Re: [ifwp] AN IFWP CONSENSUS-BASED PROPOSAL

[Jeff Williams <jwkckid1@ix.netcom.com>]

Roeland and all,

  Roeland made some excellent points here that might be good suggestions for the
nIANA to take not of, so I am cc'ing this to the comments address at the
nIANA.  Now for the rest of my comments, (See below).

Roeland M.J. Meyer wrote:

> I just ran the articles, By-Laws, and proposal letter through PDF writer and
> they are now archived in PDF form (standard production archival format at MHSC
> <GRIN>). I figure they are of historical significance and worth saving in
> present form.
>
> Not being a lawyer <grin> I like the explaination column.
>
> At 11:11 PM 8/6/98 -0400, Dan Steinberg wrote:
> >A few quick comments on the proposal.  They are not meant to
> >be exhaustive, just first impressions.  I just got back from
> >a workout to find that the landscape had (once again)
> >changed while I was away.  This is a really exciting place
> >to be right now,  despite the occasional frustration.
> >
> >1.  It's not perfect, but a great start.  Someone asked for
> >an alternative to Jon proposal and I volunteered to write
> >one.  Forget it.  No sense in me re-inventing the wheel for
> >just another discussion focus.  This will do just fine.
>
> It's more than fine. NSI did a good job in summarizing the consensus opinion
> into a workable strawman.
>
> >2. The articles of incorporation are well drafted.  No
> >extraneous boilerplate hanging around.  The commentary is a
> >nice touch.
> >
> >3.  The bylaws are also well drafted.  There is more
> >boilerplate, but most of is pretty important (and lacking in
> >Jon's drafts).  Sometimes boilerplate is good because it
> >covers all the standard bases.
>
> I use boiler-plate a lot. It makes sure that the details are covered. If it
> covers too much, there's always the "severability clause" and the "hold
> harmless". Oh yeah, I hack contracts as well as code <grin>, but only my own.
>
> >4.  Can't resist:  A proposal from NSI on a web page without
> >a domain name????
> >Did someone forget to pay for the domreg or something? (told
> >you I couldn't resist <g>).
>
> More like a host without a name-server, is that like a "horse with no name"?
> <grin> (If I were any good, at comedy, you'd be paying for it.)
>
> >Comments on the articles (no more humour, this is serious
> >stuff):
>
> Oh well, to work ...
>
> >1-5 no comment.
>
> I do;
>
> >
> > 4. The Corporation shall not issue any capital stock.
>
> The NewCo is going to need funds. If stock issuance is un-allowed the only
> other method left is bonds issuance. We should take a lesson from the
> $difficulties$ of ARIN and not hobble the corp in this way. The stock can be a
> non-voting stock class, in Delaware. By this token, I would also like to not
> hobble NewCo with the non-profit restrictions.

  VERY GOOD point Roeland, and one that I missed, to my suprise.  We do this
ourselves on occasion.

>
>
> However, this is a consensus point and I wasn't there.
>
> >> 6. Except for the initial Board of Directors (Interim
> >>      Board), whose names are set forth in these Articles
> >>      of Incorporation as the incorporators, the manner in
> >>      which the Directors are to be elected or appointed,
> >>      as well as their explicit, limited authority shall be as
> >>      provided in the By-laws.
> >
> >> In the Policy Statement and ongoing discussions,
> >> the presumption appeared to exist that the
> >> incorporators and the initial Board of Directors
> >> were the same individuals, that they are generally
> >> called "Interim Board," and they possess specific,
> >> limited powers and functions. Thereafter, a
> >> successor Board would be elected in accordance
> >> with the Bylaws.
> >
> >I'm not sure where this is coming from.  I got no sense that
> >the incorporators would be the initial board.  I am much
> >more used to whoever is around being an incorporator and
> >moving on from there.  To force the incorporators to be the
> >initial board means that we (i.e. someone) have to decide on
> >an initial board up-front.  I doubt that will happen so
> >easily.
>
> If you look at the notes;
>
> >
> > In the Policy Statement and ongoing
> > discussions, the presumption appeared
> > to exist that the incorporators and the
> > initial Board of Directors were the same
> > individuals, that they are generally called
> > "Interim Board," and they possess
> > specific, limited powers and functions.
> > Thereafter, a successor Board would be
> > elected in accordance with the Bylaws.
>
> This was a presumption, not a consensus point. I believe that this was because
> an alternative wasn't even considered. I agree with you. Making this a part of
> the articles will cause trouble. This restriction does not need to exist.

