This document is important and requires your attention. If you are in any doubt about the action you
should take, you should consult your stockbroker, solicitor, accountant or other professional adviser
authorised under the Financial Services and Markets Act 2000. This information booklet is not a
prospectus. It is issued pursuant to sections 5:3(2)(d) and 5:4(e) of the Dutch Financial Supervision
Act (Wet op het financieel toezicht) and Sections 1.2.2R(4) and 1.2.3R(5) of the Prospectus Rules.
Phoenix Group Holdings
A company incorporated as an exempted company with limited liability under the laws of the Cayman
Islands with registered number 202172 (the Company)
Scrip Dividend Scheme
Information Booklet
___________________________________________________________________________________
Introduction to the Scrip Dividend Scheme
Shareholders can use their dividends to acquire more Ordinary Shares in the Company by participating
in the Company’s Scrip Dividend Scheme. The Scheme applies to all dividends, and enables
Shareholders to increase their holding in the Company.
If you wish to elect to receive a scrip dividend instead of a cash dividend for all future dividends on
which a scrip alternative is offered, then please consider the terms and conditions of the Scrip Dividend
Scheme and procedures to be followed, as set out in this information booklet and the enclosed Mandate
Form. If you wish to receive dividends in cash you need take no action and may disregard this
document.
If you have sold or otherwise transferred all your Ordinary Shares in the Company, then please forward
the Chairman’s letter, this information booklet and any accompanying documents at once to the
purchaser or transferee, or to the stockbroker, bank manager, bank or other agent through whom the
sale or transfer was effected for transmission to the purchaser or transferee.
Further information relating to the Company and the Scrip Dividend Scheme is available on the
Company’s website http://www.thephoenixgroup.com.
1.
WHAT IS THE SCRIP DIVIDEND SCHEME?
The Company is offering a Scrip Dividend Scheme which enables each Shareholder to elect to receive
New Ordinary Shares instead of cash dividends pursuant to the terms of the articles of association of
the Company. The terms and conditions of the Scrip Dividend Scheme are set out in this information
booklet, including the Mandate Form. The Scheme will apply to all dividends and enables you to
increase your holding in the Company. At the same time, the Company retains cash for reinvestment in
its business or to be utilised in other ways that would otherwise be paid as a dividend. The Scrip
Dividend Timetable for each Relevant Dividend which sets out the relevant timetable will be
announced at the time that the future dividends are declared.
Please see section 20 for the definitions of defined terms in this information booklet and the Mandate
Form.
2.
WHO CAN JOIN THE SCHEME?
All Shareholders who live in the United Kingdom can join the Scheme.
Any Shareholder who lives outside the United Kingdom may, subject to the remaining provisions of
this section 2, treat this as an invitation to join the Scheme. It is the responsibility of any Shareholder
who lives outside of the United Kingdom and who wishes to join the Scheme:
(a)
to ensure that an election to receive New Ordinary Shares under the Scheme can validly be
made without any further obligation on the part of the Company; and
(b)
to satisfy himself or herself as to the full observance of the laws of the relevant territory,
including obtaining all relevant consents and complying with all applicable regulatory and
registration procedures and formalities.
Any Shareholder who lives outside the United Kingdom and who wishes to join the Scheme is not
permitted to join the Scheme if the above requirements are not satisfied. Any Mandate received by the
Company in contravention of the above requirements or which in the opinion of the Directors would
place undesirable restrictions and/or requirements on the Company shall be treated by the Company as
having been cancelled and a cash dividend will be paid to the relevant Shareholder.
Residents of the State of California electing to receive New Ordinary Shares in lieu of a cash dividend
will be deemed to be institutional investors for the purposes of Section 25102(i) of the California
Corporations Code and will be deemed to have made the representations in the Investor Letter to be
completed by Californian Shareholders included as Appendix 1.
Shareholders that hold Ordinary Shares that are subject to restrictions under US securities laws will
receive New Ordinary Shares that will be subject to the same restrictions under the Scheme.
Certain Shareholders have undertaken to accept scrip dividends instead of cash for a period of 12
months from 5 July 2010 in respect of 31,509,894 Ordinary Shares they currently hold. Such
Shareholders have also agreed under such agreements not to transfer any Ordinary Shares they receive
for the same period of 12 months except for certain permitted transfers. Accordingly, such
Shareholders shall take up the New Ordinary Shares under the Scheme in respect of such 31,509,894 of
Ordinary Shares they currently hold.
3.
JOINING THE SCHEME
Subject to the provisions of this section 3:
(a)
a Shareholder who holds their Ordinary Shares in certificated form can join the Scheme using
either of the methods detailed in (A) or (B);
(b)
a Shareholder who holds their Ordinary Shares through the London Stock Exchange can join
the Scheme using any of the methods in (A), (B) or (C); and
(c)
a Shareholder who holds their Ordinary Shares through Euronext can use the method described
in (D).
