Professional Documents
Culture Documents
This will serve as formal notice that a regular meeting of the Board of Directors of Acme
Software, Inc. (the “Company”) will be held at the offices of the Company in McLean, Virginia
at 11:00 a.m. on ________ ___, 2008.
[We also plan to have a Board dinner the evening prior to the meeting at ___ p.m.
at _________. We hope that all of you will be able to attend.]
[Since this is our kick-off meeting following the Series A financing, we expect this
meeting to last somewhat longer than our future meetings. After we take up a series of
formal Board actions, key members of the management team will provide various
operational reports to the Board, after which we plan to have a strategy session, focused on
_______ and _______.]
Enclosed please find a proposed agenda for our meeting along with management reports
and the proposed resolutions that we expect to discuss at the Board meeting. If you have any
questions, please feel free to call me on my cell at (____) ____-_____.
If you are unable to attend the meeting in person, please let us know and we will arrange
a call-in number.
John Smith
Chief Executive Officer
DISTRIBUTION:
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EXHIBITS:
Tab A: Agenda
Tab B: Proposed Resolutions
Tab C: CEO Report
Tab D: Sales Report / Sales Pipeline
Tab E: Technology / Product Report
Tab F: Draft Audit Committee Charter
Tab G: Draft Compensation Committee Charter
Tab H: Draft Compensation Guidelines
Tab I: Draft Investment Policy
Tab J: Interim Financials / 2008 Budget
Tab K: Organizational Chart
[Note: the attached compensation committee charter and audit committee charter are just
samples and are very streamlined for early stage, private companies and are not suitable for
public or pre-public companies; the attached investment policy and compensation guidelines
are samples for illustrative purposes; some venture capital firms have policies or guidelines
they favor.]
[Note: this notice is usually accompanied by Powerpoint slides containing the various
operational reports to be presented by key members of the executive team. We can provide
samples of these Powerpoint slides. You should distribute all or most Board materials by
email to Board members and observers at least 48 hours prior to the meeting if at all possible
to allow review in advance of the meeting.]
[Note: most venture capital firms will expect you to make it a regular practice to have an
executive session with Board members and invited guests only that excludes the management
team. During this session, formal actions would typically be taken and personnel matters
discussed. The agenda below provides for this to occur at the beginning of the meeting so
that you can then invite in the rest of the team after you wrap up; if you do it in the reverse
order, keep in mind that you will have to ask executives to leave the meeting which sometimes
is less desirable. Also, after adjournment, if there is a syndicate, many venture capital firms
like to have an informal, investor-only session and so the agenda below anticipates this.]
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AGENDA
REGULAR MEETING
OF
THE BOARD OF DIRECTORS
OF
ACME SOFTWARE, INC.
EXECUTIVE SESSION
I. Call to Order
V. Adjournment
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PROPOSED RESOLUTIONS
OF
ACME SOFTWARE, INC.
The Board next discussed granting [incentive] [and/or] [nonstatutory] stock options to
certain [key] employees [and/or consultants] of the Company pursuant to its 20__ Equity
Incentive Plan (the “Plan”). In determining the fair market value of the Company’s Common
Stock on the date hereof, the Board considered the following factors:
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of the date of its determination in order to determine in good faith the fair
market value of a share of the Common Stock of the Company].
After discussion, upon motion duly made, seconded and unanimously approved, it was:
RESOLVED, that the Board hereby grants [incentive] [and/or] [nonstatutory] stock
options to purchase shares of the Company’s Common Stock pursuant to the Plan to the
individuals and in the amounts as set forth on Exhibit A to these resolutions;
RESOLVED, that, based on a determination of the applicable criteria under IRS Rule
409A, the exercise price of such options will be __________ ($__________) per share, which
the Board hereby determines, after due consideration of the factors set forth above, to be the fair
market value of the Company’s Common Stock on the date hereof;
RESOLVED, that the options granted hereby will vest and become exercisable as to
____% of the total number of shares on the first anniversary of the Vesting Commencement
Date, as indicated on Exhibit A to these resolutions, and as to ___% each month thereafter over
the following ___ years, such that the options will be 100% vested on the __________
anniversary of the Vesting Commencement Date, subject to the optionee’s continued service on
each such date;1
1
Sample vesting only—be sure to set forth correct vesting schedules. If there are
different schedules for different persons, consider putting the vesting schedules on the Exhibit.
