Meeting of the Board of Trustees, January 12, 2002
These meeting minutes are a draft and will not be considered official minutes until approved by the Board of Trustees at their next meeting.
After due notice, a meeting of the board of trustees of the Mad River Glen Cooperative was convened at 5:00 p.m. on January 12, 2002, at the Basebox at Mad River Glen Ski Area in Fayston, Vermont. Trustees Bleier, Coleman, Eaton, Kirkpatrick, Michl, Putnam, Russell, Schultz and Steines were present. The Cooperative’s president presided. Margo Wade kept the minutes with assistance from cooperative counsel, Peter Monte.
Call to Order
President Russell called the meeting to order at 5:06 p.m.
Approval of Prior Minutes
Upon motion duly made by Ms. Steines, and seconded by Mr. Eaton, it was unanimously
VOTED: To approval of the December 8, 2001 meeting minutes.
Mr. Bleier requested that draft meeting minutes be clearly indicated as DRAFT if they are posted on the MRG web page prior to board final approval.
Paul Finnerty requested clarification of the bylaw policy pertaining to transfer of shares. As a single person, he asked if ‘immediate family’ would include nieces and nephews. He also commented on the lack of co-op identification in current MRG marketing efforts and suggested that including the co-op information and availability of shares could be beneficial. The marketing staff was present and acknowledges the comment. Mr. Russell tabled the request to define ‘immediate family’ for 30 days.
In response to Management’s request, Mr. Russell reported the Executive Committee met, via email, and approved the purchase of a replacement snow mobile for $6300 net of trade in, which was not included in the capital expenditure report. The board ratified the action of the Executive Committee.
The following is the January 6, 2002 Management Report as submitted.
We opened the mountain on December 22nd with the Single and 16 trails. By Christmas Eve, we had 3 lifts and 34 trails open. Cover was thin but customers were happy. Callie’s Corner opened on the 28th. Birdland was unable to operate due to lack of snow at the unload area.
Snowmaking was tough through the month of December. Temperatures were above normal all month. However, the crew did a good job taking advantage of temperatures when they could. The race slope was covered adequately by Christmas week and the base area and main mountain run outs were covered soon after. Water was very tight but did not become a big issue as was feared earlier in the month.
Start up went very smooth. Skier visits were down for the holiday week but all departments made the best of what we had. Ski School, Rental Repair, and the naturalist program all performed above budgets for the holiday week.
WBCN New Years Eve party went well. 300+ people attended and we took in $10,000. Management will analyze the event and make a decision as to pursue for next year.
4 shares were sold against a budget of 8 for the month. 2 shares were tendered. YTD. 12 sold out of a budget of 22.
There are 2 suggestion box locations. One in the ticket booth, one in the Basebox. All suggestions for the month will be sent to the Board each month.
As of 1/5/02 there are 176 delinquent APR’s. Another reminder will be sent out Feb. 1.
We did 84% of budget in total revenues for the holiday week.
Preliminary operating income for the month was $1,511 against a budget of ($1,192) (see financial attachment)
Pass sales were $30,000 for the month. Mad Cards were $20,000 for the month.
Pre Season sales were very good, and YTD we are still in good shape financially. However, we are still proceeding with caution and watching our expenditures as the season goes on.
A staff party is being held 1/9/02 in General Stark’s Pub at 5:00pm. At the party, we will kick off our new program for employee of the month. At the end of the season, the winners will all be entered into a drawing for a free trip in the spring as a grand prize. Morale amongst the staff is excellent even with the lean snowfall.
A list of projects for the summer has already been sent to the Facilities Committee. A preliminary list will go to the board in February. Approval of 2002 capital will happen in the March meeting.
<<<< End of Management Report >>>>
In response to Mr. Bleier’s comment, Ms. Crawford explained that the two tendered shares where a result of the expiration of the six month time limit.
Mr. Michl complimented management on the successful staggered opening of the mountain due to limited amount of snow. Mr. Wimble passed the compliment along to the Ski Patrol.
The board unanimously accepted the management report.
