arabian horse association board of directors …

ARABIAN HORSE ASSOCIATION BOARD OF DIRECTORS MEETING

APPROVED MINUTES Aurora, Colorado August 1-2, 2014

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Cynthia Richardson, President called the Board of Directors meeting to order at 8:05 a.m., August 1, 2014, at the AHA Headquarters, Aurora, Colorado. PRESENT:

Cynthia Richardson Pam Bingham Eric Wolfe Nancy Harvey Mary Jane Brown Rebecca Fleck Terry Andreasen Tague Johnson Frank Gaddie Howard Pike Cheri Clark Jan Birk Bob Nash Joanne Triplett Don Schwartz Jan Decker Rusty Cook Dan Cross Lance Walters Margo Shallcross Howard Shenk Mary Ann Hughes Laura Mickelson Russ Taylor Jay Greenberg Dave Waggoner

OTHERS PRESENT: Joanne Triplett, Region 7 Vice Chair, was present and voting for Chris Culbreth; Glenn Petty, Executive Vice President; various members of the AHA staff; and various AHA members were present at the Board of Directors meeting. ABSENT: Chris Culbreth, Region 7 Director; Terry Johnson, Region 17 Director; and Sue Meyer, Director At-Large. Note: One Director-At-Large position is vacant; Bob Fauls resigned and Terry Andreasen was appointed to fill the Vice President At-Large position.

APPROVAL OF AGENDA MOTION by Jan Decker, That the Board of Directors agenda of August 1-2, 2014 be approved as amended. Motion Passed Unanimously. (Motion #1-8/1/14-BOD)

PRESIDENT’S COMMENTS Cynthia Richardson, President, welcomed everyone to the Board of Directors meeting. Ms. Richardson reported on her recent AHA travels to the American Horse Council (AHC) and USEF meetings, Youth Nationals, Policies & Procedures to Govern AHA, Business Technology (BT) financial package architecture, AHA governance structure, Executive Committee skill sets and job descriptions. Ms. Richardson requested that the Board members consider the following questions for future meetings: (1) Where are we now? (2) Where do we want to be? (3) How do we get there? (4) What does it cost in direct dollars? What is the rate of return? (5) Do we have the staff to support a change and what is that cost?

RECEIVE CONSENT AGENDA MOTION by Jan Decker, to receive the consent agenda. Motion Passed Unanimously. (Motion #2-8/1/14-BOD)



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EXECUTIVE COMMITTEE MEETING Jan Decker, Secretary, gave a synopsis of the July 31, 2014 Executive Committee meeting. (See Exhibit I) SUBMISSION OF BOARD MINUTES TO OFFICIAL BOOKS MOTION by Jan Decker, That the March 14-15, 2014 Board of Directors meeting minutes that were approved on May 3, 2014; and the June 6, 2014 Board of Directors vote minutes that were approved on June 26, 2014, be submitted to the Official Books of AHA. Motion Passed Unanimously. (Motion #3-8/1/14-BOD) JUDGES & STEWARDS COMMISSIONER REPORT Stan Morey gave the Judges & Stewards Commissioner Report. Mr. Morey advised that there are 275 AHA judges of which 156 are National/Regional judges; also, there are 118 Stewards of which 10 are licensed for Competitive Trail and 20 are licensed for Endurance. The Board members were advised that recognition of stewards has been included in the Hall of Fame commencing with this year’s acknowledgements. Mr. Morey reported that his office is in the process of updating some of the Standards of Excellence DVD’s. Cynthia Richardson, President, recognized Mr. Morey for all of his hard work and he received a round of applause from the Board members. TREASURER’S REPORT The Treasurer’s Report was given by Bob Nash. Mr. Nash reported on the status of the Association’s Financials. Brad Short, Controller, reported on the status of the March 31, 2014 Audited Financials. Cynthia Richardson, President, advised that Motion #8-3/14/14-BOD regarding Legal Defense funds being available for Business Technology (BT) critical needs, which was referred to this meeting, is being withdrawn as there is no need for these funds at this time. EXECUTIVE VICE PRESIDENT REPORT/DEPARTMENT UPDATES Glenn Petty gave the Executive Vice President Report. Mr. Petty reported on staffing, parking garage dispute, warehouse, HVAC/roof issues, Youth Nationals, Canadian Nationals, and AHA website rebuild. Brad Short, Controller/Senior Director of Administrative Support Services, reported on bond investments and calls, and staffing. Lora Holman, HR & Office Services Director, reported on compliance of personnel files, insurance renewal, staffing, internship program, researching integrated payroll services, employee enhancement benefits, and building maintenance.



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Chuck Aaron, Senior Director of Business Technology, reported on staffing; website rebuild; Oracle upgrade; deploying new desktops, laptops and servers; Racing; and the Horse Registration System (HRS). Cynthia Richardson, President, reported that due to our alliance with the Arabian Horse Foundation (AHF), AHA was able to receive a considerable savings for all of our Microsoft software this year and in the future. Ms. Richardson publicly thanked the AHF for working with AHA to make all of this happen in such a timely manner. Leslie Lockard, Competition Services Senior Director, reported on statistics of Youth Nationals and Canadian Nationals; Sweepstakes prize money; resolutions; and High Point Achievement leaders. Debbie Fuentes, Membership & Registry Services Senior Director, reported on membership and registration statistics; 2013 registration amnesty; new export passports; breed analysis and trends; club membership drive; Arabian and Half-Arabian/Anglo-Arabian promotion; outreach and alliance activity; and staffing. Eri Hook, Marketing & Sales Specialist, reported on American Horse Publications Awards for Modern Arabian Horse; publication challenges; new revenue – 2015 calendar. Julian McPeak, Marketing & Communications Manager, reported on goals and objectives; staffing; communications; corporate partners/sponsors; Modern Arabian Horse; national events and general promotion; Name A Future Legend contest; and the website rebuild. Cynthia Richardson, President, requested that Ms. McPeak prepare an overview of the website rebuild which could be distributed to the delegates at Convention. Heather Ellzey, Marketing Specialist, reported on the 2014 Convention Key Note and Luncheon speakers and requested that all requests for committee meetings and caucus items be submitted to her as soon as possible. Ms. Ellzey also requested that the Board members send their itineraries and hotel room requests as soon as possible. Mary Ann Hughes, Annual Convention Planning Committee Board Liaison, reminded the Board members that this year’s Convention is non-hosted and requested that all of the Board members and regions bring two door prizes and consider becoming a sponsor to help defray the costs. Nedra Johnson, Youth & Family Programs Coordinator, reported on Youth Nationals, Total Arabian Interaction Learning (TAIL) program, AHYA trailer raffle, Creative Contest, AHYA Power Pods, and AHYA Board members fund raising requirements. The Board members were advised that the AHYA Board members would be attending the 2014 Adult Convention and holding their Board meeting on Sunday, November 23.



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POLICIES & PROCEDURES MANUAL Cynthia Richardson, President, presented the August 1, 2014 revised Policies to Govern the Business Operations of AHA to the Board members. (See Exhibit II) INVESTMENT PARAMATERS MOTION by Howard Shenk: Whereas, Arabian Horse Association Policies to Govern the Business Operations of AHA

defines Cash assets as: 1. Cash assets shall be invested only in certificates of deposit that are fully

insured against loss by an agency of the Federal government or in securities that are issued by, and guaranteed by, an agency of the U.S. government. Such allowable investments include, but are not limited to: a. Certificates of deposit with commercial banks or savings and loan

institutions in amounts not in excess of the amount secured by insurance by an agency of the U.S. government.

b. U.S. Treasury bills and U.S. Treasury notes c. Yankee certificates of deposit d. Federal Home Bank Certificates, and e. Federal Farm Credit Bureau Certificates

and; Whereas, In today’s financial world there is a desire to expand the available investment

opportunities for AHA assets, Therefore, Be It Moved, That the Board of Directors of AHA authorizes the following steps to be taken

relating to Investment Policy with the following addition to the AHA Policy Section 2.6.1.F.: F. Non-cash assets: The Arabian Horse association Board of Directors

authorizes the creation of a non cash diversified investment account. The Account shall be limited to not more than thirty percent (30%) of the total funds currently held as cash or equivalents in one (1.) above. Sub accounts may be established to segregate funds as deemed necessary. The AHA President with approval of the Executive Committee shall establish an Investment Advisory Group. The Investment Advisory Group is to recommend to the Executive Committee an Investment Policy Statement, including risk tolerance for use in the Investment Policy for investment of these Non Cash Arabian Horse Association Assets.

; and, Be It Further Moved, That the AHA Investment Policy recommendations including assignment of

responsibilities are to be submitted to the Executive Committee for their consideration and approval prior to implementation.

Effective: Immediately. Motion Passed Unanimously. (Motion #4-8/1/14-BOD)



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Cynthia Richardson, President, advised that she had appointed a sub-committee of the Budget & Finance Committee to act as AHA’s Investment Advisory group. The members appointed to this sub-committee are: Dan Stevenson, Dick Pope, Dave Corning and Terry Andreasen (Cynthia Richardson and Bob Nash will be ex-official members of the sub-committee). The sub-committee will prepare an investment policy for AHA and submit it to the Executive Committee for consideration and approval.

NOMINATIONS Director’s Award—Nomination forms for the Director’s Award were collected so that ballots could be made and distributed for voting.

Special Registration Commission Election—The Board members were advised that Lollie Ames, Region 10, had resigned her AHA Representative position on the Registration Commission. The Registration Commission will be holding their meeting and Breeder’s Forum next month and is requesting that this position be filled immediately. The following nomination was received: Dean Meier, Region 10.

MOTION by Jan Decker that the nominations for the Registration Commission be closed and that the uncontested ballot be accepted as the elected slate. Motion Passed Unanimously. (Motion #5-8/1/14-BOD)

Boards/Commissions/Committees—The following members were nominated as candidates: AHA Futurity Commission: Marjie Becker (Region 3) and Chuck Rickart (Region 10); AHA National Distance Commission: Carla Jo Bass (Region 9) and Eric Rueter (Region 12); Arabian Breeders Sweepstakes Commission: Jim Hitt (Region 8) and Gordon Potts (Region 8); Canadian National Show Commission: Tony Caughell (Region 17) and Karol Read (Region 0); Commissioner’s Review Panel: Michele Culbreth (Breeder) (Region 4), Rik Harnden (Amateur) (Region 3), Cheryl McCally (Amateur) (Region 9), and Cynthia Reid (Steward) (Region 2); Education/Evaluation Commission: Lori Conway (Region 10), Julie Goder-Larson (Region 10), Bill Melendez (Region 1), and John Ryan (Region 15); Ethical Practice Review Board: Raymond Cerniga (Steward) (Region 2) and Mickey Hegg (Judge) (Region 7); Internal Audit Committee : Howard Shenk (Region 7); Judges & Stewards Selection Committee: Judie Mitten (Region 7), Marilyn Norton (Region 11), and Angela O’Neill (Region 11); Market Development & Promotion Committee (Half-Arabian/Anglo-Arabian Representatives): Gary Millar (Region 17) and Becky Nash (Region 9); Nominating Committee: Deborah Johnson (Region 3) and Christine Ryan (Region 15); Probable Cause Panel: Mike Beethe (Attorney) (Region 7); Registration Commission (AHA Representatives): Dean Meier (Region 10) and Christine Rickart (Region 10); Sport Horse National Show Commission: Bob Bennett (Region 12), Gary Hooghkirk (Region 15), and Bill Pennington (Region 14); U.S. National Show Commission: Allan Ehrlick (Region 18), Gary Hooghkirk (Region 15), Bill Hughes (Region 1), Angela O’Neill (Region 11), and Larry Shallcross (Region 9); Youth National Show Commission: Diana Bein (Region 1) and Katharyn Hart (Region 9).



