placement, page-3

Hi Keating,

I am not sure that any of the directors will be paying cash. Ramy will be buying $300,000 of shares: exactly his wages for a year. Ted Byrt is buying $100,000 of shares. Last year he received $80,000 for his role as chairman of the board. As a member of the new 'Executive Committee' he might get even more this year. I imagine the company might arrange a salary sacrifice agreement of some sort to cover the cost of the placement for the boardmembers.

Last financial year Donald Stephens received $38,175 as a director of PPY and DSC Corporate Advisers (a related entity to Donald Stephens) received $90,000. It doesn't look to me like he is prepared to reinvest any of this money in order to support the company in this difficult time.

As a background to this discussion: at the AGM, it was pointed out that a large amount of the company's funds went to directors (and related entities) and that directors of some other companies only charge $1 per year in troubled times.

I focused on Donald Stephens because he is the only one of the three member Executive Committee not to support the placement. As the Executive committee control a majority of votes at any board meeting, they seem to have absolute power over the company. I think it is an important point that Donald Stephens doesn't support the placement, as he is the person in the best position to understand the true financial state of the company. He is the one who signs off on all of the financial reports and would presumably have an in-depth knowledge of all aspects of the company.