December Profit & Loss
Financial results of operation for last month and for the fiscal year to date may be summarized as follows:
Cash on hand: $559,847
Mr. Eaton commended the management for showing a profit considering the slow start to the season. Mr. Wimble responded that precautionary measures taken due to lack of snow assisted in achieving these results.
In response to Mr. Eaton’s question, Mr. Wimble clarified that the CD line item includes interest.
Mr. Michl pointed out that the co-op is ahead of budgeted net income and revenue for the year. Mr. Wimble concurred, and added that midweek figures are ok, weekend figures are off, departments’ figures are ok, and skier yield is up.
2000-2001 Audit Figures
Mr. Michl reported he and Ms. Steines met with the auditors, via conference call, to discuss the management letter. The auditors reported bookkeeping has gotten significantly better; recommended mid year reconciliation to minimize the number of adjustments; improved share holder equity reporting, which is complicated; no concerns with conflicts of interest; and reported clean figures and complimented the performance of the financial staff.
Upon motion duly made by Mr. Michl, and seconded by Ms. Steines, it was unanimously
VOTED: To accept the 2000/2001 audited financial reports figures as reported.
By Laws Revisions
Ms. Steines reported the Board Development Committee bylaw revision recommendations concerning number of employee/trustees. Specifically limiting the number of employee/trustees to three of a nine member board, with clarification of the definition of an employee.
Upon motion duly made by Ms. Steines, and seconded by Mr. Eaton, it was
VOTED: To accept, as written by Mr. Monte, and placed on the spring ballot
suggested limitation on employee/trustees.
VOTING: In favor: Coleman, Eaton, Kirkpatrick, Michl, Russell, Steines
Against: Bleier, Putnam, Shultz
The following italicized clean text includes the proposed bylaw changes to implement limitations on employee-trustees. Attached to the minute is the full document included current and proposed language.
Section 4.2 Number and Qualifications. The Board shall consist of nine trustees. To be qualified as a trustee, a person shall satisfy each of the following requirements. The Board shall determine whether these qualifications are met:
Section 4.2 (a) Ownership. A trustee shall be an owner.
Section 4.2 (b) Residency. Six of the trustees shall be Vermont residents and three of the trustees shall be nonresidents of Vermont, except only when there are insufficient qualified candidates to meet such residency requirements.
Section 4.2 (c) Conflict of Interest. A trustee shall not have an overriding conflict of interest.
Section 4.2 (d) Employment. Not more than three of the trustees may either (i) be an employee of the Cooperative, or (ii) reside in a household which derives a material amount of its income from a person who is an employee of the Cooperative. For purposes of these Bylaws, a person shall be an employee of the Cooperative if the person reports directly or indirectly to the General Manager, regardless of the person’s compensation; and a person shall be deemed to be an employee of the Cooperative for one year following the termination of such employment.
Section 4.4 Election and Term. Trustees shall be elected at the annual meeting. Votes shall be tallied separately for Vermont-resident and for non-Vermont resident candidates. The three qualified persons who receive the greatest number of votes shall be considered to have been elected; provided, however, that if the election of one or more of such persons would cause the Board to exceed the number of persons allowed by Section 4.2 of these Bylaws to serve as a trustee (because of residency or employment matters), then only the number of such persons who may serve as trustees without violating the limits of Section 4.2 shall be deemed so to be elected, and the qualified person(s) receiving the next highest number of votes and whose election would not violate the limits of Section 4.2 shall be considered elected as the remaining trustee(s). Terms of office of trustees shall begin upon their election, and trustees shall hold office until their successors are elected and qualified or until their offices are sooner terminated in accordance with these Bylaws. The terms of trustees shall be staggered so that one-third shall expire in each year. At the first election subject to these Bylaws, trustees shall be elected for specific one, two or three year terms in order to accomplish this result. Trustees may serve no more than two consecutive full three-year terms.
