1008-00002 · Lumos Analytics Inc · Governance Documents

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LUMOS ANALYTICS INC.

CHARTER OF THE NOMINATING AND CORPORATE GOVERNANCE COMMITTEE OF THE BOARD OF DIRECTORS

Adopted by the Board of Directors of Lumos Analytics Inc., a Delaware corporation

Draft prepared by Calderwood & Harkness LLP, issuer's counsel, in connection with the proposed initial public offering of Class A Common Stock on the Nasdaq Global Select Market

To become effective upon the effectiveness of the Registration Statement on Form S-1 (SEC File Number 333-264518)

Date of Adoption: [●], 2022

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I. Purpose

The Nominating and Corporate Governance Committee (the "Committee") of the Board of Directors (the "Board") of Lumos Analytics Inc., a Delaware corporation (the "Company"), is established by the Board to assist the Board in fulfilling its corporate governance responsibilities. The Committee's purpose is to:

1. Identify, evaluate, and recommend to the Board qualified individuals to become members of the Board, consistent with criteria approved by the Board and the needs of the Company as it transitions to public-company status;

2. Determine the appropriate composition of the Board and its committees, taking into account the requirements of applicable law, the listing standards of the Nasdaq Global Select Market ("Nasdaq"), and the Company's strategic objectives;

3. Develop, recommend to the Board, and oversee the Company's corporate governance principles, policies, and practices, including the Company's Corporate Governance Guidelines, Code of Business Conduct and Ethics, and other governance-related policies;

4. Oversee the annual evaluation of the performance and effectiveness of the Board and each of its standing committees; and

5. Review and make recommendations to the Board regarding the form and amount of compensation payable to non-employee directors, unless such responsibility has been expressly delegated to the Compensation Committee of the Board.

In performing its duties and exercising its authority, the Committee shall act in accordance with the Company's Amended and Restated Certificate of Incorporation (as the same may be amended, supplemented, or restated from time to time, the "Certificate of Incorporation"), the Company's Amended and Restated Bylaws (as the same may be amended, supplemented, or restated from time to time, the "Bylaws"), this Charter, applicable Nasdaq listing standards, and applicable federal and state law, including without limitation the General Corporation Law of the State of Delaware (the "DGCL").

The Committee recognizes that the Company's business operates in rapidly evolving markets for cloud-based, AI-driven analytics platforms and fintech analytics solutions, and that the composition and governance of the Board should reflect the skills, perspectives, and independence necessary to provide effective oversight of such a business in the public-company environment.

II. Composition

A. Number of Members

The Committee shall consist of no fewer than three (3) members of the Board, each of whom shall be appointed by the Board. For subsequent appointments following the initial composition established in connection with the Company's initial public offering (the "IPO"), the Board shall consider the recommendations of the Committee in appointing members to the Committee.

The initial members of the Committee, appointed by the Board in connection with the IPO, shall be:

• Diane Ochoa (Chair) — Independent Board Member; Managing Partner, Ridgeline Capital Partners Fund II, L.P.

• Samuel Adebayo — Independent Board Member; former Chief Financial Officer of Verdant Software Corp.

• Catherine Mercer — Independent Board Member; Operating Partner, Arclight Equity Group Fund VII, L.P.

B. Independence Requirements

Each member of the Committee must satisfy the independence requirements set forth in Nasdaq Listing Rule 5605(a)(2), as well as any additional independence requirements applicable to nominating committee members under Nasdaq listing standards, as determined by the Board in its business judgment based on all relevant facts and circumstances. In making such independence determinations, the Board shall consider whether the director has any material relationship with the Company (either directly or as a partner, stockholder, or officer of an organization that has a relationship with the Company) that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. No member of the Committee shall be an officer or employee of the Company or any of its subsidiaries.

The Board notes that the Company has a dual-class common stock structure consisting of Class A Common Stock, par value $0.0001 per share (the "Class A Common Stock"), which entitles its holders to one (1) vote per share, and Class B Common Stock, par value $0.0001 per share (the "Class B Common Stock"), which entitles its holders to ten (10) votes per share. The Class B Common Stock is held by the Company's co-founders, Priya Subramanian, the Company's Chief Executive Officer, and Marcus Henley, the Company's Chief Technology Officer. As a result of the dual-class structure, the co-founders are expected to hold approximately 73.5% of the total combined voting power of all outstanding shares of the Company's common stock immediately following the closing of the IPO.

The Board further acknowledges that, by virtue of the founders' majority voting control, the Company qualifies as a "controlled company" within the meaning of Nasdaq Listing Rule 5615(c). As a controlled company, the Company would be permitted to avail itself of certain exemptions from Nasdaq corporate governance requirements, including the requirement under Nasdaq Listing Rule 5605(e) that the nominating committee be composed entirely of independent directors. Notwithstanding the availability of such exemption, the Board has affirmatively determined that the Committee shall be composed entirely of directors who satisfy the independence requirements of Nasdaq Listing Rule 5605(a)(2). The Board believes that this determination is in the best interests of the Company and its stockholders and is appropriate given the heightened importance of independent director oversight of governance and nomination matters in the context of the Company's controlled-company status and dual-class capital structure.

C. Appointment, Removal, and Term

Members of the Committee shall be appointed annually by the Board, and each member shall serve until his or her successor is duly appointed by the Board, or until his or her earlier resignation, removal from the Committee or the Board, death, or disqualification. There is no limit on the number of consecutive terms a member may serve on the Committee, provided that such member continues to satisfy the applicable independence and other qualification requirements.

The Board may remove any member of the Committee at any time, with or without cause, by the affirmative vote of a majority of the Board then in office. A member of the Committee shall automatically cease to be a member of the Committee upon ceasing to be a member of the Board for any reason.

The Board shall designate one member of the Committee to serve as Chair of the Committee (the "Chair"). The initial Chair of the Committee shall be Diane Ochoa. If the Board does not designate a Chair, the members of the Committee may designate a Chair by the affirmative vote of a majority of the full Committee membership. The Chair shall preside at all meetings of the Committee, set meeting agendas in consultation with the other Committee members and management, and perform such other duties as may be assigned by the Board or the Committee from time to time.

D. Vacancies

Any vacancy occurring on the Committee, whether resulting from death, resignation, removal, disqualification, or an increase in the number of members of the Committee, shall be filled by the Board. Pending the filling of any such vacancy, the remaining members of the Committee shall have full authority to continue to act, provided that a quorum (as defined in Section III.B below) exists among the remaining members. If a vacancy reduces the number of Committee members below the minimum of three (3), the Board shall use reasonable best efforts to fill such vacancy promptly.

III. Meetings and Procedures

A. Frequency

The Committee shall meet as often as it determines necessary or appropriate to carry out its duties and responsibilities under this Charter, but in no event less than two (2) times per calendar year. The Committee is expected to meet more frequently as circumstances require, particularly during periods involving director searches, annual meeting preparation, governance policy development, and other matters within the Committee's purview.

Additional meetings of the Committee may be called at any time by the Chair, by a majority of the members of the Committee, or by the Board. Notice of each meeting shall be given to each member of the Committee in accordance with the procedures set forth in the Bylaws for meetings of committees of the Board.

B. Quorum and Voting

A majority of the members of the Committee then serving shall constitute a quorum for the transaction of business at any meeting of the Committee. No business shall be transacted at any meeting of the Committee unless a quorum is present.

All actions of the Committee shall require the affirmative vote of a majority of the members of the Committee present at a duly convened meeting at which a quorum is present. In the event of a tie vote on any matter, the matter shall not be deemed approved and may be referred to the full Board for consideration.

The Committee may act by unanimous written consent in lieu of a meeting, to the extent permitted by and consistent with Section 141(f) of the DGCL and the corresponding provisions of the Company's Bylaws. Any action taken by unanimous written consent shall have the same force and effect as if taken at a duly convened meeting of the Committee, and the written consent or consents evidencing such action shall be filed with the minutes of the Committee.

C. Attendance and Participation

Members of the Committee may participate in any meeting of the Committee by means of telephone conference call, video conference, or other communications equipment by means of which all persons participating in the meeting can hear each other, and such participation shall constitute presence in person at such meeting for all purposes, including the determination of a quorum.