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BOARD MEETING DATES MOTION by Dave Waggoner, that the 2015 Board of Director meeting dates be as follows: March 13-14, 2015, Aurora, Colorado July 31-August 1, 2015, Aurora, Colorado November 18, 2015, Denver, Colorado Motion Passed Unanimously. (Motion #6-8/1/14-BOD) AHA NATIONAL DISTANCE COMMISSION MOTION by Rusty Cook: Whereas, It is the wish of the AHA Board of Directors to approve the date and location of the

AHA Distance Nationals; and Whereas, The AHA National Distance Commission wishes to comply with the AHA Board of

Directors; Therefore, Be It Moved, That the 2015 AHA Distance Nationals be held at the Big South Fork National River

and Recreation Area, Oneida, TN. The 2-Day National Championship Competitive Trail Ride to be held on Thursday and Friday, September 10 and 11, 2015, the 50-Mile National Championship Endurance Ride on Saturday September 12, 2015 and the 100-Mile National Championship Endurance Ride on Sunday September 13, 2015.

Effective: Immediately. Motion Passed Unanimously. (Motion #7-8/1/14-BOD) ARABIAN BREEDERS SWEEPSTAKES Russ Taylor, Chair, gave the Arabian Breeders Sweepstakes report. Mr. Taylor reported on the Arabian Breeders Sweepstakes Commission’s review of the current Sweepstakes program. MOTION by Dan Cross, to recess the AHA Board of Directors meeting and reconvene as the Arabian Breeders Sweepstakes Trustees. Motion Passed Unanimously. (Motion #8–8/1//14 -BOD) The Board of Directors held an Arabian Breeders Sweepstakes Trust session from 2:35 p.m. to 3:45 p.m. MOTION by Jan Decker, to adjourn the Arabian Breeders Sweepstakes Trustees meeting and reconvene the AHA Board of Directors meeting. Motion Passed Unanimously. (Motion #9-8/1/14-BOD) ARABIAN HORSE FOUNDATION (AHF) REPORT Nancy Harvey, Board Liaison, gave the Arabian Horse Foundation (AHF) report. Ms. Harvey advised that the Foundation was very happy to help with the computer financial savings to the Arabian Horse Association.



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CANADIAN NATIONAL SHOW COMMISSION Kelsey Martinez, Staff Liaison, gave the Canadian National Show Commission report. Ms. Martinez reported on entries and the VS outbreak. The Board members were advised that after soliciting for facility bids for the 2015 and 2016 show, the Commission decided to stay in Brandon. Ms. Martinez also reported on a tax grant and sponsorships received. COMPETITIONS ADVISORY COMMITTEE Margo Shallcross, Chair, gave the Competitions Advisory Committee report. MOTION by Margo Shallcross, that the Championship and Reserve Championship award ceremony in the arena at national shows allow only one person for award photographs. Effective immediately. Motion Passed. (Motion #10-8/1/14-BOD) MOTION by Margo Shallcross: Whereas, Regional offsite (specialty regionals) recognition applications are considered part of

the main ring Regional show and do not require an additional recognition fee; and Whereas, Many regions are currently running multiple offsite Regional specialty shows which

require the same amount of processing; Therefore, Be It Moved, That Regional offsite shows are required to pay $50 per show recognition. Effective: With the 2015 Regional show applications. Motion Passed Unanimously. (Motion #11-8/1/14-BOD) MOTION by Laura Mickelson: Whereas, AHA Handbook Chapter 11, Comp 703.4 and Comp 708.2 are incomplete, outdated,

unclear in application, and no longer necessary; and Whereas, The Youth National Show Commission, like all of the other National Show

Commissions, should be free to choose the classes and age splits that work for its show; Therefore, Be It

Moved, That the following provisions be deleted from the AHA Handbook: COMP 703. AMATEUR/AMATEUR OWNER CLASS REQUIREMENTS 4. Arabian JTR/JOTR English Pleasure and Arabian JTR/JOTR Western Pleasure must be split at the Nationals into two age groups: 13 and under, and 14 to 18. COMP 708. NATIONAL SHOWS EQUITATION CLASS REQUIREME NTS 12. Saddle Seat Equitation, Reining Seat Equitation, and Hunter Seat Equitation Not To Jump must be split at the National Championship Show into two age groups: 13 and under, and 14-18.

Effective: For 2015 show season. Motion Defeated. (Motion #12-8/1/14-BOD)



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A lengthy conversation was held and concerns were expressed regarding Motion #12-8/1/14-BOD and that this would involve staff time for computer programming and verifying qualifications. HALTER SCORING AD HOC COMMITTEE Stan Morey, Staff Liaison, gave the Halter Scoring Ad Hoc Committee report. The Board members were advised that the Committee had submitted four motions for consideration. Mr. Morey reported that the Education/Evaluation Commission will review the committee’s requests to see if they can be implemented; therefore, the committee withdrew the Board motions. Cynthia Richardson, President, advised that the committee had completed their assignments by submitting this report to the Board of Directors. INTERNAL AUDIT COMMITTEE

MOTION by Eric Wolfe, That the Arabian Horse Association (“the Association”) Board of Directors approve the President’s expenses in the amount of $4,079.52 for the period March 1 through June 14, 2014. These expenses have been examined by the Internal Audit Committee and have been determined to be acceptable. Motion Passed Unanimously. (Motion #13-8/1/14-BOD) MARKET DEVELOPMENT & PROMOTION (MDP) COMMITTEE Lisa Blackstone, Committee Member, gave the Market Development & Promotion Committee report. Ms. Blackstone reported that the Committee’s main focus continues to be the AHA website rebuild. MEMBERSHIP COMMITTEE Cynthia Richardson, President, advised that discussion was held at the March Board meeting regarding charging the Membership Committee with considering a new young adult membership category to help retain the memberships of the young adults while they are furthering their education. Ms. Richardson reported that further study revealed that the AHA office is already tracking this and continues to send information/news to these individuals. It was determined that costs associated with programming a new young adult membership category was not necessary at this time, therefore, this has been postponed. The Membership Committee requested that a poll be taken among the regions to see how many offered select seating for life members at their shows. A majority of the regions do not have special seating. Ms. Richardson requested that all of the regions consider doing this and recognizing the life members at the regional shows. PUREBRED ARABIAN TRUST (PAT) UPDATE Howard Pike, Vice President At-Large, gave the Purebred Arabian Trust update. Mr. Pike reported on the July 17th PAT meeting. Mr. Pike stated that concerns were expressed that the World Arabian Horse Organization (WAHO) Conference is scheduled to take place in Qatar this November.



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RACING COMMISSION REPORT Terry Andreasen, Vice President At-Large, gave the Racing Commission report. Mr. Andreasen reported that participation is down for the Graded Stakes races. REGISTRATION COMMISSION REPORT Debbie Fuentes, Staff Liaison, gave the Registration Commission Report. Ms. Fuentes reported that the May meeting/Breeder’s Forum that was held at the Taylor Ranch in Payson, Utah, was a success. The Board members were advised that the next meeting/Forum will be held September 12-13, 2014 at Ted Carson-Butler Farms Training Center in White Oak, North Carolina (near Raleigh). SPORT HORSE NATIONAL SHOW COMMISSION Rebecca Fleck, Board Liaison, gave the Sport Horse National Show Commission report. Ms. Fleck advised that this year’s show will be held September 24-27 in Nampa, Idaho and invited everyone to attend. Ms. Fleck reported on horse and entry statistics and new split classes being offered for this year’s show. Cynthia Richardson, President, reported on the site selection process resulting in choosing Raleigh, North Carolina for next year’s show. ANNOUNCEMENT Cynthia Richardson, President, announced that tomorrow’s session will start at 7:30 a.m. There being no further business, the meeting was adjourned at 5:05 p.m.



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President Cynthia Richardson called the Board of Directors meeting to order at 7:30 a.m. on August 2, 2014 at the AHA Headquarters, Aurora, Colorado. CLOSED SESSION The Board of Directors held a closed session from 7:30 a.m. to 9:30 a.m. VOTING & BALLOT COLLECTION FOR DIRECTOR’S AWARD Ballots for the Director’s Award were distributed to the Board members for voting and collection for tabulation. U.S. NATIONAL SHOW COMMISSION Lance Walters, Board Liaison, gave the U.S. National Show Commission report. Mr. Walters reported on scheduling, sponsorships and the facility. The Board members were advised that this year’s show will be held October 17-25 in Tulsa, Oklahoma, and invited everyone to attend. YOUTH NATIONAL SHOW COMMISSION Nancy Harvey, Board Liaison, gave the Youth National report. Ms. Harvey reported on statistics for the show (entries, horses, sponsors, patrons, stalls, scholarships, etc.). YOUTH COMMITTEE MOTION by Nancy Harvey: Whereas, The AHYA Board is a dynamic and quickly changing board, this necessitates the

ability to fill vacancies efficiently, quickly and fairly; and Whereas, The AHYA Board believes that the time required for a replacement of an AHYA

Board member through the use of a special election could lead to delays in the board's ability to function. In addition, the utilization of a special election is not consistent with the original procedures for electing a Director; Therefore, Be It

Moved, That Chapter 22, Article III, Section 3.b – be changed to read: Vacancy: In case of any vacancy, the vacancy shall be filled utilizing the procedures chosen by the Region which the Director represents, found in Section 3; and, Be It Further

Moved, That Chapter 22, Article III, Section 3.e – be changed to read: When a Regional Director is elected to an AHYA office, that director shall be replaced in his/her Region utilizing the procedures chosen by the Region which the Director represents, found in Section 3.

Effective: Immediately. Motion Passed Unanimously. (Motion #14-8/2/14-BOD) MOTION by Nancy Harvey: Whereas, The AHYA Board is very interested in insuring that the most qualified candidate is

elected to the office of AHYA President, and that elections are more than just a popularity contest; and



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Whereas, The AHYA Board believes that the office President should require some AHYA board experience as the time frame of service is limited and the AHYA is a unique entity; Therefore, Be It

Moved, That Chapter 22, Article III, Section 5.c – be changed to read: Candidates for office must be at least 14 years of age as of December 1st of the previous year. The candidates for office of President must have served at least one (1) year on the AHYA Board of Directors. The candidates must be a current Youth Member of the AHYA and have a minimum of 1 full year previous membership at time of election. In addition, candidates for the office of each officer shall at all times during his/her continuance in office, be a qualified member of the AHYA or AHA.

