NOTICE OF ANNUAL GENERAL MEETING

Transcription

1 NOTICE OF ANNUAL GENERAL MEETING JOULES GROUP PLC THURSDAY 27th SEPTEMBER am THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in doubt as to what action you should take, you are recommended to seek your own financial advice immediately from your stockbroker, bank manager, solicitor, accountant or other professional adviser authorised under the Financial Services and Markets Act 2000 if you are in the United Kingdom, or from another appropriately authorised independent financial adviser if you are in a territory outside the United Kingdom. If you have sold or transferred all of your registered holding of ordinary shares in the Company, please forward this document, together with the accompanying Form of Proxy, as soon as possible to the purchaser or transferee or to the stockbroker, bank manager or other agent through whom the sale or transfer was effected for delivery to the purchaser or transferee. Notice of the Annual General Meeting of the Company to be held at: The Old Grammar School, Church Square, Market Harborough, Leicestershire, LE16 7NB on Thursday 27 September 2018 at 9.30am is set out on pages 6 to 7 of this document and the recommendation of the Directors is set out on page 5. A Form of Proxy for use at the Annual General Meeting is enclosed. To be valid, any instrument appointing a proxy must be received by Equiniti, Aspect House, Spencer Road, Lancing, West Sussex BN99 6DA as soon as possible but in any event so as to arrive no later than 9.30am on 25 September JOULES GROUP PLC (Registered in England and Wales with no ) Registered Office: Joules Building, The Point, Rockingham Road, Market Harborough, Leicestershire, LE16 7QU. Directors IAN FILBY Chairman TOM JOULE Founder and Chief Brand Officer COLIN PORTER Chief Executive Officer MARC DENCH Chief Financial Officer DAVID STEAD Senior Independent Non-Executive Director JILL LITTLE Independent Non-Executive Director

2 2 PART I - LETTER FROM THE CHAIRMAN OF JOULES GROUP PLC Dear Shareholder, 2018 ANNUAL GENERAL MEETING INTRODUCTION I am pleased to invite you to Joules Group plc s (the Company ) 2018 Annual General Meeting ( AGM ) which will be held at The Old Grammar School, Church Square, Market Harborough, Leicestershire LE16 7NB, on Thursday 27 September 2018 at 9.30am. This letter accompanies the 2018 Annual Report and Accounts (the Report and Accounts ) for the year ended 27 May The following documentation is enclosed with this letter: Notice of AGM, which sets out the details of the resolutions to be proposed at the AGM; Report and Accounts; and Form of Proxy. I look forward to welcoming you to the meeting. EXPLANATION AND SUMMARY OF THE RESOLUTIONS TO BE PROPOSED AT THE AGM Resolutions 1 to 13, 17 and 18 are proposed as ordinary resolutions. This means that for each of those resolutions to be passed, more than half of the votes cast must be in favour of the resolution. Resolutions 14 to 16 are proposed as special resolutions. This means that for each of those resolutions to be passed, at least three quarters of the votes cast must be in favour of the resolution. Resolution 1: REPORT AND ACCOUNTS (Ordinary Resolution) The Companies Act 2006 (the Act ) provides that the Company s Report and Accounts, together with reports on those accounts prepared by the Directors and the auditors, must be laid before the shareholders at a general meeting for formal adoption at the meeting. The Report and Accounts are enclosed with this letter and are also available at Resolution 2: DIRECTORS REMUNERATION REPORT (Ordinary Resolution) The Directors will present the Directors Remuneration Report for the year ended 27 May 2018 for approval. This vote is not mandatory but is considered best practice. The vote is advisory and does not affect the entitlement of any Director to any remuneration paid or to be paid. Resolution 3: FINAL DIVIDEND (Ordinary Resolution) Any final dividend must be approved by shareholders and the amount to be declared as a final dividend may not exceed the amount recommended by the Directors. The Directors are recommending a final dividend of 1.3 pence per share in respect of the year ended 27 May If approved, the final dividend will be paid on 15 November 2018 to shareholders who were on the share register at close of business on 26 October Resolutions 4 to 9: ELECTION OF DIRECTORS (Ordinary Resolutions) In accordance with the UK Corporate Governance Code all Directors (save for the Chairman) are retiring and offering themselves for re-election at the Annual General Meeting. In accordance with the Company s Articles of Association, I am retiring and offering myself for re-appointment at the Annual General Meeting as I was appointed by the Directors after the 2017 annual general meeting. My fellow Directors biographies are set out on page 34 of the Report and Accounts and you will find my biography at www. joulesgroup.com/about-us/board-directors. Resolution 10: RE-APPOINTMENT OF AUDITORS (Ordinary Resolution) The Company is required to appoint auditors at each general meeting at which accounts are laid before the Company, to hold office until the end of the next AGM. This resolution proposes the re-appointment of Deloitte LLP on the recommendation of the Audit Committee. Resolution 11: AUTHORITY TO SET THE AUDITORS REMUNERATION (Ordinary Resolution) The remuneration of the auditors must be fixed by the Company in a general meeting or in such manner as the Company may determine in general meeting. This resolution gives authority to the Directors to determine the remuneration to be paid to the auditors.