The Committee may invite any member of the Company's management, including without limitation the Chief Executive Officer (Priya Subramanian), the General Counsel (Naomi Feinberg), the Chief Financial Officer (David Lau), and other officers, directors, advisors, or consultants of the Company, to attend all or any portion of any Committee meeting as the Committee deems appropriate in its discretion; provided, however, that no member of management or any other non-Committee attendee shall be present during the Committee's deliberations or voting regarding (i) such person's own nomination, evaluation, compensation, or removal, (ii) the evaluation or nomination of such person's spouse or immediate family member, or (iii) any other matter where the Committee determines, in its sole discretion, that the presence of such person would be inappropriate.

The Committee shall have the authority to meet in executive session without the presence of any members of management at each regularly scheduled meeting and at such other times as the Committee deems appropriate.

D. Agenda and Minutes

The Chair shall, in consultation with the other members of the Committee and appropriate members of management, establish the agenda for each meeting of the Committee. Any member of the Committee may request that an item be included on the agenda for any meeting. The agenda and, to the extent practicable, supporting materials shall be distributed to Committee members in advance of each meeting to allow for adequate review and preparation.

The Corporate Secretary of the Company (currently Naomi Feinberg) or his or her designee shall prepare and maintain minutes of all meetings of the Committee, which minutes shall include a record of all actions taken at such meetings, as well as a record of all actions taken by written consent in lieu of a meeting. Draft minutes shall be distributed to the members of the Committee for review and approval in a timely manner following each meeting. Final, approved minutes shall be maintained as part of the Company's corporate records and shall be made available to any member of the Board upon reasonable request.

E. Reports to the Board

The Chair shall report to the full Board at the next regularly scheduled meeting of the Board following each meeting of the Committee on the Committee's activities, findings, deliberations, and recommendations. Such reports shall include a summary of the matters discussed and any actions taken by the Committee, as well as any recommendations or matters requiring Board action or approval. The Committee shall make such additional reports to the Board as the Committee or the Board deems necessary or appropriate from time to time.

IV. Authority and Responsibilities

The Committee shall have the following authority and responsibilities. The enumeration of specific authority and responsibilities below is not intended to be exhaustive, and the Committee may, subject to applicable law and the Company's governing documents, exercise such additional authority as is necessary or appropriate to fulfill its purpose as set forth in Section I of this Charter.

A. Director Identification and Nomination

1. Criteria for Board Membership

The Committee shall develop and recommend to the Board for approval specific criteria and minimum qualifications for selecting nominees to the Board (the "Director Qualification Criteria"). In developing the Director Qualification Criteria, the Committee shall consider, among other factors, the following:

(a) Independence. Whether the candidate satisfies the independence requirements established under Nasdaq Listing Rule 5605(a)(2) and applicable rules and regulations of the U.S. Securities and Exchange Commission (the "SEC"), and whether the candidate qualifies for service on particular Board committees that require heightened independence standards (including the Audit Committee under SEC Rule 10A-3 and the Compensation Committee under Nasdaq Listing Rule 5605(d));

(b) Professional Experience, Expertise, and Skills. The candidate's professional experience, expertise, and skills, with particular emphasis on skills relevant to the Company's business and strategic objectives, including expertise in artificial intelligence and machine learning technologies, financial technology, financial services and capital markets, cybersecurity and data privacy, enterprise software development and commercialization, public company governance and compliance, and general management and operational leadership;

(c) Diversity. The diversity of the candidate's background, experience, gender, race, ethnicity, national origin, age, sexual orientation, and viewpoints, in furtherance of the Board's commitment to achieving a balanced and representative Board composition that reflects the diversity of the Company's employees, customers, and stakeholders;

(d) Character, Integrity, and Judgment. The candidate's reputation for personal and professional integrity, honesty, and adherence to the highest ethical standards, as well as the candidate's demonstrated capacity for sound business judgment and decision-making;

(e) Availability and Commitment. The candidate's ability and willingness to devote sufficient time and attention to Board and committee duties, taking into account the candidate's other professional commitments, board memberships, and personal obligations, including any limitations imposed by the Company's policy regarding overboarding;

(f) Conflicts of Interest. Whether the candidate has any actual or potential conflicts of interest that could impair the candidate's ability to act in the best interests of the Company and its stockholders, including any relationships with competitors, customers, suppliers, or other parties with whom the Company has a material business relationship; and

(g) Cultural Compatibility. The candidate's compatibility with the Company's mission, culture, and values, including the Company's commitment to innovation, transparency, and responsible use of artificial intelligence technologies.

The Committee shall periodically review and reassess the adequacy and appropriateness of the Director Qualification Criteria and recommend any modifications to the Board for approval. The Committee recognizes that the relative importance of particular criteria may vary over time depending on the Company's evolving business needs, strategic priorities, and regulatory environment.

2. Director Search Process

The Committee shall be responsible for identifying, screening, and evaluating potential candidates for membership on the Board. In conducting its search for qualified candidates, the Committee shall:

(a) Utilize input and recommendations from members of the Board, members of management, stockholders of the Company, and other appropriate sources;

(b) Where the Committee deems appropriate, engage and direct the work of one or more third-party director search firms to assist in identifying and evaluating potential candidates, with such firms to be retained at the Company's expense pursuant to engagement terms approved by the Committee;

(c) Consider candidates recommended by stockholders of the Company in accordance with the procedures set forth in the Bylaws (including the advance notice provisions contained therein) and applicable federal securities laws, and shall evaluate such stockholder-recommended candidates using the same Director Qualification Criteria applied to all other candidates; and

(d) Evaluate incumbent directors who are eligible for renomination, taking into account such directors' past contributions to the Board, attendance records at Board and committee meetings, participation in Board and committee activities, ongoing satisfaction of applicable independence qualifications, and the results of the most recent Board and individual director evaluations.

3. Recommendations to the Board

The Committee shall recommend to the Board a slate of director nominees for election by the stockholders at each annual meeting of stockholders. The Committee shall also recommend to the Board candidates to fill any vacancies on the Board and any newly created directorships arising between annual meetings of stockholders, in each case in a manner consistent with the Certificate of Incorporation, the Bylaws, and applicable law.

In connection with the Company's dual-class capital structure and the board designation rights of certain pre-IPO investors pursuant to the Investor Rights Agreement, dated as of [●], 2021, by and among the Company and the investors party thereto (the "Investor Rights Agreement"), the Committee acknowledges the following:

(a) Jonathan Tsai currently serves as a board designee of Velthryn Venture Partners Fund IV, L.P. ("Velthryn"), which holds approximately 21.0% of the Company's pre-IPO fully diluted shares of common stock. Velthryn's board designation rights are set forth in Section [●] of the Investor Rights Agreement.

(b) Rebecca Stahl currently serves as a board designee of Arclight Equity Group Fund VII, L.P. ("Arclight"), which holds approximately 15.7% of the Company's pre-IPO fully diluted shares of common stock. Arclight's board designation rights are set forth in Section [●] of the Investor Rights Agreement.

The Committee shall coordinate with Velthryn, Arclight, and any other investors holding board designation rights under the Investor Rights Agreement regarding the exercise of such designation rights, while at all times ensuring compliance with applicable Nasdaq listing standards regarding Board composition, including requirements as to the minimum number of independent directors. The Committee shall monitor the ongoing applicability and terms of such designation rights, including any termination or modification provisions triggered by changes in the applicable investors' ownership levels following the IPO.

B. Board Composition and Committee Structure

1. Board Size and Structure

The Committee shall periodically review and make recommendations to the Board regarding the overall size, structure, and composition of the Board, including the appropriate balance of independent and non-independent directors, the appropriate range of skills, expertise, and backgrounds represented on the Board, and the desirability of refreshing Board membership through periodic rotation or the addition of new directors.

As of the date of adoption of this Charter, the Board consists of seven (7) members:

Currently, three of the seven directors (Ochoa, Adebayo, and Mercer) qualify as independent under Nasdaq Listing Rule 5605(a)(2). The Committee shall monitor the Board's compliance with applicable Nasdaq independence requirements on an ongoing basis, including the requirement that a majority of the Board be composed of independent directors (subject to applicable phase-in periods and controlled company exemptions), and shall make recommendations to the Board regarding any changes necessary to maintain compliance.

