The DIGBY Corporation Board of Directors met on December 6, 2018 to review the company's vision, strategy, financial performance, and future outlook. DIGBY's vision is to provide customized products that perfectly match customer demands in the sensor industry. The company employs a broad differentiation strategy, operating as both a cost leader and quality leader across its product segments. DIGBY leads the market in several product segments and saw increased revenue, profits, and stock price in 2018. The Board believes the executive team should continue leading the company due to its strong growth, understanding of economic conditions, and time-tested success in managing diversified operations.

1. DIGBY Corporation Board of Directors Meeting December 6, 2018 Vanderbilt University

2. Management Team

3. Vision/Mission Our vision is to provide every unique customer with a product that perfectly matches the demand within the sensor industry Our brands keep up with customers’ demand and needs, fully satisfying their most valued preferences. Our significant stakeholders are customers, management and employees, stockholders, and bondholders.

4. Strategy Review Broad differentiation strategy Operate both as a cost leader in the Low Technology segments and as a quality leader in the High Technology segments Core competency satisfies buyer criteria for every segment. Combine elements of a Niche Differentiation strategy with those of a Niche Cost Leader strategy

6. Daze: Leader in market share with 19%

7. Low End Segment

8. Dell: Leader in market share with 19%

9. High End Segment

10. Dill: Leader in market share with 18%

11. Dixie: 2nd in market share with 18%

12. Performance Segment

13. Dunce: Leader in market share with 23%

14. Dot: 2nd in market share with 23%

15. Size Segment

16. Dog: Leader in market share with 23%

18. Revenue Growth & Margins

19. Market Share

21. Performance Snapshot – Stock Price & Market Cap. Consistent investor ROI Balanced & predictable increase in company valuation

22. Financial Management Capital Budgeting Strategy Minimize costs in low tech segments to price competitively Rapid expansion, large initial investment in capacity Leverage Avoid financing solely through debt or equity by mitigating asset/equity ratio Leverage returns to shareholders Dividends Retain earnings for reinvestment At 15%-20% ROE, begin dividend issue Repurchase stock beginning in 2016 to create value for loyal shareholders

24. Strongest Competitor – Erie Strategy Low Cost Smaller company that benefitted from early profits and consistent controlled growth Capabilities High automation (less than us) Low capacity in early years Future Goals Foresaw exit from High End segment Assumptions Profitability Compliance

25. Key Learning and Adjustments Early investments in Plants, HR, and TQM key to profitability. Adjusting to current market factors, but maintain foundation. Stockdale Paradox: Early forecasting difficulties are being corrected. Better inventory management. Missed opportunities from withholding cash Fear of bankruptcy Overestimating competitor products and market share Total Project vs. Actual (25.4%) to (28.0%).

26. Why Executive Team Should Continue Growth Last years increase in net income 2017-$64,730 to 2018-$105,098 Understanding of Current Economic/Investor Ideology High dividend payout. AAA Bond Rating. Diversified product portfolio. Asset allocation across all 5 segments-8 products. Time Tested company Large Scale jump- Stock price (+83.90), Net income (+43,368) Can manage this growth Cohesive management team

27. Future Outlook Continued commitment to paying dividends. Continued Jack Welsh philosophy to every product line, may abandon Low End as competition intensifies. Continued implementation of the balanced score system to follow success and steer company action. Maintain core strategy. Improved understanding of sales forecasting.

28. Appendix A – Balanced Scorecard