Meeting Minutes

USATF Board of Directors
Conference Call
June 18, 2009

ATTENDANCE/QUORUM
Attendance:  Stephanie Hightower, Bob Hersh, Ken Taylor, Aretha Hill, Jeff Darman,
Elizabeth Phillips, Kim Haines, Dr. Evie Dennis, Philip Dunn, Steve Miller, Jack Wickens, Steve Holman, Deena Kastor, Darlene Hickman and Larry James, Board Counsel.
 
Office Staff:  Doug Logan, CEO, Shayna Sangster, Lamont Jones and Mike McNees.
 
Quorum was present.  Stephanie Hightower opened meeting at 3:05pm (Eastern) via teleconference.
 
WELCOME/PRESIDENT REMARKS
President Stephanie Hightower opened the call by stating that everyone should have received an email with attachments that included: The Nike Resolution, the CEO Resolution, USATF Draft Bylaws and the Nike Press Release.  Hightower noted that the conference call was scheduled to discuss the issues involving Nike.
 
NIKE DEAL
Doug Logan discussed the negotiation with Nike. He explained that this sponsorship is a vital revenue source for USATF and it will be an important part of the growth plans for the future.  The contract includes new concepts that were created to extract additional value from USATF’s inventory of assets.  This contract is an insurance policy that insures USATF’s ability to go forward.  Logan mentioned that he is available for one-on-one conversation then, invited questions.
 
Steve Miller posed the question of whether there were negotiations with any other companies besides Nike.
 
Logan explained that there was not contact with any other companies because the former agreement, had an exclusive negotiating period that was established inside the contract itself. Logan negotiated through the ninety days that were established through the contract, then mutually agreed with Nike to extend that period another thirty days.  An agreement was reached within that time period.  He did not go outside and try to make a market. 
 
Miller questioned whether it was unusual to not to have a competitive bid.
 
Logan responded that in his experience, including, with soccer it was not unusual to reach an agreement on an extension during an exclusive negotiating period. It was Logan’s judgment, predicated upon the value that he walked in establishing ahead of time, that the Nike offer would provide the value that Logan deemed fair and reasonable.  He exercised his best judgment at that point in time.  Logan explained that the contract in long form is still being negotiated.  Currently there is a binding term sheet that encompasses adds and drops from a prior contract.  There was input from both in-house counsel and counsel to the board, and prior to executing any contract both will be consulted and both will sign off.
 
Hightower noted that the practice of the previous board was not to engage the full board by allowing them to review the terms of the contract.  The board was pretty much in the dark with respect to what the CEO had negotiated, and the only people who knew were the President, Legal Counsel and the Executive Committee.  It is now the intention under the new board structure that anyone who wants access to review the document will have access.  If the resolution is approved today, those who would like to see the terms of the agreement can have access to them.
 
Elizabeth Phillips noted that the terms would be confidential between board members.  Hightower agreed and suggested that if anyone discloses confidential information, that person will be sanctioned and, if necessary, further actions will be taken against him or her.
 
Phillips questioned whether any other companies expressed interest in where we stood with the contract.  Logan explained that other companies did show interest, including direct overtures from Adidas and indirect overtures from two Chinese apparel companies.  Logan responded to neither.
 
Jack Wickens noted that he had spoken with Doug earlier in the day about whether there were ample opportunities for other companies to become sponsors and investors in our sport or whether we are at risk of having too many of our eggs in one basket?  Logan’s response was that there are plenty of opportunities for other companies to get involved.  There is ample opportunity for us to take advantage of that after this contract is put in place.
 
Jeff Darman made a point that this board has become more of an affirming board than a doing board.  How do we better balance being kept informed, meeting the needs of confidentiality and the need of the board to give guidance.
 
Larry James, General Counsel to the board, responded to Darman’s concerns by pointing out the normal protocol will be addressed by the CEO Resolution brought forward today.  With respect to contracts outside the normal budgeting cycle, there will be prior authorization for the CEO to enter into negotiations for a specific contract, with board counsel to sign off on the final product.  During the negotiations, the board might elect to remain apprised of development by appointing a specific committee or by discussing the proposed contract.
 