Section 4.9 Termination. The term of office of a trustee may be terminated prior to its expiration in any of the following ways: (i) voluntarily by a trustee upon notice to the Cooperative; (ii) automatically upon termination of ownership in the Cooperative or a change in residency or employment which would cause a violation of the requirements of Section 4.2 of these Bylaws; (iii) involuntarily by action at a meeting of owners whenever the best interests of the Cooperative would thereby be served; and (iv) for sufficient cause by the Board, provided that the accused trustee is accorded a fair hearing, including adequate notice of the charges and the opportunity to speak and present evidence.
Section 7.1 Executive Committee. The Board may designate an Executive Committee to act on urgent business when it is impractical to assemble the whole Board, except that such committee may not take action affecting basic or long-range policies or the legal status of the Cooperative. The committee shall be composed exclusively of trustees, including the President, Treasurer and Secretary; provided, however, that if more than one of such offices is held by an employee of the Cooperative, or a person who resides in the same household as an employee of the Cooperative, then the Board shall determine which employee-officer shall serve on the committee and shall appoint another trustee to serve in place of each officer who is thereby disqualified. The Committee may be convened by the President or by any two members of the committee upon notice to all of its members and a quorum of at least three of its members. Any action of the Executive Committee shall be reported to the Board at its next following meeting. The functioning of the Executive Committee shall not operate to relieve the Board of its legal responsibilities in the oversight of the Cooperative.
Mr. Bleier questioned what constituted a "material amount of income and how volunteers will be handled?" Mr. Monte responded that Section 4.2 gives the authority to the board to determine qualifications on a case by case basis.
There was general discussion about different scenarios involving types of volunteers; number of trustee candidates who are employees running for positions; out of state trustees moving in state; employee/trustees needing to recuse on personnel matters due to a conflict of interest; constituency representation on the board; the owners ability to realize they are electing employees to the board; governance versus management responsibilities of the board; the proposed language not being inclusive enough; and that the issue is complicate and therefore let the owners decide if the amendments should stand.
Upon motion duly made by Ms. Steines, and seconded by Mr. Bleier, it was unanimously
VOTED: To place on the spring ballot, bylaw changes to Section 2.7 which would require a two-thirds vote of the entire board to terminate a shareholder’s ownership.
Mr. Monte clarified that six trustees would have to vote affirmatively to terminate ownership. A ‘no,’ recusal, or absent trustee would all represent ‘no’ votes.
Mr. Michl questioned if the 2/3rd requirements would prevent the board from quick action. Mr. Monte pointed out that special meeting notice requirements allowed for quick response, which is the same for the current simple majority voting requirement.
Mr. Bleier stated that this amendment was previously recommended by the Shareholders RelationsCommittee and subsequently turned down by the board.
Ms. Putnam reported that she, Mr. Shultz, and Mr. Bleier would be presenting a ballot referendum proposing an amendment to Section 5.7, which would require 2/3rd vote of the entire board for suspension of an owner from meetings for a specified period.
Ms. Kirkpatrick suggested a trustee statement addressing pros and cons of both proposed amendments. Mr. Monte pointed out that the ballot may be confusing with these proposed amendments. He also asked for permission from the board to work with Ms. Putnam, Mr. Shultz, and Mr. Bleier to draft the amendment to minimize voter confusion.
President Russell accepted the notification that the referendum would be submitted.
Due to the complexity of the issues the Election Committee was tasked with developing a clear ballot and board statement.
Patricia Floyd introduced herself and reviewed the proposed session schedule, which included 1) chartering, 2) MRG’s mission, strategic vision, values & assumptions, 3) financial targets, evaluating progress: plan off season sessions.
Two four-hour sessions were scheduled for January 27 (8 a.m.-12 p.m.), and February 1 (8 a.m.-12 p.m.). The meeting location will be determined shortly.
A progress report will be presented to the Shareholders at the February 9 town meeting.
Facilities: Mr. Coleman reported that the Facilities Committee would be meeting January 29 at 7:00 p.m. to review the material that Jim Edgcomb has complied and discuss the capital facilities improvement list submitted by management.
