Forest City Trading Group 401(k) Offering Road Trip

This trip started for me with a flight from Chicago to Portland Oregon to begin a weeklong road trip with senior officers from Forest City Trading, an attorney from Morgan Lewis & Bockius, a representative from Vanguard Investments and two managing directors from Morgan Stanley. I landed at Portland International and took a taxi to the Westin Hotel in downtown Portland. There I met up with the Morgan Lewis, Vanguard and Morgan Stanley people and we drove out to the offices of Forest City.

We spent the rest of Sunday preparing a slide show and ourselves for the two hour presentation we were going to make in six different offices of Forest City in six different cities all across the United States. Initially, eight of us had speaking parts in the road show presentation and each of us had to get our slides right and practice our portion of the presentation. Keith Butcher from Morgan Stanley took control of the slides and worked with each of us individually on our presentation. After several hours at the Forest City offices, we drove over to a local hotel to practice our presentations. This was where we were to make the first formal presentation Monday afternoon at 4:00 PM.

My brother Calvin lives in Corvallis Oregon and drove to the hotel site of our practice presentations to pick me up after the practice sessions. Calvin and I drove back down to the Westin Hotel where he also checked in to spend the night.

After a quick change of clothes, Calvin and I met in the lobby and headed off to a casual dinner. We found a local bar and grill and solved most of the world’s problems over a couple of bourbons. Along the course of the evening we managed a sandwich for dinner. The night terminated early but with the agreement to meet at 6:30 AM and drive up to Mount St. Helens.

Monday, October 11, 2004

Mount Saint Helens

Mount St. Helens had been in the news in recent weeks for renewed volcanic activity. On this morning every local morning news program had a reporter stationed near the mountain for periodic updates. The morning was very foggy and the driving was slow.

It took us about 2 hours, including a stop for food, to reach the highest point we were allowed. The U.S. Forest Service had blocked the road many miles away from the mountain to protect sightseers from their own curiosity. The closer we got, the higher we got and the more the fog disappeared.

As we approached the roadblock we spotted the turnoff where all of the media vehicles were stationed.

As it turns out, it didn’t matter what television station we listened to that morning, we were going to see the same pictures, because the camera teams were all there together.

As we drove along, we began to see the smoking peak of Mt. St. Helens periodically as we wove our way around the mountains leading up into the Cascades.

The mountain is absolutely amazing and beautiful. Based on what you can see now, one can hardly imagine the total devastation from the eruption in 1981. All the mountains and valleys around Mt. St. Helens are beautiful and lush. And yet, one can still see the flow of volcanic ash through the valleys.

We took lots of pictures from as many different angles as we could find without leaving the highway.

Finally, we reached the furthest point we were permitted and parked the car. The scene was truly breathtaking. Nature can be overwhelming both literally and figuratively.

Before long, we started back down the mountain so that I could be back in Portland in time for my meeting.

Calvin drove me back down to Portland and dropped me off at the hotel where we were scheduled to make our first presentation of the road show. We said our goodbyes and he headed back to Corvallis.


Starting at about noon, we each had an opportunity to run through our piece of the presentation and receive some suggestions and make some last minute adjustments to our slides. By 3:30 PM the Portland area employees began to arrive and the practice sessions were concluded. A few over/under bets were placed on the length of time each speaker might take and we were ready to begin.

John Judy is the Chief Executive Officer of Forest City Trading and he led off the presentations. He had some brief notes on points he wanted to cover and expected to be up and down in about 10 minutes. John introduced not only the presenters, but also Charlotte Mires, from human resources and Mark Donovan, Chief Operating Officer from Forest City Trading who were in the audience. He also introduced Dan Nason representing Vanguard who provides investments and services to the 401(k) plan.

Instead of being up and down in 10 minutes, John went over the history of the Trading Group since its founding. He became very emotional describing his affection for Jack, the founder of the Trading Group who guided the company through much of its growth. Jack had passed away, but his two daughters were in the audience and John acknowledged their presence. By the time John turned the podium over to Keith Butcher, 47 minutes had elapsed. The over/under had been for 30 minutes so that bet was not a close call.

