MINUTES OF A MEETING OF THE BOARD OF DIRECTORS February 20, 2016 A meeting of the Board of Directors of USA Water Polo, Inc. was held on February 20, 2016, commencing at 10:30 a.m. Central Standard Time, in Lewisville Texas. Directors in attendance at the Board Meeting were: Mike Graff (Chair) Richard Esterkin (Secretary) (via conference call) Ryan Bailey (via conference call) Rudy Baldoni Houston Hall Ray Kennedy Ellen Estes Lee Sheldon Pang Steve Rodosky Victoria Rogers William Smith Jessica Steffens Also in attendance were: Christopher Ramsey USA Water Polo Chief Executive Officer Marty Samuels USA Water Polo Chief Operating Officer John Abdou USA Water Polo High Performance Director Jim Callahan USA Water Polo Chief Financial Officer Claudia Dodson USA Water Polo Director, Events & Development Jeff Dyrek USA Water Polo Director of Marketing Adam Krikorian Head Coach, Women s Senior National Team Stephanie London Krogius USA Water Polo Director of Advancement Christy Medigovich USA Water Polo Director, Membership & Development Greg Mescall USA Water Polo Director of Communications Dale Neuberger UANA President Mr. Graff welcomed all of the meeting attendees and briefly reviewed the meeting agenda. Mr. Graff also introduced Steven Rodosky and William Smith, recently appointed by the Nominating and Governance Committee to fill vacancies on the Board as Class A and B Directors, respectively. DB2/ 29336090.3
Approval of Minutes October 17, 2015: The minutes of the October 17, 2015 Board of Directors meeting were reviewed and, upon motion duly made, seconded and unanimously approved, it was RESOLVED, that the Minutes of the Meetings of the Board of Directors held on October 17, 2015 in the form presented at the meeting be approved. Financial Report: Jim Callahan provided a report regarding the financial results of USA Water Polo s operations through December 31, 2015 and for the month of January 2016: USA Water Polo finished the calendar year 2015 very close to budget and with a cash surplus. The 2015 audit of USA Water Polo s financial statements is in process and expected to be completed in late March, 2016. Revenue increased approximately 3% from the prior year. Mr. Callahan provided a detailed report regarding the proposed 2016 budget, focusing on the changes to the budget from the prior year. Mr. Ramsey noted that the budget did not include certain items, such as US Olympic Committee support and donated professional services. Mr. Ramsey also provided the Board with a report regarding the US Olympic Committee s funding procedures for National Governing Bodies and the status of discussions regarding possible changes to those procedures. Ray Kennedy informed the Board that he and the other members of the Finance Committee were working on formulating a proposal for the investment of USA Water Polo s surplus cash during periods of the year when cash receipts exceeded the anticipated cash disbursements. Upon motion duly made, seconded and unanimously approved, it was RESOLVED, that the budget for the year 2016 in the form presented at the meeting be approved. Marketing Update: Jeff Dyrek provided the Board with an update on USA Water Polo s marketing activities: Wasserman Media Group has concluded their analysis of USA Water Polo s current marketing efforts. o In sum, USA Water Polo s current marketing efforts have resulted in USA Water Polo achieving marketing revenue commensurate with the size of the organization. o An analysis of the value received by USA Water Polo s main sponsors as a result of their sponsorships as compared with the fees received by USA Water Polo DB2/ 29336090.3 2
reflects that, in some cases, USA Water Polo has underpriced its sponsorships. This data will be used in conjunction with discussions regarding renewal of the existing sponsorships and negotiations with future potential sponsors. o One of Wasserman s conclusions was that USA Water Polo should attempt to concentrate on attracting fewer high value sponsors, as opposed to a greater number of lower value sponsors. Shamrock Sports and Entertainment has begun contacting potential sponsors. Mr. Dyrek provided the Board with a brief status report regarding those contacts. Mr. Dyrek provided the Board with an overview of US Olympic Committee Rule 40, which limits the use of Olympic logos during the period immediately surrounding the Olympic Games. Mr. Dyrek briefed the Board on a number of sponsor-related activities with National Team athletes that provide media exposure for US Water Polo and the athletes, as well as supplemental income opportunities for the athletes. Sport Development: Claudia Dodson and Christy Medigovich provided the Board with reports regarding sport development and membership growth: From 2008 to 2013, water polo enjoyed the second largest increase of any sport at the high school level, and the highest growth rate in 2014. The rate of growth slowed somewhat, however, in 2015. This was attributed to a number of factors, including: (a) the inability to further expand Junior Olympics, (b) the cost of entry (USA Water Polo athlete and club membership fees), (c) the short season and limited competition opportunities in some regions of the country. The foregoing issues are being addressed through a new membership fee structure, by creating new playing opportunities in areas where playing opportunities have been limited in the past, and by providing resources to assist newly formed clubs that will help them manage their businesses. In addition to the foregoing, USA Water Polo is attempting to expand its brand awareness though its growing social medial platforms, targeted communications and television coverage of events, such as the upcoming Olympic Trials telecast on NBC Sports Network. Early results of these efforts appear promising. January marked the 37th consecutive month of membership growth, with the greatest growth occurring where USA Water Polo has concentrated its efforts to provide more opportunities for competition. Houston Hall provided the Board with a history of water polo in the Texas area, concentrating on the recent growth of the sport in that area and the factors that precipitated that growth. There was general discussion among the Board members regarding how the Texas experience could be applied to grow the sport in other areas. DB2/ 29336090.3 3
National Team Reports: Adam Krikorian joined the meeting with three members of the Women s Senior National Team. Mr. Krikorian reported to the Board regarding the state of the Wormen s Senior National Team and their anticipated training schedule leading up to the 2016 Olympic Games. As Mr. Udovicic was overseas, Mr. Samuels provided the Board with a report regarding the status of the Men s Senior National Team and its training schedule leading up to the 2016 Olympic Games. Advancement: Stephanie Krogius provided the Board with a report regarding the results of advancement during 2015 and the current status of USA Water Polo s fundraising efforts: The total amount of funds raised during 2015 increased by approximately 4% over the prior year (which reflected an increase of more than 25% from 2013). Notable was a substantial increase in the number of larger donations. The campaign to raise funds for the Rio Olympics is on target and will be rolled out more broadly in the spring. There will be an Olympic Gala dinner on July 16, 2016 to send our athletes off to the Rio Olympics, to raise funds to support their efforts and to recognize outstanding achievements by USA Water Polo s coaches and clubs during 2015. FINA and IOC: Dale Neuberger provided the Board with a report regarding international matters: The key issues to be addressed in connection with the 2020 Tokyo Olympics are: o Maintaining the full Olympic aquatics program, with no reduction in events; o Increasing the size of the Women s Olympic water polo tournament from 8 to 12 teams; o Maintaining water polo as an A sport in the IOC ranking; and o Improving the quality of the water polo venue. The key longer term issues for water polo at the IOC are: o Reaching a consensus at FINA to reform the rules to make the game more telegenic and spectator friendly; and o The lack of parity among the men s teams DB2/ 29336090.3 4