Notice of General Meeting

Styles & Wood Group plc

("Styles & Wood" or the "Group")

Notice of General Meeting

Styles & Wood announces that a circular ("Circular") is today being sent to shareholders giving notice of a General Meeting (the "Notice"). The Circular contains details of a proposed New Incentive Plan, proposed amendments to the Articles of Association and allotment of Hurdle Shares (the "Proposals"). The General Meeting will be held at 10.30am on 21 January 2016 at Aspect House, Manchester Road, Altrincham WA14 5PG. Copies of the Notice are available on the Company's website:

www.stylesandwood-group.co.uk/investorsinformation/

Further details on the Proposals and background to the Proposals are set out below. Capitalised terms in this announcement (unless otherwise defined) have the same meanings as set out in the Circular.

For further information please contact:

1. BACKGROUND TO THE PROPOSALS

The Proposals are the third and final component of the re-positioning of the Company for future growth. The Board's intention, supported by the major shareholders, had been to put appropriate incentive arrangements in place in June 2015 prior to the conclusion and announcement (on 19 June 2015) of the refinancing of the Convertible Preference Shares (being, the first component of the re-positioning for growth). The second component of the re-positioning of the business was the change in banking partner. The complexity of the refinancing of the Convertible Preference Shares prevented the change in banking arrangements from concluding until October 2015. The Board's opinion was that the completion of the refinancing and the change in banking arrangements took precedence over the implementation of an incentive plan for senior management. The Board believes that Shareholders should consider the Proposals in the context of the refinancing in June 2015, when the Company issued 309,100 new Ordinary Shares at a price of 50 pence each and the closing share price for an Ordinary Share on 18 June 2015, the day prior to the announcement of the refinancing, was 59.5 pence.

The principal commercial intentions of the Proposals are as follows:

· to create a value "pool" as an incentive arrangement for the Executive Leadership Team ("ELT"), with the value of such "pool" being calculated by reference to (i) the increase in share price per Ordinary Share from a floor price of £1.25 up to and beyond £4.25 and (ii) the number of Ordinary Shares in issue as at the date of the Circular (being, 7,077,585);

· the value of the "pool" will equate to 20 per cent. of the total shareholder value uplift achieved above a share price of £1.25 and below £4.25 and a further 10 per cent. of the total shareholder value uplift achieved above a share price of £4.25. The value "pool" will be calculated as follows:

(1) 20 per cent. of the share price increase between £1.25 and £4.25 multiplied by 7,077,585 (being the number of Ordinary Shares in issue as at the date of the Circular); and

(2) 10 per cent. of the share price increase above £4.25 multiplied by 7,077,585.

The plan would give a total "pool value" of £4.25 million at a share price of £4.25. A share price of £5.00 would give a total "pool value" of £4.78 million; and

· the entitlement for the ELT to participate in the "pool" will crystallise upon the occurrence of an Exit Event. If no Exit Event has occurred by 31 December 2018, half of the value of the "pool" (if any) will crystallise at that date. The balance would remain dependent on the occurrence of an Exit Event.

In the event that a share price of £4.25 is achieved upon the occurrence of an Exit Event on or before 31 December 2018, the maximum number of Ordinary Shares (or cash equivalent) which the ELT shall be entitled to receive pursuant to the Proposals is 999,188 Ordinary Shares, representing a maximum dilution to the number of Ordinary Shares in issue as at the date of the Circular of 14.1 per cent.

In order to deliver the above commercial intentions in a tax-efficient manner for the ELT, the Board has developed the arrangements, as more particularly summarised in paragraphs 2 and 3 below, whereby:

(a) the value of the "pool" to incentivise the ELT in relation to the increase in share price per Ordinary Share from £1.25 up to £2.75 is proposed to be awarded pursuant to the New Incentive Plan, further details of which are set out in Part 2 of the Circular; and

(b) the value of the "pool" to incentivise the ELT in relation to the increase in share price per Ordinary Share from £2.75 up to and beyond £4.25 is proposed to be awarded in the form of the Hurdle Shares, further details of which are set out in Part 3 of the Circular.

The New Incentive Plan does not require the approval of the Shareholders. However, as it forms part of the overall package which is being proposed to incentivise the ELT, and to ensure transparency in connection with the entire arrangement to benefit the ELT, the Board feels that it is appropriate to seek Shareholder approval for the Proposals as a whole, rather than just the elements relating to the introduction, issue and allotment of the Hurdle Shares (which do require Shareholder approval).

