July 2005

Dear Members

I have been asked by the Executive Committee of the Board of Directors to address the topic of ApHC contracts in general and our site contract for our World and National Shows in specific.

In general, when a contract comes due or is near to coming due selected staff and/or Board members will look into the existing contract and then assess whether it is competitive with the current day marketplace. We accept competitive bids and then attempt to negotiate a current contract which best benefits the ApHC organization and members.

An excellent example of this would be the recent change to the way we conduct our World Sale. Last year in 2004 led by Director Buchanan and Marketing Coordinator Jill Williams, with the assistance of Directors Connolly, Beene', Carr, and Schjeldahl and other hardworking staff, we researched bids for many facets of this event. Among those were bids for auctioneering companies, public address systems, printers and assorted other material distributors. (florists, wine, cheese, etc). What we came out of this process with was a sale last year that had one of the best catalogs in recent memory and in addition approximately $1,400 per head increase on the average price of a horse sold at our sale. This made more profit for our consignors and breeders and also an additional profit for the Appaloosa Horse Club.

This past year we have taken a new look at what we pay for our DNA kits and service. We have compared that price with the current market and other breed associations' figures. We have re-negotiated this contract to benefit the ApHC.

Recently there has been a lot of discussion both by word of mouth and on the internet concerning our site contracts for our World and National Shows. What we have done so far is send a site selection committee and negotiating team consisting of (at various times) our CEO Keri Minden LeForce, myself and Directors McWhirter, Zuidema, Schjeldahl, Connolly, Dean, Buchanan, Beene', and Baker to assess opportunities at various sites throughout the US. The cities we have looked at have included Albuquerque, Tulsa, Oklahoma City, Springfield, Ft. Worth, Las Vegas, Jackson, Indianapolis and others to a less degree. We have looked at facilities in a number of these cities as well as hotel and restaurant possibilities. We are coming toward the end of our process. Unfortunately, we have a very few vocal members who I believe have tried to derail this process and cut it short in an attempt to favor some locale over another without looking at all the factors which we will be deliberating shortly. Of course we are represented by directors from all parts of the United States. I have confidence that these directors will be looking at many factors. Some of these factors, of course, are location, facility suitability, hotels/motel and restaurants, camping & RV hook-up spots, weather conditions, and very importantly community involvement, opportunities for sponsorships, commitment by communities for safe and orderly conduct of our show and financial commitments to our members and organization. We currently, along with staff, have done our own analysis of our Youth World/National Show based on real numbers by our host city over the past several years. We contribute $11 Million to our host city and approximately $1 Million in new tax money over the two weeks of the show each year. We believe that this huge contribution should be met with an appropriate new contract that reflects an appreciation of our dollars spent. In addition, a part of our new marketing plan is to put a number of $10,000 classes at both the Nationals and World Show, a number of multiple thousands of dollar college scholarships for our Youth Exhibitors and again, a significant dollar contribution to our trail enthusiasts-both recreational and competitive-in the belief that this will add excitement to our shows and build participation not only from our ranks, but also from the exhibitor and trainer ranks of other breed associations as well. In short, we intend to grow and provide more opportunities for our breeders, exhibitors-both Youth & Non-Pro and trainers.

While our talks are continuing with several new site possibilities, we are leaving no stone unturned attempting to rework our existing Oklahoma City relationship. I will personally be meeting with the Mayor of Oklahoma City within the next couple of weeks in this effort. Our CEO Ms. LeForce is also working tirelessly for a positive outcome. Our message is very clear as in all of our negotiations--good business is not when one party wins at the expense of the other. Good business is always when the parties mutually win and mutually reap the rewards of hard work and growth.

Thank you for the opportunity to address our membership and we welcome comments concerning this from you our members.

On Behalf of ApHC BOD Executive Committee Regards,

Frank Larrabee President ApHC