Subject to the requirements set out below and those set out in sections 9 and 10, your Mandate will
remain in force for all future dividends until cancelled by you or by the Company. For further details
regarding cancellation of Mandates and/or termination or amendment of the Scheme, see sections 15
and 16.
If part of your shareholding is held in uncertificated form and part in certificated form, then you will
need to complete a separate Mandate in respect of your Ordinary Shares held in uncertificated form as
detailed below and a Mandate Form or electronic election in respect of your Ordinary Shares held in
certificated form.
In respect of any election made by whichever method, the Company and/or the Registrar reserve the
right to treat as valid an election which is not complete in all respects.
(A)
Mandate Form
To join the Scheme using the Mandate Form, you need to complete the enclosed Mandate Form (set out
in section 22) and return it to the Registrar at c/o Queensway House, Hilgrove Street, St. Helier, Jersey,
Channel Islands, JE1 1ES. No acknowledgement or receipt of your Mandate Form will be issued.
Mandate Forms must be received by the Registrar by 4.00 p.m. on the relevant Return Date to be
eligible for that Relevant Dividend. For details of the Return Date for each Relevant Dividend please
refer to the Company’s website http://www.thephoenixgroup.com or call the Registrar on +44 (0)870
707 4040. Mandate Forms received after the relevant deadline will be applied in time for the next
dividend except in respect of the Shareholders who have already undertaken to take New Ordinary
Shares instead of dividends.
(B)
Electronic elections
If you are registered with the Registrar, then you may elect to participate in the Scrip Dividend Scheme
electronically through its investor centre website at www.investorcentre.co.uk.
Your electronic election must be received by the Registrar no later than 4.00 p.m. on the relevant
Return Date. Any electronic election that is received by the Registrar after 4.00 p.m. on the relevant
Return Date will only be effective for the next dividend(s) (if any) in respect of which the Scrip
Dividend Scheme is offered for which the relevant Return Date has not passed.
(C)
CREST
If your shareholding is in uncertificated form in CREST (and was in uncertificated form as at the
relevant Record Date), then you may elect to participate in the Scrip Dividend Scheme by means of the
CREST procedures that require the use of the Dividend Election Input Message in accordance with the
CREST Manual. If you are a CREST member or other CREST sponsored member, then you should
consult your CREST sponsor who will be able to take the appropriate action on your behalf.
The Dividend Election Input Message must be correctly completed in order for a valid election to be
made. A valid election made by means of a Dividend Election Input Message will, to the extent it
relates to Ordinary Shares held in uncertificated form at the Record Date for the Relevant Dividend,
supersede all previous written elections made in respect of shareholdings in the same member account.
The Dividend Election Input Message must be received by 4.00 p.m. on the Return Date for the
Relevant Dividend. By inputting a Dividend Election Input Message as described above, you confirm
your election to participate in the Scrip Dividend Scheme in accordance with the details inputted and
with the terms and conditions of this information booklet.
(D)
Election through Euroclear Nederland
Holders of Ordinary Shares traded on Euronext (but not any other Shareholders) will be informed by
their bank or broker of the option to elect to join the Scheme.
Any holders of Ordinary Shares traded on Euronext wishing to elect to participate in the Scheme
should contact their bank or broker and ensure that such election is received by RBS no later than
3.00 p.m. (CET) on 23 September 2010. If no such election is made, the Relevant Dividend will be paid
out to such Shareholders in cash. Delivery of New Ordinary Shares will only be made on the basis of
the total number of dividend rights delivered. Any remaining fractions of Ordinary Shares will be
settled in cash.
The Company does not charge its Shareholders for joining the Scheme. Whether a bank or broker
charges a Shareholder to process its election to participate in the Scheme depends on the arrangements
the Shareholder has with its bank or broker. Please contact your bank or broker for further information
on this.
Following each Relevant Dividend any Mandate provided by Euroclear Nederland shall be cancelled.
Accordingly, a Shareholder holding Ordinary Shares through Euronext must make an election to
participate in the Scheme for each Relevant Dividend.
Euronext members who have elected to participate in the Scheme are requested to deliver their relevant
dividend rights directly to RBS.
4.
HOW MANY NEW ORDINARY SHARES WILL I RECEIVE?
Subject to the New Ordinary Shares being admitted to the official list of the UK Listing Authority and
to trading on the London Stock Exchange’s market for listed securities and to the listing and trading of
such New Ordinary Shares on Euronext (if applicable), each Shareholder who has elected to receive the
Relevant Dividend in the form of New Ordinary Shares shall be entitled to the number of New
Ordinary Shares as are together as nearly as possible equal in value to (but not greater than) the cash
amount of the Relevant Dividend that such Shareholder elects to forgo.
