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MINUTES OF THE MEETING

OF THE
PRIDE ENTERPRISES BOARD OF DIRECTORS

July 27, 2006


Orlando Airport Marriott

A meeting of the PRIDE Enterprises Board of Directors was held on Thursday, July 27,
2006. Chairman Bill Dresser called the meeting to order at 8:15 a.m.

Board Members present were:


Bill Dresser
Mike Hill
Rick Hanas
Jim Reeves
Tomas Jimenez
Eddie Jones
Rave’ Mehta
Secretary James McDonough
Rebecca Smith

Board Members absent were:


Lawrence Hamilton
Gloria Fletcher

PRIDE Staff members present were:


Jack Edgemon, President
Peter Radanovich, CFO
Dee Kiminki, Assistant Board Secretary
John Goltz, Operations Specialist
Mary Hinkle, Director of Internal Audit
Carol Tortarelli, Director of Mission Programs

Others in attendance were:


Patti Dodgen, Managing Partner, Transformations Consulting Group
Robert Sloan, Member of General Public

Summary:

• Meeting Minutes from April 27, 2006 were approved.

• Financials through the 2nd quarter were reviewed.

• The Capital Truck Purchase was reviewed.

• The South Florida Graphics Expansion was approved in concept with final
business plan approval granted to the Executive Committee.

• The cancelled DC Medical Records Scanning Project was discussed.

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• Two Resolutions regarding Bid Signing Authority were approved.

• The Resolution regarding Banking Transactions was approved.

• The Resolution regarding Check Signing Authority was tabled.

• 2007 Budget Compensation variables for the Annual Market Adjustments, Salary
Market Survey Adjustments and Team Based Incentives were approved.

• The proposed Food Service / Culinary Arts training program and the need for DC
cooperation were discussed.

• Secretary McDonough outlined his plan to expand the vocational training within
DC, of which PRIDE is an integral part.

• The audit of the PIE program was discussed in response to concerns posed by
Robert Sloan.

• The Code of Ethics was deferred to the HR Committee for review.

• Mission programs were reviewed.

• The Strategic Plan development was discussed and a Strategic Plan Committee
was formed.

Notes:

Bill Dresser made opening remarks reminding all of the Sunshine Law and that visitors
would have an opportunity to speak. He complimented the staff on the 2005 Annual
Report.

Mike Hill motioned for approval of the Meeting Minutes from April 27, 2006 with all in
favor.

Rebecca Smith joined the meeting at 8:22 a.m.

Finance Committee Chairman, Mike Hill, delivered the Finance Committee report stating
that the Social Mission Goals were good with the exception of inmate work stations
which had an aggressive goal and had lost some positions due to loss of contracts.
Financial statements through the 2nd quarter were reviewed with sales at $40.07 million
vs. a goal of $39.19 million. Although PRIDE is currently doing well financially, there is a
shortfall in sales which will impact the annual budget. This shortfall is due to the
cancellation of the DC Medical Scanning Project which had budgeted monthly sales of
$200,000 or approximately $2.2 million for the year, the overstatement of projected
revenues for the DC Work Release Laundry Contract, and the reduction in sales
(primarily to DC). All key ratios were favorable and the $5 million line of credit usage
was at $0 for the end of the period.

Mike Hill reviewed the Capital Truck Purchase and a handout was provided. The total
purchase of 4 Sterling OTR tractors and 2 Sterling 24 foot straight trucks was $392,000

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($43,000 under original budgeted amount). Special thanks to Tomas Jimenez for his
assistance.

The South Florida Graphics Expansion was reviewed by Jack Edgemon. After a tour of
DC Region 4, the Glades CI location was chosen for building availability and proximity to
the Miami-Dade market. This market currently comprises 27.5% of the print business in
Florida. Four sales people will be hired to focus on the education and government
market segments. Renovation of the building could be $1million or more; a new
estimate will be compiled for review. Equipment will cost $2.88 million over five years. It
is estimated annual revenues will approximate $5 million within 5 years and create
approximately 162 inmate workstations. Jim Reeves motioned for approval of the
project in principle with a final business plan to be distributed to whole board and
authority given to the Executive Committee for final approval. A vote was taken with all
in favor.

