FARMER BUSINESS DEVELOPMENTS PLC. Proposed Transaction Concerning FBD PROPERTY & LEISURE LIMITED. and Notice of Extraordinary General Meeting

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1 FARMER BUSINESS DEVELOPMENTS PLC (Incorporated and registered in Ireland with registered number ) Proposed Transaction Concerning FBD PROPERTY & LEISURE LIMITED and Notice of Extraordinary General Meeting This document should be read as a whole. Your attention is drawn to the letter from your Chairman which is set out in Part I and contains a unanimous recommendation from your Board that you vote in favour of the Resolution to be proposed at the Extraordinary General Meeting referred to below. Notice of an Extraordinary General Meeting of Farmer Business Developments plc to be held at p.m. on 22 October 2015 at Irish Farm Centre, Bluebell, Dublin 12, Ireland is set out at the end of this document. Shareholders will find enclosed with this document a Form of Proxy for use at the EGM. To be valid, Forms of Proxy must be completed and signed in accordance with the instructions printed thereon and returned to Capita Asset Services, Shareholder solutions (Ireland), P.O. Box 7117, Dublin 2, Ireland or by hand (during normal business hours) to Capita Asset Services, Shareholder solutions (Ireland), 2 Grand Canal Square, Dublin 2, D02 A342, Ireland so as to arrive no later than p.m. on 20 October

2 TABLE OF CONTENTS PART I LETTER FROM THE CHAIRMAN Introduction Background to and reasons for the Proposed Transaction Information on FBDPLL Current trading of FBDPLL Principal terms and conditions of the Proposed Transaction EGM Action to be taken Further information Recommendation... 8 PART II SUMMARY OF THE PRINCIPAL TERMS AND CONDITIONS OF THE PROPOSED TRANSACTION The Share Acquisition and the Loan Note Redemption Conditions to completion of the Proposed Transaction Warranties and representations Operational arrangements Finance arrangements PART III RISKS RELATING TO THE PROPOSED TRANSACTION Conditions Financing Risks to Farmer Business Developments plc relating to the Proposed Transaction not proceeding DEFINITIONS NOTICE OF EXTRAORDINARY GENERAL MEETING ORDINARY RESOLUTION EXPECTED TIMETABLE OF PRINCIPAL EVENTS Date of issue of this document 1 October 2015 Latest time and date for receipt of Forms of Proxy from Shareholders pm on 20 October 2015 Extraordinary General Meeting pm on 22 October 2015 Expected date of Completion of the Proposed Transaction Within 7 days of shareholder approval 2

3 Directors: PART I LETTER FROM THE CHAIRMAN Farmer Business Developments plc (Incorporated in Ireland. Registered number ) Registered Office and Head Office: Irish Farm Centre, Bluebell, Dublin 12, Ireland Padraig Walshe (Chairman) Jack Bayly John Bryan Donal Buckley Barry Donnelly Joe Healy James Kane (Vice Chairman) Michael Kennedy Kevin Kiersey Diarmuid Lally TJ Maher John McCullen Patrick Murphy Neil O Riordan Hugh Ryan Patrick Smith Tommy Joe Tuffy To: Farmer Business Developments plc shareholders 1 October 2015 Dear Shareholder, Proposed acquisition by Farmer Business Developments plc of FBD Holdings plc s shareholding in FBD Property & Leisure Limited and the redemption of its Loan Notes in FBD Property & Leisure Limited 1. Introduction On 21 August 2015, Farmer Business Developments plc (the Company ) entered into a conditional agreement (subject to shareholder approval) for the acquisition of FBD Holdings plc s stake in its joint venture, FBD Property & Leisure Limited (FBDPLL), through the proposed purchase of FBD Holdings plc's entire shareholding and the redemption of its Loan Notes (the "Proposed Transaction"). FBDPLL owns and manages Irish and Spanish property and leisure operations including La Cala Resort and Sunset Beach Resort in Spain and three hotels in Ireland comprising Castleknock Hotel, Faithlegg House Hotel and Golf Club and the Tower Hotel. The total consideration, which shall be financed through debt facilities and cash on completion of the Proposed Transaction, is 48.5 million (of which 23.5 million is proposed to be funded directly by Farmer Business Developments plc and 25 million through new borrowings in FBDPLL). Part II of this document contains a summary of the principal terms and conditions of the Proposed Transaction. The purpose of this document is to provide details on the Proposed Transaction, to set out the reasons for the Proposed Transaction, to explain why the Directors consider the Proposed LR (3) 3

