SIGNATURE GOLF COURSE MEDIA CONFERENCE

August 8, 2005

Josh Freeman

Jack Nicklaus

JOSH FREEMAN: Thank you, guys.

JOSH FREEMAN: Thank you. First thing I want to say is this process started more than nine years ago. And it was a process that -- and to put that into perspective for our organization, that in the meantime, from the time we decided to start acquiring the property and getting it zoned and dealing with all the entitlement issues, we designed and built Bear Trap Dunes, which is 700 homes and 27 holes that Mr. Jacobson helped us design. So that was kind of a small little project in the mean- -- in the -- while this whole project was going on. For all organizations, it was not only a long project but a very substantial project. I say it's nine years, but really our company was started in 1947 by my father. So this is really 58 years to try to get us to where we are today, where we've taken basically everything that we've learned in there and creating a community and building our homes and design and style and amenities and bringing it here. And one of the distinguishing characteristics and one of the reasons why we're so excited and honored to have Mr. Nicklaus with us is that we really are one of a vanishing breed of developers that does everything, that we're focused on every part of our community: we build the homes, we do the land, we do the entitlement, we sell the homes, we have the service, the mortgage and title, we run the golf courses. So we -- because we believe that that helps build community and it also helps create a focus on customer service that is hard to replicate if you don't do that, and that Jack and his focus and determination that caused him to be the greatest golfer, he's brought that to his design and that hands-on level -- it's kind of interesting, when we started this process, it became apparent that we had signed a Jack-endorsed Signature Golf Course, a lot of people said, Okay, I get it, so, you know, Jack -- and everybody calls him Jack, like they know him (laughter) -- so, you know, Jack just signs the thing and then he comes out of the opening and hits the ceremonial ball and that's it. I said, Well, you know, I've got financially a large stake in this project; we've spent many years working it, and Mr. Nicklaus knows more about this project on a hole-by-hole basis off the cuff than almost -- than definitely I do and almost anybody in our organization. And that focus and determination to create excellence is why we're part of it and that we're so honored to have him here, because we hope that that's a good match for not only our players but our members. So I think that in the end that creating that focus is what is going to separate us and going to help create based on the legacy for our organization to continue for all of our employees. We're extremely proud of this day and also hopefully that by definition having Jack come and sign on the course we are partly being a caretaker for his legacy as well, how well we treat our guests and our golfers and the course, it also is going to reflect back on Jack in a certain way. So hopefully we'll be great caretakers of Mr. Nicklaus' legacy as well as this will be something we'll proud of in our organization. It's a great day for the state, for the county, for the town, for our community, for our company, and for my family, personally. So without any further adieu, I'd like to say thank you, Mr. Nicklaus, for helping make this day come true for us.

JACK NICKLAUS: Josh, thank you very much. Let me say that was a great suggestion you had to come up and hit a ceremonial ball. I like that. (Laughter.) Now that I don't play golf anymore, maybe that's what I'll do from now on. Because I enjoy the other part of it. It's not the part of hitting the ceremonial ball; I enjoy the part of being on the golf course, working the golf course, doing something that's going to be here long -- obviously long beyond my golf game and my lifetime. That's what sort of motivates me when I get involved in golf course projects. The golf course project itself here at Bayside let's say (inaudible) about nine years ago and we went through about six years or seven years just sitting there not knowing what was going to happen. And as you went through your entitlement program and you went through everything else and finally got started, we knew it was a nice piece of property. We just didn't know what was going to -- what we were going to be allowed to do and what we could do. And I think we turned out, and I think you'll see today, a pretty darn nice project, a pretty darn nice golf course that's successful from the real estate standpoint at this point -- I hope more than your expectations, or at least meet your expectations.

JOSH FREEMAN: We've sold over 400 homes to date. We started sales in June of last year. So just a little over a year, about 13 months we've sold over 400 homes.

JACK NICKLAUS: Now all you've got to do is build them, right?

JOSH FREEMAN: Now all we've got to do is build them, that's right. (Laughter.)

