Board of Directors Meeting

1
Board of DirectorsMeeting
SATURDAY, MAY 13, 2006
2
EXECUTIVE SESSION
3
PLENARY SESSION
4
CHAIR WELCOME REMARKS
5
REVIEW OF MINUTES February 12, 2006 Board
Meeting
6
ELECTIONRESULTS
7
2006 Balloting Results

• 6709 valid ballot cast (92 ballots cast in 2005)
• Quorum (5819) achieved by margin of 890 (15)
• by-laws adopted 6428 (97) to 201 (7)
• Board size of 15 adopted by 3441 (52.2) to 3152
  (47.8)

• Vote Participation
• 59-79 (54.2)
• 80s (17.7)
• 90s (14.0)
• 00s (4.4)
• Associates (9.2)

8
PRESIDENTS REPORT
9

• Outreach Events
• Fiscal Year 2007 Business Plan

10
Outreach Events - 2006

• February
• BOV DC Society Event w/Supt
• Pittsburgh Chapter Basketball Chalk Talk
• Las Vegas Chapter Organization Meeting
• Chicago Academy Today (Col Gibson)
• Graduate Connection (100th Night Class of 66)
• LIFT

• March
• Mountain West Basketball Tournament
• Detroit Ice Talk
• Graduate Connection (Recognition Class of 69)
• LIFT
• Rampart Chapter Luncheon (President/CEO)
• April
• Boston Academy Night Dinner (President/CEO)
• Sabre Society/Donor Appreciation Event
• Founders Day Dinner/DG Awards
• Graduate Connection (Pinnacle All Classes)
• Appointee Tours Briefings
• 1st Class 4th Class Briefings
• ALO Briefings
• AOC School
• LIFT/CLES

11
Outreach Events - 2006

• June
• New York Academy Today w/Supt (tentative)
• San Antonio AOG Update (President/CEO)
  (tentative)
• Chicago Appointee Event/Meet AOG Chapter
  President
• Bed Breakfast
• In-Processing
• July
• Graduate Connection/Graduate Leadership
  Conference
• BOV
• August
• Graduate Connection/Warrior Run All Classes

• May
• Atlanta w/Vice Supt
• Congressional Appointee Event
• Chapter Event
• Parent Club Appointee Event
• Rampart Chapter Luncheon w/Supt
• New York Academy Today Director of Admissions
• Outstanding Squadron Banquet
• Graduate Connection/Ring Dining In Dance Class
  of 67

12
Fiscal Year 2007 Annual Business Plan

• Board Objectives
• Accelerate Comprehensive Campaign
• Complete governance changes
• Update Strategic Plan
• Strengthen alumni relations

13
(No Transcript)
14
REVENUE vs. EXPENSES (Past Future)
15
Fiscal Year 2007Annual Business Plan contd

• Accelerate Comprehensive Campaign
• Ground breaking for first major project
• Public phase roll-out in Fall 2007
• 7-11 million in Fiscal Year 2007 37-40 million
  by June 30, 2007

16
Fiscal Year 2007Annual Business Plan contd

• Complete Governance Changes
• Reduce Board size to 17
• Publish transition plan
• Restructure Nominating Committee
• Conduct election
• Transition complete July 1, 2007
• Implement Class Advisory Senate
• Implement other by-laws changes

17
Fiscal Year 2007Annual Business Plan contd

• Update Strategic Plan
• Analyze survey results
• Develop goals and objectives
• Establish tracking measurements

18
Fiscal Year 2007Annual Business Plan contd

• Strengthen Alumni Relations
• Conduct alumni survey
• Improve website capability
• Refine and strengthen class officer structure
• Refine and strengthen chapter structure
• Maintain high quality services

19
What will we do? How much will it cost?
20
COMMITTEE REPORTS
21
Finance Investment Committee UpdateMay 13, 2006
22
Finance Committee

• Committee chairmans report
• Board action to approve investment in Caxton
  Select, LLC
• Financial performance of the AOG continues to be
  strong
• Proposed budget for the year ending June 30,
  2007, supports normal operations, important
  expenditures on campaign projects, most notably
  the Memorial Pavilion, and wedges for activities
  that may happen during the year
• Board action to approve the budget

