USHPA Executive Committee Report Fall Directors Meeting Austin ...

The United States Hang Gliding and Paragliding Association, Inc.

USHPA  Executive  Committee  Report   Fall  Directors  Meeting   Austin  Texas,  November  12,  2009   April  27  Meeting   Paul reports a $17,000 per year savings to be realized by rebidding the magazine printing contract. Lisa updates the EC on her search for a USHPA representative for the Torrey Pines Soaring Council. Lisa expects to finalize her appointment within the next two weeks.

May  27  Meeting   Paul discusses the annual financial audit, which is expected to be complete in June. Lisa discusses her appointment of Ken Baier to the Torrey Pines Soaring Council and the importance of protecting the reputation of the sport of hang gliding and paragliding as well as USHPA. Lisa recognizes Dennis Pagen and Tracy Tillman for their continuing lobbying efforts regarding proposed airspace restrictions.

June  23  Meeting   The 30-day USHPA membership application is review and, per recommendation of legal counsel, the height and weight fields are dropped from the application. The Fall Directors Meeting dates and location are set. The meeting will be in Austin from November 12th to 15th. Online membership renewals are discussed and the EC directs Paul to obtain a second legal opinion. At issue is the need for original signatures on membership renewals each year. Subject to legal counsel review, the EC agrees to explore providing online membership renewals. The EC discusses formalizing the policy adopted by the EC for recording meetings. As recommended by counsel, the EC adopted a policy requiring permission from all meeting participants prior to recording all or any part of any USHPA meeting. The EC will ask the O&B Committee to draft such a policy for formal adoption at the next board meeting.

July  28  Meeting   Paul briefs the EC on Rick Butlerʼs resignation and discusses his plan to redefine the job description and find a replacement.

August  25  Meeting   Paul updates the EC on how the IT Director job position is being redefined as an Information Services Manager. The fundamental difference being a shift in responsibility away from hardware and towards database and website management. After reviewing the favorable findings outlined in a legal opinion letter, the EC directs Paul to move forward with planning for online membership renewals, subject to board approval at the Fall Meeting.

Page 2 of 2

11/12/09

September  29  Meeting   The EC discusses Bank of Americaʼs decision to cancel the VISA card affinity program. This represents a hit to USHPAʼs bottom line of ~$10,000/year. Paul announces that Erin Russell resigned and discusses the process for finding a replacement. The EC discusses two proposals for director training at the Fall Meeting. Mark Gaskill has offered to make a presentation on conflict resolution. Tim Herr has a presentation on director responsibilities. Since both presentations are worthwhile and each deserve enough time for a thorough presentation and discussion, the EC decides to go with Tim Herrʼs presentation for the Fall Meeting and ask Mark to schedule his for the Spring Meeting in 2010. The EC discusses the numerous requests made by Bob Kuczewski for an apology for the ECʼs earlier letter to Bob. By unanimous consent, the EC will not apologize for or retract the letter in question.

October  26  Meeting   The EC discusses a recent request to extend the cutoff date for determining voter eligibility for the fall director elections. The EC asks the Elections Committee to take the matter under review and determine if it is possible to extend the outside date for joining or renewing in order to allow more members to participate in the election. The Election Committee will report to the board as a whole at the Fall Meeting.

Bob  Kuczewski  Issues   Bob Kuczewski has made a number of claims regarding conduct of the EC: 1. The ECʼs action in preventing directors from attending EC meetings or calls may be illegal1. 2. Paul Montvilleʼs conduct of USHPAʼs business is unethical, dishonest and may be illegal. 2 3. In response to Bobʼs request to the TPSC3, The EC letter to Bob dated March 16, 20094 exceeded the authority of the EC5. 4. USHPA cannot dictate terms under which a director expresses his or her opinion, even in cases where the opinion expressed may differ from USHPA policy. The EC asks the board to affirm its response to (and handling of) the matters raised by Bob Kuczewski.

1

On Oct 10, 2009, at 10:53 PM, Bob Kuczewski wrote:. “Your latest stunt of banning me from the EC teleconferences is shameful and possibly illegal.” 2

On Sep 21, 2009, at 11:29 AM, Bob Kuczewski wrote: “Are you placing yourself above the Board by acquiring information and making representations that you cannot even share with the Board? That is not only unethical, but it may be illegal.” 3 4 5

Ref: Email from Bob K. to the TPSC dated 3/13/09. See Attachment #1. Ref: Email from EC (Rich Hass) to Bob K. dated March 16, 2009. See Attachment #2.

Ref: Email from Bob K. dated 10/10/09: “This is about the EC overstepping its bounds and speaking for the USHPA Board without approval, consultation, or even a chance for review.”

