MINUTES

Kansas Bioscience Authority
Board of Directors

Tuesday, April 8, 2008
9:00 a.m. – 1:25 p.m.
Wichita, Kansas

Call to Order:  A quorum being present the Board of Directors meeting was called to order at 9:00 a.m. by Chairwoman Sandra Lawrence in Wichita, Kansas.  Directors participating John Carlin, David Franz , Dan Glickman, Angela Kreps, Sandra Lawrence, Ed McKechnie, Bill Sanford, Ray Smilor, and Jon Wefald.  Others attending were Tom Corcoran, Tom Thornton, Jan Katterhenry, Jim Mitchell, Chad Bettes, Mary Cummings and Marsh LoScalzo all of KBA.  Frank Ross and Geoff  Fasel from Polsinelli law firm attended.

Review and Approval of Minutes:  Ms. Lawrence referred to the minutes of the March 25, 2008 meeting.  Mr. Wefald made a motion to approve the minutes, Dr. Smilor seconded, and the minutes were unanimously approved.

Financial Report: Ms. Katterhenry presented the financial report.
 
President’s Report:  Mr. Thornton presented the president’s report.

Mr. Thornton reported on the efforts of the upcoming Bio08 conference in San Diego on June 17 – 20, 2008.  Following further discussion it was suggested that the KBA make a formal request to the Legislative Coordinating Council inviting a legislative delegation to attend the conference.

Bioenergy Presentation:  Mr. Thornton introduced Greg Krissek, Director of Government Affairs at ICM, who gave a presentation on bioenergy opportunities in Kansas.  ICM was founded in 1995 and it is a privately held company based in Colwich, KS.  ICM sustains agriculture through innovation in engineering, building, and supporting the global biofuels industry’s most efficient ethanol plants.  ICM employs approximately 750 people, with about 80% at the Colwich office, the rest are stationed at construction sites across North America. They are accelerating the R&D program with 31 scientists looking at all phases of bioenergy production. 

Biomaterials Presentation:  Mr. Thornton introduced John Tomblin, Executive Director of the National Institute of Aviation Research (NIAR), who gave a presentation on biomaterials opportunities in Wichita leveraging the capabilities of the region’s aircraft industry. Dr. Paul Wooley, Director of the Orthopaedic Research Institute, provided additional information regarding the organization’s mission to develop a new generation of orthopaedic devices utilizing advanced composite technologies. 

Bioenergy Overview:  Mr. Thornton introduced Bret Healy, a consultant leading the development of the KBA’s bioenergy strategy.  Bret provided an overview of the KBA’s bioenergy working group, including its composition, organization and initial activities. 

Following questions and further discussion, it was recommended the charter of the working group encompass all bioenergy opportunities and not be limited to ethanol; the working group should include representation from the petroleum industry, including a retailer; that the working group should not propose public policy mandates; and the working group define outcome metrics to guide its overall objectives. 

Mr. Thornton stated that the working group will be developing a business plan to guide its activities and that these elements would be aspects of such a plan.  This plan, including a charter for the working group, would be brought before the board at a future meeting for the board’s consideration. 

Executive Session: Ms. Lawrence stated that there were items to be discussed that would qualify for the attorney-client privilege, and that also pertain to the financial condition and financial operations of the Authority and how such financial information and records relate to the business and operational strategies of the Authority.

The following motion was made by Mr. McKechine and seconded by Ms. Kreps:

WHEREAS, the Board of Directors of the Kansas Bioscience Authority (the “Authority”) in this meeting of April 8, 2008 needs to review, consider, and discuss (i) financial and operational information and records related to the financial condition and financial operations of the Authority and how such financial information and records relate to the business and operational strategies of the Authority; (ii) operational information and records related to the marketing and operations of the Authority and how such information and records relate to the marketing, business, and operational strategies of the Authority; and (iii) matters with counsel for the Authority that would be subject to the attorney-client privilege; and

WHEREAS, pursuant to Kansas law, in particular the Kansas Bioscience Authority Act, as codified in K.S.A. §74-99b01 to §74-99b89 and elsewhere (the “Act”), the Authority may discuss and consider the following in executive session when, in the opinion of the Board, disclosure of such would be harmful to the competitive position of the Authority: (i) plans that could affect the value of property, real or personal, owned or desirable for ownership by the Authority; (ii) the condition, acquisition, use, or disposition of real or personal property, and (iii) contracts for bioscience research, bioscience product manufacturing or commercialization, construction and renovation of bioscience facilities, and marketing or operational strategies; and

WHEREAS, pursuant to the Act, records of the Authority shall not be subject to the provisions of the Kansas Open Records Act, when in the opinion of the Board, the disclosure of the information in the records would be harmful to the competitive position of the Authority, provided those records include, but are not limited to (i) proprietary information gathered by or in the possession of the Authority from third parties pursuant to a promise of confidentiality; (ii) contract cost estimates prepared for confidential use in awarding contracts for research development, construction, renovation, commercialization, or the purchase of goods or services; or (iii) data, records, or information of a proprietary nature produced or collected by or for the Authority, its employees, officers, or members of the board; financial statements not publicly available that may be filed with the Authority from third parties; the identity, accounts, or account status of any customer of the Authority; consulting or other reports paid for by the Authority to assist the Authority in connection with its strategic planning and goals; and the determination of marketing and operational strategies; and

