Section 192 is what enables the going private arrangement to occur (as a disctinction from a buyout or merger). It is silent on this question. Having slept on it, I guess my beef is not so much with insiders getting value for their options, but rather that ARMZ can buy the votes despite the non-exercise.
It would obviously have remained to be seen if these options would have ever become voting shares but as of today, nobody was bullish enough to pull the trigger and actually acquire these options. Yet ARMZ gets the votes. That is my point.
Couple that with the large (and suspicious) growth of the short position (and potential for extra votes being created there) and it is ringing alarm bells for me.