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<div class=Section1>
<p class=MsoNormal style='margin-bottom:0in;margin-bottom:.0001pt'><b>April 19,
2010 OpenID Executive Committee Call Minutes<o:p></o:p></b></p>
<p class=MsoNormal style='margin-bottom:0in;margin-bottom:.0001pt'><o:p> </o:p></p>
<p class=MsoNormal style='margin-bottom:0in;margin-bottom:.0001pt'><b>Attendees:<o:p></o:p></b></p>
<p class=MsoNormal style='margin-bottom:0in;margin-bottom:.0001pt'>Don Thibeau,
Executive Director<o:p></o:p></p>
<p class=MsoNormal style='margin-bottom:0in;margin-bottom:.0001pt'>Mike Jones<o:p></o:p></p>
<p class=MsoNormal style='margin-bottom:0in;margin-bottom:.0001pt'>Nat Sakimura<o:p></o:p></p>
<p class=MsoNormal style='margin-bottom:0in;margin-bottom:.0001pt'>Chris
Messina<o:p></o:p></p>
<p class=MsoNormal style='margin-bottom:0in;margin-bottom:.0001pt'>Brian Kissel<o:p></o:p></p>
<p class=MsoNormal style='margin-bottom:0in;margin-bottom:.0001pt'>Mike Ozburn<o:p></o:p></p>
<p class=MsoNormal style='margin-bottom:0in;margin-bottom:.0001pt'><o:p> </o:p></p>
<p class=MsoNormal style='margin-bottom:0in;margin-bottom:.0001pt'><b>Absent:<o:p></o:p></b></p>
<p class=MsoNormal style='margin-bottom:0in;margin-bottom:.0001pt'>(none)<o:p></o:p></p>
<p class=MsoNormal style='margin-bottom:0in;margin-bottom:.0001pt'><b><o:p> </o:p></b></p>
<p class=MsoNormal style='margin-bottom:0in;margin-bottom:.0001pt'><b>Visitors:<o:p></o:p></b></p>
<p class=MsoNormal style='margin-bottom:0in;margin-bottom:.0001pt'>John Ehrig,
Global Inventures<o:p></o:p></p>
<p class=MsoNormal style='margin-bottom:0in;margin-bottom:.0001pt'><o:p> </o:p></p>
<p class=MsoListParagraph style='mso-margin-top-alt:0in;margin-right:0in;
margin-bottom:0in;margin-left:.25in;margin-bottom:.0001pt;text-indent:-.25in;
mso-list:l0 level1 lfo1'><![if !supportLists]><b><span style='mso-list:Ignore'>1.<span
style='font:7.0pt "Times New Roman"'> </span></span></b><![endif]><b>Budget
and membership structure discussions and recommendations<o:p></o:p></b></p>
<p class=MsoNormal style='margin-bottom:0in;margin-bottom:.0001pt'>This entire
call was devoted to budget and organizational structuring discussions resulting
from the possibility that Facebook and Yahoo! are both considering reducing
their membership classes from sustaining (the $50,000 level) to corporate (the
$10,000 level), and due to a request from Facebook that we consider revising the
organizational governance structure, because of their perception that the
current board is too big for effective decision making.<o:p></o:p></p>
<p class=MsoNormal style='margin-bottom:0in;margin-bottom:.0001pt'><o:p> </o:p></p>
<p class=MsoNormal style='margin-bottom:0in;margin-bottom:.0001pt'>The
decisions made and issues discussed follow. The executive committee recognizes
that the budgetary decisions below are actually recommendations to the full
board’s budgeting process, other than the decision about Executive
Director compensation, which the board explicitly delegated to the executive
committee.<o:p></o:p></p>
<p class=MsoNormal style='margin-bottom:0in;margin-bottom:.0001pt'><o:p> </o:p></p>
<p class=MsoNormal style='margin-bottom:0in;margin-bottom:.0001pt'><b>Budget
Decision: Retain a full-time Executive Director:</b> The executive committee
thanked Don for his offer to reduce his salary and go part time as a way to
save costs, but the committee was unanimous in requesting that Don take this
offer off the table and propose different cuts. We all agreed that we need a
full-time Executive Director at this phase of the foundation’s life and
that we want Don to remain as that full-time Executive Director. Furthermore,
we agreed that he should continue to have the budget to travel as seems
strategic and prudent; the committee observed that Don’s in-person
representation of the foundation and its mission has almost certainly been
net-revenue-positive, as new memberships can be directly attributed to his
face-to-face conversations with decision makers at companies that joined.<o:p></o:p></p>
<p class=MsoNormal style='margin-bottom:0in;margin-bottom:.0001pt'><o:p> </o:p></p>
