Performance Shares Explanation Please

Hi Guys,

I am guessing that someone has already tel NOR and know the answers here.

Can anyone please confirm how when and to who performance shares would be issued.

The way I read is that the shares go to existing share holders if the class A and class B, milestones are met and are probably just held in Escrow.

Is this the case?

or do the shares go / or have they already gone to the original venture capital investors / directors who are waiting for them to trigger and be issued from Escrow, bypassing existing share holders.

The word issued below in the COPY of Norwood's release, has thrown doubt on how this works, for me.

The other question I have is re the Class B shares, does gross revenue have to be $3,000,000 or above for two years on the trot before they are triggered?

I am trying to determine how far off this might be and if investors will get watered down (like a CR with no benefits if existing holders don't get the shares) or end up cost neutral if existing holders do get the shares as if both milestones are met it will equate to about 20% more shares being released from escrow.

Many Thanks Mark Harding

-------COPY from 2015 Year Financial Report  below -------

PERFORMANCE SHARES

During the year ended 30 June 2015 Norwood Systems Ltd "issued" a total of 157,739,522 Performance Shares to the shareholders of Norwood Systems (Aust) Pty Ltd which convert to Ordinary Fully Paid Shares on a one for one basis following the achievement of the performance milestones before the expiry date as outlined below:

78,869,761 Class A Performance Shares convert upon Norwood generating gross revenue of at least $200,000 from two separate third party contracts in any 12 month period (which may be the same 12 month period or different 12 month periods for each contract. The expiry date of the Class A Performance Shares is 9 December 2017; and

78,869,761 Class B Performance Shares convert upon Norwood generating gross revenue for any 12 month consecutive period of at least $3,000,000. The expiry date of the Class B Performance Shares is 9 June 2018.
No value has been allocated to the Performance Shares due to the significant uncertainty of meeting the two performance milestones which are based on future events.

Signed in accordance with a resolution of the Directors.