4 Transaction to be in the best interests of the Shareholders as a whole and to recommend that Shareholders vote in favour of the Resolution to be proposed at the EGM. A notice convening the EGM, at which the Resolution will be proposed, is set out at the end of this document. If you would like to vote on the Resolution but cannot attend the EGM, you can appoint a proxy to exercise all or any of your rights to attend, vote and speak at the EGM by using one of the methods set out in the notes to the notice of the EGM. 2. Background to and reasons for the Proposed Transaction On 21 August 2015, Farmer Business Developments plc and FBD Holdings plc entered into a conditional agreement (subject to shareholder approval) for the acquisition of FBD Holdings plc s stake in FBDPLL, its joint venture with Farmer Business Developments plc, through the purchase of FBD Holdings plc's entire shareholding and the redemption of its Loan Notes. The Directors believe that the Proposed Transaction has a clear strategic and financial rationale. The key benefits resulting from the Proposed Transaction are as follows: (a) (b) (c) As a major shareholder in FBD Holdings plc (holding 24.6% of the issued ordinary share capital), the Board of Farmer Business Developments plc is keen to support FBD Holdings plc s strategy to strengthen the capital position of its core general insurance underwriting subsidiary, FBD Insurance. The proceeds from the Proposed Transaction will be reinvested into FBD Insurance. This will strengthen the capital position of FBD Insurance ahead of the implementation of the Solvency II regime in January 2016; FBD Holdings plc had clearly identified that FBDPLL was non-core to its operations and was focused on exiting from the business to focus its resources on its core strategic business, insurance underwriting. This has presented Farmer Business Developments plc with the opportunity to wholly own a portfolio of hotel, resort and property assets with which it is familiar and which has strong growth prospects; Since the JV was formed in October 2011, FBDPLL has performed well, benefitting from an experienced management team and a continued improvement in the Irish and Spanish macro economy and real estate values and also a broad recovery in the hotel market in both countries. The Directors of Farmer Business Developments plc believe there are further growth opportunities in the business and as a wholly owned subsidiary of Farmer Business Developments plc, our shareholders will benefit from such opportunities; (d) FBDPLL was included in the consolidated accounts of FBD Holdings plc at 47.6m at 30 June 2015, excluding interest of 3.4m on the Loan Notes due by FBDPLL to FBD Holdings plc in certain circumstances. The Directors believe the Proposed Transaction at 48.5m represents an attractive investment opportunity for Farmer Business Developments plc s shareholders. If the Proposed Transaction does not proceed, the key benefits set out above would not be realised. The financing structure of the Proposed Transaction is not anticipated to have any impact on the Company s current dividend payment policy. Further information on the risk factors is set out in Part III of this document. Part II of this document contains a summary of the principal terms and conditions of the Proposed Transaction. 4

