L1 Group Allocates 226,623 Deferred Rights 5 to Senior Management Under Employee Incentive Plan

Significance of the Deferred Rights 5 Issuance Within L1G’s Employee Incentive Framework

L1 Group’s recent disclosure confirms the allocation of a new Tranche of deferred rights under its employee incentive scheme, introducing a new security class provisionally named "Deferred Rights 5" to its unquoted Equity instruments register. The 226,623 securities were issued on 22 April 2026, with the formal Appendix 3G notification submitted on 2 July 2026. Such deferred rights are typical components of long-term incentive plans at listed companies, designed to align the interests of senior executives and key management personnel with shareholders over a defined vesting period.

The company confirmed that some securities were granted to key management personnel (KMP) or their associates, a group including directors, the CEO, and senior officers whose remuneration is disclosed in the Annual Report. The inclusion of KMP recipients indicates that Deferred Rights 5 are part of L1 Group’s structured executive remuneration rather than a broad employee incentive. The material terms are detailed in a document lodged with ASX, and investors seeking full conditions—including performance hurdles, vesting schedules, or lapse provisions—should consult that filing.

Dividend Equivalent Payments Attached to Each Deferred Right

A key feature disclosed is that each Deferred Right 5 includes entitlement to a dividend equivalent payment. Upon valid or deemed exercise, participants receive an amount approximately equal to dividends they would have earned if holding L1G ordinary shares from the grant date. This arrangement means recipients gain not only potential Capital Gain but also a contingent economic benefit mirroring dividend income during the Holding Period.

This dividend equivalence reduces the disparity between holding actual shares and deferred rights in L1G’s remuneration design. For shareholders, dividend equivalent payments represent a cash or share cost to the company upon exercise, increasing the total economic value transferred to KMP. The company did not disclose the estimated total value of the Deferred Rights 5 tranche or the expected dividend equivalent amount in this announcement.

Context of Deferred Rights 5 Within L1G’s Unquoted Securities Portfolio

The issuance adds to L1 Group’s growing register of unquoted equity instruments. Post-issuance, the unquoted securities include eight existing classes plus the new class pending an ASX Code. The largest class is L1GAA (“Rights”) with 37,357,204 instruments, followed by L1GAC (Deferred Rights) at 9,000,370 and L1GAB (Performance Rights) at 8,908,769.

Other classes include L1GAH (Deferred Rights 4) at 2,410,410, L1GAF (Deferred Rights 3) at 2,202,517, L1GAG (Performance Rights 3) at 2,298,245, L1GAD (Performance Rights 2) at 1,640,625, and L1GAE (Deferred Rights 2) at 1,785,714. The Deferred Rights 5 tranche of 226,623 is currently the smallest class. Collectively, these unquoted incentives represent potential future ordinary share issuance, dependent on vesting, exercise, and performance conditions.

L1G’s Quoted Ordinary Share Capital Post-Notification

The update confirms L1 Group’s quoted ordinary fully paid shares total 2,566,551,484 at the time of notification. This figure serves as the baseline for calculating incremental dilution from conversion of unquoted securities, including Deferred Rights 5. Investors should aggregate outstanding unquoted instruments with ordinary shares, considering vesting and exercise conditions for each class.

The company notes that the securities-on-issue figures are automatically generated and may not fully reflect current Issued Capital if other ASX forms are being processed simultaneously. For precise capital structure details, investors should consult L1 Group’s latest annual report, shareholder communications, or the share registry.

Use of Listing Rule 7.1 Placement Capacity for Deferred Rights 5 Issue

The 226,623 Deferred Rights 5 securities were issued under an ASX Listing Rule 7.2 exemption, requiring no separate shareholder approval under Listing Rule 7.1. However, the entire amount has been counted against L1 Group’s 15% placement capacity under Listing Rule 7.1, a standard approach for employee incentive securities issued without shareholder mandate.

Given the small size—less than 0.01% of the approximately 2.57 billion quoted shares—the impact on placement capacity is minimal individually. Nonetheless, investors and analysts should include this tranche when assessing total placement capacity usage over any 12-month period preceding capital raises. No securities in this class were issued under the additional 10% capacity allowed by Listing Rule 7.1A.

Delay Between Issue and Notification Dates for Deferred Rights 5

The announcement highlights a roughly 10-week gap between the issue date (22 April 2026) and the Appendix 3G notification lodgement (2 July 2026). Such delays are not uncommon for unquoted securities issued under employee incentive schemes, especially when establishing a new class on the register.

ASX Listing Rules require timely lodgement of Appendix 3G forms, though the company did not explain the delay. Investors and governance observers may wish to assess whether L1 Group’s incentive scheme administration aligns with disclosure obligations. The immediate share price impact of this notification was not evident from public information.

Material Terms of Deferred Rights 5 Referenced in L1G Incentive Scheme Documents

L1 Group provided two URL links in the notification to ASX-lodged documents detailing the material terms of Deferred Rights 5 and the broader employee incentive scheme. Both links point to the same document covering conditions applicable to this new deferred rights class. Investors seeking information on vesting conditions, performance hurdles, forfeiture events, and dividend equivalent calculations should review these documents.

The notification confirms all 226,623 Deferred Rights 5 rank equally from issue date, with no subclasses or tiers. Specific vesting periods, performance conditions, or exercise prices were not disclosed in this announcement. Further economic valuation by the remuneration committee is expected in L1 Group’s next annual remuneration report.

Expansion of L1G’s Performance and Deferred Rights Across Multiple Classes

The Deferred Rights 5 issuance continues a multi-year series of incentive grants resulting in at least five deferred rights classes and three performance rights classes on the unquoted register. This staggered, layered approach aligns with rolling annual grant cycles typical for mid-to-large ASX-listed companies to maintain retention and performance alignment among Leadership teams.

With multiple classes at various vesting stages, significant volumes of unquoted securities may convert into ordinary shares in any given year, subject to performance outcomes. Investors concerned with dilution or remuneration expense should model each class’s potential conversion based on grant dates, vesting periods, and performance hurdles. No comprehensive vesting schedule was provided in this notification.

Investor Considerations Following the Deferred Rights 5 Announcement

The next key step is the assignment of a permanent ASX security code to Deferred Rights 5, currently listed as "New class — code to be confirmed." Once assigned, this class will be trackable via ASX’s securities register and included in future Appendix 3H notifications for lapses or cancellations.

Investors should also monitor future Appendix 3B or 3G filings indicating exercises converting unquoted rights into ordinary shares. L1 Group’s upcoming Annual General Meeting and annual report will provide further details on total remuneration value attributed to all incentive grants, including Deferred Rights 5, and any changes to the employee incentive scheme structure.