3 3 Resolution 12: AUTHORITY TO ALLOT SECURITIES (Ordinary Resolution) The Act provides that Directors shall only allot shares with the authority of shareholders in general meeting. The authority given to the Directors at the last AGM to allot (or issue) shares pursuant to section 551 of the Act expires on the date of this year s AGM. Resolution 12(i) asks shareholders to renew the Directors authority under section 551 of the Act to allot shares or grant subscription or conversion rights up to a maximum aggregate nominal value of 292,594.34, (representing 29,259,434 ordinary shares of 0.01p each) being approximately one-third of the nominal value of the issued ordinary share capital of the Company as at 30 July 2018, being the latest practicable date before the publication of this Notice. In accordance with the latest guidelines issued by the Investment Association, Resolution 12(ii) asks shareholders to grant the Directors authority to allot ordinary shares in connection with a pre-emptive offer by way of a rights issue to ordinary shareholders up to a maximum aggregate nominal amount of 292,594.34, (representing 29,259,434 ordinary shares of 0.01p each) being approximately a further one third of the Company s issued share capital as at 30 July 2018, being the latest practicable date before the publication of this Notice. This additional authority is to be applied to rights issues only. The Directors have no present intention to exercise either authorities sought under this resolution, but the Board considers it desirable that the Company has the maximum flexibility permitted by corporate governance guidelines in managing the Group s capital resources and responding to market developments. Where the Board does use the additional authority described in Resolution 12(ii), the Directors intend to follow the Investment Association s recommendations that all of the directors will stand for re-election at the next AGM. The authority set out in this resolution will expire at the end of the next AGM or at close of business on 26 December 2019, whichever is sooner. At the date of this Notice, the Company held no shares in treasury. Resolution 13: APPROVAL OF THE MAKING OF POLITICAL DONATIONS (Ordinary Resolution) This resolution will authorise the making of political donations and political expenditure. Part 14 of the Act requires companies to obtain the approval of shareholders before such political donations or expenditure can be made. Although the Company does not make what are usually regarded as political donations, it may incur expenditure on items such as sponsorship or attendance at political discussions or business liaison events organised by political parties within the EU on a non-partisan basis in order to make them aware of industry trends and key arguments affecting the industry in which the Company operates, as well as supporting the work of think tanks. Some of the Company s activities may be caught by the extended definitions of the Act and this resolution is being proposed on a precautionary basis to allow the Company to continue its current activities. The policy of not giving any cash contribution to political parties or independent election candidates will continue. Resolutions 14 and 15: DIS-APPLICATION OF PRE-EMPTION RIGHTS (Special Resolutions) If the Directors wish to allot shares, or other equity securities, for cash, or to sell any shares which the Company holds in treasury following a purchase of its own shares pursuant to the authority in Resolution 16 below, the Act requires that such shares or other equity securities are offered first to existing shareholders in proportion to their existing holding. Resolution 14 renews the Directors power to allot equity securities and sell treasury shares in exchange for cash without first offering them to existing shareholders. Apart from rights issues or any other pre-emptive offer concerning equity securities, the authority contained in this resolution will be limited to the issue of shares for cash up to an aggregate nominal value of 43, (which includes the sale on a non-pre-emptive basis of any shares held in treasury). This number represents approximately 5 per cent. of the Company s issued share capital as at 30 July 2018, being the last practicable date prior to publication of this Notice. Resolution 14 also seeks a disapplication of pre-emption rights on a rights issue, so as to allow the Directors to make appropriate arrangements in relation to fractional entitlements or other legal or practical problems which might arise. Resolution 15 seeks a separate and additional authority to dis-apply pre-emption rights in respect of 5 per cent. of the issued ordinary share capital for certain purposes pursuant to guidance from the Pre-Emption Group ( PEG ). On 12 March 2015, the PEG issued a revised Statement of Principles ( 2015 Statement of Principles ). This stated that, in addition to previous standard annual disapplication of pre-emption rights up to a maximum equal to 5 per cent., the PEG was also supportive of extending the general disapplication authority by an additional 5 per cent. for certain purposes. The Directors confirm, in accordance with the 2015 Statement of Principles, that they will only allot shares for cash pursuant to the authority referred to in Resolution 15, where the allotment is in connection with an acquisition or specified capital investment, which is announced contemporaneously with the allotment. Where the authority granted under

4 4 Resolution 15 is used, the circumstances that have led to its use and the consultation process undertaken will be disclosed by the Company in its next Report and Accounts. In addition the Board will not (except in relation to an issue pursuant to Resolution 15 in respect of the additional 5 per cent. referred to above) allot shares for cash on a non-pre-emptive basis pursuant to the authority in Resolution 14 in excess of an amount equal to 7.5 per cent. of the total issued ordinary share capital of the Company, excluding treasury shares, within a rolling three-year period, without prior consultation with the Company s shareholders. The Directors have no present intention of issuing new shares other than pursuant to employee share plans, but the Directors consider that the authority sought is appropriate as it provides the Company with the necessary flexibility to take advantage of business opportunities as they arise. The authority set out in these resolutions will expire at the end of the next AGM or at close of business on 26 December 2019, whichever is sooner. At the date of this Notice the Company does not hold any treasury shares. Resolution 16: PURCHASE OF OWN SHARES (Special Resolution) Resolution 16 seeks authority for the Company to make market purchases of its own ordinary shares, such