Ann: Half Yearly Report and Accounts, page-125

malvernmoe is correct in his view that John Wellborn received 10,000,000 shares at no expense to him.

What malvernmoe possibly omitted to say is that FEX actually pays JW money to hold these 'restricted' shares.  He receives the benefit of the dividend on these shares (which is $525k p.a. plus franking - $750k p.a.).

The Share Loan Plan under which the 10m shares were allotted comprised the issue of 10m shares at 23.0c per share financed by a 10-year interest-free company loan.  The loan is non-recourse, which means that any repayment of the loan will not exceed the market/realisable value e of the shares.

If the shares ultimately have a value less than 23.0c the shares and the loan will simply offset and be nullified.

There is no obligation for JW to use his own funds outside of the 'shares' to pay down or pay off the company loan.

The Share Loan Plan was marketed to shareholders that JW or any other 'director participant' in the 20m Share Loan Plan would benefit from share price gains above the (23.0c) issue price (but would take none of any downside).

The trick in this Share Loan Plan, however, is that despite the loan being interest-free, the shares are entitled to receive the dividend on the shares - i.e. the shares are issued and regarded as fully paid due to the fact the company has 'booked a loan to the director' on the shares - despite the loan having recourse only to the shares and not the director.

The Share Loan Plan requires that half of any dividend on the shares is applied in part repayment of the loan after deduction for income tax at the highest personal marginal tax rate (i.e. 48.5%?).  The other half of the dividend is paid directly to JW.

The 2022 FY dividend at 5.25c fully franked is $525,000 on 10m shares.  While franking is not mentioned in the Share Loan Plan rules is determining the repayment amount (and in that case probably disregarded), $525,000 less notional tax at 48.5% of $254,625 gives $270,375 net as a reduction in the $2.3m JW Share Loan Plan loan.

Therefore whilst JW has absolutely no obligation to pay for the shares he would already have received nearly $280k cash from the dividend last year (plus the associated franking credits) and his loan balance now reduced to $2.0m ($2.3m - $270,375).

What is not covered by the Share Loan Plan is any preliminary 'vesting' of the shares.  It could be possible, subject to the Board sanctioning, that JW could possibly ask for $270,625 of the shares at 23.0c each = 1,176,630 shares.

Further, the $270k cash dividend he would have received will likely have  nearly double the franking credits associated with it being $225,000 of franking credits.

If FEX dividends continue annually at the existing 5.25c/share rate JW has no obligation to pay for the 10m shares but along the way receives $270k p.a. cash dividend plus $225k worth of franking credits.

Thus malvernmoe's assertion stops short of saying that FEX pays JW to hold shares in the FEX Share Loan Plan.

I really don't believe all shareholders read the fine print when this was approved at 64% approval rate on about 110m shares that actually voted.

You can find all this information by reading the Notice of Meeting and comments in the FEX Annual Report.