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ASHA issues additional reorganization details

With high membership interest in the upcoming ASHA convention and Annual Meeting, Thursday through Saturday, February 17-19, the Association released additional detailed information today on its proposed internal reorganization.

"We're very gratified at the response of our members to the upcoming annual meeting," ASHA Executive Secretary Alan F. Balch said. "Advance reservations for the convention and the new Saddlebred Ball are very encouraging."

"In addition, we've received a number of interesting questions about our pending proposal for internal corporate restructuring. So we're taking this opportunity to provide the membership with more details in a question and answer format."

According to Communications Manager Reeves Kirtner, the added details are being mailed to all voting members and are posted on the Association's website as well.

"We are in the process of reconfiguring our website, and can now control much of its content directly from our office," Kirtner said. "With this new capability, we can now add information much more quickly than before. We are adding a new section on Governance, where the board minutes and all the information on the proxy voting, as well as the new Questions and Answers will be posted."

Kirtner added that additional questions will be answered as received. Questions should be directed by email to, or by fax to (859) 259-1628.

Proxy votes must be received prior to the commencement of the annual meeting on Saturday morning, February 19, at 10:30 a.m. at the Embassy Suites of Lexington. Voting members are encouraged to attend in person, but may vote by proxy if unable to attend.

The following is taken directly from a mailing underway this week to the Association's voting members:



In our ongoing effort to communicate thoroughly with our members, the leadership of the American Saddlebred Horse Association has prepared the following questions and answers about the proposed internal corporate reorganization to be voted on at the Annual Meeting. We remind you of the open meeting to be held on Friday morning, February 18, to discuss the proposal in detail.

If you have additional questions, please submit them to us by fax at 859/259-1628, or by email to If additional questions are received, answers will be posted on the ASHA website, at

Why are the American Saddlebred Horse Association and Foundation considering an internal corporate reorganization?

The boards of directors of these corporations believe that the companion organizations can operate more efficiently in a new framework, saving money for their members and providing better member benefits, while improving the likelihood of increased tax-deductible donations. In short, the goal is to control expenses while simultaneously stimulating revenues.

What is the proposal?

Simply put, the existing public charity - now named the American Saddlebred Horse Association Foundation - would be renamed the American Saddlebred Horse Association, and would adopt bylaws very similar to those under which we operate at present. It would, therefore, be a tax-exempt charitable organization, and would be governed by an 18-member board, as is currently the case.

The existing Association would become the American Saddlebred Registry, governed by a smaller board of 9 directors, specializing in Registry business, elected by the larger board and overlapping with it.

What changes will members see if the proposal is adopted?

In an outward sense, very few.

However, internal fiscal efficiencies should be noticeable: contributions should be stimulated, and expenses should be contained if only through less exposure to sales taxes. Therefore, costs to members, primarily through fees, should increase less in the future than would otherwise be the case. The Registry's functions would be supervised by a more specialized board.

How did the idea originate in 2004 to investigate the possibility of reorganizing the internal corporate structure of the ASHA?

In the spring, members of the professional staff questioned why sales tax was being paid on purchases, even though the ASHA is organized as a not-for-profit. The answer was that the Registry function, now included as part of the American Saddlebred Horse Association (and not the ASHA Foundation), required the Association to be organized under a section of the Internal Revenue Service code that did not exempt the Association from the responsibility to pay sales taxes. But purchases by the Foundation, a public charity, are exempt from paying sales tax. That started the inquiry.

When was the American Saddlebred Horse Association Foundation started?

The Foundation was organized as a companion organization to the Association in 1990.

In the years since then, has such a corporate restructuring ever been contemplated before?

Yes, it has been speculated about from time to time, but neither the staff nor the board ever directed that the possibility be fully investigated.

How did that happen in 2004?

After doing some preliminary investigation with the Association's legal counsel and independent auditor, the Executive Secretary raised the subject with the Planning Committee and board leadership. Since it was possible that a reorganization might benefit both of the corporations, as well as the members and the future of the breed, staff was encouraged to bring the idea to the full board, where it was presented conceptually in July 2004. The board directed that the matter be more thoroughly investigated. Minutes of these board meetings are published at

What was the next step?

In the days immediately following the July meeting, the staff's Executive Secretary and Controller met at length in Louisville with the long-time legal counsel of the Association and Foundation, Jefferson K. Streepey, and its independent auditor and Certified Public Accountant, William H. Bennett.

What were the topics of discussion?

Since Mr. Streepey attended the July meeting, and had been consulted before, he was aware of the general interest and had already done some preliminary research. He also remembered previous cursory considerations of similar ideas in the years before. Participants in the meeting agreed that this possibility should be considered anew with no pre-conceived ideas of whether or not it was practical, that the present law needed to be thoroughly researched, and any obstacle or question be raised promptly so that the Planning Committee could be advised whether the concept had merit. The independent legal counsel and accountant took the lead in researching the law.

Were any obstacles surfaced, legal or otherwise?