Keith Butcher was next and described the transaction that was being contemplated. The transaction is very complex and Keith did a great job of describing it in terms that people could understand.

Keith next introduced Lois Tonning, the Trading Group’s Chief Financial Officer. She reviewed some of the historical financial statements of the Trading Group. She then presented the pro forma statements showing how the balance sheet and income statement would change if the transaction was successful. Presenting numbers to a large audience is very difficult, but Lois did a terrific job.

The over/under on Lois was also 30 minutes, but she completed her presentation in less than 20 minutes.

Lois introduced Craig Johnston, president of the subsidiary American International Trading Group. Craig is slotted to become the next CEO in February of 2006. Craig presented the Key Executives Unit Option Plan. This plan provides some of the financing for the transaction and requires division presidents to leave some of their future compensation at risk if their division suffers significant financial losses. This is a complex plan to explain and was also the most controversial part of the transaction.

Craig introduced me to present the trustee perspective on the ESOP portion of the transaction. I explained what an ESOP is and how it works. I also used the now infamous 3-legged stool analogy to explain the interaction of the company, the employees and the trustee to make a successful transaction.

I introduced Erin Turley from Morgan, Lewis and Bockius. She explained the details of the ESOP plan document and the rules that would apply going forward.

Erin introduced Joe Strycharz from Morgan Stanley who described the information that had been sent to employees’ homes and the specific blanks they needed to complete on the election form. He also told people where to send their election forms and how to get any questions they might have answered.

Following Joe, Keith Butcher retook the podium to handle questions from the audience. The questions showed people had read the disclosure document and understood the contemplated transaction. They went on for about an hour before we wrapped up and headed back to the hotel.

Keith Butcher’s wife Julie had joined him for the weekend and they headed off for dinner. I joined Joe Strycharz in the hotel restaurant and we had an enjoyable dinner and long conversation.

Tuesday, October 12, 2004

We met at 6:30 AM in the hotel lobby and a driver took us to Hillsboro Airport to meet the company officers. We all got together at Aero Air, LLC at Hillsboro Airport and got our first look at the Gulfstream IV (N919CT) that would fly us around the country for the rest of the week.

The jet was big, beautiful and quite plush. Being a pilot I had to take a look at the cockpit to see how these pilots were treated. The all glass Honeywell instrumentation was clean and modern, even though the airplane was manufactured in 1989.

Keith Butcher and Joe Strycharz were the first to board the plane and they were clearly happy about the accommodations.

There was plenty of room with comfortable lounge chairs and tables for all of us. We met Melody who was to be our flight attendant for the week. She was a real sweetheart and quickly got to know our names and how we liked our coffee.

We took off at about 8:00 AM for Minneapolis. Keith immediately got to work on the slideshow and spent some time with each of us on our presentation.

Below, Melody talks with John Judy and Lorin Rynstrom while Keith works on the slide presentation with Craig Johnston.

Melody provided a wonderful breakfast and we all spent time getting to know each other. Below, Erin Turley and Joe Strycharz are working on their computer while Charlotte Mires looks on.

It wasn’t all work, however. There was some time for just plain socializing. Below, Mark Donovan talks with Lorin Rynstrom while Craig Johnston and Keith Butcher work on a cell phone problem. John Judy has his back to us in the lower right hand corner.

The three-hour flight was over before we knew it and the plane pulled up to Signature Flight Services at the Minneapolis-St. Paul International Airport. There we were met by two Ford Excursion SUVs for the ride to our hotel.

The Minneapolis presentation went very smoothly and benefited from our experience in Portland and the improvements to the slides that Keith implemented. The highlight of the show was Joe Strycharz’s conclusion. He stood up to close the presentation and endeared his audience by relating a personal connection to Minneapolis.

Joe had graduated from a very small high school in Moscow, Pennsylvania and there had dated Amelia Santaniello. She had gone into the broadcasting business and had become the evening news anchor for a local channel in Minneapolis. The audience murmured their recognition of who this person was. As Joe told the story, a few months ago, Joe’s sister had visited Minneapolis on unrelated business and had spoken to Amelia. That encounter made Joe’s day when Amelia asked his sister “How is Joe?” Large cheers and laughter emerged from the audience and Joe was their friend forever.