Page 3 of 3

11/12/09

Issue Number One The USHPA bylaws and SOPʼs are silent as to who may or may not attend EC meetings or calls. Bob and his lawyer take the position that (i) silence means the EC cannot prohibit nonmembers from attending and (ii) their right to participate is assured under California law.6 The EC asked counsel to review the USHPA bylaws and SOPʼs and California law and respond to the complaint in writing. In USHPAʼs response, Tim Herr confirms there is no basis for Bobʼs conclusion that silence in the bylaws and SOPʼs amounts to a requirement for open EC calls. Timʼs letter cites applicable California code and references specific case law examples where a boardʼs action to limit attendance at an executive committee meeting was permitted under law. Copies of the letters from Bobʼs attorney and the USHPA response letter are attached as Attachment #2 and #3. Bob continues to claim the ECʼs action ʻmay be illegalʼ. The EC believes it is time for Bob to either produce a supportable basis for his claim or refrain from making statements the EC believes are false, misleading and intended to damage the reputation of EC members and USHPA. Issue Number Two Paul Montville was encouraged by the EC to visit San Diego and meet with as many interested parties as time permitted. Bob had prior notice of Paulʼs trip and, in fact, met with Paul in San Diego. Bob claims these were secret meetings and, as a director, demands copies of Paulʼs notes. Given what appeared to be a conflict-of-interest, Paul refused to provide specifics of each meeting but did provide Bob with a brief summary of the trip. Bobʼs claims are baseless and without foundation and only serve to intentionally damage the reputation of the executive director. Issue Number Three USHPA bylaws authorize the EC to ʻfunction for and have the authority of the Board of Directors between meetings of the Boardʼ (ref: Article IX Section 1 Executive Committee). The ECʼs actions with respect to Bob are consistent with the bylaws and such actions are not prohibited by any of the listed exceptions in this section. Further, the ECʼs decision to withdraw Bobʼs invitation to participate on an EC call was a prudent response to a passive-aggressive threat of litigation. The ECʼs decision to decline Bobʼs request to participate on the EC call was made after consulting legal counsel. Issue Number Four Directors have a duty and responsibility to speak for USHPA when acting as a director7. The EC believes the March 16th letter to Bob was appropriate in light of Bobʼs demand letter to the TPSC for membership information8. While Bobʼs letter to the TPSC appears to be a polite request for membership information, the ECʼs response was based on understanding the context of this letter. That is, Bobʼs letter was one of numerous requests; all for the purpose of gaining an appointment for the Torrey Hawks to the TPSC. Bob is not obligated to support USHPAʼs position. However, the EC believes Bob has a duty to either speak in favor of USHPAʼs position or clearly state that his opinion is his own.

6

Ref: Attachment #3—Letter from JW Howard Attorneys dated 10/22/09.

7

Ref: SOP 2-6 USHPA Board of Directors Job Description 6.04 R: Be a Regional spokesman for the USHPA both to the pilots in the Region and any civilian organization, i.e., newspaper, government agencies, landowners, etc. 8

Ref: Attachment #4—Letter from Tim Herr to JW Howard Attorneys dated 10/23/09.

Page 4 of 4

11/12/09

Attachment 1 On Friday, March 13, 2009 9:00 AM Bob Kuczewski wrote: to the Soaring Council Chairman: Subject: Soaring Council Information Request Gary Fogel - Chairman, Torrey Pines Soaring Council, cc: Lisa Tate - President, USHPA cc: Paul Montville - Executive Director, USHPA cc: Brad Hall and Rob Sporrer - Region 3 Directors, USHPA bcc: USHPA Board and others Hello Gary, USHPA will be holding its spring Board meeting from March 26-28. I will be asking for their support to add the Torrey Hawks Hang Gliding Club to the Torrey Pines Soaring Council. I would appreciate your help with several factual matters regarding the Soaring Council to help the Committees and the Board make an informed decision. First, could you please confirm the Council's membership history as provided below (obtained from past Soaring Council bylaws). Thanks. Second, could you please provide your best estimate of the membership of the existing local clubs: Gulls (RC Club) TPSSS (RC Club) AGCSC (Sailplane Club) SDHGPA (HG/PG Club) Third, could you please share your views on the relative differences between hang gliding and paragliding compared to the relative differences between scale model RCs and non-scale model RCs. These differences have been used to explain why the Soaring Council has 2 local RC clubs and only 1 local club to represent both sports of hang gliding and paragliding. It's important for the USHPA leadership to understand this perspective when considering the Hawks' request to be added to the Soaring Council. Thanks for your time in this matter. I know you are busy, so a brief reply addressing these points would certainly be sufficient. Sincerely, Bob Kuczewski Regional Director - USHPA Region 3 President and Founder - Torrey Hawks Hang Gliding Club