The Board would further highlight to Shareholders that the Proposals are intended to replace the Company's existing long term incentive plan which is shortly due to expire and will be the only equity-based incentive arrangements in which the current ELT (including the Executive Directors) will be entitled to participate. As such, the Proposals will be the sole equity-based means by which the Company will seek to incentivise and retain the ELT (including the Executive Directors).

2. NEW INCENTIVE PLAN

Pursuant to the terms of the New Incentive Plan, it is proposed that the ELT will be granted awards which will entitle them to receive Ordinary Shares (or the cash value equivalent of Ordinary Shares), subject to a maximum "vesting value".

This "vesting value" is calculated by reference to the price of an Ordinary Share at the time of vesting (see further below), such that the ELT shall be entitled to receive Ordinary Shares (or a cash payment equivalent) with a value equal to 20 per cent. of the amount by which the share price for an Ordinary Share exceeds £1.25 multiplied by the number of Ordinary Shares currently in issue as at the date of the Circular (being, 7,077,585).

The maximum aggregate "vesting value" which can be awarded to the current ELT pursuant to the initial awards made under the New Incentive Plan will be £2,123,275.50. Such value would vest to the current ELT if the share price for an Ordinary Share is or exceeds £2.75 at the time of vesting. The figure of £2,123,275.50 is calculated by multiplying 20 per cent. of the increase in share price between £1.25 and £2.75 (being, 30 pence) by 7,077,585 Ordinary Shares.

In the event that the share price for an Ordinary Share at vesting exceeds £1.25 but is less than £2.75, the "vesting value" is calculated on a straight line basis by reference to 20 per cent. of the excess above £1.25.

As stated in paragraph 1 above, vesting of the current ELT's entitlements to the initial awards shall take place upon the occurrence of an Exit Event (or shortly prior to an Exit Event that is a Disposal or Sale). If no Exit Event has occurred by 31 December 2018, the ELT will be entitled to half of their "vesting value" at that date (calculated by reference to the average middle market quotation at close of each day's trading for one Ordinary Share as derived from the London Stock Exchange in the one month period ending on 31 December 2018). The balance of the "vesting value" would remain dependent upon the occurrence of an Exit Event (and be calculated by reference to the share price as at the date of that Exit Event).

The initial awards proposed to be made to the current ELT are as follows:

An illustration of the value which could be received by the current ELT by virtue of the initial awards (in various different circumstances) is contained in Section A of Part 4 of the Circular. The figures provided in that Section are for illustrative purposes only and should not be regarded as providing any form of guarantee as to the future performance of the share price for Ordinary Shares or the value that may be achieved for Shareholders upon the occurrence of an Exit Event.

Future awards made pursuant to the New Incentive Plan may be made on a similar basis to that set out above or may relate to a specific maximum number of Ordinary Shares and be subject to appropriate performance conditions as determined by the Remuneration Committee.

Further details of the proposed New Incentive Plan (including, without limitation, the eligibility requirements for participation, the applicable individual limits, the effects of leaving employment and certain other matters) are set out in Part 2 of the Circular.

3. HURDLE SHARES

Subject to Shareholders voting in favour of Resolutions 2 to 5, it is proposed that a new class of Hurdle Shares will be created by the Company and that these Hurdle Shares will be issued to the current ELT.

The rights which are proposed to attach to the new class of Hurdle Shares are such that, upon the occurrence of an Exit Event or, if no Exit Event has occurred by 31 December 2018, on 31 December 2018, the holders of the Hurdle Shares (as a class) shall be entitled to receive value (whether by way of participation in the proceeds of the Exit Event or by conversion of the Hurdle Shares into Ordinary Shares) calculated by reference to the prevailing share price for Ordinary Shares at that time.

The value to be attributed to the holders of the Hurdle Shares in such circumstances shall be equal to:

(a) 20 per cent. of the amount by which the share price for an Ordinary Share exceeds £2.75 (up to £4.25); and

(b) 10 per cent. of the amount by which the share price for an Ordinary Share exceeds £4.25,

in each case multiplied by the number of Ordinary Shares which are in issue as at the date of the Circular (being, 7,077,585). As such, the value rights which will be attached to the Hurdle Shares are clearly aligned to achieving growth in share price and value for the current Shareholders as at the date of the Circular.