JACK NICKLAUS: So I'm pleased that we get to open the golf course today. I've been (inaudible) obviously several times, quite a few times. And today we see the fruit of the work. So that's what we're looking forward to doing. The golf course -- well, you'll see it. We'll describe it as we go along. It's a relatively flat piece of property sitting on the bay, and as the name indicates. And it's got some really nice golf holes on it and it's got some nice views. And I think (inaudible).

JOSH FREEMAN: We'll take some time for some questions and answers. There's a mike here if anybody has a question.

JACK NICKLAUS: Well, I started with Pete. Actually, I got Pete involved in that job. That was a job that I was called on and I brought Pete in because I hadn't done anything and Pete asked me to consult with him. So Pete came in. Pete and I did about a half dozen courses together. And then I went to Muirfield Village. I sort of split off of Pete and started wanting to do my own thing a little bit more and I needed somebody to help me more with the land planning to focus on. And that's when I got involved with Desmond Muirhead and I did about a half a dozen courses with Desmond. And then about -- let's see -- I think we started about '68, I guess, we had -- and then 1974, I guess, about the time we opened Muirfield is the time that I decided I wanted to do my own expressions, and Glen Abbey was the first golf course that I did by myself. And the -- I guess the first three of four golf courses I did were fairly decent courses. They were Glen Abbey, Shoal Creek, and Castle Pines. That's three pretty good names to start off with. I'm sure I had something else in there, I can't remember, but those are the ones that strike out as being the ones that -- that -- right at the start. And the -- at that point in time, you know, most of the people that called me were people that were interested in doing tournament golf courses. And so obviously I got the reputation of doing golf courses that were relatively difficult because I was doing golf courses for tournaments. And Muirfield Village fell in that category too; it was right at the same time. And the -- I spent -- oh, I don't know how much time, you know -- from that period of time doing those, and then the Australian and Australia, other golf courses, Green Briar, which had the Ryder Cup matches, those were all golf courses that we did for tournament golf. So we started doing more and more golf (inaudible) obviously and some other things at the same time. And the evolution came as obviously the first thing I got was, Oh, I see Nicklaus was here, it's a left-to-right golf course. Well, you know, I don't think I'm stupid (laughter) and I realized, Okay, that's something I need to change. And then I had certain types of bunkering, and I said, Well, you know, okay, there's different things that -- I can do golf courses one or two ways maybe at that time; now I can do golf courses maybe twenty different ways (inaudible) give you any kind of look that you want, any kind of thing you want, any kind of golf course you want. But that's true building an organization: learning, experience, doing things, you've got to be -- I suppose I've been involved in 200 and what -- we don't ever seem to grow our numbers, Scott. What is it?

SCOTT: 291.

JACK NICKLAUS: 240?

SCOTT: 291, I think.

JACK NICKLAUS: Well, that's the company.

SCOTT: Yeah.

JACK NICKLAUS: (Inaudible.) But, anyway, you know, through all that period of time I've learned to do a lot of different things. And one of the things -- and as time goes on, you learn to adjust to equipment which you had to adjust to recently. You learn to adjust to environmental issues. You learn to adjust to obviously the needs of the client, or your primary need to adjust to the kind of golf courses that your client wants and what he wants for that piece of property. Sure, we try to guide them to what we think would be good for that property, but I think the client is the key ingredient in telling you what you should have and what you shouldn't. So we've got, you know -- you learn through that, and as an organization we -- we have well over 50 golf courses under construction right now as an organization, which I'm involved in less than half of those, or probably half of those (inaudible). I'm very proud that I have 14 guys that work with me that are either -- work with me now or have left me to go out on their own. And there are 14 members of American Society of Golf Course Architects, Rick being one of them, obviously. Rick worked for me for -- over ten years, Rick?

RICK: Yeah, something like that.

JACK NICKLAUS: About ten years. Jake's been on his own now for -- what have you been on now here? About ten years?

JAKE: 14 years.

