Minutes

Kansas Bioscience Authority
Investment Committee Meeting

Monday, August 18, 2008
11:00 a.m. – 1:00 p.m.

Call to Order: A quorum being present, the meeting was called to order at 11:00 a.m. by Committee Chairperson Ray Smilor. Attending via teleconference were Committee members, Dave Franz, Angela Kreps, Ed McKechnie and Bill Sanford. Others attending were Tom Thornton, Jan Katterhenry, Jim Mitchell, Bret Healy, Chad Bettes, Pam Fellin and Marsh LoScalzo of the KBA and Doug Anning of the Polsinelli law firm. Also attending via teleconference were Dave McDonald (WSU), Dr. Richard Nelson (KSU), Tom Robb (WSU), Mike Good (WSU), Paul Wooley (WSU), Lana Oleen (WCGME) and David Adkins (KUMC).

Review and Approval of Minutes Mr. Smilor addressed the minutes of the previous meeting of the Investment Committee and asked whether there were any changes. Dr. Franz noted the minutes needed to be revised to reflect that he was not on the call to make the vote on the three proposed investments.

Mr. McKechnie moved to adopt the minutes as amended, which motion was seconded by Ms. Kreps. The motion passed unanimously with Mr. Sanford abstaining because he was not at the July 10, 2008 meeting.

BioMass Assessment: Bret Healy introduced Dr. Richard Nelson (Kansas State Engineering Extension Department Head) and Tom Robb (WSU) joining via teleconference to discuss the biomass energy recommendation.

The KBA has convened a working group of Kansas leaders to guide development and execution of a strategic plan to make Kansas the advanced bioenergy leader in the United States. As a result of the recommendation of the KBA Bioenergy Working Group, KBA staff requested that Kansas State University submit a proposal to delineate Kansas’ biomass resources.

The total request for the biomass availability assessment proposal is $300,000 to be funded in three allocations: $100,000 upon approval by the KBA, $100,000 four months after KBA approval and $100,000 upon total completion of project (estimate June 1, 2009). After discussion, Dr. Nelson assured the Committee that he would make regular reports to the KBA on the progress of the assessment.

Dr. Smilor asked for a motion to recommend to the board approval for funding of $300,000. Ms Kreps made a motion, Mr. McKechnie seconded and the motion passed unanimously.

Kansas Bioscience Rising Star in Bio-Engineering: Wichita State University and Via Christi Dr. Mitchell introduced to the committee Mr. Mike Good (Business Operations Director, WSU) and Dr. Paul Wooley (KBA Eminent Scholar) and presented an overview of their Rising Star proposal. Consistent with KBA’s application process for the Kansas Bioscience Rising Star program, Via Christi Health System and Wichita State University (VC/WSU) had submitted a Letter of Intent requesting financial assistance to recruit Dr. Shang-You Yang to Via Christi, as a KBA Rising Star. Dr. Yang would work with Dr. Wooley 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. Dr. Yang would specifically focus on the conduct of applied research in the areas above and in teaching at both sites to integrate engineering, biology and clinical medicine.

Following discussion, the Committee suggested that the KBA staff work with Dr. Wooley and Mr. Good on alternatives to support their activity and bring this back for consideration at the next Investment Committee meeting .

Wichita Center for Graduate Medical Education: Dr. Mitchell introduced the program and provided a brief perspective on WCGME. Lana Oleen then provided some additional background information. Penny Voglesang (WCGME) joined via teleconference along with Dr. Don Brada (WCGME), Hugh Tappan (Wesley Medical) and Dr. Ed Dismuke (KUMC – Wichita). They reviewed the role of the WCGME effort, financial impact of doctors locating in Kansas and the request for continued financial support for the effort going forward. Members of the committee had a useful discussion with the group and acknowledged the importance of the effort.

Executive Session

Mr. Smilor 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.

A motion was made by Mr. McKechnie to go into Executive Session at 12:10 PM (CDT) for a period of 30 minutes, concluding at 12:40 PM (CDT) to review, consider and discuss potential investment information of a propriety nature. Dr. Franz seconded the motion and it carried unanimously.

WHEREAS, the Investment Committee of the Kansas Bioscience Authority (the “Authority”) in this meeting of August 18, 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 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: Jan Katterhenry, Jim Mitchell, Tom Thornton and Doug Anning, Esq.

Return to Open Session:

At 12:40, Mr. McKechnie made a motion to return to open session which Ms. Kreps seconded. The motion passed unanimously.

The Investment Committee asked the KBA Staff to work with WCGME and their organization to modify their current proposal, focusing specifically on clinical research and commercialization and then return for review at the next Investment Committee meeting.

Adjournment:

There being no further discussion, a motion was made to adjourn at 12:40 PM., which motion was seconded and passed unanimously. Mr. McKechnie made a motion to adjourn, Ms. Kreps seconded. The motion passed unanimously.