MINUTES FLORIDA GULF COAST UNIVERSITY EMERGENCY BOARD OF TRUSTEES MEETING WEDNESDAY, JANUARY 17, :00 P.M. STUDENT UNION BALLROOM

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1 MINUTES FLORIDA GULF COAST UNIVERSITY EMERGENCY BOARD OF TRUSTEES MEETING WEDNESDAY, JANUARY 17, :00 P.M. STUDENT UNION BALLROOM Chairman Lutgert convened the emergency meeting of the University Board of Trustees in the Student Union Ballroom at 3:00 p.m. on Wednesday, January 17, 2007 with the following members present: Sharon Irish Bevins Brian Cobb Kirt Gallatin Larry Hart Lindsay Harrington Bernie Lester David Lucas Scott Lutgert James Malone (via conference call) Ed Morton (via conference call) Jerry Starkey (via conference call) Michael Villalobos (via conference call) Jaynie Whitcomb Members of Staff Present: William Merwin Bonnie Yegidis Joe Shepard Steve Magiera Mike Rollo Susan Evans Wendy Morris Barbara Krell Kathy Bottoms Guests: Joe Catti, Chair, Foundation Board of Directors, Attorney John Potanovic, Henderson, Franklin 1. Call to Order Chair Scott Lutgert Chairman Lutgert requested that Ms. Evans call the roll for purposes of a full count of Trustees. The roll is reflected above. Chairman Lutgert reminded the audience that if any member of the public wished to speak they should register with Ms. Bottoms. Chairman Lutgert called on President Merwin to speak to the Board. President Merwin read the following statement to the Trustees: 1

2 January 17, 2007 Dear Florida Gulf Coast University Board of Trustees Members: I am writing to you to advise that I have decided to seek early retirement as President of Florida Gulf Coast University effective as of the date of Board approval. I do so with both sincere regret as well as a sense of hopefulness in the University s continued well-being. The reasons for the decision are many. There are personal issues in my life to which I must give my full attention. In this regard, I have tried to serve as your President with honesty and integrity. However, I must inform you that I have faltered in my duty and have been involved inappropriately in a personal relationship with a female faculty member. This has caused anguish to many, especially to my wife and my family, and has violated the standards of appropriate behavior that has governed the University under my watch. I will not set a different standard for myself than I would for others because of my position. I accept full responsibility for my actions. Therefore, I have decided that it would be in the best interest of all that I retire early from this University. I do not want to be in a position where I cannot devote all my time and energies to the University and to all of you as stewards of the University. I also do not want to be in a position where I cause the University community, or any of you, distraction from the work of running this University. Indeed, I express my deepest apology and sorrow for my behavior and the pain it has caused. Please be assured that I will do what ever it takes to work with you and help you in any way that I can to effectuate a smooth transition. This letter has not been an easy one to write. The development and growth of the University in so many ways and in so many areas has been something wonderful to have been a part of. I have been deeply appreciative of your care, concern, and trust in working with me over the last eight (8) years and I want to thank you for having given me the opportunity to serve. My heart is with you and I ask for your forgiveness as well as all those connected with this wonderful place. Sincerely, Dr. William C. Merwin Chairman Lutgert stated that it took great courage for President Merwin to stand up and take full responsibility for this and he applauds him for that. He stated there is no question that this was bad judgment but 2