Jack Edgemon reviewed the DC Medical Records Scanning Project. He explained that
PRIDE took on the project at the prompting of former DC Secretary Crosby. PRIDE
invested in set up costs and overhead of approximately $70,000 with anticipated
budgeted monthly sales of $200,000, or approximately $2.2 million for the year. The
project was cancelled by DC in the second month of operation. A subcontractor lost
approximately $87,000 in set up costs. The primary concern is the loss of 35 inmate
jobs and revenue as it impacts the budget. Secretary McDonough stated that DC is not
considering a renewal of the project in the future.

The four Resolutions were addressed. There was some discussion; Jim Reeves
motioned to pass the two resolutions for bid signature authority with all in favor.
Discussion ensued regarding the resolutions for Banking Transactions and Check
Signing. Rick Hanas motioned for approval of the Banking Transactions Resolution with
the amended wording to include “any two of the following to act” with all in favor.
Rebecca Smith motioned to deny check signature authority to the CFO and direct
reports. After discussion, a vote was taken to show Rebecca Smith, Tomas Jimenez,
Secretary James McDonough and Bill Dresser in favor and Jim Reeves, Ed Jones, Mike
Hill, Rick Hanas and Rave’ Mehta against; the motion failed 5 to 4. Jim Reeves
motioned to table the resolution regarding check signing authority for review at a later
date with all in favor.

There was a break between 10:04 a.m. and 10:15 a.m.

Rave’ Mehta provided the HR Committee report stating that both the HR Committee and
the Finance Committee reviewed the2007 Budget Compensation variables. Ed Jones
motioned for approval of the Annual Market Adjustments, Salary Market Survey
Adjustments and Team Based Incentives. A vote was taken with all in favor except
Rebecca Smith and Jim Reeves to pass the motion.

Jim Reeves lead the Governance Committee report summarizing the changes to the
Articles and Bylaws which were approved by the Board and submitted to the Department
of State and then sent to the Governor.

Secretary McDonough took the floor. He applauded PRIDE’s mission and stressed the
need to reduce inmate idleness through vocational training programs which help reduce
recidivism. The Secretary is creating a plan to increase vocational training and would

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like to work with PRIDE to this end. Some of the ideas included training for the
construction industry, building trusses for Habitat for Humanity, adopting greyhounds,
growing wild flowers for DOT, picking citrus, equipment repair for the military, repair of
sporting goods for children’s organizations, building wooden toys, and other innovative
ways to keep inmates active. He feels that PRIDE can assist with employment within
the system and would like to see PRIDE work in the order of 25% of the inmate
population. It was stressed by the Board that PRIDE training programs are funded
through the sale of its products and that mandates for State agencies to purchase from
PRIDE should be addressed.

Jim Reeves, in reference to the proposed culinary arts programs, asked how Secretary
McDonough can assist PRIDE in working with ARAMARK. The contract states that DC
can insist on ARAMARK purchasing PRIDE products. Secretary McDonough stated that
he is willing to work with PRIDE in regaining ARAMARK sales in order to develop the
food service training program. The Secretary also stressed using inmates to grow a
variety of vegetables to sell to ARAMARK for use within the prison system food service
(DC is currently selling some produce to ARAMARK). Jack Edgemon inquired about this
issue since PRIDE use to grow and sell products for use within the prison system.
PRIDE lost a considerable amount of business when privatization took place.
ARAMARK should be buying sanitary maintenance supplies from PRIDE because
pricing and quality is competitive (they currently buy from Ecolab). Secretary
McDonough clearly stated he is willing to work with PRIDE on this issue. Mike Hill
suggested taking up details of business expansion in the development of the strategic
plan.