Accordingly, the number of New Ordinary Shares that a Shareholder will receive for each Relevant
Dividend will depend on:
(a)
the amount of the cash dividend;
(b)
the number of Ordinary Shares registered in that Shareholder’s name at the Record Date; and
(c)
the price to be used in calculating the New Ordinary Share entitlement. This will be the average
of the middle market quotations of an Ordinary Share, derived from the London Stock
Exchange Daily Official List, for the five Business Days starting on the day the Ordinary Shares
are first quoted ex-dividend (the Calculation Price).
Please see section 5 for an example of this calculation.
In the unlikely event that the New Ordinary Shares are not admitted to listing and trading on the
London Stock Exchange or Euronext (as applicable), the dividend for Shareholders who have chosen to
receive New Ordinary Shares will be paid in cash on the Relevant Dividend payment date.
5.
FRACTIONS OF SHARES AND HELD OVER CASH BALANCES
When working out your New Ordinary Share entitlement, it is unlikely that the calculation will give
rise to an exact number of New Ordinary Shares. As fractions of New Ordinary Shares cannot be
issued, their cash value will be retained by the Company and carried forward, without interest, and
included in the calculation for your next dividend. Fractional entitlements to New Ordinary Shares
held by nominees (including Euroclear Nederland) will be settled in cash.
For example:
●
The cash dividend is 21p per Ordinary Share.
●
You hold 1,000 Ordinary Shares and elect to take New Ordinary Shares instead of the cash
dividend.
●
The Calculation Price is £6.50.
In this example:
●
The value of the cash dividend is 1,000 x 21p = £210.00
●
The number of New Ordinary Shares of equal value is 32.30, being the dividend value divided
by the Calculation Price however, as fractions of New Ordinary Shares cannot be issued, the
number of New Ordinary Shares is rounded down to 32.
●
The value of New Ordinary Shares at the Calculation Price is £208.00.
●
A cash balance of £2.00 would be carried forward to the next dividend payment.
If you withdraw from the Scheme (as to which, see section 15) or if you sell or transfer your entire
holding of Ordinary Shares, or if the Company terminates the Scheme (as to which, see section 16) or if
(being the sole Shareholder) you die, are declared bankrupt, go into liquidation or suffer from mental
incapacity, then an amount representing any balance which has been held by the Company will be paid
to you or your estate or trustee as soon as reasonably practicable.
6.
HOW WILL I BE NOTIFIED OF THE NUMBER OF NEW ORDINARY SHARES I
HAVE BEEN ALLOCATED?
As soon as practicable after your New Ordinary Shares have been issued, you will receive a statement
with your share certificate (if applicable) showing the number of New Ordinary Shares you have
received instead of the cash dividend and any cash balance to be carried forward to the next dividend
payment. The statement will also contain details of the Calculation Price. If you wish to know the
Calculation Price before this, please contact the Registrar four Business Days after the Record Date of
the Relevant Dividend: such date will be set out on the Company’s website at
http://www.thephoenixgroup.com in the “Investor Relations” section. In addition, the Company will,
as soon as practicable, announce the Calculation Price in respect of each Relevant Dividend.
If on any occasion your cash dividend entitlement, together with any cash balance brought forward, is
insufficient to acquire at least one New Ordinary Share, you will receive a statement explaining that no
New Ordinary Shares have been issued to you and showing how much cash has been carried forward to
the next dividend.
7.
WHEN WILL I RECEIVE MY SHARE CERTIFICATE OR WHEN WILL MY CREST
ACCOUNT BE CREDITED?
Share certificates (if applicable) will be posted, at your risk, on or about the same day as dividend
payments are posted to Shareholders who are taking the dividend in cash.
CREST members will have their CREST accounts credited directly with New Ordinary Shares on the
same day the cash dividend is paid. Euronext members will have their accounts credited directly with
New Ordinary Shares on the same day the dividend is paid. If the New Ordinary Shares cannot for
whatever reason be credited to your account then the Company shall issue you with share certificates in
respect of the New Ordinary Shares as soon as practicable.
When issued, the New Ordinary Shares will rank equally in all respects with the existing Ordinary
Shares and will qualify for all future dividends. The rights attaching to the Ordinary Shares are
detailed in the prospectus issued by the Company on 4 June 2010, a copy of which is available on the
Company’s website.
8.
ORDINARY SHARES HELD IN JOINT NAMES
The Scheme applies to Ordinary Shares held in joint names provided that all joint Shareholders
complete the Mandate.
9.
CAN I COMPLETE A MANDATE FOR PART OF MY HOLDING?
Other than for nominee Shareholders or Shareholders who have already agreed to accept scrip
dividends pursuant to the amended contingent rights agreements, Mandates will not be accepted for
part of a shareholding. For Shareholders who have elected to take scrip dividends, Mandates will only
be accepted for the entirety (and not part) of the remainder of their holding. A Mandate applies to the
full number of Ordinary Shares registered in your name at any time.
10.
WHAT IS THE IMPACT OF MAKING A PARTIAL ELECTION?
