Tasty : Growth Share Scheme & Notice of General Meeting – 23rd December 2020

23 December 2020

Tasty plc

("Tasty" or the "Company")

Approval of waiver of obligations under Rule 9 of the Takeover Code

Related Party Transaction

Approval of Growth Shares Scheme

Adoption of New Articles

and

Notice of General Meeting

Tasty (AIM: TAST), the owner and operator of restaurants in the casual dining sector, announces that it will be posting a circular to shareholders (the "Circular") today including notice convening a general meeting ("Notice of General Meeting") to be held at 12.00 p.m. on 15 January 2021 at the Company's offices at 32 Charlotte Street, London W1T 2NQ (the "General Meeting").

General Meeting

The Directors are asking all Shareholders not to attend the General Meeting in light of the UK Government's current restrictions on gatherings and the rules regarding social distancing which have been imposed in response to the Covid-19 pandemic. Shareholders who attempt to attend the GM in person in breach of any stay at home measures which are in place on the date of the GM will not be admitted. Instead, please vote by proxy on the Resolutions in advance of the General Meeting by one of the methods described in the Circular. Voting will be taken on a poll for all of the Resolutions. Given the current restrictions on attendance in person at the GM, Shareholders are encouraged to appoint the chairman of the GM as their proxy rather than a named person who will not currently be permitted to attend the GM unless the UK Government's restrictions in place at the date of this announcement are relaxed or lifted prior to the GM.

Shareholders are requested to vote as soon as possible and, in any event, to be valid so as to be received by the Company's registrars, Computershare Investor Services, by not later than 12.00 p.m. on 13 January 2021. Hard copies of the Forms of Proxy should be returned to Computershare Investor Services PLC at The Pavilions, Bridgwater Road, Bristol BS99 6ZY.

In addition, Shareholders can also submit questions relating to the business of the General Meeting at any time from the date of this announcement by email to [e-mail] and the Company will answer such questions on a regular basis up until 12.00 p.m. on 13 January 2021. If the restrictions on gatherings and social distancing are relaxed or lifted by the UK Government prior to the date of the GM, the Company will notify Shareholders of any resulting change which may affect the ability of Shareholders to attend the GM by issuing a further announcement through a Regulatory Information Service and on its website at https://dimt.co.uk/investor-relations/news/.

The Circular is available to view on the Company's website at https://dimt.co.uk/investor-relations/.Capitalised terms in this announcement shall have the same meaning as in the Circular to be posted to shareholders today.

Growth Shares Scheme

As announced on 15 September 2020 and 23 December 2020, the composition of the Board of Directors has changed with Adam Kaye stepping down from the Board, Sam Kaye changing his role from Joint Chief Executive Officer to Non-executive Director and Jonny Plant becoming sole Chief

Executive Officer. As part of these changes, Jonny Plant's role and responsibility has increased significantly and it was therefore deemed appropriate, given his current lack of equity incentive, aside from his interest in Ordinary Shares, to incentivise him in the form of the Growth Shares Scheme to which Jonny Plant will be invited to join as the first participant. A summary of those proposed incentive arrangements in the form of the Growth Shares Scheme is set out below.

Following consultation with certain major shareholders it is proposed to introduce the Growth Shares Scheme to vary Jonny Plant's incentive arrangements so that he may be issued the B Ordinary Shares pursuant to the Growth Shares Scheme. These B Ordinary Shares are convertible into new Ordinary Shares subject to certain performance criteria being achieved as summarised below. Should all the B Ordinary Shares be converted into new Ordinary Shares these new Ordinary Shares will represent a maximum of 10% of the Existing Ordinary Shares. In addition, Jonny Plant currently holds 7,091,902 Ordinary Shares, representing 5.03% of the Existing Ordinary Shares.

Following the issue of the B Ordinary Shares and their subsequent conversion into Ordinary Shares (should the performance criteria above be achieved); Jonny Plant will hold (together with his existing holding of Ordinary Shares) an interest in the Company of up to a total of 22,768,542 Ordinary Shares representing 14.52% of the Enlarged Ordinary Share Capital and the Concert Party will hold, in aggregate, 67,593,410 Ordinary Shares, representing 43.12% of the Enlarged Ordinary Share Capital.

The Takeover Panel has agreed, subject to the passing of the Whitewash Resolution by Independent Shareholders (being Shareholders other than the members of the Concert Party), to waive the obligation on the Concert Party to make a general offer to Shareholders under Rule 9 of the Code that could otherwise arise on the grant to Jonny Plant of B Ordinary Shares and their subsequent conversion into new Ordinary Shares (should performance criteria be met).

Accordingly, the Company is seeking the approval at the General Meeting of, amongst other things, the Whitewash Resolution and the implementation of the Growth Shares Scheme (which will also necessitate the adoption of new articles of association of the Company).

The Growth Shares Scheme will not be implemented if the Whitewash Resolution is not passed at the General Meeting.

Related Party Transaction

The issue of the B Ordinary Shares to Jonny Plant (and any subsequent conversion representing a maximum of 10% of the Existing Ordinary Shares) could be deemed to fall outside of usual remuneration parameters and is therefore classified as a related party transaction under AIM Rule

13. The Directors (excluding Jonny Plant), having consulted with the Company's nominated adviser, Cenkos Securities, believe that the terms of the new incentive arrangements are fair and reasonable insofar as shareholders are concerned.

