AMERICAN KENNEL CLUB Delegates Meeting September 10, 2007

Transcription

1 Dennis B. Sprung, President in the Chair. AMERICAN KENNEL CLUB Delegates Meeting September 10, 2007 Mr. Sprung: The meeting will come to order. The meeting is called to order at this time solely for the purpose of conducting the vote for the Delegates Standing Committees. Delegates may use the ballots that were sent to you. If you need a ballot, members of the staff have them available. After we mailed the election packet, we realized that there was an error in the ballot for Canine Health. You were sent corrected Canine Health ballots on white paper. Please use the newly revised white ballots for the Canine Health Committee Members. Remember, in marking your ballot, if you vote for more than the maximum number permitted for committee, the ballot will be invalid. When you have marked your ballots, go to the eight polling stations in the back of the room. Please line up according to your last name, giving your last name and your club name to the tellers. As is our practice, the tabulation of the ballots will be conducted by Ernst & Young, our accounting firm. Once you have voted, please proceed to lunch on the Terrace and Atrium, which are on this floor. (voting) Are there any Delegates wishing to cast a ballot for the Standing Committees who have not yet had an opportunity to vote? If all Delegates who wish to vote have done so, the Chair declares the polls closed and the tellers may retire to count the ballots. We will now take a recess for lunch and reconvene in this room afterwards. Thank you (luncheon recess) Mr. Sprung: Good afternoon. I wish each of your clubs a happy birthday as one week from today, September 17 th, is the 123rd year of our founding. (applause) If there is any Delegate who has not yet signed the attendance card please be sure to do so as this is our official record of attendance. The Chair would like to introduce the persons seated with me at the dais. On my immediate left is Chairman Ron Menaker. To his left is the Vice Chairman, David Merriam. On my right is Doris Abbate, Professional Registered Parliamentarian. To her right is Jim Crowley, Executive Secretary, and to Mr. Crowley's right is Sandra Bybel, the Court Reporter. New Delegates have been requested to submit individual photographs for publication in the AKC GAZETTE. If any Delegate has not submitted one, and wishes to do so, please see the photographer following adjournment. If a Delegate makes an amendment to the Bylaws or rules to be voted, please provide a written copy to the Executive Secretary. It is most important that the Chair has the specific wording, as this will greatly enhance our ability to project the precise words to be considered on the screens. The Bylaws of The American Kennel Club charge the Executive Secretary with keeping the records of the meeting. For the first 100 years this record took the form of minutes. For the past 20, it has been a verbatim transcript. I now call on the Executive Secretary to explain why he

2 plans to return to producing minutes of the meeting, as recommended by Robert's Rules, and is the practice of virtually every for-profit, non-profit and not-for-profit organization. Mr. Crowley: As reported in the August Board Minutes and in the letter sent with the Call Letter, I do plan to keep and publish minutes rather than a verbatim transcript. The latter not only creates a potential legal liability for the speakers, as well as the AKC, but verbatim discussion makes no sense from a business standpoint with approximately 30 competing registries. I will have the responsibility and accountability for preparing the published minutes. The minutes will continue to include a list of attendees. They will also include the date, time and location of the meeting; those on the dais, whether there is a quorum, and whether the minutes of the previous meeting were adopted; the reports of the Chairman, President and Chief Financial Officer, which may be in summary form, enabling more detailed information to be presented at the meeting; vote counts on ballots or counted votes; for roll call votes, how each member voted; actions taken, and a record of reports given; points of order, appeals to the ruling of the Chair, whether sustained or not; and the hour of adjournment. The intent of returning to publishing minutes, rather than a transcript, is not to deny information to Delegates unable to attend the meeting. As you see, there is a court reporter present. A transcript will still be prepared for the Delegates. It will be available on the Delegates' portal of the AKC website. We will again be sending instructions to the Delegates about gaining access to the portal. Any Delegate without computer access, may request a copy in writing from my office. We will download and mail a copy to them. We only ask that you be judicious in disseminating this document. Thank you. Mr. Sprung: It is my sad duty to inform you of the passing of Joan Hallock on April 11 th, Delegate for the Salina Kennel Club since December of The Chair calls on the Executive Secretary to read the names of Delegates seated since the last meeting. Mr. Crowley: These Delegates have been seated since the last meeting: Larry Abbott, McKinney, TX, to represent Trinity Valley Kennel Club Art Boger, Candler, NC, to represent Wolverine Beagle Club Robert E. Bostrom, Overbrook, KS, to represent Topeka Kennel Club Barry D. Cavanna, Pleasant Hill, CA, Contra Costa County Kennel Club Cheryl Crompton, Mishawaka, IN, to represent Michiana Kennel Club Mary Alice Eschweiler, Hartland, WI, to represent Waukesha Kennel Club John J. Gangloff, Greensboro, NC. to represent Carolina Dog Training Club Mark Grigalunas, New York, NY, to represent American Brussels Griffon Association Michael E. Harman, Roseland, VA, to represent Komondor Club of America Dr. J. A. Humphrey, Leicester, NC, to represent Ohio Valley Beagle Club Dr. Stephen Lawrence, Stafford Springs, CT, to represent Classic Toy Dog Club of Western Massachusetts Scott A. Rohrbach, Boyertown, PA, to represent Pocono Beagle Club Barbara Shaw, Denison, TX, to represent Greater Collin Kennel Club Jack G. Smith, Fallbrook, CA, to represent Great Western Terrier Association of Southern California Monica Henderson Stoner, Edgewood NM, to represent Saluki Club of America Sally Vilas, San Lorenzo, CA, to represent American Shih Tzu Club Sherry E. Wallis, Houston, TX, to represent Akita Club of America Linda D. Witouski, Conway, SC, to represent Myrtle Beach Kennel Club

