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Motion Before the Newark Country Club Board of Directors at its meeting of November 1, 2004.

 

 

 

MOTION TO APPROVE

NCC/ADG EXCHANGE AGREEMENT

 

 

Motion made by Chris Raymond, seconded by Fran Dinuzzo, that the NCC Board of Directors (“Board”) approve and recommend approval by NCC stockholders of the NCC/ADG Exchange Agreement, a copy of which is attached to these minutes, and that the stockholder vote be conducted within ninety (90) days of Board approval. Some, but not all, of the supporting reasons for this motion include:

 

In order for NCC to have an opportunity to participate in the design of the New Club (golf course, club house and country club facilities), the current timing is appropriate for approval of this Agreement;

 

This Agreement, assuming approval by Cecil County of ADG’s proposed development, provides NCC an opportunity to obtain an $11 million facility, including a brand new golf course, club house and country club facilities on approximately 170 acres of land, zoned residential and valued at $4 – $5 million, plus $1.5 million in cash to reduce NCC’s current debt;

 

As a “speculative opportunity,” NCC retains several opportunities to terminate this Agreement, without substantial penalty, if ADG is unable to comply with the requirements and responsibilities to which ADG has committed in the Exchange Agreement;

 

Because NCC currently has limited, if any, funds for future anticipated capital needs necessary to maintain and improve the club house and golf course, this Exchange Agreement allows NCC to “swap” its current land and 50-year old + facilities for a new facility within a reasonable distance from the current country;

 

 Because the NCC has a current debt on the order of $1.3 million, the $1.5 million in cash to be provided by ADG at settlement will provide NCC an opportunity to substantially reduce its debt;

 

Because NCC’s membership has dropped over the past several years, and that the anticipated trend in new members is neutral to negative for the foreseeable future, this Agreement provides an opportunity to market a new golf course and country club facility in an effort to increase membership in NCC;

 

Because NCC has debated this matter for over 22 months, it is important to proceed to come to a final resolution in order to move forward to enhance the long term viability of NCC; and

  club;

 

Based on the review of the Long Range Planning Committee’s (LRPC’s) work over the past several years, the Board believes the option of approving the NCC/ADG Exchange Agreement is a better alternative to attempting to make and finance improvements to the current facilities.

 

The Board intends to conduct several “town meetings” to discuss the details of the Exchange Agreement prior to NCC stockholder consideration.

 

For all of the above reasons, and because this Board has a fiduciary duty to it members to present to the stockholders for a decision matters that may significantly impact the Newark Country Club, the NCC Board believes it is important to present this Agreement, with a recommendation for approval, to NCC’s stockholders.

 

Motion passed by unanimous consent – a vote of 12 - 0.