2. Committee Assignments

The Committee shall recommend to the Board the assignment of directors to the standing committees of the Board (including the Audit Committee, the Compensation Committee, and this Committee), as well as any special or ad hoc committees established by the Board from time to time. The Committee shall also recommend the designation of the chair of each such committee.

In making its recommendations regarding committee assignments, the Committee shall ensure that the composition of each committee satisfies the applicable requirements of Nasdaq listing rules, SEC rules and regulations, and the charter of the respective committee. The current standing committee compositions are as follows:

(a) Audit Committee: Samuel Adebayo (Chair and designated audit committee financial expert), Diane Ochoa, and Catherine Mercer. The composition of the Audit Committee is intended to comply with the requirements of Nasdaq Listing Rule 5605(c) and Rule 10A-3 under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), including the requirement that all members be independent and that at least one member qualify as an "audit committee financial expert" within the meaning of Item 407(d)(5)(ii) of Regulation S-K promulgated under the Securities Act of 1933, as amended.

(b) Compensation Committee: Catherine Mercer (Chair), Diane Ochoa, and Samuel Adebayo. The composition of the Compensation Committee is intended to comply with the requirements of Nasdaq Listing Rule 5605(d), including the requirement that all members satisfy the heightened independence standards applicable to compensation committee members.

(c) Nominating and Corporate Governance Committee: Diane Ochoa (Chair), Samuel Adebayo, and Catherine Mercer. The composition of this Committee complies with the independence requirements described in Section II.B of this Charter.

The Committee shall periodically review committee assignments and shall recommend to the Board such changes as the Committee deems appropriate in light of changes in Board membership, director qualifications, regulatory requirements, and the Company's needs.

C. Corporate Governance

1. Corporate Governance Guidelines

The Committee shall develop and recommend to the Board for adoption a set of Corporate Governance Guidelines (the "Governance Guidelines") applicable to the Company. The Governance Guidelines shall establish the framework within which the Board and its committees operate and shall address, among other matters:

(a) Director qualification standards and the process for selecting and nominating directors;

(b) Director responsibilities, including expectations regarding meeting attendance, preparation, and participation;

(d) Director compensation philosophy and structure;

(e) Director orientation programs for newly elected directors and continuing education opportunities for all Board members;

(f) Management succession planning, including emergency succession procedures;

(g) The annual Board and committee self-evaluation process;

(h) Board leadership structure, including the roles of the Chair of the Board and, if applicable, the Lead Independent Director;

(i) The Board's role in risk oversight; and

(j) Stockholder engagement and communication.

The Committee shall periodically review and reassess the adequacy and appropriateness of the Governance Guidelines, taking into account evolving best practices in corporate governance, changes in applicable regulatory requirements, input from stockholders and proxy advisory firms, and the Company's particular circumstances, including its controlled-company status and dual-class capital structure. The Committee shall recommend to the Board such updates and modifications to the Governance Guidelines as the Committee deems appropriate.

2. Governance Policies and Practices

The Committee shall oversee the development, implementation, and periodic review of the Company's governance-related policies, including without limitation the following:

(a) Code of Business Conduct and Ethics. A comprehensive code of business conduct and ethics applicable to all directors, officers, and employees of the Company and its subsidiaries, addressing matters such as conflicts of interest, corporate opportunities, confidentiality, fair dealing, protection and proper use of Company assets, compliance with laws and regulations, and reporting procedures for violations or suspected violations of the Code;

(b) Insider Trading Policy. A policy governing the purchase and sale of the Company's securities by directors, officers, and employees, including provisions relating to trading blackout windows, pre-clearance procedures for trades by directors and Section 16 officers, guidelines for the adoption, modification, and termination of trading plans under Rule 10b5-1 promulgated under the Exchange Act, and prohibitions on trading while in possession of material non-public information;

(c) Related-Party Transactions Policy. A policy establishing procedures for the review, approval, and ratification of related-party transactions, as defined in Item 404 of Regulation S-K, including transactions involving the Company's co-founders, their family members, and entities controlled by or affiliated with the co-founders, as well as transactions with Velthryn, Arclight, Ridgeline Capital Partners Fund II, L.P., and their respective affiliates;

(d) Hedging and Pledging Policies. Policies restricting or prohibiting hedging transactions (such as prepaid variable forwards, equity swaps, collars, and exchange funds) and pledging arrangements involving the Company's securities by directors and executive officers; and

(e) Stock Ownership Guidelines. Guidelines establishing minimum stock ownership requirements for non-employee directors and executive officers, designed to align the interests of the Company's leadership with those of the Company's stockholders.

The Committee shall monitor compliance with such policies and shall recommend modifications to the Board as the Committee deems appropriate in light of evolving regulatory requirements, market practices, and the Company's circumstances.

3. Certificate of Incorporation and Bylaws

The Committee shall periodically review the Certificate of Incorporation and the Bylaws and shall recommend to the Board such amendments thereto as the Committee deems appropriate. In conducting its review, the Committee shall consider, among other matters:

(a) The implications of the Company's dual-class capital structure, including the impact on stockholder rights, board composition, and overall corporate governance;

(b) The Class B Common Stock sunset provision, which provides for the automatic conversion of all outstanding shares of Class B Common Stock into shares of Class A Common Stock on a one-for-one basis upon the earliest to occur of: (i) the seventh anniversary of the closing of the IPO; (ii) the transfer of shares of Class B Common Stock by a holder thereof to any person or entity that is not a "Permitted Transferee" (as defined in the Certificate of Incorporation); and (iii) the date on which the co-founders (together with their respective Permitted Transferees) collectively cease to beneficially own shares of common stock representing at least 10% of the total number of shares of common stock then outstanding;

(c) The governance implications of the approaching sunset triggers, including the potential impact on the Company's controlled-company status and the composition of the Board and its committees; and

(d) Any other provisions of the Certificate of Incorporation or Bylaws that the Committee believes should be amended, supplemented, or updated in light of evolving governance best practices, regulatory requirements, or the Company's circumstances.

The Committee shall make recommendations to the Board regarding the appropriate timing and manner of any governance evolution as the sunset triggers approach, with a view toward ensuring a smooth transition to a single-class capital structure and the associated changes in governance practices.

D. Board and Committee Evaluation

1. Annual Self-Assessment

The Committee shall oversee an annual self-evaluation process for the Board as a whole and for each standing committee of the Board. The purpose of the annual self-evaluation is to assess the effectiveness of the Board and its committees in fulfilling their respective responsibilities, to identify areas for improvement, and to enhance overall Board performance.

In conducting the annual self-evaluation, the Committee shall:

(a) Develop and administer appropriate evaluation procedures, which may include written questionnaires, individual or group interviews, facilitated discussions, or engagement of an independent third-party governance consultant to assist with the evaluation process;

(b) Solicit feedback from all directors regarding the performance, composition, structure, and processes of the Board and its committees;

(d) Report the findings and any resulting recommendations to the Board and to each respective committee.

2. Individual Director Evaluations

As the Committee deems appropriate, and particularly in connection with renomination decisions, the Committee shall oversee assessments of individual director performance, contribution, and qualifications. Such assessments may consider, among other factors, the director's attendance and participation at Board and committee meetings, the director's substantive contributions to Board deliberations, the director's ongoing satisfaction of applicable independence and qualification requirements, the director's engagement with continuing education opportunities, and feedback from other Board members.

E. Director Orientation and Continuing Education

The Committee shall oversee the development and implementation of a comprehensive orientation program for newly elected or appointed directors. The orientation program shall be designed to provide new directors with thorough and timely information about the Company's business, operations, strategy, financial condition, risk profile, corporate governance structure, key policies, and regulatory environment. The orientation program shall include, at a minimum, meetings with the CEO, CFO, General Counsel, CTO, and other members of senior management, as well as the provision of relevant corporate documents, Board materials, and background information.

The Committee shall also recommend opportunities for continuing education for all Board members on topics relevant to their service as directors, including developments in corporate governance, changes in applicable laws and regulations, industry trends relevant to the Company's cloud-based AI-driven analytics platform and fintech analytics business, and emerging issues in areas such as cybersecurity, data privacy, and responsible artificial intelligence.

