Section 121AG — Income Tax Assessment Act 1936: Demutualisation method 2

(1) Under demutualisation method 2, in connection with the implementation of the demutualisation: (a) all membership rights in the mutual insurance company are extinguished; and (b) not more than 10 shares (the special shares) in the mutual insurance company are issued to a trustee to hold for the benefit of the policyholder/member group, where: (i) the issue takes place before the issue of the ordinary shares mentioned in paragraph (c); and (ii) on the issue of all the ordinary shares, the rights attaching to the special shares become the same as those attaching to the ordinary shares; and (c) a greater number of shares (the ordinary shares) of only one class in the mutual insurance company are either: (i) issued, at the election of each person in the policyholder/member group, to the person or to a trustee to sell on behalf of the person; or (ii) issued to a trustee, at the election of each person in the policyholder/member group, to distribute to the person or to sell on behalf of the person; and (d) the trustee sells the ordinary shares and distributes the proceeds to the person, or distributes the ordinary shares to the person; and (e) the ordinary shares are listed within the listing period. Note: Other things may also happen in connection with the implementation of the demutualisation. (2) The following diagram shows the main events, where this demutualisation method is used involving an election covered by subparagraph (1)(c)(ii).