5 3. Information on FBDPLL Overview of hotel, resort and property portfolio FBDPLL owns and manages Irish and Spanish property and leisure operations including La Cala Resort and Sunset Beach Resort in Spain, and three hotels in Ireland: (a) Castleknock Hotel and Country Club, Dublin, Ireland Winner of the AA Hotel of the Year 2013/2014, this four star hotel is located in an affluent suburb of Dublin with 144 bedrooms. The hotel has easy access to Dublin Airport and caters primarily for the corporate market mid-week and leisure market at weekends. The facilities include a modern leisure centre and the property adjoins Castleknock Golf Club. (b) Faithlegg House Hotel and Golf, Waterford, Ireland A four star period country house hotel located outside Waterford city with 82 bedrooms and suites, function and conference facilities, and an 18 hole championship golf course. (c) Tower Hotel, Waterford, Ireland A three star hotel in Waterford city centre with 138 bedrooms and function/conference facilities. (d) La Cala Resort, Costa del Sol, Spain An integrated development with a 107 room four star hotel with spa, golf club with three championship golf courses, golf academy and 179,265m 2 of land for residential and commercial development (22,112m 2 of which is under development in a joint venture with Taylor Wimpey plc). (e) Sunset Beach Resort, Costa del Sol, Spain A four star beachfront timeshare/aparthotel resort on the Costa del Sol, 15 minutes from Malaga airport with 597 hotel apartments (337 apartments equivalent owned by FBDPLL), 6 bars and restaurants, a supermarket and related facilities. Summary financials For the financial year ended 31 December 2014, FBDPLL generated EBITDA 1 of 5.9 million. In H1 2015, FBDPLL generated EBITDA of 2.0 million. As at 30 June 2015 FBDPLL had gross assets of million, borrowings 2 of 21.4 million and net assets 3 of 95.1 million. FBD Hotels & Resorts trademark The existing trade mark and brand of the business, FBD Hotels & Resorts, is being maintained. The Directors consider this branding to be a key attribute of the business and will contribute to the future growth potential of the business. Retention of the FBD Hotels & Resorts name ensures continuity of the brand which brings a strong sense of continuity to FBDPLL sales and marketing strategies, particularly for the Irish hotels. For the period of three years post completion of the Proposed Transaction (which period can be renewed with the agreement of FBD Holdings plc), FBDPLL will benefit from the continuation of the existing arrangement whereby FBD Insurance promotes FBD Hotels & Resorts to its 400,000 quality customers. This promotion has been a successful part of FBDPLL sales and marketing campaigns across all FBDPLL hotels/resorts. As well as offering an opportunity for incremental business, this promotion is considered a key tool in customer repeat business. Note 1: EBITDA represents Earnings including the impact of land disposals before interest, tax, depreciation and amortisation for continuing operations. Note 2: Bank Borrowings at 30 June 2015 were 13.9m. In addition there was a Term loan from Farmer Business Developments of 7.5m (due to mature in October 2016). FBDPLL completed a refinancing on 2 July 2015 which resulted in FBDPLL borrowing an additional 7.5m from a financial institution in order to repay the Farmer Business Developments plc loan 7.5m. As a result bank borrowings at 2 July 2015 amounted to 21.4m. Note 3: Net assets as presented excludes loan notes due to Farmer Business Developments plc and FBD Holdings plc. 5

6 Experienced management team The experienced management team and staff of FBDPLL, who are currently on secondment from FBD Holdings plc, are remaining with the business and will transfer to and become employees of FBDPLL as part of the Proposed Transaction. David Kelly, FBDPLL CEO, has over 20 years operational experience in the Hotel, Golf and Property sectors and will remain in the role following completion of the Proposed Transaction. He was one of the main team members involved in the sale by FBD Group of a large tranche of the development land in La Cala to Grupo Lar in 2006 for 120 million. In addition he led the teams for the disposal by FBDPLL of its hotels in Killarney, Sligo and more recently for the disposal of FBDPLL s Temple Bar Hotel to the US based hotel Group Pyramid for 27.2m in March David was instrumental in the restructuring of FBDPLL following the establishment of the JV in Current trading of FBDPLL H FBDPLL EBITDA 1 of 2.0 million represents an increase of 1.2 million (144%) over the same period in H ( 0.8 million). Note 1: EBITDA represents Earnings including the impact of land disposals before interest, tax, depreciation and amortisation for continuing operations. Irish hotel assets FBDPLL current trading is ahead of budget. Occupancy rates and room rates continue to improve across the three Irish hotels in Dublin and Waterford, resulting in improving profits and revenue per available room (RevPar). Year to date RevPar generated across the Irish hotels represents an increase of c.10% over 2014 levels. The return of visitor numbers to near peak levels together with the improvement in domestic spend are the main drivers of this improvement. The reduced volatility in the sector is also leading to a more normalised market in hotel transactions. Spanish hotel assets The Spanish market recovery is continuing and the performance of the Spanish assets is ahead of budget. Visitor numbers to Spain have reached record levels and Spain is benefitting from the upheaval in competitor markets such as Tunisia and the Middle East. The strength of sterling against the euro has been a significant factor in the increase of UK visitors (the largest market) to the Costa del Sol. These factors combined with low exposure to the Spanish domestic economy has resulted in Spanish revenue growth of c.12% over 2014 revenue. Spanish residential property market The Spanish residential property market continues to improve. FBDPLL s JV in La Cala with Taylor Wimpey plc was launched in December 2014 and has resulted in 62% of the 60 units being sold to date from the plans for 11.8 million. Future outlook Management of FBDPLL consider that the future outlook for FBDPLL is positive. Occupancy rates and room rates are projected to continue to grow for the Irish hotels. The improvement in the domestic economy and growth in visitor numbers is projected to result in sustained growth in the medium term. The Dublin hotel market is running into undersupply which is a positive development for the hotel in Castleknock. In addition the wider economic recovery is projected to continue to underpin growth in the Waterford hotels performance. 6

