August 2004 Executive Committee Agenda

MINUTES OF THE

NATIONAL COLLEGIATE ATHLETIC ASSOCIATION

EXECUTIVE COMMITTEE

NCAA National Office April 29, 2004

Indianapolis, Indiana

Participants:

Donald Beggs, Wichita State University

Carol A. Cartwright, Kent State University

G. Wayne Clough, Georgia Institute of Technology

Suzanne Coffey, Bates College

Mary Sue Coleman, University of Michigan

Scott Cowan, Tulane University

Ronald Eaglin, Morehead State University

George Hagerty, Franklin Pierce College

Carol Harter, University of Nevada, Las Vegas

Robert Hemenway, University of Kansas

John P. Keating, University of Wisconsin, Parkside

John McCardell Jr., Middlebury College

Linwood Rose, James Madison University

Phillip Stone, Bridgewater College (Virginia)

Randall Webb, Northwestern State University

John A. White, University of Arkansas

Suzanne Willey, University of Indianapolis

Myles Brand, NCAA

Jan A. Brown, NCAA, recording secretary

Bernard Franklin, NCAA

Peter Likins, University of Arizona, and Christine Plonsky, University of Texas, were not able to attend.

Also in attendance were: Chris Monasch, America East Conference; Gary Brown, associate director of The NCAA News; Elsa Cole, NCAA general counsel; Dennis Cryder, senior vice-president for branding and communications; Gail Dent, associate director of public relations; Danita Edwards, vice-president for public affairs; Jeff Howard, managing director of public and media relations; Jim Isch, senior vice-president for finance and operations; Tom Jernstedt, executive vice-president; Kevin Lennon, vice-president for membership services; Keith Martin, managing director of finance and business operations; Wallace Renfro, senior advisor to the NCAA president for communications; Judith Sweet, senior vice-president for championships and education services/senior woman administrator; David Berst, Daniel Dutcher and Mike Racy, NCAA governance vice-presidents; and Bridget Belgiovine and Beth DeBauche, NCAA governance directors.

[Note: These minutes contain only actions taken (formal votes or stated "sense of the meeting") in accordance with NCAA policy regarding minutes of all Association entities. While certain items on the Committee?s agenda were acted on at various times throughout the meeting, all final actions within a given topic are combined in these minutes for convenience of reference.]

The meeting was called to order at 4:07 p.m. by the chair, President Cartwright. All members were present as noted above.

1. Welcome and Announcements. President Cartwright welcomed George Hagerty, the new chair of the Division II Presidents Council, and Scott Cowan to the committee.

2. Approval of January 12, 2004, Meeting Minutes.

It was VOTED

?To approve the Executive Committee minutes of the January 12, 2004, meeting as distributed.?

The Executive Committee went into Executive Session at 4:09 p.m. The Executive Session ended at 4:35 p.m.

3. NCAA President?s Report. President Brand provided updates, discussed a series of initiatives and sought Executive Committee input.

a. Reallocations, Outsourcing and Reviews Update. The Executive Committee received an update on national office operations. No formal action was taken.

b. Strategic Plan and Implementation Strategies. President Brand reviewed the final strategic plan document and the implementation strategies developed by the staff.

It was VOTED

?To approve the final version of the Association?s Strategic Plan as distributed.?

c. Taskforce on Presidential Roles. President Brand informed the Executive Committee about his plans to create a taskforce to study the issue of engaging more college and university presidents in the governance of intercollegiate athletics. No formal action was taken.

4. NCAA Executive Committee Subcommittee on the Role of the President?s Report.

a. President?s Role in the Legislative Process. The Executive Committee discussed the role of the NCAA president to assist the Committee with its constitutional responsibilities of identifying ?core issues that affect the Association as a whole,? including the president?s ability to suggest legislative changes.

It was VOTED

?That the Executive Committee provide the NCAA president with the authority to recommend legislative changes.?

b. Increased Decision-Making Authority for Staff. The Executive Committee discussed the NCAA staff?s authority to make initial decisions on academic waivers (NCAA Bylaw 14- Eligibility) and Student-Athlete Reinstatement (SAR)/Administrative Review Subcommittee (ARS) waivers [NCAA Bylaws 14, 15 (Financial Aid) and 17 (Playing and Practice Seasons].

It was VOTED

?That the Executive Committee grant the staff increased decision-making authority in the areas of academic waivers and SAR/ARS waivers.?

c. The NCAA Committee Structure. The Executive Committee discussed a recommendation to review the NCAA committee structure in response to the recent efforts to lessen bureaucracy, improve efficiency and reduce the expenses of the governance structure.