Any partial election by a nominee Shareholder shall have effect only in respect of the dividend to
which it relates. Other than for those Shareholders who have undertaken to take the scrip dividend
pursuant to the amended contingent rights agreements, any residual cash balance due to a nominee
Shareholder will be paid out at the same time as the cash dividend is paid out. A cash dividend will
automatically be paid on any Ordinary Shares which are not specified in a Mandate.
11.
WHAT HAPPENS IF I ACQUIRE ORDINARY SHARES AFTER I HAVE COMPLETED
A MANDATE?
Any additional Ordinary Shares which you acquire, and which are registered in your name prior to the
relevant Record Date, including pursuant to any previous scrip dividend will be covered by the
Mandate and you will receive New Ordinary Shares, instead of cash dividends, for your entire
shareholding.
If you acquire Ordinary Shares before they are quoted “ex-dividend” for a dividend, then you may be
entitled to the dividend on those shares. You are advised to contact your stockbroker or other agent
through whom the acquisition was made without delay to ensure that the acquired Ordinary Shares are
registered promptly in your name.
If you have provided a Mandate for all your Ordinary Shares, then New Ordinary Shares will
automatically increase your entitlement to receive New Ordinary Shares pursuant to the terms of the
Scheme when future dividends are declared.
12.
DOES THE SCHEME APPLY IF I TRANSFER PART OF MY HOLDING?
The Scheme will apply to those of your Ordinary Shares which you have not transferred. The right to
receive the New Ordinary Shares will not transfer with the transfer of the Ordinary Shares.
13.
MORE THAN ONE HOLDING?
If your Ordinary Shares are registered in more than one holding and you want to receive New Ordinary
Shares instead of cash dividends, you must complete a separate Mandate for each holding. If you wish,
you may ask the Registrar to combine your holdings. You cannot however combine a sole
shareholding with a joint shareholding.
14.
WHAT ARE THE TAX EFFECTS?
The tax effect of taking New Ordinary Shares will depend on each Shareholder’s individual
circumstances. Explanatory notes are given at section 21.
15.
CANCELLING A MANDATE
You may cancel your Mandate for all future dividends at any time in writing to the Registrar. For a
cancellation to be effective for any particular dividend, the written cancellation notice must be received
by 4.00 p.m. on the Return Date for the Relevant Dividend. If a cancellation is received after that date,
then such cancellation will apply to all subsequent dividends. A Mandate will be regarded as cancelled
for any Ordinary Shares which a Shareholder (other than those who have contractually agreed to take
scrip dividends) sells or transfers to another person. This will take effect from registration of the share
transfer. Mandates will be cancelled immediately on notice to the Registrar of death, bankruptcy or
mental incapacity of a Shareholder. If you have made a partial election in accordance with sections 9
and 10, your Mandate will terminate automatically following the payment of the Relevant Dividend.
16.
CAN THE COMPANY AMEND, SUSPEND OR TERMINATE THE SCHEME?
The operation of the Scrip Dividend Scheme is always subject to the Directors’ decision to make an
offer of a scrip dividend alternative in respect of any particular dividend.
The Directors may, at any time after such an offer is made and before the relevant New Ordinary
Shares have been issued, revoke, amend, suspend, or terminate the offer or the Scheme by notice in
writing to Shareholders.
If the Directors suspend or terminate an offer or the Scheme before the relevant New Ordinary Shares
have been issued, or decide not to offer a scrip dividend alternative in respect of any particular
dividend, then the Shareholders will receive their dividend in cash in the usual way.
If the Directors amend the Scheme or an offer, then your instructions will remain valid under the
amended terms unless you notify the Registrar in writing that you wish to terminate your Mandate in
accordance with the terms of this information booklet.
Subject to the above, if the Directors offer a scrip dividend alternative in respect of any one or more
future dividends under the Scheme and you have submitted a Mandate in accordance with the terms of
this information booklet, then you will be issued New Ordinary Shares on the terms of this information
booklet.
17.
WHEN WILL THE SCHEME END?
The operation of the Scheme shall cease on 23 December 2011, which is the date of the expiry of the
Shareholders resolution for the approval of the Scheme, unless the Scheme is terminated earlier in
accordance with the terms of this information booklet or the operation of the Scheme is otherwise
extended by way of a further Shareholders resolution.
18.
IMPACT ON THE WARRANTS
The Company has in issue three types of warrants which each have anti-dilution provisions which are
triggered when the Company issues Ordinary Shares pursuant to a scrip dividend scheme.
The exercise price for each of the warrants is as follows:
(a)
the Public Warrants, currently listed on the London Stock Exchange and Euronext, have an
exercise price of €11.00;
(b)
the Lender Warrants have an exercise price of £15.00; and
(c)
the Royal London Warrants have an exercise price of €11.00,
(in the case of each warrant, the Warrant Price) and exercise of the relevant warrant entitles the
warrant holder to one Ordinary Share per warrant.