F. Management Succession Planning

The Committee shall oversee the development and periodic review of a management succession plan for the Chief Executive Officer (currently Priya Subramanian) and other key members of the Company's senior management team, including without limitation the Chief Technology Officer (Marcus Henley), the Chief Financial Officer (David Lau), the General Counsel (Naomi Feinberg), and the Chief Revenue Officer (Tomás Aguilar).

The succession plan shall address both long-term succession planning, including the identification and development of internal candidates for senior leadership positions, and emergency succession planning, to ensure the continuity of competent leadership in the event of the unexpected departure, incapacitation, or death of the CEO or other key executives. The Committee shall review the succession plan with the Board at least annually and shall recommend such updates and modifications as the Committee deems appropriate.

G. Stockholder Engagement on Governance Matters

The Committee shall oversee the Company's engagement with stockholders on corporate governance matters, including through the Company's annual proxy solicitation process, direct outreach to significant stockholders, and responses to stockholder inquiries and correspondence. The Committee shall:

(a) Review and consider stockholder proposals submitted for inclusion in the Company's proxy materials in accordance with Rule 14a-8 promulgated under the Exchange Act, as well as stockholder proposals submitted pursuant to the advance notice provisions of the Bylaws;

(b) Review and consider correspondence from stockholders relating to governance matters;

(c) Consider the perspectives, concerns, and recommendations of the Company's significant stockholders, including Velthryn Venture Partners Fund IV, L.P. (holder of approximately 21.0% of pre-IPO fully diluted shares), Arclight Equity Group Fund VII, L.P. (holder of approximately 15.7% of pre-IPO fully diluted shares), and Ridgeline Capital Partners Fund II, L.P. (holder of approximately 7.8% of pre-IPO fully diluted shares); and

(d) Report to the Board on the results of the Company's stockholder engagement activities and recommend any responsive actions or governance changes.

H. Director Compensation

Unless the Board has expressly delegated such responsibility to the Compensation Committee, the Committee shall review and make recommendations to the Board regarding the form and amount of compensation payable to non-employee directors for service on the Board and its committees. Such review shall encompass all components of director compensation, including:

(a) Annual cash retainer fees for Board service;

(b) Additional cash retainer fees or meeting fees for service on or chairing committees of the Board;

(c) Equity-based compensation, including stock options, restricted stock units, or other equity awards granted under the Company's equity incentive plan(s);

(d) Reimbursement of reasonable out-of-pocket expenses incurred in connection with Board and committee service; and

(e) Any other benefits, perquisites, or forms of compensation provided to non-employee directors.

In reviewing and making recommendations regarding director compensation, the Committee shall consider the competitiveness of director compensation relative to comparable publicly traded companies, the alignment of director compensation with the long-term interests of the Company's stockholders, applicable regulatory guidance and best practices, and input from independent compensation consultants, as appropriate. The Committee shall ensure that director compensation does not compromise the independence of non-employee directors.

V. Delegation

The Committee may, in its discretion, delegate any of its duties and responsibilities to one or more subcommittees of the Committee, each consisting of one or more members of the Committee, to the extent permitted by applicable law (including the DGCL), applicable Nasdaq listing standards, the Certificate of Incorporation, and the Bylaws. The Committee may also delegate authority to the Chair to act on behalf of the Committee between meetings on matters that the Committee deems appropriate, subject to ratification by the full Committee at its next meeting.

Any subcommittee to which the Committee delegates authority shall report its activities, findings, and recommendations to the full Committee on a regular basis. Notwithstanding any such delegation, the Committee shall retain ultimate responsibility for the matters delegated and may revoke or modify any delegation at any time.

VI. Resources and Advisors

The Committee shall have the sole authority to retain and terminate any search firm, consultant, or other advisor to assist in identifying, screening, and evaluating director candidates, including the sole authority to approve such firm's or consultant's fees and other retention terms. All such fees and expenses shall be borne by the Company.

The Committee shall also have the authority to obtain advice and assistance from internal or external legal, accounting, or other professional advisors as the Committee deems necessary or appropriate in the exercise of its duties and responsibilities under this Charter. The Committee may retain external advisors without the prior approval of management or the full Board, and the Company shall bear all costs and expenses associated with such engagements.

The Company shall provide appropriate funding, as determined by the Committee in its sole discretion, for the payment of: (a) compensation to any search firms, consultants, legal counsel, or other advisors retained by the Committee; and (b) ordinary administrative expenses of the Committee that are necessary or appropriate in carrying out its duties and responsibilities under this Charter.

VII. Annual Review of Charter

The Committee shall review and reassess the adequacy of this Charter at least annually. In conducting its review, the Committee shall consider whether this Charter adequately addresses the Committee's responsibilities in light of evolving corporate governance best practices, changes in applicable Nasdaq listing standards and SEC rules, developments in the Company's business and governance structure, and any other factors the Committee deems relevant.

Following its annual review, the Committee shall recommend any proposed changes to this Charter to the Board for approval. This Charter, as approved by the Board, shall be made available on the Company's corporate website. In addition, the Company shall disclose the availability of this Charter in its annual proxy statement or as otherwise required by applicable Nasdaq listing standards and SEC rules.

VIII. Limitations

While the Committee has the duties, responsibilities, and authority set forth in this Charter, it is not the duty of the Committee to ensure the Company's compliance with all applicable laws, regulations, and listing standards. The Committee's role is one of oversight. The management of the Company is responsible for the day-to-day governance, compliance, and operational activities of the Company, and the Company's independent auditors are responsible for auditing the Company's financial statements.

Nothing contained in this Charter is intended to, or shall be construed to, create any duty, obligation, or standard of care applicable to any member of the Committee or any other member of the Board beyond those duties, obligations, and standards of care that are imposed by applicable law, the Certificate of Incorporation, and the Bylaws. Nothing in this Charter is intended to expand the applicable standard of liability under the DGCL for any member of the Committee or the Board.

The designation of a member of the Committee shall not, in and of itself, impose on such person any duties, obligations, or liabilities that are greater than the duties, obligations, and liabilities imposed on such person as a member of the Board in the absence of such designation.

IX. Effective Date

This Charter shall become effective automatically, and without further action by the Board, upon the effectiveness of the Company's Registration Statement on Form S-1 (SEC File Number 333-264518) filed with the SEC in connection with the Company's proposed initial public offering of shares of Class A Common Stock on the Nasdaq Global Select Market under the ticker symbol "LMSA."

Prior to the effective date, this Charter shall have no force or effect, and the Committee shall have no authority to act hereunder. Upon the effective date, this Charter shall supersede any prior charter, terms of reference, or other organizational documents of the Committee, if any.

Note: This Charter was prepared in draft form by Calderwood & Harkness LLP, issuer's counsel to Lumos Analytics Inc., in connection with the Company's proposed initial public offering of Class A Common Stock. This Charter was not formally adopted by the Board of Directors of Lumos Analytics Inc. prior to the withdrawal of the Registration Statement on Form S-1 (SEC File Number 333-264518) on June 15, 2022.

As adopted by the Board of Directors on [●], 2022

Prepared by Calderwood & Harkness LLP, 1 Market Street, Spear Tower, Suite 3600, San Francisco, CA 94105, as issuer's counsel to Lumos Analytics Inc. C&H Matter No. 1008-00002.