23
Investment Subcommittee Members

• Richard Abramson, 68, National Managing
  Director, Bernstein Investment Research and
  Management (Chairman, Investment Subcommittee)
• Charles Garcia, 83, Chairman and CEO, Sterling
  Financial (Chairman, Finance Investment
  Committee)
• Roderick Hennek, 75, Managing Director, Morgan
  Keegan and Company
• William Jennings, Professor of Finance and
  Investments, United States Air Force Academy

24
Investment SubcommitteeThird Quarter
Teleconferences

• February 23 Discussed investment options for
  the Real Estate and Hedge Fund portions of our
  investment portfolio
• March 14th Discussed February results and
  specifics about potential new money managers for
  Real Estate and Hedge Funds - narrowed choices
• April 18th Discussed March results and status
  of research on potential new money managers
• April 26th Made final decision to move 1.5
  million of real estate investment to Azure Global
  Real Estate Fund and up to 2.9 million of Bond
  portfolio to Caxton Select, LLC

25
Proposed Board Resolution

• The Board of Directors of the Association of
  Graduates of the United States Air Force Academy
  authorizes James A. Shaw, President CEO, to
  subscribe to purchase Class A Limited Liability
  Company interests in Caxton Select, LLC
• Mr. Shaw is authorized to make an initial
  subscription of up to 2.9 million and any
  further subscriptions as directed by the
  Investment Subcommittee of the Finance
  Investment Committee and approved by the Finance
  Investment Committee

26
Financial SummaryNine Months Ended March 31, 2006
27
Proposed Budget Process Year Ending June 30,
2007

• Look back
• Look ahead
• Rigorous analysis
• Finance Investment Committee review and approval

28
Proposed Budget Assumptions Year Ending June 30,
2007

• 4.5 salary increase
• Increase authorized positions to 53 from 50 (1
  senior management position and 2 support
  positions for alumni relations)
• Wedge for senior personnel initiatives
• Expenses for campaign projects
• Capital expenses

29
Proposed Budget Summary
30
ITS TIME TO VOTE!
31
Nominating Committee UpdateMay 13, 2006
32
Committee Members(Functioning since February
2006 Board Meeting)

• Al Rogers 64 Director, Chair
• Gil Mook 67 Director
• John Moore 78 Director
• Vacant Director
• Dave MacGhee 70 Non-Director
• Vic Thuotte 73 Non-Director
• Rob Mishev 99 Non Director

33
Overview

• New AOG by-laws guidance
• Proposed AOG Transition Plan
• 2006/2007 schedule
• Next steps

34
By-laws of the AOGArticle IV Board of Directors

• Section 1
• Directors of the Board shall be members of the
  AOG. The Board will consist of not more than
  fifteen (15) Directors who are selected in
  accordance with the procedures set forth in
  Sections 2-5 below.
• Section 2 Elected Directors
• There shall be no more than eleven (11) Elected
  Directors who are nominated by the Nominating
  Committee, or placed on the ballot by petition,
  as the case may be, and elected by the voting
  membership. Elected Directors serve a four-year
  term and may stand for election to a second
  consecutive four-year term if re-nominated by the
  Nominating Committee, or placed on the ballot by
  petition, as the case may be, and re-elected by
  the membership. The Nominating Committee shall
  propose a slate of candidates for the elected
  positions of not less than two (2) times the
  number of vacancies to be filled.

35
By-laws of the AOGArticle IV Board of Directors

• Section 3 Appointed Directors
• There shall be no more than four (4) appointed
  Directors who are nominated by the Nominating
  Committee and ratified by the Board. Members of
  the Board eligible for re-appointment may not
  ratify their own nominations. The terms of
  appointed Directors shall be staggered with two
  (2) appointed following each biennial election of
  the Board. The selection of the appointed
  Directors normally occurs at the second meeting
  after each biennial election of the Board. The
  appointments to fill vacancies can be done at any
  time. Terms of office expire just prior to the
  second meeting of the Board four (4) years after
  the year of the biennial election preceding
  appointment. Appointed Directors may serve a
  second consecutive four-year term consistent with
  nomination and ratification procedures outlined
  herein. In nominating appointed Directors,
  diversity, skill levels, and experience (i.e.,
  financial, audits, investments, legal) shall be
  considered.
• Section 7
• A smooth and orderly transition to the structure
  of the Board adopted by these by-laws, a
  transition consistent with the report of the Blue
  Ribbon Council, dated January 19, 2006, will be
  completed by 2007.