  Completely agreed.

>
>
> >9.  Minor typo in the commentary. "principle should be
> >"principal"
>
> More seriously;
>
> >
> > 9. The address, including street and
> > number, of the initial registered office of
> > the Corporation is [as required by the
> > jurisdiction of incorporation].
> > Note:
> > Some registered office at a real location
> > is necessary in most jurisdictions. This
> > isn’t necessarily where the principle
> > offices are located. The statement of this
> > location is generally a boilerplate
> > requirement.
>
> When I registered MHSC, in DE, I was under the impression that I also had to
> register in all States where MHSC physically did business. In our case, CO and
> CA, as well as DE. Ergo, we have foreign corp status in CO and CA. In both
> those jurisdictions we had to provide native registered agencies (we did
> that). Our principle offices are in CO, but we have physical presence in CA as
> well.
> My understanding is that, in States where we have no physical presence,
> application for foriegn corp status is not required. Even though we may have
> customers in that State.
>
> The point is that, whereever NewCo is incorporated, it will need a registered
> agent. If the physical offices are in another State, it will ALSO have to have
> a registered agent there, as well as, foriegn corp status in that State. I am
> also given to understand that "Principle Offices" must also be a physical
> location. Ergo, if a corp is in VA, registering in DE, then it can not use DE
> for "Principle Offices" unless it also has physical presence there.
>
> My point in all this is that this needs much refinement.
>  Selection of State of incorporation.

Yes, and from my experience, DE is the best choice.

>  Selection of State of "Principle Offices" (Colorado is a good suggestion,
> IMHO)
>  Determination of number of offices and their locations.

 CO is ok, but you do have a corporate tax problem.

>
>
> [Someone, on this list, once chided me for commenting on this issue. However,
> since we (MHSC) ARE a DE corp, operating in multiple States, and we have
> recently gone through this excersize (late last year), I think that we are
> qualified for some thing more than cleaning the spitoon around here. <grin> I
> am also fresh from an "Articles and By-Laws" session (MHSC BOD, I'm the
> chair)]
>
> >Bylaws.
>
> >
> > 2.1.1 Organization
> > members
> > Organization members include all entities of any
> > kind other than individual natural persons. Such
> > members shall be entitled to nominate
> > candidates and to vote on the matter of election
> > of Directors and all other benefits normally
> > accorded to members.
>
> Notes:
> >
> > Dialog at the IFWP workshops and
> > text proposed in various
> > alternative drafts provide for the
> > creation of two special
> > organization classes: registries
> > and the IETF as the principal
> > Internet standards organization.
> > These organizations enjoy special
> > rights in the form of nominating
> > and electing some number of
> > Directors.
>
> I have a few major pieces of heart-burn here.
> 1) A third type of organization member should be an ISP or telecomm org.
> 2) The "Registry" member type is concieved to be the RIRs, exclusively.
> 3) Why should the IETF have special rights? They already have a home at the
> ISOC.
> 4) A fourth type of member should be a commercial Internet commerce org.

Exactly, and I made this point earlier.

>
>
> >
> > 2.2 Membership Dues
>
> All members should pay flat-rate, annual dues. No "% of gross income" BS. That
> kind of thing is strictly "wealth redistribution scheme" stuff. In can also be
> mis-construed as an illegal tax, in some circles. Keep it simple and
> flat-rate.
> If NewCo needs more cash, it can sell limited duration, non-voting, stock (aka
> BONDS).

  Yes, and those bonds can be made tax exempt, which would be much moreattractive
as well.  We have done this on a number of occasions.  Never had any
problem in selling them either.  They were usually all bought up in less than
10 days.

