Wave Systems Corp. (fka WAVXQ)

[dig space]

tkc, you state as do others

"they did not need shareholders to approve an R/S"

I do not believe this is true ...

Tkc, I’m seeing an urban myth on shareholder approval for an RS, namely that you an others state that a WAVX RS did not require shareholder approaval and that is was just a means to sneak in auth share limit increase.

From the Fool:
“Under the laws of the state of Delaware, where many U.S. corporations are legally organized, a reverse split requires an amendment to the certificate of incorporation.”
http://wiki.fool.com/Do_Reverse_Stock_Splits_Require_Approval%3F

From corporationlegal.com
“In jurisdictions with mandatory par value stock (e.g. the U.K.) and jurisdictions that encourage par value stock (Delaware) [WAVX has a par value], the corporate action effecting the forward / reverse split will have to set both the multiple by which the number of outstanding shares is increased or decreased and the new par value. This implies that the corporate action will always be effected by amendment to the articles (or, in the case of the UK, by filing a new statement of capital[1]) if only to set the new par value and will also give rise to a class vote of the shares whose par value is affected[2].” [after previously stating an amendment to the articles requires shareholder approaval].

From Wake Forest Law Review:
“However, as with the case of changing the number of authorized shares, in Delaware a reverse stock split requires shareholder approval.[54] “
http://wakeforestlawreview.com/the-power-to-issue-stock#_ftn55

From a rather lengthy and meticulously cited comparison of Maryland and Delaware law:
“Reverse Stock Splits. Unlike Delaware, Maryland permits the board of directors of a corporation with a class of equity securities registered under the Securities Exchange Act of 1934 or a corporation registered as an open-end investment company under the Investment Company Act of 1940 (§2-309(e)(1)), subject to any restriction in its charter that explicitly provides otherwise by reference to Section 2-309(e) or its subject matter (i.e., reverse stock splits), without stockholder action, to effect a reverse stock split resulting in a combination of shares at a ratio of not more than ten shares into one share in any twelve-month period (§2-309(e)(2)).”[unlike Delaware = Delaware does not allow RS without shareholder approval]

The ONLY reference (other than the WAVX boards) to state that an RS does not require shareholder approval is from the SEC … but they state clearly in the next sentence it is the domain of State law, Delaware in this case.

Every reference to RS and Delaware law I can find indicates an RS requires shareholder approval.

I recommend abandoning arguments that depend on the notion that shareholder approval is/was not required for a RS in the case of WAVX.