options for directors, page-11

Dear Poult,

Based on your suggestion of a SP of .045c in 12 months time (a triplefold increase against current price) and a .04c conversion price for directors free options, I ask you to look at this scenario:

"You own a house worth $1,000,000 today.

AM renovates your house over 12 months at a cost of $600,000 of his own cash (That is what is would cost AM to convert his free options at your .04c suggestion).

At the end of the renovation your house is worth $3,000,000 (a threefold increase) giving you a $2,000,000 profit.

AM sells his converted options at your suggested SP of .045c which gives him a $75,000 profit on the investment of his time, skill and $600,000."

Do you see where I am coming from? I doubt SHs would begrudge a better deal to AM than your proposed ".045c/.04c deal" would bring him.



At least the announcements proposed issue of free options to directors is a form of committment by them to shareholders by way of directors having to increase the SP by performance before they benefit. In any event the directors have to cough up $1,500,000 of their own funds to convert their options before they are in a position to obtain any benefit. Importantly, that is $1,500,000 that the company will not need to cap raise from SIs or SHs.

My first thoughts on perusing the announcement were "Pigs with their noses in the trough". On closer analysis, I think that directors are confident of a minimum .05c SP in the future. That will make their options worth converting. It will also put me way in profit. (Commiserations to SHs that got caught in the .095c P&D and and have failed to average down.)

The reason any coy directors do what VILs directors are doing is because the ASX rules allow them to. Same as the proverbial question "Why do dogs .... ..... .....?" the answer to which we all know is - Because they can.

Happy New Year everyone

Miki