>
>
> >> 2.8 Waiver of Notice
> >>
> >>  Whenever any notice is required to be given to any member
> >>  under the provisions of these Bylaws, the Articles of
> >>  Incorporation or applicable [law of the state of
> >>  incorporation], a waiver thereof in writing, signed by the
> >>  person or persons entitled to such notice, whether before or
> >>  after the time stated therein, shall be deemed equivalent to
> >>  the giving of such notice.
> >>
> >> This provision provides a means for members
> >> or Directors to waive notice requirements. The
> >> provision may need tailoring to the law of the
> >> place of incorporation.
> >
> >This appears to be boilerplate that is not necessary for an
> >internet-based organization.  Surely everyone can receive
> >notice via e-mail?  After all, this is an internet
> >association.  About the only exception I can think of would
> >be that paper notice (and no waiver possible) would be
> >necessary if the domain for the known e-mail address (either
> >SLD or TLD) was on-hold or otherwise unavailable.
>
> There is the problem of authenticating the notices. MHSC does this through SSH
> encrypted e-mail links. We also have regular InternetPhone(tm) conferences
> over
> those same SSH encrypted VPN pipes. We also have a shorter notice period and
> more frequent BOD meetings. I see no reason why NewCo can not operate
> similarly. Internet proponents should be able to use the technology, or they
> shouldn't be there.

  Yep, we have done this on many occasions.  You can also do the same thing using
SSH and Internet video confrencing over a DDS sat link to any acceptable
downlink site as well.  We sell this service to home users through several
affiliates
under several different brand names.

>
>
> >> 2.9 Quorum
> >>
> >>  In the event that approval or adoption of an action by
> >>  members of the Corporation is required by law, or in the
> >>  event the Board elects to submit any matter to the
> >>  members for approval or adoption, ten percent (10%) of the
> >>  members of the Corporation represented in person or by
> >>  proxy shall constitute a quorum at a meeting of the
> >>  members. If less than ten percent (10%) of the members
> >>  are represented at a meeting, a majority of the members so
> >>  represented may adjourn the meeting from time to time
> >>  without further notice. Each member entitled to vote with
> >>  respect to the subject matter of an issue submitted to the
> >>  members shall be entitled to cast one vote on each such
> >>  issue.
> >
> >As telephone and other means are allowable, I see no reason
> >for the quorum to be so low, especially if proxies are
> >allowed.  I have some reservations about proxy votes, but
> >I'll leave it for the appropriate section.
>
> I agree, with InternetPhone and encrypted links, one should be able to get 60%
> or more participation, on minimal notice, fully authenticated, in real-time.

Yep, sure can.

>
>
> >> 2.11 Proxies
> >>
> >>  A member may vote by proxy executed in writing by the
> >>  member or by his, her or its attorney-in-fact. Such proxy
> >>  shall be filed with the Secretary of the Corporation before or
> >>  at the time of the meeting. A proxy shall become invalid
> >>  eleven months after the date of its execution unless
> >>  otherwise provided in the proxy. A proxy with respect to a
> >>  specific meeting shall entitle the holder thereof to vote at
> >>  any reconvened meeting following adjournment of such
> >>  meeting but shall not be valid after the final adjournment
> >>  thereof.
> >
> >OK.  Here it is.  I personally don't like proxies, although
> >I understand they have their place.  But in an
> >internet-based organization, surely people who are
> >interested can show up via telephone, or even via the
> >internet?
>
> Agreed. A small group, like the BOD, doesn't need proxies. Too much room for
> abuse.

  They should have the option though Roeland to cover emergency situations for
instance.