In addition, the warrants may be redeemed by the Company at their redemption price of €0.01 provided
that in the case of:
(i) the Public Warrants and the Royal London Warrants, the Ordinary Share price equals or
exceeds €16.50 per Ordinary Share on each of 20 trading days within any 30 trading day
period; and
(ii) the Lenders Warrants, the Ordinary Share price equals or exceeds £19.50 per Ordinary
Share for any 20 consecutive trading days (in the case of each warrant, the price
threshold is the Floor Price for the relevant warrant).
The impact of the Scrip Dividend Scheme on the warrants is that:
(a)
the number of Ordinary Shares to which the relevant warrant holder is entitled upon exercise of
each warrant increases in proportion to the increase in the number of issued Ordinary Shares
pursuant to the Scrip Dividend; and
(b)
the Warrant Price and Floor Price for each warrant shall be adjusted (to the nearest penny/cent)
by multiplying such Warrant Price or Floor Price, as the case may be, immediately prior to the
issue of Ordinary Shares under the Scheme by a fraction of (x) where the nominator is the
number of Ordinary Shares purchasable upon exercise of the relevant warrant which is divided
by the denominator which is the number of Ordinary Shares so purchasable upon exercise of the
relevant warrant immediately after the issue of the New Ordinary Shares.
The Company will announce as soon as practicable the impact on the warrants for each Relevant
Dividend.
19.
WHAT DO I DO IF I HAVE ANY QUESTIONS?
If you have any questions relating to the Scheme, please write to the Registrar at c/o Queensway
House, Hilgrove Street, St Helier, Jersey, Channel Islands, JE1 1ES or call them by telephoning +44
(0)870 707 4040. If you are a Euronext member please contact RBS by telephone on: +31 20464
3707, by fax on: +31 20464 1707 or by email at [email protected].
If you wish to receive dividends in cash in the usual way you need take no action and may
disregard this information booklet.
20.
DEFINITIONS
Business Day means a day (other than a Saturday, Sunday or public holiday in England or the
Netherlands) when banks in both London and Amsterdam are open for business;
Calculation Price has the meaning given in section 4(c);
Company means Phoenix Group Holdings, a company incorporated as an exempted company with
limited liability under the laws of the Cayman Islands with registered number 202172;
CREST means the relevant system (as defined in the Uncertificated Securities Regulations 2001
(SI/3755)) in respect of which Euroclear UK & Ireland Limited is the operator;
Directors means the directors of the Company;
Dividend Election Input Message means the dividend election input message transferred through
CREST by any CREST member/Shareholder wishing to elect to participate in the Scrip Dividend
Scheme;
Euronext means Euronext Amsterdam by NYSE Euronext;
Lender Warrants means the warrants issued to the lenders (under the groups facility agreements as
detailed in the prospectus issued by the Company on 4 June 2010) on 2 September 2009;
London Stock Exchange means the London Stock Exchange plc;
Mandate means the instructions of a Shareholder provided to the Company pursuant to the any of the
methods detailed in section 3;
Mandate Form means a mandate, in a form approved by the Company, from a Shareholder to the
Directors to allot under the terms of the Scrip Dividend Scheme, New Ordinary Shares in lieu of cash
dividends to which the Shareholder may become entitled from time to time;
New Ordinary Shares means new Ordinary Shares issued under the Scrip Dividend Scheme;
Ordinary Shares means Ordinary Shares of €0.0001 each in the capital of the Company;
Public Warrants means the warrants issued by the Company in respect of Ordinary Shares;
Registrar means Computershare Investor Services (Cayman) Limited, c/o Queensway House, Hilgrove
Street, St Helier, Jersey, Channel Islands, JE1 1ES, telephone +44 (0)870 707 4040, email
[email protected];
Record Date means in respect of any dividend, the date notified by the Company to Shareholders as the
date by which they must be registered as Shareholders in order to be entitled to receive that dividend;
Relevant Dividend means any dividends proposed by the Company to which the Shareholders are
entitled and for which the Scrip Dividend Scheme is offered;
Return Date means, in respect of any Relevant Dividend, the date notified by the Company to
Shareholders as the date by which the Mandate to be provided by a Shareholder must be received by
the Registrar in order for it to be effective in respect of that Relevant Dividend;
Royal London Warrants means the warrants issued to The Royal London Mutual Insurance Society
Limited on 2nd September 2009 (as detailed in the prospectus issued by the Company on 4th June
2010);
Scrip Dividend Scheme or Scheme means the Phoenix Group Holdings scrip dividend scheme
pursuant to the articles of association of the Company and comprised in the terms and conditions
contained in this information booklet, as amended from time to time, including the Mandate Form;
Scrip Dividend Timetable means a timetable for each proposed scrip alternative covered by the
Scheme as notified by the Company to Shareholders and as set out on the Company’s website
http://www.thephoenixgroup.com in the “Investor Relations” section, as may be amended from time to
time; and
Shareholder means holder of Ordinary Shares.
