The answer is both...on a percentage basis.
For example, let's say they don't do anything with those shares for five years and let's say by that time there are 100M common shares outstanding to keep the math simple.
If the company decided to convert all 3,450 shares, they would convert to 345M shares.
If it were a handful, lets say 100 shares, those would convert to 345 shares...but when you look at the full conversion of 345M, you see the framework of the exit strategy that they've set up to be fair to both regular investors and the officer/management team with the latter receiving a much larger percentage overall. UF