authority being limited to the purchase of 10 per cent. of the ordinary shares in issue as at 30 July 2018, being the last practicable date prior to publication of this Notice. The maximum price payable for the purchase by the Company of its own ordinary shares will be limited to an amount equal to the higher of (i) 5 per cent. above the average of the middle market quotations of the Company s ordinary shares, as derived from The London Stock Exchange Daily Official List for the five business days prior to the purchase; and (ii) the higher of the price of the last independent trade of an ordinary share and the highest current independent bid for an ordinary share as derived from the London Stock Exchange Trading System. The minimum price payable by the Company for the purchase of its own ordinary shares will be per share (being the amount equal to the nominal value of an ordinary share). The Directors have no present intention of exercising the authority to purchase the Company s ordinary shares but will keep the matter under review, taking into account other investment opportunities. The authority would only be exercised if and when, in the light of market conditions prevailing at the time, they believe that the effect of such purchases will be in the best interests of shareholders generally. Company law allows the Company to hold in treasury any shares purchased by it using its distributable profits. Such shares will remain in issue and will be capable of being re-sold by the Company or used in connection with certain of its share schemes. At the date of this Notice the Company does not hold any shares in treasury. As at 30th July 2018 (the last practicable date prior to the publication of this Notice) options to acquire a total of 4,375,000 ordinary shares were outstanding under the Company s employee share schemes representing 4.98 per cent. of the issued share capital of the Company at that date and 5.54 per cent. of the issued share capital of the Company if the authority sought by this resolution were to be exercised in full. The authority set out in this resolution will expire at the end of the next AGM or at close of business on 27 September 2019, whichever is sooner. Resolutions 17 and 18: RULE 9 WAIVER (Ordinary Resolutions) Resolutions 17 and 18 relate to the waiver of the mandatory offer provisions set out in Rule 9 of the City Code on Takeovers and Mergers (the Takeover Code ). The Company has applied to the Panel on Takeovers and Mergers for a waiver of Rule 9 of the Takeover Code in order to: a) permit the Company the authority to purchase its own ordinary shares, as proposed under Resolution 16, to be exercised by the Directors other than Tom Joule; and b) permit Tom Joule to acquire up to 146,900 ordinary shares in the capital of the Company under options which were granted on 26 July 2018 if Resolution 18 is passed (as detailed further in Part III), without triggering an obligation which would otherwise arise under Rule 9 of the Takeover Code for a controlling shareholder to make an offer for the shares of the Company. Resolutions 17 and 18 must be approved by independent shareholders on a poll, being the shareholders of the Company other than Tom Joule or any concert party of Tom Joule (as defined by the Takeover Code), (the Independent Shareholders ). For more information on Resolutions 17 and 18, see the Explanatory Notes and Additional Information in Part III.

5 Documents available for inspection Copies of the following documents may be inspected at the registered office of the Company during normal business hours Monday to Friday (public holidays excepted) up to and including the day of the AGM, and at the venue for the AGM from half an hour before the time fixed for the AGM until the end of the AGM: (a) the existing Articles of Association of the Company; (b) the Report and Accounts for the year ended 27 May 2018; (c) copies of the service contracts of the Executive Directors and copies of the letters of appointment of the Non-executive Directors; (d) the consent letter from Peel Hunt LLP referred to on page 14; and (e) this document. With exception of item (c), copies of these documents will also be available on the Company s website ( 5 Action to be taken Voting on the business of the meeting will be conducted on a poll. I would encourage shareholders to exercise their right to vote in the following ways: If you will be attending the AGM, please bring the attendance slip enclosed with your Form of Proxy to the AGM when voting. If you are not able to attend the AGM in person, you can cast your votes by proxy by completing the enclosed Form of Proxy and returning it to Equiniti Limited, Aspect House, Spencer Road, Lancing, West Sussex BN99 6DA, UK. Completion and return of the Form of Proxy will not prevent shareholders from attending in person and voting at the meeting should they subsequently decide to do so. CREST members may use the CREST electronic proxy appointment service to submit their proxy appointment in respect of the AGM as detailed in the Notes to the Notice of the AGM on pages 14 to 15. Please note that all forms of proxy and appointments, whether postal or electronic, must be received by 9.30am (UK time) on 25 September The results of voting on the resolutions will be posted on the Company s website immediately after the AGM. Shareholder queries Should you have any queries on the documentation enclosed or the AGM generally, please do not hesitate to contact Jon Dargie, Company Secretary. Statement of Capital and Voting rights As at 30 July 2018 (being the latest practicable date prior to publication of this Notice) the Company s issued share capital comprised 87,778,302 ordinary shares which each carry one vote. Therefore, total voting rights in the Company as at 30 July 2018 are 87,778,302. Recommendation In accordance with the provisions of the Takeover Code, Tom Joule is unable to make any recommendation in relation to Resolution 17 and Resolution 18, in which he is considered to be interested, as it relates to the potential percentage increase in his interest in ordinary shares in the capital of the Company. The Directors, other than Tom Joule (the Independent Directors ), who have been so advised by Peel Hunt LLP, consider Resolution 17 and Resolution 18, along with the issue of the options to Tom Joule, to be fair and reasonable and in the best interests of the Independent Shareholders and the Company as a whole. In providing their advice to the Independent Directors, Peel Hunt LLP has taken account of the Independent Directors commercial assessments. Accordingly, the Independent Directors unanimously recommend that Independent Shareholders vote in favour of Resolution 17 and Resolution 18, as the Independent Directors intend to do in respect of their own shareholdings, which together represent, in aggregate, 1.95 per cent. of the issued share capital of the Company. The Board, including Tom Joule, believes that all of the other resolutions to be put to the AGM (save for Resolutions 17 and 18) are in the best interests of its shareholders and the Company as a whole. Accordingly, the Board recommends that shareholders vote in favour of all other resolutions, as the Directors intend to do in respect of their own beneficial shareholdings in the Company. I look forward to seeing you at the AGM. Yours sincerely IAN FILBY Chairman 20 August 2018