7 The Spanish recovery is projected to continue with significant further projected increases to visitor numbers to Spain driving growth in the Spanish assets. Both Sunset Beach Resort and La Cala Resort are well positioned to benefit from the continued improvement with expectations of significant room rate increases in the future. FBDPLL signed a second JV agreement with Taylor Wimpey plc in 2015 for the development of 103 units in La Cala (JV1 60 units) which is anticipated to deliver positive returns in the medium term as well as underpinning asset value. 5. Principal terms and conditions of the Proposed Transaction The Company has entered into a conditional agreement (subject to shareholder approval) for the Proposed Transaction. Under the terms of the conditional agreement: (a) (b) (c) (d) Farmer Business Developments plc will acquire FBD Holdings plc s shareholding in FBDPLL for 10,000; and FBDPLL will redeem all of the Loan Notes held by FBD Holdings plc in FBDPLL for a consideration of million. As part of the Proposed Transaction FBD Holdings plc will grant an exclusive non transferrable licence to FBDPLL to use the FBD Hotels & Resorts trade mark in order to allow it to continue to market its existing hotels and golf courses as FBD Hotels & Resorts. The licence is for five-year terms which shall automatically renew at the end of each such term but may be terminated in the event of a material breach by FBDPLL or in the event of a change of control or insolvency of FBDPLL. FBD Holdings plc has also agreed, for a threeyear period, to continue its existing practice of promoting FBD Hotels & Resorts in certain circumstances. Key management of FBDPLL will continue with the business following the Proposed Transaction. Completion of the Proposed Transaction is subject to the approval of the shareholders of both Farmer Business Developments plc and FBD Holdings plc. The Company expects that the Proposed Transaction will complete within seven days of shareholder approval. Farmer Business Developments plc and FBDPLL have signed heads of terms with a financial institution to finance the Proposed Transaction. The terms of these finance arrangements remain subject to credit committee approval of the relevant financial institution and finalisation of legal agreements. Further details of the terms and conditions of the Proposed Transaction are set out in Part II of this document. 6. EGM Set out on page 14 of this document is a notice convening an EGM, to be held at 12.30pm on 22 October 2015 at which the Resolution to approve the Proposed Transaction will be proposed. The full text of the Resolution, which will be proposed as an ordinary resolution, is set out in the Notice of EGM, and Completion is conditional upon the passing of the Resolution. The Resolution will be decided on a show of hands, unless a poll is validly demanded in accordance with the Articles of Association of the Company. On a show of hands, each Shareholder present in 7

