Silicon Forest Summit December 6, 2003 Board Deliberations, Conflicts and Protections in Deciding to Sell the Company - PowerPoint PPT Presentation

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Silicon Forest Summit December 6, 2003 Board Deliberations, Conflicts and Protections in Deciding to Sell the Company PowerPoint Presentation
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Silicon Forest Summit December 6, 2003 Board Deliberations, Conflicts and Protections in Deciding to Sell the Company

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Silicon Forest Summit December 6, 2003 Board Deliberations, Conflicts and Protections in Deciding to Sell the Company
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Silicon Forest Summit December 6, 2003 Board Deliberations, Conflicts and Protections in Deciding to Sell the Company

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  1. Silicon Forest SummitDecember 6, 2003 Board Deliberations, Conflicts and Protections in Deciding to Sell the Company Matthew A. WilsonGeneral Counsel of Chrome Systems Corp

  2. Chrome Systems Corporation • 17 years of automotive industry experience • 100+ dedicated employees, totally focused on automotive industry • Many vehicle specialists assigned to specific OEM lines • Pioneered electronic vehicle specification • Privately held / unbiased data aggregation 38 makes • Independently verified most accurate vehicle data • 100% orderable data and configuration logic • Providing LTO ~ BTO platforms to the automotive industry • Chrome solutions are used everywhere there’s an automotive transaction or activity: Fleet, OEMs, Dealer and Consumer

  3. Key Clients & Partners

  4. Factors the Board must consider in deciding whether to fund or sell the Company • Stage of the Company’s lifecycle • Current financial condition of the Company • Quality of technology and personnel

  5. Potential conflicts between the Board, management, shareholders and employees There exists an inherent conflict between the groups: • Board: broad/macro-economic view • Management: strategic and personal view • Employee: how does it impact “me” view • Shareholders: return on investment view

  6. What type of economic, market and competitive analysis should the Board conduct? Internal: • Board should look to management for analysis • Board should test analysis by discussion External: Board should validate analysis with external discrete sources.

  7. How should the Board determine Fair Market Value for an acquisition? Challenge: FMV is a relative question in today’s market. Factors: • Method of valuation • Stage of Company lifecycle • Movement within Company’s market Key: Engage a qualified Banker to assist

  8. Involvement of the Executive team & Internal employee dynamics The Board should rely on the Executive team - Executive team is the primary source of information and analysis Be prepared for the grapevine - Have a clear and consistent communication plan Be prepared for loss of focus and productivity from employees - Work with the Executive team to manage through the disruption

  9. The Unsolicited Offer Reaction: Caution – consider the source Response time: Prompt with appropriate boundaries and guidelines Auction? Unless clear reason not to - yes Risks: • Damage to momentum • Damage to key relationships or opportunities • Perception in the marketplace if transaction is not consummated

  10. Chrome Systems Corporation is a proud sponsor of the 2003 Silicon Forest Forum Thank you to White & Lee and Intel for a great event