Effective: Immediately. Motion Passed Unanimously. (Motion #15-8/2/14-BOD)

EXECUTIVE COMMITTEE AUTHORITY MOTION by Terry Andreasen, That the AHA Board of Directors approve submitting the proposed Executive Committee authority revised Bylaws resolution to the 2014 Convention. Motion Passed Unanimously. (Motion #16-8/2/14-BOD)

SHOW COMMISSION LIMITATIONS Cynthia Richardson, President, reported on the Executive Committee’s (EC) decision to limit members to only be able to serve on one national show commission at a time: (1) The EC believes that serving on a national show commission is very demanding and time consuming. (2) It was also noted that AHA has a lot of members that are very able and willing to serve on these commissions. (See Exhibit I, EC Motion # 4-07/31/14)

ARABIAN BREEDERS SWEEPSTAKES MOTION by Howard Shenk to ratify the August 1, 2014 Sweepstakes Trustees motions. Motion Passed. (Motion #17-8/2/14-BOD) (See Exhibit III)

CAPITAL EXPENDITURES MOTION by Howard Pike: Whereas, Existing requirements for both building and business technology (BT) capital

investment exceed funds available within AHA; and Whereas, The Board of Directors has been presented with and discussed a broad range of

information relating to the capital expenditure needs; Therefore, Be It Moved, That the Executive Committee develop a prioritized plan for addressing both the BT

and Building Capital Expenditures; and, Be It Further Moved, That the funding likely will require the need to borrow/mortgage and is recognized by

the Board of Directors as necessary; and, Be It Further Moved, That the Executive Committee prioritized plans and terms for funding will be

distributed for Board of Director approval as soon as available. Motion Passed Unanimously. (Motion #18-8/2/14-BOD)



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REGIONAL BOUNDARIES AD HOC COMMITTEE Terry Andreasen, Chair, gave the Regional Boundaries Ad Hoc Committee report. Mr. Andreasen presented a PowerPoint report to the Board of Directors. Mr. Andreasen stated that he would distribute a packet of statistics to all of the Board members at Convention. SHOW COMPARISONS Cynthia Richardson, President, reported that she had sent a show comparison questionnaire to the Board members in March with a reminder in June. The Board members were requested to complete the questionnaire and return it to Ms. Richardson by early July. Ms. Richardson stated that she only received responses from two of the regions. Ms. Richardson advised that she would resend the questionnaire to the Board members so that the remaining Board members could complete it and return it to Ms. Richardson. A copy of all of the questionnaires will be sent to the Board members with the agenda material packets in October so that the Board can address this item at the November meeting (if time permits, if not, it will be continued to the March meeting). BYLAWS COMMITTEE Cynthia Richardson, President, reported that the Executive Committee believes that the AHA Bylaws are very important and that members of the Bylaws Committee need to be aware of all intricacies involved particularly with PAT provisions. Therefore, the Executive Committee is recommending that the Board of Directors consider changing the Bylaws Committee from a Tier B to a Tier A committee which will be appointed by the AHA President. MOTION by Frank Gaddie that the Bylaws Committee be defined as a Tier A committee and appointed by the President. Effective January 1, 2015. Motion Passed Unanimously. (Motion #19-8/2/14-BOD) There being no further business, the meeting was adjourned at 11:25 a.m.

Jan Decker, AHA Secretary Approved: _______________ _______________ Date Initials



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EXHIBIT I

ARABIAN HORSE ASSOCIATION EXECUTIVE COMMITTEE MEETING

APPROVED MOTION July 31, 2014

PROCUREMENT PURCHASE POLICY

MOTION by Bob Nash, seconded by Terry Andreasen, to adopt the revised Purchase Requisition Guidelines. Effective Immediately Motion Passed Unanimously. (EC Motion # 1-07/31/14) (See Exhibit A) USEF REPRESENTATION MOTION by Howard Pike, seconded by Bob Nash, that a policy be adopted for priority seating selection for the Arabian Horse Association positions with the USEF, which shall be the current President, Immediate Past President, and/or the current elected Vice President. Effective Immediately. Motion Passed Unanimously. (EC Motion # 2-07/31/14) PHOTOS AT NATIONAL SHOWS MOTION by Bob Nash, seconded by Lance Walters, that in the interest of safety, no more than 5 people can enter the show arena for Champion and Reserve Champion photos at AHA National Events. Effective Immediately. Motion Passed Unanimously. (EC Motion # 3-07/31/14) (See EC Motion # 6-07/31/14) SHOW COMMISSION LIMITATIONS MOTION by Howard Pike, seconded by Nancy Harvey, that on or after November 1, 2014, no individual may be elected or appointed to serve on more than one national show commission at one time. Motion Passed Unanimously. (EC Motion # 4-07/31/14) AHA BYLAWS MOTION by Terry Andreasen, seconded by Nancy Harvey, that a proposed resolution be forwarded to the 2014 AHA Convention as an amendment to provide that the AHA Bylaws become consistent with the Policies and Procedures Manual. The amendment proposed is to be in Article IV, Paragraph d. Executive Committee: delete the words “…subject to ratification by the Board” in the last sentence. Motion Passed Unanimously. (EC Motion # 5-07/31/14) PHOTOS AT NATIONAL SHOWS MOTION by Bob Nash, seconded by Lance Walters, to reconsider EC Motion #3-07/31/14 and refer it back to the AHA Board of Directors for consideration. Motion Passed Unanimously. (EC Motion # 6-07/31/14)

Page 1 of 2



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EXHIBIT I, Continued ARABIAN HORSE ASSOCIATION

EXECUTIVE COMMITTEE MEETING APPROVED MOTION

July 31, 2014 EXHIBIT A Purchase Requisition Guidelines Purchase Orders/Requests

• ALL purchases must have an approved purchase requisition BEFORE ordering. Exception: When traveling on AHA business, use discretion and good sense.

• If there is a contract, that will serve as the purchase requisition approval. A PO will still need to be completed and logged into the system.

• Recurring bills (such as Xcel, Aurora Water, Deep Rock) will have an open purchase requisition for the fiscal year. Each bill will be added to the running total for the purchase requisition.

• Small item orders that are recurring will also be done on an open PO number. • Purchases of budgeted airline tickets will that are under $350 ($450 Canada) including baggage do not need a

PO. If over, contact accounting and complete PO. • Unbudgeted travel must be approved by the EVP. • Travel Advances and Expense Reports will still be done with the current forms.

Approvals

• All purchase requisitions must have the proper approvals before being submitted to accounting for final approval.

o Current signing authority observed • The following should be followed when submitting a purchase request

o $0-$1000 = no quotes needed o $1001- $5000 = three telephone/catalog quotes required including contact name. o $5001 up = three written quotes required and attached to the purchase order

Steps for Purchasing

1. Fill out purchase order/request. • If over $1,000, obtain either telephone or written quotes and attached to the purchase order/request.

2. Obtain department approval for purchase order. 3. Submit to accounting via hardcopy or electronically ([email protected]). All purchase orders in

the box/email will be approved each day prior to 9:00am. For rush items, take directly to controller. 4. Accounting will log the approved purchase order/request and return the approved PO for you to use in

ordering. • If a purchase order/request is denied, the controller will explain why. If need be, both the requesting party

and the controller will discuss the purchase with the EVP. ***Once the invoice comes in, there will be no need for department approval since the PO was approved.

Page 2 of 2



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EXHIBIT II

Amended as of August 1st, 2014

ARABIAN HORSE ASSOCIATION POLICIES

(Addendum to Board Reference Manual)

POLICIES TO GOVERN THE BUSINESS OPERATIONS OF AHA

TABLE OF CONTENTS

Category I: Ends Policy 1.0 AHA Ends Policies

Category II: Management Limitations Policy 2.0 General Management Constraint 2.1 Treatment of Members 2.2 Treatment of Staff/Volunteers 2.3 Financial Condition and Activities 2.4 Asset Protection 2.5 Financial Planning/Budgeting

2.6 Investment Management 2.7 Emergency EVP Succession 2.8 Compensation & Benefits 2.9 Communication and Support to the Executive Committee/Board of

Directors Category III: Board-Management Delegation Policy 3.0 Governance-Management Connection 3.1 Unity of Control 3.2 Accountability of the EVP 3.3 Delegation to the EVP 3.4 Monitoring EVP Performance Category IV: Governance Process Policy 4.0 Governance Commitment 4.1 Governing Style & Values

4.2 Executive Committee Job Description 4.3 Agenda Planning

4.4 President’s Role 4.5 Executive Committee Members’ Code of Conduct 4.6 Governing Committees

4.7 Governing Committee Principles 4.8 Governance Budget



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EXHIBIT II, Continued POLICY 1.0 POLICY TITLE: ENDS POLICIES

1.0 Global Ends Statement:

AHA exists for Growth in the Number of People Having

A Passion to Own and Enjoy the Arabian Horse

(Not reflecting any order of priority) 1. There is growth in the interest in and demand for the Arabian Horse. 2. The integrity of the breed is preserved. 3. There is increased participation in activities involving the Arabian Horse. A. There is growth in the membership of affiliated clubs. 4. The equine industry and general public recognize and value the attributes of the Arabian Horse. 5. Members have services and benefits that are valuable and convenient. POLICY TYPE: MANAGEMENT LIMITATIONS POLICY 2.0 POLICY TITLE: GENERAL MANAGMENT CONSTRAINT

The EVP shall not cause or allow any practice, activity, decision or organizational circumstance that is unlawful, imprudent, or in violation of commonly accepted business and professional ethics and practices. POLICY TYPE: MANAGEMENT LIMITATIONS POLICY 2.1 POLICY TITLE: TREATMENT OF MEMBERS

With respect to interactions with AHA members, or those applying to become members, the EVP shall not cause or allow conditions or procedures that are unfair, unsafe, untimely, undignified or unnecessarily intrusive. Accordingly, he/she shall:

1. Ensure that members/customers are treated with respect and courtesy. 2. Ensure that new members are placed in the appropriate membership categories.

A. Encourage club affiliation

3. Help to enable members to benefit from club membership.

4. Not Collect, review, transmit, store nor destroy member information in a manner that fails to protect against improper access to that information/data.



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EXHIBIT II, Continued

A. AHA considers records and financial information submitted to AHA to be confidential between the party and AHA. Copies of records and/or information are only released back to the person or party submitting the documents and only to the address recorded at AHA or listed on the paperwork received, with the following exceptions:

B. INFORMATION WE WILL GIVE OUT

Arabian, Half-Arabian and Anglo-Arabian Horse Registries Information

• Horse Name • Sire • Registration Number • Sire Registration Number • Owner Name and Address • Dam • Foal Date • Dam Registration Number • Color • Castration Date (if applicable) • Markings • Breeder Information • Sex • Transfer Information

Membership

• Current AHA Membership Number (to Show Officials or Member Organization regarding their own members) • Current AHA Member street address • Telephone numbers and e-mail addresses ONLY for the following - Board of Directors - AHA recognized Arabian Judges & Stewards - Regional Officers - Event Secretaries - Committee Chairs - Event Managers - Committee Members - Youth Board of Directors - Club Contacts - Youth Committee Chairs - Commercial Exhibitors - Youth Committee Members - Advertisers

Programs/Events/Shows • Verify entries in AHA Events • Verify horse enrollment in AHA Programs • Sweepstakes Payment Information on Status of Prize Money Payout

C.

INFORMATION WE WILL NOT GIVE OUT Member Telephone Number (except as listed above) Member Email Addresses (except as listed above) Member Social Security numbers Membership

• Multiple AHA Members’ Addresses (must purchase labels – forward request to AHA) • AHA Account Balances/Invoices/Statements/Delinquent Notices/Collection Notices (refer all requests for information to Accounting Dept.)



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EXHIBIT II, Continued Employee (Past/Present) Information

• Requests for Employment Information (refer all questions to Human Resources Dept.)

D. Non-Standard Information

Written Request Required Board, committee and/or member requests for additional information must be submitted in writing to the EVP for evaluation. All requests should be made in good faith and for a proper purpose. The request should describe with reasonable particularity the purpose for the request and the records the member desires to inspect. Requests should not violate any individual’s right to privacy or due process and may require a court order or subpoena.

Appeal Procedure

If the EVP denies the request, the member may appeal the decision by sending the request to the Executive Committee for review at its next scheduled meeting. If the Executive Committee denies the request, the member may appeal that decision by sending the request to the AHA Board of Directors for review at its next regularly scheduled meeting. The BOD decision is final.

Associated Costs

AHA may impose a reasonable charge covering the costs of labor and material to produce any large copy project as a result of an information request.

5. Communicate to members a clear understanding of what AHA membership entitlements may be expected

from the services offered.

6. Ensure a process for timely response to complaints. POLICY TYPE: MANAGEMENT LIMITATIONS POLICY 2.2 POLICY TITLE: TREATMENT OF STAFF/VOLUNTEERS

With respect to the treatment of volunteers and employees, the EVP shall not cause or allow conditions that are unsafe, unfair or undignified. Accordingly:

1. Pertaining to volunteers, the EVP shall ensure that volunteers are informed of and execute agreements specifying mutual expectations and consideration.

