Chapter 137

Celina looked at the assembled group sheepishly. None of them knew what was going on – with the possible exception of Mike, who had remained silent. The females naturally assumed Adam, Walt or Sean had made a stupid comment and Adam was left to do damage control.

"Sorry," Celina apologized. "Do I need to touch on any points of my report?"

"Are you OK?" Allie asked.

"Yeah, temporary insanity I guess," Celina answered, "but it's OK now. Can we go back into session?"

"Sure," Sean said. "I'm sure you and Mike have better things to do than show up here on Sunday nights."

"You'd be surprised if you think that," Mike said. "This is actually one of the high points of my week."

"Mine, too," Celina said. "I enjoy spending time out here."

A look of comprehension crossed Rebecca's face. She was almost always the first to catch on to things.

"You are always welcome here," Rebecca said with authority. "We should let you know that more often. I think a part of it is that we look up to you so much that we don't want to embarrass ourselves when we act like we're 12."

"She means when Walt acts like he's 12," Adam said.

"Well, yeah," Rebecca said. "I guess that is what I meant."

"Anyway, back to the report," Sean said. There was time for extraneous conversation after the meeting ended. He tried to keep the meetings to one hour or less. It was another hallmark of his management style. He didn't think every single issue needed a 40-minute discussion once consensus was reached. For the most part, everyone appreciated it. It gave them time for other things.

"I have a couple of things I'd like to suggest," Karlie said. "I'm not sure if I have standing, though."

"The chair recognizes Karlie Chandler," Sean said. He wasn't sure she was authorized to speak at board meetings either but he was firmly on the side that she should be.

"I just want to make sure it is stated explicitly that the education grant can cover more things than just college education," Karlie said after smiling sweetly at Sean. "If we have someone who wants to take diesel mechanics or auto body repair, I think we should cover it. This is not just about providing skills to assist Subarctic or Five Friends. It is about providing a viable skill for the person's future."

"Good point," Walt said with a thoughtful nod. "Are we covered on that, Celina?"

"Generally," she said. "I can word it more clearly. I think that is a good idea, Karlie. I should have considered that. But you're going to have a hard time quantifying the requirements. The place has to be accredited before we can cover it."

"Most places like that are," Walt said. "You get a certificate or a diploma, depending on the school. I don't think she's talking about taking a cooking class at the local Y or just a single class on anything. I think she is talking about a career-track vocational education program. Those are usually one- or two-year programs."

"But that opens up another question," Karlie said. "What about added-training programs?"

"That I can answer definitively," Celina stated. "Those are covered under your corporate bylaws. You can already pay, as a simple example, for me to take a class to become an agent as part of my job. The same is true for Veronica or anyone already employed. Those are considered continuing education. Incidentally, I think Veronica will be ready to take the test in approximately another week."

"Excellent," Sarah said. She was happy that Veronica was going to become certified. It wouldn't change a single thing about how the business operated but it would give the young woman a sense of accomplishment.

"I think it would be best if I insert a separate clause about certified non-traditional courses," Celina continued. "It would keep you from seeing problems in the future. Good idea, Karlie. Is there anything I might have missed?"

"Just the part about reimbursement of previous education expenses," Adam said.

Celina frowned slightly.

"It's a double-edged sword, Adam," she said. "We cannot, legally, reimburse you for previous classes if we're disregarding their impact on your educational record. I know it would not affect a single person in this room. Everyone here has already supplied a copy of their transcripts for our files. But it would affect others. Unless they meet the threshold, we cannot provide for their education."

"Well, that answers that," Walt said.

"Does it?" Allie asked. "Look, this might affect me, I'm not sure. My high school GPA was spotty at best. It might have been below 2.5. I'm sure the fact I didn't finish affected it adversely. It might make more sense for us to help others out of pocket instead of losing out on reimbursement of past expenses."

"You don't get tax write offs for that," Celina pointed out. "Isn't that the point here?"

"A small portion of a point," Allie said. "It is the right thing to do. That is the major point. The fact that we see benefits from it isn't the primary reason at this point. But I think we would see a bigger tax effect if we agreed to pay for Sean's loans than if we agreed to pay for Veronica to go to junior college. I mean, we would still pay for Veronica. It is a short-term solution against a long-term one. We really need to think about this."

Walt was already doing math in his head. It was a gift he possessed.

"Long-term, we're better off just passing on what we've already spent," he declared. "Unless this is as large as we're ever going to be. Does anything think that is the case?"

"Maybe," Adam said. "I sort of hope it is, actually."

"For the parts of the business we already have in place, I tend to agree with you," Walt said. "But we're talking about other interests, too. What happens if we invest in Steve Rayburn's garage or Renaldo's photography studio? We'll want to be able to provide the same benefits to those employees, too. Personally, I think those sorts of things are viable for us."

"The same with some of the decent web sites that are under-funded," Walt continued. "I can see us offering Chad Raymond some seed money for a percentage of his business, Melody too if it came to it. In the next year or two, I can see us having 100 people nominally employed by Subarctic. I can see perhaps 50 of them wanting to take classes."

"Which presents another issue," Shelly offered. "But I'll wait until Walt is finished. I know he gets distracted easily."

"Yeah, thanks," Walt said. "Where I was going is that we probably have about $300,000 in outstanding loans that might be reimbursed from all of our present employees. That includes the board and other owners and contract workers like Tyanna, Jason and Cameron. That is a drop in the bucket compared to what we'll do in the future. I think we're going to see more than the couple who are here now that will fall beneath the 2.5 threshold. First off, we didn't really quantify how that level applies. Say I went for one semester and found out I wasn't ready for college. I took 12 hours and failed 9 of them. I come out with a crappy GPA but then I join the workforce for a few years and gain some maturity. When I'm ready to start back to college, I think it would be unfair if Subarctic held something from five years ago against me."

