Impellam : Notice of AGM

IMPELLAM GROUP PLC

NOTICE OF ANNUAL GENERAL MEETING

THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubt as to the action which you should take, you are recommended to seek your own advice from your stockbroker, solicitor, accountant or other professional adviser authorised under the Financial Services and Markets Act 2000.

If you have sold or transferred all of your shares in Impellam Group plc please pass this document, together with the accompanying documents, as soon as possible to the purchaser or transferee or to the stockbroker, bank or other agent through whom the sale or transfer was affected for onward transmission to the purchaser or transferee.

Impellam Group plc

Registered in England No. 6511961

DETAILS OF THE 2023

ANNUAL GENERAL MEETING

This document should be read as a whole. Your attention is drawn to the letter from the Chairman of Impellam Group plc which is set out on pages 2 to 6 of this document recommending, on behalf of the Directors, that you vote in favour of the Resolutions to be proposed at the Annual General Meeting referred to below.

Notice of the Annual General Meeting, to be held at the offices of Impellam Group plc, 107-112 Leadenhall Street, London EC3A 4AF at 3.00pm on Tuesday 27 June 2023, is set out on pages 7 to 11 of this document. To appoint a proxy and vote online please go to www.signalshares.com and follow the instructions to register your appointment, or complete and return a paper proxy form, in either case no later than 3.00pm on Friday 23 June 2023. If you hold shares in CREST you may appoint a proxy by completing and transmitting a CREST Proxy Instruction to Link Group (CREST Participant ID RA10) so that it is received no later than 3.00pm on Friday 23 June 2023.

Impellam Group plc Registered office: 800 The Boulevard Capability Green Luton Bedfordshire LU1 3BA

Registered Number: 6511961

2 June 2023

To: Holders of Ordinary Shares

Dear Shareholder,

Annual General Meeting - Tuesday 27 June 2023

I have pleasure in sending to you the Notice of the Annual General Meeting ("AGM") of Impellam Group plc (the "Company") which is to be held at 3.00pm on Tuesday 27 June 2023 at the offices of Impellam Group plc, 107-112 Leadenhall Street, London EC3A 4AF.

Voting at the AGM

Your vote is very important to us. Voting will be by way of a poll. We urge you to vote and appoint your proxy electronically via www.signalshares.com, alternatively you can fill in a proxy form and return it our Registrars or, if you are a CREST member, appoint your proxy through the CREST proxy appointment service, as detailed in Note 5 on page 10. We strongly encourage all shareholders to appoint the Chairman of the AGM as your proxy, with voting instructions, to ensure your vote in counted. Please note that the deadline for the receipt by our Registrars of all proxy appointments is 3.00pm on Friday 23 June 2023.

Resolutions - explanatory notes

Set out below is an explanation of the Resolutions that are proposed at the AGM. Resolutions 1 to 12 are proposed as Ordinary Resolutions and Resolutions 13 to 18 are proposed as Special Resolutions.

Ordinary Resolutions

Resolution 1 - Annual Report 2022

Shareholders will be asked to receive and adopt the Company's Annual Report & Financial Statements and the reports of the Directors and the Auditors for the 52 weeks ended 30 December 2022 (the "Annual Report 2022"). A copy of the Annual Report 2022 can be found on the Company's website.

Resolutions 2 to 8 (inclusive) - Re-election of Directors

In accordance with best practice, each of the current Directors of the Company are subject to annual re-election by Shareholders. Accordingly, each of them retires and being eligible, offers themselves for re-election. Biographical details of all current Directors are set out on pages 40 and 41 of the Annual Report 2022.

Resolutions 9 and 10 - Appointment of Auditors and Auditors' remuneration

The Company is required at each AGM to appoint Auditors to hold office until the conclusion of the next AGM. Accordingly, Resolutions 9 and 10 propose the appointment of BDO LLP as Auditors of the Company and authorise the Directors to determine their remuneration.