2
Sample vesting only—be sure to set forth correct accelerated vesting schedules. If there
are different schedules for different persons, consider putting the vesting schedules on the
Exhibit.
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RESOLVED, that all of the foregoing grants of options will be made pursuant to [an
Incentive Stock Option] [and/or] [a Nonstatutory Stock Option] Agreement in substantially the
form previously approved by the Board, [and as attached hereto as Exhibit ____,] with such
ministerial changes as the Company’s [General Counsel][Chief Executive Officer] will deem
necessary or appropriate;
RESOLVED, that the options granted hereby and the Common Stock issuable upon
exercise of the options will be offered and sold in accordance with applicable state and federal
securities laws; and
RESOLVED, that the officers of the Company be, and each of them hereby is,
authorized and directed, for and on behalf of the Company to take such further action and
execute such additional documents as each may deem necessary or appropriate to carry out the
foregoing resolutions.
RESOLVED, that the charter for the Compensation Committee of the Board of Directors be,
and it hereby is, revised and adopted in substantially the form attached hereto as Exhibit B;
RESOLVED, that the charter for the Audit Committee of the Board of Directors be, and it
hereby is, revised adopted in substantially the form attached hereto as Exhibit C;
RESOLVED, that such charters will be deemed resolutions of the Board of Directors;
RESOLVED, that such charters describe the full power and authority of the respective
committees;
RESOLVED, that such committees will have full power and authority to take any and all
actions deemed necessary, appropriate or incidental to discharging the authority delegated to such
committees by these resolutions or to fulfilling the purposes of these resolutions;
3
Sample vesting only—be sure to set forth correct accelerated vesting schedules. If there
are different schedules for different persons, consider putting the vesting schedules on the
Exhibit.
4
Sample extended exercise period only—be sure to set forth correct post-termination
exercise periods. If there are different periods for different persons, consider putting the periods
on the Exhibit.
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RESOLVED, that the authority hereby conferred will remain in force until revoked by the
Board of Directors of the Company;
RESOLVED, that effective as of the date hereof, the Compensation Committee will be
comprised of ______________ and ________, to serve on such committee until their successors
are duly elected and qualified or until their earlier death, resignation or removal;
RESOLVED, that effective as of the date hereof, the Audit Committee will be comprised of
________________ and ________________, to serve on such committee until their successors
are duly elected and qualified or until their earlier death, resignation or removal; and
RESOLVED, that the directors and officers of the Company be, and they hereby are,
authorized and directed to take such action and to execute such documents as each may deem
necessary and appropriate to carry out the intent of the foregoing resolutions.
WHEREAS, the Board of Directors has determined that it would be advisable to adopt an
investment policy to establish parameters to be followed for the investment of excess cash of the
Company.
RESOLVED, that the investment policy attached hereto on Exhibit D is hereby ratified,
confirmed and approved in all respects.
MISCELLANEOUS RESOLUTIONS
RESOLVED, that the officers of the Company, and any of them, are each hereby authorized
and directed to execute all documents and to take such action as any of such officers may deem
necessary or advisable in order to carry out and perform the purposes of the foregoing
resolutions.
RESOLVED, that any actions prior to the date of the foregoing resolutions hereby taken by
the person elected as the officers of the Company that are within the authority conferred thereby
are hereby ratified, confirmed and approved as the acts and deeds of this Company.
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EXHIBIT A
Vesting
Optionee Name Type Shares Price Commencement State
Date
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EXHIBIT B
PURPOSE:
The purpose of the Compensation Committee of the Board of Directors of ACME SOFTWARE, INC.,
a Delaware corporation (the “Company”) will be to (i) administer the Company’s various stock
option plans (the “Stock Plans”), (ii) establish and review the salary, bonuses, employee benefits
and other employee compensation of any nature for management of the Company and
(iii) perform such other functions as will be deemed necessary or convenient related to the
foregoing.