JACK NICKLAUS: You're on your own for 14 years? (Laughter.) And, you know, he's done an awful lot of good golf courses on his own. And he came back to me here and asked me, he said, with this project, he said, Jack, he said, Josh Freeman would like to have you involved in a project that I'm involved in (inaudible) (laughter). And he said, Would you come and do that? And I said, Why (inaudible) want me? They said, Well, why don't you be involved like you were before (inaudible) Rick's worked with me and he's quite capable of doing the golf course himself. But obviously the combination of the two, we worked it out, and Rick was -- Rick's been very good about that, he's actually taken a back seat and not -- not -- not trying to push himself forward in that deal. But obviously there's a lot of freedoms when I work with a job and I keep (inaudible) and he has freedoms to do different things. And I give my guys freedom to do things. I give the bulldozer operator freedoms to do things as long as the strategy and the end product turn out to be what I want on the top of the ground. And by doing that I end up with variety. If I had -- and I don't think that I could take 30 golf courses at one time and probably create as much variety if I didn't have different people working with me on different projects, which is kind of nice. And so, you know, that's sort of the evolution where we are. Right now, you know, you never know what the next trend is. The next trend right now is minimalistic golf courses, you know. That's the biggest bunch of junk I've ever heard. You know, I'm doing one with Tom Doak, who has actually been very good. I've enjoyed the golf course (inaudible) up there this afternoon up in New York. But minimalistic. It's minimalistic when something is there and he didn't want to move it but it's not minimalistic when he needs to move a mountain and then create what he wants to look like it was minimalistic. So that's all right. It's a just a -- it's a phrase. But Tom has been very good. We've had a wonderful time. And so look -- go look at what he has done. And I've did a lot of golf -- I've got a lot of seaside type of golf courses lately in that vein too. And -- but I've got a golf course -- talk about minimalistic, I've got a golf course in, you know, Nebraska that I'm doing right now. I was out there last week. I don't think -- if we move 2000 yards of dirt, I'd be surprised. Might be closer to 200. I mean, we moved nothing. I mean, it was (inaudible, multiple speakers) you don't say that on mini golf course. You want to talk about minimalistic, that's minimalistic. I enjoy just taking a piece of ground and try to use that piece of ground to the best of its ability. Environmentally and drainage-wise, that generally doesn't happen. It certainly could happen here, but you couldn't drain this piece of property without moving some dirt. You've got a variety of different things that you do. So it's whatever happens today is -- things change.

JACK NICKLAUS: I'll be sure to tell you that today when I get out there. I'm pleased that it's done. I'm pleased that it's serving its purpose. It's just -- it's all the golf course is an amenity for Bayside's real estate. That's basically what it is. It's to create an attraction, to bring people here to play golf, to enjoy it, to be the central focus for what it is. That's what it is. And it's done nothing more than that. It's a nice golf course. It's one that hopefully from the back tees it will be very testy. Obviously if it's 7,500 yards it's going to be pretty testy. But the members stay at about 6,600 yards, so we hope that the members can play it, can enjoy it, have fun. That's what we want them to do. We also want them to be able to come out here and play and have it not be a golf course that they want to just play once and move on. I think one of the compliments that you want in a golf course, and I certainly think that you'll find that here, is you'll go out to the golf course -- what you don't want is somebody who goes out and (inaudible), Gee, that was a nice little golf course, I enjoyed playing that; where are we going to play tomorrow? What you want is to walk out on the golf course and say, Gee, I enjoyed that golf course today; what time can I get on tomorrow? And that's all the idea is, is to be able to create enough variety in your golf course and create enough interest in your golf course, create enough slice in the golf course that you don't see everything the first time you play it. You've got to keep playing it, keep enjoying it, keep wanting to go, you know -- keep going after the challenge of that golf course. That's the intrigue of it. That's why I keep them coming. We've been very fortunate as an organization to be able to create golf courses that have created good real estate value and interest throughout the country. Our courses seem to have the ability to sell their memberships better and sell them faster and sell the housing and the real estate faster than most anybody else, I think. And I think a lot of that goes to being able to create a golf course that has a balance between difficulty and an interest and playability and people wanting to come and play it. We're very proud of that.