Resolution 11 - Political donations and political expenditure

The Company does not make and has no intention of changing its current practice of not making, donations to political parties or organisations (and will not do so without specific endorsement of its Shareholders), and there are restrictions under the Companies Act 2006 upon political donations and political expenditure being made or incurred without prior Shareholder authorisation. The restricted activities are given broad meanings by the Companies Act 2006, such that certain expenditure which might be, in the view of the Directors, in the interests of the Company to incur would be prohibited (such as expenditure for the purposes of communicating the Company's views to political audiences and relevant interest groups). To allow the Directors to comply with the Companies Act 2006 and to act in the interests of the Company, a Resolution will be proposed which would give the Directors authority to make political donations or incur political expenditure in an aggregate amount not exceeding £50,000 in the period ending on 30 June 2024 or the conclusion of the 2024 AGM (whichever is the earlier). This Resolution also covers any political donations made, or any political expenditure incurred by, any subsidiaries of the Company.

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Resolution 12 - Authority to allot shares

The existing power granted to the Directors to allot shares will expire on the conclusion of the AGM on Tuesday 27 June 2023. Accordingly, a Resolution will be proposed to renew the Directors' authority to allot:

1. in relation to a pre-emptive rights issue only, shares up to a maximum nominal amount of £300,144 (which represents approximately two-thirds of the Company's issued share capital as at 18 May 2023, being the last practicable date prior to the date of this document). This maximum is reduced by the nominal amount of any shares allotted under the authority set out in paragraph 12(b); and
2. in any other case, shares up to a maximum nominal amount of £150,072 (which represents approximately one-third of the Company's issued share capital as at 18 May 2023, being the last practicable date prior to the date of this document). This maximum amount is reduced by the nominal amount of any shares allotted under the authority set out in 12(a) in excess of £150,072.

This authority will expire at the earlier of the conclusion of the 2024 AGM and 30 June 2024. The Directors do not have any current intention to exercise this general authority, however, the Directors consider it appropriate to maintain the flexibility that this authority provides. It is intended to renew this authority at successive AGMs.

As at 18 May 2023, being the last practicable date prior to the date of this document, the Company does not hold any shares as treasury shares within the meaning of section 724 of the Companies Act 2006.

Special Resolutions

Resolution 13 - Disapplication of statutory pre-emption rights

In addition to Resolution 12, a Resolution will be proposed to renew the Directors' powers to allot shares for cash up to an aggregate nominal amount of £45,021 (being 10 per cent of the nominal value of the Company's issued ordinary share capital as at 18 May 2023, being the last practicable date prior to the date of this document) without first offering such shares to existing Shareholders. The Resolution also enables the Company, in the event of a rights issue, to meet certain practical difficulties which may arise in connection with fractional entitlements or in respect of overseas Shareholders as a result of local laws and which prevent shares from being issued strictly pro rata. This authority will expire at the earlier of the conclusion of the 2024 AGM and 30 June 2024. The Directors do not have any current intention to exercise this power, however, the Directors consider it appropriate to maintain the flexibility that this power provides. It is intended to renew this power at successive AGMs.

Resolution 14 - Purchase of own shares

The Directors consider that it would be beneficial to the Company if, in certain circumstances, the Company had the power to continue to purchase its own Ordinary Shares. The current authority given in the 2022 AGM for the Company to purchase Ordinary Shares will expire on the conclusion of the AGM on Tuesday 27 June 2023. The Directors will only exercise this power if they are satisfied, after careful consideration, that it is in the best interests of shareholders and the Company.

Furthermore, account will be taken of the overall financial implications for the Company of exercising this authority. If such purchases were made, the Company would be able to do either or a combination of the following:

1. cancel the purchased Ordinary Shares so reducing the total number of Ordinary Shares in issue; or
2. where the shares were purchased out of distributable profits, subject to certain limitations, hold them as treasury shares.

Treasury shares themselves may be cancelled, sold for cash or transferred for the purposes of the Company's employee share schemes. Statutory pre-emption rights apply to a sale of treasury shares for cash and the disapplication of the statutory pre-emption rights in Resolution 13 includes, within the pre-emption disapplication amount, any sales of treasury shares for cash which may occur.