It was VOTED

?That the Executive Committee charge the NCAA president, through the senior vice- presidents, to conduct a comprehensive review of the committee structure.?

d. Presidential Authority and Responsibilities. The Executive Committee discussed the president?s authority and responsibilities for legal and financial affairs, delivering efficient, equitable and cost-effective services to the membership; serving as an advocate and spokesperson for the Association; and asserting leadership in the implementation of the ?new? strategic plan.

It was VOTED

?That the Executive Committee conduct a review of the scope of the NCAA president?s authority and responsibilities.?

5. NCAA Executive Committee Finance Committee Report.

a. Second Quarter Budget-to-Actual. The Committee reviewed a report of the Association?s financial activity for the first two quarters of the fiscal year. Revenues and expenditures were within expected budget parameters.

b. Budget Timeline. The Executive Committee noted that since the strategic plan has been approved, the Executive Committee Finance Committee and the divisional budget committees will be meeting during the next couple of months to develop and finalize their budget recommendations for the August meeting.

c. Association-Wide Budget Request Summaries. The Executive Committee noted the Association-wide committees? budget requests for the upcoming biennium. The summaries have been provided to all three divisional Management Councils and presidential bodies to elicit feedback, prior to the Executive Committee Finance Committee meeting.

d. Quasi-Endowment Proposal. The Executive Committee discussed the creation of a quasi-endowment to protect the long-term financial viability of the organization. The endowment would provide resources to support ongoing initiatives for the national office or student-athlete programming. To fully fund student programming or partially fund the national office, an endowment of $500 million would be necessary. Establishing a 4.5 percent spending rate for the fund would support programming of approximately $22.5 million annually. Until the endowment target allocation is reached, limited withdrawals would be planned.

The Executive Committee discussed the possibility that the quasi-endowment could initially be funded from the former NCAA Foundation unrestricted net assets and the NCAA working capital reserve. With the long-term CBS agreement, the Association is receiving two partial payments in September and January, reducing the need for a working capital reserve. A total of almost $60 million could be redirected to seed the new quasi-endowment. Additional funding in subsequent years would be from two sources: 1) 50 percent of year-end unbudgeted revenues and expenditure savings; and 2) allocating 10 percent of the annual increase in Association revenues for the endowment. The latter policy has been in place for the working capital reserve for several years.

It was VOTED

?That the Executive Committee approve in concept the establishment of a quasi-endowment and request that the Executive Committee Finance Committee further develop the proposal and bring back its final recommendation to the Executive Committee in August.?

e. Investment Subcommittee. The Executive Committee discussed the recommendation that two fund pools be created??the quasi-endowment fund and the reserve fund. It was recommended that there be different asset allocation strategies for the two fund pools. For the quasi-endowment pool, the objective would be longer term in nature and would have a 60-40 percent allocation of equities and fixed income. The operating reserve fund would be more risk adverse and would have a 20 percent exposure to equities with an 80 percent exposure to fixed income.

It was VOTED

?That the Executive Committee approve the target asset allocations and ranges for the two investment pools as outlined.

[Note: The Executive Committee noted that currently there are no women on the Investment Subcommittee and encouraged the subcommittee to enhance its gender diversity.]

f. Retirement Plan Technical Adjustments. The Executive Committee reviewed amendments to the NCAA Supplemental TSA Plan designed to comply with the requirements of the maximum disparity safe harbor under IRS Notice 89-23. The changes are housekeeping in nature.

It was VOTED

?That the Executive Committee approve the amendments to the NCAA Supplemental TSA Plan as presented.

6. NCAA Division I Board of Directors and Divisions II and III Presidents Councils.

a. Division I Board of Directors. The Committee received an update on the Division I Board of Directors meeting, which included the following items:

(1) Academic Reform. Approved Phase Three of the Incentives/Disincentives Reform Package. The division will examine the impact of contemporaneous penalties two years after implementation to assess the impact of the penalties in changing the academic environment, especially in men?s basketball.

(2) Legislative Items that Required Action by the Board.

(a) Student-Athlete Medical Expenses. Adopted emergency legislation to permit an institution to provide a student-athlete's medical expenses (including surgical expenses, medication, rehabilitation, physical therapy expenses and dental expenses) resulting from any injury or illness regardless of whether the injury or illness occurs during the academic year or summer vacation period.