>
>
> >> 2.12.2 Additional
> >>                      Councils
> >>
> >>                      The Members, by resolution at
> >>                      the Annual Meeting and
> >>                      adopted by a majority of the
> >>                      Directors in office, may create
> >>                      additional Councils or dissolve
> >>                      existing Councils.
> >
> >The directors are elected by the members.  If the members
> >vote to create/dissolve councils, why should the directors
> >have to vote on it?  In the absurd extreme, if the directors
> >vote contrary to the wishes of the members, they will be
> >removed (eventually) and new directors inserted.   I suggest
> >that adoption by the board is superfluous, unless
> >specifically required by the laws of the eventual
> >jurisdiction.
>
> Agreed.
>
> >> 3.4.1 Interim Board
> >>
> >>  The Interim Board of Directors specified in the Articles of
> >>  Incorporation shall serve until the first general membership
> >>  meeting of the Corporation, and shall not be eligible for
> >>  election until after a period of five years.
> >>
> >>                      3.4.2 Elections
> >>
> >>  One-half (1/2) of the Directors shall be elected each year at
> >>  the annual membership meeting.
> >
> >Hmmm. The initial board sits until the first meeting.  Then
> >1/2 of the directors are elected.  The other half doesn't
> >get elected until next year?  I must be missing something.
> >
> >> 3.18 Removal
> >>
> >>  One or more Directors (including the entire Board) may be
> >>  removed from office, with or without cause, by the
> >>  affirmative vote of four-fifths (4/5ths) in the manner provided
> >>  by these Bylaws.
> >
> >Minor quibble.  4/5 of who/what?  Probably should specify
> >4/5ths of the members.
> >
> >> 4.1 Number and
> >>                 Qualifications
> >>
> >>  The officers of the Corporation shall be a President, a Vice
> >>  President, a Secretary and a Treasurer, each of whom shall
> >>  be elected by the Board. Other officers and assistant
> >>  officers may be elected or appointed by the Board, such
> >>  officers and assistant officers to hold office for such period,
> >>  have such authority and perform such duties as are
> >>  provided in these Bylaws or as may be provided by
> >>  resolution of the Board. Any officer may be assigned by the
> >>  Board any additional title that the Board deems
> >>  appropriate. Any two or more offices may be held by the
> >>  same person, except the offices of President and
> >>  Secretary. All officers who are not Directors shall be
> >>  ex-officio members of the Board.
> >
> >Another minor quibble.  Why not put the CTO and General
> >Counsel in as officers right away and go beyond the
> >boilerplate?  We all know that they will be required.
> >
> >> 4.10 Salaries
> >>
> >>  The salaries of the officers and agents shall be as fixed
> >>  from time to time by the Board or by any person or persons
> >>  to whom the Board has delegated such authority. No officer
> >>  shall be prevented from receiving a salary by reason of the
> >>  fact that he or she is also a Director of the Corporation.
> >
> >But only an ex-officio Director, right?  I hope no one is
> >suggesting that regular board members be officers as well?
>
> >
> > 5.1 Income
> > The Corporation shall derive its revenue from
> > membership dues and its own registry
> > application activities. This shall proceed on a
> > cost recovery, non-profit basis.
>
> Two problems here;
> 1) Since the impression here is that (aprox) $35US per year is a minimum
> figure
> required to prevent cyber-piracy, it would be very difficult for NewCo to
> retain its non-profit status and keep registry fees at those levels.
> 2) Initial funding can not come from dues and fees alone. The ramp-up is too
> slow and much facilities need be built quickly. ARIN has this problem now.
> Some means must be built in to allow other funding sources.

  Absolutely and non-voting shares, or tax exempt BONDS are tow options aswell as
warrants and ADR's or World bonds is another route that might be
a consideration.  Contact me if you need help getting underwriting on this.
I am sure that I can arrange it.

>
>
> >
> > 8.2  A great start towards enumerating the powers of the
>
> >interim board.
> >
> >That's it for first impressions.  Again, thank you NSI for
> >both taking me off the hook and (more importantly) coming up
> >with something useful as a starting point for debate.
> >Singapore will be very interesting.
>
> Agreed. I've had my problems with NSI, but they've been answered.

  Hummmmm?  I don't now if this comment is good of bad.  >;)  <g>

>
>
> _________________________________________________
> Morgan Hill Software Company, Inc.
> Roeland M.J. Meyer, ISOC
> (RM993)
> President and CEO.
> e-mail:        <mailto:rmeyer@mhsc.com>mailto:rmeyer@mhsc.com
> Web-pages:    <http://www.mhsc.com/~rmeyer>http://www.mhsc.com/~rmeyer
> Web-site:        <http://www.mhsc.com>http://www.mhsc.com
> Colorado Springs, CO - Livermore, CA - Morgan Hill, CA
> -----------------------------------------(legal notice)--------
> Note: Statements made in this message do not
>          necessarily reflect the  position of MHSC. All
>          forcasts and projections are to be considered
>          as forward-looking and presume conditions which
>          may not be referenced herein.
> -----------------------------------------(/legal notice)-------
>
>

 Regards,

--
Jeffrey A. Williams
DIR. Internet Network Eng/SR. Java/CORBA Development Eng.
Information Network Eng. Group. INEG. INC.
E-Mail jwkckid1@ix.netcom.com