DESCRIPTION: A corporate advisory board can provide input on strategic direction and growth of the business and allow the company to access high-quality experience and advice, increasing the likelihood of long-term success. MAJOR TOPICS: - Purpose of an advisory board - Function of senior advisors - Board composition and structure - Board member evaluation - Board interaction with owners and senior management - Advisory board v. board of directors - Compensation issues - How to attract senior advisors

1. Presenters:
Alexander B. Kasdan, Managing Director
William F. Capps, Partner, Chairman, Corporate Department
CORPORATE ADVISORY BOARDS: THEIR ROLE AND VALUE
August 1, 2013

2. 1
Alexander B. Kasdan is a Managing Director at DelMorgan & Co. He has more
than twenty years of investment banking, real estate, corporate law and corporate
strategy experience. Alex has executed over 100 domestic and cross-border
transactions totaling more than $10 billion in overall volume in a variety of industries.
Prior to joining DelMorgan, Alex founded Convergence Capital Partners, LLC, a
boutique investment banking advisory and real estate investment firm and was an
investment banker at Barrington Associates, Peter J. Solomon Company, Credit Suisse
First Boston and Merrill Lynch.
Alex practiced law with O’Melveny & Myers LLP (formerly O’Sullivan Graev &
Karabell LLP) and Paul, Hastings, Janofsky & Walker LLP (formerly Battle Fowler
LLP), where he specialized in mergers and acquisitions, private equity and corporate
finance transactions. In addition, Alex served as Corporate Counsel in charge of
business development at Schlumberger Ltd., a global oilfield and information services
company.
Alex graduated magna cum laude from Middlebury College with a B.A. degree in
Economics and Italian and was elected to Phi Beta Kappa during his junior year. In
addition, he holds a J.D. degree from Columbia University Law School and has studied
at the University of Florence in Italy. Alex is admitted to the Bar in the State of New
York.
Alex is a Senior Advisor to Governance and Transactions LLC, an advisory firm
established in 2003 by Mr. James L. Gunderson, former Secretary and General Counsel
of Schlumberger Limited, to assist boards, management and owners with corporate
governance, compliance, structuring and strategic transactions.
100 Wilshire Blvd.
Suite 750
Santa Monica, CA 90401
(310) 980-1718
www.delmorganco.com
ak@delmorganco.com

3. 2
Bill Capps is a partner and chairman of the Corporate Department. He
represents some of the Firm's higher visibility corporate and banking clients
in many business matters, with particular emphasis on securities matters
(including mergers and acquisitions and representation of Special
Committees), international matters, real estate and building materials
companies, corporate finance, franchising, executive compensation
planning, litigation management and health care transactions. His
experience includes serving substantial corporate clients in all business
matters. In addition, Bill is a licensed real estate broker.
Bill holds a J.D. degree from Boalt Hall School of Law, University of
California, Berkeley, 1973, and a B.A. degree with high honors from
Whittier College, 1968.
Representative Experience:
• Representation of Fortune 500 companies in all aspects of international
transactions
• Representation of building materials industry
• Representation of significant families in Southern California in business
and personal planning including succession planning
• Strategic litigation management for major disputes
1900 Avenue of the Stars
7th Floor
Los Angeles, CA 90067
(310) 201-3513
www.JMBM.com
Wcapps@JMBM.com

4. 3
WHY CORPORATE ADVISORY BOARDS
 Purpose of an advisory board: superior corporate governance
 Provide non-binding informed guidance on strategic direction and growth
 Allow the company to access high-quality experience and advice
 Increase likelihood of long-term success
 Function of senior advisors: types of advice
 Board composition and structure
 Board member training
 Board member evaluation
 Board interaction with owners and senior management
 Advisory board v. board of directors
 Compensation issues
 Periodic meetings
 How to attract senior advisors

5. 4
WHY CORPORATE ADVISORY BOARDS
 Open scope of advice: marketing, human resources, new markets,
science, technology, finance, dealing with outside advisors, etc.
 Feeder for board of directors
 Safe harbor for future directors to get to know the business
 Informal interaction with management
 Strategic planning
 Transactions / due diligence
 Acquisition integration
 Capital raising
 Exit preparation and sell-side assistance
 In short, leveraging multi-faceted knowledge and expertise

6. Corporate Advisory Boards:
Their Role and Value
Presented By:
William F. Capps
WFC@JMBM.com
Jeffer Mangels
Butler & MItchell
August 1, 2013

7. 1. Purpose and Definition of Advisory Board
Corporate Advisory Boards
Role as senior advisory counsel on important or
technical issues
• Merger and acquisition
• Financing and capital raise
• Operations
• Marketing and promotion
• Strategic thinking
• Technology
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8. 1. Purpose and Definition of Advisory Board
Corporate Advisory Boards
Compare liability issues and fiduciary responsibilities
vs. conventional board of directors
• Distinguish between an advisory board and a fiduciary board
• Control of board of directors by management is lacking
because the board has an independent liability and
responsibility
• Legal duty (care and loyalty)
• Legal responsibility for decisions
• Legal protections
• More narrow expertise
3

9. 1. Purpose and Definition of Advisory Board
Corporate Advisory Boards
Advantages of non-fiduciary board
• Suitability of technically trained individuals as BOD members
• Time and responsibility demands
• Usually private companies, nonprofits and technology
companies
• Nonprofit functions: give or get
• Put company in touch with best professional advisors like
attorneys and accountants and bankers
• Formalize advice process
• Safe harbor before bringing issue to the fiduciary board
• Focus input on specific issues and problems
• Customer and competitor issues
• Relatively new and growing popularity
4

10. 1. Purpose and Definition of Advisory Board
Corporate Advisory Boards
Process and steps in formation of advisory board
• Define advisory member skills desired
• Determine expectations (is name on website sufficient?)
• Create your pitch and compensation package
• Brainstorm the target list of advisors
• Seek out the targeted advisors and recruit them
• Celebrate, incorporate and communicate
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11. 1. Purpose and Definition of Advisory Board
Corporate Advisory Boards
Additional resources to consider
• Compare with companies like The Board Group who are
building boards (both advisory and fiduciary) for a fee
• Books for reading
• The Directors and Officers Guide to Advisory
Boards by Mueller
• Game Changing Advisory Boards by Howfield
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12. 2. Functioning of Senior Advisors
Corporate Advisory Boards
(a) Unbiased, inexpensive, expert help
(b) Advisory relationship as opposed to legal role of directors
(c) Reach into ecosystem of the company in its environment
(d) Tailor made to company
(e) What are problems of an advisory board?
- Not enough time
- Not enough wisdom
- Too much effort
- Expensive
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13. 3. Board Composition and Structure
Corporate Advisory Boards
(a) Five to eight members
(b) Chairman as leader
(c) Two or three year "term"
(d) Look to needs of the company rather than the advisor
(e) Members must meet four times per year and have time
for meetings
(f) Tips for doing it right with technology
- Ask for small investments?
- Run semi-annual advisory dinners
- Don't overplay advisors in your VC and other
investment pitches
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14. 4. Board Evaluation and Training
Corporate Advisory Boards
(a) Yearly evaluation by board itself and by senior management
(b) Anonymous survey to get honest input
(c) No record kept for litigation purposes
(d) "Hard" data points are few for evaluation
(e) Evaluation of advisors more subjective than evaluation of fiduciary
board member
(f) Training may increase performance of board of advisors
- Financial
- Regulatory environment
(g) Develop metrics to measure performance
(h) Making sure board members know what the owners want
- Values and philosophies
- Reinvestment of earnings
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15. 5. Board Interaction with Owners and Senior Management
Corporate Advisory Boards
(a) Less formality required
(b) Members should actually have a more collaborative role
with senior management
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16. 6. Compensation Issues
Corporate Advisory Boards
(a) Fee for meeting
(b) Fee for long standing service (e.g. options)
(c) Dependent upon quality and performance of individual
(d) Should not be treated as a lifetime perquisite
(e) The greater the expertise, the greater the reward
(f) Discuss actual forms of agreement used by technology
companies in connection with advisory board
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17. 7. How to Attract Senior Advisors
Corporate Advisory Boards
(a) Flattery
(b) Self interest in industry
(c) Networking without liability
(d) Use professional advisors?
- Attorneys
- Accountants
- Bankers
- Investment bankers
(e) Role as stepping stone to future fiduciary board membership
(f) Role as place for senior advisors who have a less time and/or
less energy to devote to company
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