Minutes of the Annual General Meeting
Held 13:10 (1:10 pm), Friday, 13 December 1996
in the Oak Alley Room of the Bourbon Street Hotel
Flamingo Road, Las Vegas, Nevada USA
Chaired by Brian Wowk, CryoCare President and Patient Director
Minutes taken by Charles Platt
Revisions by Ben Best, CryoCare Secretary
CryoCare Directors Brian Wowk, Micheal O'Neal and Bruce Waugh were all present. Other attendees: Jerry Hagen, Paul Wakfer, Carlotta Pengelley, Ben Best, Erico Narita, Charles Platt, Roger Gray, and one CryoCare member who prefers to remain anonymous.
Charles Platt was unofficially deputized to record the minutes, since he had a laptop computer with him and was already doing transcripts of meetings in Saul Kent's room at the A4M conference.
Brian moved that any checks for an amount greater than $10,000, written against CryoCare's bank account, should require two signatures. Bruce Waugh asked if this is practical, bearing in mind the physical separation of directors. Could a mailing delay create problems? Brian said the only case where a sum of this size is likely to be involved would be in paying BioPreservation for cryopreservation services, and a delay of a few days in this situation would not be problematic. Bruce seconded the motion. It was approved unanimously.
Charles Platt asked for a printed agenda for the meeting. Brian Wowk told him that the agenda had not been printed.
Appointment of directors for CryoCare Canada. In the past these have been the same directors as for CryoCare US. Brian Wowk moved to continue this arrangement during 1998. Bruce Waugh seconded. Approved unanimously.
Meeting venue for next year. Brian Wowk explained that CryoCare annual meetings have taken place in Las Vegas in 1996 and 1997 because A4M meetings in Las Vegas have attracted cryonicists, and CryoCare has had booths in the exhibit area both years. Brian pointed out, however, that the Life Extension Foundation was denied a booth at A4M this year, and CryoCare may not find it worthwhile to participate next year. Brian suggested that CryoCare's annual meeting could take place at a more central location, convenient for members--although the greatest concentration of members is in Southern California. Paul Wakfer pointed out that more officers and directors of CryoCare live in the north-east.
Ben Best suggested Florida as a location for the 1998 meeting because CryoCare's membership is concentrated in Florida, New York, and California, and meetings have already been held in New York and Nevada (which is near California). Brian pointed out that tours of the lab are possible if a meeting is held in California.
In which month should the meeting be held? Brian suggested that November might be a better month than December for many people. He moved that the next annual meeting should be in November (early enough to avoid Thanksgiving), in California. Micheal O'Neal seconded the motion. It was approved unanimously.
Brian Wowk gave his President's Report, but said that most of what he had to say had already appeared in writing in CryoCare Update. Basically he said that little has been happening in CryoCare because key people have been involved in research. Membership has remained approximately constant at around 80 members. Finances have been stable despite loss of donations from LEF during 1997. We have about $5,000 in the bank.
Brian said that one major problem is that about 15 members are more than 90 days in arrears on their dues, and some members are more than 1 year behind. We have not sent any threatening letters. How should we handle this? What type of wording is appropriate? Should there be one registered letter indicating dire consequences, or some kind of gradual escalation? The current procedure, Brian said, is merely to send invoices indicating amounts past due.
Paul Wakfer asked if he is on the list, because he doesn't remember paying dues. He was told that he is not on the list of late payers. Brian said he thinks some people may have lost interest in cryonics because they were persuaded to join by friends and were never very enthusiastic.
Paul Wakfer asked if BioPreservation has received readiness fees for all members, or only for dues-paying members. He was told that fees have only been paid on behalf of dues-paying members. Charles Platt asked if automatic bank transfers can be arranged, so that CryoCare doesn't have to bill all its members. Ben Best said that credit card transfers may be possible, and this is being investigated. He added that he has taken on the responsibility of debt collection, since Kevin Brown was unwilling to deal with it.