2. Pertaining to employees, the EVP may not:

A. Operate without a written personnel manual, approved by legal counsel, that clarifies personnel rules for employees, provides for effective handling of grievances, and protects against wrongful conditions.

B. Fail to acquaint staff with this policy. C. Allow staff to be unprepared to deal with emergency situations (e.g. – fire, tornado, etc.)

3. Pertaining to employees and volunteers, the EVP may not retaliate against an employee/volunteer for

reporting to management or to the Executive Committee acts or omissions by AHA personnel, management or the Executive Committee or Board of Directors that the employee/volunteer believes, in good faith and based on credible information, constitutes a violation of state or federal law or a governing policy of the Executive Committee.



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EXHIBIT II, Continued POLICY TYPE: MANAGEMENT LIMITATIONS POLICY 2.3 POLICY TITLE: FINANCIAL CONDITION AND ACTIVITIES

With respect to financial condition and activities, the EVP shall not cause or allow the development of fiscal jeopardy, or a material deviation of actual expenditures from the Executive Committee’s Ends priorities. Accordingly, the EVP shall not:

1. Expend more funds than have been approved in the budget as established by the BOD. A. The EVP may not incur any organizational indebtedness, with the exception of use of credit cards used

for normal business purchases, which must be paid off on a monthly basis. B. Lease agreements and other asset purchases done on time may occur with the approval of the

Executive Committee.

2. Fail to settle payroll obligations and payables in a timely manner.

3. Use restricted or designated funds for purposes other than stated.

4. Fail to maintain specific reserve fund balances as follows: A. Legal defense fund, or B. Major capital items/replacement fund, or C. Any other fund from time-to-time approved by the Executive Committee/Board of Directors.

5. Allow tax payments or other government ordered payments or filings to be overdue or inaccurately filed.

6. Acquire, sell, encumber, or dispose of Headquarters building or any other material assets without Board

of Director approval. 7. Fail to aggressively pursue material receivables within A/R policy as approved by the Executive

Committee.

8. Fail to exercise adequate internal controls over receipts and disbursements to avoid unauthorized payments or material depletion of assets.

9. Fail to manage procurement procedures in conformance with Procurement Purchase Policy approved by

the Executive Committee.

10. Fail to ensure that the valuation of assets is accurately recorded.

11. With the approval of the Executive Committee, be authorized to utilize up to $200,000 from the Cash Reserve Account for general cash needs between Jan 1, and June 30 to cover short term cash flow issues, to be paid back by the August Board meeting in which the funds were used. (BOD 03/14)

12. The legal defense will be maintained at a balance of $150,000. In the event of a legal defense funding

need the “first out” monies come from the temporarily restricted portion of the account balance. (BOD 03/14)



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13. The Cash Reserve Account can be used for short term loans, at no interest, to the AHA general fund for the designated purposed in an amount determined by a two-thirds vote of the board of directors. Repayment of all funds loaned to the AHA general fund from Cash Reserve Account must begin no later than six months after the original disbursement of funds from the Cash Reserve Account (i.e. first repayment due in disbursement month plus six months). Repayment terms will be no less than $15,000 per month until all monies have been repaid. BOD may adjust the repayment amount higher based on the organization’s cash position. (BOD 03/14)

POLICY TYPE: MANAGEMENT LIMITATIONS POLICY 2.4 POLICY TITLE: ASSET PROTECTION

The EVP shall not allow AHA’s assets to be unprotected, inadequately maintained or unnecessarily risked and shall not endanger the Association’s public image, its credibility, or its ability to accomplish Ends without the Executive Committee’s approval (e. g.. – building upkeep that is unable to be funded such as carpet replacement, etc.).

Accordingly, he or she shall:

1. Maintain facilities and equipment from improper wear and tear or insufficient maintenance.

2. Employ risk management practices to minimize exposure of the organization, its Board or staff to claims of liability. A. Against theft and casualty losses to at least replacement value; and B. Against liability losses to Board members, staff and the organization itself in an amount equal to or

greater than the average for comparable associations. C. Against employee theft and dishonesty, or through the provision of trust or surety bonds for officers

and employees.

3. Enforce the conflict of interest policy approved by the Board of Directors.

4. Protect intellectual property, information and files from loss or significant damage.

5. Maintain records in a manner consistent with a Records Retention Schedule established in accordance with recommendations from legal counsel.

6. Receive, process and disburse funds to meet the Board-appointed auditor’s standards.

7. Invest or hold operating capital in secure instruments or in interest-bearing accounts except where

necessary to facilitate ease in operational transactions and manage long-term investments in accordance with the “Investment Management” policy (2.6).

8. Not change the name or logo of the Association, or of any of the major program components that are

integral to AHA’s brand without BOD approval.

9. Not dispose of any real property outside of maintenance and/or out-of-date guidelines.



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EXHIBIT II, Continued POLICY TYPE: MANAGEMENT LIMITATIONS POLICY 2.5 POLICY TITLE: FINANCIAL PLANNING/BUDGETING

Financial planning for any fiscal year or the remaining part of any fiscal year may not deviate materially from the Board’s Ends priorities, risk financial jeopardy, or fail to be derived from a multi-year plan without EC/BOD approval. Accordingly, the approved budget prepared and utilized by the EVP shall not:

1. Risk incurring those situations or conditions described as unacceptable in the Investment Management Policy 2.6.

2. Omit credible projection of revenues and expenses, separation of capital and operational items, cash flow

projections, and disclosure of planning assumptions, demonstrating a three-year forecast as it relates to strategic (Ends) initiatives.

3. Fail to provide adequately for reserve funds as set forth in the “Financial Condition and Activities” policy.

4. Fail to provide adequate funding for the functions of approved Show Commissions budgets.

5. Provide less for Board and Executive Committee activities and functions than is set forth in the

Governance/Board Budget policy (see policy 4.8 in Governance Process). POLICY TYPE: MANAGEMENT LIMITATIONS POLICY 2.6 POLICY TITLE: INVESTMENT MANAGEMENT

With respect to the management of Board-designated reserve/investment funds, the EVP shall not fail to manage such funds in accordance with the following Investment Guidelines which may be changed with Board of Director approval:

1. Cash assets shall be invested only in certificates of deposit that are fully insured against loss by an agency of the Federal government or in securities that are issued by, and guaranteed by, an agency of the U.S. government. Such allowable investments include, but are not limited to: A. Certificates of deposit with commercial banks or savings and loan institutions in amounts not in excess

of the amount secured by insurance by an agency of the U.S. government. B. U.S. Treasury bills and U.S. Treasury notes C. Yankee certificates of deposit D. Federal Home Bank Certificates, and E. Federal Farm Credit Bureau Certificates F. Non-cash assets: The Arabian Horse association Board of Directors authorizes the creation of a non

cash diversified investment account. The Account shall be limited to not more than thirty percent (30%) of the total funds currently held as cash or equivalents in one (1.) above. Sub accounts may be established to segregate funds as deemed necessary. The AHA President with approval of the Executive Committee shall establish an Investment Advisory Group. The Investment Advisory Group is to recommend to the Executive Committee an Investment Policy Statement, including and risk tolerance for use in as the Investment Policy for investment of these Non Cash Arabian Horse Association Assets.



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2. The maturity dates of any investments shall be monitored to insure that liquid funds are available when required. A. Maturity dates. Maturity dates shall be managed so that budgeted cash outflows are covered by

anticipated principal inflows and principal maturities. B. Early redemption. Early redemption of investments is to be avoided whenever possible by

appropriately managing maturity dates. When an early redemption is required, the selection process should be based on preservation of principal and the level of interest being earned by the various approved investments.

C. Investment parameters. Investment parameters should be defined by AHA management with the goal of making the necessity of an early redemption an improbable occurrence.

3. The priorities for individual investment decisions shall be as follows:

A. Priority #1. Preservation of Principal. B. Priority #2. Ensuring adequate liquidity, as described in paragraph #2 above. C. Priority #3. Maximization of interest income. D. Priority #4. Staggering of maturity dates and call dates (when applicable) to protect against interest

rate volatility and call provisions. E. Priority #5. Investment amounts will be limited to face values of $500,000 or less to further limit

interest rate exposure, call provision exposure and liquidity exposure within the portfolio unless approved by the EC.

4. In compliance with the foregoing, the EVP shall develop investment parameters for cash determined to be

available for investment. A. The investment parameters will be submitted to all investment consultants that have been approved by

the EC, whole, except when: B. The EVP shall select the investment deemed to best match the investment parameters submitted and

authorize the execution of the investment transaction by the approved investment consultant that submitted the investment alternative.

5. The Executive Committee shall review the recommendations for investment consultants submitted by the EVP

and shall identify which of these investment consultants should be used in the bid process. A. Not more than three investment consulting firms shall be utilized at any given time to ensure that the

investment consultants involved have a sufficient stake in the process to encourage their best efforts, and to help ensure adequate and accurate record keeping and management of AHA assets.

6. The AHA Budget and Finance Committee is charged with reviewing, at least yearly beginning with the end

of the 1st quarter, the investments proposed by the approved investment consultants and the investment selections made by the management of AHA. The results of these periodic reviews and any recommendations are to be submitted to the Executive Committee at its next scheduled meeting, or sooner if deemed appropriate by the Budget and Finance Committee. (Handbook Chapter 5, CBP 116)

POLICY TYPE: MANAGEMENT LIMITATIONS POLICY 2.7 POLICY TITLE: EMERGENCY EVP SUCCESSION

In order to protect the Board from sudden loss of EVP services, the EVP shall ensure that at least one other member of the management team is sufficiently familiar with Board and EVP issues and processes to take over with reasonable proficiency as an interim successor. This will be reviewed each year at the first EC meeting following Jan 1st.



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EXHIBIT II, Continued POLICY TYPE: MANAGEMENT LIMITATIONS POLICY 2.8 POLICY TITLE: COMPENSATION AND BENEFITS

The EVP shall not cause or allow jeopardy to the Association’s fiscal integrity or public image when dealing with employment, compensation and benefits for employees, consultants, volunteers or contractors. Accordingly, he or she shall not:

1. Change his or her own compensation. 2. Change his or her own benefits, except as his or her benefits are consistent with a package for all other

employees.

3. Promise or imply anything other than “at-will” employment.

4. Establish current compensation ranges and benefits that deviate materially from the geographic and/or professional market value for the skills employed (using Mountain States Employer Council and/or ASAE salary surveys or comparable published entities).

5. Establish or change retirement benefits so as to cause unpredictable or inequitable situations.

6. Propose or implement any policies that are in violation of applicable laws and regulatory requirements.

POLICY TYPE: MANAGEMENT LIMITATIONS POLICY 2.9 POLICY TITLE: COMMUNICATIONS & SUPPORT TO THE EXECUTIVE COMMITTEE/BOARD OF DIRECTORS

The EVP shall ensure the Executive Committee and Board of Directors are informed and supported in their work. Accordingly, the EVP shall:

1. Report to the Executive Committee, in a timely manner, an actual or anticipated noncompliance with any governing policy.

2. Submit monitoring data required by the Executive Committee (see Monitoring EVP Performance policy

3.4) on time and in an accurate and understandable fashion, directly addressing provisions of the governing policies being monitored.

3. Inform the Executive Committee of significant incidental information, including but not limited to,

anticipated adverse media coverage, threatened or pending lawsuits, or material external and internal changes. Notification of planned material internal changes is to be provided to Executive Committee members in advance, when feasible.



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4. Advise the Executive Committee if, in the EVP’s opinion, the Executive Committee or Board of Directors is not in compliance with governing policies on Governance Process and Executive Committee-Management Delegation, particularly in the case of Executive Committee, or Executive Committee member, behavior that is detrimental to the working relationship between the Executive Committee and the EVP.

