Ann: Notice of General Meeting/Proxy Form, page-51

I think it is poorly written in showing the formula as depicted. Essentially, they are trying to say that DW is entitled to a number of PR's driven by his base salary, but capped at 32 million (in the event that SP collapses or is manipulated down). If we take his base salary as A$400k (as per last annual report) then his 'entitlement would be $400k x 3 x 50%, or $600,000 worth of PR's. Of course, if the base salary has increased since then, then the dollar figure valueing the PR entitlement is also adjusted, but still limited by the 32m cap. On the basis of the A$600k 'entitlement', if the 60 day VWAP post the General Meeting is A$0.02, then he is entitled to 30 million PR's across the 5 tranches.

If the 60 VWAP post the General Meeting, falls to (say) A$0.018, then the 32 million cap kicks in and that is his entitlement of PR's across the 5 tranches. Of course, if VWAP rises to (say) A$0.024 then his entitlement is reduced to 25 million PR's.

As an aside Ex, having combed through the document more than a few times, I have come to the conclusion (regarding the SP tranche) that each 20% issue will have a hurdle to achieve (i.e tripling the vesting date SP with relation to issue date SP - to fully vest that issue of PR's). The key dates that I have reconciled in my mind in seeking to understand the resolutions, being:

• the approval date is the date of the GM (if approved by shareholders) and this will drive the calculation of the total number of PR's entitled to. Capped at 32m of course.
• the issue date which is at the BoD's discretion and hence gives considerable flexibility....but the constraints to this flexibility are that all PR's need to be issued within 3 years of the approval date. Hence, up to 3 years before the reserves, resources or production tranche PR's are issued. The SP tranche could take up to 12 months before the first 20% is issued (at BoD discretion), with the 2nd and 3rd issues of this tranche being issued on the 1st and 2nd anniversary of the first issue.
• the vesting date for each batch of PR's issued is independent of each other and driven by the criteria pertinent to their respective tranche.

Of course, I may have interpreted this completely incorrectly, and happy to be corrected.

All IMO etc .