Ann: Notice of Meeting, Performance Rights Plan and rights issue-FAR.AX, page-75

The problem is Gilbert complacency by shareholders is what allows directors to do what they like and unfortunately in worst case scenarios to destroy companies. Options / performance shares is a tool management have been bestowing upon themselves for years. They have gotten away with it based on the belief by shareholders that it is just normal. It is only in more recent times that shareholders have started to take a stand.

The debate here is not about whether there should be a bonus scheme available...of course there should be, and it should be significant. What is at question is the setting of targets...what triggers the bonus! The current FAR plan has the targets set far too low. So what happens with low targets.....

>The bonus is paid out too quickly, then new bonus shares are set
>Every issuance is a dilution to regular shareholders (not matter how small that is)
>Easily achieved bonuses are not properly "valued" by any individuals (including managers)...they just become a norm and an expectation (and often leading to a spiral downhill in performance)
>If directors are given cheap or easily achieved freebies the goal posts for accepting a takeover can be greatly shifted. Sitting on a bucket load of cheap/free shares can pave the way to someone being prepared to accept a lower ball offer ("my shares cost me nothing - I can accept this early offer and move onto something else")

I am not suggesting any of the above would be an attitude of FAR management but as with so many companies before - it is too late once it has occurred!

Transparent Boards and Management don't mind being challenged. Shareholders need to challenge this Plan...if FAR are convinced the levels are right they can give the explanation as to why

dodds