5. Provide the Executive Committee with all the necessary decision making information required, and inform

the Executive Committee of relevant trends.

6. Present information in a clear and concise manner (summary) ensuring detailed information is available if requested.

7. Provide support for official Executive Committee, Board, officer or committee communications and

functions. A. The EVP shall provide secretarial and administrative support who shall be responsible to the

Executive Committee and Board of Directors for collating and distribution of Board and Executive Committee meeting agenda packets within the established deadlines; take the Minutes of Board and Executive Committee meetings, and provide administrative support for official Board and Executive Committee functions.

8. When addressing official Executive Committee business deal with the Executive Committee as a whole

except when: A. fulfilling individual requests for information, or B. responding to officers or committees duly charged by the Executive Committee.

9. Supply for the Executive Committee’s consent agenda, along with applicable monitoring information, all

decisions delegated to the EVP yet required by law, regulation or contract to the Board or Executive Committee-approved.

10. Be responsible to develop a procedure to establish and provide metrics:

A. detailing his/her performance with regards to governing policies being monitored by the Executive Committee.

B. detailing departmental and/or organizational processes against established Ends (goals). These goals originate with the EVP bringing them to the Executive Committee.

POLICY TYPE: EXECUTIVE COMMITTEE-MANAGEMENT DELEGATION POLICY 3.0 POLICY TITLE: GOVERNANCE - MANAGEMENT CONNECTION

The Executive Committee’s official connection to the operational organization, its achievements and conduct will be through an Executive Vice President(EVP), titled “EVP”.



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EXHIBIT II, Continued POLICY TYPE: EXECUTIVE COMMITTEE-MANAGEMENT DELEGATION POLICY 3.1 POLICY TITLE: ACCOUNTABILITY OF THE EVP

The EVP is the only staff person accountable to the Executive Committee for operational achievement and conduct. Accordingly:

1. The Executive Committee shall not give instructions to persons who report directly or indirectly to the EVP.

2. The Executive Committee shall not evaluate, either formally or informally, any staff other than the EVP.

3. The Executive Committee shall view EVP performance as identical to organizational performance, so that

organizational accomplishment of the Executive Committee’s stated Ends and compliance with Board and Management Policy Limitations will be deemed successful EVP performance.

POLICY TYPE: EXECUTIVE COMMITTEE-MANAGEMENT DELEGATION POLICY 3.2 POLICY TITLE: DELEGATION TO THE EVP

The Executive Committee shall instruct the EVP through written governing policies that prescribe the organizational Ends to be achieved, and describe organizational situations and actions to be avoided, allowing the EVP to use any reasonable interpretation of these policies. Accordingly:

1. The Executive Committee shall develop and maintain Ends policies instructing the EVP to achieve certain results, for and on behalf of the membership, at a specified worth or priority. These policies will be developed systematically from the broadest, most general level to more defined levels. All issues that are not Ends issues as defined here are Means issues.

2. The Executive Committee shall develop and maintain Management Limitations policies that limit the

latitude the EVP may exercise in choosing organizational means. These policies will be developed systematically from the broadest, most general level to more defined levels. To preserve accountability, the Executive Committee shall not prescribe organizational means delegated to the EVP.

3. The EVP is authorized to establish all operating policies, make operating decisions, establish operating

practices and pursue delegated activities, as long as such are consistent with a reasonable interpretation of the Executive Committee’s Ends and Management Limitations policies.

4. The Executive Committee may change its Ends and Management Limitations policies, thereby shifting the

boundary between Executive Committee and EVP domains. By doing so, the Executive Committee changes the latitude of choice given to the EVP. However, as long as any particular delegation is in place, the Executive Committee shall respect and support the EVP’s choices that are compliant with a reasonable interpretation of those policies.



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EXHIBIT II, Continued POLICY TYPE: EXECUTIVE COMMITTEE-MANAGEMENT DELEGATION POLICY 3.3 POLICY TITLE: MONITORING EVP PERFORMANCE

The Executive Committee shall systematically and rigorously monitor the EVP’s job performance to determine the extent to which Ends are being achieved and whether operational activities fall within boundaries established in Management Limitations policies. Accordingly:

1. Monitoring is simply to determine the degree to which Executive Committee policies are being met. Information that does not address policy compliance will not be considered in the evaluation of EVP performance.

2. The Executive Committee shall acquire monitoring information by one or more of three methods:

A. by internal report, in which the EVP discloses, in writing, policy interpretations and compliance data to the Executive Committee

B. by external report, in which an external, disinterested third party selected by the Executive Committee assesses compliance with governing policies

C. by direct Executive Committee inspection, in which a designated member or members of the Executive Committee assess compliance with the appropriate policy criteria.

3. In every case, the Executive Committee shall judge whether (a) the EVP’s interpretation is reasonable, and

(b) whether data demonstrate accomplishment of or compliance with the EVP’s interpretation.

4. In every case, the standard for compliance shall be any reasonable EVP interpretation of the governing policy being monitored. The Executive Committee is the final judge of reasonableness, and will always judge with a “reasonable person” test (what a reasonably prudent person would do in that context).

5. All policies instructing the EVP shall be monitored at a frequency and by a method chosen by the Executive

Committee. The Executive Committee may monitor any policy at any time by any method.

POLICY TYPE: GOVERNANCE PROCESS POLICY 4.0 POLICY TITLE: GOVERNANCE COMMITMENT

The purpose of the Executive Committee, acting on behalf of the Board of Directors to govern AHA’s business operations, is to ensure that the Arabian Horse Association (1) achieves appropriate results for its membership at an appropriate cost (as specified in Board Ends policies), and (2) avoids unacceptable actions and situations.



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EXHIBIT II, Continued POLICY TYPE: GOVERNANCE PROCESS POLICY 4.1 POLICY TITLE: GOVERNING STYLE & VALUES

To fulfill its governance role on behalf of the Board of Directors, the Executive Committee commits to acting lawfully, observing Policy Governance principles, with an emphasis on (a) results for members, (b) encouragement of diversity in viewpoints, (c) strategic leadership rather than administrative detail, (d) clear distinction of Executive Committee/Board and chief executive roles, (e) collective rather than individual decisions, (f) future rather than past or present, and (g) governing proactively rather than reactively. Accordingly:

1. The Executive Committee shall cultivate a sense of group responsibility. The Executive Committee, not the staff, will be responsible for excellence in governing. The Executive Committee shall be the initiator of governing policy. The Executive Committee shall not use the expertise of individual members to substitute for its judgment, although such expertise may be used to enhance the understanding of the Executive Committee as a body.

2. The Executive Committee shall direct, control and inspire the Arabian Horse Association’s business

operations through the careful establishment of broad written policies. The Executive Committee’s major focus will be on the Association’s intended long-term impacts, not on the administrative or programmatic means of attaining those effects.

3. The Executive Committee shall enforce upon itself whatever discipline is needed to govern with excellence.

Discipline will apply to matters such as attendance, preparation for meetings, policymaking principles, respect of roles, and ensuring the continual development of governance skills. Although the Executive Committee can change its governance process policies at any time, it will scrupulously observe those currently in place.

4. All policies of the Executive Committee are contained in this document, and they remain in effect, unless

amended or deleted by Executive Committee action.

5. The Executive Committee shall orient new Executive Committee members in its governance process and these policies.

6. The Executive Committee shall not allow any officer, individual or committee of the Executive Committee

to hinder or be an excuse for not fulfilling its commitments on behalf of the AHA Board of Directors.

7. The Executive Committee shall monitor and discuss its process and performance at each meeting. Self-monitoring will include comparison of Executive Committee activity and discipline to Governance Process and Executive Committee-Management Delegation policies.

8. The Executive Committee shall ensure that the Association’s activities, with the exception of personnel or

other matters of a sensitive nature, shall be open and accessible to reasonable scrutiny by AHA’s membership.



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9. The Executive Committee shall ensure that the Association, in its hiring and other activities, will not discriminate on the basis of race, creed, national origin, religion, age, handicap, political affiliation, sex, sexual orientation, or marital, parental or military status.

POLICY TYPE: GOVERNANCE PROCESS POLICY 4.2 POLICY TITLE: EXECUTIVE COMMITTEE JOB DESCRIPTION

On behalf of the Arabian Horse Association Board of Directors, the Executive Committee shall ensure appropriate performance of AHA’s business operations by assuming direct responsibility for the following:

1. The Executive Committee shall produce: A. Needs Assessment: In addition to consultations with the Board of Directors and contact with the

Membership, Delegates, and Annual Convention, the Executive Committee shall assess the needs of AHA’s membership as they relate to the Association’s activities and scope of influence, and will develop Ends policies identifying the results the organization is to produce in addressing those needs.

B. Advocacy: The Executive Committee shall be accountable to the membership regarding the organization’s expected future results, and its present accomplishments.

2. The Executive Committee shall develop and maintain written governing policies consistent with Board of

Directors policy. A. ENDS: Organizational products, their effects and benefits, to our members and horses and their

relative worth. B. MANAGEMENT LIMITATIONS: Constraints on executive authority that establish the prudence and

ethics boundaries within which all executive activity and decisions must take place. C. EXECUTIVE COMMITTEE/MANAGEMENT DELEGATION: How authority is delegated to the EVP

and his/her authority and accountability is properly monitored.

3. The Executive Committee shall retain, set forth terms of employment and oversee the EVP, and will assure successful EVP performance by assessing actual performance against policies on Ends and Management Limitations.

4. The Executive Committee shall approve an annual budget and submit it to the Board of Directors for

approval prior to the start of the next fiscal year. POLICY TYPE: GOVERNANCE PROCESS POLICY 4.3 POLICY TITLE: AGENDA PLANNING

The Executive Committee shall prepare and follow an annual work-plan that includes (1) a complete review and, if appropriate, refinement of Ends policies and (2) continuous improvement in governance performance through governance education, enriched input and deliberation. Accordingly:

1. The Executive Committee’s annual planning cycle will conclude each year no later than 2 weeks prior to the first day of Budget & Finance Committee’s annual budget meeting, so that administrative planning and budgeting can be based on accomplishing a one year segment of long-term Ends.



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2. The Executive Committee’s planning cycle will start in April with the development of its work-plan for the next Fiscal year. A. The Executive Committee shall identify its priorities for Ends and other issues to be resolved in the

coming year, and will identify the information gathering necessary to fulfill its role. This may include consultations with selected groups in the membership, meetings with other entities in the equine industry, other methods of gaining membership input, governance education, and other education related to Ends issues.

B. The President shall, at the commencement of the Executive Committee’s annual planning cycle, prepare a tentative agenda plan for the following year’s meetings.

3. The President shall determine the agenda for any particular Executive Committee meeting, although

Executive Committee members may request or recommend any appropriate matters for Executive Committee consideration. A. An Executive Committee member may recommend or request a matter for Executive Committee

discussion by submitting the item to the President at least 20 days prior to the scheduled Executive Committee meeting.

B. The meeting agenda and packet are to be received by Executive Committee members at least 14 days prior to the scheduled Executive Committee meeting.

C. By an affirmative vote of a majority of the members of the Executive Committee, or of those present at a meeting, additional matters may be added to the agenda of any Executive Committee meeting.

4. The Executive Committee shall attend to consent agenda items (those items delegated to the EVP yet

required by law or third-party to be Board-approved) as expeditiously as possible.

5. The Executive Committee shall act to approve/disapprove EVP monitoring reports received since the previous meeting. Additional EVP monitoring will be on the agenda if the Board, for any reason, chooses to arrange for direct inspection or third-party monitoring, or otherwise amend its monitoring schedule.

