All shareholders really should understand this issue related to item 2 in the Proxy that will come to a vote on September 30. Please read this long post if you are still thinking about how to vote.
As we know, they are requesting an additional 25 million shares be added to the "2012 Equity Incentive Plan." The reasons according to Mulholland on the call yesterday:
1) Limited availability of shares/options to grant today
2) 21 FTE employees … need to hire more
3) Attract and retain mgmt talent
4) Several other reasons outlined in proxy statement
Shareholders should understand that Execs and Board have already granted 9.3 million of those shares to themselves: NP - 5.5 million; Kelly - 1.75 million; Mulholland - 400k; Ray - 850k; Colachis - 320k; 3 outside directors - 168k each;
Those grants were made on June 15 and June 25. They are conditional upon shareholder approval of the amendment we are voting on Sept 30. Repeat......they have already given themselves 9.3 million of the 25 million....they need us to approve those. Repeat....5.5 million already awarded to NP, subject to the vote.
It gets a little worse: The plan allows them to grant options and/or shares. Bear with me. There are 3 basic categories:
1. Options. They have a strike price. In this case, the management options are at $3.12 and the BOD options are at $6.15 (these are the share prices on June 15 and June 25, respectively). Options are "fair" to shareholders, as it basically puts us all in the same shoes. They only have value if the share price increases. 3.8 million of the 9.3 million in "early awards" are in the form of options (2 million to NP).
2. Restricted Stock Units: This is just giving them stock, so is much more valuable (they don't have to pay a strike price for it, they just get the shares). These vest over three years, which is the only restriction. They can make a lot of money on these if the stock stays at the same price, or even if it goes down. There are 1.1 million shares of these (500k for NP). This is a gift. I haven't verified this, but I'll bet the vesting accelerates if NP gets fired.
3. Performance stock grants. Similar to the Restricted Stock units, these are shares of stock. They are highly valuable even if the stock drops in price. (NP has 3 million of them, so they would be worth $3 million even if the stock falls to $1 per share.) Silver lining on these is that they only vest if "certain performance conditions set forth in the award are met." HOWEVER, they don't tell us what the performance conditions are!!! For all we know, they have already met the standard and NP will get 3 million shares the day the vote is approved. Wouldn't you like to know that in advance of the vote?????????
Please vote NO on item 2 of the Proxy.
All of the information and data cited above is on pages 16 and 17 of the paper version of the proxy.
As we know, they are requesting an additional 25 million shares be added to the "2012 Equity Incentive Plan." The reasons according to Mulholland on the call yesterday:
1) Limited availability of shares/options to grant today
2) 21 FTE employees … need to hire more
3) Attract and retain mgmt talent
4) Several other reasons outlined in proxy statement
Shareholders should understand that Execs and Board have already granted 9.3 million of those shares to themselves: NP - 5.5 million; Kelly - 1.75 million; Mulholland - 400k; Ray - 850k; Colachis - 320k; 3 outside directors - 168k each;
Those grants were made on June 15 and June 25. They are conditional upon shareholder approval of the amendment we are voting on Sept 30. Repeat......they have already given themselves 9.3 million of the 25 million....they need us to approve those. Repeat....5.5 million already awarded to NP, subject to the vote.
It gets a little worse: The plan allows them to grant options and/or shares. Bear with me. There are 3 basic categories:
1. Options. They have a strike price. In this case, the management options are at $3.12 and the BOD options are at $6.15 (these are the share prices on June 15 and June 25, respectively). Options are "fair" to shareholders, as it basically puts us all in the same shoes. They only have value if the share price increases. 3.8 million of the 9.3 million in "early awards" are in the form of options (2 million to NP).
2. Restricted Stock Units: This is just giving them stock, so is much more valuable (they don't have to pay a strike price for it, they just get the shares). These vest over three years, which is the only restriction. They can make a lot of money on these if the stock stays at the same price, or even if it goes down. There are 1.1 million shares of these (500k for NP). This is a gift. I haven't verified this, but I'll bet the vesting accelerates if NP gets fired.
3. Performance stock grants. Similar to the Restricted Stock units, these are shares of stock. They are highly valuable even if the stock drops in price. (NP has 3 million of them, so they would be worth $3 million even if the stock falls to $1 per share.) Silver lining on these is that they only vest if "certain performance conditions set forth in the award are met." HOWEVER, they don't tell us what the performance conditions are!!! For all we know, they have already met the standard and NP will get 3 million shares the day the vote is approved. Wouldn't you like to know that in advance of the vote?????????
Please vote NO on item 2 of the Proxy.
All of the information and data cited above is on pages 16 and 17 of the paper version of the proxy.
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