CI-THE OWNERS GROUP - 

RESOLUTION #2 FOR THE SGM

Special Resolution #2

 

To amend ARTICLE IV BOARD OF DIRECTORS, Section 4.1 of Table 13, Fifth Amended and Restated By-Laws, to change the composition of the Board of Directors from five (5) persons to seven (7) persons, with these two (2) new positions categorized as “Independent Directors”, elected solely by the Voting Power of the Resort Point Members, and to elect two (2) new Independent Directors during the Special Meeting, from the Members present, as interim Directors until the election in 2017.

 

Rationale for the Special Resolution to Amend By-law 4.1 and to Immediately Elect two new Independent Directors

 

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 (3) (Trevor Bruno; Ron O’Gorman; and, Robert Reyes) of the five (5) Directors are employees of the       Declarant/Developer (Diamond Resorts International).

 

2- Of the two (2) remaining Director positions only one is officially independent, as indicated in the BC              

    Disclosure Statement, article 3.9(c)(ii), a seat held currently by Mr. Kenneth Smith.

 

3- Although Mr. Smith’s seat is considered independent, he is in a conflict of interest, as the company Traner    

    Smith & Co., PLLC, where he is a principal owner, provides Financial Services to the Board of Directors.

    This conflict removes his ability to be independent.

 

4- Although the Board has suggested that Mr. James Orr’s position is independent (as he is not a DRI  

    employee), the club instruments state otherwise; Mr. Orr’s position can be voted on by both the Declarant

    and Members. The imbalance between the Declarant vote (1 vote/1 point) to the Member vote (1 vote/15

    points) makes it impossible for this position to be independent.

 

ARTICLE IV. BOARD OF DIRECTORS, Section 4.1 of Table 13, Fifth Amended and Restated By-Laws of Club Intrawest “allows for the number of Directors to be increased or decreased from time to time by an amendment to these By-Laws; provided, however, that the Board shall be comprised of at least five (5) but no more than seven (7) persons, and the Board shall at all times be comprised of an odd number of Directors.”

 

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.”

 

 

Submitted by:            Konrad Kawalec

                                    Membership # 1-365787

                                    Annual Points:  300