36
By-laws of the AOGArticle IX Nominations and
Elections

• Section 1
• Approximately half of the four-year term Director
  positions will be open for election during odd
  numbered years. The AOG will publicize
  nomination procedures. On or before the first
  day of June of the year preceding an election,
  the Board shall advise the Nominating Committee
  of the need for a slate of candidates and provide
  instructions as deemed appropriate by the Board.
  By the thirtieth day of November of the year
  preceding said election, the chair of the
  Nominating Committee shall submit to the Board a
  slate of candidates who have been recruited by
  the Nominating Committee, or who have volunteered
  to be considered by the Nominating Committee,
  Every issue of Checkpoints shall carry an item
  indicating to whom a member of the AOG may make
  known his or her desire to run for election as a
  Director of the AOG, and a calendar for
  nominations and elections. The Nominating
  Committee shall include, without further review,
  in the slate of candidates for the next election,
  all members that have indicated an interest in
  serving on the Board between the date of the last
  election and the open nomination closing date and
  who have also provided a document showing support
  of twenty-five (25) AOG members by their
  signature. Such candidates must also agree to
  fulfill the requirements of Directors.

37
By-laws of the AOGArticle IX Nominations and
Elections contd

• As a minimum, all candidates, those reviewed and
  nominated by the Nominating Committee and the
  petition candidates must agree to fulfill the
  requirements of AOG Director as listed below
• A. Be dedicated to the Vision, Mission, Ideals
  and Principles, for which the AOG stands.
• B. Be capable of attending all meetings of the
  AOG Board, and any committees to which he/she is
  assigned, and commit the time required to
  discharge Board and committee duties. The term
  capable of attending means being able and
  willing to afford the travel to and from Colorado
  Springs at least four (4) times each year and
  able to afford the time away from his/her
  profession to attend these meetings and for
  related work.
• C. Be responsible for discharging his/her duties
• (1) In good faith
• (2) With the care that an ordinarily prudent
  person in a like position would exercise under
  similar circumstances
• (3) In a manner the Director reasonably believes
  to be in the best interests of the AOG.

38
By-laws of the AOGArticle XII Committees,
Councils, Meetings and Appointments

• Section 4c Nominating Committee
• The Nominating Committee is a statutory
  committee, chaired by an elected Director, one
  (1) additional Director, and five (5)
  non-director committee members selected from
  graduate members. A member may not serve on the
  Nominating Committee during an election process
  in which the member is a candidate for election.
  Other than those candidates who are placed on the
  ballot by petition, recommendations for
  candidates to be elected as Directors shall be
  made by the Nominating Committee for approval by
  the Board. The Nominating Committee shall
  maintain a pool of candidates qualified to serve
  as committee members.

39
By-laws of the AOGArticle XVIII Transition Plan

• These by-laws will become effective immediately
  upon certification of the results of the vote by
  the AOG Board Secretary except for Article IV
  Board of Directors, Sections 1, 2, and 3.
  Article IV, Sections 1, 2, and 3 will be
  effective and implemented no later than July 1,
  2007. Article IV, Sections, 1, 2, and 3 will be
  addressed in a transition plan approved by the
  Board, consistent with the by-laws language.