<p class=MsoNormal style='margin-bottom:0in;margin-bottom:.0001pt'><b>Budget
Decision: Continue outsourced association management services:</b> The
committee next communicated that we likewise need to continue adequately
funding outsourced organizational management services in order to keep the
foundation in good working order.<o:p></o:p></p>
<p class=MsoNormal style='margin-bottom:0in;margin-bottom:.0001pt'><o:p> </o:p></p>
<p class=MsoNormal style='margin-bottom:0in;margin-bottom:.0001pt'><b>Budget
Decision: Maintain adequate legal support:</b> The committee agreed that we
must maintain sufficient legal support to address IPR and governance issues for
the foundation. The Executive Director shared his plans to retain a
“general counsel” approach to consolidate legal fees in the last
board meeting.<o:p></o:p></p>
<p class=MsoNormal style='margin-bottom:0in;margin-bottom:.0001pt'><o:p> </o:p></p>
<p class=MsoNormal style='margin-bottom:0in;margin-bottom:.0001pt'><b>Budget
Decision: Fund product market research:</b> The committee agreed that it
makes sense to continue activities that inform the directions we need to pursue
for OpenID to succeed.<o:p></o:p></p>
<p class=MsoNormal style='margin-bottom:0in;margin-bottom:.0001pt'><o:p> </o:p></p>
<p class=MsoNormal style='margin-bottom:0in;margin-bottom:.0001pt'><b>Agreement:
N+1 rule problematic:</b> The current bylaws state that when there are N
sustaining members that there must be N+1 community board members. There was
agreement that the N+1 rule is problematic. For one thing, it dilutes the value
of sustaining membership, possibly resulting in fewer sustaining members. Some
also felt that it makes the board too large for effective decision-making. The
committee also observed that, effectively, most of the community board members
are already working at companies invested in OpenID. The committee recommends
that the bylaws be revised to replace the N+1 rule.<o:p></o:p></p>
<p class=MsoNormal style='margin-bottom:0in;margin-bottom:.0001pt'><o:p> </o:p></p>
<p class=MsoNormal style='margin-bottom:0in;margin-bottom:.0001pt'>Replacement
options discussed include:<o:p></o:p></p>
<ul style='margin-top:0in' type=disc>
<li class=MsoNormal style='margin-bottom:0in;margin-bottom:.0001pt;mso-list:
l2 level1 lfo2'>having working groups elect a limited number of board
members from among their members, as some other organizations do,<o:p></o:p></li>
<li class=MsoNormal style='margin-bottom:0in;margin-bottom:.0001pt;mso-list:
l2 level1 lfo2'>having a limited, fixed number of community members
elected by the foundation members,<o:p></o:p></li>
<li class=MsoNormal style='margin-bottom:0in;margin-bottom:.0001pt;mso-list:
l2 level1 lfo2'>eliminating community board memberships. <o:p></o:p></li>
</ul>
<p class=MsoNormal style='margin-bottom:0in;margin-bottom:.0001pt'>No matter
which replacement options might be chosen, we agreed that it would make sense
to grandfather existing community board seats despite any restructuring –
respecting the decisions of the members who elected them.<o:p></o:p></p>
<p class=MsoNormal style='margin-bottom:0in;margin-bottom:.0001pt'><o:p> </o:p></p>
<p class=MsoNormal style='margin-bottom:0in;margin-bottom:.0001pt'><b>Agreement:
Ą la carte funding problematic</b>: Facebook has stated that even if they
reduce their membership class from sustaining to corporate, that they would plan
to continue to spend a total of $50,000 on foundation activities, with $40,000
going to designated projects. The committee agreed that while sponsorship of
designated projects is always welcome, that it would be unworkable for this to
become the primary funding model for the foundation. Were many board members
to also choose this “ą la carte” funding model, it would reduce the
funds available for budgeting of regular foundation activities to below a
sustainable level. Furthermore, funding for designated projects tends to be
one-time, and thus fade away over time. Thus, the executive committee
recommends, for the health of the organization, that sustaining members renew
at the sustaining level, providing the organization predictable, budgetable
