EXHIBIT 10.19
                              EMPLOYMENT AGREEMENT

         AGREEMENT made this tenth day of November, 1998, effective as of
November 15, 1998 (this "Agreement"), by and between WAVE SYSTEMS CORP., a
Delaware corporation, with a principal place of business at 480 Pleasant St.,
Lee, MA. (hereinafter referred to as "Employer"), and Steven K. Sprague, an
individual residing at 147 Reservoir Road, Lenox, MA (hereinafter referred to as
"Executive").

         WHEREAS, Employer wishes to retain Executive's skill, knowledge and
experience for the management of its operations and Executive wishes to make
such skills, knowledge and experience available to Employer;

         NOW, THEREFORE, in consideration of the mutual covenants hereinafter
set forth, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Employer and Executive hereby agree
as follows:

         Section 1.  Employment.

         1.1 Term. Employer shall employ Executive, and Executive shall serve
Employer as President and Chief Operating Officer, for a term beginning on
December 1, 1998 and ending on December 1, 1999, as such date may be extended to
the terms of this paragraph (the "Term of Employment"), unless earlier
terminated pursuant to the provisions of Section 5 of this Agreement. The Term
of Employment shall be automatically extended for consecutive additional periods
of one (1) year each unless either Employer or Executive provides written notice
to the other of its/his intention not to renew not less than sixty (60) days
prior to the expiration of the then current term.

         1.2      Duties.

                  (a) Capacity. During the Term of Employment, Executive shall
         assume and perform such executive, operational and financial duties and
         responsibilities commensurate with his position, and Executive shall
         further assume and perform such other reasonable executive and
         managerial responsibilities and duties as may be assigned to him
         hereafter from time to time by the Board of Directors of Employer.
         Executive shall comply with all applicable employment policies of
         Employer.

                  (b) Schedule. During the Term of Employment, Executive shall
         be employed on a full-time basis. Executive's working schedule during
         the Term of Employment shall correspond with the reasonable
         requirements of his position.

         1.3 Compensation and Benefits. During the Term of Employment, as
compensation for the services to be rendered during such period and the other
obligations undertaken by Executive hereunder, Executive shall be entitled to
the following compensation:

                  (a) Salary. Employer shall pay to Executive an annual minimum
         Base Salary of One Hundred and Eighty Five Thousand ($185,000.00)
         Dollars, payable in accordance with Employer's normal payroll
         procedures. Said annual minimum Base Salary may be increased from time
         to time by Employer in the sole and absolute discretion of the Board of
         Directors of Employer, but shall in no event be reduced by Employer
         without the prior consent of Executive.

                  (b) Bonuses. Executive shall be entitled to operational
         bonuses based upon performance. The bonus structure for the initial
         Term of Employment is set forth on Schedule A attached hereto and
         incorporated herein. The bonus structure for all future periods shall
         be subject to determination of Employer, based on similar methods and
         methodologies to those set forth on Schedule A.

                  (c) Expenses. During the Term of Employment, Employer shall
         pay or reimburse Executive for all reasonable and necessary business
         expenses incurred or paid by him in the 

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          performance of his duties and responsibilities hereunder, subject to
          such reasonable substantiation or documentation as may be required by
          the Board of Directors from time to time.

               (d) Benefits. During the Term of Employment, Executive shall be
          entitled to four (4) weeks vacation and other such fringe benefits,
          including paid holidays, health, life and disability insurances, sick
          days, personal days, etc. in accordance with such executive benefit
          plans and policies as have been or may be established by Employer from
          time to time or which Employer is required to maintain by law.

               (e) Additional Benefits. In addition to all other benefits
          provided hereunder, Employer shall pay to Executive the benefits set
          forth on Schedule B.

         Section 2.  Development of Inventions, Improvements or Know-How.

         2.1 Information. During the Term of Employment, Executive shall keep
Employer informed of any and all promotional and advertising materials,
catalogs, brochures, plans, customer lists, supplier lists, candidate lists,
manuals, handbooks, inventions, discoveries, improvements, trade secrets, secret
processes and any technology, know-how or intellectual property made or
developed by him, in whole or in part, or conceived of by him, alone or with
others, which results from any work he may do for, or at the request of
Employer, or which relates in any way to the business operations, activities,
research, investigations or obligations of Employer (collectively, the
"Confidential Information").

         2.2 Assignment of Rights. Executive, and his heirs, assigns and
representatives shall assign, transfer and set over, and do hereby assign,
transfer and set over, to Employer, and its successors and assigns, all of his
and their right, title and interest in and to any and all Information, and any
patents, patent applications, copyrights, trademarks, tradenames or other
intellectual property rights relating thereto, provided or conceived by
Executive during the Term of Employment.