Director	Independence Status	Role / Affiliation
Priya Subramanian (Chair of the Board)	Non-Independent	Co-Founder and Chief Executive Officer
Marcus Henley	Non-Independent	Co-Founder and Chief Technology Officer
Diane Ochoa	Independent	Managing Partner, Ridgeline Capital Partners Fund II, L.P.
Samuel Adebayo	Independent	Former CFO, Verdant Software Corp.
Catherine Mercer	Independent	Operating Partner, Arclight Equity Group Fund VII, L.P.
Jonathan Tsai	Non-Independent	Velthryn Venture Partners Fund IV, L.P. designee
Rebecca Stahl	Non-Independent	Arclight Equity Group Fund VII, L.P. designee

LUMOS ANALYTICS INC.
CHARTER OF THE NOMINATING AND CORPORATE GOVERNANCE COMMITTEE OF THE BOARD OF DIRECTORS
Adopted by the Board of Directors of Lumos Analytics Inc., a Delaware corporation
Draft prepared by Calderwood & Harkness LLP, issuer's counsel, in connection with the proposed initial public offering of Class A Common Stock on the Nasdaq Global Select Market
To become effective upon the effectiveness of the Registration Statement on Form S-1 (SEC File Number 333-264518)
Date of Adoption: [●], 2022
TABLE OF CONTENTS
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I. Purpose
The Nominating and Corporate Governance Committee (the "Committee") of the Board of Directors (the "Board") of Lumos Analytics Inc., a Delaware corporation (the "Company"), is established by the Board to assist the Board in fulfilling its corporate governance responsibilities. The Committee's purpose is to:
1.  Identify, evaluate, and recommend to the Board qualified individuals to become members of the Board, consistent with criteria approved by the Board and the needs of the Company as it transitions to public-company status;
2.  Determine the appropriate composition of the Board and its committees, taking into account the requirements of applicable law, the listing standards of the Nasdaq Global Select Market ("Nasdaq"), and the Company's strategic objectives;
3.  Develop, recommend to the Board, and oversee the Company's corporate governance principles, policies, and practices, including the Company's Corporate Governance Guidelines, Code of Business Conduct and Ethics, and other governance-related policies;
4.  Oversee the annual evaluation of the performance and effectiveness of the Board and each of its standing committees; and
5.  Review and make recommendations to the Board regarding the form and amount of compensation payable to non-employee directors, unless such responsibility has been expressly delegated to the Compensation Committee of the Board.
In performing its duties and exercising its authority, the Committee shall act in accordance with the Company's Amended and Restated Certificate of Incorporation (as the same may be amended, supplemented, or restated from time to time, the "Certificate of Incorporation"), the Company's Amended and Restated Bylaws (as the same may be amended, supplemented, or restated from time to time, the "Bylaws"), this Charter, applicable Nasdaq listing standards, and applicable federal and state law, including without limitation the General Corporation Law of the State of Delaware (the "DGCL").
The Committee recognizes that the Company's business operates in rapidly evolving markets for cloud-based, AI-driven analytics platforms and fintech analytics solutions, and that the composition and governance of the Board should reflect the skills, perspectives, and independence necessary to provide effective oversight of such a business in the public-company environment.
II. Composition
A. Number of Members
The Committee shall consist of no fewer than three (3) members of the Board, each of whom shall be appointed by the Board. For subsequent appointments following the initial composition established in connection with the Company's initial public offering (the "IPO"), the Board shall consider the recommendations of the Committee in appointing members to the Committee.
The initial members of the Committee, appointed by the Board in connection with the IPO, shall be:
•  Diane Ochoa (Chair) — Independent Board Member; Managing Partner, Ridgeline Capital Partners Fund II, L.P.
•  Samuel Adebayo — Independent Board Member; former Chief Financial Officer of Verdant Software Corp.
•  Catherine Mercer — Independent Board Member; Operating Partner, Arclight Equity Group Fund VII, L.P.
B. Independence Requirements
Each member of the Committee must satisfy the independence requirements set forth in Nasdaq Listing Rule 5605(a)(2), as well as any additional independence requirements applicable to nominating committee members under Nasdaq listing standards, as determined by the Board in its business judgment based on all relevant facts and circumstances. In making such independence determinations, the Board shall consider whether the director has any material relationship with the Company (either directly or as a partner, stockholder, or officer of an organization that has a relationship with the Company) that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. No member of the Committee shall be an officer or employee of the Company or any of its subsidiaries.
The Board notes that the Company has a dual-class common stock structure consisting of Class A Common Stock, par value $0.0001 per share (the "Class A Common Stock"), which entitles its holders to one (1) vote per share, and Class B Common Stock, par value $0.0001 per share (the "Class B Common Stock"), which entitles its holders to ten (10) votes per share. The Class B Common Stock is held by the Company's co-founders, Priya Subramanian, the Company's Chief Executive Officer, and Marcus Henley, the Company's Chief Technology Officer. As a result of the dual-class structure, the co-founders are expected to hold approximately 73.5% of the total combined voting power of all outstanding shares of the Company's common stock immediately following the closing of the IPO.
The Board further acknowledges that, by virtue of the founders' majority voting control, the Company qualifies as a "controlled company" within the meaning of Nasdaq Listing Rule 5615(c). As a controlled company, the Company would be permitted to avail itself of certain exemptions from Nasdaq corporate governance requirements, including the requirement under Nasdaq Listing Rule 5605(e) that the nominating committee be composed entirely of independent directors. Notwithstanding the availability of such exemption, the Board has affirmatively determined that the Committee shall be composed entirely of directors who satisfy the independence requirements of Nasdaq Listing Rule 5605(a)(2). The Board believes that this determination is in the best interests of the Company and its stockholders and is appropriate given the heightened importance of independent director oversight of governance and nomination matters in the context of the Company's controlled-company status and dual-class capital structure.
C. Appointment, Removal, and Term
Members of the Committee shall be appointed annually by the Board, and each member shall serve until his or her successor is duly appointed by the Board, or until his or her earlier resignation, removal from the Committee or the Board, death, or disqualification. There is no limit on the number of consecutive terms a member may serve on the Committee, provided that such member continues to satisfy the applicable independence and other qualification requirements.
The Board may remove any member of the Committee at any time, with or without cause, by the affirmative vote of a majority of the Board then in office. A member of the Committee shall automatically cease to be a member of the Committee upon ceasing to be a member of the Board for any reason.
The Board shall designate one member of the Committee to serve as Chair of the Committee (the "Chair"). The initial Chair of the Committee shall be Diane Ochoa. If the Board does not designate a Chair, the members of the Committee may designate a Chair by the affirmative vote of a majority of the full Committee membership. The Chair shall preside at all meetings of the Committee, set meeting agendas in consultation with the other Committee members and management, and perform such other duties as may be assigned by the Board or the Committee from time to time.
D. Vacancies
Any vacancy occurring on the Committee, whether resulting from death, resignation, removal, disqualification, or an increase in the number of members of the Committee, shall be filled by the Board. Pending the filling of any such vacancy, the remaining members of the Committee shall have full authority to continue to act, provided that a quorum (as defined in Section III.B below) exists among the remaining members. If a vacancy reduces the number of Committee members below the minimum of three (3), the Board shall use reasonable best efforts to fill such vacancy promptly.
III. Meetings and Procedures
A. Frequency
The Committee shall meet as often as it determines necessary or appropriate to carry out its duties and responsibilities under this Charter, but in no event less than two (2) times per calendar year. The Committee is expected to meet more frequently as circumstances require, particularly during periods involving director searches, annual meeting preparation, governance policy development, and other matters within the Committee's purview.
Additional meetings of the Committee may be called at any time by the Chair, by a majority of the members of the Committee, or by the Board. Notice of each meeting shall be given to each member of the Committee in accordance with the procedures set forth in the Bylaws for meetings of committees of the Board.
B. Quorum and Voting
A majority of the members of the Committee then serving shall constitute a quorum for the transaction of business at any meeting of the Committee. No business shall be transacted at any meeting of the Committee unless a quorum is present.
All actions of the Committee shall require the affirmative vote of a majority of the members of the Committee present at a duly convened meeting at which a quorum is present. In the event of a tie vote on any matter, the matter shall not be deemed approved and may be referred to the full Board for consideration.
The Committee may act by unanimous written consent in lieu of a meeting, to the extent permitted by and consistent with Section 141(f) of the DGCL and the corresponding provisions of the Company's Bylaws. Any action taken by unanimous written consent shall have the same force and effect as if taken at a duly convened meeting of the Committee, and the written consent or consents evidencing such action shall be filed with the minutes of the Committee.
C. Attendance and Participation