income, and then sponsor designated projects such as summits, interop work,
etc. on top of that, as they see fit.<o:p></o:p></p>
<p class=MsoNormal style='margin-bottom:0in;margin-bottom:.0001pt'><o:p> </o:p></p>
<p class=MsoNormal style='margin-bottom:0in;margin-bottom:.0001pt'><b>Agreement:
Only one short-term viable revenue-generating product:</b> In consultation
with Global Inventures, we’ve learned that foundations almost universally
derive revenue from one or more of three kinds of products:<o:p></o:p></p>
<ul style='margin-top:0in' type=disc>
<li class=MsoNormal style='margin-bottom:0in;margin-bottom:.0001pt;mso-list:
l1 level1 lfo3'>Conference Fees<o:p></o:p></li>
<li class=MsoNormal style='margin-bottom:0in;margin-bottom:.0001pt;mso-list:
l1 level1 lfo3'>Licensing and Certification<o:p></o:p></li>
<li class=MsoNormal style='margin-bottom:0in;margin-bottom:.0001pt;mso-list:
l1 level1 lfo3'>Memberships<o:p></o:p></li>
</ul>
<p class=MsoNormal style='margin-bottom:0in;margin-bottom:.0001pt'><o:p> </o:p></p>
<p class=MsoNormal style='margin-bottom:0in;margin-bottom:.0001pt'>The
committee discussed the applicability of each of the three possible kinds of
revenue that GI identified to the OIDF.<o:p></o:p></p>
<ul style='margin-top:0in' type=disc>
<li class=MsoNormal style='margin-bottom:0in;margin-bottom:.0001pt;mso-list:
l3 level1 lfo4'><i>Conference Fees: </i> We agreed that while we could
investigate charging reasonable amounts for some OIDF events –
perhaps for non-members to attend – that this both would not
generate nearly enough revenue to be material to the operation of the
foundation, and that doing this could work counter to our mission of
building a widely deployed Internet identity solution.<o:p></o:p></li>
<li class=MsoNormal style='margin-bottom:0in;margin-bottom:.0001pt;mso-list:
l3 level1 lfo4'><i>Licensing and Certification:</i> First, the OIDF
formed the Open Identity Exchange (OIX) to do certification for OpenID,
and so any certification revenues would accrue to OIX, rather than OIDF at
this point. Second, the ramp-up on certification is likely to take years,
and so even if we were receiving the certification revenues, they would
likely not be significant for at least two years.<o:p></o:p></li>
<li class=MsoNormal style='margin-bottom:0in;margin-bottom:.0001pt;mso-list:
l3 level1 lfo4'><i>Memberships:</i> Knowing that the other two classes of
revenue were either irrelevant or insignificant is clarifying, because it
makes clear that the foundation must have a structure that allows
membership revenues to almost wholly fund the organization. Thus, the
committee agrees that we should focus any restructuring efforts on a
membership structure that both provides a stable funding basis for
operating the foundation and for maximizing participation.<o:p></o:p></li>
</ul>
<p class=MsoNormal style='margin-bottom:0in;margin-bottom:.0001pt'><o:p> </o:p></p>
<p class=MsoNormal style='margin-bottom:0in;margin-bottom:.0001pt'><b>Observation:
Sustaining member “plus” membership category already in operation
today: </b> The committee observed that there is already a healthy dynamic in
the foundation, where some sustaining members also donate significant resources
to key foundation projects. Examples are the legal work that was donated to
establish the IPR policy and procedures and the hosting and sponsorship of
OpenID Summits. The executive committee hopes and expects to see this vital
“membership class” continue.<o:p></o:p></p>
<p class=MsoNormal style='margin-bottom:0in;margin-bottom:.0001pt'><o:p> </o:p></p>
<p class=MsoNormal style='margin-bottom:0in;margin-bottom:.0001pt'><b>Agreement:
The sustaining membership price is right:</b> In light of the fact that
memberships are the only significant revenue-generating product that we have to
sell, the committee agreed that (a) the price of sustaining membership at
$50,000 is appropriate as-is. Indeed, while a few existing members are
considering lower membership classes, the track record over the past year has
been that many more new companies have stepped up to pay this price as a
demonstration of their interest in OpenID. $50,000 is clearly a price that the
