Xero : Ongoing Disclosure Notice - A Lark

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Ongoing Disclosure Notice

Disclosure of DirectorsandSenior Managers Relevant Interests

Andrew (Andy)ark

Xero Umilod (XRO)

Not applicable

Ceased role asChrefMarketing andRevenue Officer on 31December 2016

Sections 297(2) and 298(2),Financial Markets Conduct Act 2013

ToNZXLlmitod;arid

Name ofllstod isst.Jor:

Datothisdisclosure made:

Dateof lastdisclosure :

Directororseniormanageralvlng dls closuro

Fullname(s):

Name oflisted Issuer:

Name of rolalodbody COfporate (if applicable) :

Positionhold fn hstod issuer:

Summary of aequfsition or disposalof re evantinterest(oxcludlngspociflod dorivativos)

Class ofaffocled quotod financialproducts :

Nature of he affectedrelevant 1nterest(s):

For that relevant lntorost-

Number heldin class before acquisition or disposal:

Number heldin class afteracqu s1l1on or disposal:

Currentregistered holder(s):

Registered holder(s) oncelransfersare rogsterod:

(a)Ordmary shares n Xero Umitod (Ordinary Shares);(b)Unlisted condltlOlla1 contractual rightlo beissuedOrdinary Shares(RSUs):(c)Optionslo acquireOrdinary Shares (Options)

(a)(i) egal ownershipof Ordinary Shares and(11) Beneficial ownership of Ordinary Shares through he XeroUmitod Employoe RestrictedShare Plan (SharePlan);(b) Holderof RSUs, subject lolhe termsof lho Xoro limitedResriclodStock Unitand OptionPlan (AU) (AUPlan):(c) HolderofOptions,eachOption ontit11ng tho holderlosubscnbe for onoOrdmary Share,subJoci tolhe terms oftheAU Plan

l•X1)30,000 and111) 8,479:(bl 36 ,750:(c)160,000

(a)(1) 66,076 and (n)Nono;(b)None;(c) 41,667

(a)(t) Andy ark and (1i) XoroTrustee Ltmitod;(b) Andy ark (c)Andy ark

(aXJ)AndiLariandi,;JNA:(b) NA;(c) Andy ark

Summary ofacquisitionordisposal ofspoclflodderivatives rolovantlnlorost (ifapplicable}

Typoof affected derivative:

Th& notional valueof !he derlvalive(ifany)or theno11ona amountofunderlying financial products( anv):

Astaterr.enl as to whetherlhederivativeis cash se111ed or physicaNysellled:

Maturity date of tho derivative (1f any):Expiry date ofthe denvat ve(1f anv):

The pr ce specif edin the terms of1he dorivat1ve (1fany):

Any otherdetailsneededlo understandhow the amounl oftho consideration payableunder the derivative or the value ofthe derivatrve isaffected by thevalue of the underlyingfinancialproducts:

Class of underlying financialproducts:Oetalls ofaffectedderivative-

Not applicable

Nol apphcable

Nol appticablo

Not applicable

Not appl cable

Not apphcablo

Nol appl!cabloNol appllcable

For thatdenvat1ve,·

Par1ies to the derivat ve:

If the director orsenior managerisnot aparty totho der vative,lhe nature ofthe relevant interestinlhe derivat ve:

Ootalls of transactions giving risoto acquisition ordisposalTotalnumberof transactions to which no11ce ro!ales:

Details of transactionsrequiring di1clo1uro· Date oftransaction:

Nature oftransaclion:

Not appl cableNot applcable

6 January 2017

(a)(i)Issueof33,250 Ordinary Shares uponvesting ofRSUs allocatedunder the AUPlan andtransferoflegal ownership of2,826 Ordmary Shares from Xero Trustee limilodto Andyark which were grantedin accordance with the Share Plan as part oftho romunorat1on package ofAndy

lark and (ii) Forfeiture ofremaining 5.653 Ordinary Sharesheld by Xero Trustee limitedon behalfofAndy arkinconnoclionwithMdy ark's cessalion of employment withthe Xero limitedGroup;(b) Forfeiture ofremaining 3,500RSUs hold byAndy Larkin connection withAndy ark's cessation of empklymontwith the Xero limitedGroup;(c) Forfeitureor118,333 Options heldby Andy

lark n connoct10nwith Andy lark's cessation ofomploymonl

with thoXerollmilod Gro1.Jp

Namoof any olherparty or partieslo the transaclion (ifknown):