40
AOG Board Approved Transition Approach

• Within forty-five (45) days of the certification
  of the election results by the AOG Board
  Secretary, the Board shall approve and publish a
  transition plan
• Estimate by approximately June 25, 2006
• Within ninety (90) days after the certification
  of the election results by the AOG Board
  Secretary or July 1, 2006, whichever is later,
  the Board shall consist of not more than
  seventeen (17) elected or appointed Directors
• Estimate July 1, 2006
• Full implementation of the Board size and
  composition, consistent with the by-laws, will be
  complete not later than July 1, 2007
• Board size will be fifteen (15)

41
Proposed Transition Plan

• Purpose
• Transition dates
• Appointed Directors (November odd years)
• Nominating Committee non-directors (February
  cycle)
• Two (2) transition positions for 2007 election
• President/CEO position as an appointed Director
• July 1, 2006, Board membership
• July 1, 2007, Board membership
• Nominating Committee Transition Plan
• Committee transition responsibilities
• All existing AOG documents will be reviewed for
  compliance with new by-laws by June 30, 2006
• All changes or updates (for compliance with new
  by-laws) to existing AOG documents will be
  complete by August 12, 2006
• All new initiatives required by the new by-laws
  will be identified with a milestone plan and
  presented to the Board on or before the August
  12, 2006, Board meeting

42
Proposed AOG Board Transition Plan
43
Proposed Nominating Committee

• Actions
• Advertise, recruit, interview, screen and
  nominate two (2) new non-directors
• Advertise May 15, 2006 June 30, 2006
• Interview/screen/nominate July 1-31, 2006
• Board approval by August 12, 2006
• Orient two (2) new non-directors to AOG and
  Nominating Committee
• Continue current six (6) member Nominating
  Committee, including John Moore, with the
  interviewing of potential Nominating Committee
  non-directors, until two (2) new non-directors
  are approved by the Board

44
Existing AOG Documents to be Updated/Changed

• Checkpoints Chairs letter nomination
  advertisements election schedule
• AOG website May 15, 2006
• Post Transition Plan
• Post Director service dates and status thru 2007
• Post 2006/2007 election schedule and nominating
  process
• Post updated nomination policy and procedures
• Post updated Requirements for a Director
• Post advertisement for Nominating Committee
  candidates to be submitted to AOG by June 30,
  2006
• Post advertisement for Director candidates
  (Nominating Committee candidates and petition
  candidates) to be submitted to AOG by August 1,
  2006
• Post new petition form

45
(No Transcript)
46
Planning Schedule
As of 2/11/06
Calendar Year 2006 Nominating Committee Timeline
47
Planning Schedule
As of 2/11/06
Calendar Year 2007 Nominating Committee Timeline
48
Next Steps

• August 2006
• August 1, 2006, deadline for 2007 nomination
  packages and petition candidates
• Present two (2) non-director candidates for Board
  approval on or before August 12, 2006, Board
  meeting (NC)
• August October 2006
• Interview candidates for 2007 slate
• November 2006 Board Meeting
• Present slate for Board approval

• June 2006
• Advertise/Interview candidates for non-director
  NC (NC)
• Approve Transition Plan on or before
  approximately June 25, 2006
• July 2006
• Board at seventeen (17) on July 1, 2006

49
Graduate DependentScholarship Committee
UpdateMay 13, 2006
50
2006 GDS Committee Members

• Vic Andrews 66
• Scott Dennis 79
• Lisa Mazur 85
• Don Williams 83

51
2006 Selection List

• Cameron McAllister 1000 Buschmann Award
• John Buckley IV 1000
• Kaitlin Burke 1000
• Daniel Gilday 1000
• Matthew Graves 1000
• Matthew Morton 1000
• Rachel Santee 1000
• Brian Finn 750
• Stephen Lin 750
• Miranda Tsukamoto 750
• Ezekiel Wetlesen 750
• Indicates number of times student has
  previously received award

52
Distinguished Graduate Awards Committee
UpdateMay 13, 2006
53
Campaign SteeringCommittee UpdateMay 13, 2006
54
Outline

• Progress through March 31, 2006
• Highlights Trends Milestones
• Impact of Gifts
• Annual Giving/Class Giving Highlights
• 4th Quarter Projections

55
Progress through March 31, 2006
56
Progress through March 31, 2006
57
Progress through March 31, 2006
58
Highlights Trends Milestones

• 27.73 million in campaign
• 8.75 million in FY 2005/2006 equal to 20
  growth over FY 2004/2005 (9 months vs. 12 months)
• 12,358 donors 49,812 gifts
• 31 donors giving 100,000 or more
• 83 donors giving 25,000 or more
• 131 donors giving 10,000 or more

59
Third Quarter Highlights

• Received first six-figure commitment from parent
  - 100,000 for the basketball team (athletics)
• Received 270,000 for cultural immersion
  programs (academics)
• Received 114,000 endowment for ACES (character
  development)
• Received 25,000 for the Heritage Trail
  (heritage)
• Received 50,000 for undesignated use

60
Significant Increases In Annual Giving For Third
Quarter
61
Class Gift Dollars Raised

• Class Giving Dollars Raised is up 50 over last
  year through three quarters

Through the 3rd Quarter

• An additional 368,000 has already been raised
  during the fourth quarter (as of May 9, 2006)

62
Other Highlights

• Successful Sabre Society Appreciation Event
• Hired a new Donor Relations Officer
• In the process of developing a more robust Donor
  Relations Plan
• Will report back to every donor in the Fall about
  the impact of their gifts
• Reporting will begin on all endowments
• Creation and implementation of a
  cumulative-giving society
• Donor appreciation event

63
Fourth Quarter Projections

• June 30, 2006 28.5 Million
• Continued Roll-Out of Campaign
• Increased Volunteer Involvement
• Increased Planned Giving

64
Alumni Relations Committee UpdateMay 13, 2006
65
Committee Actions

• Survey
• Website
• Class Advisory Senate

66
Alumni Survey

• Member Survey Complete
• Online version being programmed
• Three versions member, associate, non-member
• Timeline
• Estimate survey in the field on/about July 10,
  2006
• Survey results September 15-30, 2006
• Communication Strategy
• Synergized between contractor recommendations and
  AOG communications plan to maximize response
  rates and support analysis purity

67
Class Advisory Senate

• Staff examined Navy model and drafted proposal
• Alumni Relations Committee review (Co-Chair Steve
  Finch prepared alternate plan)
• By-laws pass May 4, 2006 (Governance Committee
  now responsible)
• Implementation strategy proposed by Alumni
  Relations Committee
• Late Summer 2007 recommended
• Members of the senate should create their own
  charter
• Senate charter should stay separate from by-laws

68
Website Strategic Goals

• Primary information portal for USAFA and graduate
  community
• Users will routinely visit for most valuable info
• Tasteful and classy look
• Robust, well organized, easy navigation, envy of
  others
• Host our site on our servers

69
End State Website Functions

• Appropriate multimedia to enhance pages
• Timely, relevant information
• Secure servers
• Information directly connects to AOG database
• Online directory (members only)

70
End State Website Functions- contd

• Online voting
• AOG online store
• Robust development information
• Online event registration
• Gone But Not Forgotten

71
End State Website Functions contd

• Career center
• Calendar of AOG events
• Photo gallery (members only)
• Site map and site search

72
End State Website Functions contd

• Base access for grads
• E-Community for professional/social
  networking/mentoring
• Section for parents
• Links to other AFA sites

73
Website Timeline - Phase One

• Early Summer 2006
• Finalize new site design
• Set up local AOG server
• Recreate interactive functions on Net-Community

74
Website Timeline Phase Two

• Late Summer 2006
• Phase out of IAC, make us self sustaining
• Transfer all information from old site to new
• Begin internal testing
• Policy development (August Board meeting)

75
Website Timeline Phase Three

• Fall/Winter 2006
• Launch site publicly
• Obtain feedback with online polling and survey
  results
• Build customization for parts (ongoing as-needed
  process)

76
Resources

• Initial Net-Community charges 50,000 (PAID)
• Extension of IAC contract 20,000 (PAID)
• E-Community 10,000 annual
• Recurring Net-Community charges 17,000 annual
• Blast email capability 6,700 annual
• Delta 7,700
• Old site (IAC) cost 42,400 annual
• New site cost 34,700 annual
• Potential web equipment investment 10,600
  (podcast video/audio)

77
Governance Committee UpdateMay 13, 2006
78
Strategic Planning Committee UpdateMay 13, 2006
79
NEW BUSINESS
80
Board Meeting Schedule

• August 11-12, 2006
• October 20-21, 2006
• February 9-10, 2007
• May 11-12, 2007
• August 10-11, 2007
• November TBD, 2007
• February 8-9, 2008
• May 9-10, 2008

81
ADJOURNMENT