CI-THE OWNERS GROUP -
RESOLUTION #1 FOR THE SGM
Special Resolution #1
To amend the Disclosure Statement dated January 29, 2016, clause 3.9 (c) (ii) Voting for Directors to read “at least two directors (the “Independent Directors”) must be elected solely by the Voting Power of the Resort Point Members.
Rationale for the Special Resolution to Amend the Disclosure Statement dated January 29, 2016.
The current composition of the Board of Directors does not adequately serve the interests of the membership at large for the following reasons;
1- Three of the five directors are employees of the Declarant/Developer, Diamond Resorts Canada: Mr. Trevor Bruno, Mr. Ron O’Gorman, and Mr. Robert Reyes
2- Although Mr. James Orr is a club member, the declarant/developer can vote for this fourth director position, providing an unfair advantage to the declarant, who has 15 times the voting power of members. As of April 15th, 2016, the declarant’s voting power in the club is 47%.
3- Given the role of the manager and its broad discretion, having two members of the Board comprised of independent (non-declarant voting) Members helps to have the interests of the Club and the manager better aligned and helps boost membership perceptions of the Board and the value of membership. This shift also could help ease Members’ concern about the management transition to DRI.
In the Unanimous Written Consent of the Special Committee of the Board of Directors of Club Intrawest, dated December 31, 2015, by Directors Smith and Orr, Section V, Decision and Recommendations indicates “(a) Increase Club Member representation on the Board of Directors. Increase Club Member representation on the Board of Directors. Given the role of the manager and its broad discretion, having a majority of the Board comprised of independent Club Members helps ensure the interests of the Club and the manager are well aligned and helps boost membership perceptions of the Board and the value of membership. This shift also could help ease Club Members’ concerns about the transition to Diamond. IRCG holds 3.6% of the Club’s Resort Points (with preferential voting, currently 36% of the vote) and three of the Board’s five seats are occupied by IRCG employees. Club Members could be given the opportunity to replace a Board Member with an independent Club Member. Alternatively, the Club’s bylaws permit the board size to increase to seven, so the Club could add two seats to the Board so the Club Members could elect two more, for a total of four.”
In summary, the current composition of the Board of Directors does not adequately reflect independence from management and is unable to demonstrate oversight in the development and performance of internal control, a current requirement of COSO (Committee of Sponsoring Organizations of the Threadway Commission) 2013 Integrated Framework. COSO is the standard used to hold not profit and public sector Boards of Directors registered in the US to account.
Submitted by: Konrad Kawalec
Membership # 1-365787
Annual Points: 300