SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant /x/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/x/ Preliminary Proxy Statement / / Confidential, for Use of
the Commission Only (as
permitted by Rule 14a-
6(e)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
KAVILCO INCORPORATED
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement,
if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/x/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(i)(2) or Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange
Act Rule 14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-
6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction
applies:
(2) Aggregate number of securities to which transaction
applies:
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth the amount
on which the filing fee is calculated and state how it was
determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided
by Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or Schedule
and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
KAVILCO INCORPORATED
PROXY SOLICITED BY BOARD OF DIRECTORS
TWENTY-THIRD ANNUAL MEETING OF SHAREHOLDERS
NOVEMBER 9, 1996
As to matters 1, 2, and 3 below, discretionary authority is
hereby granted to any such matter as to which no choice is
indicated. Discretionary authority is hereby granted as to any
other matters that may lawfully come before the meeting.
Management knows of no other matters to be considered by the
Shareholders.
CHECK BOX (A) OR (B)
(1)
(A) [ ] TO VOTE DISCRETIONARY for the election of three
Nominees as set forth in the Board of Directors' Proxy
Statement for the three-year terms ending in 1999. The
undersigned hereby appoints Louis Thompson, Laird Jones
and Robert Young, Sr., or any of them, Proxies for the
undersigned to vote on their behalf.
(B) [ ] TO VOTE DIRECTED in the manner set forth below for
the election of the Nominees below for the Board of
Directors of the Corporation for the three-year terms
ending in 1999. Notwithstanding the foregoing, the
proxies may withdraw any Nominee listed below, at their
discretion, if the Nominee(s) is unable to serve for
good cause. The proxies may, at their discretion, cast
the votes of the withdrawn Nominee(s) for any other
Nominee(s) set forth in the Proxy Statement.
Nominee Number of Shares X3=Number of Votes Cast
------- ----------------------------------------
Ramona Hamar ---------------X3---------------
Rosemarie Trambitas ---------------X3---------------
Jeane Breinig ---------------X3---------------
(2) To vote on the selection Price Waterhouse as the independent
public accountants of the Corporation.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
(3) To vote on the proposed amendment to the Corporation's
Articles of Incorporation to create two new classes of
partially alienable Common Stock into which shares of
existing common stock subject to full alienability
restrictions may be converted at the option of the holder
thereof.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
The foregoing proposals are made by the Board of Directors
and the Proxy is solicited by the Board of Directors and will be
voted as specified.
PLEASE SIGN, DATE AND RETURN THIS PROXY PROMPTLY IN THE POSTAGE
PAID ENVELOPE PROVIDED.
Number of shares _______ Dated _______________, 1996.
----------------------------
Sign here as name appears of left.
----------------------------
IMPORTANT: Executors,
Administrators, Trustees,
Guardians, should so indicate
KAVILCO INCORPORATED
One Union Square, Suite 3010
600 University Street
Seattle, Washington 98101
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
Notice is hereby given that the Twenty-third Annual Meeting
of the Shareholders of Kavilco Incorporated (the "Company") will
be held at 1:00 p.m., Alaska Time, on November 9, 1996, at the
Ted Ferry Civic Center, 888 Venetia Avenue, Ketchikan, Alaska,
for the following purposes:
(1) To elect three (3) directors of the Company for
positions which expire in 1996;
(2) To approve independent public accountants of the
Company;
(3) To approve or disapprove a proposed recapitalization
(the "Proposed Recapitalization") of the Company pursuant to
which the Company's articles of incorporation will be amended to
(i) authorize two new classes of common stock which may be
pledged as collateral for loans to Shareholders ("Class C Stock"
and "Class D Stock") and (ii) change the terms of the two
existing classes of common stock ("Class A Stock" and "Class B
Stock") to make them convertible at the option of the holders
thereof into the corresponding class of such new common stock;
and
(4) To transact such other business as may properly come
before the meeting or any adjournment thereof.