All references to times in this document are to the time in London, England, unless otherwise stated.
21.
TAXATION
The Company has been advised that, under current United Kingdom legislation and current HM
Revenue & Customs (HMRC) practice (both of which may change, possibly with retroactive effect),
the taxation consequences for Shareholders electing to receive New Ordinary Shares instead of a cash
dividend under the Scheme will, broadly, be as follows. This summary only relates to the position of
Shareholders resident and, if individuals, ordinarily resident and domiciled in, and only in, the United
Kingdom for taxation purposes who hold their Ordinary Shares as an investment (other than under an
individual savings account) and who are the absolute beneficial owner of the Ordinary Shares to which
any relevant election relates and any dividends paid on them. The tax position of certain categories of
Shareholder who are subject to special rules (such as persons acquiring their Ordinary Shares in
connection with employment, dealers in securities, insurance companies and collective investment
schemes) is not considered. In addition, the summary below may not apply to (i) a person who holds
Ordinary Shares as part of or pertaining to or attributable to a fixed base or permanent establishment in
a non-UK jurisdiction; or (ii) any Shareholders who, either alone or together with one or more
associated persons, such as personal trusts and connected persons, control directly or indirectly at least
10 per cent. of the voting rights or any class of share capital of the Company. The precise taxation
consequences for a particular Shareholder will depend on that Shareholder’s individual circumstances.
This summary of the taxation treatment is not exhaustive. If you are in any doubt as to your tax
position, you should consult your professional adviser before taking any action.
Individuals
On the basis of UK case law, individuals who choose to receive New Ordinary Shares under the
Scheme should not be treated as receiving income in respect of the issue of the New Ordinary Shares.
Individuals should therefore not be liable to income tax in respect of the New Ordinary Shares issued to
them.
The issue of the New Ordinary Shares should not trigger a disposal of an individual’s existing
registered holding of Ordinary Shares (the Original Holding) for the purpose of capital gains tax but
instead the Original Holding and the New Ordinary Shares should be treated as a single holding
acquired at the time of the Original Holding. The issue of the New Ordinary Shares will not generate
further allowable expenditure for capital gains tax purposes but that which was treated as arising in
respect of the Original Holding will be apportioned across the single holding comprising the Original
Holding and the New Ordinary Shares.
Companies
On the basis of longstanding HMRC practice founded on UK case law principles, a company receiving
New Ordinary Shares under the Scheme should not be treated as receiving a distribution for corporation
tax purposes.
The Company intends to pay up the New Ordinary Shares by capitalising requisite amounts of its share
premium account. If this is the case, the amounts so paid up should be treated for tax purposes as “new
consideration” and so should not be deemed to be a distribution for tax purposes under provisions
which might otherwise treat such amounts as an income distribution for corporation tax purposes to the
extent of share capital which the Company has previously repaid.
A corporate Shareholder should not be treated as making any disposal for chargeable gains purposes at
the time the New Ordinary Shares are issued. Instead the New Ordinary Shares and the corporate
Shareholder’s Original Holding should be treated as a single holding acquired at the time of the
Original Holding. The issue of the New Ordinary Shares will not give rise to any additional allowable
expenditure for chargeable gains purposes but that which was treated as arising in respect of the
Original Holding will be apportioned across the single holding comprising the Original Holding and the
New Ordinary Shares.
Fractions of Shares and Held Over Balances
As explained at section 5 above, it is possible that a Shareholder who elects to take part in the Scheme
will, when New Ordinary Shares are issued to him, be entitled to an amount representing what would
otherwise be a fractional entitlement to shares which will be held by the Company and applied toward
the next issuance of New Ordinary Shares (or paid to the Shareholder in certain specified
circumstances). Based on UK case law, there are good arguments that any amount carried forward, and
therefore not at the immediate disposal of the Shareholder, should not be treated as taxable income
arising to the Shareholder at the time that the New Ordinary Shares are issued. If this amount were
subsequently paid to the Shareholder (or for the Shareholder’s benefit) in cash, the amount would then
be treated as taxable income of the Shareholder. The tax treatment of this income should be in line
with that described in the listing particulars (available at http://www.thephoenixgroup.com) in respect
of dividends from the Company.
Transactions in Securities
You should be aware of anti-avoidance provisions, contained in Chapter 1 of Part 13 of the Income Tax
Act 2007 (for income tax payers) and Part 15 Corporation Tax Act 2010 (for corporation tax payers)
which permit HMRC in certain circumstances to counteract a tax advantage obtained in consequence of
certain transactions in securities. No clearance has been sought from HMRC that it will not apply these
provisions in relation to those Shareholders who elect to receive New Ordinary Shares. The Company
does not expect that Chapter 1 of Part 13 of the Income Tax Act 2007 or Part 15 Corporation Tax Act
2010 (as relevant) should generally apply to Shareholders, but this will depend upon each
Shareholder’s individual circumstances.
