Minutes of the meeting Diversity Investment Group September 1, 1997 The meeting was called to order at 7:30 PM at the Kaiser Glenlake office. The minutes of the previous meeting were approved. The valuation statement was reviewed. Unit value was $10.121. Total value was $6996.21. A motion was passed to amend the partnership agreement to increase the number of partners to 26. In addition, the group's consensus was that no further partners are to be admitted immediately, and that we will let the group's size return to no more than 25 in the future. John Brock was nominated and approved as a new partner. Both of the two prior actions required a 2/3 majority of the number of partners (17/25). Doyle G. and Larry C. had already approved these motions in writing in advance of the meeting. A motion was passed to reimburse David B. $12.50 to enroll John B. in the NAIC. Handouts were circulated on 'Applying judgement to the SSG' and 'How to read the VL page.' The former is available on the club web page. A 'computer' SSG class will be offered at the home of Todd F. on Sunday 9/7 at 1 PM. A 'paper' SSG class will be offered at the home of David B. on Wednesday 9/17 at 7:30 PM. David spoke on the importance of the analysts' reports to the group's success. Since we have invested about $9000 as of this meeting, we must carefully follow our holdings from now on. It will be VERY important for any analyst who cannot attend a meeting to send their report in with another partner. This can be done in writing or by e-mail. At September's meeting, no arrangements were made in advance to provide reports for COMS, NKE or TECH. Analyst assignments were as follows: ADBE Gary K. NKE Jay C. CMH Todd F. TECH Larry C. COMS Phil H. ORCL Miguel M. FLR Holly D. AZO John B. DIS John S. AUD Tom S. Analysts reports: ADBE (Gary K. sent his report with John S.) This has proved to be volatile as we expected. The price was borderline Buy/Hold. NKE (David B.) Discussion of the fiscal year's results. Price in the buy zone. CMH (Todd F.) Industry is somewhat depressed still. Price in buy zone. TECH (David B.) Good recent quarter. Company continues to cut costs. Price is borderline buy/hold. COMS No report was available. We discussed that price is down recently. Expect charges to earnings this quarter due to merger with USR. FLR (Holly D.) Group felt they still did not understand the industry (engineering and construction) and Fluor's business activities well enough yet to judge it. Also, wanted to see another quarter of earnings growth to prove that they had turned around their recent management difficulties. New SSG presented by John B. on Autozone (AZO). Industry and leading competitors discussed (with visual aids!). AZO is better managed and has less debt than Pep Boys. Retail Speciality industry is not yet represented in our portfolio. AZO has strong growth prospects (18-20%). New SSG discussed on Oracle (ORCL) by Miguel M. Company has excellent growth record in 'hot' computer services industry. Many partners said they really did not understand ORCL's business and wanted to hear more. Need new SSG accounting for recent 3:2 split. Will be an attractive buy option for the future. New SSG presented on Automatic Data Processing (AUD) by David B. Long record of consistent earnings growth. Worldwide, stable, large-cap company. Expect less volatility than our other holdings. Discussion centered around whether to split this month's investment between AZO and AUD. Finally a motion was approved to put all the new funds collected (~$2000) into AUD. John B. will continue to analyze AZO, and we should consider it for a future buy. After discussion about candidates for the office of Vice- President, Todd F. was nominated and approved by unanimous vote. Assigned to present SSG's next month: Jonathan L., Kyle B. and Bruce G. The next six-weeks NAIC Investors' College begins October 6. Preregistration is necessary. Discussion about small groups to study and present stocks was tabled until Gary was present to champion the idea again. We briefly returned to the idea of socially responsible investing. All agreed that a complete picture needs to be presented about the company along with the SSG. This will help everyone to judge social factors as well as financial factors. The discussion period will serve for everyone to make their opinions known as well. There is also the option to sell a company if we do not approve of their behavior. Miguel agreed to provide an interim valuation statement via e- mail after each month's stock purchase. We briefly discussed the idea of holding our meetings in a restaurant. It was noted that we would require a fairly private space to conduct our business. Some thought that having a meal would be too distracting. Specific venues will be investigated. There was some discussion about moving the meeting date next month because of the Jewish holiday. The consensus seemed to be that since someone is absent from every meeting, it would serve the most people to keep the meeting on the same regular night (first Wednesday). The meeting was adjourned at 9:30 PM, until Wednesday, October 1 at 7:30 PM, at the Kaiser Glenlake office. Present at the meeting were: Kyle B., John B., David B., John D., Holly D., Russ D., Jeff F., Todd F., Bruce G., Jonathan L., Miguel M., Tom S., John S., Steve W., and Sabrina Y. Absent were: Clarissa C., Jay C., Larry C., Phil H., Gary K., Bobby L., Leon L., Vinnie M., Doyle R., Monty S., Randy W. Late contribution: Bobby L. There were no visitors. Respectfully submitted, David Brodeur (reporting for the vacationing Vinnie Metzger)