market will bear.<o:p></o:p></p>
<p class=MsoNormal style='margin-bottom:0in;margin-bottom:.0001pt'><o:p> </o:p></p>
<p class=MsoNormal style='margin-bottom:0in;margin-bottom:.0001pt'><b>Agreement:
The corporate membership price is too low:</b> The maximum corporate
membership price is currently $10,000. We discussed that this means there is a
HUGE price jump between corporate and sustaining membership – a factor of
5 (or more). From a pricing perspective, this means that if a company is
wavering between sustaining and corporate membership, that we’re
currently giving them a significant and perverse incentive to join at the lower
membership level. We agreed that the price of corporate memberships should
therefore be raised, to remove this disincentive to joining at the sustaining
level. Possible prices discussed were $25,000 and $20,000 for the largest
companies. The committee believes that we should continue to have a sliding
price scale based on company size at this membership level.<o:p></o:p></p>
<p class=MsoNormal style='margin-bottom:0in;margin-bottom:.0001pt'><o:p> </o:p></p>
<p class=MsoNormal style='margin-bottom:0in;margin-bottom:.0001pt'><b>Agreement:
Need for more differentiated benefits:</b> We believe that the foundation
should investigate structuring the member benefits package so that the value of
membership at different levels is more differentiated. For instance, were we
to charge for participation in some events, we could offer several free
attendee slots to sustaining members and one or a few free slots to corporate
members. (Given that the current $25 individual membership price already
doesn’t cover our expenses to administer these memberships, this benefit
may not make sense at the individual level.) The executive committee did not
make specific recommendations of particular differentiated benefits at this
time.<o:p></o:p></p>
<p class=MsoNormal style='margin-bottom:0in;margin-bottom:.0001pt'><o:p> </o:p></p>
<p class=MsoNormal style='margin-bottom:0in;margin-bottom:.0001pt'><b>Agreement:
Not at all a crisis situation: </b> The committee agreed that while it is
unfortunate that we may not have the full level of funds anticipated during the
April 5<sup>th</sup> board meeting, that even should two or even more
sustaining members drop to the corporate membership level, that overall, the foundation
will still have more resources and committed members than ever before. We
would have been thrilled a year ago to have that amount of committed revenue to
budget against, and ecstatic two years ago. While we may not be able to do
everything envisioned on April 5<sup>th</sup>, we’re still far ahead of
where we’ve ever been, and the growth trends continue to remain
positive. It is natural and normal for members to evaluate their appropriate
levels of commitment to any endeavor from time to time, and while some may
choose reduce their level of commitment to the foundation and its mission, more
are increasing them. (Nonetheless, we also agreed that we should continue to
endeavor to provide compelling value to as many members as possible, so the
decision to renew or join is an easy one.)<o:p></o:p></p>
<p class=MsoNormal style='margin-bottom:0in;margin-bottom:.0001pt'><o:p> </o:p></p>
<p class=MsoNormal style='margin-bottom:0in;margin-bottom:.0001pt'><b>Agreement:
Need for OpenID v.Next should inform our budgeting:</b> Given the widespread
agreement that OpenID 2.0 will not take us across the goal line for a number of
important use cases (although being perfectly adequate for others), and given
the need to allocate scarce financial resources, the committee agreed that we
should spend no money actively marketing OpenID 2.0 or developing new OpenID
2.0 libraries during this fiscal year. Adoption will continue to occur in
places where it makes sense and will be stalled until v.Next where it
doesn’t. (Although as stated earlier, the committee believes we should
be committed to market research that informs our v.Next endeavors and
specifications.)<o:p></o:p></p>
<p class=MsoNormal style='margin-bottom:0in;margin-bottom:.0001pt'><o:p> </o:p></p>