JACK NICKLAUS: Usually I'm opening up whatever I open up a year as far as golf courses, and we open -- I open them all that I can. And those are the most fun days I have during the year. Today will be a very fun day. My body has kind of fallen apart since the British Open. But that's all right, because I didn't really want to play golf after that. But the -- I enjoy going out -- those are fun days for me to go out and play the golf course, so I'll enjoy today a lot. I'll go out and see the -- and I actually use that as a last site visit. And what I mean by that is, you know, you can do all the things you can in dirt, you can do all the things that you see grow in, you can do all those kind of things, but until you actually go out and play golf shots on it and come up with, say, Well, that hole doesn't quite do what I want it to do, and I'm surprised, I'll make a little tweak on that, I use that. I have to say about the last 40 or 50 golf courses I haven't made many tweaks. So fortunately our organization has done a good job as far as finishing up a golf course and we haven't had much of that fortunately. Go out and play it, enjoy it, just have some fun. And hopefully it's what people want. That's what I want.

JACK NICKLAUS: Well, you have water somewhat in play; you have water not in play. I mean, we've got water at the first hole here. But it is not really in play. It should not be in play. It is, but it shouldn't be. We try to take it as far out of play as we can and we try to push the bunker set and move it to the -- move as much play to the right as we can to get around it. That particular pond, I don't know whether that was a requirement from --

JOSH FREEMAN: Storm water management.

JACK NICKLAUS: From storm water management? Was that storm water management or was that an aesthetic pond for an entrance road?

JOSH FREEMAN: I have storm water for the entrance road.

JACK NICKLAUS: Both. Storm water management issued (inaudible) aesthetically pleasing. I don't like to put water in first holes. I try to take it out of play as much as I can. But we do have a lot of water. It's a low piece of property; it needs to be drained. And when you do that, you're going to have water. And so -- and also, you know, I think if you look at real estate values, the highest price comes from a house on water looking over a golf course. That's the other end of that, you know. And so I don't think we want to do this golf course where Josh can't get anything for his property. He's got to pay for me, you know? (Laughter.) But, anyway, that's sort of what we look at. I try to manage the water to where it's got a balance in having -- I try to take it out of play as much as I can, utilize it when I think it's a proper time to utilize it.

JACK NICKLAUS: No, Jim, not really. I think that mostly what I was influenced by was what I played, golf. And I think if you -- I mean, I grew up on a Donald Ross golf course. If you can tell me what a Donald Ross golf course (inaudible) and maybe that's why Donald Ross was so good. Because I don't think you can tell what it is, except it was a good quality golf course. I think you can tell what a MacKenzie golf course was. MacKenzie had a look on his bunkers and he had a look of fairly severe greens, as does Augusta National or Cypress Point or -- I'm trying to think of one -- New South Wales, I guess, and Royal Melbourne. They're all very severe greens. But he didn't know that that greens (inaudible) more than eight or nine (inaudible). You take Tillinghast. Tillinghast I felt like was great around the green areas, but I didn't think the rest of his golf course was much. If you took Baltusrol and you took Winged Foot, if you look at both those golf courses, they were probably barn fields and then trees grew up over time. So they were -- the trees grew up and -- and that really became the strategy beyond the green areas (inaudible) very good. And but I never really took a lot from that. I mean, I really sort of took, well, you know, I like the Ross course I grew up on, which was Scioto. It was a very simple golf course. I love Pinehurst. Pinehurst has always been my favorite designed golf course. Here's a golf course that is totally tree lined. Doesn't have any water in play. Yet it doesn't have a tree in play even though it's tree lined. And it's a very, very -- it's a Ross golf course unlike what I grew up on. So you couldn't tell the two of them together. I think I try to take the ground and try to create what I think should be on that piece of ground, whether it looks like Tillinghast, MacKenzie, Ross, or Nicklaus, or whoever. I don't really know what it looks like. But I just try to figure out what I think fits on that ground (inaudible) the bunkering concept is usually your look. And, you know, some places want a wild bunker concept; some places want a playable bunker concept. We're sort of pie-ish bunker type concept here. And, I mean, you just do different looks. And does that mean that that's somebody else? I hope not. I hope it's me.