Ben said he's decided to write a letter to every one of our members and give them a status update: what they owe, and how their records should be improved. Ben said he suggested some sort of predictable mechanism, like a 2-year limit on unpaid dues with an automatic loss of membership (after several warnings). He said that he foresaw heartbreaking situations involving elderly, unemployed members in debt who are unable to obtain insurance -- and tough choices for CryoCare Foundation (if it is to remain financially solvent).
Charles Platt mentioned that Alcor has the same problem; this is not a situation unique to CryoCare. It's endemic to cryonics generally.
Bruce Waugh asked if the people behind on their dues still maintain valid insurance. Ben said that it doesn't matter if insurance is valid, if dues have not been paid; because dues must be paid regardless.
Paul Wakfer pointed out that a shortfall of dues may not be a problem if a member needs cryopreservation services, because the dues debt could be recovered from the member's insurance payout. But this cannot be an official policy, because it would encourage everyone to stop paying dues, and CryoCare needs cash flow.
Paul asked what ability we have to find out whether insurance is up to date. Ben said that Brian has proposed that when dues are paid, the member must also present proof that insurance is still valid. Relatively few CryoCare members have named CryoCare as irrevocable beneficiary.
Ben suggested charging interest after 30 days and disqualifying members automatically after two years. He said he wants a firm rule because he doesn't want to agonize over every case. Paul suggested a 1-year cutoff. Carlotta Pengelley suggested that a case-by-case assessment should made, not an automatic cutoff.
Charles Platt suggested that since it is a very significant decision to eliminate a member, all three directors should sign off on each termination. Ben and Paul said on the contrary, CryoCare directors should not be involved in micromanagement. Charles said that this isn't micromanagement; if a member is terminated by error, CryoCare could be legally liable if the member dies and we don't respond.
Bruce suggested that interest should be charged after 30 days; and after 1 year you lose your membership, with a possible hardship extension to 2 years.
Ben suggested that officers should make a judgment call in hardship cases, with the president retaining final authority.
Bruce said that at the very least, officers should report to directors on how many hardship cases have been allowed.
Paul Wakfer suggested that CryoCare Foundation address the problem of hardship cases by setting-up a separate charity for that purpose.
Brian moved that there should be an interest penalty of 1.5 percent per month, on accounts more than 30 days overdue, for a grace period of up to one year; at that point, a warning letter should be sent; if there is no response within another 30 days, a registered letter should be sent announcing termination, with executive clemency possible for hardship cases.
Micheal O'Neal asked for a separate vote on who approves hardship cases, because he felt uncomfortable about the president being the only one with this power. He feared the possibility of favoritism. Brian reworded his motion to require a majority vote by all directors to approve each hardship case. Micheal O'Neal seconded this motion, which was approved unanimously.
Charles Platt was unhappy about requiring people to show proof of insurance when they pay their dues, because he felt it would discourage people from making payments. Many people do not file or keep documents carefully, and would not be able to show proof of insurance without digging through their records. They would use this as an excuse to postpone paying their dues.
Brian Wowk found this implausible. He suggested broadening the term to "proof of financial responsibility" to cover members who use some means other than insurance to pay for their eventual cryopreservation. Brian moved that members should be required to provide proof of funding on an annual basis, with a 30-day deadline. This was passed unanimously.
Last item on the agenda: The Trust. Longterm funding is currently being handled by IPCF, originally envisioned to be a tax exempt cemetery trust. The exemption was denied by IRS on the grounds that if cryonics turns out to be feasible, the IPCF would not qualify as a cemetery organization because the patients weren't really dead. How can we safeguard patient funds from taxation and avoid the laws against perpetuities? Bob Krueger has had some lawyers drawing-up a boiler-plate trust between himself and LGT Trust Management Limited in Liechtenstein (one of the few legal jurisdictions which has no law against perpetuities). It was hoped that this could replace the IPCF. Currently there is $40,000 for two patients in IPCF, which spends $600 in cryopreservation maintenance fees (Courtney Smith is not charging any administrative fees).