         Section 3. Non-Disclosure. The Executive shall keep secret and retain
in strictest confidence, and shall not use for the Executive's benefit or the
benefit of others, except in connection with the business and affairs of the
Employer (the "Business"), all Confidential Information and shall not disclose
any Confidential Information to anyone outside of the Employer, except for
Confidential Information which is at the time of receipt by the Executive, or
thereafter becomes, publicly known through no wrongful act of the Executive. The
obligations of Executive under this Section 3 shall survive any termination of
this Agreement for a period of five (5) years.

         Section 4. Covenant Not To Compete. In consideration of the Employer's
obligations hereunder, during the Term of Employment and during the Designated
Period (as defined herein), the Executive will not (i) anywhere within North
America, engage, directly or indirectly, alone or as a shareholder (other than
as a holder of less than five percent (5%) of the common stock of any publicly
traded corporation), partner, officer, director, executive or consultant in any
other business identified as a direct competitor in the Company's annual Form
10-K; (ii) divert to any competitor of the Employer any customer of the
Employer; or (iii) solicit or encourage any officer, executive, employee or
consultant of the Employer to leave its employ for employment by or with any
competitor of the Employer. If at any time the provisions of this Section 4
shall be determined to be invalid or unenforceable, by reason of being vague or
unreasonable as to area, duration or scope of activity, this Section 4 shall be
considered divisible and shall become and be immediately amended to only such
area, duration and scope of activity as shall be determined to be reasonable and
enforceable by the court or other body having jurisdiction over the matter, and
the Executive agrees that this Section 4 as so amended shall be valid and
binding as though any invalid or unenforceable provision had not been included
herein. The term "Designated Period" shall mean a period of two (2) years
immediately following any termination of this Agreement and/or Executive's
employment hereunder, whether voluntary or involuntary and regardless of the
reason for termination.

         Section 5.  Termination of Agreement.

         5.1.     Right to Terminate.
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                  (a) Death. This Agreement shall terminate immediately upon
Executive's death.

                  (b) Disability. In the event that Executive, because of
         accident, disability or physical or mental illness, is incapable of
         performing his duties hereunder, unless otherwise prohibited by
         applicable law, Employer shall have the right to terminate Executive's
         employment hereunder upon thirty (30) days prior written notice to
         Executive. For purposes of this Section 5.1(b), Executive shall be
         deemed to have become incapable of performing his duties hereunder if
         he shall have been incapable of so doing for (i) a continuous period of
         one hundred eighty (180) days and remains so incapable at the end of
         such one hundred eighty (180) day period; or (ii) periods amounting in
         the aggregate to one hundred eighty (180) days within any one period of
         three hundred sixty-five (365) days and remains so incapable at the end
         of such aggregate period of one hundred eighty (180) days.

                  (c) Cause. Employer shall have the right to terminate
         Executive's employment hereunder for cause immediately without prior
         notice to Executive. The term "cause" shall mean (i) misappropriation
         of material business opportunity, (ii) fraud, embezzlement, or
         misappropriation of funds involving assets of Employer or any of their
         customers, (iii) commission of or conviction with respect to any
         criminal activity which materially affects Executive's ability to
         perform his duties or materially harms the reputation of Employer or
         (iv) final written determination by the Board of Directors of Employer
         after thirty (30) days notice to Executive and the opportunity for
         Executive to be heard by the Board of Directors of (A) Executive's
         willful failure or refusal to comply with material and reasonable Board
         of Directors directives or to render the services required under this
         Agreement (except in the case of an accident, disability or physical or
         mental illness) or (B) Executive's material breach of this Agreement.

                  (d) Deemed Termination. Executive shall have the right to
         terminate this Agreement and resign from his employment with Employer
         by written notice to Executive within thirty (30) days of the effective
         date of any material adverse change by Employer in Executive's
         compensation, responsibility, location of employment, or other material
         terms of employment except as specifically contemplated herein or
         within thirty (30) days of the occurrence of a material breach by
         Employer of the terms and conditions of this Agreement.

                  (e) Other. Employer and Executive shall each have the right to
         terminate this Agreement and Executive's employment hereunder for any
         other reason not specified in this Section 5.1, with or without cause,
         upon thirty (30) days prior written notice to the other party.

                  (f)      Rights and Obligations of Executive Upon Termination.

                           (i) Upon the termination of Executive's employment
                  pursuant to Sections 5.1(a), (b), (c), (d), or (e), of this
                  Agreement, Employer shall not have any further obligation to
                  Executive under this Agreement except (other than as provided
                  in Section 5.1(f)(ii) below) to distribute to Executive his
                  Base Salary due pursuant to Section 1.3(a) hereof (and accrued
                  vacation pay) up to the date of termination.