Page 5 of 5

11/12/09

Attachment #2 On March 16th, 2009, Rich Hass (representing the EC and USHPA) wrote: Bob: This letter is in response to your repeated requests for USHPA support in helping get you a seat on the Soaring Council. After discussing this matter, the Executive Committee (“EC”) has determined that USHPA is well represented on the Soaring Council by Brad Hall. Further, we believe you have a direct conflict-of-interest in serving on the Soaring Council. That is, your continued interference with management of this site following your suspension is straining what has been a successful relationship between the flying community and the City of San Diego. By this letter, USHPA affirms the following: USHPA will not support your request for additional representation on the Soaring Council. USHPA will look to Brad Hall as its sole representative on the Soaring Council and all matters pertaining to USHPAʼs relationship with the Torrey Pines site. You are not authorized to speak on behalf of USHPA for matters pertaining to Torrey Pines. Specifically, if you identify yourself in correspondence as a USHPA RD, you must state that you are speaking as an individual and you have no authorization to speak on behalf of USHPA. Bob, USHPA is absolutely committed to supporting Torrey Pines as a flying site for both hang glider and paraglider members of our association. We believe your actions have been detrimental to the best interests of the flying community at-large. USHPA reserves all rights to take whatever action it deems is in the best interest in the USHPA pilot community at-large to protect this important flying site. At present, that includes taking steps to be certain you abide by the three requirements outlined above. Thanks, Rich Hass Secretary, USHPA

HERR & ZAPALA,

LLP

BUSINESS ATTORNEYS

October 23, 2009 VIA FACSIMILE AND MAIL

John W. Howard 1508 West Lewis Street San Diego, CA 92103 (Fax) 619-234-2842 RE: USHPA Director Bob Kuczewski Dear Mr. Howard: I am in receipt of your letter dated October 22, 2009 addressed to Lisa Tate, President of the United States Hang Gliding and Paragliding Association, Inc. ("USHPA"). I am counsel for the USHPA. Please direct any further communications to my attention. You have demanded, on behalf of Bob Kuczewski, that the USHPA give him notice of and allow him to attend all meetings of the Executive Committee of the USHPA. Your demand is rejected. The Executive Committee of the UHSPA will continue to allow nonmember participation in its meetings at its discretion. The USHPA's Executive Committee is created by the Association's bylaws and provides that the only members of that committee be the four officers of the Association. Bob Kuczewski is not an officer of the Association. Bob Kuczewski is not a member of the Executive Committee. Attendance at meetings of the Executive Committee by nonmembers is at the pleasure of the Executive Committee. Under the bylaws, the work of the Executive Committee is communicated to all board members by way of dissemination of minutes shortly after the conclusion of those meetings. You premise your demand on the incorrect assumption that in the absence of a bylaw providing otherwise, all directors have a right to attend the meetings of all committees. That is simply not the law.

152 North Third Street, Suite 500 San Jose, CA 95112

Phone: 408.287.7788

Fax: 408.287.7263

John W. Howard October 23, 2009 Page 2 of 3 You cite American Center for Education, Inc. v. Cavnar (1978) 80 Cal.App.3d 476 for the proposition that "[all directors] have the right to attend any meeting of any subcommittee of the board of directors" However, American Center for Education, Inc. v. Cavnar does not so hold. There was no issue in that case as to whether or not a board member could attend a meeting of a committee of which he was not a member. There was discussion as to whether or not a bank manager could be present at a board meeting, and the court held that attendance was at the discretion of the board as a whole ("The question of whether persons other than members of a board of directors may attend meetings of the board is a matter for the discretion of the board as a whole rather than any individual director.") In so ruling, the court cited Burt v. Irvine Co. (1964) 224 Cal.App.2d 50, 51, which held that boards of directors as a whole (and not individual directors) can determine in their sound discretion whether or not persons other than members of the board should be allowed to attend meetings of the board. The holding in Stratton Group, Ltd. v. Chelsea Nat'l Bank, Fed. Sec. L. Rep. (CCH) P93,051 (S.D.N.Y. 1971) is directly on point. In that case, two newly elected directors (not members of the Executive Committee of the corporation) complained that they were not notified of an Executive Committee meeting. The court held that no notice was required because, not being members of the Executive Committee, they had no right to attend the committee's meetings. ("Since Messrs. Hurwitz and Sprayregen were not members of the executive committee, it was obviously not required that they be informed of this meeting. That they could make no provision to attend a meeting they had no right to attend is of little consequence herein. . . . Thus even assuming that Mr. Sprayregen wished to object to the Sassower offer or present a more favorable underwriting offer to the executive committee, this has no bearing on the propriety of the [executive committee] meeting in view of the fact that he was not a member of the committee and had no right to attend.") It is axiomatic and, in fact, as the Stratton Group court noted, it is obvious, that only persons who are members of a body are entitled to attend that body's meetings. If one is not a member of a committee, one has no right to attend that committee's meetings and his attendance at those meetings is at the discretion of the full committee. The CEB treatise, Advising and Defending Corporate Directors and Officers, has this to say on the subject: "Persons who are not members of a board committee may attend meetings of the committee by invitation, but may not vote on actions taken by the committee." Section 5.2. As you have acknowledged, Mr. Kuczeqski owes fiduciary duties to the USHPA. Those duties include the duty of care, the duty of loyalty, the duty of good faith and the duty of obedience. He is required by these duties to put the interests of the USHPA in front of the interests of himself and any other club, group, faction or organization of which he his

John W. Howard October 23, 2009 Page 3 of 3 a part. Those duties do not, however, require that he attend meetings of committees of which he is not a member. Sincerely,

Timothy E .Herr TH/kk