JACK NICKLAUS: Biggest challenge here? Getting started. (Laughter.) I think environmental issues were probably the biggest issues we had here, wouldn't you think? I would think so. I think that's the biggest issue. I think that's the biggest problem you had for zoning, everything else, going through to make sure you cover all the bases. I think those are probably. The golf course itself was not difficult to build, certainly not difficult to design (inaudible) you had to cover your water management area, you had to make sure you had your retention bases and so forth and so on to be able to play. Do the -- look, do the -- do the things that was required from water management/environmental standpoint. Outside of that, the golf course, you fit the golf course inside and around that basically.

JACK NICKLAUS: Oh, yeah. (Inaudible) decision five years ago. I still have to figure out how to get rid of the (inaudible) (laughter). I really -- I mean, I should have got away from it a long time ago. From the standpoint of playing. You know, I haven't really been involved playing. I've played a little bit. And you try to say, How do you stop? I had to figure out -- I had to actually pick a time and say, This is it. And, I mean, when I played all of the four Majors in 2000, I said that was going to be the end of my Major Championship golf, basically. And obviously I played in the Masters after that. I haven't played the PGA or U.S. Open since then. But I told St. Andrews that, you know, when they scheduled for 2005, I told them (inaudible) -- let me back that up. We're at the Champions Dinner in 2000. And I said (inaudible) made a comment to Peter Dawson, When is it coming back to St. Andrews? (Inaudible) 2006. Oh, that's too bad, I'll be too old then. And he said, What if it was played in 2005, would you consider coming back? I said, Peter, that would be an awfully nice compliment, I said, I'll be 65, I said, If I'm still playing golf, yeah, I'll do that. Well, obviously he did that. And so I went back. And I just picked that time as the time when I would end my competitive golf. I mean, I have no desire to play any more golf. I played last week. I played out in Salt Lake City with my son Michael in a father-son and I'll play some skins games. And, you know, I may host the Memorial Tournament again someday. But I don't think I'll consider myself as a competitor. I don't plan to play any other golf. And I'll do my course openings and I'll play, you know, a set of skins games, father-son, things like that. I may even start playing with my wife and my daughter, you know. And neither one of them play (laughter), so I'm safe so far. (Inaudible) boys out to the golf course yesterday. And she just said she was going along. She hits it farther than me. And she hits it pretty good. They have to pop it. I didn't know she could still hit a golf ball. (Inaudible) oh, yeah, I've hit some. I said, When is the last time you played? I said, I don't know. She goes, Five years ago. (Inaudible) she's just an athlete. But, anyway, you know, I'm very comfortable. And, thankfully, when they said over there I was actually quite -- it was the only time when I missed the cut that I really wasn't unhappy about it. And with all the reception that I got, as nice as the people were, as much as they made out of that for me that week, I really didn't think it was -- it was actually kind of nice at dinner on Friday that the tournament could go on without worrying about Jack Nicklaus. If that had happened on Sunday, if I was the guy winning the golf tournament, I don't think I would have been very happy with the reception going on. You understand what I mean? I've never been one for ceremony. I don't like that. I just don't like it. But I had to end it someplace and I had to do it, and that's what I did.

JACK NICKLAUS: Yeah, I played (inaudible). Years ago I played there. I think that's the only time I played there. (Inaudible, multiple speakers.)

