PSA LLC

C O N F I D E N T I A L

This is a temporary working page for our discussions regarding the formation of an LLC to negotiate PSAs with clients.  This page can only be accessed with a direct URL - there are no links elsewhere on ASTL's site.

CONF CALL 02/12/12 4pm EST AGENDA
(Minutes are posted on this page in blue)

1. Introduce everyone (Rick L) done
    Chris Haug ("Howg") - CFO, CEO 
    Chad Trout - Sales/recruiting 
    Rick Hansen - developer H/W & S/W 
    Rick Lewis - developer H/W & S/W 
    Rick H's sister - TBD Not discussed, Rick L will follow up with Rick H offline.
2. Background on GE opportunity (Rick H & Rick L)
       Rick H described his talks with GE over the past year on how to keep working past the one year cutoff.
3. Business entity & compensation (Chris H) 
      Easiest method of forming a corporation. Avoids taxation at corp level, eliminates double taxation. LLCs widely used instead of SubCh S.
4. Getting on GE's vendor list (Chad) 
     Chad contributed this link to GE's site.
     Get a manager to sponsor us helps.  Is Adecco involved?  GEs goes pretty quick like a day or so. ITT took 2-3 weeks to set up.
5. Temporary working agreement 5 proposals to consider (led by Rick L)

General discussion on where this is going?
Chris says more our decision than his, he's on board.
Rick H asked about LLC paperwork, who is responsible?  
Rick L replied that Chris as advisor, Rick H and Rick L share day to day responsibilities for paperwork, Chad handle business matters. Chris concurs. 

Chad says it will be easier to get on vendor lists than with an agency. Rick H says he and I want this to be bigger than just the two of us.  Doesn't seem worth it to just do a few contracts.

Chris H: Rick L raising issue: exactly where do we want to take this?  Vehicle for staying at GE or looking to really grow it into a sizable organization. Rick H yes grow it, wants to focus more on business than technical. Did this for 8 years, they ended up doing both tech and biz in Tampa Bay area. Worked out well, falling out.  They grew it to a fairly good sized company.  Rick L concurs.  He doesn't care that much about staying at GE long term. 

Other strategic question from Chris H: given that we want to grow this, each of us should explore our personal strengths. What are we bringing to the table? What skills and experience from both technical as well as business basis. This avoids some of the common problems where roles and identities haven't been explored.  We don't need to answer this today, keep this in the back of our minds as we discuss this. What roles do we want to play in 2 years?

Rick H will email his strengths to us and we can throw them together. 

Rick L mentioned that both Jeff Armstrong and Shawn Clark are both supportive of this.

Chris H: relative timelines?  Need to put this together in 6 weeks?    Rick H explained that he was supposed to return to GE in early March but prefers to wait to go in through a PSA as opposed to contractor. Rick L said that he has no time line, his contract ends April 25th, and he's willing to pursue this while working elsewhere after May 1st. 



PROPOSAL 1 (02/11/12)
Use the consensus model for all decision making.  Here is a flowchart of the process.  And here is a link to a description.

Consensus model

Decision rule: Unanimous. All may elect to have person in charge make a decision which is binding on all and has the same effect as if the group was in consensus on the proposal.  Example: we decide we need an answering service. We set the guidelines (service availability, cost, etc.) then make a person in charge. The person in charge has the authority to enter into a contract within the guidelines with whatever provider they wish, without further discussion with or approval from the group.

Dissent rule: blocking (1 person) with requirement for alternative proposal. Blocked proposals are tabled until the next meeting with offline discussion encouraged in order to find a suitable alternative.

Stand aside rule: Anyone may stand aside in lieu of dissent.

The proposal is that we adopt this model for all activity going forward.   If consensus is reached on this, the remainder of this meeting will be conducted using this process.

CONSENSUS REACHED? yes

Chad concurs.  Rick H open to any form of management that work, if it doesn't work try something else. Chris H: as part of an LLC agreement, there will need to be one person designated as the managing member.  Powers and restrictions that manager can do are spelled out in the LLC operating agreement.   Who would best serve as this managing member?  Doesn't have a vested interest in the day to day business.  Let's say Chris is the managing member, he would not be acting as a participant in assignments, could stand and act as the primary administrator on the back side of things, keep things running smoothly.  Rick H: makes sense to him, the 3 of us can focus on business.   This is worth discussing sooner rather than later.  Noted that Chris is not volunteering for this, just making the point. [Rick L's note: Chris has a lot on his plate and simply may be unable to serve in any role other than an advisor to us in these early days]

PROPOSAL 2 (02/11/12)
Investigate alternatives for state of incorporation of LLC. Delaware is  suggested because several of us have had positive experiences with that State . Also investigate physical location for service of process: Florida and Texas are suggested due to no state income tax.   Report back with recommendations and costs in one week.

CONSENSUS REACHED? yes
ASSIGNED TO: Rick L will initiate the draft working agreement.

Chris H: When we go to form the LLC in DE, there is a company there that he has used for a fee will serve as the registered agent. If we decide he is managing member, registered agent forwards to Chris, then he distributes.   The service is readily available.  Florida and Texas not relevant.  DE carries the cachet of being The Place to do it. No objections.

PROPOSAL 3 (02/12/12)
Draft a temporary working agreement between the four of us and distribute via email for review.  When everyone has had a chance to make their input, revise the document and send out for approval.   Once approved, this will serve as the basis for the LLC operating agreement.   Suggest a 2-week period for this activity: one week to review draft, one week to complete approval.

CONSENSUS REACHED? Yes, Chris thinks this will raise other issues that we need to address. Good 
ASSIGNED TO: Rick L to initiate, send to Rick H, then to Chad then to Chris.

PROPOSAL 4 (02/12/12)
Empower Chad Trout on behalf of the group to contact GE Transportation ("GETS") to start the process of getting on their vendor list. Also to contact Shawn Clark, Software Manager at GETS. Pre-requisite: Temporary working agreement approval.

CONSENSUS REACHED? yes
ASSIGNED TO: group

Rick H to Chad: does GE need formal LLC or will this agreement work?  Chad thinks it's fine, having the managers on board.  Each GE has a different vendor list. We are able to go through the correct channels not get sidetracked. Chris H: Chad raises another good point: there is going to need to be a point person in our group who is going to manage clients (assuming CHad).  Someone who will serve as point person for all matters.  Chad is fine with that, he's done that for the past several years.

PROPOSAL 5 (02/12/12)
The proposal is to meet again via teleconference in one week's time.

CONSENSUS REACHED? Yes
Date/Time? Sat 2/18 at 12pm EST Chris H - earlier up until 12:00 next Sat. he has to be in VA leaving about 1:30pm.  Rick L will confirm with everybody on Friday.

Any last discussion? Rick H has action item for individual strengths, will send to Rick L. 

Call was completed at 4:44pm EST.
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