Finance: Ms. Steines reported that the next Finance Committee meeting is scheduled, via conference call, on January 30 at 3:00 p.m. for final review of the audit.
Shareholders Relations: Ms. Putnam reported that the committee met on December 28 with good participation (16 attendees, 12 voting members), two more meetings are scheduled, one during February vacation and one on St Patrick’s Day weekend. Items discussed included termination/suspension issues; rights and responsibilities documents, which will be distributed to trustees; and the importance of owners purchasing mad money. Mr. Bleier asked that owners also participate on the approval of the rights and responsibility document.
Shareholder Relations Committee recommendations include:
Mr. Bleier and Ms. Putnam proposed a motion and then withdrew – to recommend that two Echo publications be printed: one for the general public and one for in-house and shareholders distribution. Both to be co-edited by a team comprised of Shareholder Relations Committee members and management.
Mr. Bleier clarified that the Shareholder Relations Committee felt communication over that last year has greatly improved between management and board, management and owners, owners and management, and owners and board, but communication between owners still needs improvement.
Board Development: Ms. Kirkpatrick reported that the committee met on January 7. Minutes have been distributed to the board. Board ratification was needed to established the Nomination and Election Committee, and after consultation with management scheduling a date for the candidate forum on March 23 from 5 p.m. -7 p.m.
Upon motion duly made by Ms. Kirkpatrick, and seconded by Mr. Russell, it was unanimously
VOTED: To approve the Procedures for Posting Committee Meeting Minutes as follows:
These procedures will provide structure and a clear understanding to the committee chair for creating and posting meeting minutes.
Mr. Russell suggested that all documents submitted for posting on the web page should be submitted as a Microsoft Word document for easier formatting.
Upon motion duly made by Ms. Kirkpatrick, and seconded by Ms. Steines, it was
VOTED: To approve creation of the Nomination & Election Subcommittee, whose members will be Mr. Eaton, Ms. Kirkpatrick, and Ms. Steines.
VOTING: In favor: Bleier, Coleman, Eaton, Kirkpatrick, Putnam, Schultz, Steines
Recusing: Michl, Russell
Upon motion duly made by Ms. Kirkpatrick, and seconded by Mr. Eaton, it was
VOTED: To approve and ratify the schedule as proposed by the Nomination & Election Subcommittee, including the March 23 candidate forum.
VOTING: In favor: Coleman, Eaton, Kirkpatrick, Michl, Putnam, Russell, Schultz, Steines
Mr. Bleier raised concern with the board editing candidate’s bios. Ms. Kirkpatrick and Ms. Steines clarified that editing will only take place with candidate approval, as it has in the past. Co-op Counsel Mr. Monte added that editing may be necessary to protect the Co-op’s liability. Mr. Russell noted that the entire election procedure is clearly stated in a policy written by Josh Tower, and approved many years ago.
Ms. Steines asked to table the Code of Ethics discussion, but asked if there were objection to the Nomination & Election Subcommittee using the code. Mr. Shultz replied that he agrees with the concept, but has questions regarding the content.
Personnel: Mr. Russell reported the committee has not met therefore has taken no action.
20th Committee: Mr. Russell reported the committee has not met therefore has taken no action.
Use of the Membership List: Mr. Russell relayed
the request by Mr. Kalkstein’s lawyer, a Mr. Hemsley, to obtain a copy of the membership list for Mr. Kalkstein’s own personal use. (please click on the link to view the text of the message in GIF image format). Mr. Russell stated that he believes the pre-existing 1996 "Records Disclosure Policy" allows an owner to send unlimited number of uncensored mailings to the members on the list, while it protects the list from misuse. Co-op Counsel Mr. Monte has prepared a response to Mr. Kalkstein’s request, which will be reviewed in executive session. Mr. Bleier stated that he would be more comfortable with allowing use of the membership list if the owner requesting the mailing list signs an agreement that the use would be for co-op business and non-commercial. He is concerned that the board is considering prior review of material for political reasons. Mr. Monte stated that the 1996 policy of prior review can protect the co-op from lawsuits that might possibly occur if the Co-op was somehow determined to be the "source" of the mailing.
