Grant of Options

Castleton Technology Plc

 ("Castleton" or "the Company")

Grant of Options

As outlined in the circular to shareholders dated 9 June 2015, Castleton, the software and managed services provider to the public and not for profit sectors, announces that on 18 July 2015 it awarded options over 8.6% of the fully diluted share capital in the Company ("Options") to Haywood Chapman (Chief Financial Officer), Davinder Sanghera (Chief Operating Officer), David Payne (Non-Executive Director), Phil Kelly (Non-Executive Director) and MXC Guernsey Limited ("MXC").

The Options have been granted as follows:

· to Haywood Chapman, Options over 2% of the fully diluted share capital under a combination of EMI Share Options, Unapproved Share Options and Employee Share Scheme Options;

· to Davinder Sanghera, Options over 1% of the fully diluted share capital under a combination of EMI Share Options, Unapproved Share Options and Employee Share Scheme Options;

· to David Payne, Options over 0.4% of the fully diluted share capital under a combination of Unapproved Share Options and Hurdle Shares;

· to Phil Kelly, Options over 0.2% of the fully diluted share capital under a combination of Unapproved Share Options and Hurdle Shares; and

· to MXC, Options over 5% of the fully diluted share capital of the Company under the MXC Share Option Scheme.

All of the Options are evergreen, meaning that the percentage of the fully diluted issued share capital held under option will remain constant, notwithstanding any further issues of ordinary shares of 0.1 pence in the capital of the Company ("Ordinary Shares"). The Options are being awarded under a variety of schemes, both approved and unapproved. All of the Options are subject to vesting criteria whereby the average price of Ordinary Share must exceed 3 pence, and in some cases 4 pence, for a 10 day period between the second and third anniversaries of 1 April 2015.

If the average price of an Ordinary Share does not reach or exceed the targets above then the Option shall lapse.

The award of these Options has been delayed due to the Company being in a close period resulting from the half year results and recent acquisition activity.

Related Party Transaction

The grant of options to MXC is deemed to be a related party transaction Under the AIM Rules for Companies as they are equivalent to 5% of the fully diluted share capital of the Company. Accordingly the independent directors, for these purposes being Haywood Chapman, Davinder Sanghera, David Payne and Phil Kelly, consider, having consulted with finnCap, the Company's nominated adviser, that the terms of the share option award to MXC are fair and reasonable insofar as the Company's shareholders are concerned.

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