Members of the Committee may participate in any meeting of the Committee by means of telephone conference call, video conference, or other communications equipment by means of which all persons participating in the meeting can hear each other, and such participation shall constitute presence in person at such meeting for all purposes, including the determination of a quorum.
The Committee may invite any member of the Company's management, including without limitation the Chief Executive Officer (Priya Subramanian), the General Counsel (Naomi Feinberg), the Chief Financial Officer (David Lau), and other officers, directors, advisors, or consultants of the Company, to attend all or any portion of any Committee meeting as the Committee deems appropriate in its discretion; provided, however, that no member of management or any other non-Committee attendee shall be present during the Committee's deliberations or voting regarding (i) such person's own nomination, evaluation, compensation, or removal, (ii) the evaluation or nomination of such person's spouse or immediate family member, or (iii) any other matter where the Committee determines, in its sole discretion, that the presence of such person would be inappropriate.
The Committee shall have the authority to meet in executive session without the presence of any members of management at each regularly scheduled meeting and at such other times as the Committee deems appropriate.
D. Agenda and Minutes
The Chair shall, in consultation with the other members of the Committee and appropriate members of management, establish the agenda for each meeting of the Committee. Any member of the Committee may request that an item be included on the agenda for any meeting. The agenda and, to the extent practicable, supporting materials shall be distributed to Committee members in advance of each meeting to allow for adequate review and preparation.
The Corporate Secretary of the Company (currently Naomi Feinberg) or his or her designee shall prepare and maintain minutes of all meetings of the Committee, which minutes shall include a record of all actions taken at such meetings, as well as a record of all actions taken by written consent in lieu of a meeting. Draft minutes shall be distributed to the members of the Committee for review and approval in a timely manner following each meeting. Final, approved minutes shall be maintained as part of the Company's corporate records and shall be made available to any member of the Board upon reasonable request.
E. Reports to the Board
The Chair shall report to the full Board at the next regularly scheduled meeting of the Board following each meeting of the Committee on the Committee's activities, findings, deliberations, and recommendations. Such reports shall include a summary of the matters discussed and any actions taken by the Committee, as well as any recommendations or matters requiring Board action or approval. The Committee shall make such additional reports to the Board as the Committee or the Board deems necessary or appropriate from time to time.
IV. Authority and Responsibilities
The Committee shall have the following authority and responsibilities. The enumeration of specific authority and responsibilities below is not intended to be exhaustive, and the Committee may, subject to applicable law and the Company's governing documents, exercise such additional authority as is necessary or appropriate to fulfill its purpose as set forth in Section I of this Charter.
A. Director Identification and Nomination
1. Criteria for Board Membership
The Committee shall develop and recommend to the Board for approval specific criteria and minimum qualifications for selecting nominees to the Board (the "Director Qualification Criteria"). In developing the Director Qualification Criteria, the Committee shall consider, among other factors, the following:
(a) Independence. Whether the candidate satisfies the independence requirements established under Nasdaq Listing Rule 5605(a)(2) and applicable rules and regulations of the U.S. Securities and Exchange Commission (the "SEC"), and whether the candidate qualifies for service on particular Board committees that require heightened independence standards (including the Audit Committee under SEC Rule 10A-3 and the Compensation Committee under Nasdaq Listing Rule 5605(d));
(b) Professional Experience, Expertise, and Skills. The candidate's professional experience, expertise, and skills, with particular emphasis on skills relevant to the Company's business and strategic objectives, including expertise in artificial intelligence and machine learning technologies, financial technology, financial services and capital markets, cybersecurity and data privacy, enterprise software development and commercialization, public company governance and compliance, and general management and operational leadership;
(c) Diversity. The diversity of the candidate's background, experience, gender, race, ethnicity, national origin, age, sexual orientation, and viewpoints, in furtherance of the Board's commitment to achieving a balanced and representative Board composition that reflects the diversity of the Company's employees, customers, and stakeholders;
(d) Character, Integrity, and Judgment. The candidate's reputation for personal and professional integrity, honesty, and adherence to the highest ethical standards, as well as the candidate's demonstrated capacity for sound business judgment and decision-making;
(e) Availability and Commitment. The candidate's ability and willingness to devote sufficient time and attention to Board and committee duties, taking into account the candidate's other professional commitments, board memberships, and personal obligations, including any limitations imposed by the Company's policy regarding overboarding;
(f) Conflicts of Interest. Whether the candidate has any actual or potential conflicts of interest that could impair the candidate's ability to act in the best interests of the Company and its stockholders, including any relationships with competitors, customers, suppliers, or other parties with whom the Company has a material business relationship; and
(g) Cultural Compatibility. The candidate's compatibility with the Company's mission, culture, and values, including the Company's commitment to innovation, transparency, and responsible use of artificial intelligence technologies.
The Committee shall periodically review and reassess the adequacy and appropriateness of the Director Qualification Criteria and recommend any modifications to the Board for approval. The Committee recognizes that the relative importance of particular criteria may vary over time depending on the Company's evolving business needs, strategic priorities, and regulatory environment.
2. Director Search Process
The Committee shall be responsible for identifying, screening, and evaluating potential candidates for membership on the Board. In conducting its search for qualified candidates, the Committee shall:
(a) Utilize input and recommendations from members of the Board, members of management, stockholders of the Company, and other appropriate sources;
(b) Where the Committee deems appropriate, engage and direct the work of one or more third-party director search firms to assist in identifying and evaluating potential candidates, with such firms to be retained at the Company's expense pursuant to engagement terms approved by the Committee;
(c) Consider candidates recommended by stockholders of the Company in accordance with the procedures set forth in the Bylaws (including the advance notice provisions contained therein) and applicable federal securities laws, and shall evaluate such stockholder-recommended candidates using the same Director Qualification Criteria applied to all other candidates; and
(d) Evaluate incumbent directors who are eligible for renomination, taking into account such directors' past contributions to the Board, attendance records at Board and committee meetings, participation in Board and committee activities, ongoing satisfaction of applicable independence qualifications, and the results of the most recent Board and individual director evaluations.
3. Recommendations to the Board
The Committee shall recommend to the Board a slate of director nominees for election by the stockholders at each annual meeting of stockholders. The Committee shall also recommend to the Board candidates to fill any vacancies on the Board and any newly created directorships arising between annual meetings of stockholders, in each case in a manner consistent with the Certificate of Incorporation, the Bylaws, and applicable law.
In connection with the Company's dual-class capital structure and the board designation rights of certain pre-IPO investors pursuant to the Investor Rights Agreement, dated as of [●], 2021, by and among the Company and the investors party thereto (the "Investor Rights Agreement"), the Committee acknowledges the following:
(a) Jonathan Tsai currently serves as a board designee of Velthryn Venture Partners Fund IV, L.P. ("Velthryn"), which holds approximately 21.0% of the Company's pre-IPO fully diluted shares of common stock. Velthryn's board designation rights are set forth in Section [●] of the Investor Rights Agreement.
(b) Rebecca Stahl currently serves as a board designee of Arclight Equity Group Fund VII, L.P. ("Arclight"), which holds approximately 15.7% of the Company's pre-IPO fully diluted shares of common stock. Arclight's board designation rights are set forth in Section [●] of the Investor Rights Agreement.
The Committee shall coordinate with Velthryn, Arclight, and any other investors holding board designation rights under the Investor Rights Agreement regarding the exercise of such designation rights, while at all times ensuring compliance with applicable Nasdaq listing standards regarding Board composition, including requirements as to the minimum number of independent directors. The Committee shall monitor the ongoing applicability and terms of such designation rights, including any termination or modification provisions triggered by changes in the applicable investors' ownership levels following the IPO.
B. Board Composition and Committee Structure
1. Board Size and Structure
The Committee shall periodically review and make recommendations to the Board regarding the overall size, structure, and composition of the Board, including the appropriate balance of independent and non-independent directors, the appropriate range of skills, expertise, and backgrounds represented on the Board, and the desirability of refreshing Board membership through periodic rotation or the addition of new directors.
As of the date of adoption of this Charter, the Board consists of seven (7) members:
