Hi Country employee concerns take center stage during CDBG public hearing

A public hearing held by the Montana Business Assistance Connection to take public comments on the application for a Community Development Block Grant that could be used to help a prospective buyer purchase Hi Country Snack Foods, Inc. drew more than a dozen people, nearly all of them Hi Country employees.

MBAC's Community Development Program Grant Manager Eric Seidensticker, identified the potential buyers as Travis and Molly Byerly of Bozeman and reiterated that the purpose of the application is to keep the jobs at Hi Country in Lincoln.

"I have to hammer that home, because I have had a few questions about 'is he gonna move the business?' We can only really write it saying we're going to use programs like the CDBG ... if it's to keep business here," Seidensticker said.

Although the Hi Country employees in general voiced their support for the sale of the business, their main concerns included the fact that news of a pending sale reached them after Seidensticker's initial presentation on the CDBG at the April 6 Government Day meeting, and how such a sale might affect the Employee Stock Option Program.

Chris Castagne, who has worked at Hi Country for 28 years, explained that for many of the long-term employees, the ESOP has been a major factor in keeping them with Hi Country for so long.

"It was put before us as we are owners of Hi Country. It is our retirement," he said.

Castagne told the BVD the ESOP was created Jan.1, 1994 using a similar Community Development Block Grant to purchase the shares of the company that had belonged to Jim Johnson's former partner, Lee Mason. In his view, that means the employees participating in the ESOP should be kept apprised of developments, such as a pending sale, in the same way an individual, single minority partner would be.

"My concern is: will our ESOP be pledged as any type of collateral, or will it be encumbered in any way by that (loan)? That's a big concern," Castagne told Seidensticker. "As long as the ESOP participants are convinced our interests are being looked at first and foremost, it will have our whole support."

Another concern voiced by Hi Country employees was the potential for unilateral changes to the ESOP prior to a sale.

"We have an ESOP lawyer. He's also our trustee. He is our voice. I hope he is being brought along on every step of this thing and kept informed," Castagne said. "He wants to be -needs to be - so there isn't any problem with this down the road."

Seidensticker admitted he first learned of the Hi Country ESOP while researching the age of the county's Revolving Loan Fund, as part of the grant application process.

"An ESOP is a different type of an entity," he said. "I'm really happy I did come across that and I'm really happy we're getting comments here today."

Castagne told Seidensticker he felt Travis Byerly needed to begin visiting with the employees. "We're in Lincoln Montana, and there's a lot of experience sitting here. We're a valuable source of information."

Seidensticker agreed to take the comment from the employees back to the Byerlys, and to look at the original ESOP agreement and any subsequent modifications.

Seidensticker explained that, if funded, the $400,000 grant would be part of a larger funding package - somewhere in the $6 million range - for the purchase of the business. He also wanted to make it clear that if the grant is approved, it isn't simply a handout. The money is added to the Lewis and Clark County Revolving Loan Fund, and would them be provided to the Byerly's in the form of a loan to be repaid, he explained. As the money is repaid it can be used for other loans to support businesses throughout the County.

Although it would only help fund a small part of the overall financing package, the fact that the CDBG application required public hearings reassured Castagne somewhat, since it requires information on the sale to be brought out into the open.

"Programs like this require just what happened today," Seidensticker told the BVD after the meeting. "That's why it's so important we cover all our bases in public hearings."

Seidensticker said prospective buyer Travis Byerly has a background in both the meat industry and in marketing that lends itself to Hi Country's product line.

Byerly founded the Montana Fish Company in Bozeman in 2005, is currently listed as Director of Procurement at Bozeman's Stay Classy Meats and has already been exploring marketing options around the country for Hi Country's Pemmican products.

Seidensticker believes that has been reassuring to Hi Country owner Jim Johnson.

"Hi Country, it's a brand. Jerky in Montana is a big deal," he said. "They've got an understanding; It's pretty reassuring to know he's already involved with the new products."

He said Byerly has also been very vocal with MBAC that he wants to grow the business and retain the jobs that are currently here.

"I understand there has been some heartburn, but they're excited and I gather people think it's a good time for a transition," Seidensticker said.