"Like Veronica," Sarah pointed out. "She has been out of high school for five years."

"But she would only need one semester to become eligible," Adam pointed out.

"Katey would need more," Mary said. "In fact, I'm not sure it will possible for her to bring it up to a 2.5 in less than two years. She is already 60 hours in, you know."

"Damn, this is getting complicated," Rachelle muttered. "I don't want to table this. We need to hash this out and make some firm decisions. Celina, how easy is it to change the parameters later?"

"Again, there are two answers to that," Celina replied. "It is extremely easy to alter the guidelines. However, the moment you do, you lose all past tax indemnity. You would essentially be altering the trust. You also do not want to have two trusts. The government allows only one per corporate entity. That means you can't have a separate set of standards for previous students than you do for incoming students."

"Why?" Adam asked, then a thought popping into his head. "Why don't we agree to disregard all previous experience more than 365 days past? That would clear almost everyone and still let us get a portion of what we've paid out. We would use only classes in the previous school year. For example, I know Katey took no classes in the spring. That means we only use the hours and GPA she accrued during the fall and summer. That would let us take care of Jason, Cameron and Tyanna. They are all in their first year. We would lose our freshman expenses but that's it."

"That is possible," Celina said thoughtfully. "I need to check the legal ramifications. I know you want this done as soon as possible. Can we schedule an emergency meeting for later in the week?"

"It's not an emergency meeting if we schedule it," Sean joked, "and I think we can set something up. Still, I don't think another week is going to make much difference if we can't meet until next Sunday."

"True, but the sooner we get it started the sooner you can see tuition reimbursement," Celina said. She had a very good idea of how much money each person was talking about.

"I'm the only one without loans," Rachelle said. "Thanks to Daddy, that is. The rest plan to delay their reimbursement until they can claim the interest on their student loans off their taxes. Adam and Mary have been on scholarship from Day 1, so they won't see anything. The rest are on grants that won't qualify for reimbursement. I can wait so long as this is in place to help out everyone in August."

"Hey, that's my money," Mike said with a laugh. "Don't think you're going to pocket what I paid for your education!"

"Oh, yeah," Rachelle said sheepishly. "I guess you're right. Sorry, Daddy. I guess I should ask if you're willing to wait."

Mike laughed again.

"I can wait and I don't expect repayment," he said. "I told you from the day you stepped on campus that so long as you maintained a good GPA, I would pay your way. You've lived up to your end of the bargain. I'll live up to mine. The fact that you found a way to get it paid for twice is not an issue as far as I'm concerned. Besides, that means I don't need to feed your bank account any longer."

"So we can agree to table this until our next meeting?" Sean asked. "I want it clear that at our next meeting – regular or emergency – I expect us to have our ducks in a row. We need to decide how we're going to do this. I'm not opposed to Adam's suggestion, if it meets the legal standard. Really, the group in this room should be the least of our concern. It is my opinion, speaking solely as an owner and not as chairman, that we should look for the long-term gain of Subarctic Enterprises even if it means we have to personally pay for some of it out of pocket."

"I'll have an answer on Adam's proposal by Tuesday," Celina promised. "If it's workable, I would recommend we word it that way. If it isn't, I'll let you know as soon as I can."

The last item on the agenda was the purchase of Looker Lass.

"Now, as I understand this, Rebecca is asking this to affect only future profits from Subarctic," Walt said when it came time for discussion. "Am I right about that?"

"That is the way the motion is worded," Shelly confirmed.

"I don't like it," Walt said. "I won't agree to it and I won't support it."

All heads turned to look at him. It was rare for Walt to make such a strong statement.

"Why?" Shelly wondered. There was a trace of anger in her voice that Adam recognized instantly.

"It isn't a fair offer," Walt said. "Look, we're assuming all the assets and all the debts of Looker Lass. I've looked over the prospectus and there is no equity in this. This is not a merging of equals."

"So you suggest we're paying too much?" Adam wondered. He was of the opposite opinion and he thought Walt might be thinking the same thing.

"No, I think we're paying too little," Walt said. "When I said it wasn't a merger of two equals, I wasn't talking about Subarctic being the bigger player. We have more money, sure. But we have absolutely no reputation and no way to guarantee that we will ever make more money."

"You're kidding, right?" Shelly said. She had been appointed spokesperson for the proposal by default, it seemed.

"I'm not kidding," Walt said. "We have plans to make more money. But there is absolutely no guarantee we will. I sure as hell hope we do but what is your proof that you're right?"

That caught Shelly off-guard.

"Uh, well, I suppose it is all speculation at this point," she admitted.

"Meanwhile, Looker Lass has proven it can practically print money," Walt continued. "I'm not opposed to exchanging a portion of our stock for certain assets of Looker Lass. But we're talking about taking over the whole enchilada on the speculation we'll be able to provide a larger profit for Rebecca. I'm not willing to bet our friendship on that."

"I am," Rebecca declared. Walt smiled at her.

"Sadly, you are not included in this discussion," he said. There was no anger or hostility in his voice. "So you'll have to let me or Adam look out for your best interests in this matter."

That brought the looks in Adam's direction.

"You know where I stood on this," he said simply. "We're paying too little for the assets Rebecca is offering. Yes, it is a good deal for Subarctic and I suppose that should be my main interest."