Mary Hinkle reported on behalf of the Audit Committee regarding PIE wage
administration in answer to questions previously posed by Robert Sloan. Ms. Hinkle
reviewed the PIE program (Prison Industry Enhancement Certification Program). She
explained that the program covers products sold outside of the State with the exception
of work viewed as a service. For PIE work, inmates are paid at the Florida minimum
wage (currently higher than Federal minimum wage). Her audit concluded that the
industries are complying and that inmates are informed of the program and information
is available. Robert Sloan was invited to comment and shared his experience and
reiterated his complaints stating that the PIE wages were not properly administered.
Ms. Hinkle said that accounting for every time an inmate touches some aspect of a PIE
job can be difficult. One example of resolve is the Dental Lab where they split the PIE
wages between all inmate workers since everyone touches the piece during the
assembly process. Other industries have separate PIE areas. She concluded that the
PIE program is fairly administered and an audit by the National Correctional Industries
Association showed that PRIDE is in compliance.

There was a break between 11:49 a.m. and 12:40 p.m. Patti Dodgen joined the meeting
at 12:44 p.m.

Dee Kiminki discussed the proposed Code of Ethics. She stated that some changes had
been made since it had last been discussed with the Board and the most significant
being that “no gift of any value” may be received. There was discussion regarding the
ramifications to Board members and their relationships with staff members. Jim Reeves
motioned to have the Code of Ethics reviewed by the HR Committee with all in favor.

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An update on Mission Programs was presented by Carol Tortarelli. She emphasized
the Statutory Missions and showed that PRIDE has 363 OJT programs and 3502
inmates received training certificates in 2005. Ms. Tortarelli went on to discuss the
details of the proposed food service / culinary arts pilot OJT program. This is only a
training program and would be funded through the sale of food service related products
to ARAMARK (the current food service contractor for DC). The food service industry is
third highest for adding new jobs in the next 5 years. This would be an accredited
program through First Coast Technical with one instructor to rotate between several
institutions. After the first 30 hours, the inmate can receive a “Servsafe” certificate which
potential employers would recognize. Costs include the instructor salary, overhead,
administration fee, instructional materials and the like for approximately $80,000 per
year and would potentially provide certification to about 384 inmates per year (new work
stations). The only way the OJT work program will be initiated is if ARAMARK agrees to
buy kitchen/sanitation products from PRIDE, which will fund the program. It will
ultimately contribute to PRIDE’s social goals, increase work stations and increase sales
of related products She stated that while PRIDE is doing a good job with OJT and
placement (98% 30 day job retention rate), there is a need for new business
development and improved transition training for inmates.

There was a break from 1:38 p.m. to 1:46 p.m.

The development of a Strategic Plan was discussed and Bill Dresser introduced Patti
Dodgen from Transformations Consulting Group (TCG) who presented their scope of
services. She proposed a plan of action including Board retreats with an overall time
frame of about 6 months. Ms. Dodgen left the meeting and discussion continued. It was
concluded to have a Strategic Plan Committee consisting of Mike Hill (Committee
Chairman), Rave’ Mehta, Rebecca Smith, Rick Hanas and Secretary McDonough. Staff
will develop an initial plan and a committee meeting will be held on August 31st.
Commitment to a consultant will be deferred to a later date.

Jack Edgemon delivered his President’s Report. Mr. Edgemon stated that the ITC
lawsuit was still in negotiation with hopes to be finalized soon and could not be
discussed on public record. A Nursery Work Program was under consideration as a
vocational work program; a meeting with the nursery association concluded there is a
growing need for trained people in this area. The Work Release Laundry Program,
already discussed, was essentially making about 1/3 of its initial revenue projections and
the contract was being renegotiated. A portion of PRIDE’s State leased land used for
growing sugarcane was released to the Palm Beach County Health Care District. After
much negotiation, the health care district agreed to purchase products from PRIDE with
a minimum net worth of $750,000 over 30 years. Regional meetings were held for all
employees in order to review company financials, the Team Based Incentive program,
the Code of Ethics and the 401K program; there was much positive feedback from
employees about the direction of PRIDE. Bill Dresser proposed that the members of the
Board conduct industry visits every other month. The next meeting will be August 31st
for the Strategic Plan Committee and the Executive Committee.

There being no further business, the meeting was adjourned at 3:14 p.m.

____________________________

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William Dresser, Chairman

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