As is the case with the New Incentive Plan, if no Exit Event has occurred by 31 December 2018, the holders of the Hurdle Shares will on 31 December 2018 be entitled to receive half of the value of the Hurdle Shares at that date (with the balance due only upon the occurrence of an Exit Event and calculated by reference to the share price at the time of that Exit Event).

An illustration of the value which could be received by the current ELT by virtue of their holdings of Hurdle Shares (in various different circumstances) is contained in Section B of Part 4 of the Circular. As above, the figures provided in that Section are for illustrative purposes only and should not be regarded as providing any form of guarantee as to the future performance of the share price for Ordinary Shares or the value that may be achieved for Shareholders upon the occurrence of an Exit Event.

It is expected that the Hurdle Shares will be issued to the ELT in consideration for each member of the ELT entering into an agreement stating that he is to be an "employee shareholder" in accordance with the provisions of Section 205A of the Employment Rights Act 1996. This means that the ELT will receive their Hurdle Shares in return for giving up some employment rights (in particular the right to claim unfair dismissal in most cases and the right to a statutory redundancy payment).

The proposed allotment and issue of Hurdle Shares to the ELT is expected to be as follows:

There are no further anticipated issues of Hurdle Shares other than those set out above.

It is anticipated that, subject to Shareholders voting in favour of the Resolutions at the General Meeting, the Hurdle Shares will be issued to the ELT on 22 January 2016 (or as soon as reasonably practicable thereafter once the Company and the ELT have complied with the requirements of the Employment Rights Act 1996 in relation to the issue of such Hurdle Shares as "employee shareholder" shares).

Further details of the Hurdle Shares (including, without limitation, the voting, dividend and redemption rights, the restrictions on transfer, the effects for the holder of leaving employment and certain other matters) are set out in Part 3 of the Circular.

4. IRREVOCABLE UNDERTAKINGS

Certain Shareholders (being, Robert Hough, Paul Mitchell, Business Growth Fund and Henderson Volantis) have given irrevocable undertakings to vote in favour of the Proposals representing in aggregate 28.1 per cent. of the existing issued Ordinary Shares as at 22 December 2015, being the last practicable day before the publication of the Circular.

5. RELATED PARTY TRANSACTION

The proposed participation of Tony Lenehan and Philip Lanigan (each being a director of the Company) in the New Incentive Plan, and the proposed allotment of Hurdle Shares to Tony Lenehan and Philip Lanigan, each constitute related party transactions under AIM Rule 13 of the AIM Rules. The Independent Directors consider, having consulted Shore Capital and Corporate Limited (the Company's nominated adviser), that the terms of such related party transactions are fair and reasonable insofar as Shareholders are concerned.

6. GENERAL MEETING

Set out at the end of the Circular is a notice convening the General Meeting of the Company to be held at 10.30am on 21 January 2016 at Aspect House, Manchester Road, Altrincham WA14 5PG, at which the following Resolutions will be proposed:

Resolution 1

An ordinary resolution to approve and adopt the New Incentive Plan.

Resolution 2

A special resolution to approve the amendments to the Articles to incorporate the provisions relating to the Hurdle Shares.

Resolution 3

An ordinary resolution to grant the Board authority to allot the Hurdle Shares.

Resolution 4

A special resolution to disapply statutory pre-emption rights in connection with the issue and allotment of the Hurdle Shares.

Resolution 5

An ordinary resolution to authorise the directors to consolidate such number of Hurdle Shares which may be required to be converted in accordance with the New Articles, into one hurdle share with a nominal value representing an amount equal to the aggregate nominal value of the converting Hurdle Shares and then to immediately sub-divide and reclassify such consolidated hurdle share into Ordinary Shares and Deferred Ordinary Shares in accordance with the New Articles.

Resolutions 1, 3 and 5, being ordinary resolutions, will require a simple majority of those Shareholders voting in person or by proxy (whether on a show of hands or in a poll) in favour of such Resolution.

Resolutions 2 and 4, being special resolutions, will require approval by not less than 75 per cent. of those voting in person or by proxy (whether on a show of hands or in a poll) in favour of such Resolutions.

Only holders of Ordinary Shares may vote at the General Meeting.