3 on the other hand, stated that the Board will take into account the past accomplishments that have been made for this great institution. Chairman Lutgert called for a motion to accept the President s resignationretirement. Motion was made by Trustee Harrington to accept President Merwin s resignation-retirement effective immediately. Motion was seconded by Trustee Malone. Motion carried unanimously. Chairman Lutgert stated that when President Merwin told him about this matter he felt it was important to engage an independent counsel to avoid any potential conflict of interest in negotiating the terms of President Merwin s retirement. He stated that in the past we have used Henderson Franklin and Mr. Lutgert asked for a motion from the Board to ratify his decision to retain independent counsel of Henderson Franklin Starnes & Holt, P.A. He stated that attorney, John Potanovic, is here today and introduced him to the Board. Motion was made by Trustee Lester to approve Chairman Lutgert s hiring of independent counsel. Motion was seconded by Trustee Whitcomb. Motion carried unanimously. Chairman Lutgert stated that at the same time while looking into this matter it became apparent that it was prudent, although he had no indication of any financial indiscretions on the part of the President, that the University conduct an audit to confirm that no financial indiscretions or misuse of assets transpired. He stated that in discussions with the vice presidents it was determined that again it would be good for the University to hire an independent auditing firm to look into this matter on behalf of the Foundation Board of Directors. Chairman Lutgert stated he engaged an independent auditing firm which is currently in the process of running an audit and that the audit should be complete by early next week. A full report should be back late next week or the following week. Chairman Lutgert requested a motion to ratify his decision to retain the auditing firm of Stroemer Tuscan & Company. Motion was made to approve the hiring of Stroemer Tuscan & Company by Trustee Lester. Motion was seconded by Trustee Hart. Motion carried unanimously. Chairman Lutgert reported that once President Merwin made the decision to retire, Chairman Lutgert asked him if he would be comfortable discussing this with Trustee Lucas who is Chairman of the Finance and Administration Committee and who also negotiated the President s contract and is familiar with the contract. Chairman Lutgert stated President Merwin had hired counsel for himself. President Merwin did contact Trustee Lucas. Chairman Lutgert requested a motion to ratify the role of Trustee Lucas as Board representative in discussing the President s retirement with the President and making a presentation to the Board. Motion was made by Trustee Starkey to approve Trustee Lucas as the representative to discuss the President s retirement and make a 3

4 presentation to the Board. Motion was seconded by Trustee Lester. Motion carried unanimously. Chairman Lutgert called on Trustee Lucas to give his report to the Board. Trustee Lucas stated that he and President Merwin met separately and then with attorneys John Fishbain and Jon Potanovic present and came to an agreement over a period of time. Trustee Lucas recommends to the Board that the President be given one year s compensation plus benefits. This has been agreed upon by the President and Trustee Lucas without the ability of discussion with other Board members. Trustee Lucas stated that it is his recommendation based on President Merwin s eight years of service and the job that he has done, the money he has raised, and the leadership he has provided for this institution. Chairman Lutgert asked attorney John Potanovic to provide information to Trustees regarding this matter. Mr. Potanovic answered questions the Trustees had regarding compensation scenarios. Trustee Lester stated that his preference is to settle on the agreement subject to the audit findings. Trustee Gallatin asked who would determine whether it was a successful audit. Mr. Potanovic stated this would ultimately be left in the Board s judgment. Trustee Hart agreed that this matter should be settled as soon as possible, but felt this should wait until the audit has been completed. Dr. Shepard stated that the audit report should be completed by the end of next week with a report forthcoming. Trustee Lucas stated he felt the agreement should be acted on today. Trustee Starkey asked if the audit would be a privileged document. Ms. Morris stated the final audit report will be a public record. Trustee Hart made a motion to wait until the audit report is received before moving forward with the decision on the retirement agreement. Motion was seconded by Trustee Starkey. Mr. Lucas asked for comments from Mr. Magiera. Mr. Magiera stated that in a case like this you will not get an opinion from an auditor. He stated the auditor will show you if there is anything financial where they can point to a dollar amount or to a trip or a claim if there are any. Mr. Magiera stated the auditor will determine what was appropriate or not appropriate. Trustee Whitcomb stated the Board has fiduciary responsibility to review all items to make this decision. Trustee Morton stated that he thinks the job done by Trustee Lucas and the suggested contract for the President seems fair but he feels Trustee Hart s counsel is valued and the entire approval be withheld until such time as the final adjudication of the audit can be determined by the Board. Trustee Hart further stated that he believes what Trustee Lucas has done is fair and is the right thing to do, but before the decision is made, he feels the Board has a responsibility to review the documents and that should be the responsibility of each and every Board member. Trustee Lucas agreed with this point. Ms. Evans called the roll for the vote and the motion carried unanimously. 4