All shareholders are invited to attend the meeting.
Shareholders of record at the close of business on September 9,
1996, the record date fixed by the Board of Directors, are
entitled to notice of and to vote at the meeting.
By Order of the Board of Directors
of Kavilco Incorporated
September 18, 1996 John Campbell, Secretary
YOUR VOTE IS IMPORTANT
PLEASE RETURN YOUR PROXY CARD
WHETHER OR NOT YOU INTEND TO BE PRESENT AT THE MEETING, PLEASE
SIGN AND DATE THE ENCLOSED PROXY AND RETURN IT IN THE ENCLOSED
ENVELOPE. A SHAREHOLDER WHO COMPLETES AND RETURNS THE PROXY AND
SUBSEQUENTLY ATTENDS THE MEETING MAY ELECT TO VOTE IN PERSON,
SINCE A PROXY MAY BE REVOKED AT ANY TIME BEFORE IT IS VOTED.
KAVILCO INCORPORATED
One Union Square, Suite 3010
600 University Street
Seattle, Washington 98101
PROXY STATEMENT
The enclosed proxy is solicited by the Board of Directors of
Kavilco Incorporated (the "Company") for use at the Twenty-second
Annual Meeting of Shareholders to be held at 1:00 p.m., Pacific
Time, on November 9, 1996, at the Ted Ferry Civic Center, 888
Venetia Avenue, Ketchikan, Alaska, and at any adjournment
thereof. The Company expects to mail this proxy statement and
the proxy to shareholders on or about September 18, 1996.
Proxies may also be solicited personally, by telephone, by
employees, officers and directors of the Company. All costs of
solicitation of proxies will be borne by the Company.
Only shareholders of record of Class A (voting) stock at the
close of business on September 9, 1996 (the "Record Date"), are
entitled to vote at the annual meeting in person or by proxy. On
the Record Date, there were 11,576.83 shares of Class A Stock of
the Company outstanding. Each Class A shareholder is entitled to
one (1) vote for each share owned and may vote up to the total
number of shares on each matter submitted to a vote of the
shareholders.
With respect to the matters specified on the enclosed proxy
card, shares represented by duly executed proxies will be voted
in accordance with the specifications made. As indicated on the
enclosed proxy card, an executed proxy as to which no
specification is made with respect to a particular matter grants
discretionary authority with respect to how the shares evidenced
thereby may be voted and will count towards the establishment of
a quorum. Proxies may be revoked at any time before they are
exercised by a written revocation received by the Secretary of
the Company, by properly executing a later dated proxy or by
attending the meeting and voting in person.
THE COMPANY WILL DELIVER TO ITS SHAREHOLDERS A COPY OF ITS
MOST RECENT ANNUAL REPORT, AND THE MOST RECENT SEMI-ANNUAL REPORT
SUCCEEDING THE ANNUAL REPORT, IF ANY, UPON REQUEST. A
SHAREHOLDER WHO WOULD LIKE MORE INFORMATION ABOUT THE MATTERS
DISCUSSED IN THIS PROXY STATEMENT, MAY WRITE KAVILCO
INCORPORATED, ATTENTION: SCOTT BURNS, CHIEF FINANCIAL OFFICER,
ONE UNION SQUARE, SUITE 3010, 600 UNIVERSITY, SEATTLE, WASHINGTON
98101, OR CALL 1-206-624-6166.
SUMMARY OF PROPOSALS
The following summary is qualified in its entirety by the
detailed information which appear elsewhere in this Proxy
Statement.
Proposal No. 1. (discussion at page 3-4 of the Proxy Statement)
Proposal No. 1 calls for the shareholders' annual election
of three directors, each to serve a three year term and
recommends that the shareholders elect the Board of Directors'
nominees identified on page 5 of this Proxy Statement.
Proposal No. 2. (discussion at page 4 of the Proxy Statement)
Proposal No. 2 calls for the annual approval of the
Company's selection of Price Waterhouse as independent public
accountants of the Company.
Proposal No. 3. (discussion at pages 5-12 of the Proxy Statement)
Proposal No. 3 requests approval or disapproval of a
proposed recapitalization of the Company pursuant to which (i)
Class C Stock and Class D Stock will be authorized; and (ii)
Class A Stock and Class B Stock, the existing classes of stock,
will be amended so that, at the option of the holder, Class A
Stock may be converted into Class C Stock and Class B Stock may
be converted into Class D Stock.
If this proposal is adopted by the shareholders, a
shareholder may elect at any time to convert part or all of his
or her shares to Class C Stock or Class D Stock. On the other
hand, no shareholder is obligated to convert his or her Class A
or Class B Stock into Class C or Class D Stock. Even if this
proposal is approved, a shareholder will be able to continue to
hold his or her Class A Stock or Class B Stock. Under existing
law, Class A Stock and Class B Stock may not be sold, pledged or,
with certain limited exceptions, otherwise alienated, but also
are generally not subject to claims of the shareholder's
creditors. Under the proposal, the Class C Stock and Class D
Stock may be pledged as collateral to secure loans to the holder
thereof, but may not otherwise be sold or assigned by the
shareholder (except to the same limited extent as the Class A and
Class B stock may be) and do not have the creditor protection
attributes of the Class A Stock or Class B Stock. Class C Stock
will be voting stock, may be owned only by Native shareholders
and will convert to Class D Stock if transferred to a non-Native.
Class D Stock will be nonvoting, may be owned only by non-
Natives, and will convert to Class C Stock if transferred to a
Native.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
Number of Directors and Nominees
The Bylaws of the Company provide that the business of the
Company is managed by a Board consisting of nine (9) directors.
The Bylaws further provide for three (3) year terms of office.
The election of directors is staggered so that only three (3)
directors are elected each year. The Board of Directors
recommends the election of the three nominees listed below, all
of whom are presently Board members, to serve a three (3) year
term ending in 1999 and until their successors are elected and
qualified. Unless otherwise instructed, the proxy holders will
vote proxies received by them for these nominees. In the event
any nominee should not be available for election, the
discretionary authority provided in the proxy will be exercised
to vote for such other person(s) as may be designated by the
present Board of Directors:
Ramona Hamar
Rosemarie Trambitas
Jeane Breinig
Cumulative Voting
Pursuant to the Bylaws of the Company, each shareholder
entitled to vote at an election of Directors may vote the number
of shares owned by him for as many persons as there are directors
to be elected or may cumulate his votes by giving one candidate
as many votes as equals the number of directors to be elected
multiplied by the number of his shares or by distributing these
votes on the same principle among any number of candidates.
Compensation of Officers and Directors
All compensation paid by the Company for the year ended
December 31, 1995, to the CEO and each of the four most highly
paid executive officers, whose total compensation exceeds
$100,000, is as shown in the following table.
Summary Compensation Table
<TABLE>
<CAPTION>
(D)
All Other
(C) Compensation
(A) (B) Annual (annual
Name of Individual Capacities Compensation retirement plan
or Number in Group Which Served (Salary) contribution)
- ------------------ ------------ ------------ ---------------
<S> <C> <C> <C>
Louis A. Thompson Chief
Executive
Officer,
President
and Director $74,192 $14,838
Scott Burns Chief
Financial
Officer $85,539 $17,108
All the executive
officers as a
group (2 persons) $159,731 $31,946
</TABLE>
Compensation Pursuant to Plans
The Company has a retirement plan for its employees that is
a defined contribution plan with annual contribution being equal
to 20% of the participant's salary.
Compensation of Directors
The Company's directors receive fees, per diem and
reimbursement for expenses for attending meetings. Several
directors also participate in a Company medical insurance
program.