EVP remuneration will be determined in connection with the anniversary of hire date after a review and summary of monitoring actions taken during the past twelve months.) POLICY TYPE: GOVERNANCE PROCESS POLICY 4.4 POLICY TITLE: PRESIDENT’S AND OFFICERS ROLE

As the Association’s top-elected officer, the President shall serve as its chief governance officer, ensuring the integrity of the Board’s and Executive Committee’s process and, secondarily, representing the Membership, Board of Directors and Executive Committee to outside parties. Accordingly:

1. The President’s shall ensure that the Board and Executive Committee behave consistently with the Bylaws, their respective governing policies, and those legitimately imposed from outside the organization. A. Executive Committee meeting discussion content will include only those issues that clearly, according

to Executive Committee policy, belong to the Executive Committee to decide or to monitor. B. Deliberation will be fair, open, thorough, timely, orderly, and to the point.



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2. In the governance of AHA’s business operations, the President is authorized to make decisions consistent with the Executive Committee’s Governance Process and Board/Management Delegation policies The President is hereby delegated the authority to use any reasonable interpretation of these policies. A. The President is empowered to preside at Membership, Delegates, Board of Directors and Executive

Committee meetings with all of the commonly accepted power of that position. Robert’s Rules of Order, latest edition, shall serve as the rules of order for meetings of the Membership, Delegates and Board of Directors.

B. The President may represent the Board and Executive Committee to outside parties in announcing Board-stated or Executive Committee-stated positions and in stating decisions and interpretations within the area delegated to her or him. The President may delegate this authority but remains accountable for its use.

C. The President may appoint members to serve on Committees, unless specified otherwise in Bylaws or Board policies.

D. The President, with approval of the Executive Committee, be delegated the authority to authorize payments for emergency funding up to $25,000 to cover non-budgeted “emergency expenditures”. The funds may come from the General Fund or the Cash Reserve Account (All CRA policies apply) as determined by the Executive Committee (BOD 03/14)

Powers and Duties of Officers. (Bylaws & Merger Agreement) The President serves as the chief governing officer of the Association. The President ensures the fulfillment of the Board’s governance obligations and fiduciary duties, presides at meetings of the Board and Membership and shall fulfill other responsibilities as may be designated from time to time by the Board in its Governing Policies, or as designated by resolution.

A. The President, unless otherwise specified, shall be the official spokesperson of the Association’s Membership and Board of Directors. The President’s authority to speak and/or make decisions on behalf of the Board is subject to the direction of the Board of Directors, as stated in its Governing Policies.

B. Vice-President. In the event the President is absent, unable or refuses to act, the Vice-President shall fulfill the duties of the President. The Vice-President shall also fulfill other responsibilities as may be delegated by the Board of Directors in its Governing Policies.

C. Treasurer. The Treasurer shall advise and update the Board and committees on matters of fiscal policy, and shall serve as an ex officio member of the Board’s Audit Committee.

D. Secretary. The Secretary shall keep or cause to be kept at the principal office of the Association the minutes of all meetings of the Board and of all meetings of the Membership and shall ensure the accuracy of the effective Governing Policies manual of the Board. The Secretary shall perform or cause to be performed such other and further duties as may be required by law or as may be prescribed from time to time by the Board of Directors or these Bylaws.

E. Two At-Large Vice-Presidents shall represent the interests of purebred Arabian Horses and seek to aid, promote and foster the preservation of the unique qualities of the purebred Arabian Horse Breed. The At-Large Vice Presidents shall recommend, encourage and support Arabian Horse Association’s involvement in all activities and undertakings incidental to or designed to further, promote or grow the purebred Arabian Horse Breed consistent with the best interests of the purebred Arabian Horse.

F. The Past-President shall assume responsibility to the Executive Committee of providing historical business perspective to ensure successful turnover of authority and business continuity.



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G. Executive Vice President. The Board of Directors shall employ an Executive Vice President (EVP), with terms of employment as the Executive Committee shall determine, and as the Executive Committee may set forth in an Employment Agreement. The EVP shall have the authority and responsibility for the day-to-day operations of the Association, in accordance with these Bylaws and the Governing Policies of the Board as amended from time-to-time. The EVP shall be responsible for the employment of staff in a manner consistent with the Governing Policies. The EVP shall be an ex-officio, non-voting member of the Board of Directors and Executive Committee.

POLICY TYPE: GOVERNANCE PROCESS POLICY 4.5 POLICY TITLE: EXECUTIVE COMMITTEE MEMBERS’ CODE OF CONDUCT

The Executive Committee commits itself and its members to ethical, professional, and lawful conduct, including proper use of authority and appropriate decorum when acting as Executive Committee members. Accordingly:

1. Executive Committee members must demonstrate loyalty to the interests of AHA’s membership, unconflicted by loyalties to staff, other organizations, sectors/regions within the membership or any personal interests as customers/members of the Association.

2. Executive Committee members must avoid conflict of interest with respect to their fiduciary responsibility.

A. There must be no self-dealing or any conduct of private business or personal services between any Executive Committee member and the organization, except as procedurally controlled to assure openness, competitive opportunity, and equal access to inside information.

B. When the Executive Committee is to decide upon an issue about which a member has a conflict of interest, that member shall disclose the conflict to the Executive Committee and absent herself or himself without comment from not only the vote but also from the deliberation.

C. Executive Committee members must not use their positions to obtain staff employment for themselves, family members or close associates. Should an Executive Committee member apply for staff employment, he or she must first resign from the Executive Committee.

3. Executive Committee members must not attempt to exercise individual authority over the organization.

A. Executive Committee members’ interaction with the EVP or with staff must recognize the lack of authority vested in individuals except when explicitly Executive Committee authorized.

B. Executive Committee members’ interaction with public, media or other entities must recognize this limitation and that Executive Committee members are not to speak for the EVP, or to speak for the Executive Committee except to repeat explicitly stated Executive Committee decisions.

C. Except for participation in Executive Committee deliberation about whether the EVP has achieved a reasonable interpretation of Executive Committee policies, Executive Committee members will not publicly express individual judgments of performance of employees or the EVP.

4. Executive Committee members must respect the confidentiality appropriate to issues of a sensitive nature.

5. Executive Committee members shall support the legitimacy and authority of the final determination of the

Executive Committee on any matter, regardless of the member’s personal position on the issue.



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6. Executive Committee Members shall not cause nor participate in any practice, activity or circumstance that is unlawful under prevailing antitrust laws, regulations or applicable court decisions that affect the Arabian Horse Association.

7. An Executive Committee member aware of credible information that suggests that a governing policy has

been violated, by either the Executive Committee, the Board or the EVP, has an affirmative obligation to bring the concern to the Executive Committee’s agenda for monitoring.

POLICY TYPE: GOVERNANCE PROCESS POLICY 4.6 POLICY TITLE: GOVERNING COMMITTEES

A committee is a governing committee only if its existence and charge come from the Executive Committee, regardless of whether its composition includes Executive Committee or Board members. The only governing committees are those which are set forth in this policy. Unless otherwise specified, the EVP, or his/her staff designee, will serve as a non-voting member of each committee.

1. Audit Committee (Resolution 2-07, Chapter 5, CBP 130) A. Deliverable #1: Annual specification of scope of audit, prior to outside audit, consistent with Board

monitoring policy. This may include engaging the auditor to, in addition to a standard G.A.A.P. Audit, assess the operating organization’s performance with specific governing policies (e.g. Financial Condition and Activities). Deliverable #2: Assessment and confirmation of auditor’s independence, and recommendation to Executive Committee for engagement of auditor -- by no later than the Executive Committee meeting held at the Annual Convention of each year. Deliverable #3: Direct inspection monitoring of the Financial Condition & Activities, Financial Planning and Budgeting, Asset Protection, Investment Management and Compensation and Benefits policies, per schedule established by the Executive Committee (policy 3.4). Deliverable #4: Recommendations to the Executive Committee for changes, as deemed appropriate, to AHA’s Investment Management and other finance-related governing policies.

B. Authority: To direct work of outside auditors, to use management time as needed for administrative support, and to incur costs of no more than the amount established by the Executive Committee for all matters related to the audit.

C. Composition: 3 Board of Director members elected by the Board of Directors plus the Treasurer serving in an ex officio member capacity in conjunction with the Controller.

POLICY TYPE: GOVERNANCE PROCESS POLICY 4.7 POLICY TITLE: GOVERNING COMMITTEE PRINCIPLES

The Audit Committee and other committees established by the Executive Committee, when used, will have one essential role -- to strengthen and support the governance work of the Executive Committee as a whole. These “governing committees” are not to interfere with delegation from Executive Committee to the EVP, or from the EVP to other staff. Accordingly:

1. Governing committees are to help the Executive Committee do its job, not to help, advise or exercise authority over staff.



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2. Governing committees most commonly assist the Executive Committee by undertaking activities not delegated to the EVP, by preparing policy alternatives and implications for Executive Committee deliberation, or by performing specific monitoring functions. Governing committees will normally not have direct involvement with current staff operations.

3. Governing committees may not speak or act for the Executive Committee except when formally given such

authority for specific and/or time-limited purposes. The Executive Committee shall carefully state its expectations and committee authority (in the “Governing Committees” policy) in order not to conflict with authority delegated to the EVP.

4. Governing committees must not exercise authority over staff. Because the EVP works for the Executive

Committee, he or she shall not be expected to obtain approval of a governing committee before an executive action.

5. This policy applies to any group formed by Executive Committee action, whether or not it is called a

committee and regardless of whether the group includes Executive Committee and/or Board members. It does not apply to committees formed under the authority of the EVP.

POLICY TYPE: GOVERNANCE PROCESS POLICY 4.8 POLICY TITLE: GOVERNANCE BUDGET

The Executive Committee shall consciously invest in its ability to govern competently and wisely. Accordingly:

1. Executive Committee skills, methods, and supports will be sufficient to assure governing with excellence. A. The Executive Committee shall invest in governance to orient new Executive Committee members, and

to maintain and increase existing Board member skills and knowledge. B. Outside monitoring assistance, including fiscal audit, will be arranged as needed so that the Executive

Committee can exercise confident control over organizational performance. C. Outreach/linkage mechanisms (e.g. surveys) will be used as needed to ensure the Executive Committee

understands membership viewpoints and values.

2. Costs will be prudently incurred, but sufficient to ensure the development and maintenance of superior governance. Prior to the EVP’s development of the annual budget, the Executive Committee shall establish its governance budget for the next year, considering but not limited to items such as: A. Governance training and consultation, including publications. B. Executive Committee and Officers travel/reimbursements (attendance at conferences, workshops,

Board meetings, etc.) C. Audit and other third-party monitoring of organizational performance. D. Executive Committee-initiated surveys, focus groups and opinion analyses. E. Executive Committee-hosted ownership linkage/outreach events. F. Governance committee(s) functions.

3. On behalf of the Board of Directors, the Executive Committee shall also ensure that the annual Budget

provides adequate funding for Board of Directors functions, as well as the Executive Committee’s own governance functions.



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EXHIBIT III INVESTMENT POLICY MOTION by Howard Shenk: Moved, That the Sweepstakes Trustees approve utilization of the below AHA Business Operations Investment

Management Policy 2.6 Number one (#1.) in regard to Sweepstakes Assets: 1. Cash assets shall be invested only in certificates of deposit that are fully insured against loss

by an agency of the Federal government or in securities that are issued by, and guaranteed by, an agency of the U.S. government. Such allowable investments include, but are not limited to: a. Certificates of deposit with commercial banks or savings and loan institutions in

amounts not in excess of the amount secured by insurance by an agency of the U.S. government.

b. U.S. Treasury bills and U.S. Treasury notes. c. Yankee certificates of deposit. d. Federal Home Bank Certificates, and e. Federal Farm Credit Bureau Certificates. f. Non-cash assets: The Arabian Horse association Board of Directors authorizes the

creation of a non cash diversified investment account. The Account shall be limited to not more than thirty percent (30%) of the total funds currently held as cash or equivalents in one (1.) above. Sub accounts may be established to segregate funds as deemed necessary. The AHA President with approval of the Executive Committee shall establish an Investment Advisory Group. The Investment Advisory Group is to recommend to the Executive Committee an Investment Policy Statement, including risk tolerance for use in as the Investment Policy for investment of these Non Cash Arabian Horse Association Assets.

