The Board of Directors is responsible for overseeing and deciding on major changes in the governance or operations of the Company. The Voting Agreement establishes the size of the Board and the Board members chosen by the stockholders. The Board typically consists of an odd number of Directors to avoid deadlock. It is typical for the lead Investors in a Preferred Stock financing to have the right to designate one or more members of the Board of Directors. The holders of Common Stock often have the right to designate one or more director as well. There are also typically provisions for independent directors and a Board seat for the CEO. The Voting Agreement requires all stockholders to vote those designees into office.
Term Sheet Language: At the Closing, the Board of Directors shall consist of [______] members comprised of (i) [name] as [the representative designated by [____], as the lead Investor, (ii) [name] as the representative designated by the remaining Investors, (iii) [name] as the representative designated by the Common Stockholders, (iv) the person then serving as the Chief Executive Officer of the Company, and (v) [___] person(s) who are not employed by the Company and who are mutually acceptable [to the other directors].