PEL.L Regulatory News (PEL)

Paragon Entertainment Limited

Amendments to the Paragon Entertainment Investments Limited incentive scheme ("PEIL Scheme")

Paragon Entertainment Limited (AIM: PEL), the attractions design, production and fit-out business, is pleased to announce certain amendments to the terms of the Paragon Entertainment Investments Limited incentive scheme ("PEIL Scheme") which was established in December 2011.

The PEIL Scheme was originally created to deliver value to participants based on a discounted cash flow calculation which, broadly, compares the market capitalisation of the business with the value created by participants in the scheme (the remaining members of which are Mark Pyrah, Pete Holdsworth and Mark Taylor, all of whom are directors of the Company) since their appointment to the board in December 2011. The PEIL Scheme is due to expire in December 2016 and is, to all intents and purposes, valueless for current participants. Each of the beneficiaries to the PEIL Scheme holds 136,900 'A' shares in PEIL for the purposes of the PEIL Scheme.

The proposal now is that the PEIL Scheme is:

a) extended for a further five years through December 2021; and

b) amended to reduce the discount factor applied to the calculation used to determine vesting of awards from 12.5% to 5% with effect from inception of the scheme in December 2011; and

c) amended to impose a further vesting condition, requiring that a minimum trailing twelve month EBITDA run-rate of £800,000 is delivered in the 12 months prior to the measurement date selected for calculating the vesting of awards.

Further, an alternative to the PEIL Scheme (as amended) is also now being established to provide participants with a percentage of the value of any cash offer (or an offer based on securities readily realisable for cash) during the next three years. This alternative would only be available on the basis of participants waiving any entitlements under the terms of the PEIL Scheme (as amended).

The PEIL Scheme participants mentioned above are all directors of the Company and are thus not independent for the purposes of this amendment and are also deemed to be Related Parties within the meaning of the AIM Rules. The independent director of the Company for the purposes of these amendments is Martin Barratt who considers, having consulted with finnCap, that the above arrangements are fair and reasonable insofar as Shareholders are concerned.

PEL also operates an EMI scheme which is also being amended to provide additional incentive for its participants.

Further details of the PEIL Scheme are set out in the Company's AIM Admission Documents dated 16 December 2011.

Notes to Editors:

Paragon Entertainment Limited (AIM:PEL) is an award winning provider of attraction services from initial design production and consulting through to the fit out and installation of themed attractions, heritage exhibits, museums, aquariums and water parks, inter alia.

Paragon Entertainment is the holding company for Paragon Creative Limited.

The Group's projects have included:

· The design and build of Kidzania, London;

· The design and build of galleries at the Olympic Museum for the IOC in Lausanne, Switzerland;

· The design and build of the galleries at The National Museum of Kazakhstan;

· The design and build of Titanic Belfast;

· The thematic build of the Wallace and Gromit ride at Blackpool Pleasure Beach;

· Licensing and distribution installations at Gullivers, Milton Keynes and Art Mall, Ukraine.

The Group listed on AIM in 2011.

Further information can be found at: http://www.paragonent.com/