8 person will have one vote and on a poll each Shareholder present in person or by proxy will have one vote for each Ordinary Share and one vote for each 11% Non-Cumulative Preference share held. The passing of the Resolution requires a majority of the votes cast in respect of the Resolution. 7. Action to be taken If you are a Shareholder, you will find enclosed with this document a Form of Proxy for use at the EGM. Whether you intend to be present at the EGM or not, you are asked to complete the Form of Proxy in accordance with the instructions printed thereon and to return it to the Company's registrar, Capita Asset Services, Shareholder solutions (Ireland), P.O. Box 7117, Dublin 2, Ireland or by hand (during normal business hours) to Capita Asset Services, Shareholder solutions (Ireland), 2 Grand Canal Square, Dublin 2, D02 A342, Ireland as soon as possible and, in any event, so as to arrive not later than pm on 20 October The completion and return of the Form of Proxy will not preclude you from attending the EGM and voting in person if you wish to do so. 8. Further information Your attention is drawn to Part II and Part III of this document, each of which provides additional information on matters referred to in this letter. You are advised to read the whole document and not merely rely on the key or summarised information in this letter. 9. Recommendation The Directors consider that the Proposed Transaction is fair and reasonable as far as Farmer Business Developments plc s shareholders are concerned. The Directors believe the Proposed Transaction has a clear strategic and financial rationale following the assessment of the impact of the Proposed Transaction on Farmer Business Developments plc s existing investment in FBD Holdings plc and the merits of the underlying investment in FBDPLL. As a result, the Directors consider that the Proposed Transaction delivers shareholder value and is in the best interests of Farmer Business Developments plc's shareholders as a whole and unanimously recommend that you vote in favour of the Resolution to be proposed at the EGM as the Directors intend to do with regard to their own respective beneficial holdings. Yours sincerely [SIGNATURE] Padraig Walshe Chairman For and on behalf of the Board 8

9 PART II SUMMARY OF THE PRINCIPAL TERMS AND CONDITIONS OF THE PROPOSED TRANSACTION 1. The Share Acquisition and the Loan Notes Redemption On 21 August 2015, Farmer Business Developments plc entered into a conditional agreement with FBD Holdings plc and FBDPLL pursuant to which: the Company agreed, subject to the terms and conditions set out in the Transaction Agreement, to acquire the entirety of FBD Holdings shareholding in FBDPLL, being 10,000 B Ordinary Shares of 1.00 each for a total price of 10,000; and subject to the completion of the acquisition of FBD Holdings plc s entire shareholding in FBDPLL, FBDPLL agreed to redeem the Loan Notes, with an initial principal amount of 62.6 million issued by FBDPLL to FBD Holdings plc on 19 October 2011 for a total redemption price of million (the Redemption Price ). Upon the completion of the acquisition of FBD Holdings plc s entire shareholding, the Company will become the sole legal and beneficial shareholder of FBDPLL. Following the redemption of the Loan Notes, FBDPLL will cease to owe any obligations to FBD Holdings plc with regard to the Loan Notes, including with respect to all interest accrued. 2. Conditions to completion of the Proposed Transaction The completion of the Proposed Transaction is conditional only upon the Proposed Transaction being approved by an ordinary resolution of the shareholders of each of the Company and FBD Holdings plc. If these conditions are not met by 31 December 2015 (or such later date as the Company and FBD Holdings plc may agree), the Transaction Agreement will terminate and the Proposed Transaction will not proceed. The Company and FBD Holdings plc have each agreed to use all reasonable endeavours to obtain the requisite shareholder approval to enable the Proposed Transaction to proceed. On the completion of the Proposed Transaction, each of the nominee directors of FBD Holdings plc will resign from the board of directors of FBDPLL and the Company will assume full control over the board of FBDPLL. 3. Warranties and representations Each party to the Transaction Agreement provides limited warranties and representations concerning its ability to enter into and perform its obligations thereunder. The Company does not receive the benefit of any warranties or representations from FBD Holdings plc concerning the business and assets of FBDPLL. Therefore, the only warranties from FBD Holdings plc that relate to FBDPLL that will remain in effect from the completion of the Proposed Transaction are certain of those relating to the tax affairs of FBDPLL that were given in October 2011 when the Company first acquired shares in FBDPLL. These tax warranties will themselves expire at the end of December