Stamp Duty and Stamp Duty Reserve Tax
No stamp duty or stamp duty reserve tax will be payable on the receipt of New Ordinary Shares under
the Scheme.
US federal income taxation
The following discussion is a general summary based on current law of certain US federal income tax
considerations relevant to receiving New Ordinary Shares instead of a cash dividend on Ordinary
Shares. The discussion is not a complete description of all tax considerations that may be relevant to
investors, does not address the tax consequences of owning or disposing of New Ordinary Share and
does not consider an investor’s particular circumstances. For a general discussion of certain US federal
income tax consequences of owning or disposing of Ordinary Shares generally, please consult the
listing particulars available at http://www.thephoenixgroup.com. This summary only applies to US
Holders (as defined below) that receive New Ordinary Shares with respect to Ordinary Shares held as
capital assets and that use the US Dollar as their functional currency.
THE STATEMENTS ABOUT US FEDERAL INCOME TAX CONSIDERATIONS ARE MADE
TO SUPPORT THE SCRIP DIVIDEND SCHEME. NO TAXPAYER CAN RELY ON THEM
TO AVOID TAX PENALTIES. EACH INVESTOR SHOULD SEEK ADVICE FROM AN
INDEPENDENT TAX ADVISOR ABOUT THE TAX CONSEQUENCES UNDER ITS OWN
PARTICULAR CIRCUMSTANCES OF RECEIVING OR OWNING THE NEW ORDINARY
SHARES UNDER THE LAWS OF THE CAYMAN ISLANDS, THE UNITED KINGDOM, THE
UNITED STATES AND ITS CONSTITUENT JURISDICTIONS, AND ANY OTHER
JURISDICTIONS WHERE THE INVESTOR MAY BE SUBJECT TO TAXATION.
As used here, a ‘‘US Holder’’ means a recipient of New Ordinary Shares that is for US federal income
tax purposes (i) a citizen or individual resident of the United States, (ii) a corporation or other business
entity treated as a corporation created or organised under the laws of the United States or its political
subdivisions, (iii) an estate the income of which is subject to US federal income tax without regard to
its source or (iv) a trust subject to the control of one or more US persons and the primary supervision of
a US court.
The US federal income tax treatment of a partner in a partnership that receives New Ordinary Shares
will depend on the status of the partner and the activities of the partnership. Partnerships should consult
their tax advisors concerning the US federal income tax consequences to their partners of the receipt,
ownership and disposition of the New Ordinary Shares.
Receipt of New Ordinary Shares
Receipt of New Ordinary Shares by a US Holder as part of the Scrip Dividend Scheme will be treated
as ordinary income from foreign sources in an amount equal to the fair market value of the New
Ordinary Shares (determined by the price at which New Ordinary Shares trade at the time of the
distribution). The distribution will not be eligible for the dividends received deduction available to US
corporations or the preferential rate allowed for qualified dividends. A US Holder’s basis in the New
Ordinary Shares will be equal to the fair market value of the New Ordinary Shares at the time they are
received. A US Holder’s holding period for the New Ordinary Shares will begin at the time they are
received.
Because the distribution of the New Ordinary Shares will be treated as a dividend for US tax purposes,
it may be reported to the IRS unless the recipient is a corporation or has otherwise established a basis
for exemption. Backup withholding tax at the applicable statutory rate may apply to amounts subject to
reporting if the holder fails to provide an accurate taxpayer identification number or otherwise establish
a basis for exemption. Any amount withheld may be credited against the holder’s US federal income
tax liability or refunded to the extent it exceeds the holder’s liability. The Company will not be
responsible for any such withholding of tax unless it pays non-corporate US Holders directly.
THE DISCUSSION ABOVE IS A GENERAL SUMMARY. IT DOES NOT COVER ALL TAX
MATTERS THAT MAY BE OF IMPORTANCE TO A PARTICULAR INVESTOR. EACH US
HOLDER IS URGED TO CONSULT ITS OWN TAX ADVISOR ABOUT THE TAX
CONSEQUENCES TO IT OF AN INVESTMENT IN NEW ORDINARY SHARES IN LIGHT
OF THE INVESTOR’S OWN CIRCUMSTANCES.
22.
PHOENIX GROUP HOLDINGS SCRIP DIVIDEND SCHEME MANDATE FORM
Shareholder name:
Shareholder reference number (as shown on Shareholder’s share
certificate):
Shareholder address:
If you wish to participate in the Scrip Dividend Scheme please complete, sign and return this Mandate Form to the Registrar at c/o Queensway House,
Hilgrove Street, St Helier, Jersey, Channel Islands, JE1 1ES.