3 The following Delegates, who were attending their first meeting since approval, were introduced from the floor: Patricia A. Anders, Staunton, VA, to represent Shenandoah Valley Kennel Club Roberta L. Berman, Staten Island, NY, to represent American Manchester Terrier Club Art Boger, Candler, NC, to represent Wolverine Beagle Club Mary Alice Eschweiler, Hartland, WI, to represent Waukesha Kennel Club Mark Grigalunas, New York,NY, to represent American Brussels Griffon Association Dr. J. A. Humphrey, Leicester, NC, to represent Ohio Valley Beagle Club Dr. Stephen Lawrence, Strafford Springs, CT, to represent Classic Toy Dog Club of Western Massachusetts LuAnn Moore, Shreveport, LA, to represent Shreveport Kennel Club Scott A. Rohrbach, Boyertown, PA, to represent Pocono Beagle Club Charles M. Rowe, Port Murray, NJ to represent St. Louis Beagle Club Barbara L. Schwartz, Hollis, NH, to represent St. Louis Collie Club Richard Chris Scranton, Seville, OH, Northern Ohio Beagle Club Jack G. Smith, Fallbrook, CA Great Western Reserve Terrier Association Monica Henderson Stoner, Edgewood, NM, Saluki Club of America Amanda W. Toner, East Longmeadow, MA, to represent Cocker Spaniel Breeders Club of New England Sherry E. Wallis, Houston, TX, to represent Akita Club of America Mr. Sprung: Thank you and a sincere welcome to all of our new Delegates. Last evening the AKC management team hosted the orientation for new Delegates. I'd like to thank the 43 new Delegates who attended and the Board of Directors. It was very successful and we believe well received. I also want to thank Dan Smyth, Chairman of the Delegate Advisory and Advancement Committee, as well as Chair of the Coordinating Committee for his participation and advice to the Delegates. Management plans on continuing this program annually. The minutes of the June 11, 2007 meeting were published in the AKC GAZETTE and mailed to each Delegate. If there are no corrections, the minutes will stand approved as published. Hearing no corrections, the minutes stand approved. The next item is the approval of a new member club. The Central Indiana Kennel Club has been approved by your Board of Directors and will be voted upon at this meeting. In accordance with the Bylaws, a written ballot shall be required, if requested in writing by at least five Delegates made to the Executive Secretary seven days prior to the scheduled vote. The Chair has been advised by the Executive Secretary that no such request has been received. We will therefore proceed with the vote. An affirmative vote of four-fifths of the Delegates is required to elect. The question is on the election of the Central Indiana Kennel Club as a member of the American Kennel Club. Those in favor, please raise your hand. Thank you. Those opposed, please raise your hand. Thank you. There were four-fifths in the affirmative. The Chair declares that the Central Indiana Kennel Club has duly been elected a member of the American Kennel Club. The Chair calls on Ron Menaker for the Chairman's report. Mr. Menaker: Good afternoon. It is sometimes beneficial in both our personal and our professional lives to step back and take a longer perspective of what we have achieved and what we seek. Our natural inclination is to focus on just today and tomorrow.

4 Today I want to share with you some longer range evaluation of just how AKC is doing and more specifically, how we are doing financially. In the year 1995 our annual report recorded a total income, both realized and unrealized, of $32.4 million dollars. Our 2006 figure was $70 million dollars. In this period we have never reported a net annual loss. We have a legal and fiduciary duty to maintain a pension fund sufficient to meet our employees retirement rights. While many U.S. corporations, both profit and non-profit, are facing serious deficits in their pensions funds, I am proud to say that our AKC pension fund is well over 100% funded. For many years AKC produced very adequate income to fund its basic programs; however, we failed to prepare for the uncertainties of the future. In 1995 we had no Operating Reserve although our auditors advised that an organization such as ours should have an operating reserve of at least fifty per cent of its annual budget. Today, in 2007, we have an operating reserve of $32 million dollars. As the nature of our revenue has shifted, it becomes increasingly clear that it is wise for us to develop an endowment reserve. In 1995 we had no endowment reserve. Today our endowment reserve stands at $22 million dollars. In the past eleven years we have seen a modernization of our administration and our financial operations. There has been major investment in the IT capability of our organization. The AKC of today is far different from the Mom and Pop operations of the AKC of years past. In this eleven-year period it is useful to note the new and improved programs and expenditures: 1. We created the AKC Canine Health Foundation and have contributed almost $16 million to it. 2. We have contributed $1.7 million to the AKC Museum of the Dog. 3. Through AKC/CAR, we have funded grants totaling $1.5 million for Canine Support & Relief. 4. We have increased our PR advertising almost $10 million. 5. We have almost doubled our capital expenditures for information technology resulting in a 20% reduction of headcount. 6. Online registration of dogs now has reached over 60% of litter registrations. 7. We have added a full-time archivist and have created a Breeders Newsletter. 8. AKC and AKC/CAR have contributed $400,000 to the Parent Club conferences. 9. The AKC/Eukanuba National Championship was created and is now considered among the three most prestigious dog shows in the world. Forty percent of our entries are bred-by-exhibitor. 10. AKC now is considered a first call for disaster relief for dogs. 11. We have awarded hundreds of thousands of dollars in scholarships. 12. We have created a Breeder of the Year program and have established significant online breeder services. These only highlight what is a very long list of AKC achievements. We have consciously strived to increase the quality and scope of our sport, and to do so, in a financially responsible manner. I have spoken thus far of AKC s record of progress. We are proud of its financial stability and have every reason to believe that under enlightened management it will continue.

5 However as useful as it is to evaluate an organization in grand terms, it is also necessary to cast a discerning eye on the distinct parts of our club which help make up the whole. In this regard I have two areas of caution. We are all aware of the serious decline in AKC registrations from 1990 to today. Serious efforts have been made, and must continue to be made, to address this problem. While some of the decline surely can be attributed to the development of more competitive registries, the full explanation is yet to be understood. Business and social patterns change and we must be aware of those changes and develop a positive response. The revenue experience of 1990 is not that of 2007 and we can expect that there will be a changing revenue experience ten years from now. The second area of my concern is the gap which continues in the cost of our Event Department and the income which it generates. While we have never expected this department to generate excess income, I am concerned that it continues to cost so much. The fees that are assessed in this department impact clubs and exhibitors alike. Yet, when analyzed over the years and compared with annual inflation figures, we find that these fees have failed to keep up. Most employees of an organization would be very unhappy if their annual wages did not at least keep up with inflation. The same standard must be applied to company costs. Part of the shift in revenue has required that those who participate in our sport share a larger portion of its cost. The days when 100% of the cost of our sport was paid by others are over. This does not mean that your board and management will not continue to vigorously seek new revenues to support AKC. It does mean that those of us who involve ourselves in AKC activities will have a greater responsibility for pay to play. In the past eleven years we have met some very serious challenges and it is likely that in the next eleven years we will face unknown challenges. We may be required to spend large sums of money to meet those challenges. Our revenue sources may change even more dramatically than they have since While the future is unknown, our commitment to facing it squarely and creatively is known. I am convinced that your board and your management are making decisions today which will bear the scrutiny of time and will ensure that the AKC of tomorrow will be as vigorous and dynamic as it is today. Thank you. (applause) Mr. Sprung: Thank you, Ron. Next on the agenda is the President's report. Many of the tenets in AKC's mission statement, promoting the sport of purebred dogs, responsible dog ownership and protecting the rights of all dog owners, are furthered by public education. We have two such educational programs this month, one for the pet-owning public and one for future fanciers. This Saturday we will hold our annual AKC Responsible Dog Ownership Day flagship events in Raleigh and New York City, along with 370 plus events this month nationwide. I'd like to invite you to join us and also to thank the many parent club members who will be volunteering their time to participate in the popular Meet The Breeds booths. Also, the New York staff will be holding an AKC Educational Match on September 29th at the Hunterdon Developmental Center in Clinton, New Jersey to help educate first-time exhibitors so they too can experience the joys and rewards of competing in AKC-sanctioned events. But as a registry, governing body, and a club of clubs, our reach to influence canine culture in this country can only go so far. One of AKC's main hurdles has been our inability to raise funds through tax-deductible donations to help causes close to our hearts.

6 AKC has had successful cause-related campaigns with such initiatives as DOGNY, which raised more than $3 Million in contributions for AKC/CAR Canine Support and Relief for search and rescue organizations after the 9/11 tragedies. In 2005, following Hurricane Katrina, more than $1 Million was raised to help the canine victims of the Gulf disaster. These public outreach efforts not only garnered significant PR for the AKC but, importantly, proved that our organization could benefit from an ongoing charitable fund to address dog lovers' desires to give not only in times of disaster, but in times of celebration. Over the years, the sport has missed out on some very impressive gifts and donations because AKC's structure would not allow a tax incentive to the donors, leaving some -- who only wanted to support and give -- no place to go. That scenario is about to change. I'm happy to make the first public announcement at the Delegates meeting today that we are in the process of establishing a new and distinct not-for-profit organization, separate from AKC, to present educational programs, give to charitable foundations, and accept tax-deductible donations. This new entity will also be able to apply for grants. The name of the new organization is: the AKC Humane Fund. As we all know, humane means marked by compassion, sympathy, or consideration for humans or animals. You and your club members' compassion for animals is second to none, and the AKC Humane Fund will embody our emotional conviction to the animals we love. The Fund's mission is to unite a broad spectrum of animal lovers in promoting the joy and value of responsible and productive pet ownership through education, outreach and grant-making. The AKC Humane Fund will be proactive and reach out to dog lovers, as well as broaden its constituent base and our relationship with those who do not go on to breed or exhibit. Many times you hear people say they are members of the AKC because they own a registered dog. While we know this is technically not true, we also know that people have a yearning to belong to something bigger than themselves that reflects their values when it comes to their best friend. This new independent entity, with anticipated federal recognition of exemption from federal income taxes, will allow the Fund to solicit tax-deductible donations in order to champion specific causes, as well as offer membership in the Fund to those who donate. Membership will be like other charities, such as a public radio station or an environmental charity, where a donation is considered membership -- a way of saying I belong, I agree, or I support your mission. The Fund gives one an emotional connection to their core beliefs. To give you an idea of how contributions from individuals and organizations might be used, I'll give you some examples. We expect the Fund to: Provide support to the AKC Canine Health Foundation; Companion Animal Recovery; and the Museum of the Dog. Rest assured, this new Fund will not be competing with any of our affiliates. This Fund is not a registry or event-giving entity in any way. The Fund will be able to sponsor educational programs and provide grants to other like-minded non-profit organizations, including Parent Club Breed Rescue Groups. The AKC Humane Fund plans to establish a Hall of Fame for fanciers, including breeders, owners, Delegates, judges and handlers. A successful Fund will enable implementation of these programs. I invite your input, cooperation and support. Please contact Daphna Straus, who authored this plan, or myself at your convenience. We welcome your clubs ideas as this program develops. We have already completed all of the ground work and are optimistic that in the near-term we will obtain recognition of the Fund's tax-exempt 501(c)3 status. However, as part of the launch, we are now beginning to accept inaugural membership pledges by inviting clubs, individual fanciers, and others to be the founding members of this important organization to bring its mission to life. In recognition of founding member contributions, we will create a Wall of Honor. The Wall will feature the names of the first founding members.

7 I invite you and your membership to join in this new opportunity. This is a first step, which will take years to mature, but I believe it is time for us to walk down this road together. Thank you. (Applause.) The Chair call on Jim Stevens for the Financial Report. Mr. Stevens: Before we review our current financial results, we thought it would be informative to provide some additional insight into the components of our financials. As most of you are aware, our core revenues originate primarily from registrations and event related fees. We re also very fortunate to reap the benefit of other significant revenues which are not part of our core operations. We commonly refer to these as alternative revenues. Sources of such revenues include our affinity credit card, licensing, pet insurance, and sponsorships. It s useful to take a look at how these numbers stack up to provide some perspective on AKC s financial landscape. Although our annual core revenues were almost four times the amount of alternative revenues for last year, the costs associated with core activities far exceed their related revenues. For last year, our core revenues totaled $51½ million. However, the corresponding costs were $60½ million. This left an operating deficit of $9 million from our core activities in On the other hand, expenses of slightly less than $2 million generated alternative revenues of over $13 million. This created an operating surplus of over $11 million last year for these other activities. If we then drill down to focus on the events area, all AKC events generated almost $8 million in revenues last year. These revenues included recording fees, event service fees, and license fees from show applications. Expenses associated with these events totaled over $18 million. This left an annual operating deficit of over $10 million from events. This amount was comparable to the prior year. The $18 million for event related expenses includes all of AKC s costs associated with our events. Approximately 30% of AKC s employees are fully dedicated to events. Many other departments within AKC also devote a considerable amount of time to events related activities. This amount takes all of these costs into consideration. As you can see here, the amount of this expense is not an arbitrary number. This is a copy of footnote #7 from our 2006 audited financial statements which discloses this specific amount as part of our overall program costs. This amount has been audited by Ernst & Young as part of their certification of our annual financial statements. Let s now shift gears to take a look at how the current year is shaping up. Our financial results so far this year have been satisfactory overall. We ll review with you today how our numbers look for the first seven months of this year. In comparing our operating results vs. last year, revenues rose slightly and total operating expenses increased 3%. Our operating surplus of $2.3 million excludes investments. The year-to-date operating surplus was $660,000 or 22% lower than last year. In terms of revenues, we re all painfully aware that the trend in registrations continues to be a major concern. The number of year-to-date litter registrations through the end of July was 4½% lower than the previous year. Dog registrations followed a similar trend and were 5% lower than last year. On a more positive note, the percentage of litters completed online most recently rose to 62%, while 28% of dog registrations originated online. In terms of events, total entries increased by 3% from last year. Agility and Rally continue to generate higher entries, which is good news.

8 In reviewing the trend of total annual entries over the past few years, it s refreshing to see that the level of participation in the sport has consistently increased each year. Here s a snapshot of what our expenses look like compared to the previous two years. Payroll and benefits appear in gold and all other expenses are reflected in blue. Due to our on-going cost containment efforts, the level of our expenses has remained relatively stable with only modest increases over the past three years. Expenses such as travel continue to pose a challenge given the higher cost of gas, hotels, and airfares as we all know. In a nutshell, that s how things have shaped up so far this year from an operations perspective. Now, let s move into the world of investments. Our investments continue to make a significant contribution in enhancing our bottom line. Our portfolio generated $3.8 million in unrealized gains for this period. This amount was significantly higher than last year. As a result, our net surplus of $6.1 million for the first seven months was more than $1 million higher than Many of you have heard me discuss at previous meetings how pleased we ve been with the success of our investments. You ve also heard me caution you that we can t count on this trend continuing indefinitely in the future. So the fact that we ve incurred some recent unrealized losses from our investments in the month of July should come as no surprise. Considering the turbulence in the stock markets over the past couple of months, I suspect some of you may have even thought I looked like this. You ll be pleased to know that was not the case at all. Nevertheless, given the increased role our investments have played in our financial results, I suspect you might wonder how we deal with downward trends in the markets. While weathering difficult markets is never fun, we take it in stride. Our investment approach is more akin to being in a marathon, not a sprint. In other words, we take a long term view. Here we have two disillusioned investors. The investor on the left says In this market it s important to take a long term view. The person standing next to him responds, Is this long enough? as they re standing on a ledge of a building looking to jump. Needless to say, this isn t our vision of taking a long term view of the markets. We are not, and never intend to be, market timers in terms of how we manage our investments. The most important thing is that we achieve a reasonable return over the long haul. We recognize that certain periods of time may be painful when the markets are volatile. You ll be pleased to hear that our investment portfolio has performed reasonably well on a year to date basis. Through the end of July, our return was 7%. This appears as the gold bar on the left side in this graph. We outperformed three out of the four major stock market indices and just slightly trailed the Dow Jones Index. We re obviously very satisfied with this result. To summarize, I d like to recap some important points: We are very dependent on alternative revenues as our registrations continue to decline. Despite our best efforts, the level of alternative revenues and investment gains will fluctuate from year to year. In closing, while we understandably have genuine concerns about our future revenues, let there be no doubt that, from a balance sheet perspective, AKC is currently in the strongest financial position it has been in its history. Nevertheless, we need to be aware of the continuously changing financial landscape and continue to take the appropriate proactive steps in order to secure the future of the sport for the next generation. Mr. Sprung: Thank you, Jim. Before proceeding to voting on proposed amendments, let s review the process to help all Delegates consider the amendments.

9 AKC staff will project the proposed amendments that Delegates are being asked to consider on the screens. Any proposed amendment will be typed and shown on the screens. If an amendment is adopted, the screens will reflect the proposal as amended. If an amendment is not adopted, the screen will project the originally proposed amendment. Delegates continue the consideration of the proposed amendment as thus amended or not amended. The Chair intends to take a standing vote for each motion that requires a two-thirds vote. If needed, the Chair will take an additional counted vote. The first vote is on the proposed amendment to Article VII, Board of Directors: Election, Meetings and Quorum of AKC's Charter and Bylaws. The amendment was requested by the Beaumont Kennel Club and approved by your Board of Directors. The amendment will allow a Director of the AKC to continue to hold his or her office as director, after resigning or being removed from his or her position as a Delegate. The proposal was read at the June 2007 meeting. It has been published in two issues of the AKC GAZETTE, and appears on the green worksheet. The Board recommends its approval. A two-thirds affirmative vote is required for adoption. Is there any discussion? The Chair recognized Carl Holder, Delegate for the Beaumont Kennel Club who spoke as follows: I move to postpone this amendment to the next meeting. Unidentified Delegate: Second. Mr. Sprung: Motion and second. Now we're open for discussion. Mr. Merriam: Yes. I'd like to speak to the motion to postpone. The reason for the Board's approving the motion of the amendment is that once the Delegate body elects a Director that a single club, that is the club of a Director, should not be able to defeat that decision by the dropping of that Delegate. As the discussion has developed over the last month or two, we become aware of the discomfort of many Delegates of having on the Board a non-delegate Director for a long period of time, i.e., if the Director was elected and then three months later was dropped as a Delegate, they would then serve the remaining of the four years as a non-delegate Director. We heard your concerns in that regard. The other concern which the Board considered, and is not addressed by this amendment, is what we call the dead period in the dropping of a Delegate Director. The present Bylaws specifies that if a Delegate Director is dropped as a Delegate at the discretion of the Board, that Director may serve until the next annual meeting at which time that Delegate or non-delegate Director can stand at that election and give the Delegate body an opportunity to decide whether they want that Director to continue or to not continue. This, opportunity, however, is defeated if the Delegate Director is dropped as a Delegate at a time period somewhat after about the middle of September. The reason for that is that if the person ceases to be a Delegate after September, there's insufficient time for that Delegate to seek an alternative Delegate seat and, therefore, be eligible to be a candidate in the next annual meeting. Now these three principles, that is, of not allowing a single club to defeat your decision, the principle of not having a non-delegate Director on the Board for a very long period of time, and the principle of not permitting the dropping of a Director as a Delegate in the dead period, i.e. from about September until the annual meeting, these three principles, we think, can be worked into a cohesive amendment. The courtesy of Carl and his club to discuss that with him is appreciated, and we appreciate his willingness to postpone the matter. And the reason for the postponement is that we can come up with a concise as possible amendment to the amendment at the next meeting which will

10 incorporate these three principles, which we think are basically overwhelmingly held by this Delegate body, and therefore, I would urge that you vote to postpone for one meeting. Thank you Mr. President. Mr. Sprung: Thank you. That is the Board's rationale. Any other discussion? We have a motion and a second on the floor to postpone the vote to the next meeting. It will be a majority vote. All those in favor please stand. Thank you. All those opposed please stand. Thank you. The motion is carried. The next vote is on the proposed amendment to Chapter 8, Section 12 of AKC's Field Trial Rules and Standard Procedures for Retrievers. The proposed amendment was submitted by the Retriever Advisory Committee and approved by the Board of Directors. This amendment would delete the current Section 12 and replace with text to allow a handler to withdraw from a specific stake during a trial if the handler feels that running the test may injure or aggravate an existing physical or medical condition of the dog. The proposal was read to you in June and published in two issued of the GAZETTE. It's on the gray worksheet. The Board recommends its approval. A two-thirds affirmative vote is required. Is there any discussion? The question is on Chapter 8, Section 12 of the AKC's Field Trial Rules and Standard Procedures for retrievers. Those in favor please stand. Thank you. Be seated. Those opposed please stand. Thank you. Be seated. There were two-thirds in the affirmative and the amendment is adopted. The third vote is on the proposed amendment to Chapter 14, Section 5 of AKC's Field Trial Rules and Standard Procedures for Retrievers. It was submitted by the Retriever Advisory Committee and approved by the Board. The amendment would eliminate pigeons as a permitted choice of birds for use in the minor stake, and make requirements for game birds uniforms in all licensed field trial stakes. The proposal was read to you in June and published in the GAZETTE on two occasions. It is on the yellow worksheet. The Board recommends its approval. A two-thirds vote is required for adoption. Is there any discussion? The question is on Chapter 14, Section 5 of AKC's Field Trial Rules and Standard Procedures for Retrievers. Those in favor please stand. Thank you. Be seated. Those opposed please stand. Thank you. Be seated. There were two-thirds in the affirmative. The amendment is adopted. The fourth vote is on Chapter 9, Section 2, 6 and 7 of the Field Trial Rules and Standard Procedures for Basset Hounds. The proposed amendment was submitted by the Basset Hound Club of America and approved by the Board of Directors. The change will lower the required number of entries to obtain a field championship title from 10 to 6 entries. The proposal was read in June and published in two issues of the AKC GAZETTE. It is on the pink worksheet. The Board recommends its approval. A two-thirds affirmative vote is required for adoption. Is there any discussion? The question is on Chapter 9, Sections 2, 6 and 7 of the Field Trial Rules and Standard Procedures for Basset Hounds. Those in favor, please stand. Thank you. Be seated. Those opposed please stand. Thank you. Be seated. There are two-thirds in the affirmative. The amendment is adopted.

11 The final vote is on the Standing Rule. The proposed amendment was submitted by the Bylaws Committee. The amendment would eliminate the three minute speech given by candidates for Director prior to the beginning of the balloting at the annual meeting. At the June 2007 meeting, Judi Daniels, Chair of the Bylaw Committee gave notice that the Delegates would be asked to rescind the Standing Rule at the September 2007 meeting. The proposal has been mailed to you and is on the goldenrod worksheet. A majority vote will be required for adoption. Is there any discussion? The Chair Recognized Judith Daniels, Delegate for the Mt. Baker Kennel Club and Chair of the Delegate Bylaws Committee who spoke as follows: Thank you. Historically, just to give you an idea of how this began, we adopted a three-minute speech Standing Rule to introduce candidates to the Delegate body, because up to that time some of us didn't even know who the candidates were by sight, or identifying name with face. So that was a way for us to hear what they sounded like, what they had to say, and what they looked like. Since that time we've had so many things put in place and the system by which we elect our Delegates now include, and will include a new item for this time, our Directors. First of all, all candidates are going to be known by our December-January meeting on our new timeline. Then at the December Forum, we will have our first introduction to all of our candidates. It's going to be Meet the Candidates and the Bylaws Committee is working on the actual program for that and how it will really work. It will mainly include an initial statement from the candidates, and it will also have questions and answers, and hopefully an open dialogue so that we can begin to understand who are candidates are. From that time on there are published interviews in papers and magazines. There are different organizations, judges groups that ask the candidates questions and publish them to all of us. There are candidates' individual letters to all the Delegates. There are the candidates' statements in Perspectives, and finally, very importantly, the day before the election is the Delegate's Caucus where we once again will see all the candidates and where a candidate may have had an item that wasn't quite clearly established through the election process. That's the candidate's final time to indicate exactly where he or she stands, and will also give Delegates a final time to ask questions of them. So one of the criteria you may have discerned from all of this is that being a candidate means that the candidate must have a lot of stamina. There's a lot they go through. And if we, which we are recommending, rescind the three-minute speech, we may have more than we ever wanted to know about some of the candidates at that time. By starting our meeting early, as we always have, to accommodate the three-minute speeches, without those we will have more time to handle the election, and that will at least on some occasions allow more people to stay for the final votes. Because there have been times with many multiple ballots where some of our Delegates have had to leave to meet trains or planes, and that's not really fair to the candidates, so we urge you to vote yes on this. Thank you. Mr. Sprung: Thank you. Any further discussion? The Chair recognized Dr. J. Charles Garvin, Delegate for the Marion Ohio Kennel Club, who spoke as follows: Dr. Garvin: I have some concerns about this and was expecting to hear more from the other committee about this as well. But it concerns me that by eliminating the only official way of letting the candidates have a formal introduction in front of the Delegate body, we leave to only unofficial sources that not all the Delegates have a tendency necessarily to read. That is, yes, all the magazines want to interview the candidates, but not all the Delegates read those magazines. The Forum is not a required portion of the meeting, and so we have no assurance that there would be any speeches prior to the election.

