Starlet Project Plan

1. Initial Assets: In winding up the Starduster aircraft operations at Oroville Airport in 2003, Les Homan, outgoing Starduster owner, donated a partially built Starduster Starlet, SA500, project to the Oroville Foundation of Flight (OFOF). It consisted of an essentially complete welded fuselage and empenage, two wings built up to the point of all the woodwork finished and ready for sealing and fabric, two ailerons with woodwork finished, and rudder and elevator welded tubing complete and basically ready for cover.

2. Goal: The ultimate OFOF goal is to completely finish the project, including the engine, propeller and all systems and have it certificated as an Amateur-Built Experimental aircraft. At that point the parties with an equity share may decide whether, and by whom, the project is test flown. It is hoped that the final product will be capable of conforming to the eventual Sport Aircraft rule such that it can be flown by an appropriately qualified Sport Pilot. Then the plan is to sell the entire project (or the major sub-assemblies thereof depending on the litigation paranoia of the group) for a profit, over and above what has been put into it. :) In the absence of National Emergencies and other such extenuating circumstances, it shall be the goal of the Project Task Force to complete the Project within two years (circa July, 2006).

This is an attempt to create a working framework for the organization and the valuation (US Dollars) of the project such that workers are credited with their share of the increase in value of the project and donors are credited with the proportionate value of their hardware/materials donations. At the same time, the project can be offered for sale in an 'as-is' condition on a continuous basis, and should a buyer appear and the partners approve, the proceeds equitably distributed between OFOF, the workers and the donors.

OFOF Members providing useful work will be credited with logged hours and thereby will earn a share of the value of the project. The dollar value to be assigned per hour of work TBD (by the Starlet Task Force).

There will be a need for many pieces of hardware and materials on an ongoing basis. It is unlikely that OFOF will be in a position, or inclined. to fund the purchase of those items. However, by providing a method by which donors gain a proportionate share of the project equity, there may be many who would be willing to provide the hardware and/or the funding. The value to be credited to be equal to the purchase price or the market value, in the case of used and pre-owned parts or combination. Once donated, the donor gives up any right to reclaim the item(s) but gets full credit and participation in the equity valuation and eventual sale proceeds, if he so desires. Under extenuating circumstances, the donor can appeal to the equity holders for special dispensation.

1. A Steering Committee (SC) of 3 shall be elected by the equity partners from among the equity partners. The SC shall meet at least monthly in conjunction with the normally scheduled OFOF BOD meeting and shall transmit via email minutes of the meeting to all equity partners. Decisions by the SC shall be transmitted by email to all stakeholders within 24 hrs of the decision. Within 5 days, at the request of any combo of equity partners that equals or exceeds 10% of the existing total project equity, a detailed review and vote to approve or disapprove of said decision shall be taken. The SC shall be bound by the result of the vote.

2. A vote of confidence (VOC) in the SC may be called at any time by any equity partner(s) who hold 5% or more of the total equity. A request for a VOC vote may not be called more often than every 90 days by any combination of the same parties. Upon a vote of "No Confidence", the existing SC shall be disbanded and a new SC elected. Task Force leader to be responible for nominations of the new SC.

The total value (V) of the project at any time shall be the sum total of the original value of the original donated parts from Starduster (A), plus the accumulated value ascribed to the credited labor (B) , plus the accumulated value ascribed to any donated labor (C), plus the total value of the donated hardware/materials for equity (D), plus the total value of donated "stuff" (no equity), (E). The value "A" shall be set by the orginal members of the Starlet Task Force with the approval of the OFOF BOD. Donated labor and donated "stuff" increases the value of the OFOF portion in any sale proceeds distribution calculation.

If at any time in the Project lifetime, an offer to buy is received that equals, or exceeds, 120% of the total current value (1.2V), a vote of all of the equity partners shall be held and the Project sold if 51% of the represented equity votes affirmatively. When the project has been completed, any offer shall trigger the same vote as above with the same percentage to approve.

1. If a sale is made that equals or exceeds the total current value of the Project, all hardware/materials equity partners shall be repaid at 100% of their book value. All labor equity partners shall be repaid 100% at their logging rate for their total logged hours. The remainder passes to OFOF and the Project structure is declared terminated. If the sale exceeds the total current value, we might consider passing on the same percentage increase to the hardware and labor partners? (if we should be so fortunate :) )

2. If it is voted to sell at less than the total current value of the Project, the distribution to the hardware/materials equity partners shall be repaid at 100% as above, while the labor and OFOF repayment shall be reduced such that the proportion of labor repayment to OFOF proceeds equals the respective proportion of equity shares. NB - the object of the 100% return under adverse circumstances is the ultimate incentive for the donation of the hardware in the first place. Without this assurance, it is probably doubtful that signifcant timely donations will take place.

Example: Say the total current project book value is $50,000 and hardware equity is $20K (40%), labor equity is $20K (40%) and OFOF equity is $10K(20%) . Say it is voted to sell the Project for a total of $40K. Then the hardware equity will be paid off 100% at $20K leaving $20K to be divided 2/3 (40/60) to labor and 1/3 (20/60) to OFOF.

If an equity partner ceases to maintain his membership (end of January each year) in OFOF, his equity share shall revert to OFOF. If an equity partner becomes deceased and his spouse/heirs continue/retain membership in OFOF, their equity share shall remain active and votable by them. If no continuation is forthcoming by/within the following January (normal membership renewal period), the former members equity share shall revert to OFOF.

If, for whatever reason, no significant Project progress is made over any 6 mo. period in the opinion of the Starlet Task Force, or the BOD of OFOF, the Project shall be put up for sale to the highest bidder (eBay?) and sold with the proceeds distributed as stated in Para. H above.