; and, Be It Further Moved, That the AHA Investment Policy recommendations including assignment of responsibilities are to be

submitted to the Executive Committee for their consideration and approval prior to implementation. Effective : Immediately. Motion Passed Unanimously. (Motion #1-8/1/14-ST) SWEEPSTAKES PROGRAM REVISIONS MOTION by Russ Taylor: Whereas, The in-utero Sweepstakes enrollments continue to decrease, primarily as a function of decreased

breedings and registrations; and Whereas, The Arabian Breeders Sweepstakes Commission would like to encourage breedings and stimulate

enrollments as Breeding Entries into the Arabian Breeders Sweepstakes Program; Therefore, Be It Moved, That there be four in-utero nominations available as follows:

1. $400 In-Utero nomination (just as we have it now). This category is an entry for all Sweepstakes Program divisions both Halter and Performance for the life of the horse (just as we have it now).

2. $200 In-Utero Sweepstakes Eligibility Nominations. This category makes the resulting foal eligible for Nomination Completion fee anytime during its life (“Completion Fee” is $1,500). Note: In many cases this Nomination Completion fee would actually be paid by the end user sometime later in the horses life, in most cases the amateur (or other owner) who is actually going to get most of the payback. It is a way for the end recipient to bear some of the entry costs of the in-utero program and give some relief to the breeder. This hopefully encourages the entry of more horses that will be in or can later complete the program requirements without eliminating the need to all start with the in-utero entry.



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EXHIBIT III, Continued

3. $300 In-Utero Halter only Breeding Entry. Makes this entry only eligible for receiving payback via Sweepstakes halter classes and is a life-long nomination.

4. $300 In-Utero Performance only Breeding Entry. Makes the entry eligible for receiving payback via Sweepstakes performance classes, Sweepstakes rides, etc. and is a life-long nomination.

5. The Completion Fee of $1,500 is applicable to those entries enrolled for $200 and $300. Effective: January 1, 2016. Motion Passed Unanimously. (Motion #2-8/1/14-ST) MOTION by Russ Taylor: Whereas, The current Sweepstakes Program requires the sire of an unborn foal that is sired by an Arabian Sire

to be enrolled as Nominated Sire; and Whereas, The Nominated Dam category currently only allows an unborn foal out of an Arabian Mare bred to a

Non-Arabian Sire to be enrolled as a Breeding Entry; Therefore, Be It Moved, Allow the offspring of dams that are enrolled as Nominated Dams that are bred to Arabian Stallions

that are not enrolled as a Nominated Sire be eligible to be enrolled as a Breeding Entry; and, Be It Further

Moved, That mares already enrolled as a Nominated Dam would be included for future breedings. Effective: January 1, 2015. Motion Passed Unanimously. (Motion #3-8/1/14-ST) MOTION by Russ Taylor: Whereas, The current Sweepstakes Program needs to be changed in order for the Sweepstakes Program to be

continued; and Whereas, Based on the Sweepstakes survey and a decision by the Arabian Breeders Sweepstakes Commission;

and Whereas, The Commission is recommending changes to the current Sweepstakes Program; Therefore, Be It Moved, That category B (Sweepstakes Points classes at the Local and Regional Level), Category C (2 Year-

Old Halter Classes at U.S. Nationals and Canadian Nationals) and Category D (3 Year-Old and Under and 4 Year-Old and Over Championships at U.S. Nationals) be discontinued; and, Be It Further

Moved, That in lieu of these categories, the program be revised as indicated in the attached Exhibit “A.” Effective: January 1, 2016. Motion Postponed Unanimously. (Motion #4-8/1/14-ST) (Refer to Motion #6-8/1/14-ST) MOTION by Russ Taylor, that at Regionals, Sweepstakes will pay AAO classes, if not offered the payout will revert to AO classes. The High Point classes will utilize both AAO and AO classes in determining payout. Effective: January 1, 2016. Motion Passed Unanimously. (Motion #5-8/1/14-ST) MOTION by Russ Taylor: Whereas, The current Sweepstakes Program needs to be changed in order for the Sweepstakes Program to be

continued; and Whereas, Based on the Sweepstakes survey and a decision by the Arabian Breeders Sweepstakes Commission;

and Whereas, The Commission is recommending changes to the current Sweepstakes Program; Therefore, Be It



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EXHIBIT III, Continued Moved, That category B (Sweepstakes Points classes at the Local and Regional Level), Category C (2 Year-

Old Halter Classes at U.S. Nationals and Canadian Nationals) and Category D (3 Year-Old and Under and 4 Year-Old and Over Championships at U.S. Nationals) be discontinued; and, Be It Further

Moved, That in lieu of these categories, the program be revised as indicated in the attached Exhibit “A.” Effective: January 1, 2016. Motion Passed Unanimously. (Motion #6-8/1/14-ST) (See Exhibit III.A.) MOTION by Russ Taylor: Whereas, Currently the Breeder/Nominator of a Breeding Entry is awarded payback equal to 5% of the

Allocated Prize Money and Point Prize Money awarded to that entry at National, Regional and Local Shows, or at designated non-show events, provided all Sweepstakes requirements are met; and

Whereas, Payback money will be paid to the original nominator of the Breeding Entry; and Whereas, The Sweepstakes Commission would like to increase the payback to the breeder/nominators of

Breeding Entries; Therefore, Be It Moved, That the Breeder/Nominator payback be increased from 5% to 10% of allocated prize money earned

by that entry; and, Be It Further Moved, That increase in the Breeder/Nominator payback would only be paid to those who nominated the foal

in-utero at the $300 or $400 entry level as indicated in Sweepstakes Motion #1 (See Motion # 2-8/1/14-ST).

Effective: January 1, 2016. Motion Passed Unanimously. (Motion #7-8/1/14-ST) MOTION by Russ Taylor: Whereas, The Arabian Breeders Sweepstakes Commission would like to encourage the breeding and showing of

yearling halter horses at the Regional and National Level; and Whereas, Sweepstakes participants have expressed their concern to have Sweepstakes classes as amateur

classes; Therefore, Be It Moved, That the Sweepstakes Yearling Halter Classes at the Regional and National Level be restricted to

yearlings enrolled as Breeding Entries; and, Be It Further Moved, That the Sweepstakes Yearling Halter Classes be changed to Sweepstakes Yearling Halter Amateur To

Handle; and, Be It Further Moved, That the Sweepstakes Yearling Halter Classes be judged and shown under the class specifications as

indicated in Exhibit “A”. Effective: January 1, 2015. Motion Passed. (Motion #8-8/1/14-ST) (See Exhibit III.B.)



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EXHIBIT III.A.

EXHIBIT “A” LOWERED PAYOUTS – ALTERNATIVE CONSIDERATION NOT REVIEWED BY THE ARABIAN BREEDERS SWEEPSTAKES COMMISSION

SWEEPSTAKES CATEGORY ‘A’ - Allocated – 50% rule applies

Purebred USN CNL SHN Regional Local PB Yearling Colt $15,000 PB Yearling Gelding $15,000 PB Yearling Colt/Gelding $1,500 $1,500 $2,000 PB Yearling Fillies $15,000 $1,500 $1,500 $2,000 PB Gelding AOTH $ 600 PB Mares AOTH $ 600 PB English Pl. Jr Horse $15,000 $1,500 $ 600 PB English Pl. AAOTR $ 600 $500 PB Country Eng. Pl. Jr Horse $15,000 $1,500 $ 600 PB Country English Pl. AAOTR $ 600 $500 PB Hunter Pl. Jr Horse $15,000 $1,500 $ 600 PB Hunter Pl. AAOTR $ 600 $500 PB Western Pl. Jr Horse $15,000 $1,500 $ 600 PB Western Pl. AAOTR $ 600 $500 PB Reining Jr Horse $15,000 $1,500 $ 600 PB Reining AAOTR $ 600 $500 PB Western Trail Jr Horse $ 1,500 $1,000 $ 600 PB Western Trail AAOTR $ 600 $500 PB Working Cow Jr. Horse $ 1,000 $ 350 PB Working Cow AAOTR $ 350 $500 PB Cutting Jr Horse $ 1,000 $ 350 PB Cutting Non pro $ 350 $500 PB SH Under Saddle Jr Horse $1,500 PB SH Under Saddle AOTR $ 350 $500 PB Dressage Training level Jr Horse $1,500 PB Dressage Second Level AOTR $ 350 $500 PB Working Hunter AOTR $ 350 $500 Half Arabian/Anglo Arabian USN CNL SHN Regional Local HA/AA Yearling Colt/Gelding $10,000 $1,500 $1,500 $2,000 HA/AA Yearling Fillies $10,000 $1,500 $1,500 $2,000 HA/AA Gelding AOTH $ 600 HA/AA Mare AOTH $ 600 HA/AA English Pl. Jr Horse $10,000 $1,500 $ 600 HA/AA English Pl. AAOTR $ 600 $500 HA/AA Country Eng. Pl. Jr Horse $10,000 $1,500 $ 600 HA/AA Country Eng. Pl AAOTR $ 600 $500 HA/AA Hunter Pl. Jr Horse $10,000 $1,500 $ 600 HA/AA Hunter Pl. AAOTR $ 600 $500 HA/AA Western Pl. Jr Horse $10,000 $1,500 $ 600 HA/AA Western Pl. AAOTR $ 600 $500 HA/AA Reining Jr Horse $10,000 $1,500 $ 600



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EXHIBIT III.A., Continued Half Arabian/Anglo Arabian USN CNL SHN Regional Local HA/AA Reining AAOTR $ 600 $500 HA/AA Western Trail Jr Horse $ 1,500 $1,000 $ 600 HA/AA Western Trail AAOTR $ 600 $500 HA/AA Working Cow Jr. Horse $ 1,000 $ 350 HA/AA Working Cow AAOTR $ 350 $500 HA/AA Cutting Jr Horse $ 1,000 $ 350 HA/AA Cutting Non pro $ 350 $500 HA/AA SH Under Saddle Jr Horse $1,500 HA/AA SH Under Saddle AOTR $ 350 $500 HA/AA Dressage Training Level Jr Horse $1,500 HA/AA Dressage Second Level AOTR $ 350 $500 HA/AA Working Hunter AOTR $ 350 $500 Distance: National Ride Regional Endurance PB/HA/AA $ 1,500 $ 600 Competitive Trail PB/HA/AA $ 1,500 $ 600 Payback Schedule: National: $15,000 $10,000 $1,500 $1,000 Champion $5,000 $3,200 $ 400 $ 250 Reserve Champion $3,000 $2,000 $ 300 $ 150 Top Ten $ 875 $ 600 $ 100 $ 75 Regional: $2,000 $ 600 $ 350 Champion $ 750 $ 250 $ 125 Reserve Champion $ 500 $ 125 $ 75 Top Five $ 250 $ 75 $ 50 Local: $500 Champion $300 Reserve Champion $200 Local prize money recipients are determined annually by Achievement points for horses competing in those Amateur classes at the local level for each Region. i.e.: there will be 18 Local Western Pleasure AAOTR Champions and Reserve Champions. There are 22 classes which will payout to the Champion and Reserve Champion in each of the 18 Regions or a total of 792 horses that may receive payback for competing at the Local Level. The Local level is defined as AHA recognized shows that are not Regional or National Shows. Total Paybacks: Potential Estimated % Actual Payout US Nationals $197,000 80% $157,600 Canadian Nationals $ 23,000 80% $ 18,400 Sport Horse Nationals $ 12,000 80% $ 9,600 Regionals – per Region ($ 29,700) 50% ($ 14,850) X 18 = 534,600 $ 267,300 Local - per Region ($ 11,000) 80% ($ 8,800) X 18 $198,000 $ 58,400



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EXHIBIT III.A., Continued Total Paybacks: Potential Estimated % Actual Payout

Distance National Rides $ 3,000 80% $ 2,400 Regional Rides $ 21,600 40% $ 8,640 Total payback to horse owner $ 989,200 $622,340 Breeder/Nominator payback $ 98,920 $ 62,340 ______________________________________________ Total Payout $1,088,120 $684,680



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EXHIBIT III.A., Continued

SWEEPSTAKES ENTRIES ANALYSIS by Foaling Year (As of February 6, 2014)

Total Horses - Purebred, Half and Anglo Arabian 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004

Foals Registered 2,132 -43% 3,751 -15% 4,440 -13% 5,114 -22% 6,519 -17% 7,875 -11% 8,875 -5% 9,316 -9% 10,285 -3% 10,582

Sweeps Entries Rec’d 1,535 72% 1,948 52% 2,288 52% 2,597 51% 3,600 55% 4,370 56% 4,291 48% 4,248 46% 4,503 44% 4,481 42%

Sweeps Foals Registered 666 31% 1,290 34% 1,613 36% 1,917 37% 2,663 41% 3,255 41% 3,385 38% 3,278 35% 3,516 34% 3,398 32%

* All percentages are of the number of horses registered.