No. In fact, from both the legal and accounting standpoints, the independent recommendation came forward that the possible internal reorganization ought to be immediately considered, and a time-line prepared of what steps needed to be taken to effectuate it, if the Planning Committee agreed. While neither legal counsel nor the independent auditor makes business decisions for the corporations, their advice is carefully considered. If any legal or accounting obstacles to the concept were apparent, and there were none, those would have been disclosed to the Planning Committee.

Who were the members of the Planning Committee that initially considered the concept?

Co-chairs Joan Hamilton and Jim Ruwoldt, joined by members Elizabeth Deknatel, Judy Werner and Fred Sarver, as well as Executive Secretary Alan Balch, representing the staff.

Did the independent auditor, legal counsel, the Planning Committee, and the board itself, consider whether it was appropriate for marketing to be a function of a public charity organized under section 501 (c) (3) of the Internal Revenue Service Code?

Yes, repeatedly. In fact, there is no prohibition from “marketing” being conducted by a public charity. All major successful public charities have extensive, professional marketing programs. The United States Equestrian Federation is organized under this same section of the IRS Code, and has an extensive and growing marketing function. So do all National Governing Bodies of Olympic and international sports, such as swimming, athletics, figure skating, and skiing, which seek to expand the public's understanding and awareness of those sports, as defined in the law. So do higher-profile public charities, such as the United Way and the Red Cross. After all, education of the public about the importance of furthering a cause is the fundamental component of not-for-profit marketing! Our cause is furtherance of the public understanding and interest in the American Saddlebred horse.

Does this internal reorganization contemplate that all marketing would be done exclusively by the new Association?

No. In fact, because of provisions in the law, the Registry would retain the Futurity and Sweepstakes programs, as well as the American Saddlebred Grand National, which are fundamentally programs designed to assist in marketing the breed. However, general educational, marketing, and new corporate sponsorship programs would reside in the new Association; a primary role of the Association is to educate the public about its programs, as well as the breed itself.

When was the plan presented to the Board of Directors?

After intensive investigation and detailed work by staff, counsel, and auditor, the Planning Committee considered the proposal in detail prior to the October meeting of the board, and it was the primary subject addressed by the board at the October meeting. Without dissent, the staff was directed, with the Planning Committee, to finalize its thinking with great care for presentation to the board at a special meeting toward the end of the year, in time for deadlines to be met for presentation to the membership in February 2005.

Did the board of directors endorse the plan?

Yes. In the course of a meeting held most of the day December 1, and continued December 9, after all directors had been provided detailed revisions of proposed bylaws and other required documents, including proposed amendments to articles of incorporation, and a formal agreement between the Foundation and the Association, the board voted with 2 dissenting members to move the matter forward to the membership.

Were other actions taken by the board?

Yes. The board voted unanimously to engage further independent legal and tax analysis of the proposal, to be completed prior to the Annual Meeting, by firms without any historical connection to the Association or Foundation.

Why wasn't the action delayed until after the further analysis was completed?

Since the membership requires certain notice periods prior to the annual meeting, the board felt it was prudent to move ahead based on the independent analysis already conducted in great detail by its professional advisors. Otherwise, consideration of the proposal would have to wait an entire year, since membership approval is required to amend the articles of incorporation of the Association.

Who has been engaged to perform the further analysis, and what are its results?

A committee including the president and treasurer of the Association and Foundation, Fred Sarver and David Howard, respectively, along with director Matthew Heiman, was directed by the board to choose the additional experts. They are James B. Martin, Jr., of Ogden, Newell & Welch (legal) and Michael Mountjoy, of Carpenter, Mountjoy and Bressler (accounting). Their final letters will be published upon completion, but, as anticipated, their preliminary opinions are favorable and reinforce the previous conclusions reached by counsel and the independent auditor.

Why does the board ask that you mail your proxy on this matter?

The board urges that you attend the annual meeting in person. However, since there are over 6,000 voting members, it is impractical to expect that most of them can attend. Therefore, the board has asked that members return their proxy giving authority to others to evaluate the proposal and vote on their behalf, or to vote for, against, or abstain on the proposal. The board urges a vote FOR the proposal because it is clearly in the best organizational interest of the corporations, its members, and the future of the American Saddlebred.

If I send my proxy, can I still attend and vote in person?

Yes, of course. The board asks that you send your proxy to enable the orderly conduct of business at the meeting, and in case you are delayed or unable to attend at the last minute. The board wants to be sure that all members are fully educated about the proposal, and are confident that the more you learn about it, the more you will feel that it should be approved.

What if something illegal or improper is discovered at the last minute?

In that event, of course the board would withdraw the proposal from consideration.

Will I have a chance to ask questions about the proposal, or about other matters?

Yes. A special forum has been scheduled for Friday, February 18, at the annual meeting, so that all questions about the proposal can be addressed in person, in as much detail as possible. This and all other matters will also be open for discussion at the annual meeting itself, Saturday morning, February 19.

What if I have a further question right now?

The Association encourages you to email or write with any questions you may have, at any time. When questions are received, answers will be posted on the Internet website of the Association, and widely circulated. Questions should be sent to

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