Part 3 Formal business - resolutions
Resolution 1 – Adoption of Remuneration Report
No discussion
Carried
Resolution 2 – Re-election of Director Mr Gordon Gilchrist
No discussion
Carried
Resolution 3 – The issue of 10% placement Capacity Under Listing Rule 7.1A
No discussion
Carried
Resolution 4 – Adoption of Incentive and Retention Plan
No discussion
Carried
Resolution 5 – Issue of Incentive Options and Performance Rights Under the Incentive and Retention Plan to a Related Party – Mr Miles Kennedy.
No discussion
Carried
Resolution 6 – Issue of Incentive Options and Performance Rights Under the Incentive and Retention Plan to a Related Party – Mr Gordon Gilchrist
Discussion centered around clarification of the terms for the incentive options and performance rights.
SW – On the options it will be over a time period and performance rights it’s going to be vesting conditions. All hurdles will have to be met before they vest, and also time.
MK – On the options, you get 1/3rd in a year’s time, and 1/3rd in two years time, and on the performance, one has already been met (incorporation of SML). Secondly, the kimberlite license has to be renewed (rubber stamped). Thirdly, the shares have to trade at 50c or more for ten consecutive days. The fourth condition is after a minimum of one year. So it’s designed to try and keep people in the company. Make us actually perform and to make us stay.
SH – If these options don’t get approved, you walk away – is that what you’re saying?
MK – No, not saying that.
SH – What’s the basis of these options being issued, and I understand...don’t get me wrong, I like the company…
MK – Don’t you love the board? (lol)
SH – I just wanted to know, why do you think you’re entitled to these options?
MK – Well, we’re not entitled to it, we’re not entitled to it, without you voting for them, we’re not entitled to it…we’re not allowed to have them. So, and instead of coming along, and just saying to you, grant us a million options or half million options with no conditions. What we are saying is if we are imposing a set of conditions upon ourselves and asking you vote on it. It’s you prerogative to vote against it if you don’t like it.
SH – I just wanted to get some clarification. I think 2% is a fairly low benchmark to the potential of this company, and I was wondering if it’ll have a kind of dilutionary effect.
MK – You’re talking the case of Gordon here – a total of half million shares. A total of half million shares that can be issued in the capital structure of 300m shares. The total plan can never be more than 5% of the company. Half million over 300 million is a small fraction, but the ability of the directors to actually buy shares in this company…you know, if you have a look since January last year when we started mining, we have issued 71 price sensitive announcements. 71, now every one of those announcements actually usually takes a couple of days to cobble together. Now, while we are in receipt of information, we can’t buy a share on the market…we’re not allowed to trade, and we’re constantly in a place, in a zone here, of really not being able to buy, other than through exercising options, at today a substantial premium of the share price. There must be a discount in the future…let’s hope so because that’s what we’re all here for. I hope that answers you question.
SH – My last question, can you not buy on market at some stage?
MK – No, if we are in receipt of price sensitive information, which invariably we are in this company. You know, it’s not like if we judge it to be price sensitive. It’s whether some regulatory body…you know if it’s a discovery of a large diamond…we get a number of these every week.
SH - What’s the latest one? (lol lol lol)
MK – You know if we get that information, and we buy. Someone in ASIC might say, well you were in receipt of information that wasn’t available to the general public.
SH – Would you like to buy today?
MK – I would like to buy today. I’m not allowed to buy two day before and two days after an announcement…not allowed to…it’s prohibition.
SW – Chair, if you allow me to say something, just in answering your question, there’s a part B to that as well. 71 price sensitive announcements, over 100 if you include the normal announcements – the quarterlies, 5b, 3b and all the rest of it. I have not been in a company where we’ve called on the non-executive directors more often and as regular as we have in this company. You come on-board as a director of this company…over 100 announcements you are perusing over the last 16 months. You’re basically employed…I mean the amount of time that they go through as well. I also, from my perspective, think that it’s commensurate to the effort that they put in.
Carried
Resolution 7 – Issue of Incentive Options and Performance Rights Under the Incentive and Retention Plan to a Related Party – Mr Albert Thamm
No discussion
Carried
Resolution 8 – Issue of Incentive Options and Performance Rights Under the Incentive and Retention Plan to a Related Party – Mr Steven Wetherall
MK – I’m sure, from the presentation, and indeed, for those of you who have been in the company for a couple of years, it’s now over two years since Steven has joined us and I’ve got to tell you that during that time he has not had a salary increase. He is motivated by making sure that he gets an equity stake in this company, and that the value he derives from his endlessly hard work, and I want to say it is endless.
SH Comment – I think it’s appropriate that his performance rights are more than the incentive options, from his position in the company.
Carried
MK - That concludes the business of today. Thank you all very much for attending. I think it’s probably the largest attendance we’ve actually ever had. It’s good to see you here, rest assured that we’re trying our hardest, and I hope we have a big win.
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