Before returning this Mandate Form, you should read the terms and conditions of the Scheme as set out in this document (a copy of which can be found at
the Company’s website http://www.thephoenixgroup.com) and retain a copy of the completed Mandate Form. Please note that if you hold Ordinary Shares
subject to restrictions under US securities laws then any New Ordinary Shares that you receive will be subject to the same restrictions.
Please insert your full name, address and Shareholder reference number (which can be found on your share certificate) in the box above. If you have more
than one shareholding account please state all reference numbers as this Mandate Form will only be applied to the reference numbers stated.
If you are a resident of the State of California, you must complete and return an investor letter in the form included as Appendix 1.
To the Directors of the Company
I/We, the undersigned, being the registered holder(s) of Ordinary Shares in the Company, confirm that I/we have read and understood the terms and
conditions of the Scheme. I/We wish to elect to participate in the Scheme and receive an allotment of New Ordinary Shares in respect of any future
dividend in respect of which a scrip dividend is offered for my/our maximum entitlement on the terms of the relevant scrip dividend offer and the
Company’s articles of association until this Mandate is revoked by me/us or by the Company.
I/we authorise you to credit my/our member account or to send at my/our risk by first class post a definitive share certificate, as appropriate, in respect of
New Ordinary Shares allotted to me/us pursuant to this Mandate.
Signature of Shareholder:
Date:
Signature of other joint Shareholders (if applicable)
Date:
If you have elected to receive New Ordinary Shares using this Mandate Form and to be credited to your CREST account please complete the table below:
CREST Participant ID:
CREST Member Account ID (if any):
Please mark this box if signing on behalf of the Shareholder as Power of Attorney or Receiver and provide documentary evidence of such
appointment.
Notes:
In the case of joint Shareholders, all joint Shareholders must sign. In the case of a Shareholder which is a body corporate, this Mandate Form must be
signed by two authorised signatories (e.g. two directors or a director and company secretary) stating their capacity. Alternatively, this Mandate Form can
be signed by a director of the body corporate under its common seal or in the presence of a witness who attests the director’s signature.
If you have any queries about this Mandate Form, please contact the Registrar by telephoning +44 (0)870 707 4040.
To be effective for a particular dividend you must complete and return your Mandate so as to be received by the Registrar no later than 4.00 p.m.
on Return Date for the Relevant Dividend.
If you make any mistakes when completing this Mandate Form, please do not use correction fluid, just cross out the error and initial the change or
complete a new Mandate Form which is available from the Company’s website http://www.thephoenixgroup.com/.
This Mandate Form forms part of, and should be read in conjunction with, the other information contained in this information booklet.
Appendix 1
Investor Letter to be completed by Californian Shareholders
Phoenix Group Holdings
32 Commercial Street
St Helier
Jersey
JE2 3RU
Dear Sirs:
With reference to our acquisition of the New Ordinary Shares of Phoenix Group Holdings, we hereby
confirm that:
1.
We understand and acknowledge that the New Ordinary Shares have not been and will not be
registered under the U.S. Securities Act of 1933, as amended (the “Act”), and therefore may not be
offered or sold, directly or indirectly, in the United States or to or for the account or benefit of any
United States person, except in compliance with the registration requirements of the Act and other
applicable laws or pursuant to any exemption therefrom.
2.
We are institutional investors for the purposes of Section 25102(i) of the California
Corporations Code, which are defined as (a) bank, savings and loan association, trust company,
insurance company, investment company registered under the Investment Company Act of 1940, or
pension or profit sharing trust (other than a pension or profit sharing trust of the issuer, a self employed
individual retirement plan or an individual retirement account); (b) any organization described in
Section 501(c)(3) of the Internal Revenue Code, as amended to December 29, 1981, which has total
assets (including endowment, annuity and life income funds) of not less than $5,000,000 according to
its most recent audited financial statement; (c) any corporation which has a net worth on a consolidated
basis of not less than $14,000,000 according to its most recent audited financial statement; (d) any
wholly owned subsidiary of any of the foregoing institutional investors; or (e) the federal government,
any agency or instrumentality of the federal government, any corporation wholly owned by the federal
government, any state, any city, city and county, or county, or any agency or instrumentality of a state,
city, city and county, or county, or any state university or state college and any retirement system for
the benefit of employees of any of the foregoing; provided that any purchaser listed in (a) through (e)
above represents that it is purchasing for its own account (or for such trust account) for investment and
not with a view to or for sale in connection with any distribution of securities.
3.
We have such knowledge and experience in financial and business matters as to be capable of
evaluating the merits and risks of our investment in the Securities, and are able to bear the economic
risk of such investment.
As recipients in an intended private placement of New Ordinary Shares which have not been registered
under the Act, we are acquiring the New Ordinary Shares for our own account and (subject to
disposition of our property being at all times within our control) not with a view to any resale or
distribution or other disposition thereof by us.
………………………
Signature
…………………………
Number of Shares held
………………………
Name of Shareholder
………………………
Date