Therefore, a further Resolution will be proposed at the AGM to authorise the Directors to purchase up to a maximum of 9,004,342 Ordinary Shares, being 20 per cent of the issued Ordinary Share capital of the Company as at 18 May 2023 (the last practicable date prior to the date of this document), and which provides that the maximum price per Ordinary Share payable on any exercise of the authority shall not be more than the higher of (i) 10 per cent above the average of the middle market quotations for an Ordinary Share as derived from the London Stock Exchange's Daily Official List for the five business days prior to making any purchase; and (ii) the higher of the price for the last independent trade of and the highest current independent bid for an Ordinary Share on the London Stock Exchange's AIM market. The minimum price payable shall be

1 pence per Ordinary Share, being the nominal value of an Ordinary Share. For this purpose both the maximum and minimum prices permitted to be paid are exclusive of expenses. This authority will expire at the earlier of the conclusion of the 2024 AGM, when the Directors intend to seek renewal of the authority, and 30 June 2024.

Impellam Group plc

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Resolution 15 - Appropriation of the Company's distributable profits in relation to January 2023 special dividend On 27 January 2023, the Company paid a special dividend of 55.4 pence per ordinary share, with the total amount of the dividend being £24,962,993 (the "January 2023 Dividend"). While the Company had sufficient reserves overall to support the January 2023 Dividend, there was an administrative oversight concerning technical compliance with the Companies Act 2006, as the Company's latest filed annual accounts at the time (the "2021 Annual Accounts") did not evidence the necessary reserves for the distribution. In particular, the 2021 Annual Accounts showed £44,056,483 in distributable reserves, and following the distributions made in the period up to 27 January 2023, distributable reserves would have stood at £17,747,310 resulting in £7,215,683 of the January 2023 Dividend being unlawful (the "Relevant Dividend"). On 31 March 2023, the Company filed interim accounts at Companies House which show distributable reserves for the relevant period.

As this was an administrative oversight it should be noted that no Shareholder inadvertently benefited from this distribution and that the purpose of this proposed resolution is to put Shareholders and all potentially affected parties, so far as possible, in the same substantive position they would have been had the administrative oversight not occurred.

Accordingly, in order to rectify the Relevant Dividend, Resolution 15 proposes: (i) the appropriation of sufficient distributable profits of the Company to the payment of the Relevant Dividend; and (ii) to release by way of set off of the appropriated distributable profits against amounts owed by Shareholders in respect of the Relevant Dividend pursuant to a formal deed of release with the past and present Shareholders who were recipients of the Relevant Dividend (the "Shareholders' Deed of Release").

Resolution 16 - Cancellation of void shares and Shareholders' deed of release

The Company effected certain share repurchases between 27 January 2023 and 30 March 2023 (the "Share Repurchases") pursuant to a share purchase plan announced on 8 July 2022. Due to the lack of distributable reserves following the January 2023 Dividend and as a further consequence of the administrative oversight described above, the Share Repurchases were made without sufficient distributable reserves as required by the Companies Act 2006 and are considered void. As a result, the repurchases and cancellation of, in aggregate, 94,822 Ordinary Shares for consideration of £651,847 are void (the "Void Shares"). The Company will seek High Court approval for the cancellation of the Void Shares as required by the Companies Act 2006.

The Company may have a claim against the Shareholders from whom it acquired the Void Shares (the "Repurchase Shareholder Claim"). Those claims are (at the very least) not straightforward and the Company does not consider that it should seek to unwind the Share Repurchases and seek repayment of the monies due but, instead, seeks to give legal effect to the Share Repurchases it intended to undertake at the time and which the Board still considers to be in the best interests of the Company. Accordingly, the Company proposes to seek cancellation of the Void Shares on the basis that the selling Shareholders be released from any liability they may have to the Company in return. Provided shareholder approval is obtained and the High Court confirms the cancellation, both the Company and the selling shareholders will be in the same substantive position they would have been had the administrative oversight not occurred.

Accordingly, Resolution 16 proposes the cancellation of the Void Shares in exchange for the set off of the Repurchase Shareholder Claim. On the assumption that the cancellation of the Void Shares takes effect, Resolution 16 also approves the Company entering into a formal release in respect of the potential claims against the current and former shareholders who were recipients of the proceeds of the Share Repurchases (such release to be contained in the "Shareholders' Deed of Release").

Resolution 17 - Directors' deed of release

While it is noted that the Company has no intention of bringing any claims against any Directors in respect of the Relevant Dividend or the Share Repurchases, principally as it would not be appropriate to do so and also as the likelihood of such claims being successful is very low, it is still felt prudent, for good order, that the deed detailed below is entered into to confirm that the Company will not make any claims against the Affected Directors (as defined below).