10 4. Operational arrangements On the completion of the Share Acquisition, FBD Holdings plc will have divested itself of all commercial interests in FBDPLL, and therefore it has been agreed that a number of the main agreements entered into at the time of the creation of the joint venture shall be terminated, including the shareholders agreement and the services agreement that were entered into in October FBD Holdings plc has, however, agreed to provide certain limited IT and property services to FBDPLL for a transitional period of six months to allow FBDPLL a short period to make alternative arrangements for these services. The existing management of FBDPLL, who are currently employees of FBD Holdings plc, will transfer to FBDPLL on the completion of the Proposed Transaction. Under the Transaction Agreement, FBD Holdings plc has agreed to grant an exclusive licence to FBDPLL to allow it to continue to trade and market the hotels under the FBD Hotels & Resorts name. The licence is for five-year terms which shall automatically renew at the end of each such term but may be terminated in the event of a material breach by FBDPLL or in the event of a change of control or insolvency of FBDPLL. FBD Holdings plc has also agreed to continue, for a period of three years, the existing practice of promoting FBD Hotels & Resorts to customers and staff of FBD Group under certain circumstances. 5. Finance arrangements The transaction consideration of 48.5 million shall be financed through debt facilities and cash, on completion of the Proposed Transaction (of which 23.5 million will be funded directly by Farmer Business Developments plc and 25 million through new borrowings in FBDPLL). Farmer Business Developments plc and FBDPLL have signed heads of terms with a financial institution to finance the Proposed Transaction. The terms of these finance arrangements remain subject to credit committee approval of the relevant financial institution and finalisation of legal agreements. Redemption of Loan Notes Under the terms of the Proposed Transaction, FBDPLL will redeem all of the Loan Notes held by the FBD Holdings plc in consideration of the payment of million (the Redemption Amount ) by FBDPLL to FBD Holdings plc. The completion of the redemption of the Loan Notes is conditional only on the completion of the Share Purchase. Following payment of the Redemption Amount, all amounts owing in respect of the Loan Notes shall be released and FBDPLL shall have no further obligation to FBD Holdings plc in respect of the Loan Notes, including with respect to accrued interest. 10

11 PART III RISKS RELATING TO THE PROPOSED TRANSACTION 1. Conditions The Proposed Transaction is conditional on the approval by the shareholders of Farmer Business Developments plc and FBD Holdings plc. The approval of the shareholders of FBD Holdings plc is outside of the control of the Company and could delay or prevent Completion. There can be no assurance that this condition will be satisfied or waived and that the Proposed Transaction will take place. 2. Financing Farmer Business Developments plc and FBDPLL have signed heads of terms with a financial institution to finance the Proposed Transaction. While the Directors are confident that finance facilities will be secured, they are still subject to credit committee approval and completion of legal agreements which could delay or prevent completion of the Proposed Transaction. 3. Risks to Farmer Business Developments plc relating to the Proposed Transaction not proceeding The Proposed Transaction forms a significant aspect of FBD Holdings plc s strategy to strengthen its capital position ahead of the implementation of the new Solvency II capital requirements for FBD Insurance from 1 January If the Proposed Transaction does not proceed, FBD Holdings plc may seek to raise alternative sources of finance, which may adversely impact the value of Farmer Business Developments plc s significant shareholding in FBD Holdings plc. The risks noted above are those risks which the Board believes to be material to the Proposed Transaction. Additional risks and uncertainties which are not known to the Board at the date of this document, or which the Board currently does not consider to be material, may also have a material adverse effect on Farmer Business Developments plc and FBDPLL if they materialise. 11

