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May 7, 2013


May 7, 2013

“First of all, it’s good to see everyone again. There’s nothing I’d rather do tonight than answer a lot of questions. I’d love to answer all your questions. Hopefully, you can understand this is somewhat a fluid situation. Candidly, on a lot of the matters you’d like to ask questions about, I don’t know any more than you guys do. I did think it was important, because I’ve been very out front since April 3 when we appeared, to talk to you all. When I saw everyone here for the draft and the pre-draft party, but candidly, I didn’t want to distract from the draft because the draft is all about football and the future of the Browns. I thought it was important for tonight, which is the first time that I’ve been back for any time period since the draft, to spend time to talk about what has happened since April 15.

“Let me start by saying this, I apologize to the city of Cleveland, Northeastern Ohio and all Browns fans because the last thing we ever wanted to do as a new owner was to detract from football and the Browns and just what a great football area this is. I apologize for that, we feel badly about it, and we’re comfortable that we’ll work through this situation, but I did want to say that publicly.

“Let me just take you all through, and some of you were in Knoxville for a couple of our press conferences, so some of this is not going to be new news. Let me just go back to April 15 when the FBI came into our building and took a lot of information. Candidly, we were confused and didn’t understand really exactly what was going on. We had heard it had something to do with rebates we paid to trucking companies. On April 18, four days later, they released their affidavit that they used to get a search warrant. In it, I guess it was good news and bad news. The good news was, we understood what the issue was. The bad news, and it was really sickening to me, candidly, was the apparent behavior of some of our sales people; behavior that’s not characteristic of how the 20,000 employees of PFJ (Pilot Flying J) act and behave towards anyone. We don’t talk that way. We don’t act that way. Candidly, it was behavior that was particularly improper towards customers. It came out Thursday afternoon, I read it Thursday night and was literally almost sick to my stomach, candidly. Number one it was embarrassing and number two it’s not how we act. Over the weekend, we worked diligently and on Monday, April 22, you all probably saw it, we held a press conference in which we announced five steps.

“Number one, we were going to pull our entire internal audit team. You have to remember, we operate over 600 truck stops spread out over the country and handle a tremendous amount of cash. Our internal audit team for the most part is focused on our stores. We pulled them back in and they are going to do an internal audit story. I’ve said this very publicly and privately that, if in fact we did short change anyone on any rebate program that we would write them a check, with interest, and pay them back. We have in fact written several checks since we started the investigation. I would like for that internal audit group to work things out as quickly as possible. I think you all know I’m very impatient. The important thing is, as I’ve told all trucking companies, I probably talked to literally 250-300 trucking companies in the last three weeks, is the important thing is to get it right. I’d like to wrap things up by the end of the month, but if it takes to early June or early July, we are going to get the numbers right. If we owe “XYZ” trucking company, we’ll write them a check on the spot. The second thing we’ve done is we’ve suspended several members of our sales team. I think that was absolutely the proper thing to do given the circumstances. The third thing we did is these ‘manual transactions’, and I won’t bore you with the details of those. We are beginning to put into our system different processes where they are done electronically. In layman’s terms, there is no opportunity for human intervention, if you will. That’ll be done by June 30. You probably say, ‘Why can’t you do it sooner?’ There are customers who are involved and candidly, some of the customers like the way they are getting their payments. We have to work with the customers and do the right things for the customers in getting them changed over. The fourth thing we are going to do is install a compliance officer in Pilot Flying J. Candidly, you all haven’t known us for that long, but Pilot Flying J has doubled in size since 2008. With that growth has come a lot of great things, but I’m not sure in certain areas we had the proper checks and balances in place. This compliance officer will report to General Counsel, who reports to me, I think will help us put those checks and balances in place. We have begun talking to people with great experience in that area and I feel confident here again by June 30. The key is to get the right person or people that we’ll have that in place.

“The fifth thing and this was announced last week, is to appoint a special independent counsel, investigator, whatever term you want to use, who will report to the board, not to me. Who will do their own investigation. The individual’s name is Reid Weingarten. Probably not someone any of you would have normally heard of, I hadn’t heard of. But he’s very well respected and his reputation is impeccable. He’ll do his own independent investigation. Remember, we are a private company, not a public company and this is something we don’t have to do. I think it’s just so important internally and externally that we get this right that we’ve not only agreed to do it, we’ve volunteered to do it on our own. I think his investigation will probably take several months. Once again, very embarrassed. Pilot Flying J has been in business, starting with Pilot, now Pilot Flying J, now 54 years. It’s a family business as you all know and that’s not how we act and how we do things. I think it’s a company that has had really as good a reputation as anyone in the business. That reputation has been tarnished and as I said on April 22, we’re going to begin to rebuild that reputation. Today before I came to Cleveland, we had a little get together with the Cleveland Clinic earlier and then gave the brief talk tonight, I’ve been out talking on trucking companies. First of all, apology and secondly, asking for a second chance because this is not how we act and it’s not how we treat people. We’re going to begin to rebuild our reputation and we understand that it’s going to take a long time to do. But, we are big boys, we’ve been in this business for 54 years and I hope we are in business another 54 years, candidly. That’s all I have to say. Like I said, I would love to take questions.

“I will switch subjects briefly and talk about football. I don’t know if you all were out there [at the banquet], but I feel like we’ve have a really good offseason. I will say this, and I’ve seen some comments, I had the privilege of sitting in the draft room Thursday night, Friday night and all day Saturday. There are periods where it’s really boring but there are periods where it’s really interesting. I had the opportunity to watch Ray (Farmer), Mike (Lombardi), Joe (Banner) and Rob (Chudzinski) interact. I know there have been some comments that maybe it’s not great teamwork, but I’ve never seen four people work together in a positive manner better than those guys did. It wasn’t all agreement. There was a lot of disagreement, a lot of conversation going back and forth, but I’m very excited about the draft we had. I think people forget that we got Davone Bess, who I think is a (heck) of a player and the kind of player that makes a big difference. He’s the kind of guy who knows how to get first downs on third down. He was a teammate of Chad Pennington, who’s from Knoxville and is a good friend of ours. Chad relayed to me through a good friend of his that Davone was one of the best teammates he’s ever had. I’m very excited about the guys we picked up. I’m going home tonight.

“I’ll be out calling trucking companies for the next two and a half days then I’ll be back up here for practice. We’ll have everybody here Friday afternoon, Saturday afternoon and Sunday. I’m real excited about our schedule as I remarked in there. I think we have a great home schedule opening up with the Dolphins at home and having a Thursday night national TV game which I don’t think we’ve had since maybe 2008 or 2009. I think it’s going to be great for our fans. I think we’ll have a better football team this year. As I’ve said on several occasions, we’re going to do this the right way. It’s not going to happen overnight. You don’t go from winning 14 games in three years to winning 14 games in one year. I’m convinced we will have a better team this year and we’ll be better in 2014. I think Joe articulated it very well after the draft, we stand very accountable for what happens this year and we are not at all throwing this year away. I think it’s very important. I think we’ll have a good team. I think we’ve put together a really coaching staff. The intensity in the building, several of the players have remarked to me that the intensity in the building, in the weight room and on the practice field is definitely amped up and I think that will result in a better football team.

I appreciate everyone coming tonight. I’ll be up here this weekend to watch practice. I look forward to it and go Browns.”