12 This may not be an issue for an incumbent on the Board, or someone whose been around a long time, but I think for a Delegate that is perhaps running for the Board for the first time, or has not had a long opportunity to get to know all the other Delegates, it may put them in a relative disadvantage, and I think anything that provides a disadvantage to encouraging people to run and serve on the Board is an overall disadvantage for the organization. So I have some real concerns about just eliminating this without substituting it for something else. I had anticipated there will be a substitution of this to say that the meeting prior to the annual meeting would be the time for the speeches, that three-minutes a piece still should be able to be accomplished in 20 to 30 minutes time frame at a maximum. So I would encourage instead to have a substitute, that this would be the speeches to be provided to the Delegates at the meeting prior to the election. Thank you. The Chair recognized Patricia Laurans, Delegate for the German Wirehaired Pointer Club of America, who spoke as follows: I've heard what Judi and her committee had to say and I agree with a great deal of it. I had hoped though that what I would hear is that those three-minute speeches would be done at the December Forum. Ms. Daniels: Well, that is part of it. I didn't outline everything. Ms. Laurans: I mean we're being asked to eliminate something before we're being told what we're substituting for it. And I would like to know what it is that's going to take the place of those threeminute speeches, and I think that's what I'm hearing from Charlie. And that's something to be done in an official meeting, not the Caucus. We can still have the Caucus, but I don't want the Caucus because everyone doesn't attend the Caucus, and I don't want to depend on those magazines anymore than you do, Judi. We've both been there. So I think I'd like to know what it is we will be doing at the December meeting, that is, the rationale for eliminating the three-minute speech. Mr. Sprung: Judi, do you want to try that? Ms. Daniels: Yes, Mr. President. Thank you. That's a very valid question and I tried to cut my remarks short because I didn't want to inundate everyone, and I'm sorry, but what we were talking about at the Bylaws Committee yesterday, and part of what is on the schedule for the Forum, and mind you, the Forum in December will be attended by all the Delegates who are there because it's right after the Invitational, so it won't be something where they may be there and may not be there, we are intending for the three-minute speeches, in fact, we're intending for an opening speech for each candidate and then a closing remark after questions that have been submitted previously to our moderator, and then additional questions and handled in as close a debate Forum as we can. What has not been done in the past at the Caucus when we ask questions, which is what we're hoping to do at the Forum, is for any question that is directed either to the entire candidate slate where whomever starts the answer out, or whether it's directed to an individual candidate, after that first statement the moderator will ask if there's any additional remarks or any dissenting remarks, any opposite side remarks so that we can get both sides of an issue if it's asked about, and that will be the format. And then depending on how many questions are submitted prior to the actual Forum, we will have an open session for questions and answers from the floor. But there will definitely be speeches. You're going to hear and see what our candidates look like and where they stand. Thank you. Mr. Sprung: Thank you.

13 Mr. Holder: Since this is a Standing Rule, we can go ahead and do all that right now. We don't have to do a previous notice. We can go ahead and amend it or rescind this and make a motion that the speeches be at the December meeting, and then it will be an established Standing Rule. I mean this is something that can all be done right now very quickly. The Chair recognized Melanie Steele, Delegate for the Greyhound Club of America, who spoke as follows: One concern I have in conjunction with what Dr. Garvin said was the fact that as long as the speeches remained where they are within the record, then they would be a part of the published record and that would be very important to me and I think some other individuals. The Chair recognized John Ronald, Delegate for Samoyed Club of America, who spoke as follows: Charlie makes a good point. We do need to hear what the candidates have to say, but I would ask everybody, and each of your individual answers may be different, but how many of you believe that the election's turned on a speech in the three-minutes section on election day in the past. Some of you may believe that, some of you may not, but the candidates all have adequate time to make their views known to us based on what Judi is saying beforehand. The thing that concerns me is this year we'll have three candidates, maybe four to elect. Next year we'll have four to elect. When we are in a contested election in prior years it's troubled me that people have left early in the most critical part of the election. The first few candidates always get elected pretty easily. It's the last candidate or the last two candidates where we have to go through multiple ballots and the votes get close and it's critical, but by the time we get to the last critical ballots, some of those votes that would have swung the election have had to go home. And if we can build some time into that day so that we can fully attend to the voting process and honestly elect those last two candidates, I think we're doing the candidates a big service and they'll have adequate opportunity to make their voices known on the prior day and through all the various other media that have been put forward for us. Thank you. Ms. Laurans. I heard what Melanie had to say and I think it's a very valid point. And the Forum does not have published minutes. I just asked Judi if it would be something that would be acceptable to her Committee, and I don't know if she has to check with them or not, I hope so, but instead of having a Forum in December, let's have a longer meeting and have the speeches or whatever you want in the published record, if that's what you all want. I mean there are ways to do this so that we can have a meeting in March where people don't have to leave. The Chair recognized Lynette Saltzman, Delegate for the Oakland Dog Training Club, who spoke as follows: Basically I was going to say what Pat was going to say. There are several good reasons for having speeches in December, and one of the most important is that the Delegates can get a feel of the candidates and report to their clubs, which none of us could do before. The second thing that was brought up about having the speeches in the record I think is also very important because then your club members can have a chance to take a look at the candidate's positions on different things. I don't see what the reason could possibly be for not having the speeches at the December meeting. I mean is there a good reason for not having them at the December meeting? Mr. Sprung: The Delegates will make the decision.