6 6 PART II - NOTICE OF ANNUAL GENERAL MEETING NOTICE is hereby given that the Annual General Meeting (the AGM ) of Joules Group plc (the Company ) will be held at The Old Grammar School, Church Square, Market Harborough, Leicestershire LE16 7NB on Thursday 27 September 2018, commencing at 9.30am for the following purposes: ORDINARY BUSINESS To consider and, if thought fit, to pass the following resolutions which will be proposed as ordinary resolutions: 1. To receive and adopt the Company s Annual Report and Accounts for the year ended 27 May 2018, together with the reports thereon of the Directors and auditors. 2. To approve the Directors Remuneration Report for the year ended 27 May To declare a final dividend of 1.3 pence per share for the year ended 27 May 2018, to be paid on 15 November 2018 to members whose names appear on the register of members at the close of business on 26 October To re-appoint Ian Filby as a Director of the Company. 5. To re-elect Tom Joule as a Director of the Company. 6. To re-elect as a Director of the Company. 7. To re-elect Jill Little as a Director of the Company. 8. To re-elect Colin Porter as a Director of the Company. 9. To re-elect David Stead as a Director of the Company. 10. To re-appoint the auditors, Deloitte LLP, as auditors of the Company, to hold office from the conclusion of this AGM until the conclusion of the next general meeting at which accounts are laid before the Company. 11. To authorise the Directors to set the auditors remuneration. SPECIAL BUSINESS To consider and, if thought fit, pass the following resolutions, of which resolutions 12, 13, 17 and 18 will be proposed as ordinary resolutions and resolutions 14 to 16 will be proposed as special resolutions: 12.(i) THAT the Directors be and are hereby generally and unconditionally authorised pursuant to section 551 of the Companies Act 2006 (the Act ) (in substitution for any existing authorities to allot shares) to exercise all the powers of the Company to allot shares in the Company and to grant rights to subscribe for or to convert any security into shares in the Company up to an aggregate nominal amount of 292,594.34, being approximately one third of the issued share capital of the Company, provided that such authority shall expire at the end of the next annual general meeting of the Company after the passing of this resolution (or, if earlier, at the close of business on 26 December 2019), save that the Company may before such expiry make an offer or agreement which would or might require such shares to be allotted or rights to subscribe for or convert securities into shares to be granted after such expiry, and the Directors may allot shares and grant rights to subscribe or convert securities into shares in pursuance of such offer or agreement as if the authority conferred by this resolution had not expired, and further, 12.(ii) THAT, the Directors be and are hereby generally and unconditionally authorised to exercise all powers of the Company to allot equity securities (within the meaning of section 560 of the Act) in connection with a rights issue in favour of ordinary shareholders where the equity securities respectively attributable to the interests of all ordinary shareholders are proportionate (as nearly as may be) to the respective numbers of ordinary shares held by them up to an aggregate nominal amount of 292,594.34, being approximately one third of the issued share capital of the Company, provided that this authority shall expire at the end of the next annual general meeting of the Company after the passing of this resolution (or, if earlier, at the close of business on 26 December 2019), save that the Company may before such expiry make an offer or agreement which would or might require equity securities to be allotted after such expiry and the Directors may allot equity securities in pursuance of such an offer or agreement as if the authority conferred hereby had not expired. 13. THAT the Company be authorised to make donations to political parties, to independent election candidates and to political organisations and to incur political expenditure (in each case as defined in Part 14 of the Companies Act 2006) not exceeding 50,000 in total during the period of one year beginning with the date of the 2018 Annual General Meeting. 14. THAT, subject to the passing of resolution 12, the Directors be authorised pursuant to section 570 of the Companies Act 2006 (the Act ) to allot equity securities (as defined in section 560 of the Act) for cash under the authority given by resolution 12 (set out in this AGM notice) and are empowered pursuant to section 573 of the Act to sell ordinary shares (as defined in section 560 of the Act) held by the Company as treasury shares (as defined in section 724 of the Act) for cash, as if section 561 of the Act did not apply to any such allotment or sale, such authority to be limited to allotments of equity securities or the sale of treasury shares: (i) in connection with or pursuant to an offer by way of rights, open offer or other pre-emptive offer to the holders of shares in the Company and other persons entitled to participate therein in proportion (as nearly as practicable) to their respective holdings, subject to such exclusions or other arrangements as the Directors may consider necessary or expedient to deal with fractional entitlements or legal or practical problems under the laws of any territory or the regulations or requirements of any regulatory authority or any stock exchange in any territory; and (ii) otherwise than under paragraph (i) above, up to a nominal amount of 43, (being 5 per cent. of the Company s issued share capital, as at 30 July 2018), such authority to expire at the end of the next annual general meeting of the Company after the passing of this resolution or, if earlier, at the close of business on 26 December 2019, but in each case prior to its expiry, the Company may make offers or enter into agreements, which would or might require equity securities to be allotted (and treasury shares to be sold) after the authority expires, and the Directors may allot equity securities (and sell treasury shares) under any such offer or agreement as if the authority had not expired.