WHEREAS, the Board believes that the disclosure of any such items and records would be harmful to the competitive position of the Authority; be it

RESOLVED, it is the opinion of the Board that the disclosure of such items would be harmful to the competitive position of the Authority, and therefore the Board declares that its review, consideration, and discussion of such financial and operational information and records at this Board meeting shall occur in executive session; and

FURTHER RESOLVED, it is the opinion of the Board that the disclosure of such records and information would be harmful to the competitive position of the Authority, and therefore, such records and information to be reviewed at this Board meeting shall not be subject to the provisions of the Kansas Open Records Act; and

FURTHER RESOLVED, that the Board of Directors shall meet in executive session from 12.02 p.m. until 12.20 p.m. on Tuesday, April 8, 2008 unless the Board of Directors earlier concludes its review, consideration, and discussion prior to 3:00 p.m., in which event, the executive session shall adjourn at such earlier time; and

FURTHER RESOLVED, that the following persons shall remain and participate in the executive session of the Board inasmuch as their involvement is important to the Board’s review, consideration, and discussion: Board of Directors,  Tom Thornton, Jan Katterhenry, Frank J. Ross, Jr., Esq. and Geoffrey D. Fasel, Esq.

Upon motion duly made, the Directors voted unanimously to recess into executive session.

All other guests and staff depart the executive session at 12:02 p.m.

Return to Open Session: At 12:50 p.m., the board left executive session and returned to open meeting.

Mr. McKechine made a motion to create a three person committee composed of the KBA’s Chairman, Vice Chair & Secretary and Treasurer to review and to make recommendations regarding the adequacy of legal representation back to the full Board.  Mr. Carlin seconded, the motion carried unanimously. 

Committee Reports: 

Audit: Mr. Sanford moved to accept the recommendation of the Audit Committee to engage the firm Allen, Gibbs and Houlik, LC to conduct an audit of the financial statements of the KBA. Ms. Kreps seconded the motion and it carried unanimously.

Governance Committee: Mr. McKechnie reported that the Governance Committee met earlier in the morning to review and approve the committee’s charter; to review and approve the KBA’s Conflict of Interest and Documentation Policy; to review and approve the FY 2008 board of directors assessment and to initiate the evaluation; and to review the compliance with the state’s Statement of Substantial Interest requirements.  Mr. McKechnie stated that legal counsel has been directed to develop for the committee’s review a policy regarding donations to the KBA.  Legal counsel will initiate the board assessment through one-on-one phone calls with directors.   The results of the assessment will be presented and discussed at the annual meeting.

Nominating Committee:  Mr. Carlin stated the Nominating Committee had no report. 

Executive Committee:   Ms. Lawrence stated the Executive Committee had no report. 

Finance and Investment Committee: On behalf of the Investment Committee, Dr. Smilor presented two investments to the Board for their consideration:

• $2 million to the University of Kansas Medical Center (KUMC) and the University of Kansas Medical Center Research Institute (KUMCRI) to match a $3 million grant they recently received from the Economic Development Administration of the Department of Commerce (EDA).   KUMC / KUMCRI would provide the remaining $1 million match.  The funds would be used to renovate the existing Breidenthal Research Building on the Medical Center campus for use as a bioscience incubator.  Mr. Carlin made a motion to approve the committee’s recommendation, Ms. Kreps seconded and the motion carried unanimously.

• $911,954 under the Kansas Bioscience Eminent Scholar program to Via Christi Health System and Wichita State University (VC/WSU) to recruit Dr. Paul Wooley to Via Christi and create an Orthopedic ImmunoGenetic Laboratory staffed to study the biocompatibility of composite implants, beginning with tissue and animal studies leading to orthopedic surgery applications like composite prosthetic joints and fixation devices.  Mr. Carlin made a motion to approve the committee’s recommendation, Mr. Franz seconded and the motion carried unanimously. 

Heartland BioVentures Presentation: Mr. Thornton introduced Jim Mitchell, the KBA’s director of investments, who provided an overview of Heartland BioVentures.  Heartland BioVentures is an internal program, overseen by a private sector advisory board chaired by Bill Sanford. The purpose of the program is consistent with our past perspective on commercialization, namely to foster the formation and growth of bioscience startups by bringing a strong private sector mentality to our assessment, assistance and investment in client companies. 
 
Ms. Lawrence recommended that going forward the meeting should begin with the business aspects and have the educational presentations at the end of the meetings.

Adjournment:  There being no further business, Ms. Lawrence made a motion to adjourn the meeting, Mr. Sanford seconded and the motion carried unanimously.  The meeting was adjourned at 1:25 p.m.