Hightower made note that these concerns will be one of the primary topics at the July board meeting.
 
Logan made three points : 1.)  This Nike procurement is unique;  2.) It will Probably be the largest negotiation we will have in this quadrennium; the fact USATF was operating between two boards was a factor; and 3.)  he does not want the board to be an affirming board, but a proactive board.
 
Steve Holman questioned whether this affirmation is necessary before things can proceed.  Logan said, most definitely.
 
Evie Dennis inquired whether this is correcting something that the previous CEO had messed up. Logan did not want to comment on his predecessor’s actions. Hightower noted that this is what Masback developed, and that we had to live with it after his departure.  
 
MOTION: (Hightower/Dennis) Adopt Nike 2009 Contract Resolution:
Roll Call Vote:  12 affirmatives
APPROVED Unanimously
(Willie Banks, Deena Kastor & Max Siegel not present for this vote.)
 
MOTION: (Hightower, Taylor) Adopt CEO Authority Resolution:
 
Discussion:
 
 Wickens states that the authority is diluted in Article 23 of bylaws and feels that the line should be deleted.  Logan speaks in favor of the deletion.
 
MOTION: (Wickens/Kastor) Strike last sentence of Proposed Amendments to Article 23.I   
 
“Under Contracts: . . . . The content of all contracts effecting sport committee(s) shall, during their negotiation phase, be communicated to the appropriate committee(s).”
 
Roll Call Vote to approve amendment:  13 affirmatives
APPROVED Unanimously.
(Willie Banks & Max Siegel not present for this vote.)
 
MOTION: (Wickens/Dennis) In bylaw amendment proposal: 23.I.2 Execution (i) Change the President to the Chair.
Roll Call Vote: 13 affirmatives
APPROVED Unanimously
(Willie Banks & Max Siegel not present for this vote.)
 
Roll Call Vote for the CEO Authority Resolution: 13 affirmatives.
APPROVED Unanimously.
The Resolution passes with the two amendments to the bylaws.
 
Hightower added that there will be a meeting at the Championships in Eugene of a Sub-committee of the Law & Legislation Committee.  They will go through our bylaws to try to point out the areas that currently do not express the current business practice of USATF.  These items will be outlined and then there will be a meeting of the whole Law & Legislation Committee (most of the members to be selected in the coming weeks) to rewrite and configure for a vote at the Annual Meeting.  The bylaws allow the Board to amend, but the changes must be ratified by a vote at the Annual Meeting.  Hightower said that we are trying to create a process for changing the current bylaws to get them to conform to business realities, yet still allow the Membership to play a role in the process. 
 
 
NCAA COACHES FORUM
 
Hightower asked Steve Miller to talk about his role in holding a Coaches Forum at the NCAA Meet.  Miller said that he thought it went very well.  Many said that they were pleased to see the outreach now, and that it was long overdue.  The communication in the past was not seen as welcomed, and many were glad to see that attitude change for the future.  The effort to form a stronger link to Coaches through Steve Miller was seen as a good change to bring forward in the future of USATF. 
 
Logan addressed the three Track & Field Committees of the NCAA.  These are important programs for us to get behind.  In the past we have not given the coaches sufficient opportunity to participate.  There are several plans to forge new alliances.
 
JULY BOARD RETREAT
 
Hightower mentioned the need for everyone to make reservations to attend the retreat in July in Indianapolis.
 
Mike McNees reported that he has found a consultant for the retreat, and that he has an agenda.  The consultant is Erika Anderson. She is the owner of the Proteus Company/Internation.com.  Expect two days of full planning. Plan to start early on Sunday at 7:30 AM.  Specifics will come later.
 
Requirements from Doug Logan:  We will have a working lunch on Saturday.  Expect pretty full days.  Make sure that you do not make plans to do anything else.
 
The web site will be sent out to all so they can look up the web site in advance:  Proteus Company/international.com
 
Meeting adjourned at 4:10pm (Eastern)