<p class=MsoNormal style='margin-bottom:0in;margin-bottom:.0001pt'><b>Agreement:
Experiment in allocating funds to committees not entirely successful: </b> This
year, for the first time, we attempted to empower committees and increase
involvement, by enabling them to request budget allocations for specific
projects. In practice, only three committees submitted requests and those
requests were largely driven by committee chairs that were already deeply
involved. The executive committee agrees that many of the proposed projects
are worthwhile and should continue to be funded; however, it also directed the
Executive Director to include line items in the committee budgets along with
all other budgetary line items when considering where we can allocate less so
as to be able to live within our means and best fulfill our mission.<o:p></o:p></p>
<p class=MsoNormal style='margin-bottom:0in;margin-bottom:.0001pt'><o:p> </o:p></p>
<p class=MsoNormal style='margin-bottom:0in;margin-bottom:.0001pt'><b>Moving
forward: Research, Recommendations, and Resolutions:</b> The committee agreed
that our budgeting and restructuring discussions should have three components:
Research, Recommendations, and Resolutions. Specifically:<o:p></o:p></p>
<ul style='margin-top:0in' type=disc>
<li class=MsoNormal style='margin-bottom:0in;margin-bottom:.0001pt;mso-list:
l4 level1 lfo5'><b>Research:</b> We are actively investigating financial
and organization structure options open to the foundation. This has
included consultations with Global Inventures’ CEO Deepak Kamlani
about potential revenue sources and examining other foundations’
structures. In addition to the survey proposed by the ED, this research
has also included discussions with Facebook and Yahoo! about what
directions they’d like to see the foundation take.<o:p></o:p></li>
<li class=MsoNormal style='margin-bottom:0in;margin-bottom:.0001pt;mso-list:
l4 level1 lfo5'><b>Recommendations:</b> The executive committee and
Executive Director are producing a set of recommendations to the full
board on the issues before us. This call was part of that process.<o:p></o:p></li>
<li class=MsoNormal style='margin-bottom:0in;margin-bottom:.0001pt;mso-list:
l4 level1 lfo5'><b>Resolutions:</b> These recommendations will be
distilled into a set of specific board resolutions, to be voted on at the
in-person board meeting at IIW, on the afternoon of May 19<sup>th</sup>.
(Please plan to attend in person if possible, by phone if not possible, or
please designate a proxy as a last resort.)<o:p></o:p></li>
</ul>
<p class=MsoNormal style='margin-bottom:0in;margin-bottom:.0001pt'><o:p> </o:p></p>
<p class=MsoNormal style='margin-bottom:0in;margin-bottom:.0001pt'><b>Observation:
Bylaws can be changed by board action:</b> Mike Jones clarified that the
Bylaws of the organization may be changed by board action (unlike changes to
the IPR Policy and Procedures, which also require a membership vote). Thus,
the board does have the power to effect changes to the organizational structure
in a timely fashion, given consensus to do so. Specifically, the bylaws state:<o:p></o:p></p>
<p class=MsoNormal style='mso-margin-top-alt:0in;margin-right:0in;margin-bottom:
0in;margin-left:.5in;margin-bottom:.0001pt;line-height:normal;text-autospace:
none'><b><span style='font-size:12.0pt;font-family:"TimesNewRomanPS-BoldMT","serif"'>Section
9.2 Bylaw Amendments</span></b><span style='font-size:12.0pt;font-family:"TimesNewRomanPSMT","serif"'>.
To the fullest extent permitted by the Act, the authority to make, alter, amend
or repeal these Bylaws is vested exclusively in the Board of Directors and may
be exercised upon approval of two-thirds of the directors present at a meeting
duly held at which a quorum is present without the vote or consent of any
members or third parties.</span><o:p></o:p></p>
<p class=MsoNormal style='margin-bottom:0in;margin-bottom:.0001pt'><o:p> </o:p></p>
<p class=MsoNormal style='margin-bottom:0in;margin-bottom:.0001pt'>[Mike Ozburn
joined the call near the end]<o:p></o:p></p>
<p class=MsoNormal><o:p> </o:p></p>
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