Ms. Kirkpatrick added that when the 1996 policy was adopted, there was no sensitive bond issue at the time, as it came up in the first or second meeting of the co-op. It was adopted without a crisis with the discussion that the SH List of names is something valuable to protect. The policy was originally implemented because it was generally felt that some aspects of the co-op are proprietary and private, to protect members, also customers, of the co-op from commercial solicitations, and at the time there was concern about inflammatory information regarding a sensitive bond issue. The trustees raised and discussed issues revolving around the fact this Owner’s request had never been previously denied, nor did the request suggest any compromise to following the procedure as stated in the 1996 policy; information getting into the wrong hands, e.g. Sugarbush’s president and vice president both being co-op owners; possible legal ramifications; and attaching the letter in the minutes. Further discussion was tabled, to be reconsidered in Executive Session.
Shareholder Certificates: Ms. Steines and Ms. Putnam proposed a motion and then withdrew – to direct management to take action, with legal council, to correct Co-op shares that were issued in error to multiple parties and any shares issued to an entity other than to one person.
Mr. Bleier supported correcting the errors. Ms. Kirkpatrick stated that this involves approximately 11 shares, there will be natural attrition, and should not spend the money to correct a technicality. Mr. Michl pointed out that some Valley Businesses proudly display their share (i.e. The Bridges). Mr. Monte cautioned the possibility that some of these owners/entities may not voluntarily comply with the request to correct. He suggested that management send out the request to correct, report response rate back to the board, and determine how to fully rectify the errors once these owners have responded to the request. Mr. Coleman recommended making this suggestion to management rather directing them to do so with a formal motion.
Further Shareholder Comment
Jim Vann complimented the board on a productive meeting; he supports the limit on employees on the board to 1/3, but cautioned that ‘employment’ must be clearly defined; MRG patrol is excellent and knows the MRG skiers best; a home owner could also be construed as having a conflict of interest in some board matters; and further pointed out that the Shareholder Relations Committee meant no acrimony towards the Board Development Committee and was only recommended posting of the election schedule.
Shawn Kalkstein assured the board that his lawyer’s request to obtain the mailing list would not be used for commercial purposes, but felt his purpose was valid because he wished to communicate with other owners on matters of corporate governance. He stated that if he failed to do as he stated he would be subject to charges of fraudulent behavior. He is willing to sign an agreement stating his purpose and asked the board to regard his request seriously. Further, he believed the bylaws clearly specify the conditions which he intends to comply with.
Rocky Bleier, as an employee from the podium, commended management for a harmonious start to the season. He feels the general attitude of those involved with mountain operations and the high level of morale is directly related to the general manager’s management style.
At 8:25 p.m. the board entered into executive session and resumed open session at 9:50 p.m.
Upon motion duly made by Ms. Kirkpatrick, and seconded Mr. Michl, it was unanimously
VOTED: To direct counsel, Peter Monte, to respond to Mr. Kalkstein’s attorney regarding disclosure of a list of owners and addresses, and to appoint trustee’s Kirkpatrick and Steines as a committee to consult with Mr. Monte to resolve the dispute.
Upon motion duly made by Ms. Steines, and seconded Mr. Eaton, it was unanimously
VOTED: To decline to exercise the Co-op’s right of first refusal to purchase stock of the Mad River Barn which is available for a price of $650,000, but to request the Co-op’s option rights be presumed for a future transfer.
Upon motion duly made by Mr. Eaton, and seconded Ms. Steines, it was
VOTED: To determine that President Russell committed no wrongdoing by making the comments quoted and were then published in the National Coop Association business journal.
VOTING: In favor: Coleman, Eaton, Kirkpatrick, Michl, Putnam, Steines
Abstaining: Bleier, Shultz
There being no further business to come before the board the meeting adjourned at 10:00 p.m.
Margo B. Wade
A true record.
Robin "Rocky" Bleier, Secretary
Proposed Bylaw Amendments