FlexBoard Ltd. ("FBL") is a fictional ASX-listed public company in the surfboard shaping industry. Mr. Barry Ling was an English lawyer and businessman. He introduced FBL to Fifth Avenue Equity, a U.K.-based investment fund, and it purchased a large block of shares in January 2022 from an Australian shareholder and therefore became FBL 's largest shareholder with 18.7% of its shares. With the support of Fifth Avenue Equity, Barry was then appointed a director of FBL and Chairman of the Board.

Soon afterwards, it was proposed that Barry would be hired as FBLs CEO, and his appointment and proposed remuneration package was considered at two Board meetings on 22 February 2022 and 23 March 2022. At the February meeting, there was strong opposition to the proposed employment contract by some directors, and the Board did not approve it. They decided that it would be prudent first to retain an independent remuneration consultant to advise them. FBL's Remuneration Committee was asked to consider the matter further and report back to the Board.

At this next meeting on 23 March 2022, the Board of Directors of FBL approved an Employment and Remuneration Package Agreement (the "Agreement") for Barry on the recommendation of the Remuneration Committee. The Agreement provided Barry with generous payments and benefits, including a five-year employment term with renewals, a signing bonus of 25 million shares, the right to buy share options in the amount of 75 million shares over the next three years, and a cash advance of $2 million payable on his first day as CEO. If Barry exercised all his share options, he would be able to control 13% of the votes of the company within three years. The Agreement also contained very generous change of control and termination provisions, so that if FBL removed Barry for any reason except wilful misconduct, or if he resigned before the five-year term concluded, he would receive a $20 million termination fee. The total value of his remuneration package for the first year, if certain relatively low performance hurdles were met, would amount to approximately 10% of FBL 's profits for the previous year. Upon execution of the Agreement, Barry became Chairman and CEO of FBL.

In approving the Agreement, the Board relied mainly on a 50-page report prepared by Maggie Soo, an executive remuneration consultant at Key Group Associates, a well-known consultancy firm, most of whose clients were large UK-based corporations. Due to time constraints imposed on the preparation of the opinion, it was based on "high level observations" and was limited in scope. Ms. Soo believed that she was providing advice to FBL on a non-controversial executive contract. Ms. Soo concluded that based on the information provided to her and on comparisons to companies in RPL's international peer group, the remuneration provisions in the Agreement were "at the high end of the spectrum but reasonable for someone of Barrys stature." Ms. Soo

was invited to give a thirty minute presentation of her report to the Board. Barry declared his interest in the vote and left the room after the presentation, and then the other directors unanimously approved the Agreement.

When details of the Agreement emerged, there was immediate shareholder opposition. One institutional investor, KR Asset Management Pty. Ltd ("KR Pty Ltd") was FBL's second largest shareholder and owned 15.4% of FBL's shares. Bob McCloud was KR's Executive Vice- President. In April, he became aware of the Agreement and came to the conclusion that it was excessive and something should be done about it.

Advise KR Pty Ltd as to what legal rights or remedies it can exercise. (10 marks)