Board composition

[goodcounsel]

The current version of the Certificate of Incorporation states:

“Board Composition” means that for so long as at least 25% percent of the initially issued shares of Preferred Stock remain outstanding,...

As a practical matter, when is this not going to be the case? Conversion or redemption of the Series Seed Shares is not likely prior to an exit. Thus, even as the ownership of the Series Seed is diluted ever more by future rounds, this provision would not eliminate the separate Series Seed board seat (although that very well could be negotiated away).

Wouldn't it make more sense to base this provision not on the number of original Series Seed shares that are outstanding, but rather, on the amount of ownership that the Series Seed continues to represent? For example:

“Board Composition” means that for so long as the shares of Series Seed Preferred represent at least [__]% of the sum of (i) all shares of the Corporation's capital stock (on an as-converted basis) issued and outstanding, assuming exercise or conversion of all options, warrants and other convertible securities, and (ii) all shares of the Corporation's capital stock reserved and available for future grant under any equity incentive or similar plan, ...