Thoconskleratlon, oxpressod1n NewZealand dollars, paidor received for thoacquisition ordisposal.Ifthoconsidorat1on wasnot incash and cannot bereadilyby converted Intoa cash value,descnbetheconskleration:

Number of financialproductsto whichthetransacl on related:

(a)(i) Not applicab!e and(11)Transfor oflogal ownership ofOrdinary Shares from Xero Trustee limited o Andy Lark:(b)Not apphcable:(c)Notapplicable

(a)(i)33,250Ordinary Shareswore issuedupon vesl1ng of 33,250RSUsgranted under 1he AUPlan aspart ofhe remunerationpackage ofAndy Lark.No cashconsiderationwas requiredto be paidfortho RSUsto vest2,826Ordinary Shares werogranlodIn accordance with

the Share Plan as part oftho remunerationpackage ofAndy Lark.The legalownersh pfor suchOrdinaryShares has nowbeen transferred to Andy Lark and(Ii)NIA.Forfeiture of5,653Ordinary Shares holdbyXero TrusteeUmilod on behalf of AndyLarkin connection with Andy Lark's cessationof employmenlwilh lho Xero L1m1tod Group:(b)NIA.Forfeiture of3,500RSUshold by

Andy Larkin con1"10ct1on with AndyLark's cessa1ion ofemployment

with lhoXeroLimited Group; (c)

NA.Forfeiture of118,333OpHonsheld byAndy Larkinconnecl1on

w1h AndyLark's cessatonofemploymentwilh lhoXero Limited Group

Whether relevant interestswore acquired ordisposed of during a closedperiod:

Whether priorwritten clearance was prov1dod toallow theacqulsit1on or dsposal toproceed during the closed period:

Dato ofthopnor wnUon clearance (if any):

Ifthe issuer hos afmanc,a/ products trad,ngpohcy that proh1brts d,rectors or senlOf managers from trading during any periodwithoul writflmclearance (a closedperiod) include the followingdeta{fs-

3

No

Not applicable

Nolapplicable

Summary ofothorrelovant ntorutsaftor acquisition or dfsposal:

Classof quoted financial products:

Nature ofrelevant interest:Forthat relevant intoresl,·Number heldin class:

Current re91slorod holder(s):

Fora derivative relevant interest.·

j Typeof derivative:

Oola llsofdorivatlvo,·

Not applicableNot appllcable

Not applicableNot apphcable

INotapplicable

Thenotional valueof the donvativo (ifany) or thenot1onat amount of underlying financial producls (if any):

Astatement as towhether hederivaHvo iscash setllod or physicaNy settlod:

Maluritydate of the dor!Vahve (1fany):

Expiry date of thederivative(ifany):

fhe price's specified terms (ifany):

Any other details needed lounderstand how thoamount of thocons1dorallonpayable under tho derivative or thovalue of lhe derivativeis affected by thevalue of the underlying financ alproducts:

Forthat derivative relevant interest,·

Partieslo the deri'vatfve:

Ifthe directoror sonfor managerisnot a par1y to he derivative,the natureof lherorovant inloresl ln thederivative:

Not applicable

Notapplicable

Notapplicable

Notapplicable

Nol applicable

Nol applicable

Not applicable

Nol applicable

Certification

Icert fythat,to the best ofmy knowledge andbeilef ,the nformalion contalnodin thisdisclosureiscorrecland thatIamduly aulhor sodto make thisdisclosure byallpersonsfor whom 11 ismade.

Signatureordirectoror officer;Datoof signature: