VCC Update - December 2017

The Volunteer Coordinating Committee ("VCC") is an informal group of Embarc members seeking to advance the interests of all Embarc members. The following are current VCC members:

• Mike Berthiaume

• Michel Charron

• Patrick Cormier

• Chantal Desjardins

• Paul Faucher

• Konrad Kawalec (ex officio)

• Jonathan Mayer

Please find below and in the next days, on behalf of the VCC, the Fall 2017 Update to Members. We split this Update in a few posts because there is a lot of content. The previous Updates to Members were published last summer and early in the Fall.

CONTEXT

Embarc Club, formerly Club Intrawest, is not an organization that is truly directed or actually controlled by Embarc resort point members. It is in fact directed and controlled by Diamond Resorts International ("DRI") inasmuch as 3 of the 5 directors on the Board are Diamond employees (including the President of the Board).

Owing to that control, DRI employee directors always ensure absolute DRI control by making certain that the Board selects DRI itself or one of its subsidiaries as the Manager of Embarc. Thus DRI, as the manager, also controls the reservation system and shares your “vacation information” with DRI, the Developer sales force so that it can direct-market to members and vacationers during vacation stays, usually during the “members’ update” or other sales presentations. It is increasingly difficult to book units during Peak and Holiday periods at premium Embarc locations because DRI appears to be unfairly using its pool of developer-held Embarc points and making block reservations way ahead of the reservation window permitted in rules for resort point members . The cumulative increases of our annual resort dues remains unchecked. We members do not have our Club under our control even though we collectively own over 90% of the total resort points. This is not “negativity”, it is reality.

Under the control of DRI since 2016, 22,000 Embarc resort point members have seen a continued steep decline of the value of their points on the secondary market versus the steep increase in the retail price of points sold by DRI, cumulative increases of their annual “resort dues” above inflation, numerous bugs and errors with the online reservation system and increased difficulties in booking premium Embarc locations during Peak and Holiday periods. In addition, DRI makes it easy for members of the public to book our accommodation during Peak and Holiday periods by making rooms available on third party booking sites and by reserving blocks of resort units at prime vacation time many months and years in advance of the “reservation windows” under the rules for resort points members.

As of today, all of the questions that have been sent by individual members and the VCC to the Board of Directors asking about “What do members truly own” have not been answered adequately.

Finally, a recent Federal Court of Appeal of Canada decision confirmed that there does not seem to be evidence that resort point members have any beneficial ownership of real property in the Embarc resorts but rather, members only own “resort points” that convey merely a “right to use” to occupy the resorts. In other words, we resort point members are not “owners” but rather “users” of Embarc resorts. This essentially means that resort point members are not very different from members of the public who “rent” resort accommodations from DRI through such websites as Expedia or Travelocity. So much for the claims and sales representations that Embarc is an “exclusive club” and that members have beneficial ownership of resort units or assets.

In November 2015, when Intrawest announced the pending sale of its interests in the Club, mounting member dissatisfaction led a number of member volunteers to self-organize into a member group to examine how members’ rights could be affected by the pending sale and to understand and protect whatever rights members have. This group evolved over the next two years into the VCC of today.

In this Update to Members, the following updates will be covered:

• What the VCC is and how it operates;

• Our Action Plan (in general);

• Geldert Law and JRA; and

• Our challenges and how you can help.

THE VCC

When the VCC started, it did not have any formal structure or bylaws to support its strategy or action plan. The VCC was indeed and remains to this day an informal self organized group of like-minded individual volunteers seeking the best interests of 22,000 resort point members like themselves. As a result, the VCC, during its first period of existence, was fluid in its composition and several members pulled hard on different projects. Despite this informality, the VCC accomplished a considerable amount of work for the benefit of members. For example, the VCC was successful in its efforts to force the scheduling of the first ever General Meeting of members in the 22 year history of the Club. The Special General Meeting was convened in Vancouver in June of 2016 but despite the attendance of over 1,000 members and 13% representation of resort point members by proxy and in person,we did not meet the quorum threshold of 15% of total resort points. As a result, the then president of the Board of directors refused to officially open the SGM, much to the dismay of all gathered there from around the world, and then proceeded to use the remaining time in the meeting hall for Intrawest presentations.

The VCC campaign to support Konrad Kawalec as independent director instead of Ken Smith met with success in June 2017. Now fully energized, the VCC decided in June 2017 to align its efforts under new Vision, Mission and Values statements - announced in the Summer 2017 VCC Update to Members.

In the period July to November 2017, the VCC attempted to craft an Action Plan. However it was realized that the VCC needed to meet in person again for a full day to resolve outstanding differences of opinions. I am pleased to report that VCC decisions were taken on a consensus basis during our all-day retreat on November 27th. We now have an action plan.

The VCC also decided to improve its operations, in a number of key areas, by developing four guidelines:

• VCC Code of Ethics & Working Principles. What is the purpose of the VCC? How can we prevent conflict of interest? How are roles & responsibilities discharged and how should VCC members work with one another? Who is eligible to serve on the VCC and how are voting rights governed? How are new VCC members admitted to the VCC? All these answers and more can now be found in the VCC Code of Ethics & Working Principles.

• VCC Meetings & Retreats. When the VCC meets, what are the agenda, quorum and voting rules? Who is responsible for what? How are decisions recorded and who can see them? All these answers and more can now be found in the VCC Meetings & Retreats Guidelines.

• VCC External Collaboration. The VCC does not have and does not want a monopoly on advancing the interests and knowledge of Embarc members. There are many passionate and knowledgeable individuals in our community that have from time to time generously shared their findings with us. Some members have asked us how these activities relate to the the work and priorities of the VCC. Also, how can we best leverage the legal, accounting and governance knowledge our members have? All these answers and more can now be found in the VCC External Collaboration Guidelines.

• VCC Community Publication Guidelines. There has been a few incidents of deleted posts in the CIOG Facebook Group which have provoked a number of legitimate questions. Which posts should be deleted and according to what rules and process? Who are the administrators of the Facebook Group and how do they relate to the VCC? All these answers and more can now be found in the Embarc Community Publication Guidelines.

In a few days, I will publish the basis of our VCC Action Plan.

Patrick Cormier, VCC Team Lead

Stay vacationed, but be aware!