Replies to post #141601 on Wave Systems Corp. (fka WAVXQ)

[cygnuscap]

a vested option is the same thing as share ownership. That is why the SEC requires the "beneficial ownership" clause. any options that vest within 60 days of the filing are considered shares. i.e. one could exercise them and make them full shares. Mgmt. may argue that many of their options are underwater so that they "deserve" to get grossed up as a future incentive. But this argument is not really fair in that if they get the stock to rise, then their existing options go in the money and have value. At the end of the day, options are just another form of compensation. If shareholders want to carve out a third of the company and give it to management and future employees, so be it. Its just an unusual (and not very good) deal for existing shareholders.


I do note that the shorting against the PP is an opinion built through conversations with lawyers and PIPE hedge funds. I do not know if it is true at WAVX. It is certainly a grey area with the SEC.

[wavxmaster]

24601

Perhaps this is why the ASM was moved up! 60 days from March 31, 2007 would be May 31, 2007, "exercisable within 60 days."



"The following table sets forth certain information as to the number of shares of Common Stock of the Company beneficially owned as of March 31, 2007 by each executive officer, each director and nominee for director of the Company and all executive officers and directors as a group."

(4) Includes 846,221 shares of Class A Common Stock that are subject to options presently exercisable or exercisable within 60 days.


SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information as to the number of shares of Common Stock of the Company beneficially owned as of March 31, 2007 by each executive officer, each director and nominee for director of the Company and all executive officers and directors as a group. To the knowledge of the Company, each of the owners named below has sole voting and investment power with respect to the shares of Common Stock beneficially owned by him or it unless otherwise indicated.

Beneficial Owner (1)



Number of Shares
of Class A Common
Stock Owned(2)

Percent
of
Class

Number of Shares
of Class B Common
Stock Owned

Percent of
Class

Percent
of All
Outstanding
Common
Stock(3)


Steven Sprague(4)
915,11
2.1%
14,034
35.8 %
2.1%

John E. Bagalay, Jr.(5)
55,330*
—
—

Nolan Bushnell(6)
27,331 *
—*

George Gilder(7)
96,999
*
667
1.7%
*

John E. McConnaughy, Jr.(8)
69,081*
—
—*

Gerard T. Feeney(9)
469,494
1.1%
—
—
1.1%


All executive officers and directors
as a group (6 persons) (10)
1,633,348
3.8%
14,701
37.5%
3.8%

* Less than one percent.

(1) Each individual has sole voting and investment power, except as otherwise indicated.

(2) Includes shares of Class A Common Stock issuable upon the conversion of Class B Common Stock.

(3) In circumstances where the Class B Common Stock has five votes per share, the percentages of total voting power would be as follows: Steven Sprague, 2.2%; John E. Bagalay, Jr., less than 1%; Nolan Bushnell, less than 1%; George Gilder, less than 1%; John E. McConnaughy, Jr., less than 1%; Gerard T. Feeney, 1.1%, and all Executive Officers and directors as a group, 3.9%.

(4) Includes 846,221 shares of Class A Common Stock that are subject to options presently exercisable or exercisable within 60 days. Also includes 58,351 shares of Class A Common Stock acquired through Wave’s employee stock purchase plan. In addition, includes 12,367 shares of Class B Common Stock held in trust for the benefit of Mr. Steven Sprague’s family, and for which Mr. Steven Sprague is a trustee and 2,333 shares of Class A Common Stock held jointly by Mr. Sprague and his spouse, Judith