Eleanor opened the proceedings by explaining that the board was reviewing the December compensation program, its financial treatment, the internal warnings it had generated, and the company's response to employee complaints. She said clearly that no individual would be asked to give an opinion beyond the information they actually possessed. That distinction reassured Evan. He did not want to become a symbol in an argument where symbols mattered more than evidence.
Celia presented a chronological chart. The certificate block had been purchased three years earlier for $88,400 against a printed face amount of $310,000. It had been restricted to promotional use and had expired on April 30. Internal finance entries nevertheless continued to carry it at its printed amount, and the December payroll system had used the certificates to clear earned-wage liabilities for thirty-one operational employees.
The figures were displayed on a screen large enough for the directors to read without leaning forward. Celia distinguished between the original overvaluation of the certificate asset, the improper treatment of expired instruments, and the unpaid wages. The original purchase-price difference was $221,600. That was a clear accounting discrepancy, but the full reporting impact depended on subsequent entries, timing, materiality, and how the company's statements had been presented. She refused to let Grant collapse the entire issue into either a harmless gift-card mistake or a number more sensational than the underlying evidence supported.
A director named Thomas Beale asked whether the company had broken a law simply by purchasing discounted certificates. Celia replied that buying them for permitted promotional purposes was not the issue. The concerns arose from using them contrary to the purchase restriction, substituting them for earned wages, and recording the transactions in a way that did not reflect their economic substance. Counsel added that the precise statutory consequences would be evaluated under the applicable wage laws, contracts, and facts.
Grant shifted in his seat. "The program was meant to keep employees working during a temporary cash squeeze. We were choosing between creative compensation and layoffs."
Eleanor looked at the October reserve statement. "If there was a cash squeeze that prevented payroll, why did we tell employees the year-end reserve was fully funded?"
"Finance assured me the money was available for commitments," Grant replied.
Preston looked up. "The reserve was an accounting designation. We never represented that it was sitting untouched in a separate bank account."
Celia placed the October announcement on the screen and highlighted the word segregated. "Your communication used that word," she said. "Whatever distinction you intended internally wasn't explained to the employees who received it."
Eleanor turned to Preston. "Did you know the certificates were expired?"
He hesitated. "I understood there was a redemption cutoff. I believed the instrument could retain promotional value through vendor accommodation."
"Had the vendor promised to honor expired certificates?"
"Not in writing."
"So you treated a possibility as payment."