• 9,224,361 Performance Options with various expiry dates have vested
• Vesting Options were granted when the company's sales were significantly lower
• New enhanced incentive framework introduced with tiered revenue/cash receipts hurdles

DroneShield Limited (ASX:DRO) has advised that 9,224,361 Performance Options with various expiry dates have vested, due to the company reaching the required milestone of $200 million of cash receipts within a rolling 12-month period. The Vesting Options were granted when the company's sales were significantly lower than today, to incentivise the employees. The CEO holds 709,361 of the 9,224,361 Vesting Options, which were approved by shareholders at the 2025 Annual General Meeting. The remaining Vesting Options were granted in February 2025 and issued to employees under the Incentive Option Plan, which was approved by shareholders in 2023. Assuming all 9,224,361 Performance Options are exercised, the company's capital structure will be updated. Additionally, the company has introduced an enhanced incentive framework, where eligible team members will receive Performance Options with tiered hurdles of $300 million, $400 million, and $500 million in revenue or cash receipts over a rolling 12-month period. The Non-Executive Directors are not eligible for the New Options, and any New Options proposed for the CEO will be submitted to shareholders for approval at the next Annual General Meeting.

The company reported a total share option non-cash expense of $23.5 million for the year ended 2025, due to Performance Options granted over several annual performance periods crystallising in a short amount of time, as a result of the rapid growth of the business.