7 15. THAT subject to the passing of resolution 12, the Directors be authorised pursuant to section 570 of the Companies Act 2006 (the Act ) in addition to any authority granted under resolution 14 above, to allot equity securities (as defined in section 560 of the Act) for cash under the authority given by resolution 12 (set out in this AGM notice) and/or to sell ordinary shares held by the Company as treasury shares for cash as if section 561 of the Act did not apply to any such allotment or sale, provided that such authority be: (i) limited to the allotment of equity securities or sale of treasury shares up to a nominal amount of 43, being not more than 5 per cent. of the issued ordinary share capital of the Company as at 30 July 2018 being the latest practicable date prior to publication of the notice of meeting; and (ii) used only for the purposes of financing (or refinancing, if the authority is to be used within six months after the original transaction) a transaction which the Directors of the Company determines to be an acquisition or other capital investment of a kind contemplated by the Statement of Principles on Disapplying Pre-Emption Rights most recently published by the Pre-Emption Group prior to the date of this notice, such authority shall expire at the end of the next AGM of the Company or, if earlier, at close of business on 26 December 2019 (unless previously revoked or varied by the Company in general meeting). Such authority shall extend to the making, before such expiry, of an offer or an agreement, which would, or might, require equity securities to be allotted (and treasury shares to be sold) after the authority ends and the Directors may allot equity securities (and sell treasury shares) under any such offer or agreement as if the authority had not expired. 16. THAT the Company be and is hereby generally and unconditionally authorised for the purpose of section 701 of the Companies Act 2006 (the Act ) to make market purchases (as defined in section 693 of the Act) of ordinary shares of each in the capital of the Company ( ordinary shares ) provided that: a) the maximum number of ordinary shares hereby authorised to be purchased is 8,777,830 (being approximately 10 per cent. of the current issued ordinary share capital of the Company); b) the minimum price (exclusive of expenses) which may be paid for such ordinary shares is per share, being the nominal amount thereof: and c) the maximum price (exclusive of expenses) which may be paid for such ordinary shares shall be an amount equal to the higher of: i. 5 per cent. above the average of the middle market quotations for such shares taken from The London Stock Exchange Daily Official List for the five business days immediately preceding the day on which the purchase is made; and ii. the higher of the price of the last independent trade of an ordinary share and the highest current independent bid for an ordinary share as derived from the London Stock Exchange Trading System; d) such authority shall expire at the end of the next AGM of the Company or, if earlier, at close of business on 27 September 2019 provided that the Company may make a contract to purchase its own ordinary shares under the authority conferred by this resolution prior to the expiry of such authority, which will or may be executed wholly or partly after the expiry of such authority, and the Company may make a purchase of its own ordinary shares in pursuance of any such contract as if the authority hereby conferred had not expired. 17. THAT approval is granted for the waiver by the Panel on Takeovers and Mergers of any obligation that could arise, pursuant to Rule 9 of the Takeover Code, for Tom Joule or any persons acting in concert with him to make a general offer for all the ordinary issued share capital of the Company, following any increase in the percentage of shares of the Company carrying voting rights in which Tom Joule and any persons acting in concert with him are interested resulting from the exercise by the Company of the authority to purchase its own ordinary shares granted to the Company pursuant to resolution 16 above, the approval shall expire at the end of next year s annual general meeting (or, if earlier, the close of business on 27 September 2019). 18. THAT approval is granted for the waiver by the Panel on Takeovers and Mergers of any obligation that could arise, pursuant to Rule 9 of the Takeover Code, for Tom Joule or any persons acting in concert with him to make a general offer for all the ordinary issued share capital of the Company, following any increase in the percentage of shares of the Company carrying voting rights in which Tom Joule and any persons acting in concert with him are interested as a result of Tom Joule acquiring up to: a) 98,097 ordinary shares in the capital of the Company pursuant to the options granted to Tom Joule on 26 July 2018 in accordance with the Joules 2016 Long Term Incentive Plan; and b) 48,803 ordinary shares in the capital of the Company pursuant to the options granted to Tom Joule on 26 July 2018 in accordance with the Joules 2016 Deferred Bonus Plan. By order of the Board JONATHAN DARGIE Company Secretary 20 August REGISTERED OFFICE: Joules Building, The Point, Rockingham Road, Market Harborough, Leicestershire, LE16 7QU

