The Motion and Vote

Via email on October 27, 2005, Kirk McKusick moved and was seconded by Clem Cole to move forward with separating SAGE from USENIX.

USENIX is committed to work with newSAGE to complete and enter into the outsourcing and LISA cooperative agreement before December 31, 2005, which current memorandum of understanding is attached. Under this agreement, USENIX will pay newSAGE for performing certain SAGE-related services until newSAGE receives tax-exempt status from the Internal Revenue Service under tax exemption 501(C)(3) or the agreement is terminated, whichever occurs first. The effective date of the agreement for the purpose of calculating money to be paid will be the date at which newSAGE begins providing services but in no event shall be before the agreement is fully completed and executed by both parties. Excluding debt incured prior to the effective date of the agreement, newSAGE shall have liabilities no greater than 110% of assets as of December 31, 2006. The newSAGE organization shall have an excess of assets over liabilities as of December 31, 2007. USENIX agrees to resolve disputes arising from the agreement by binding arbitration for issues whose outcome will not potentially jeopardize the 501(c)(3) status of USENIX.

The current memorandum of understanding will have two changes made to ensure that USENIX does not risk its 501(c)(3)status:

1) In the event that newSAGE does not get 501(c)(3) status, transfer of the SAGE-related assets, including the SAGE name and trademark, shall be done at fair market value and only if USENIX determines that such transfer will not jeopardize its own tax-exempt status.

2) Receipts from the LISA conference shall be a fixed dollar amount decided in advance reflecting USENIX's good-faith determination of the fair market value of the services newSAGE renders to USENIX during the time newSAGE is performing services for USENIX.

Motion failed: In favor: 4 (McKusick, Ts'o, Hall, Halprin); against: 4 (Blaze, Cole, Couch, Jones)

The President's Memo to Members   Back to top of the page

Subject: SAGE update

As many of you are aware, in June 2004 the USENIX Board developed a plan with members of the SAGE Executive Committee that gave SAGE a choice to either potentially become a separate organization from USENIX or to remain part of USENIX. The plan included criteria by which any separation decision would later be evaluated. The SAGE representatives chose to try to become a separate organization. Since then, hundreds of volunteer and staff hours, on the part of both SAGE and USENIX, have gone into refining and executing that plan, trying to make it a reality. We jointly developed a term sheet intended to lead to a formal agreement between USENIX and an independent SAGE that would govern the relationship between the two organizations, and those advocating an independent SAGE developed a working budget that was submitted to USENIX. On Friday, October 28, 2005, the USENIX Board voted on the question of whether to proceed with separating SAGE from USENIX. Based on the budget submitted, the plans specified in the term sheet, and possible legal ramifications for USENIX, the USENIX Board decided not to proceed with separating SAGE from USENIX.

A key reason for this decision was that the plan submitted by representatives of the independent SAGE failed to convince a majority of the USENIX Board that the plan had any reasonable chance of success. Given that the plan failed to convince a majority of the Board that the independent SAGE would be likely ever to reach a state of financial solvency, the Board decided that it would be best to end the separation process now, rather than to spend more than $200,000 of USENIX's money on a venture that would almost certainly fail, based on our analysis of the business plan provided to us. Another important reason was that USENIX's lawyer advised us that many aspects of the proposed financial arrangements would likely be considered by the IRS as donations by USENIX to the independent SAGE, rather than as fees paid at fair market value for specific services provided. Such donations are prohibited under U.S. tax law, because while USENIX is a 501(c)(3) nonprofit corporation, the independent SAGE has not been granted 501(c)(3) status (and, based on a review of their application to the IRS, USENIX's lawyer believes that the IRS will most likely deny the 501(c)(3) application and rule that they are instead eligible for 501(c)(6)—trade association—status). Making such donations would jeopardize USENIX's 501(c)(3) nonprofit status.

What's next, you might ask? What's next is that USENIX will continue to be the organization providing SAGE programs and services, as it has been for over 10 years. As it always has been, USENIX is dedicated to serving the needs of the system administration community. Members will continue to enjoy their SAGE benefits such as the Salary Survey, Short Topics Booklets, Members Mailing List, and Jobs Board. Whether it's through LISA, ;login:, conferences, training and/or the SAGE Special Interest Group, USENIX strives to offer programs and services designed to help individual administrators reach their career goals as well as to further system administration as a profession. Now that the uncertainty about whether SAGE would separate or not has been resolved, the USENIX Board and staff welcome suggestions for additional programs intended to benefit our members who are system administrators. Please send your suggestions to suggestions@sage.org.

We can't speak for the board of the independent organization that was trying to become SAGE, but they could choose to carry on with their mission to create a new organization also devoted to the profession of system administration, but to do so without USENIX funding and without the SAGE name. If so, we would wish them well and welcome proposals for cooperation between our two organizations where it makes sense to both parties.

In summary, we wanted to report to you that we have fulfilled our commitment to you, our members, and especially our SAGE members, to decide in a timely manner whether the plan presented to us for an independent SAGE was practicable, and if so, to help bootstrap the new organization's success. While we understand that some will be disappointed that it was our determination that the plan presented to us was not a viable plan, we hope all will agree that for the good of both USENIX and SAGE, we are in a better place for both organizations now that the uncertainty about SAGE's home has been removed. No matter which way you may have wished this decision would go, we hope that all of you who care about the system administration profession will continue your support of and participation in SAGE and will help us make it an even better advocate for and asset to the profession.

Respectfully yours,
Mike Jones, USENIX Board President

P.S. Interested members may read the motion that failed to pass on Friday, October 28, at https://www.usenix.org/about/sage_update_nov05.html.

Statement from the USENIX Board    Back to top of the page

The undersigned members of the USENIX Board of Directors make the following statement to USENIX and SAGE members:

• Despite a lengthy negotiation that consumed hundreds of volunteer and staff hours from representatives of both USENIX and the SAGE Inc. organization, now called The League of Professional System Administrators (LOPSA), about possible terms for having them become SAGE, no workable agreement emerged. Therefore, we now believe that it is in the best interests of USENIX and LOPSA to focus our respective efforts on building our own organizations for the good of our members. We do not believe that any continued negotiations on funding of LOPSA by USENIX under the present framework would be worthwhile, and any new proposal must ensure it addresses the issues regarding asset transfer and funding previously raised by the Board. It is generally felt that any new proposal would have to be substantially different in order to satisfactorily address these issues.
  
  
• The USENIX Board welcomes proposals for cooperation between LOPSA and USENIX where it makes sense to both organizations.
  
  
• USENIX continues to be committed to serving its SAGE members and the system administration community both now and in the future. The USENIX Board will be actively looking at ways to refine our services for all our members, and your input to us is an important part of this process.
  
  
• Members wanting to give us guidance about shaping future programs for system administrators should send their suggestions to suggestions@sage.org.