Ann: Proposed issue of Securities - EOS, page-15

The traditional options are flawed as an incentive. The taxation consequences when an employee exercises options often create the need to sell a substantial proportion of the newly issued shares on the market in order to cover the taxation obligations on top of any money borrowed to cover the exercise price. This can distort the short term share price because the employee has little discretion over when and how many shares they have to dispose of. Investors often read the selling as a lack of faith by the employee and react emotionally. Attempts by the employee to avoid on-market selling by privately disposing of the shares to an institution or sophisticated investor are also often interpreted as being sneaky or malicious. In short, employee options are nasty cranky things that create a lot of problems.

The share loan fund is a more elegant solution. The repayment price can be set at above or below market price to provide the desired type and leel of incentive. There are no income tax implications when the loan is repaid, so there's no need for the employee to liquidate any of their holdings to cover costs or other obligations.

EOS has operated its share loan scheme for many years. It has nothing to do with the balance sheet or profitability. It has everything to do with allowing the company to provide appropriate employee incentives while protecting your interests as a shareholder.

Oh... wait... you're not a shareholder! Why are you getting so wound up about this?