JACK NICKLAUS: I think we do have a special role there. Unfortunately, equipment is making one of the most difficult things to do, to design a golf course. You don't want me to go on that soapbox for a while. But, I mean, it changes so rapidly or it has changed so rapidly, particularly the golf ball. It's very difficult to try to develop a strategy. That's one of the reasons why I've done -- why I've changed what I do as a (inaudible).I started this maybe five, six years ago, I suppose, where basically I'm back at three tees rather than five or six tees (inaudible) extra tee in. But this golf course is 7,400 -- 7,500 (inaudible) 7,542. That's a long golf course, particularly at sea level. I mean, really a long golf course. And I've got a lot of extra woods in my bag here. You can see that. But the members' tees here are going to be 66-, 67-, 6,500 yards (inaudible), which is a pretty standard number. And the thing is, I used to have a set of back tees, and maybe another 300 yards up above a set of tees, another 300 yards, another set of tees, and have people choose what they want. Well, right now, the average -- most people go to the back tees, they go to the next set of tees and play. Well, if you did that here, the members' tees would be 7,200 yards. They couldn't play the golf course. They wouldn't like it. They would think it's -- that's a big challenge. So we've just -- like we (inaudible ) 6,600. And I think that what we'll try to do is make a golf course that the members will enjoy. The biggest problem you've got is when people try to set up a golf course for a tournament and they want to have more than 6,600 and not 75 because maybe it's a senior tournament or something. Then they try to mix and match and they don't have a clue what they're doing and they end up with a -- they can make a bad golf course out of it. So you really should play -- play the golf course at -- that what it's supposed to be. The members, as long as they've got a golf course, they can play 90 -- 90 -- or less than 2 percent of your play is played from the back tees. That's your scorecard. That's your -- when you bring in a special event or something, that's where you play. That's the biggest challenge that you face in doing golf courses. To get back to your question, we're doing golf courses -- we didn't do any golf courses in the Caribbean for years. We've finally got one in the Dominican Republic. We've got golf courses right now (inaudible) contracts. They've got three in the Dominican Republic. We've got Tortola, Anguilla, Antigua, San Lucia -- let's see -- Barbados, Grenada, St. Croix (inaudible) being able to progress. We have -- Mexico for years didn't have much -- we've probably done -- well, I suppose we've probably finished a dozen golf courses in Mexico. We've probably done 20 percent of the golf courses that exist in Mexico (inaudible). Gone into -- I think Eastern block is the next place golf is going to blossom. And we've got golf courses in -- well, like Turkey isn't exactly the Eastern block, but we move up into Croatia, Slovenia, Czech Republic, Poland, Bulgaria. We've got one we're finishing up in Russia. And we've got two more contracts getting ready to go in Russia. I mean, we've got -- I've got one, like the first golf course going to Mongolia. I mean, those are kind of interesting to me to bring golf into those countries and places there's never been golf and introduce it in a way that I think the game should be played but also how they can learn on it. And if you look at China now, we've got probably -- I don't know -- fifteen golf courses. Twelve? Fifteen? Where are we?

UNIDENTIFIED: More than that.

JACK NICKLAUS: More than that?

UNIDENTIFIED: Over 20.

JACK NICKLAUS: Over 20. And, you know, (inaudible) I've done three or four of them. And but what we've done is, you know, the people in China -- there are over a billion people in China. A lot of them are going to play golf and they're going to take up that game. And so what is the influence we're going to have on them taking up the game of golf and how are they (inaudible). We had the first Chinese International playing at the Memorial Tournament last year (inaudible) beat Ernie at the Thailand Open (inaudible, multiple speakers). Anyway, he won the Asian circuit. We had him there. He played the Masters last year. That type of thing. (Inaudible, multiple speakers.) But, you know, you understand (inaudible). And I enjoy that. I have fun with that. We've -- and having the opportunity to introduce golfers to strange places. Like I was mentioning Sand Hills earlier. Very interesting. I mean, it's an absolute stark nothing, there's not a tree in sight for miles, and yet there's nothing but the largest (inaudible) in the United States and -- and sand hills are 100 miles to 300 miles long in Nebraska. And, I mean, you talk about wind whipping across the plains. We were out there the other day and it was just beautiful out there and about ten minutes later it was blowing 40, you know, (inaudible). Or on the southern coast of Africa, which I thought for years has the best looking golf courses I've ever seen. You go from Cape Town all the way up the coast of south -- southeast coast of Africa, it is fantastic. We've got one, St. Francis Bay that's got 300-foot dunes off the ocean, it's all through this whole area. I mean, it's just unbelievable. I'm going down there in a couple of weeks again. Those are fun to do too. Because people never -- they've never played golf in those places and they've never seen this kind of property. It must be like when Alister MacKenzie showed up at Cypress Point. I bet he thought that was pretty special, because it's still pretty special, it seems like.