Share Capital

As at 31 December 2008, the Company’s issued share capital comprised a single class of shares referred to as ordinary shares each with a nominal value of 2.5p. Details of the ordinary share capital can be found in Note 27 to the Financial Statements.

On 26 July 2007, the Company announced a £1bn share buyback programme. As at 31 December 2008, a total of 449,891,914 ordinary shares (2007: 241,207,267), each with a nominal value of 2.5p, were repurchased for cancellation. This represented 7.68% of the issued share capital as at 31 December 2008 (2007: 3.83%). The aggregate consideration paid was £520m (£523m including expenses) (2007: £318m (£320m including expenses)) at an average price of £1.16 per share (2007: £1.32 per share). Since the year end, and up to 24 March 2009, (being the last practical date prior to the publication of the Notice of the AGM) no further ordinary shares were re-purchased for cancellation.

At the 2008 AGM, the Company was granted authority by shareholders to purchase up to 611,414,917 ordinary shares, representing 10% of the Company’s issued share capital as at 17 March 2008. This authority will expire at the forthcoming AGM; accordingly, Resolution 11 seeking shareholders’ approval to renew this authority is set out in the Notice of the AGM. Resolution 11 seeks to allow the Company to make a market purchase of up to 586,167,936 of its own ordinary shares representing 10% of the Company’s issued share capital at 24 March 2009 (being the last practicable date prior to the publication of the Notice of the AGM). Resolution 9 will, if approved, authorise the directors to allot up to an aggregate nominal amount of £48,358,855, being 33% of the total issued capital as at 24 March 2009 (being the last practicable date prior to the publication of the Notice of the AGM).

Resolution 10, set out in the Notice of the AGM, will, if approved by the shareholders, authorise the directors to issue further shares up to the equivalent of 5% of the Company’s issued share capital as at 24 March 2009 (being the last practicable date prior to the publication of the Notice of the AGM) for cash without offering the shares first to existing shareholders in proportion to their holdings. A more detailed explanatory note is set out in the Notice of the AGM. It is not intended, without prior consultation with the Investment Committee of the Association of British Insurers, to issue in this way more than 7.5% of the issued share capital in any rolling three year period. The resolution will, if approved, also authorise the directors to allot shares in connection with a rights issue otherwise than strictly pro rata where practical considerations, such as fractions and foreign securities laws, make this desirable.

Details of the number, the consideration and the reason for the issue of shares by the Company during 2008 are set out in Note 27 to the Financial Statements.

Other than the above, the directors have no current intention of issuing further share capital and no issue will be made which would effectively alter control of the Company without prior approval of the members in general meeting.

Substantial Share Interests

As at 24 March 2009, the Company had received notifications from the following parties that they have a notifiable interest in the issued share capital of the Company:

In addition, the Company had received notification from Barclays that it had a notifiable interest amounting to 4.01% of the issued share capital of the Company.

Related Party Transactions

Details of related party transactions are set out in Note 42 to the Financial Statements.

Rights and Obligations Attaching to Shares

The rights and obligations relating to the Company’s ordinary shares are set out in the Articles of Association; a copy can be obtained on request to the Company Secretary at the Company’s registered office. Changes to the Company’s Articles of Association must be approved by special resolution of the Company in a general meeting.

Holders of ordinary shares are entitled to attend, speak and vote at general meetings. On a show of hands at a general meeting of the Company every member present in person or every proxy present who has been duly appointed by a member shall have one vote and on a poll every member present in person or by proxy shall have one vote for every ordinary share held. These rights are subject to any special terms as to voting upon which any shares may be issued or may at the relevant time be held and to any other provisions of the Company’s Articles of Association. Under the Articles of Association, directors have the power to suspend voting rights and in certain circumstances the right to receive dividends in respect of shares where the holder of those shares fails to comply with a notice issued under section 793 of the Companies Act 2006.

The Notice of the AGM specifies deadlines for exercising voting rights and appointing a proxy or proxies to vote in relation to resolutions to be proposed at the general meeting. All proxy votes are counted and the numbers for, against or withheld in relation to each resolution are announced at the AGM and published on the Company’s website after the meeting. The Company in a general meeting may by ordinary resolution from time to time declare dividends in accordance with the respective rights of the members, but no dividend can exceed the amount recommended by the Board.

The Board can decline to register any transfer of any share which is not a fully paid share. In addition, registration of a transfer of an uncertificated share may be refused in the circumstances set out in the uncertificated securities rules and where the number of joint holders exceeds four. The Board may also refuse to register the transfer of a certificated share unless: (a) the instrument of transfer is duly stamped and is left at the Company’s registered office or such other place as the Board may from time to time determine accompanied by the certificate for the share to which it relates and such evidence as the Board may reasonably require to show the right of the transferor to make the transfer; (b) the instrument of transfer is in respect of only one class of share; and (c) the number of joint holders does not exceed four.

Subject to the provisions in the Companies Act, all or any of the rights attaching to an existing class of shares may be varied from time to time either with the consent in writing of the holders of not less than three-fourths in nominal value of the issued shares of that class (excluding any treasury shares) or with the sanction of a special resolution passed at a separate general meeting of the holders of those shares.

Shares acquired through the employee share schemes rank equally with all other ordinary shares in issue.

Barclays Private Bank & Trust (Isle of Man) Limited, as trustee of the Legal & General Employees’ Share Ownership Trust, holds 0.5% of the issued share capital of the Company as at 24 March 2009 in trust for the benefit of the executive directors, senior executives and managers of the Group. The voting rights in relation to these shares are exercised by the trustee. The trustee may vote or abstain from voting the shares or accept or reject any offer relating to shares, in any way it sees fit, without incurring any liability and without being required to give reasons for its decision.

Legal & General Share Scheme Trustees Limited, as trustee of the Legal & General Employee Share Trust, holds 0.02% of the issued share capital of the Company as at 24 March 2009 in the trust. The trust is in the process of being wound up and the shares are held on behalf of the beneficiaries of the trust. The voting rights in relation to these shares are exercised by the trustee. The trustee may vote or abstain from voting the shares or accept or reject any offer relating to shares, at its own discretion.

Under the rules of the Legal & General Group Employee Share Plan (Plan) eligible employees are entitled to acquire shares in the Company. Plan shares are held in trust for participants by Equiniti Share Plan Trustees Limited which holds 0.48% of the issued share capital of the Company as at 24 March 2009. Voting rights are exercised by the trustees on receipt of the participants’ instructions. If a participant does not submit an instruction to the trustees no vote is registered. In addition, the trustees do not vote any unawarded shares held under the Plan as surplus assets.

The Company is not aware of any agreements between shareholders which may result in restrictions on the transfer of securities and/or voting rights.