Another approach, and perhaps a middle ground, for management to...

Another approach, and perhaps a middle ground, for management to consider would be to let any unexercised $0.75 options expire and then distribute the remaining $1.25 piggy-back options for free to existing piggy-back holders (i.e. those who did exercise their options) on a 1 for every 'n' already held basis (i.e. proportional allocation), where 'n' depends on the number of options that are available to be distributed based on the number of $0.75 options expiring.

Race would forego the immediate short-term revenue of the unexercised $0.75 options, but it would lock in the much larger amount to come in upon exercising the $1.25 options in 2+ years (assuming the share price plays ball of course). Assuming we hit 85+% of $0.75 options exercised, the reduction in short-term revenue may be workable, and I would note that early exercise of the $1.25 options (14000 in the last notice, and probably continues to slowly come in over time providing the share price remains favourable) appears to be contributing (perhaps unexpectedly) to additional short-term revenue as well.

As @johndprent and others have noted, letting the unexercised $0.75 options expire will slightly reduce dilution and any longer term shortfall in funding (which would be minimal anyway) caused by this approach could probably be easily raised at higher prices when needed anyway.

This approach would continue the theme of rewarding long-term shareholders, seems reasonably fair (perhaps except to anyone newly on the register) and as the options would be to existing holders only I would assume there shouldn't be a problem from a regulatory standpoint.