PROPOSAL NO. 2
APPROVAL OF INDEPENDENT PUBLIC ACCOUNTANTS
The approval of the selection of Price Waterhouse as
independent public accountants of the Company voted on at the
annual meeting. Shareholders are asked to approve this
selection. Unless the proxy holders are instructed otherwise,
proxies will vote for the selection of Price Waterhouse as
independent public accountants. If this selection is not
approved, the Board of Directors intends to take the matter under
advisement. Price Waterhouse has acted as the Company's
independent public accountants since March 18, 1988. No
representative of Price Waterhouse is expected to be present at
the annual meeting.
Professional services of Price Waterhouse consisted of
issuing an opinion on audited financial statements and assisting
in SEC and tax matters.
PROPOSAL NO. 3
PROPOSED RECAPITALIZATION
Introduction
Kavilco Incorporated (the "Company") is the Village
Corporation for the village of Kasaan, Alaska, which is located
on the east side of Prince of Wales Island in Southeastern
Alaska. Pursuant to the Alaska Native Claims Settlement Act
("ANCSA"), the Company was incorporated in 1973 under the
corporation laws of the State of Alaska to hold, invest, manage
and/or distribute lands, property, funds and other rights and
assets for and on behalf of the village of Kasaan in accordance
with ANCSA.
Under the Articles of Incorporation of the Company (the
"Articles"), the Company's authorized capital stock is currently
divided into two classes of common stock ("Common Stock"): Class
A Stock ("Class A Stock") and Class B Stock ("Class B Stock").
Holders of Class A Stock have all the rights of a shareholder in
a business corporation organized under the laws of the State of
Alaska, including, without limitation, the right to vote in
elections for the Board of Directors and on such other matters as
are presented from time to time to shareholders and the right to
receive dividends and other distributions declared by the Board
of Directors from time to time. Shareholders of the Company who
are Natives within the meaning of ANCSA have been issued and hold
Class A Stock. Non-Natives who have acquired shares of Class A
Stock from Native shareholders by will or intestate succession
(or by other means permitted by ANCSA) have been issued and hold
Class B Stock. Holders of the Class B Stock have all the same
rights as the holders of the Class A Stock, except that they have
no voting rights.
Pursuant to the Company's Articles and ANCSA, none of the
Company's Common Stock is currently alienable; i.e., such stock,
inchoate rights to such stock, and dividends paid or
distributions made with respect to such stock may not be sold,
pledged, subjected to a lien or judgment execution, assigned in
present or future, treated as an asset under laws affecting
creditors' rights, or otherwise alienated (the "Alienability
Restrictions"). ANCSA, as originally enacted, provided that the
Alienability Restrictions would automatically lapse and terminate
twenty years after December 18, 1971, the date of enactment of
ANCSA. However, pursuant to the Alaska Native Claims Settlement
Act Amendments of 1987 enacted February 3, 1988 (commonly known
as the "1991 Amendments"), ANCSA was amended to provide that the
Alienability Restrictions shall continue until terminated in
accordance with specified procedures. Briefly, ANCSA, as
amended, specifically permits the termination of Alienability
Restrictions by a decision of the shareholders to amend the
Village Corporation's articles of incorporation to opt out of the
Alienability Restrictions. The Company's Articles of
Incorporation restate ANCSA prior to the 1991 Amendments and
provide that the Alienability Restrictions lapse and terminate on
December 18, 1991. As a result of the 1991 Amendments, this
statement in the Articles did not effectively terminate the
Alienability Restrictions, which can only be terminated by
shareholder vote and amendment to the Articles of Incorporation.
Mainly as a result of the Alienability Restrictions,
shareholders of the Company currently have no liquidity with
respect to their shares of Class A or Class B Stock. That is to
say, shareholders are not permitted to sell their Class A or
Class B Stock, pledge their shares as collateral for loans, or
otherwise realize the immediate present value of their shares.