For further information, please contact:
Tasty plc	Tel: [phone]
Jonny Plant, Chief Executive
Cenkos Securities plc (Nominated adviser and broker)
Mark Connelly / Katy Birkin	Tel: [phone]

1. Background to, and reasons, for the proposed implementation of the Growth Shares Scheme

As announced on 15 September 2020 and 23 December 2020, the composition of the Board of Directors has changed with Adam Kaye stepping down from the Board, Sam Kaye changing his role from Joint Chief Executive Officer to Non-executive Director and Jonny Plant becoming sole Chief Executive Officer. As part of these changes, Jonny Plant's role and responsibility has increased significantly and it was therefore deemed appropriate, given his current lack of equity incentive, aside from his interest in Ordinary Shares, to incentivise him in the form of the Growth Shares Scheme. A summary of those proposed incentive arrangements in the form of the Growth Shares Scheme is set out below.

The Growth Shares Scheme

It is proposed that the Company establishes the Growth Shares Scheme to which Jonny Plant will be invited to join as the first participant. The object of the Growth Shares Scheme is to entitle the employee to participate only in the future capital growth of the Company as well as permit the employee to convert their B Ordinary Shares into the Company's Ordinary Shares, whilst retaining many of the commercial benefits of an option scheme.

Following consultation with certain major shareholders it is proposed to introduce a new incentive arrangement to vary Jonny Plant's incentive arrangements so that he may be issued the B Ordinary Shares pursuant to the Growth Shares Scheme. These B Ordinary Shares are convertible into new Ordinary Shares subject to certain performance criteria being achieved as summarised below (and detailed further in paragraph 7 of Part III of the Circular). Should all the B Ordinary Shares be converted into new Ordinary Shares these new Ordinary Shares will represent a maximum of 10% of the Existing Ordinary Shares. In addition, Jonny Plant currently holds 7,091,902 Ordinary Shares, representing 5.03% of the Existing Ordinary Shares.

The 90 day VWAP of an Ordinary Share as at the Last Practicable Date was 2.30 pence. The level of participation that the B Ordinary Shares are entitled to, and the maximum number of Ordinary Shares into which the B Ordinary Shares can convert is referenced to the following share price performance targets of the Company being met:

• if, at any time, within 12 months, the 90 day VWAP of the Ordinary Shares is 6 pence or more, up to 3.33%;
• if, at any time, within 24 months, the 90 day VWAP of the Ordinary Shares is 8 pence or more, up to 6.67%;
• if, at any time, within 48 months, the 90 day VWAP of the Ordinary Shares is 16 pence or more, up to 10%;

The maximum percentage that the new Ordinary Shares will represent, as a result of the conversion of B Ordinary Shares, will be no more than 10% of the Existing Ordinary Shares.

Example

By way of an example of the above rights, if in 20 months' time the 90 day VWAP is more than 8p, Jonny Plant's B Ordinary Shares are entitled to convert into and up to 10,451,093 new Ordinary Shares, being 6.67% of the Existing Ordinary Shares.

Further details of the Growth Shares Scheme are set out in paragraph 7 of Part III of the Circular.

The Growth Shares Scheme will not be implemented if the Whitewash Resolution is not passed at the General Meeting.

Following the issue of the B Ordinary Shares and their subsequent conversion into Ordinary Shares (should the performance criteria above be achieved); Jonny Plant will hold (together with his existing holding of Ordinary Shares) an interest in the Company of up to a total of 22,768,542 Ordinary Shares representing 14.52% of the Enlarged Ordinary Share Capital and the Concert Party will hold, in aggregate, 67,593,410 Ordinary Shares, representing 43.12% of the Enlarged Ordinary Share Capital.

2. Background to and reasons for the Rule 9 Waiver

The purpose of issuing the B Ordinary Shares to Jonny Plant pursuant to the Growth Shares Scheme is to incentivise him for the benefit of Shareholders to reflect his new role and responsibility as sole Chief Executive Officer.

As described above, the Company proposes to issue the B Ordinary Shares to Jonny Plant following the passing of the Whitewash Resolution (subject to all of the other Resolutions also being passed at the General Meeting).

The increase in the percentage shareholding of the Concert Party as a result of the conversion of B Ordinary Shares into new Ordinary Shares by Jonny Plant without a waiver of the obligations under Rule 9 of the Takeover Code (commonly referred to as a "Whitewash"), would oblige the Concert Party to make a general offer to Shareholders under Rule 9 of the Takeover Code. The Panel has agreed to a waiver of this obligation, subject to the Whitewash Resolution being approved at the General Meeting (on a poll) by Independent Shareholders who hold in excess of 50% of the Independent Shares. The Rule 9 Waiver is therefore conditional upon Independent Shareholders approving the Whitewash Resolution. If the Whitewash Resolution is not approved by Independent Shareholders, the Growth Shares Scheme will not be implemented.

The Takeover Code

The Takeover Code is issued and administered by the Takeover Panel. The Takeover Code applies, inter alia, to all public companies which have their registered office in the United Kingdom and are considered by the Takeover Panel to have their place of central management and control in the United Kingdom. The Company is such a company and Shareholders are therefore entitled to the protections afforded by the Takeover Code.

Under Rule 9 of the Takeover Code, any person who acquires an interest (as such term is defined in the Takeover Code) in shares which, taken together with the shares in which he and persons acting in concert with him are interested, carry 30% or more of the voting rights in a company that is subject to the Takeover Code, is normally required to make a general offer to all of the remaining shareholders to acquire their shares. Similarly, when any person, together with persons acting in concert with him or her, is interested in shares which in aggregate carry not less than 30% of the voting rights but does not hold shares carrying more than 50% of the voting rights of such a company, a general offer will normally be required if any further interests in shares are acquired which increases the percentage of shares carrying voting rights by any such person. Such an offer would have to be made in cash at a price not less than the highest price paid by him, or by any member of the group of persons acting in concert with him, for any interest in shares in the company during the 12 months prior to the announcement of the offer.