Currently, three of the seven directors (Ochoa, Adebayo, and Mercer) qualify as independent under Nasdaq Listing Rule 5605(a)(2). The Committee shall monitor the Board's compliance with applicable Nasdaq independence requirements on an ongoing basis, including the requirement that a majority of the Board be composed of independent directors (subject to applicable phase-in periods and controlled company exemptions), and shall make recommendations to the Board regarding any changes necessary to maintain compliance.
2. Committee Assignments
The Committee shall recommend to the Board the assignment of directors to the standing committees of the Board (including the Audit Committee, the Compensation Committee, and this Committee), as well as any special or ad hoc committees established by the Board from time to time. The Committee shall also recommend the designation of the chair of each such committee.
In making its recommendations regarding committee assignments, the Committee shall ensure that the composition of each committee satisfies the applicable requirements of Nasdaq listing rules, SEC rules and regulations, and the charter of the respective committee. The current standing committee compositions are as follows:
(a) Audit Committee: Samuel Adebayo (Chair and designated audit committee financial expert), Diane Ochoa, and Catherine Mercer. The composition of the Audit Committee is intended to comply with the requirements of Nasdaq Listing Rule 5605(c) and Rule 10A-3 under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), including the requirement that all members be independent and that at least one member qualify as an "audit committee financial expert" within the meaning of Item 407(d)(5)(ii) of Regulation S-K promulgated under the Securities Act of 1933, as amended.
(b) Compensation Committee: Catherine Mercer (Chair), Diane Ochoa, and Samuel Adebayo. The composition of the Compensation Committee is intended to comply with the requirements of Nasdaq Listing Rule 5605(d), including the requirement that all members satisfy the heightened independence standards applicable to compensation committee members.
(c) Nominating and Corporate Governance Committee: Diane Ochoa (Chair), Samuel Adebayo, and Catherine Mercer. The composition of this Committee complies with the independence requirements described in Section II.B of this Charter.
The Committee shall periodically review committee assignments and shall recommend to the Board such changes as the Committee deems appropriate in light of changes in Board membership, director qualifications, regulatory requirements, and the Company's needs.
C. Corporate Governance
1. Corporate Governance Guidelines
The Committee shall develop and recommend to the Board for adoption a set of Corporate Governance Guidelines (the "Governance Guidelines") applicable to the Company. The Governance Guidelines shall establish the framework within which the Board and its committees operate and shall address, among other matters:
(a) Director qualification standards and the process for selecting and nominating directors;
(b) Director responsibilities, including expectations regarding meeting attendance, preparation, and participation;
(c) Director access to management and to independent professional advisors;
(d) Director compensation philosophy and structure;
(e) Director orientation programs for newly elected directors and continuing education opportunities for all Board members;
(f) Management succession planning, including emergency succession procedures;
(g) The annual Board and committee self-evaluation process;
(h) Board leadership structure, including the roles of the Chair of the Board and, if applicable, the Lead Independent Director;
(i) The Board's role in risk oversight; and
(j) Stockholder engagement and communication.
The Committee shall periodically review and reassess the adequacy and appropriateness of the Governance Guidelines, taking into account evolving best practices in corporate governance, changes in applicable regulatory requirements, input from stockholders and proxy advisory firms, and the Company's particular circumstances, including its controlled-company status and dual-class capital structure. The Committee shall recommend to the Board such updates and modifications to the Governance Guidelines as the Committee deems appropriate.
2. Governance Policies and Practices
The Committee shall oversee the development, implementation, and periodic review of the Company's governance-related policies, including without limitation the following:
(a) Code of Business Conduct and Ethics. A comprehensive code of business conduct and ethics applicable to all directors, officers, and employees of the Company and its subsidiaries, addressing matters such as conflicts of interest, corporate opportunities, confidentiality, fair dealing, protection and proper use of Company assets, compliance with laws and regulations, and reporting procedures for violations or suspected violations of the Code;
(b) Insider Trading Policy. A policy governing the purchase and sale of the Company's securities by directors, officers, and employees, including provisions relating to trading blackout windows, pre-clearance procedures for trades by directors and Section 16 officers, guidelines for the adoption, modification, and termination of trading plans under Rule 10b5-1 promulgated under the Exchange Act, and prohibitions on trading while in possession of material non-public information;
(c) Related-Party Transactions Policy. A policy establishing procedures for the review, approval, and ratification of related-party transactions, as defined in Item 404 of Regulation S-K, including transactions involving the Company's co-founders, their family members, and entities controlled by or affiliated with the co-founders, as well as transactions with Velthryn, Arclight, Ridgeline Capital Partners Fund II, L.P., and their respective affiliates;
(d) Hedging and Pledging Policies. Policies restricting or prohibiting hedging transactions (such as prepaid variable forwards, equity swaps, collars, and exchange funds) and pledging arrangements involving the Company's securities by directors and executive officers; and
(e) Stock Ownership Guidelines. Guidelines establishing minimum stock ownership requirements for non-employee directors and executive officers, designed to align the interests of the Company's leadership with those of the Company's stockholders.
The Committee shall monitor compliance with such policies and shall recommend modifications to the Board as the Committee deems appropriate in light of evolving regulatory requirements, market practices, and the Company's circumstances.
3. Certificate of Incorporation and Bylaws
The Committee shall periodically review the Certificate of Incorporation and the Bylaws and shall recommend to the Board such amendments thereto as the Committee deems appropriate. In conducting its review, the Committee shall consider, among other matters:
(a) The implications of the Company's dual-class capital structure, including the impact on stockholder rights, board composition, and overall corporate governance;
(b) The Class B Common Stock sunset provision, which provides for the automatic conversion of all outstanding shares of Class B Common Stock into shares of Class A Common Stock on a one-for-one basis upon the earliest to occur of: (i) the seventh anniversary of the closing of the IPO; (ii) the transfer of shares of Class B Common Stock by a holder thereof to any person or entity that is not a "Permitted Transferee" (as defined in the Certificate of Incorporation); and (iii) the date on which the co-founders (together with their respective Permitted Transferees) collectively cease to beneficially own shares of common stock representing at least 10% of the total number of shares of common stock then outstanding;
(c) The governance implications of the approaching sunset triggers, including the potential impact on the Company's controlled-company status and the composition of the Board and its committees; and
(d) Any other provisions of the Certificate of Incorporation or Bylaws that the Committee believes should be amended, supplemented, or updated in light of evolving governance best practices, regulatory requirements, or the Company's circumstances.
The Committee shall make recommendations to the Board regarding the appropriate timing and manner of any governance evolution as the sunset triggers approach, with a view toward ensuring a smooth transition to a single-class capital structure and the associated changes in governance practices.
D. Board and Committee Evaluation
1. Annual Self-Assessment
The Committee shall oversee an annual self-evaluation process for the Board as a whole and for each standing committee of the Board. The purpose of the annual self-evaluation is to assess the effectiveness of the Board and its committees in fulfilling their respective responsibilities, to identify areas for improvement, and to enhance overall Board performance.
In conducting the annual self-evaluation, the Committee shall:
(a) Develop and administer appropriate evaluation procedures, which may include written questionnaires, individual or group interviews, facilitated discussions, or engagement of an independent third-party governance consultant to assist with the evaluation process;
(b) Solicit feedback from all directors regarding the performance, composition, structure, and processes of the Board and its committees;
(c) Compile and analyze the results of the evaluation process; and
(d) Report the findings and any resulting recommendations to the Board and to each respective committee.
2. Individual Director Evaluations
As the Committee deems appropriate, and particularly in connection with renomination decisions, the Committee shall oversee assessments of individual director performance, contribution, and qualifications. Such assessments may consider, among other factors, the director's attendance and participation at Board and committee meetings, the director's substantive contributions to Board deliberations, the director's ongoing satisfaction of applicable independence and qualification requirements, the director's engagement with continuing education opportunities, and feedback from other Board members.
E. Director Orientation and Continuing Education
The Committee shall oversee the development and implementation of a comprehensive orientation program for newly elected or appointed directors. The orientation program shall be designed to provide new directors with thorough and timely information about the Company's business, operations, strategy, financial condition, risk profile, corporate governance structure, key policies, and regulatory environment. The orientation program shall include, at a minimum, meetings with the CEO, CFO, General Counsel, CTO, and other members of senior management, as well as the provision of relevant corporate documents, Board materials, and background information.