12 DEFINITIONS The following definitions apply throughout this document, unless the context requires otherwise: B Shares B Ordinary Shares Board or Directors Circular Completion Euro, EUR or Extraordinary General Meeting or EGM Farmer Business Developments (the Company) FBD Group FBD Holdings or FBD Holdings plc FBD Insurance the 10,000 B Ordinary Shares in FBDPLL held by FBD Holdings plc to be acquired by Farmer Business Developments plc as part of the Proposed Transaction B ordinary shares of 1.00 each in FBDPLL the directors of Farmer Business Developments plc this document completion of the Share Sale and the Loan Notes Redemption pursuant to the Transaction Agreement Euro, the lawful currency of Ireland the Extraordinary General Meeting to be held at 12.30pm on 22 October 2015, or any adjournment thereof Farmer Business Developments plc (company number ) whose registered office is at Irish Farm Centre, Bluebell, Dublin 12, Ireland FBD Holdings plc and its subsidiary undertakings F.B.D. Holdings plc (company number ) whose registered office is at FBD House, Bluebell, Dublin 12, Ireland F.B.D. Insurance plc (company number 25475) whose registered office is at FBD House, Bluebell, Dublin 12, Ireland FBDPLL FBD Property & Leisure Limited (company number ) whose registered office is at FBD House, Bluebell, Dublin 12, Ireland Form of Proxy H1 2015, 2014 Interest or Stake Loan Notes the form of proxy accompanying this document for use by Shareholders in connection with the EGM the half yearly unaudited results of the FBDPLL for the six months ended 30 June 2015 and 30 June 2014 respectively FBD Holdings plc s shareholding and Loan Notes in FBDPLL the 62.6 million B-Irredeemable Convertible Unsecured Loan Note of FBDPLL held by FBD Holdings plc Loan Notes Redemption the redemption of the Loan Notes in their entirety for million Property & Leisure Group FBD Property & Leisure Limited and its subsidiary undertakings 12

13 Proposed Transaction Registered Office Resolution RevPar Shareholder(s) the proposed acquisition by Farmer Business Developments plc of the entire shareholding in FBDPLL from FBD Holdings plc and the redemption by FBDPLL of all of the Loan Notes held by FBD Holdings plc Irish Farm Centre, Bluebell, Dublin 12, Ireland the ordinary resolution to approve the Proposed Transaction to be proposed at the EGM, the full text of which is set out in the Notice of EGM at the end of this document Revenue per available room holder(s) of Ordinary Shares and Preference Shares Shareholders Agreement the share subscription and shareholders agreement dated 23 August 2011 between the FBD Holdings plc, Farmer Business Developments plc and FBDPLL Share Purchase Solvency II Transaction Agreement the purchase by Farmer Business Developments plc of the B Shares in FBDPLL from FBD Holdings plc the Solvency II Directive (2009/138/EC), an insurance industry regulation agreed by the European Parliament in 2009 the transaction agreement dated 21 August 2015 between (i) FBDPLL, (ii) FBD Holdings plc, and (iii) Farmer Business Developments plc 13

14 NOTICE OF EXTRAORDINARY GENERAL MEETING Farmer Business Developments plc (Incorporated in Ireland. Registered number ) NOTICE IS HEREBY GIVEN that an Extraordinary General Meeting of the Company will be held at 12.30pm. on 22 October 2015 at Irish Farm Centre, Bluebell, Dublin 12, Ireland to consider and, if thought fit, pass the following Resolution as an ordinary resolution: ORDINARY RESOLUTION THAT the Proposed Transaction, the acquisition by Farmer Business Developments plc of FBD Holdings plc s interest in FBD Property & Leisure Limited and its subsidiary undertakings, pursuant to the Transaction Agreement (as defined in the circular to shareholders dated 1 October 2015, a copy of which has been produced to the meeting and initialled by the Chairman of the meeting for the purposes of identification only (the "Circular")), in the manner and on the terms and conditions of the Transaction Agreement be and is hereby approved and that the Directors be and are hereby authorised to take all such steps as may be necessary or desirable in relation thereto and to carry the same into effect with such modifications, variations, revisions or amendments (providing such modifications, variations or amendment are not of a material nature) as they shall deem necessary or desirable. BY ORDER OF THE BOARD Irish Farm Centre, Bluebell, Dublin 12, Ireland Bryan Barry Company Secretary 1 October