Phoenix Registrar at Computershare Investor Services PLC, The Pavilions, Bridgwater Road, Bristol BS99 6ZY or by lodging your proxy online via www.investorcentre.co.uk/eproxy so as to be received by as soon as possible but in any event so that the Form of Proxy is received by no later than 1:00 p.m. (London time) on 26 November 2018 or, in the case of an adjourned meeting, not less than 48 hours before the time and date appointed for the adjourned meeting. To be valid, the white Form of Proxy for the Scheme General Meeting must be lodged by the time stated above.

Old Phoenix DI Holders

You are an Old Phoenix DI Holder if you hold Old Phoenix Depositary Interests and are not recorded on the Register as holding Old Phoenix Shares directly.

Old Phoenix DI Holders who hold Old Phoenix Depositary Interests as at the Voting Record Time may not vote directly at the Court Meeting but shall instead be entitled to either: (i) instruct the Old Phoenix Depositary to vote on the Scheme at the Court Meeting in respect of the applicable number of Old Phoenix Depositary Interests representing Old Phoenix Shares held by them at the relevant time, or (ii) obtain an authorisation from the Old Phoenix Depositary to attend and vote at the Court Meeting on behalf of the Old Phoenix Depositary on the Scheme, in respect of the applicable number of Old Phoenix Depositary Interests representing Old Phoenix Shares held by them at the relevant time.

If you are an Old Phoenix DI Holder and wish to instruct the Old Phoenix Depositary on how to vote at the Court Meeting and/or the Scheme General Meeting, you must complete and return the blue Form of Instruction and the white Form of Instruction respectively, either by submitting hard copies to the Old Phoenix Depositary at Computershare Investor Services PLC, The Pavilions, Bridgwater Road, Bristol BS99 6ZY, by lodging your instruction online via www.investorcentre.co.uk/ eproxy, or by using the CREST voting service in accordance with the procedures described further below, so as to be received by as soon as possible but in any event by no later than 1:00 p.m. on 23 November 2018 (or, in the case of an adjourned meeting, no later than 72 hours before the time and date set for the adjourned meeting).

Old Phoenix may treat as invalid a CREST Voting Instruction in the circumstances set out in regulation 35(5)(a) of the Uncertificated Securities Regulations 2001.

Voting Record Time

Entitlement to attend and vote at the Scheme General Meeting (and the number of votes which may be cast thereat) will be determined:

* in the case of Old Phoenix Shareholders, by reference to the Register at 6:00 p.m. on 26 November 2018, or in the case of an adjourned meeting, 6.00 p.m. on the day which is two Business Days before the date of the adjourned meeting. In each case, changes to the Register of Old Phoenix after such time on the relevant date will be disregarded; and
* in the case of Old Phoenix DI Holders, by reference to the Depositary Interest register of Old Phoenix at 6:00 p.m. on 23 November 2018, or in the case of an adjourned meeting, 6.00 pm on the day which is three Business Days before the date of the adjourned meeting. In each case, changes to the Depositary Interest register of Old Phoenix after such time on the relevant date will be disregarded.

Inspection of documents

Copies of the following documents will be available for inspection at the venue for the Scheme General Meeting from 15 minutes before the commencement of the Scheme General Meeting until its conclusion:

(a) the proposed amendments to the Old Phoenix Articles;
(b) the memorandum of association of New Phoenix and the New Phoenix Articles;
(c) the document of which this notice forms part (including the Scheme document);
(d) the New Phoenix Share Plans; and
(e) the Prospectus.

Copies of each of these documents are also available on the Phoenix Group's website at http://www.thephoenixgroup.com/investor-relations/agm-and-egm/

Dated: 2 November 2018

Annex

Notice of termination of the facility relating to the Old Phoenix Depositary Interests

2 November 2018

Computershare Investor Services PLC

The Pavilions Bridgwater Road Bristol BS99 6ZY Telephone +44 (0) 870 702 0000 Facsimile +44 (0) 870 703 6101 DX 78139 Bristol Textphone users please call +44 (0) 870 702 0005 www.computershare.com

Dear Depositary Interest holder

Cancellation of Depositary Interests (DIs) representing Ordinary shares of Phoenix Group Holdings ISIN: KYG7091M1096

We refer to the Circular to Shareholders and Explanatory Statement issued by Phoenix Group Holdings ('PGH') on 2 November 2018 (the 'Circular') to which this notice is annexed. Capitalised words used, but not defined, in this letter have the meanings given to them in the Circular.

Computershare Investor Services PLC (the 'Depositary') hereby notifies each holder of Depositary Interests representing ordinary shares in PGH (the 'Depositary Interests') that, in order to facilitate the Scheme (as explained in Part II of the Circular and set out in Part III of the Circular):

* subject to and conditional on the Scheme being sanctioned by the Court under section 86 of the Cayman Companies Law, the Depositary shall terminate the Depositary Interest facility relating to the Depositary Interests shortly prior to the Scheme Record Time on the Scheme Effective Date, in accordance with clause 14 of the Trust Deed (the 'Termination'); and
* upon the Termination becoming effective:
* the Depositary will cease to act as depositary for the purpose of issuing Depositary Interests;
* the Depositary Interests will be cancelled in accordance with the terms of the Trust Deed; and
* the holders of the cancelled Depositary Interests will be entered onto the share register of PGH as the holders of ordinary shares on a one-for-one basis, in the same name as they were recorded as a holder of Depositary Interests.

