ASEA Update

December 19, 2012

Dear Rocky Mountain Membership,

We hope that this letter finds everyone in good spirits as you prepare for the holidays in the new snow! In order to update our membership, the Board of Directors of PSIA-Rocky Mountain-AASI is sending this communication concerning our efforts over the past year to formalizing agreements with the ASEA, the American Snowsports Education Association (known by many of you as “national”).

In The Presidents Letter from the 2011 fall edition of Instructor to Instructor, Joel Munn brought to your attention the lack of formal agreements between the ASEA and PSIA-RM-AASI, as well as the other eight regional PSIA associations (companies) known as divisions. In his article he quoted Peter Donahue’s National Report which stated: “there are no formal agreements between the divisions, or, between divisions and the national association, except those governing the use of our logos, and the non-binding agreement on adhering to national standards.” The ASEA is the nationwide organization of ski and snowboard pros to which almost all of you currently pay $61 annual dues. It is imperative to realize that because “there are no formal agreements” between the ASEA and the divisional organizations, the ASEA is not a national “umbrella” organization of the 9 other entities: something most members may assume. Factually, each of the independent regional businesses provide their member services as well as their educational and certification programs using the logos, marks, and intellectual properties; known collectively as the ASEA Properties. Presently these Properties are trademarked and copyrighted by the ASEA; they are essentially leased to the divisions by way of a fairly non-specific document known as the “1986 Agreement”.

The lack of structure, contractual relationships, and absence of legal governance between all PSIA companies was addressed by regional and ASEA leadership in a nationally attended Strategic Meeting in January 2012. Due to varied corporate structures and issues surrounding individually held assets, the possibility of forming one nationwide company was soon eliminated. Therefore, the challenge we now face is the formation of contractual alliances which provide independence and autonomy for each regional business, and the ASEA. At the same time, we hope to create a national entity of the ten. This entity would have legal governance combined with the formalized processes and procedures necessary to conduct our common business affairs related to the ASEA (PSIA) Properties or brand (independent of regional business affairs). The strategy agreed upon by all companies coming out of the January 2012 meeting was to move towards an affiliation agreement. This process is continuing.

As members and essentially stock holders of the PSIA-RM-AASI, you should be aware of some simple facts: We are an independently incorporated business within the State of Colorado. We are a non-profit corporation and report to the IRS as a 501-c-6 (PSIA-RM, the membership portion) and a 501-c-3 (Rocky Mt. Educational Foundation; clinics and certifications). The combined assets of these two entities are approximately $1.7 million which include a $516,000 investment fund, and an office condominium in Steamboat Springs. We have been very clear throughout the affiliation process that PSIA-RM-AASI wants to be part of a national organization; one that is a partnership. This is essential! In order to protect your assets as well as maintain autonomy in conducting our affairs, from the start of negotiations we unequivocally stated to the ASEA and all other parties our desire to formalize our affiliation with the ASEA. At the same time we stated clearly that we cannot and will not be an affiliate of the ASEA. Our position is, and will remain, that in order to sign any contractual agreement with the ASEA it must be an equal partnership. We cannot enter an arrangement which would put decisions, which are the fiduciary responsibility of our Board, in the hands of other Boards and/or management teams.

As we mentioned above, the logos, marks, and intellectual properties of PSIA and AASI are owned by the ASEA. Over the past 16 months the ASEA and their attorneys, have made it clear that from their perspective this ownership gives them final authority on decisions which affect those properties. This was recently re-enforced in a letter of reply to our recent proposal addressed to our attorney Mike Holloran. The ASEA attorney Bill Walters on Dec. 13, 2012, stated: “ASEA exclusively owns the ASEA trademarks, related intellectual properties and related registrations of those ASEA properties, and maintains, protects and licenses those ASEA Properties.  ASEA licenses the ASEA Properties to the Divisions and, in order to protect the ASEA Properties, ASEA must have the ability to ensure that the ASEA properties are used consistently and properly…the divisions have the right to use the ASEA Properties under a license and subject to certain conditions”. This response of a position of ultimate authority is counter to the theme recently agreed upon among the 10 companies when we met at Copper Mt. in October.  At that time, for example, it was agreed the ASEA would “house” the national standards created collaboratively within the divisions

Inevitably, many of the decisions ASEA can make beyond the authority of your Board of Directors and our Executive Director will have financial implications, strategic impact, and may directly affect the versatility and timing of much of our daily business affairs as well as our plans for the future. As trustees of PSIA-RM-AASI we cannot have the destiny of your company compromised and possibly put at risk in this way. We cannot move forward with the ASEA’s continued use of ownership of the Properties as leverage for authority over our independence. With this caveat, the PSIA-RM-AASI has presented a proposal to the ASEA which we believe will allow the formation of a legal national organization. We believe our proposal maintains the independence of the participating parties. We have clearly stated to the ASEA, and the other regional entities, that the only contractual agreement we are prepared to enter at this time is one in which we share ownership or have some non-terminable agreement for use of the Properties. These Properties were developed primarily from the divisional level where the integrity of the logo and marks are truly maintained, and to be shared openly. RM, at the advice of our attorney, has presented this concept in order to create a partnership; a partnership where governance can be legally designed. This proposal also allows for formalized processes and procedures as well as monitoring and enforcement policies among the 10 independent, yet mutually vested parties.

In order to dispel any rumors we clearly state: PSIA-RM-AASI has never said we would “secede” from the collective entity referred to as national, nor the brand recognized by the PSIA and AASI logos. Since there is no contractual “national” organization; this “secession” is factually not possible. We have, however, been warned by the ASEA that should we not sign an agreement they would pull our right to use the ASEA properties. This same agreement may possibly be signed by most other regional companies. This position by the ASEA clearly illustrates their perception of ultimate authority. Our response to their threat is that should the ASEA attempt to do so, we would enter litigation with them, and as the process moves forward we will fall back on the “1986 Agreement” and continue conducting our business affairs using the ASEA Properties.

We want everyone to be assured that PSIA-RM-AASI remains committed to being a partner in a formally defined national entity.  As members of both Rocky Mountain and the ASEA you are the fundamental stakeholders, and stockholders, of both organizations. We encourage you to voice your opinions to both the ASEA Board and to the Rocky Mountain Board.

Thank you for taking the time to read about and understand these important efforts and challenges. We are striving to serve you and the needs of our collective organization to the best of our abilities.  In turn, we wish you the best in your efforts as committed ski and ride professionals this season, and into the New Year.

Sincerely,

PSIA-Rocky Mountain-AASI Executive Committee:

Joel Munn jmunn@psia-rm.org

Rick Hinckley rhinckley@psia-rm.org      

Rick Rodd rrodd@psia-rm.org