COMPOSITION:
The Compensation Committee will be comprised of up to three members of the Board (unless
the Board determines otherwise by resolution). The members of the Compensation Committee
and its Chairperson will be appointed by and serve at the discretion of the Board.
The operation of the Compensation Committee will be subject to the Bylaws of the Company, as
in effect from time to time, and Section 141 of the Delaware General Corporation Law. The
Compensation Committee will have the full power and authority to carry out the following
responsibilities:
1. Administer the Stock Plans, as the same may be amended and in effect from time to
time; provided, that the Board of Directors reserves the power to administer the Stock Plans at
such times as the Board determines to be appropriate.
2. Grant stock options and stock equivalents under the Stock Plans, provided, that each
grant will satisfy all the applicable terms of the Stock Plan as in effect at the time of grant.
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6. To perform such other functions and have such other powers as may be necessary or
convenient in the efficient discharge of the foregoing.
7. To report to the Board from time to time, or whenever it will be called upon to do
so.
MEETINGS:
The Compensation Committee will hold at least one regular meeting per year and additional
meetings as the Chairperson or Compensation Committee deem appropriate. The officers of the
Company may attend any meeting of the Compensation Committee, except for portions of the
meetings where such person’s presence would be inappropriate, as determined by the Committee
Chairperson.
Minutes of each meeting of the Compensation Committee will be kept and distributed to each
member of the Compensation Committee, members of the Board who are not members of the
Compensation Committee and the Secretary of the Company. The Chairperson of the
Compensation Committee will report to the Board from time to time, or whenever so requested
by the Board.
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EXHIBIT C
PURPOSE:
The purpose of the Audit Committee of the Board of Directors of ACME SOFTWARE, INC., a
Delaware corporation (the “Company”) generally is to oversee and interact with the Company’s
independent auditors and to review the Company’s audited financial statements.
COMPOSITION:
The Audit Committee will be comprised of up to three members of the Board (unless the Board
determines otherwise by resolution). The members of the Audit Committee and its Chairperson
will be appointed by and serve at the discretion of the Board.
The operation of the Audit Committee will be subject to the Bylaws of the Company, as in effect
from time to time, and Section 141 of the Delaware General Corporation Law. The Audit
Committee will have the full power and authority to carry out the following responsibilities:
3. To evaluate, together with the Board, the performance of the independent auditors
and, if so determined by the Audit Committee, recommend that the Board replace the
independent auditors.
4. To have familiarity, through the individual efforts of its members, with the
accounting and reporting principles and practices applied by the Company in preparing its
financial statements, including, without limitation, the policies for recognition of revenues in
financial statements.
5. To assist and to interact with the independent auditors so that they may carry out
their duties in the most efficient and cost effective manner.
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6. To evaluate the cooperation received by the independent auditors during their
audit examination, including their access to all requested records, data and information, and to
elicit the comments of management regarding the responsiveness of the independent auditors to
the Company’s needs.
7. To consult with the independent auditors and to discuss with the senior
management of the Company the scope and quality of internal accounting and financial
reporting controls in effect.
8. To perform such other functions and to have such power as may be necessary or
appropriate in the efficient and lawful discharge of the foregoing.
MEETINGS:
The Audit Committee will hold at least one regular meeting per year and additional meetings as
the Chairperson or the Audit Committee deem appropriate. The officers of the Company may
attend any meeting of the Audit Committee, except for portions of the meetings where such
person’s presence would be inappropriate, as determined by the Audit Committee Chairperson.
Minutes of each meeting of the Audit Committee will be kept and distributed to each member of
the Audit Committee, members of the Board who are not members of the Audit Committee and
the Secretary of the Company. The Chairperson of the Audit Committee will report to the Board
from time to time, or whenever so requested by the Board.
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EXHIBIT D
1,500 7,519
Accounting/Admin/Supp.30,000 60,000 5% 4,577 (.014%)
(.005%) (.023%)
* Depending upon company and individual performance, employee can achieve 0% to 125% of
target bonus. The upper range at any level should only be used in exceptional cases.