You do not need to take any action in connection with the Termination. For further details about the Scheme and related proposals, and the actions you should take in connection with the Scheme, please refer to the Circular.

Please do not hesitate to get in contact should you have any questions.

Yours faithfully

For Depositary

AI assistant

Phoenix Group Holdings PLC — Proxy Solicitation & Information Statement 2018

5015_rns_2018-11-02_e6ad283f-c901-47d0-a8ba-1cac92f7fdd2.pdf

Recommended proposals for

Instructions to Old Phoenix Shareholders

Instructions to Old Phoenix DI Holders

Instructions to both Old Phoenix Shareholders and Old Phoenix DI Holders

IMPORTANT NOTICE

Notice to United States holders of Old Phoenix Shares and Old Phoenix Depositary Interests

Enforceability of judgments

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Publication of this document

CONTENTS

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

The Court Meeting and Scheme General Meeting will be held at Juxon House, 100 St. Paul's Churchyard, London, United Kingdom, EC4M 8BU at the times stated above (London time) on 28 November 2018.

ACTION TO BE TAKEN

Old Phoenix Shareholders

Old Phoenix DI Holders

IT IS IMPORTANT THAT AS MANY VOTES AS POSSIBLE ARE CAST AT THE COURT MEETING SO THAT THE COURT MAY BE SATISFIED THAT THERE IS A FAIR REPRESENTATION OF OLD PHOENIX SHAREHOLDER OPINION (INCLUDING AS INSTRUCTED OR REPRESENTED BY OLD PHOENIX DI HOLDERS).

YOU ARE THEREFORE STRONGLY URGED TO COMPLETE AND RETURN YOUR FORMS OF PROXY OR FORMS OF INSTRUCTION OR REQUEST YOUR LETTER OF REPRESENTATION (AS APPLICABLE) AS SOON AS POSSIBLE.

SUMMARY AND KEY QUESTIONS ANSWERED

THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

Old Phoenix Shareholders and Old Phoenix DI Holders should read the whole of this document and not just rely on this summary. This summary should not be regarded as a substitute for reading the whole document.

SHAREHOLDER HELPLINE TELEPHONE NUMBER:

1. Why is the Phoenix Group proposing the Scheme?

2. Why is the Phoenix Group implementing the Proposals by way of a scheme of arrangement?

3. What will I end up with after the Scheme comes into effect?

4. Do I have to pay anything under the Scheme?

5. What is the New Phoenix Reduction Of Capital and why is it proposed?

6. What will the share capital of Old Phoenix be following the Scheme taking effect?

7. What effect will the Scheme have on the Old Phoenix Share Plans?

8. Why am I being sent this document?

9. Will a prospectus relating to the New Phoenix Shares be issued?

10. Why are there two meetings and do I need to attend both?

11. Do I need to vote?

Old Phoenix Shareholders

Old Phoenix DI Holders

12. What about future dividends? Do I need to change my existing instructions so far as the payment of dividends is concerned?

13. What do I do with my old share certificates?

14. Will I receive share certificates for my New Phoenix Shares?

15. Will I have to pay any tax as a result of the Scheme?

16. What happens if the Scheme does not proceed?

17. Do I need to take further action?

18. What if I still have questions?

PART I: LETTER FROM THE CHAIRMAN

Recommended proposals in connection with the introduction of a new holding company and related matters

1. Introduction

one New Phoenix Share for every one Old Phoenix Share

2. Background to and reasons for the Proposals

3. Impact of the Proposals

3.1 Business and Operations

3.2 Corporate governance and Board of Directors

3.3 Admission to listing

3.4 Dividends and New Phoenix Reduction of Capital

3.5 Capital authorities

3.6 Share Plans

4. Action to be taken

5. Overseas Shareholders

6. Recommendation

PART II: EXPLANATORY STATEMENT

1. Introduction

2. Background to and reasons for the Scheme and related Proposals

3. Summary of the Proposals

3.1 The Scheme

(a) Amendments to Old Phoenix Articles

(b) Cancellation of Old Phoenix Depositary Interests

(c) Cancellation of Scheme Shares

for each Old Phoenix Share cancelled: one New Phoenix Share

(d) Establishing New Phoenix as the holding company of the Phoenix Group

3.2 Admission of New Phoenix Shares

3.3 Effect on the Old Phoenix Share Plans and proposals in relation to the New Phoenix Share Plans

3.4 Proposals in relation to Outstanding Subordinated Debt Securities

3.5 New Phoenix Reduction of Capital

4. Conditions to the implementation of the Proposals

4.1 Court Meeting

Further details of action to be taken in respect of voting at the Court Meeting by Old Phoenix Shareholders and Old Phoenix DI Holders is set out in paragraph 12 of this Part II (Explanatory Statement).

4.2 Scheme General Meeting

(a) Special resolutions

(b) Ordinary resolutions

4.3 Court Hearing

Phoenix Group Holdings PLC Proxy Solicitation & Information Statement 2018