Ann: Announcement of 1 for 3 Bonus Options Issue, page-10

Rest assured NSC would not set a conversion price of $1.02 unless they thought that they could create an NTA value in excess of that within the termination period - otherwise the whole exercise would be a waste of time. These sorts of strategies have worked well for other LICs in the past (WAM group, Sandon Capital, IBC) and you might note that heading towards the conversion termination there is almost always a pump of the SP. It is this period of pumping where unhappy shareholders should jettison the stock. The point is the free option almost always gives rise to a better exit point if that is what you are looking for whether it is a success or not. However the real point is that it gives management greater incentive to eclipse that figure by whatever means at their disposal to have the options exercised.