Founder Incentive Securities Terms

Founder Incentive Securities Terms
8 September 2008

In accordance with the terms of Item 10.14 of the CXH Stapled Security Prospectus and the Product Disclosure Statement (“PDS”) and further arrangements required by the Founders at the time of listing, CXH agreed to the issue of 6 million incentive stapled securities to the Founders. CXH has now entered into a deed with the Founders to formalise the terms of that arrangement. The major provisions of the Deed are that:

5,341,677 of the Incentive Securities will only be allotted if performance benchmarks are achieved by CXH in FY2009, 2010 and 2011. Those benchmarks are a 9% yield in FY 2009; a 9.5% yield in FY2010 and a 10% yield in FY 2011. If benchmarks are achieved, then 40% of stapled securities would be issued in July 2009; a further 20% in July 2010; and the final 40% in July 2011.
There is the ability to clawback if earlier targets are not met, but later targets are. However, if no targets are met, then no Incentive Securities will be allotted.
The balance 658,333 of the Incentive Securities will be allotted to third party, non‐employee Founders in July 2009
All Incentive Securities allotted prior to 1 December 2010 are to be held in escrow until 1 December 2010.
Further requirements of the Founders for listing of CXH are included in the deed as providing that unallocated Incentive Securities, notwithstanding the above provisions, will all be allocated immediately, without any escrow period, prior to any change in control of CXH. A change in control may include (but not be limited to):

a. a takeover offer being made for CXH stapled securities;
b. any person (other than the current controllers) gaining or asserting control over the Board of the Company.

It should be noted that the signing of the Deed formalises the terms of the arrangement notified in Item 10.14 of the PDS and further requirements of the founders for agreement to listing of CXH and that no approach has been made to CXH in relation to a take-over bid or any other attempt to take control of CXH

For Further Information Call:
Bryan Northcote
Compass Hotel Group
(02) 8908 9500

Appendix 4E and Preliminary Financial Report
30 August 2010

FY 10 Financial Results
27 August 2010

Results of AGM
1 December 2009

Chairman's Address at AGM
1 December 2009

Annual Report June 2009
26 November 2009

Full Year Results June 2009
20 November 2009

Extension to Suspension
20 November 2009

Appendix 4E and Consolidated Financial Statements
20 November 2009

Notice of AGM AND pROXY fORMS
29 October 2009

Market Update and Appointment of Company Advisers
2 October 2009

Change of Registered Office
2 October 2009