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2016 Restated Bylaws Part 4: THREE YEAR CONTRACT LIMITATION

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 PostPosted: Mon 05 Sep 2016 9:49 am   
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Joined: Mon 27 May 2013 10:54 pm
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Refer to the Executive Summary at the back end of the proposed bylaw mailer.

This is the section discussing the 1 year vs. 3 year contract limitations.

Having dealt with contracts in the government sector, I am not sure why they could not negotiate multi-year contracts with option years under the current bylaws. For instance, a 1+4 has a base year with 4 option years. This can obtain the intended savings, should it not?

Also, the "explanation" says that in a crisis there must be a special election. The current bylaws allow for multi-year contracts, just with Membership approval. Why could the BOD not simply include any multi-year contract proposals along with the annual BOD election materials?

RECOMMENDATION: Tentative approval as long as it stand on its own, but this needs to be discussed.

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 PostPosted: Mon 05 Sep 2016 8:34 pm   
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Look at it from the perspective of a vendor. You put forth a offer on a contract. But the BoD has to put it to a vote for the membership.

That just introduces uncertainty that you would get the order.

When I ran my business - I would not offer my best price if there was deal uncertainty. Because what happens is that you put forth your best price/terms, and it is not approved. Well you know they are going to come back and ask for a "better deal" to win approval. So I would hedge - giving me some negotiating room since I am not negotiating with the final decision maker.

This came up in my business in similar fashion all the time when the contract had to be approved by a parent corporation.

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FACT: We have two independent BoD members - Bob Morrison and Cecilia Cuevas. You can trust that they are independent BoD members, because WMOwners Inc. cast proxy votes for them in the 2011 election. Both of these owners do not have any current or previous financial ties to Wyndham, and meet the IRS and SEC criteria for independent board members.


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 PostPosted: Mon 05 Sep 2016 8:40 pm   
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Joined: Mon 27 May 2013 10:54 pm
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ecwinch wrote:
Look at it from the perspective of a vendor. You put forth a offer on a contract. But the BoD has to put it to a vote for the membership.

That just introduces uncertainty that you would get the order.

When I ran my business - I would not offer my best price if there was deal uncertainty. Because what happens is that you put forth your best price/terms, and it is not approved. Well you know they are going to come back and ask for a "better deal" to win approval. So I would hedge - giving me some negotiating room since I am not negotiating with the final decision maker.

This came up in my business in similar fashion all the time when the contract had to be approved by a parent corporation.

Thanks for the perspective on the delays and uncertainty with having to go to a Membership election situation.

What about a base plus option setup?


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Chris
A WorldMark and Club Wyndham Owner
FLY NAVY

Resorts visited:
WorldMark: Solvang, Lake Tahoe, Angels Camp, Running Y, Depoe Bay, Big Bear, Marina Dunes, Reno, Wolf Creek, West Yellowstone, Havasu Dunes, Santa Fe, Grand Lake, Steamboat Springs
Club Wyndham: Grand Desert, Angels Camp, Flagstaff, Old Town Alexandria, Governor's Green, Great Smokies Lodge, Smokey Mountains, Kingsgate
Other: Club Tahoe, Glacier Wilderness Resort, Vacation Village in the Berkshires, USS Constellation, USS Dwight D. Eisenhower, Camp Lemonnier (Djibouti)


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 PostPosted: Mon 05 Sep 2016 10:13 pm   
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uscav8r wrote:
What about a base plus option setup?


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Meaning a base contract of three years plus an option for two years?

The same problem you have today is present with that contract. The vendor cannot amortize any fixed expense of the contract over the option years.

So if the BoD contracted me to take over internet service at all resorts, I can only amortize the ramp-up costs over three years. Otherwise I take a beating if you don't exercise your option. I think in those contracts you end up over-paying in year 4+. It is what we see with cell phone providers.

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Eric

FACT: We have two independent BoD members - Bob Morrison and Cecilia Cuevas. You can trust that they are independent BoD members, because WMOwners Inc. cast proxy votes for them in the 2011 election. Both of these owners do not have any current or previous financial ties to Wyndham, and meet the IRS and SEC criteria for independent board members.


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 PostPosted: Thu 15 Sep 2016 5:50 am   

Joined: Thu 15 Sep 2016 5:39 am
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I do contracting for the DOD. Base plus options makes sense because it is only a 1-year agreement with no obligation to exercise options in outlying years. There are always ways to handle inflation like forward pricing, price indexing, etc. The benefit to Worldmark would be to have pre-negotiated terms that would provide multi-year savings with no obligation to exercise the option if better terms are available. The benefit to the vendor would be to have the likelihood of a stable stream of business. We do it all the time, and generally both parties come out feeling like our agreements are a win-win.


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