8 8 PART III - RULE 9 WAIVER EXPLANATORY NOTES AND ADDITIONAL INFORMATION EXPLANATORY NOTES Pursuant to the relationship agreement between the Company and Tom Joule dated 20 May 2016 (the Relationship Agreement ), the Company has undertaken, for so long as Tom Joule and/or his concert parties hold(s) in aggregate an interest in 30 per cent. or more of the aggregate voting rights of the Company, to propose to the independent shareholders annually a resolution to waive all obligations of Tom Joule (and/or his concert parties) to make a general offer for the remaining equity share capital of the Company in accordance with Rule 9 of the City Code on Takeovers and Mergers (the Takeover Code ) that may otherwise arise as a result of the Company purchasing or effecting any other transaction in relation to its shares or related securities or the grant or exercise of any Board approved incentive arrangements relating to shares in the capital of the Company or related securities. Resolutions 17 and 18 (the Waiver Resolutions ), which will be proposed as a poll vote of independent shareholders, seek approval of a waiver of the obligation that could arise on Tom Joule and any person acting in concert with him to make a general offer for the entire issued share capital of the Company as a result of: a) purchases by the Company of ordinary shares pursuant to Resolution 16, which if passed would grant authority to the Company to buy back its own ordinary shares (the Buyback Authority ) (Resolution 17); and/or b) the exercise by Tom Joule of options to acquire up to 146,900 ordinary shares in the capital of the Company under options which were granted on 26 July 2018 (Resolution 18). Under Rule 9 of the Takeover Code, when (i) any person acquires, whether by a series of transactions over a period of time or not, an interest in shares which, taken together with shares in which he and persons acting in concert with him are interested, carry 30 per cent. or more of the voting rights of a company subject to the Takeover Code, or (ii) any person who, together with persons acting in concert with him, is interested in shares which in aggregate carry not less than 30 per cent. of the voting rights of a company, but does not hold shares carrying more than 50 per cent. of such voting rights and such person, or any person acting in concert with him, acquires an interest in any other shares which increases the percentage of the shares carrying voting rights in which he is interested, then in either case, that person is normally required to make a general offer in cash for all the remaining equity share capital of that company at the highest price paid by him, or any persons acting in concert with him, for shares in that company within the 12 months prior to announcement of the offer. Under Rule 37 of the Takeover Code, when a company purchases its own voting shares, any resulting increase in the percentage of shares carrying voting rights in which a person or group of persons acting in concert is interested will be treated as an acquisition for the purpose of Rule 9 (although a shareholder who is neither a director nor acting in concert with a director will not normally incur an obligation to make a Rule 9 offer). For the purposes of Rule 9, the acquisition or grant of options to acquire shares does not generally give rise to an obligation to make a general offer but the exercise of such options will be considered to be an acquisition of an interest in shares for the purposes of Rule 9. Tom Joule currently holds an aggregate of 28,147,210 ordinary shares representing per cent. of the issued share capital of the Company. If the Company were to repurchase from persons other than Tom Joule all the ordinary shares for which it is seeking authority (and assuming no other allotments of ordinary shares), the maximum potential shareholding of Tom Joule would increase to per cent. of the issued share capital of the Company. Tom Joule is currently interested in an aggregate of 499,980 ordinary shares under the Joules 2016 Long Term Incentive Plan ( LTIP ) and the Joules 2016 Deferred Bonus Plan ( DBP ): NAME OF SCHEME UNDER WHICH OPTIONS GRANTED LTIP DBP LTIP LTIP DBP DATE OF GRANT NUMBER OF SHARES UNDER OPTION 106,858 51, ,767 98,097 48,803 EXERCISE PRICE PER SHARE 17 August August October July July 2018 The principal provisions of the LTIP and DBP are summarised in paragraph 6 (Employee share plans) of Part 7 of the Company s admission document (available at The vesting of each award under the LTIP is subject to the achievement of a performance condition and, ordinarily, continued employment. The waiver of Tom Joule s obligation to make a general offer pursuant to Rule 9 of the Takeover Code on the exercise of the options granted to him in 2017 (detailed above) was approved by the independent shareholders of the Company at its 2017 AGM. Details of the applicable performance conditions for these options were contained in the Company s Notice of AGM dated 4 September 2017.

