AHA PRESIDENT

MYRON KRAUSE

2014 West Alcott
Fergus Falls, MN. 56537
Home Phone: 218-739-3511
Office: 218-736-3466

Email: krause@prairietech.net

Walter Misco, Chair
Gary Dearth, Vice-Chair
Grace Greenlee, Secretary
Lollie Ames
Peter Conway
Frank Galovic
Paul Kostial

Following our March Board of Director's meeting, the AHA Legal Review Committee requested a legal review of the proposed modifications to the Breeders Sweepstakes program. You are all very well aware that there was considerable discussion and some confusion regarding the authority of the Board in this situation. In this letter I will highlight points from the requested legal review that I believe will add clarity to the situation. I must inform you that the attachment from legal counsel is confidential and should not be disseminated to others. I am also attaching a copy of the Sweepstakes Trust Agreement, amended as of 8-24-91. It is important for you to know that the Commission has the support of me as well as other members of the Executive Committee and the Board of Directors. As leaders representing the membership, we all realize the importance of changes in the Sweepstakes program and must remain focused on doing what is best for our membership while being mindful of what is wise for our organization as a business. Your willingness to address Sweepstakes program areas that need changes is admirable. Your receptivity to suggestions has been gracious and accommodating.

A significant issue, which we sought guidance on, was who has the final authority over the Breeders Sweepstakes program. It is the law firm's opinion, based on a review of the Sweepstakes Trust Agreement and resolutions, that the AHA Board of Directors has the ultimate authority over the Sweepstakes program. The 1984 Board resolution creating the Sweepstakes program dictates in one section that the Sweepstakes Commission "make recommendations to the Board for the promotion, regulation, operation and management of the Sweepstakes." Per the Sweepstakes Trust Agreement, the rules and regulations "may be changed, altered, amended or modified from time to time by the Board of Directors."

Two dates have been mentioned when discussing the subject of Sweepstakes: 1984, when the Trust was created, and 1991 when IAHA amended the Trust Agreement to reflect the reincorporation in Colorado. Our legal review states that it "does not appear that the substantive terms in the Trust Agreement have been amended or modified since its creation in 1984." The legal opinion adds, "In fact, in 1991 the IAHA, upon reincorporation in Colorado, adopted and agreed to fulfill the rights and obligations of the 1984 Trust Agreement which included the requirement that the Board of Directors must approve any changes to the Sweepstakes rules and regulations."

However, the most significant issue for both the Board of Directors and Sweepstakes Commission was the potential liability for making the proposed changes. The law firm concluded that the risk of liability is not sufficient to reject rule changes deemed reasonable and necessary for the continued success of the Sweepstakes program.

With the review completed, I sincerely hope that we can move on in a positive manner. It is important to point out that we must be careful that the issue of authority does not override our primary objective: To improve the Sweepstakes program and be more responsive to our general membership.

I think you will agree that the Board at their March meeting embraced the concept of change with Board members appreciative of the positive actions taken by the Sweepstakes Commission. Indeed, we are in a period of change. Our Association has "awakened" to the fact that if we are to survive as a breed and as an Association, we must make changes. The process we are going through now is a painful one. Change is never easy, particularly when there have been few changes in a number of years.

I applaud the leadership and actions displayed by the Sweepstakes Commission. It is imperative that we all remain focused on programs and initiatives that will help turn our Arabian horse industry around. With your proactive recommendations, we are on the road to major changes that will make our breed and Association a better one with members, exhibitors and breeders being the benefactors of your leadership, insight and initiative. We are making progress: In our minds, in our hearts and in our actions. Let's keep it up.

As always, I am available to talk with any of you if you need additional information or clarity.