I have a question for the team here. From the 1
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Posted On: 01/01/2017 5:36:06 PM
I have a question for the team here.
From the 10K:
Our Class B common stock entitles holders to ten (10) votes per share on all matters submitted to a vote of our stockholders and our Class A Common Stock entitles holders to one (1) vote per share on all matters submitted to a vote of our stockholders. Dr. Menon and Mr. Ehrlich each have vested options that they can exercise and convert into 18,000,000 shares of Class B common stock. That alone could result in the equivalent of 360,000,000 votes of Class A Common Stock. As of June 30, 2016 we had 123,589,536 shares of Class A Common Stock outstanding and no shares of Class B common stock outstanding. Because of the ten-to-one voting ratio between our Class B common stock and Class A Common Stock, upon exercise and conversion of such options into shares of Class B common stock, the Class B common stock holders can collectively control a majority of the combined voting power of our common stock (i.e., approximately 47%) and therefore be able to control all matters submitted to our stockholders for approval. This concentrated control will limit or preclude your ability to influence corporate matters for the foreseeable future.
All the information I can find regarding this on the boards indicates that Menon/Ehrlich may not exercise these options and they only exist to allow them to retain control of the company if somehow they otherwise lost the majority stake in the company. I could not find any indication that this was the case from company documents. Is there anyone who can substantiate this? I assumed this was simply part of compensation.
Thank you in advance.
From the 10K:
Our Class B common stock entitles holders to ten (10) votes per share on all matters submitted to a vote of our stockholders and our Class A Common Stock entitles holders to one (1) vote per share on all matters submitted to a vote of our stockholders. Dr. Menon and Mr. Ehrlich each have vested options that they can exercise and convert into 18,000,000 shares of Class B common stock. That alone could result in the equivalent of 360,000,000 votes of Class A Common Stock. As of June 30, 2016 we had 123,589,536 shares of Class A Common Stock outstanding and no shares of Class B common stock outstanding. Because of the ten-to-one voting ratio between our Class B common stock and Class A Common Stock, upon exercise and conversion of such options into shares of Class B common stock, the Class B common stock holders can collectively control a majority of the combined voting power of our common stock (i.e., approximately 47%) and therefore be able to control all matters submitted to our stockholders for approval. This concentrated control will limit or preclude your ability to influence corporate matters for the foreseeable future.
All the information I can find regarding this on the boards indicates that Menon/Ehrlich may not exercise these options and they only exist to allow them to retain control of the company if somehow they otherwise lost the majority stake in the company. I could not find any indication that this was the case from company documents. Is there anyone who can substantiate this? I assumed this was simply part of compensation.
Thank you in advance.
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