5 There was a five minute recess for return at 3:35 p.m Chairman Lutgert stated that he will make a recommendation on who the Interim President will be to the Board and it will be up to the Board to vote on that recommendation. He stated it is important that we have someone who has the respect of the faculty and community. The person he selected is Dr. Richard Pegnetter, Dean, College of Business as the Interim President of Florida Gulf Coast University. At this time, Chairman Lutgert asked Board members to discuss this recommendation. Trustee Lester moved that we approve the appointment to be effective immediately. Trustee Malone seconded the motion. Motion carried unanimously. Chairman Lutgert asked Interim President Pegnetter to speak to the Trustees. Dr. Pegnetter stated that he is humbled by this invitation and will serve with every ounce of his ability to make sure that we continue to move the campus forward until we get a new President in place. Dr. Pegnetter stated that he is not and will not be a candidate for the presidency. Dr. Pegnetter stated that he plans to move as quickly as possible to get new leadership in place. He stated he will be asking leaders on campus to assist in keeping us moving forward and on an upward path. Chairman Lutgert mentioned that one important point in his selection of an Interim President was that this individual would not be a candidate for the presidency. Chairman Lutgert stated the committee will be a Search and Screen Committee. He stated that the ultimate responsibility for hiring the President is with the Board of Trustees. Chairman Lutgert stated that this committee will come back to the Board with a list of candidates and the Board will decide among those candidates. He stated that it was not important for a large number of Trustees to be on the Committee because all the Trustees will be involved in the process. Chairman Lutgert stated that it was important to have individuals representing the different groups in the University to include Trustees, faculty, deans, students, staff and Foundation Board members. He stated that at some point in time, most likely in the next week, it will be important to give the Committee its charge. At this time Chairman Lutgert shared the list of recommended Committee members listed below: COMMITTEE CHAIR Dr. Peg Gray-Vickrey (Associate Vice President for the Office of Curriculum and Instruction in the FGCU Division of Academic Affairs) COMMITTEE VICE CHAIR Mr. Dolph von Arx (Chairman of the Regional Business Alliance of Southwest Florida, and Former 5

6 Chairman, President and CEO of Planters Lifesavers Company, an Affiliate of RJR Nabisco Inc.) Mr. Dick Ackert (Former Chair and Member of the FGCU Foundation Board of Directors) Dr. Christine Andrews (Assistant Professor in the FGCU College of Business) Dr. Sharon Irish Bevins (FGCU Board of Trustees, and President of the FGCU Faculty Senate) Dr. Cecil Carter (Associate Professor in the FGCU College of Education) Mr. Dudley Goodlette (Former State Representative, and Member of the FGCU Foundation Board of Directors) Mr. Larry Hart (FGCU Board of Trustees, and Chair of the FGCU Board of Trustees Academic/Student/Faculty Affairs Committee) Dr. Donna Price Henry (Dean of the FGCU College of Arts and Sciences) Dr. David Kakkuri (Director of the FGCU Center for Leadership and Innovation) Mr. Fred Pezeshkan (Former Chair and Member of the FGCU Foundation Board of Directors) Mr. Dave Powell (Former Chair and Member of the FGCU Foundation Board of Directors) Mr. Jameson Yingling (FGCU Student, and Vice President of the FGCU Student Government) Ms. Lisa Wasson (Coordinator of Accounting at FGCU) A motion was made by Trustee Malone to approve the recommended list. Motion was seconded by Trustee Cobb. Motion carried unanimously. Chairman Lutgert thanked the members of this committee and members of staff who assisted him during this difficult time. Chairman Lutgert stated there is a regular meeting on Monday, January 22 nd, and requested that this be a conference call meeting. He then requested that an in-person meeting be scheduled when the audit is ready for presentation. He stated that each Trustee will be contacted when the audit is ready. Chairman Lutgert stated that no matter how great one person is, the University is greater than any one individual and that he has no doubt that the collective efforts and wisdom of everyone here is going to make this University even greater than it is today. Meeting adjourned at 4:00 p.m. 6