Shareholder Resolution

RESOLUTION SUMMARY

A shareholder has submitted a resolution in accordance with the Sealaska bylaws to be placed on the 2017 proxy to be voted on by Sealaska shareholders. This resolution proposes an amendment to the Sealaska Bylaws at Section 3.1 related to Board Composition and Term. The amendment to the bylaws,  if adopted, would reduce the size of the Board of Directors from 13 to 9 members.

VOTING STANDARD

This is a binding shareholder resolution, and if adopted will amend the Corporation’s bylaws. A bylaw may be amended, repealed or restated only by the Board of Directors or by a majority vote of the outstanding shares eligible to vote at any annual meeting of shareholders, or at any special meeting of shareholders called for that purpose. (Bylaws, Article VII, Amendments; and Alaska Statute 10.06.228).
This means that in order to pass, the resolution must have the affirmative vote of a majority of all of the outstanding voting shares of the Corporation. As of the record date on April 17 for the 2017 annual meeting, there were 2,034,433 outstanding shares of voting stock; therefore, the resolution requires 1,017,217 Yes or affirmative shares voted in order to pass. The bylaw may be amended or repealed by a vote of the outstanding shares, or by the Board of Directors.

• The Sealaska shareholders sponsoring this proposed amendment recommend a “Yes” vote, in favor of the resolution.

The Sealaska Board of Directors recommends a “No” vote, against the resolution.

Pros

  • Reduced cost from board fees paid to fewer members.
  • Reduced cost from board expenses due to fewer members.
  • Fewer members could result in more efficient meetings and decision making.
  • To accomplish the reduction, the resolution would potentially remove the longest serving directors and, thereby, provide openings for new board members.

Cons

  • Fewer board seats actually makes it more difficult for new or independent nominees to be elected.
  • With more than 22,000 shareholders, 9 directors results in decreased representation of shareholder interests.
  • 13 members ensures a broad array of experience and expertise on the board.
  • 13 members is in alignment with average board size of Alaska Native Regional corporations.
  • Fees and expenses related to the board have already been reduced due to annual and monthly fee caps and removal of health care benefits in 2014.
  • The resolution as written targets longest serving directors for removal to accomplish the reduction, regardless of their experience.