Note: It is important to understand that registration numbers tend to increase over time as recent foal crops continue to have foals registered, thus affecting the “ultimate” percentages. 2010 and prior years are likely to be fairly correct. 2011 may pick up a few more registrations, 2012 even more, and 2013 registrations are likely to increase the most. FY2014 Sweepstakes income is broken down as follows: Breeding entries full price: 1045.26 X $ 400 = $418,105 Breeding entries ½ price: 98 X $ 200 = $ 19,600 Point enrollment: 969 X $ 100 = $ 96,900 Nominated Mare: 4 X $1,000 = $ 4,000 Nominated Sire full price: 12 X $2,000 = $ 24,000 Nominated Sire discounted: 33 X $1,000 = $ 33,000 Non Arabian Nominated Sire: 2 X $2,500 = $ 5,000 Deferred Billing entries: (deferred billing is 14.5% of entry income) $101,755 (FY10 – FY13 Deferred billing averaged approx. 18% of total entry income) Total entry income FY2014: $702,360 Under the current program and situation it would appear that a projection of approximately 2250 registrations per year and the typical Sweepstakes nomination rate of about 52% or 1170 Breeding Nominations is what might be reasonable to expect in the immediate future (under the current program).



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EXHIBIT III.A., Continued Proposed Breeding Entry Nomination Schedule: Sweepstakes Enrolled – Full Breeding Entry $400 Sweepstakes In-Hand Entry $300 Upgrade to Sweepstakes Enrolled $1,500 Sweepstakes Performance Entry $300 Upgrade to Sweepstakes Enrolled $1,500 Sweepstakes Eligibility Nomination $200 Upgrade to Sweepstakes Enrolled $1,500 Based on the projection of 2,250 foals registered for each of the years 2016, 2017, 2018, the projected income for sweepstakes based on the proposed nomination schedule would be as follows: %/No. %/No. %/No. %/No. %/No. %/No. Year Foals Registered Total Nominated Sweeps Enrolled Sweeps In-Hand Sweeps Perf. Sweeps Eligible Upgrade 2016 2250 52%/1170 40%/468 20%/234 20%/234 20%/234 0 2017 2250 52%/1170 40%/468 20%/234 20%/234 20%/234 3%/35 2018 2250 54%/1215 40%/486 20%/243 20%/243 20%/243 5%/61 2019 2250 56%/1260 40%/504 20%/252 20%/252 20%/252 7%/88 2020 2250 58%/1305 40%/522 20%/261 20%/261 20%/261 9%/117 Breeding Entry Nomination Type Fee 2016 2017 2018 2019 2020 Sweepstakes Enrolled – Full Breeding Entry $ 400 $187,200 $187,200 $194,400 $201,600 $208,800 Sweepstakes In-Hand Entry $ 300 $ 70,200 $ 70,200 $ 72,900 $ 75,600 $ 78,300 Sweepstakes Performance Entry $ 300 $ 70,200 $ 70,200 $ 72,900 $ 75,600 $ 78,300 Sweepstakes Eligibility Nomination $ 200 $ 46,800 $ 46,800 $ 48,600 $ 50,400 $ 52,200 Sweepstakes Upgrade $1,500 0 $ 52,500 $ 91,500 $132,000 $175,500 ________ ________ ________ ________ ________

Total Breeding Entry Income: $374,400 $426,900 $480,300 $535,200 $593,100 Total estimated non-breeding entry income (see below): $210,000 $210,000 $210,000 $210,000 $210,000 Total estimated annual Sweepstakes income: $584,400 $636,900 $690,300 $745,200 $803,100 Proposed new program estimated annual payout: $684,680 $684,680 $684,680 $684,680 $684,680 Net annual financial impact to Sweepstakes fund: -$100,280 -$ 47,780 $ 5,620 $ 60,520 $118,420

Net 5 year financial impact to Sweepstakes Fund: $36,500



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EXHIBIT III.A., Continued Estimated average annual income from Nominated Sires: 15 X $2,000 = $ 30,000 Estimated average annual income from Nominated Sires: 35 X $1,000 = $ 35,000 Estimated average annual income from non-Arabian Nominated Sires: 2 X $2,500 = $ 5,000 Estimated average annual income from Nominated Mares: 5 X $1,000 = $ 5,000 *Estimated average annual income from new (PB) Mare Nominations: 15 X $1,000 = $ 15,000 Estimated average annual income from entries utilizing Deferred billing: ($750,000x15%) = $120,000 Total estimated annual income of non-Breeding entry: $210,000



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EXHIBIT III.B.

EXHIBIT “A” Class Specification --- Arabian Breeders Sweepstakes Yearling Halter

1 Yearling Halter Classes for the prizes awarded by the Arabian Breeder's Sweepstakes will be subject

to all of the General Rules of both AHA and USEF, particularly AR-1, AR-2 and AR-3. 2. ALL horses showing in these classes MUST be Sweepstakes nominated. 3 All Horses must by shown by Amateur Handlers. 4. No whips or other attention getting devices are allowed. Exhibitors may carry carrots, treats, hay, or

grass with them. Excessive use of these treats, or unmannerly behavior caused by them, will be penalized.

5. It imperative that all horses be shown in a relaxed, dignified manner. No hard stand ups will be

permitted. Horses are not to be rewarded, placed, or scored higher for how they "show." Horses are not to be penalized for being relaxed, quiet, and mannerly. Horses that are crouching, cowering, buckling at the knees, sweating, trembling, racing backwards or sideways to escape their handlers, or other behavior indicating fear, stress, or intimidation, will be disqualified. This rule will be strictly enforced.

6. All yearlings will be shown unshod. Any horse visibly limping, or obviously of impaired soundness will

be dismissed from the class. 7. Any horse with a welt or other swelling that could possibly be a whip mark will be dismissed from the

class, regardless of how the mark was caused. 8. If chains are used they must be used as "captive" chains that cannot tighten under the horse's chin.

Chains over the nose, lip chains, or chains through the mouth will not be used. Leather straps under the chin, or leather pieces connecting the two sides of the halter under the chin, are permitted.

9. No shanking is permitted, particularly the "sideways" shank often associated with a captive chain.

Exhibitors violating this rule may be dismissed from the class, receive a lowered score, or receive penalty points.

10. Horses may show in a traditional style Arabian show halter, a western style show halter, or a show

quality barn halter. Halters with bits or nameplates are prohibited. 11. At all AHA Regional and National level competitions, the order of go shall be determined and posted

by the horse's birth date oldest to youngest, including post entries. 12. It is mandatory that competitions use the Arabian Halter Judging System and use the Arabian Halter

Judging System Score Sheets and that the scores be posted within an hour of the end of the session in which the final section of the class is held. AHA score sheets may be obtained by contacting AHA in writing or email or may be downloaded from the AHA website, www.arabianhorses.org.



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EXHIBIT III.B., Continued 13. All Controlled Paddock regulations specified by AR 116.5 will be in force. ADDITIONALLY, Horses

will be required to gather in the controlled paddock at least 10 minutes before the start of their section. The Paddock announcer will make clear when the 10 minute call is approaching, and announce when it begins. Any horse not present in the paddock at the 10 minute call will be disqualified. Absolutely no schooling of any kind will be permitted in the paddock. Arabian Score Card "In the Ring" procedures will be used. No whips, schooling devices or aids of any kind are permitted in the paddock. No "bagging", shakers, or noisemakers of any kind will be permitted in the paddock, the show ring, or any alley way or aisle between the two. During the 10 minute paddock period, a steward or judge will examine each entry for compliance with equipment and grooming rules. The paddock judge need not be one of the judges adjudicating the class. For large classes, paddock time limits may be extended at the discretion of show management.

14. If numbers warrant, class may be split into sections. 15. AR115 Penalties/Eliminations

Breeding/In-Hand competitor must be eliminated for (also see AR105 Soundness and Welfare): a. Removal of eyelashes. b. Changing the natural color of the mane and/or tail (AR106). c. Applying a product to a horse’s hoof to hide or conceal a conformation defect. Only clear or

transparent products may be used on the hooves of horses while being shown in Breeding and/or In-Hand classes.

An entry must be penalized for: a. Excessive amounts of oil, grease or other similar substances. b. Balding the area around the eyes or proximal to the muzzle and nostrils.

Procedure 1. A horse must be handled and shown throughout an entire class by only one and the same person,

except that a substitute handler may be used if, during a class, the original handler becomes ill or is injured. Time allowed for the change of handler shall be in accordance with AR108 Time Out Rules No handler may show more than one horse per class.

2. Handlers are expected to keep a reasonable clearance between horses and judges should modify the alignment of horses to achieve that clearance. Further judging will not commence until the Call Judge approves the placement and spacing of all horses.

3. Breeding/In-Hand horses are not to be stretched. A horse is considered not stretched if all four feet are flat on the ground and at least one front and one rear cannon bone is perpendicular to the ground.

4. Competitions will use the "In the Ring" procedure as specified in AR 116.6.a&b. Specifications for Purebred Classes 1. Horses must be serviceably sound i.e., horse must not show evidence of lameness, broken wind or

complete loss of sight in either eye. 2. A wry tail or one carried in an unnatural fashion is a breeding fault, and judges must consider it as a

fault in adjudicating breeding and in-hand classes. 3. Colt/Stallion, Filly/Mare Breeding Classes. Emphasis shall be placed in the following order of

importance: type, conformation, suitability as a breeding animal quality, movement, substance, and manners. When Colt/Stallion and Geldings are judged together, Geldings shall not be judged on suitability as a breeding animal.



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EXHIBIT III.B., Continued 4. Gelding In-Hand classes may be offered. To be shown and judged under the same provisions

procedure as the Breeding classes. 5. Gelding In-Hand Classes. Emphasis shall be placed in the following order of importance:

conformation, type, quality, movement, substance, and manners. Specifications for Half-Arabian Classes Classes will be judged on conformation, quality, substance and Purebred Arabian type, in that order. The Half-Arabian or Anglo-Arabian may show characteristics of any other breed. The foregoing first named three qualities shall take precedence in adjudication of Breeding/Gelding In-Hand classes over Purebred Arabian breed type.

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