9 The performance condition for the LTIP award granted on 26 July 2018 is set out in the Directors Remuneration Report contained in the 2018 Report and Accounts (page 44). 9 The DBP award granted on 26 July 2018 is granted in respect of the deferred portion of Tom Joule s bonus earned for the financial year to 27 May 2018 and will ordinarily vest following the publication of the Company s report and accounts for the financial year to May 2021, subject, ordinarily, to continued employment. Assuming the LTIP and DBP awards vest in full, if Tom Joule were to exercise the options referred to above to acquire in aggregate 499,980 ordinary shares (and assuming no other allotments of ordinary shares or repurchase of ordinary shares by the Company), the maximum potential shareholding of Tom Joule would increase to per cent. of the issued share capital of the Company. If the Company were to repurchase from persons other than Tom Joule all the ordinary shares for which it is seeking authority and Tom Joule were to exercise all of the options referred to above to acquire in aggregate 499,980 ordinary shares (assuming full vesting of the LTIP and DBP awards and no other allotments of ordinary shares), the maximum potential shareholding of Tom Joule would increase to per cent. of the issued share capital of the Company. In respect of the options referred to above, the Board has the discretion to cash settle the options regardless of whether the Waiver Resolutions are passed. The Company applied to the Panel on Takeovers and Mergers (the Takeover Panel ) for a waiver of Rule 9 of the Takeover Code in order to: (a) permit the Buyback Authority proposed under Resolution 16 to be exercised by the Board; and (b) allow Tom Joule to exercise the share options granted in 2018 referred to above, without triggering an obligation on the part of Tom Joule to make a general offer to shareholders. The Takeover Panel has agreed, subject to Independent Shareholders (being the shareholders of the Company other than Tom Joule or any concert party of Tom Joule) approval on a poll, to waive the requirement for Tom Joule and any person acting in concert with him to make a general offer to all shareholders where such an obligation would arise as a result of purchases by the Company pursuant to the authority provided by Resolution 16 or following the exercise by Tom Joule of the share options granted in As Tom Joule is interested in the outcome of the Waiver Resolutions, he will be precluded from voting on them. In the event that the Waiver Resolutions are approved at the annual general meeting, Tom Joule will not be restricted from making an offer for the Company. Following exercise of the Buyback Authority (either in whole or in part) and/or the exercise of the share options referred to above, Tom Joule will continue to be interested in shares which carry more than 30 per cent. but will not hold more than 50 per cent. of the Company s voting share capital, and any further increase in the number of shares in which he is interested will be subject to the provisions of Rule 9 of the Takeover Code. Given Tom Joule s history with the Company and his position as Chief Brand Officer, the Independent Directors (being all the Directors other than Tom Joule) believe that shareholders should welcome the long-term participation by Tom Joule in the equity of the Company. However, the Independent Directors are cognisant that the exercise of the Buyback Authority and future buyback authorities could lead to Tom Joule s shareholding in the Company increasing to levels where some shareholders might be concerned. As a result, it is the intention of the Independent Directors, over the three year period beginning on the date of the AGM, not to use the Buyback Authority and future buyback authorities in that three year period if the exercise of those future buyback authorities would have the effect of increasing Tom Joule s shareholding in the Company beyond 49.9 per cent. TOM JOULE AND HIS INTENTIONS Tom Joule founded Joules in The Joules brand was born after Tom s entrepreneurial spirit led him to create practical, stylish high-quality products to reflect the colourful personalities of those who love the outdoors. Between 2010 and 2015, Tom has featured three times in Drapers 100 Most Influential People in Fashion Retail. In 2015, he was a finalist in the Fashion Entrepreneur of the Year category at the Great British Entrepreneur Awards. In his current role, Tom is focused on developing the Joules brand, product and creative direction. Tom Joule has confirmed to the Company that he has no intention to change the Company s current plans with respect to: i. the future business of the Company (including any research and development functions of the Company); ii. the continued employment of the employees and management of the Company or its subsidiaries, including any material change in conditions of employment or in the balance of the skills and functions of the employees and management; iii. his strategic plans for the Company, or their likely repercussions on employment, or the locations of the Company s places of business, including the location of the Company s headquarters and headquarters functions; iv. employer contributions into the Company s pension scheme(s), the accrual of benefits for existing members, or the admission of new members;

10 10 v. the redeployment of the fixed assets of the Company; or vi. maintenance of the Company s listing on the London Stock Exchange, as a result of the proposals set out in the Waiver Resolutions. Peel Hunt LLP has provided advice to the Independent Directors, in accordance with the requirements of paragraph 4(a) of Appendix 1 to the Takeover Code, in relation to the granting of the waiver by the Takeover Panel of the obligation that could arise on Tom Joule to make an offer under Rule 9 of the Takeover Code. This advice was provided by Peel Hunt LLP to the Independent Directors only and in providing such advice Peel Hunt LLP has taken into account the Independent Directors commercial assessment. ADDITIONAL INFORMATION 1. Responsibility Statement The Directors take responsibility for the information contained in this document and, to the best of the knowledge and belief of the Directors (who have taken all reasonable care to ensure that this is the case), such information is in accordance with the facts and does not omit anything likely to affect the import of such information, save that: only the Independent Directors take responsibility for the recommendation and associated opinion attributed to them on page 5. To the best of the knowledge and belief of the Independent Directors (who have taken all reasonable care to ensure that this is the case), such information is in accordance with the facts and does not omit anything likely to affect the import of such information; and only Tom Joule takes responsibility for the information in this document which relates to him and his intentions. To the best of the knowledge and belief of Tom Joule (who has taken all reasonable care to ensure that this is the case), such information is in accordance with the facts and does not omit anything likely to affect the import of such information. 