At the March 16 meeting we went over all these legalities and discussed some questions that Bob Tufts had raised. The rest of this section gives the decisions that we reached.
Though we are capitalizing the company in a way that saves us from meeting the fantastically expensive requirements of the Securities and Exchange Commission, there remain the less stringent requirements of the state of California. We have the choice of applying in advance for a permit to offer stock or simply filing notice of a private offering with the Secretary of State. The former slightly reduces the risk of later legal problems at a cost of $700-1,000 and 2-3 weeks delay. The consensus of the meeting was that it's not worth it; we'll sell the stock, then file the notice of private offering.
Private corporations often have special agreements that prevent stock from getting into the hands of outsiders. In order to cover lots of contingencies, including death, divorce, bankruptcy, and other involuntary transfers of stock, these agreements get very long and messy. Our decision was that a fancy agreement is not worth the time and expense; we'll just make an agreement that the company and its stockholders have first refusal if anyone wants to sell his stock to an outsider.
MSP obviously doesn't want to force its employees (ourselves) to sign the usual employee software rights agreement, with the usual restrictive and unenforceable clauses. We'll write our own agreement that says: I have the right to produce software for MSP without a prior claim by someone else; I won't use other people's trade secrets; I won't steal trade secrets from MSP; I will give MSP first refusal on any ideas I develop for mass market software. Under the last clause you can write anything that's not for a large market; if it later develops mass market potential, you give MSP first refusal on it.
We have collected the full legal names and addresses of nearly everyone in the company, as needed for company records, stock registration, and whatnot. The list is given at the end of this letter. If your name is not on it, please give us your full legal name, with parentheses around parts of the name that are not normally used (!), and your address.
Finally, the Board of Directors of the company will have 3-5 members, an item that must appear in the articles of incorporation. Though nothing has been officially determined, it is likely that the board will consist initially of the people in the north bay area who are actively in touch and have time to devote to organizational trivia: Dan Drake, Keith Marcelius, Jack Stuppin, and John Walker.
Editor: John Walker