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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 Matthew A. Wilson General Counsel of Chrome Systems Corp. Chrome Systems Corporation. 17 years of automotive industry experience

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Silicon Forest SummitDecember 6, 2003

Board Deliberations, Conflicts and Protections in Deciding to Sell the Company

Matthew A. WilsonGeneral Counsel of Chrome Systems Corp

chrome systems corporation
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
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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
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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
slide6
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.

slide7
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

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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

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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
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Chrome Systems Corporation

is a proud sponsor of the

2003 Silicon Forest Forum

Thank you to

White & Lee and Intel

for a great event