Replies to post #127455 on Wave Systems Corp. (fka WAVXQ)

[Architect]

ESOP: It is catch 22, the company I work for is not public, the shares are held by the employees.

IMHO, for WAVX, to attract solid employees, wave will either need to increase the pay scale above the other "big/establish" tech companies or you offer ownership through an ESOP. Someone suggested to someone the other day that Wave should hire Go (I THINK) for 250K a year in California…I am not sure I could live the life style that I have here in the Midwest in California. We have a regional offices in California, I know what it cost there to live, unless you’re a native, it pretty expensive.

If wave is for real, which I believe it is, a company needs the a solid staff of new graduates, young/old techs and establish war horses as the doers for the sales force.

It may cost us share holders a few bucks, but, who is selling now anyway?

WAVX for me is a risk investment, I look for concept, revenue, growth deployment and more employees. I leave the dd stuff to the folks who are qualified, I am not, just a small investor who owns a few shares

[tkc]

Kev, as I recall the ESOP began May '05. Employees purchase stock through a payroll deduction plan, similar to a 401K or 403B. They puchase the stock at a 15% discount to the current market price (w/o matching as in a 401K.) Remember that most company's match at least 25% of employees' 401K payroll deduction. The Gov. figured that 15% discount for ESOPs stock purchases was an employee benefit - a cost to the Corp just as health insurance or the 25% match for 401Ks. Usually, the stock comes out of the authorized shares, so the company gets the $, 85% of current market value, thus increasing the total # of outstanding shares(it's dillutive). But no where near as expensive as a Defined Benefit Program. Some ESOPs purchase shares on the open market, paying market price while providing employees the 10-15% discount. IT'S AN EXPENSE, IT COSTS $, but in Waves case it provides a source of cash - although it is dillutive because the shares aren't puchased on the open market - they come from authorized, but unissed shares. Pretty sure I've got this correct. THUS, IT'S a NON CASH EXPENSE. But it is an expense - it's dillutive.