The Committee shall also recommend opportunities for continuing education for all Board members on topics relevant to their service as directors, including developments in corporate governance, changes in applicable laws and regulations, industry trends relevant to the Company's cloud-based AI-driven analytics platform and fintech analytics business, and emerging issues in areas such as cybersecurity, data privacy, and responsible artificial intelligence.
F. Management Succession Planning
The Committee shall oversee the development and periodic review of a management succession plan for the Chief Executive Officer (currently Priya Subramanian) and other key members of the Company's senior management team, including without limitation the Chief Technology Officer (Marcus Henley), the Chief Financial Officer (David Lau), the General Counsel (Naomi Feinberg), and the Chief Revenue Officer (Tomás Aguilar).
The succession plan shall address both long-term succession planning, including the identification and development of internal candidates for senior leadership positions, and emergency succession planning, to ensure the continuity of competent leadership in the event of the unexpected departure, incapacitation, or death of the CEO or other key executives. The Committee shall review the succession plan with the Board at least annually and shall recommend such updates and modifications as the Committee deems appropriate.
G. Stockholder Engagement on Governance Matters
The Committee shall oversee the Company's engagement with stockholders on corporate governance matters, including through the Company's annual proxy solicitation process, direct outreach to significant stockholders, and responses to stockholder inquiries and correspondence. The Committee shall:
(a) Review and consider stockholder proposals submitted for inclusion in the Company's proxy materials in accordance with Rule 14a-8 promulgated under the Exchange Act, as well as stockholder proposals submitted pursuant to the advance notice provisions of the Bylaws;
(b) Review and consider correspondence from stockholders relating to governance matters;
(c) Consider the perspectives, concerns, and recommendations of the Company's significant stockholders, including Velthryn Venture Partners Fund IV, L.P. (holder of approximately 21.0% of pre-IPO fully diluted shares), Arclight Equity Group Fund VII, L.P. (holder of approximately 15.7% of pre-IPO fully diluted shares), and Ridgeline Capital Partners Fund II, L.P. (holder of approximately 7.8% of pre-IPO fully diluted shares); and
(d) Report to the Board on the results of the Company's stockholder engagement activities and recommend any responsive actions or governance changes.
H. Director Compensation
Unless the Board has expressly delegated such responsibility to the Compensation Committee, the Committee shall review and make recommendations to the Board regarding the form and amount of compensation payable to non-employee directors for service on the Board and its committees. Such review shall encompass all components of director compensation, including:
(a) Annual cash retainer fees for Board service;
(b) Additional cash retainer fees or meeting fees for service on or chairing committees of the Board;
(c) Equity-based compensation, including stock options, restricted stock units, or other equity awards granted under the Company's equity incentive plan(s);
(d) Reimbursement of reasonable out-of-pocket expenses incurred in connection with Board and committee service; and
(e) Any other benefits, perquisites, or forms of compensation provided to non-employee directors.
In reviewing and making recommendations regarding director compensation, the Committee shall consider the competitiveness of director compensation relative to comparable publicly traded companies, the alignment of director compensation with the long-term interests of the Company's stockholders, applicable regulatory guidance and best practices, and input from independent compensation consultants, as appropriate. The Committee shall ensure that director compensation does not compromise the independence of non-employee directors.
V. Delegation
The Committee may, in its discretion, delegate any of its duties and responsibilities to one or more subcommittees of the Committee, each consisting of one or more members of the Committee, to the extent permitted by applicable law (including the DGCL), applicable Nasdaq listing standards, the Certificate of Incorporation, and the Bylaws. The Committee may also delegate authority to the Chair to act on behalf of the Committee between meetings on matters that the Committee deems appropriate, subject to ratification by the full Committee at its next meeting.
Any subcommittee to which the Committee delegates authority shall report its activities, findings, and recommendations to the full Committee on a regular basis. Notwithstanding any such delegation, the Committee shall retain ultimate responsibility for the matters delegated and may revoke or modify any delegation at any time.
VI. Resources and Advisors
The Committee shall have the sole authority to retain and terminate any search firm, consultant, or other advisor to assist in identifying, screening, and evaluating director candidates, including the sole authority to approve such firm's or consultant's fees and other retention terms. All such fees and expenses shall be borne by the Company.
The Committee shall also have the authority to obtain advice and assistance from internal or external legal, accounting, or other professional advisors as the Committee deems necessary or appropriate in the exercise of its duties and responsibilities under this Charter. The Committee may retain external advisors without the prior approval of management or the full Board, and the Company shall bear all costs and expenses associated with such engagements.
The Company shall provide appropriate funding, as determined by the Committee in its sole discretion, for the payment of: (a) compensation to any search firms, consultants, legal counsel, or other advisors retained by the Committee; and (b) ordinary administrative expenses of the Committee that are necessary or appropriate in carrying out its duties and responsibilities under this Charter.
VII. Annual Review of Charter
The Committee shall review and reassess the adequacy of this Charter at least annually. In conducting its review, the Committee shall consider whether this Charter adequately addresses the Committee's responsibilities in light of evolving corporate governance best practices, changes in applicable Nasdaq listing standards and SEC rules, developments in the Company's business and governance structure, and any other factors the Committee deems relevant.
Following its annual review, the Committee shall recommend any proposed changes to this Charter to the Board for approval. This Charter, as approved by the Board, shall be made available on the Company's corporate website. In addition, the Company shall disclose the availability of this Charter in its annual proxy statement or as otherwise required by applicable Nasdaq listing standards and SEC rules.
VIII. Limitations
While the Committee has the duties, responsibilities, and authority set forth in this Charter, it is not the duty of the Committee to ensure the Company's compliance with all applicable laws, regulations, and listing standards. The Committee's role is one of oversight. The management of the Company is responsible for the day-to-day governance, compliance, and operational activities of the Company, and the Company's independent auditors are responsible for auditing the Company's financial statements.
Nothing contained in this Charter is intended to, or shall be construed to, create any duty, obligation, or standard of care applicable to any member of the Committee or any other member of the Board beyond those duties, obligations, and standards of care that are imposed by applicable law, the Certificate of Incorporation, and the Bylaws. Nothing in this Charter is intended to expand the applicable standard of liability under the DGCL for any member of the Committee or the Board.
The designation of a member of the Committee shall not, in and of itself, impose on such person any duties, obligations, or liabilities that are greater than the duties, obligations, and liabilities imposed on such person as a member of the Board in the absence of such designation.
IX. Effective Date
This Charter shall become effective automatically, and without further action by the Board, upon the effectiveness of the Company's Registration Statement on Form S-1 (SEC File Number 333-264518) filed with the SEC in connection with the Company's proposed initial public offering of shares of Class A Common Stock on the Nasdaq Global Select Market under the ticker symbol "LMSA."
Prior to the effective date, this Charter shall have no force or effect, and the Committee shall have no authority to act hereunder. Upon the effective date, this Charter shall supersede any prior charter, terms of reference, or other organizational documents of the Committee, if any.
Note: This Charter was prepared in draft form by Calderwood & Harkness LLP, issuer's counsel to Lumos Analytics Inc., in connection with the Company's proposed initial public offering of Class A Common Stock. This Charter was not formally adopted by the Board of Directors of Lumos Analytics Inc. prior to the withdrawal of the Registration Statement on Form S-1 (SEC File Number 333-264518) on June 15, 2022.
As adopted by the Board of Directors on [●], 2022
Prepared by Calderwood & Harkness LLP, 1 Market Street, Spear Tower, Suite 3600, San Francisco, CA 94105, as issuer's counsel to Lumos Analytics Inc. C&H Matter No. 1008-00002.
Director | Independence Status | Role / Affiliation
Priya Subramanian (Chair of the Board) | Non-Independent | Co-Founder and Chief Executive Officer
Marcus Henley | Non-Independent | Co-Founder and Chief Technology Officer
Diane Ochoa | Independent | Managing Partner, Ridgeline Capital Partners Fund II, L.P.
Samuel Adebayo | Independent | Former CFO, Verdant Software Corp.
Catherine Mercer | Independent | Operating Partner, Arclight Equity Group Fund VII, L.P.
Jonathan Tsai | Non-Independent | Velthryn Venture Partners Fund IV, L.P. designee
Rebecca Stahl | Non-Independent | Arclight Equity Group Fund VII, L.P. designee

LUMOS ANALYTICS INC.

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