Accordingly, Resolution 17 proposes to waive and release the Affected Directors from any obligations or liabilities arising from the Relevant Dividend and/or the Share Repurchases by way of the Company entering into deed polls in favour of the Affected Directors (the "Directors' Deed of Release").

A copy of the form of the Directors' Deed of Release and the Shareholders' Deed of Release are available for inspection in the manner described in note 13 of the Notice of Annual General Meeting.

The consequence of entry into the Directors' Deed of Release and the Shareholders' Deed of Release by the Company is that the Company will be unable to make any claims against past and present: (i) Shareholders who were recipients of the Relevant Dividend or the proceeds of the Share Repurchases (the "Recipient Shareholders"); and (ii) those persons who were directors of the Company at the time of declaration and/or payment of the Relevant Dividend or the Share Repurchases (the "Affected Directors"), in each case, in respect of the declaration and/or payment of the Relevant Dividends or the Share Repurchases having been carried out otherwise than in accordance with the Companies Act 2006.

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Resolutions 15 to 17, if passed, will put all potentially affected parties, so far as possible, in the position in which they were always intended to be had the Relevant Dividends been made and the Share Repurchases been carried out in accordance with the procedural requirements of the Companies Act 2006.

The proposed remedial steps will not have any effect on the Company's financial position. This is because the aggregate amount of the Relevant Dividend and Share Repurchases is equal to and offset by the release of each Recipient Shareholder from the liability to repay the amounts already paid and the Company will not be required to make any further payments to Shareholders in respect of the Relevant Dividend or the Share Repurchases.

As a result of their interest in its subject matter, the Directors will not vote on this Resolution 17 (or on Resolutions 15 and 16). Neither Resolution 15 nor 16 is subject to the passing of Resolution 17.

Related Party Transactions

The entry by the Company into the Shareholders' Deed of Release and consequential waiver of any rights of the Company to make claims against shareholders in respect of the January 2023 Dividend and the Share Repurchases constitute related party transactions pursuant to Rule 13 of the AIM Rules, in respect of Lombard Trust (and therefore Lord Michael Ashcroft), Hendrik M. Van Heijst and their associates who are currently each interested in more than 10 per cent of the total voting rights to be cast at the AGM.

In addition, the entry by the Company into the Directors' Deed of Release and consequential waiver of any rights of the Company to make claims against past and present Directors in respect of the January 2023 Dividend, constitutes a related party transaction pursuant to Rule 13 of the AIM Rules as each of the Directors is a related party for the purposes of the AIM Rules.

The votes of each of the Directors shall not be taken into account in establishing whether the majority necessary for the passing of Resolutions 15 to 17 has been obtained. The Directors have undertaken to abstain from voting on Resolutions 15 to 17.

In lieu of any independent Directors' recommendation in relation to Resolutions 15 to 17, in order to provide a statement as to what is fair and reasonable, and specifically due to all Directors being statutory directors at the time that the January 2023 Dividends were paid, Canaccord Genuity Limited, in its capacity as Nominated Adviser to the Company for the purposes of the AIM Rules, considers that Resolutions 15 to 17 (and specifically the entry by the Company into the Shareholders' Deed of Release and the Directors' Deed of Release) are fair and reasonable insofar as the Shareholders of the Company are concerned.

Availability of documentation

Copies of the Shareholders' Deed of Release and the Directors' Deed of Release are available on the AGM information page of the Company's website at www.impellam.com.

Resolution 18 - Capital reduction

In order to facilitate future payments of dividends, Resolution 18 proposes the reduction of the Company's share premium account in an amount of £30,121,328. The Company must also seek High Court approval for the capital reduction as required by the Companies Act 2006.

Contingent on such approval, the Company anticipates that it will have sufficient distributable reserves to be in a position to pay dividends in the foreseeable future. The capital reduction will also give flexibility for the Company to undertake other forms of capital transactions capable of delivering value to Shareholders.

In respect of the capital reductions proposed by Resolutions 16 and 18, the High Court will have to be satisfied that the proposals do not cause any prejudice to the Company's creditors. The Company expects to be able to satisfy the High Court in that regard but reserves the right not to pursue the reductions in the event they are no longer considered by the Board to be in the best interests of the Company.

Impellam Group plc

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