(ii) In the event of a Deemed Termination as provided for in Section 5.1(d)
     above or in the event that Executive shall terminate this Agreement and
     Executive's employment hereunder without cause pursuant to Section 5.1(e)
     above, Employer agrees (i) to pay to Executive as severance, on the date of
     such termination, a lump sum payment in an amount equal to three (3) years
     of the Executive's annual Base Salary then in effect, and (ii) continue the
     Executive's health insurance and other benefits set forth on Schedule B for
     a period equal to the remaining Term of Employment then in effect.

                           (iii) Upon the termination of this Agreement and
                  Executive's employment hereunder, whether voluntary or
                  involuntary, and regardless of the reason for or manner of
                  termination, all of the obligations of Executive under
                  Sections 2.2,3, and 4 shall remain in full force and effect
                  and shall survive the termination of this Agreement to the
                  extent set forth herein.
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         Section 6.  Miscellaneous.

         6.1      Remedies.

                  (a) Injunctions. Inasmuch as any breach of, or failure to
         comply with, this Agreement will cause serious and substantial damage
         to Employer, if Executive should in any way breach or fail to comply
         with the terms of this Agreement, Employer shall be entitled to an
         injunction restraining Executive from such breach or failure.

(b)      Cumulative Remedies. All remedies of Employer expressly provided for
         herein are cumulative of any and all other remedies now existing at law
         or in equity. Employer shall, in addition to the remedies herein
         provided, be entitled to avail itself of all such other remedies as may
         now or hereafter exist at law or in equity for compensation, and for
         the specific enforcement of the covenants contained herein. Resort to
         any remedy provided for hereunder or provided by law shall not prevent
         the concurrent or subsequent employment of any other appropriate remedy
         or remedies, or preclude the recovery by Employer of monetary damages.

         6.2 Amendment. This Agreement may be amended only by a writing duly
executed by the parties hereto.

         6.3 Entire Agreement. This Agreement and any other agreements expressly
referred to herein set forth the entire understanding of the parties hereto
regarding the subject matter hereof and supersede all prior contracts,
agreements, arrangements, communications, discussions, representations and
warranties, whether oral or written, between the parties regarding the subject
matter hereof.

         6.4 Notice. For purposes of this Agreement, notices and communications
provided or permitted to be given hereunder shall be deemed to have been given
when (i) made by telex, telecopy or facsimile transmission; or (ii) sent by
overnight courier or mailed by United States registered or certified mail,
return receipt requested, postage prepaid to the parties at their addresses set
forth below their signature to this Agreement, or at such other addresses as
either may designate in writing as aforesaid from time to time.

         6.5 Assignment. This Agreement is personal as to Executive and shall
not be assignable by Executive. Employer may assign its rights under this
Agreement to any affiliate or to any other person, firm, corporation, or other
entity which may acquire all or substantially all of the business which is now
or hereafter conducted by Employer, provided, that any such assignment shall be
subject to the express terms and conditions hereof.

         6.6 Governing Law. This Agreement shall in all respects be governed by,
and construed in accordance with, the laws of the State of New York.
              
         6.7 Severability. Each section and subsection of this Agreement
constitutes a separate and distinct provision hereof. It is the intent of the
parties hereto that the provisions of this Agreement be enforced to the fullest
extent permissible under the laws and public policies applicable in each
jurisdiction in which enforcement is sought. Accordingly, if any provision of
this Agreement shall be adjudicated to be invalid, ineffective or unenforceable,
the remaining provisions shall not be affected thereby. The invalid, ineffective
or unenforceable provisions shall, without further action by the parties, be
automatically amended to affect the original purpose and intent of the invalid,
ineffective and unenforceable provision; provided, however, that such amendment
shall apply only with respect to the operation of such provision in the
particular jurisdiction with respect to which such adjudication is made.

         6.8 Waiver. The failure of Employer to insist upon strict adherence to
any term of this Agreement on any occasion shall not be construed as a waiver of
or deprive Employer of the right thereafter to insist upon strict adherence to
that term or any other term of this Agreement. Any waiver by Employer must be in
writing and signed by a duly authorized representative of Employer other than
Executive.
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         6.9 Headings. The headings of this Agreement are solely for convenience
of reference and shall not be given any effect in the construction or
interpretation of this Agreement.

         6.10 Binding Effect. Subject to the foregoing, this Agreement shall be
binding upon and inure to the benefit of the respective parties hereto and their
heirs, personal representatives, successors and permitted assigns.

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the date first above written.



                                   EMPLOYER:
                                   WAVE SYSTEMS CORP.


                                   By:      /s/ Gerard T. Feeney 
                                            Name:  Gerard T. Feeney
                                            Title: SVP Finance & Admin, CFO

                                   Address for Notices:

                                   Wave Systems Corp.
                                   480 Pleasant St.
                                   Lee, MA  01238



                                   EXECUTIVE / Employee:

                                   /s/ Steven Sprague
                                   Steven K. Sprague, President & COO


                                   Address for Notices:

                                   Steven Sprague
                                   147 Reservoir Road
                                   Lenox, MA