Ann: Notice of Annual General Meeting, page-50

Dear All,

I have just got off the phone with Company Secretary, John Palermo, who called me after I sent an email an hour or so ago to Matt Wright expressing my concern that the directors will be entitled to performance shares under the proposed new scheme. That email was evidently forwarded to Mr Palermo and Jeff Edwards very quickly.

Mr Palermo made it very clear to me that:
1. Resolution 6 does not, and is not intended, in any way to confer in any way performance rights on any of the Directors - it is only intended for employees. When I drew Mr Palermo's attention to the reference to "selected Directors" in paragraph 3, he realised why I and others had expressed the concern we have. He intends to have this part of the resolution reviewed and again emphasised it's not intended for the directors at all.
2. Mr Palermo also drew my attention to the Corporations Law that requires shareholder approval for the issue of any shares to directors (which accorded with my understanding) and an employee share scheme like that proposed by Resolution 6 can't be used to circumvent that.

Mr Palermo gave me his express permission to share this with the Hotcopper forum because the Board wants it to made absolutely clear that this resolution is for employees not directors - the Board is very conscious of this. I suspect formal clarification will be forthcoming in due course. It may be, as I suggested, that a formal amendment to the proposed resolution which deleted reference to "Directors" would solve the problem.

I will be supporting the resolution if that is how it ends up.


J