** Range includes lower level inside sales reps. Sales people will have a commission plan on
top of salary. It is expected that commission rates will be approximately 7.5% of revenue.
Commission payments will be made 50% upon receipt of acceptable order and 50% upon
receipt of funds.
Options will vest over four years with the first 1/4 vesting at the first anniversary of the grant.
Thereafter, options will vest monthly for the remaining three years.
Bonuses will be paid annually in January of the following year based upon meeting corporate and
individual objectives.
Model assumes approximately __ million common share equivalents and a company with __-__
people and $__M in revenues.
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EXHIBIT E
I. OBJECTIVES
In order of importance the primary objectives of the ACME SOFTWARE, INC. (the
“Company”) investment guidelines are as follows:
INVESTMENT RETURN - Once the two aforementioned objectives have been explored
and met then investments may be made from the Company approved list of investment
securities, (enclosed herein). The minimum investment return objective will be to deliver
the market return as provided by the guidelines set below. Investments will be diversified
in order to minimize any risk of principal or inappropriate concentrations of investments
with any one entity. In no manner can the principal funds invested be exposed to any
potential loss when making investments on behalf of the Company.
The Company investment guidelines have been instituted to meet the above objectives.
The guidelines set forth herein have been created as a tool of management and should be
interpreted as such. This tool is to be used to properly manage all investable cash balances
to assure safekeeping of these assets. Any flexibility regarding addressing this subject
must be derived from interpretation of these guidelines unless otherwise preapproved by
the Board of Directors.
The Company has adopted this written investment policy that establishes guidelines
relating to diversification, credit ratings, and maturities with the stated purpose of
conserving capital and maintaining liquidity until funds are used in the operations of the
Company.
The management of the Company investable corporate cash position will be supported by
the investments which provide ample liquidity without loss of principal. Daily liquidity is
essential. Restrictions on liquidity are as follows:
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• A minimum of $200,000 or 5 days of required cash, whichever is larger, must be
available on a daily basis and accessible on any business day until 2:00 PM Eastern
time with no loss of principal.
• The remainder of the funds could be invested in securities with maturities no longer
than one hundred eighty (180) days. Above liquidity requirements must be first met at
all times when determining maturity parameters.
• Repositioning of these securities before their maturity, generating any potential gain
or loss, is permitted for managing liquidity requirements only.
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Approved Securities List
Bank Obligations
Certificate of Deposits
Bankers Acceptances
Repurchase Agreements
Time Deposits
Corporate Obligations
Commercial Papers
Medium-Term Notes
Corporate Bonds
Municipal Obligations
Variable Rate Notes
Revenue Anticipation Notes
Tax Anticipation Notes
Bond Anticipation Notes
Trends for a given company or industry must be reviewed periodically by the assigned
investment manager to assure continuing credit quality of investments and implementation
of any appropriate portfolio adjustments to maintain this credit quality or percentage
positions.
V. MARKETABILITY
All securities are to be purchased through investment banking and brokerage firms of high
quality and reputation. In the unlikely event that securities must be sold before their
maturity, the securities must be easily remarketed.
Normal investing practice is to reinvest the funds on the day a security matures, to
minimize lost interest. A daily transaction log is to be maintained and available for review
at any time. All trading firms must generate a hard copy document for each transaction
which is mailed to the investment manager on a timely basis, and then matched to the
transaction log.
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VII. CUSTODY ACCOUNT
Assets are to be held in a segregated bank custody account in the name of the Company
with the separate fiduciary account documents executed by either the CEO or CFO of the
Company and the custodial bank.
The Chief Financial Officer or individual appointed by the Board and his/her authorized
employees are responsible for securing and managing investments and cash for operations.
These individuals have full discretion to invest any excess capital to strict adherence to
these guidelines. These guidelines are to be reviewed periodically with the Chief Financial
Officer or Chief Executive Officer at least semi-annually, and revisions made consistent
with objectives set forth here.
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