(b) Student-Athlete Individual Financial-Aid Limit. Adopted legislation to establish a student-athlete's individual maximum financial-aid limit as the cost of attendance; further, to specify that a student-athlete may receive institutional financial aid based on athletics ability, outside financial aid for which athletics participation is a major criterion and educational expenses awarded by the U.S. Olympic Committee or a U.S. national governing body (or, for international student-athletes, expenses awarded by the equivalent organization of a foreign country) up to the value of a full grant-in-aid. Finally, the legislation would specify that a student-athlete may receive any other financial aid unrelated to athletics ability up to cost of attendance or the value of a full grant-in-aid plus a Federal Pell Grant, whichever is greater.

(3) Summer Financial Aid for Prospective Student-Athletes. Adopted emergency legislation to enable institutions, in sports other than basketball where it is now permitted, to provide athletically related financial aid to qualified prospective student-athletes during summer immediately prior to their full-time enrollment; further, it agreed to establish a small group to develop a definition of the pool of prospects deemed to be qualified for such assistance with the intention of implementing the program in the summer 2005, subject to the Board?s approval.

b. Division II Presidents Council.

(1) Association-wide and Division II Membership Issues. The Executive Committee discussed a recommendation from the Division II Presidents Council to establish a subcommittee of the Executive Committee to examine how membership changes considered by one division relate to the overall health of the Association; specifically, how one division and/or its student-athletes might be affected by the membership action(s) of another division. The Division II Presidents Council expressed concern that the Association has become too benign about membership-classification issues. While abundant attention has been focused on how membership requirements affect each division internally, there has been much less examination of how one division is affected by the actions of another. The Executive Committee agreed that this issue is of importance; however, it decided that these issues should be discussed with the full Executive Committee. The Executive Committee charged the staff with reviewing pending proposals and bringing to the committee any concerns it may have regarding the impact the proposals would have on the membership in all divisions.

(2) The following Division II informational items were provided as a written report:

(a) New Presidents Council Representatives. Four newly elected representatives were in attendance at its April meeting: Charles Ambrose, Pfeiffer University; Daniel Bradley, Fairmont State College; Robert Brown, Arkansas Tech University; and Eddie Moore Jr., Virginia State University.

(b) Management Council Vice-Chair Election. Jill Willson, athletics director, Texas A&M University-Kingsville, was appointed vice-chair of the Management Council, effective September 1, 2004.

(c) Presidents Council Vice-Chair Election. Arthur Kirk, Saint Leo University, was elected vice-chair, effective September 1, 2004.

(d) Division II Identity Enhancements. Approved two recommendations from the Division II Management Council related to Division II?s public image.

(e) 2005 NCAA Convention Legislation. Approved approximately 25 legislative proposals for consideration by the Division II membership at the 2005 NCAA Convention. Included in this package are two proposals that deal with conditions of Division II membership.

? Mandatory Binding Arbitration (Bylaws 3.2.4, 3.3.4 and 3.6.4). This proposal stems from an April 2003 referral from the Executive Committee and recommendations from NCAA general counsel to require NCAA active members, member conferences, and provisional or affiliate members to be subject to mandatory binding arbitration of claims arising under federal law against the NCAA, its officers, employees and agents. It further requires all member conferences and affiliated members to be subject to mandatory binding arbitration under state law.

? Academic Success Rate. This proposal would include, as a condition and obligation of Division II active membership, that an institution submit, on an annual basis, a supplemental report to measure the academic success rate (ASR) for all Division II student-athletes, effective August 1, 2005.

(f) Expansion of Division II Year-Round Testing. Approved a drug testing pilot study to include all Division II championships sports in the year-round drug-testing program, effective August 1, 2004.

(g) Ethnic Minority and Women?s Coaches Program. Approved the development of an ethnic minority and women coaches? intern program in Division II.

(h) Association-Wide Committee Frequency. Approved exceptions to the two-meetings-per-year restriction for the following Association-wide committees: Minority Opportunities and Interests Committee; Postgraduate Scholarship Committee; and Committee on Women?s Athletics.

c. Division III Presidents Council.

(1) Association-Wide Issues.

(a) Association-Wide Strategic Plan. Approved the Association-Wide Strategic Plan, as well as the incorporation of goals and objectives into the Division III plan.

(b) Association-Wide Committee Meeting Frequency. Approved the waiver to permit three in-person meetings for 2004-05 and 2005-06 for the Minority Opportunities and Interests Committee; Postgraduate Scholarship Committee; and Committee on Women?s Athletics.

