The Board of Directors

The Board of Directors

By Scott Carpenter

Copyright 2013 Scott Carpenter

Smashwords Edition

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Company Overview

Carolina Sportswear is a multi-national clothing retailer with 1,100 stores in the U.S., 35 in Canada, and 319 in Europe and Australia. The company designs a few of its own clothing lines and purchases the rest of their inventory from several major fashion brands. Last year's revenues were $8.5B with an $899M net income. The average store employees approximately 29 employees, some full-time and some part-time. The average sale is $258. College students love to work at the company and enjoy the 50% off employee discount after three months of service.

Carolina Sportswear is headquartered in New York City. Most Board meetings have been in the corporate headquarters to gain quick access to key VP's and Managers. However, Ron Strong has been pushing to have Board Meetings in other States to improve the company exposure in strategic 'underserved' metropolitan areas.

All but one store is company-owned and operated. That one franchise store is the only store remaining from a failed franchise program piloted 16 years ago. This franchise store is consistently in the top five 'Hero' stores in annual revenues and profits. The store owner, Mary Williams, is a retired Fortune 100 Marketing VP who absolutely loves her store and the product. She has turned down a Board Member nomination every year for the last 14. No one dares tell her she has to close her store. Besides, several company commercials have been filmed at her very upscale location. She has a direct line to Sarah Newman that both people enjoy and both people have been known to abuse to other company manager's agitation.

The company has grown through adding stores, mergers with regional companies, and through a hostile takeover several years ago. Martha York was instrumental in structuring those financial deals for Carolina Sportswear as she was a major stockholder before joining the Board. Her 'broker' fees gained her additional common stock ownership rather than additional cash. She did not need the cash, anyway.

Stores are organized into regions with a Regional Manager overseeing the U.S. operations and reporting to the VP of Operations. There are 50 Regions in the United States. Stores in other areas of the world are organized by country with Country Managers reporting to the VP of International Operations who, in turn, reports to the VP of Operations. Due to their geographic size and the distance between stores, there are two Regional Managers in Canada and three in Australia with each of these managers also managing stores. There are no stores in China.

The company has about 4,100 venders. No single vender commands more than 12% of the annual sales dollars. The company maintains large corporate relationships. The Regional and Country Managers purchase various clothing accessories from local manufacturers and dealers.

Board Compensation

A. 1,000 Shares of Common Stock and $5,000 per quarter if profitable

B. 500 Shares of Common Stock and $5,000 per quarter if not profitable

C. 1,000 shares of Common Stock when profitable the first year following a Board Member's term.

D. $2,000 per Quarterly Board Meeting attended.

E. $1,000 per Quarterly Board Conference Call attended.

F. $5,000 per year to chair a committee.

G. $10,000 per year to chair the Audit Committee

H. $1,000 per year to serve on a Committee

I. $1,000 to attend a Committee Meeting

J. $500 clothing allowance when purchased on any Saturday in December before Christmas when completing a store evaluation.

K. $250 clothing allowance any other time when completing a store evaluation. Maximum $1,000.

L. All pre-authorized company travel is fully reimbursed. Normally, travel is Business class.

M. Must maintain 2,500 shares of Common Stock to remain on Board.

N. Must make four store visits per year and complete the store evaluation.

O. Board positions are four-year terms. Few people have been asked to stay longer in the previous decade. Two Board Member's terms expire each year, one expires in April, the other in October.

Board of Directors Service

Ron has brought two people onto the Board; Chance Noble and Tom Gentry. He explains their role. We are the group who decides the company's direction, the future. We supervise senior management, and, technically, most importantly, are the stockholders advocate. After all, the stockholders voted for each of us to have these positions. We do not, normally, get involved in the day-to-day business, but, we do insure the VP's do. I, in my dual role as CEO, have day-to-day responsibilities. Other than Sarah Newman, each Director was also approved by their current functional area VP before being presented to the stockholders on proxy. Remember that when you recommend salary and compensation for your VP.

We ran $8.5B in annual sales last year. Most of our customers love our stores. The stores are attractive, safe, well laid out, fully stocked, and comfortable. We know this from our customer feedback. Some of our competitor's stores have the same or similar merchandise. The difference in us and them is