2. Business of the Company and current trading and prospects Established in Britain by Tom Joule nearly three decades ago, Joules is a premium lifestyle brand with an authentic heritage. The Group is a multi-channel retailer that designs clothing, footwear and accessories for women, men and children, as well as an expanding range of homewares, toiletries and eyewear collections, available through its own retail stores, online, rural shows and events and wholesale channels. The Company s principal activity is that of a holding company. Financial year 2018 was a positive and exciting year for the Group. Revenue of million increased by 18.4 per cent. compared to the prior period (FY17: million). Excluding the impact of currency, Group revenue grew by 18.8 per cent. in the period. This reflects strong growth in both the Retail and Wholesale segments. On a geographic basis, UK sales increased 16.2 per cent. to million and International sales increased 35.7 per cent. to 24.4 million, now representing 13.1 per cent. of Group revenue. Underlying profit before tax increased by 28.5 per cent. to 13.0 million. The Board remains confident that the Group s momentum will continue in its financial year ending in 2019 despite the uncertain macro-economic outlook. This confidence is supported by the growth in the Company s customer base, new store opening plans, a robust Autumn/Winter wholesale order-book in the UK and internationally, and positive early feedback on the Company s Spring/Summer 2019 ranges from wholesale customers. 3. Directors The names of the Directors and the positions they hold at the date of this document are: NAME Ian Filby Tom Joule Colin Porter David Stead Jill Little POSITION Non-Executive Chairman Founder and Chief Brand Officer Chief Executive Officer Chief Financial Officer Senior Independent Non-Executive Director Independent Non-Executive Director Further information relating to the Directors is included on page 34 of the Report and Accounts and at The business address of the Directors is: Joules Building, The Point, Rockingham Road, Market Harborough, Leicestershire LE16 7QU. 4. Directors and related parties Buyback Authority It is not the Directors intention to sell any of their shareholdings back to the Company pursuant to the Buyback Authority. There are no proposals to exercise the Buyback Authority. 5.Interests of the Directors and dealings of Tom Joule At the close of business on 30 July 2018 (being the latest practicable date prior to the date of this document), the interests of the Directors and their families and the interests of persons connected with them, within the meaning of Part 22 of the Companies Act 2006, in the issued share capital of the Company were as follows on the opposite page:

11 NAME ORDINARY SHARES HELD % OF ISSUED SHARE CAPITAL 11 Tom Joule Colin Porter David Stead Jill Little Ian Filby 28,147,210 1,519, ,016 31,250 25, % 1.73% 0.16% 0.04% 0.03% 0% At the close of business on 30 July 2018 (being the latest practicable date prior to the date of this document), details of the options over ordinary shares granted to the Directors were as follows: NAME INTEREST IN OPTIONS OVER ORDINARY SHARES GRANT DATE EXERCISE PRICE EXERCISE PERIOD VESTING DATE Tom Joule LTIP: 106, August 2017 Following the publication of the Company s annual report and accounts for the year ended May 2020 to 16 August 2027 Following the publication of the Company s annual report and accounts for the year ended May 2020 Tom Joule DBP: 51, August July 2020 to 16 August July 2020 Tom Joule LTIP: 194, October 2017 Following the publication of the Company s annual report and accounts for the year ended May 2019 to 5 July 2026 Following the publication of the Company s annual report and accounts for the year ended May 2019 Tom Joule LTIP: 98, July 2018 Following the publication of the Company s annual report and accounts for the year ended May 2021 to 26 July 2028 Following the publication of the Company s annual report and accounts for the year ended May 2021 Tom Joule DBP: 48, July July 2021 to 26 July July 2021 Colin Porter LTIP: 200,581 * 6 July 2016 Following the publication of the Company s annual report and accounts for the year ended May 2019 to 5 July 2026 Following the publication of the Company s annual report and accounts for the year ended May 2019 Colin Porter LTIP: 110, August 2017 Following the publication of the Company s annual report and accounts for the year ended May 2020 to 16 August 2027 Following the publication of the Company s annual report and accounts for the year ended May 2020 Colin Porter DBP: 52, August July 2020 to 16 August July 2020 Colin Porter LTIP: 101, July 2018 Following the publication of the Company s annual report and accounts for the year ended May 2021 to 26 July 2028 Following the publication of the Company s annual report and accounts for the year ended May 2021 Colin Porter DBP: 50, July July 2021 to 26 July July 2021 LTIP: 191,860* 6 July 2016 Following the publication of the Company s annual report and accounts for the year ended May 2019 to 5 July 2026 Following the publication of the Company s annual report and accounts for the year ended May 2019 DBP: 132, July July 2019 to 13 July July 2019 LTIP: 119, August 2017 Following the publication of the Company s annual report and accounts for the year ended May 2020 to 16 August 2027 Following the publication of the Company s annual report and accounts for the year ended May 2020 DBP: 54, August July 2020 to 16 August July 2020 LTIP: 77, July 2018 Following the publication of the Company s annual report and accounts for the year ended May 2021 to 26 July 2028 Following the publication of the Company s annual report and accounts for the year ended May 2021 DBP: 75, July July 2021 to 26 July July 2021 *Colin Porter and also received tax qualifying options of up to a maximum of 30,000, which were granted under the Tax Qualifying LTIP, and subject to the same performance conditions as the LTIP award. The tax qualifying options have an exercise price of 1.72 per share (being the market value on the date of grant). The vesting of the LTIP award will be scaled back to take account of any gain made under the tax qualifying option. In the 12 months prior to the close of business on 30 July 2018 (being the latest practicable date prior to the date of this document), Tom Joule has not dealt in the Company s ordinary shares.