(c) Mandatory Binding Arbitration (Bylaws 3.2.4, 3.3.4 and 3.6.4). Agreed to sponsor legislation at the 2005 Convention to require NCAA active members, member conferences, and provisional or affiliate members to be subject to mandatory binding arbitration of claims arising under federal law against the NCAA, its officers, employees and agents. It further requires all member conferences and affiliated members to be subject to mandatory binding arbitration under state law. This action stems from the April 2003 referral from the Executive Committee and NCAA general counsel.

(2) Division III-Specific Actions.

(a) Future of Division III- Phase II. As a result of the adoption of 2004 Convention Proposal No. 66, Division III approved the establishment of a joint Management Council/Presidents Council Oversight Group; the oversight?s group charge and a two-year delineation of responsibilities and timetable to address the resolution. Implementation will include division-wide research, focus groups, chief executive officer surveys and direct quarterly communication with the membership for input and feedback.

(b) Presidents Council Vice-Chair Election. Elected Ivory Nelson, Lincoln University, as vice-chair, effective July 2004.

(c) Presidents Council Vacancy. Approved the appointment of Richard Torgeson, Luther College, to replace John McCardell, effective June 30, 2004.

7. Establishment of an NCAA Executive Committee Administrative Subcommittee. The Committee discussed a need for the establishment of a formal process to conduct business more efficiently and effectively between meetings.

It was VOTED

?That the Executive Committee establish an Administrative Subcommittee to address critical issues between meetings. The subcommittee will consist of five members, including the chair of the Executive Committee, the chairs of the three divisional presidential bodies and a Division I-AA or Division I-AAA chief executive officer.?

8. Amendment of NCAA Defense and Indemnification Policy. The Executive Committee discussed the need to amend the current NCAA defense and indemnification policy based on its action to create an administrative subcommittee. The Committee also reviewed two lawsuits in which the president of the NCAA had been named as a party defendant.

It was VOTED

?That the Executive Committee amend the current policy to substitute a quorum of the Administrative Subcommittee for one of the Executive Committee for purposes of determining defense and indemnification and clarify that its vote can be taken by electronic mail, telephone, facsimile or in person.?

It was VOTED

?That the Executive Committee approve the request for defense and indemnification for the NCAA president for the two cases presented.?

9. Association-wide Review of Playing Rules Administration. The Committee discussed its role in the Association?s playing rules approval process in light of recent confusion regarding proposed playing-rule changes.

It was VOTED

?That the Executive Committee direct the NCAA Division I Championships/Competition Cabinet and the NCAA Divisions II and III Championships Committees to conduct a joint review of issues pertaining to playing-rules administration.?

10. Association-wide Committee Frequency Requests. Pursuant to the Association?s bylaws, the Committee is required to authorize excep-tions for Association-wide committees to hold more than two meetings per year. Three of the nine Association-wide committees had requested waivers: (1) Minority Opportunities and Interests Committee (MOIC); (2) Committee on Women?s Athletics (CWA); and (3) Postgraduate Scholarship Committee.

It was VOTED

?That the Executive Committee approve the requests from these committees for the 2004-05 and the 2005-06 academic years.?

[Note: The biennial approval process for committee meeting frequency waivers was adopted April 2003 by the Committee. The Executive Committee agreed to include this issue in the review of the committee structure and the president?s authority and responsibilities.]

11. NCAA Executive Committee Subcommittee on Gender and Diversity Issues.

a. National Youth Sports Program (NYSP). The Committee reviewed a recommendation to maintain funding for the National Youth Sports Program (NYSP) at its current level. The subcommittee believed that funding the NYSP was consistent with the Association?s strategic plan, noting value of the supporting role intercollegiate athletics plays in the higher education mission and in enhancing the service of community and strengthening the identity of member institutions, and is consistent with the subcommittee?s charge. The subcommittee believed it would be important to maintain a financial relationship with NYSP to encourage minority participation in higher education pursuits.

It was VOTED

?That the Executive Committee refer the recommendation to the Executive Committee Finance Committee for evaluation.?

b. Confederate Battle Flag ? Football Bowl Certification. The committee discussed its previous actions regarding the Confederate Battle Flag and its intent to hold the certification of bowl games to the same standard as the awarding of NCAA championships contests in states where a moratorium exists.

It was VOTED

?That the Executive Committee direct the Football Certification Subcommittee of the Division I Championships/Competition Cabinet, which oversees the certification of all exempted football contests, to deny any requests for certification of bowl games in any state where a moratorium exists as a result of the state?s Confederate Flag stance.?

c. Confederate Battle Flag??Intercollegiate Certified Events. The committee discussed its intent to hold the certification of all exempted intercollegiate contests to the same standard as the awarding of NCAA championship contests in states where a moratorium exists.

It was VOTED