14 The Chair recognized Cynthia Garman, Delegate for the Lancaster Kennel Club, who spoke as follows: There's a fairly simply solution to that. I would move that the following be substituted for the striking of the rule and that the new resolution read: Resolved, that at the meeting next preceding the annual meeting, each candidate for Director shall be allowed one speech for three minutes. A second would be nice. Unidentified Delegate: I second it. Ms. Garman: Thank you. Mr. Sprung: Do we have that motion correctly? Ms. Garman: Absolutely. Mr. Sprung: We do have a second. Now is there debate on this? Ms. Garman: What does it say? Mr. Sprung: Motion is that at the meeting next preceding the annual meeting, each candidate for Director shall be allowed one speech for three minutes. Is there discussion on this motion? The Chair recognized Denise Dean, Chair for the Bernese Mountain Dog Club of America, who spoke as follows: I would like to make a friendly amendment to our amendment that says that at the next meeting preceding the annual meeting the Meet the Candidates will be held at that meeting instead of the Forum, so we have a longer format as a regular deal. Ms. Garman: I will not accept that as a friendly amendment. It's quite possible that depending on the business the best time for those -- Mr. Sprung: That will have to be a separate motion. We have to finish this one first. Ms. Daniels: May I ask a technical question? The new motion would be a new Standing Rule, correct? Mr. Sprung: Yes. Ms. Daniels: And at this meeting that requires, half, two-thirds, which? Mr. Sprung: Majority. Ms. Daniels: Majority. Okay. Well, then my technical question then was if 50 percent for rescinding a Standing Rule required prior notice, why does not a new Standing Rule require prior notice? Mr. Sprung: It's amending a previous Standing Rule. Ms. Daniels: I'm just concerned.

15 Mr. Sprung: Judi s asking why this can be voted on without prior notice. Mr. Crowley: Yes, this is an amendment to an existing Standing Rule. Without prior notice it would require two-thirds for adoption. We can vote on it, but it will require two-thirds. Ms. Daniels: I got it. Thank you. Mr. Merriam: Point of order. We do have a motion. Point well taken. We have in front of the body a motion with notice which is in black on the screen. That's in front of the body for an amendment to the Standing Rule notice having been given. That motion must be dealt with first, unless it's amended. And so either the red is an amendment to the original motion, in which it's an order, or -- which is a majority to amend, and then you're talking about a 50 percent of the amended motion. If it's a separate motion, it should be out of order until the present motion in front of the body is disposed of, and if it's a separate motion ultimately heard, then it requires a two-thirds motion because it is without notice: Is that correct? Mr. Holder: I just want a little clarification. This is amending by substitution; is that correct? Mr. Sprung: That's correct Mr. Holder: Thank you. The Chair recognized John Nielsen, English Setter Association of America, who spoke as follows: Just a question perhaps for Jim. Under the new concept of minutes versus transcript, would these Three-minute speeches be in the minutes or not in the minutes and in a transcript. Mr. Crowley: They would not normally be in the published minutes; however if it was the will of the Delegate body to put them in I would definitely put them in the published minutes in addition to the transcript on the Delegate Portal on the web site. At least we can put in the minutes, if that was the will of the body. Mr. Garvin: I think putting all the technicalities aside, Cindy's proposed amendment to the amendment is an excellent solution. It solves the problem and should be passed. Thank you. Ms. Daniels: Mr. President, as an individual, I have not polled my Committee, but as an individual I agree with that because if the Delegates wish it to be printed so that they can take it to their clubs, that's fine. What this entire election procedure change was all about was helping the Delegates inform their clubs better about the candidates, so this is fine. Mr. Sprung: Thank you. We have a motion to substitute. It's a majority vote. All those in favor please stand. Thank you. All opposed. Thank you. The majority rules and it is passed. We will now vote on the adoption of the substitute Standing Rule. All those in favor of the adoption please stand. Thank you. All those opposed please stand. Be seated. Thank you. The substitute is adopted. The Chair calls on the Executive Secretary to read the first proposed amendment to Article VI: Delegates of the AKC's Charter and Bylaws.