accesing hawsons through a silver gate., page-43

Thanks for the question and i appreciate your points.

1. In light of the things Mr Sheard has said in the press and in his letters to shareholders I don't believe that this would be a workable situation. I have been deeply disappointed by having been dragged through the mud during this process. I spoke to Nick on the phone about his comments in his letters to shareholders about this being a takeover. Nick knows this is not the case, he knows we have no association with Conglin Yue, yet said it because it appeals to the mums and dads out there and our own inherent fears and the prejudices of the lowest common denominator. I said to him that i thought he had gone to far keeping in mind that we might all need to work together in the future. His response, and i swear this on my little girls life, was that of course there will be sections of the board hostile toward the Silvergate nominee's if shareholders elect them. I tried to make the point to Nick that its not the job of the board to pick teams and play favourites. its job is to represent the shareholders whom elected them, regardless of their personal attitude toward each other. I feel now that the make up of the board you suggest would be untenable and would result in conflict that would not serve shareholders at all well.

i have made the effort to publicly state that we would look at a 7 person board option where the two independents were truly independent. No one from the company has chosen to contact me or any associate of Silvergate about this possibility. it is now too late given proxy's have closed for Fridays meeting.

For the record, Linda is Australian. Wilson is Hong Kong Canadian. They are not Chinese any more than i am.

2. slight correction. i dont think, and i am happy to be corrected, that anyone worked without pay. i know Nick cut his salary back and yes, we give him full marks for doing so. We have a deep respect for people who take this kind of responsibility and action. However, i think and again, happy to be corrected that only Mr Hair and Mr Sheard were sitting on the board at the time. Mr Chllakos and Dr Williams are yet to sit a full cycle and as yet have not been elected by shareholders. Whilst i have no doubt they would willingly accept such a request from Mr Sheard, i do not believe its actually happened.

In answer to the second part of the question, the answer is yes, of course we would do the same. I was recently appointed the interim CEO of another listco. The company was in a diabolical situation and the salary i took was less than 1/4 of the previous CEO and in order to ensure the company staved off insolvency, i lent it 100k of my own money, unsecured and did not receive interest. We are far more concerned about the 8 or so million we spent buying shares than we are about whether we get 50k or 100k or zero per year in salary.

Aligning interests, and delivering results are two different thing. Aligning interests only works for the smaller shareholders if you are able to deliver results. Otherwise, where shares and options are being thrown around, and where directors pay is being doubled, all that is happening is that wealth is being transferred from you, to the board.Without results, aligning interests at no cost to the directors has negative value for shareholders.

I hope that answers your questions. Happy to discuss any point further if you like.