That evening, the eleven of us on the airplane joined two senior local officers and their wives for dinner at Champs. During the dinner, Joe was challenged on the story of Amelia. He agreed to call her and someone came up with the station’s phone number. Joe called and the switchboard did everything they could to get him off the phone but he asked them to just tell Amelia that Joe Strycharz was on the phone. Well, Amelia came to the phone and talked to Joe.

As the conversation wound to a close, Joe put Amelia on the speaker so we could all talk with her. Upon being challenged, she read us over the speaker phone the opening script for that night’s evening news. None of us were surprised when after adjourning to the bar to watch the evening news; Amelia read the script exactly as she had read it to us. From out of nowhere, Joe developed some solid credibility.

Wednesday, October 13, 2004

Again we met early in the morning to drive to the airport. We took off at 8:00 AM for Nashua, New Hampshire. As we got close to our destination, it became apparent that we were arriving at the peak of the fall foliage season. The countryside was alive with bright, beautiful colors. Lorin Rynstrom, president of the New Hampshire business, obtained the cooperation of the pilots to descend and fly us low over the terrain to get a good view of the trees and their colors.

We arrived at about 1:00 PM and again had two SUVs for us to drive to the office.

The trees around the office were just spectacular.

Inside the office, everyone met the traders and learned a little about the operation of the office.

The presentation was introduced by Lorin Rynstrom and went very smoothly. This had been the most profitable business office for several years in a row. The traders were very sophisticated and were not shy with their questions. The funniest line during the question and answer session came from John Judy when he described the Unit Option Plan as just s supplement to his Social Security upon retirement.

Thursday, October 14, 2004

The next morning we took off earlier than the initial plan because we were going to make an additional stop in Maryland. Steve Wheeler worked for the New Hampshire office from his home on the eastern shore of Maryland. We welcomed him onto the airplane and made a brief stop at the small uncontrolled airport in Easton, MD to drop him off.

After a quick turnaround, we took off and landed in Tampa, Florida. Again we were met with some SUVs and we drove to the Marriot Hotel at the Tampa International Airport. We checked in and drove over to the Tampa offices.

Above, Charlotte faxes in her election form.

After the presentation, we all had dinner at the world’s greatest steak place then went back to the hotel.

Friday, October 15, 2004

This was to be a long day and we got an early start. We flew to Birmingham Alabama, made our presentation and then flew to Richmond, Virginia to spend the night.

Before leaving Birmingham, we managed a group picture of the traveling group.

The women left to right are Lois Tonning, Erin Turley and Charlotte Mires.

The whole group left to right are Mark Donovan, Lois Tonning, Erin Turley, John Judy, Charlotte Mires, Joe Strycharz, Keith Butcher, Vaughn Gordy, Dan Nason, Craig Johnston, and Lorin Rynstrom.

By this time on the trip, we were satisfied with the presentation slideshow so no more adjustments were necessary. A deck of cards was located, a David Mathews Band DVD was inserted and a very loud game of Blackjack ensued. The group was loud enough that those who were not playing closed the cabin door.

After landing in Richmond, we drove about 45 minutes to our hotel. A group of about 5 of us went to a bar across the street for some scotch and a cigar before heading to bed.

Saturday, October 16, 2004

Everyone rallied for breakfast at the hotel before heading to “The Place” to make our presentation. Keith and Joe happened to show up at breakfast wearing blue shirts and very similar ties. Lorin Rynstrom said they looked like salesmen for Jiffy Lube.

This was our final presentation and we thought it would be our quickest. There were a few over/under bets placed and the overs won them all. The presentation did go quickly but the questions and answers went longer than at any other meeting. Several of the audience missed their tee times to get all of their questions answered.

After the final presentation, many of the traveling group went separate ways. Some got on commercial flights, others rented cars. The Oregon people and I got back on the G-4 to head west. The plane stopped at Chicago Midway to drop me off and then headed for Portland.

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