Ben expressed concern that the Liechtenstein Trust gives unlimited investment authority to the Trustees to invest as they please (with the possibility of generating commissions for themselves and without responsibility for annual cryopreservation fees). Bob Kreuger is concerned about this also, and felt that we would prefer that the Liechtenstein Trust should only make investments as directed by the Patient Advocate (or an appointed Money Manager). Bob Krueger's lawyers agreed to rewrite the Trust so that the Trustees would take investment advice from the Patient Advocate or the Patient Advocate's representative. This plan, however, will require additional fees for the Money Manager, perhaps 1% per year.
Ben said he had phoned LGT Trust in Liechtenstein and learned that it requires a minimum of 6,000 Swiss francs (about $4,500 US) per year which is more than CryoCare can afford. The Liechtenstein fee is 3/8ths of 1 percent up to 2.5 million francs, and 1/4 of 1 percent for over 2.5 million francs, but there is a $4,500 minimum. We could have multiple trusts sharing the same $4,500 minimum if the trusts all came from the same source (CryoCare Foundation).
Paul Wakfer pointed out that this would be affordable if we had more patients in care. Ben acknowledged this, but said that a Liechtenstein Trust is simply not currently economically feasible for CryoCare. Ben said he was also nervous about Liechtenstein because it is a principality, and the next prince could have a brain defect. Bruce Waugh said that the draft trust document contains a provision to move the trust if necessary.
Brian expressed astonishment that so much work had been done on the Trust without anyone having phoned Liechtenstein to determine the costs. He asked Ben what Bob Krueger's response had been to the $4,500 minimum. Ben replied that Bob had suggested that Member annual fees be increased so as to cover the minimum fees. Ben also said that Bob told him that Brian had assured Bob that CryoCare Foundation would repay Bob for the $3,000 - $5,000 expected cost for the lawyers drawing up the Trust. Brian acknowledged that he had told Bob that CryoCare would bear some of the lawyer costs.
Bruce Waugh said that the draft agreement contains a provision to appoint an investment advisor. Ben disputed this, saying that a very large portion of the document is concerned with asserting the absolute investment authority of the LGT Management. Ben said that the only recourse to the Patient Advocate in the existing Trust is to dissolve the Trust altogether.
Ben said that a Trust in Wisconsin (which has no laws against perpetual Trusts) now seems like the best path to pursue. By being in the Unites States, a Wisconsin Trust would be more legally secure than a Trust in a foreign country, but we are again vulnerable to severe taxation. Brian mentioned that we may be able to minimize the taxes by treating the trust funds as a "subscription payment", with taxes only applicable to the funds expended for regular cryopreservation maintenance service. Ben reported on Courtney Smith's idea that CryoCare's service should really be regarded as reanimation, and that by that standard taxation on deliverance of service would not be applicable until reanimation. Brian observed that the IRS denied us cemetery status on the grounds that we are in the reanimation business, so that Courtney's idea is completely consistant with the IRS position.
Ben said that Courtney told him that some ACS patients have Wisconsin trusts, and the lawyer who drew them up will work with CryoCare. Ben said that he didn't think Money Managers were smarter than anyone else at investing money, but that having a Money Manager would relieve CryoCare of liability for investment decisions. Ben expressed concern about the Money Manager fees in addition to the Trust costs.
An anonymous member of the audience said that he is a Money Manager, and that the costs need not be as high as Ben feared. He said that he had set up his own trust in California, with family members as trustees and provision to keep passing it down the line. When he dies, the trust will move to whatever is the best domicile. There is no provision against perpetuities in Wisconsin, Alaska, and one of the Dakotas.
Ben asked the anonymous Member Money Manager if he would work with Ben and Courtney Smith to arrive at a workable Trust. The Money Manager agreed. There were no motions or votes on the Trust question, with further research to be done by MMM, Ben and Courtney.
Brian Wowk called the meeting to order, observing that it would be very brief.
Brian motioned that he remain President of CryoCare Canada, that
Ben Best remain Treasurer and that Kevin Brown remain Secretary.
Passed unanimously by the Directors.
Brian moved that the meeting be adjourned, and this motion passed also.