From time to time, shareholders of the Company have asked the
Board of Directors to consider alternatives for providing
liquidity to the Company's shareholders, and in the fall of 1994,
the Board of Directors began an evaluation of liquidity
alternatives. As a consequence of this evaluation, in July 1995,
the Board of Directors approved a plan pursuant to which two new
classes of Common Stock would have been created. The plan
contemplated that the new classes of Common Stock could be
pledged as collateral for loans to shareholders, but would be
subject to certain alienability restrictions. Shareholders of
the Company were to have been given the option, but not be
obligated, to convert all or a portion of their existing shares
of Class A or Class B Stock into new shares of this new Common
Stock at any time.
At the Company's Annual Meeting held on November 11, 1995,
the shareholders considered the plan to authorize the new classes
of Common Stock and make the Class A and Class B Stock
convertible at the option of shareholders into those new Classes.
At that meeting, by a narrow margin, the plan did not garner a
sufficient number of votes in favor and therefore was not
approved. After the Annual Meeting, the Board of Directors began
to reconsider the plan. At subsequent board meetings in 1996,
the Board reviewed the considerations which led it to originally
adopt the plan and determined that the plan was still in the best
interests of the Company and the shareholders. Consequently, the
Board of Directors resolved to readopt the plan at its July 12,
1996 board meeting and resubmit it to the shareholders of the
Company for consideration at the annual meeting to be held on
November 9, 1996.
In order to implement this plan, the Board of Directors has
again approved an amendment to the Company's Articles which
(i) authorizes the two new classes of partially alienable Common
Stock: Class C Stock (with full voting rights, restricted to
shareholders who are Natives) and Class D Stock (without voting
rights, to be issued to persons who are not Natives upon their
acquisition of Class C Stock or upon their conversion of shares
of Class B Stock issued to them in connection with their
inheritance of Class A Stock), and (ii) makes the existing
Class A and Class B Stock convertible into Class C and Class D
Stock, respectively, at the option of each shareholder.
Evaluation of Liquidity Alternatives and Recommendations
In reapproving the plan, the Board of Directors, at its
regularly scheduled special meetings held on January 12-13, 1996
and July 12-13, 1996, reconsidered the various liquidity
alternatives it had identified in connection with its earlier
evaluation leading to the July 1995 adoption of the plan. As
part of that earlier evaluation, the Board of Directors had
identified the following as warranting further review and
analysis:
Alternative 1: Terminating the Alienability Restrictions
with respect to existing Common Stock pursuant to the
provisions of ANCSA.
Alternative 2: Authorizing two new classes of Common Stock
which are not subject to any of the Alienability
Restrictions, one with full voting rights and one without
voting rights, which the Company's shareholders would have
the option (but not the obligation) to acquire upon
conversion of some or all of their existing shares of Class
A Stock or Class B Stock, as the case may be.
Alternative 3: Authorizing two new classes of either fully
alienable Common Stock similar to that considered under
Alternative 2 or partially alienable Common Stock similar to
that considered under Alternative 4, except that
shareholders would only be allowed to convert existing
shares to the new stock during a certain defined period.
Alternative 4: Authorizing two new classes of Common Stock
identical to Class A Stock and Class B Stock, respectively,
except that shares of each new class could be pledged as
collateral for loans. (Although shares of these new classes
would be subject to creditors' claims, they would not
otherwise be voluntarily transferable by the holder except
to the extent that Class A Stock and Class B Stock are
transferable.)
At regularly scheduled special meetings of the Board of
Directors held on January 12-13, 1996 and July 12-13, 1996,
respectively, the Board reconsidered the foregoing liquidity
alternatives, determined once again that the implementation of
Alternative 4 would, on balance, be in the best interests of
Company and its shareholders, and resolved to approve certain
amendments to the Company's Articles that are necessary to permit
the implementation of that alternative. In arriving at this
determination, the Board of Directors reconsidered the extensive
discussions with the Company's officers and corporate counsel in
connection with its earlier evaluation of liquidity alternatives
and reconsidered various factors, both pro and con, including the
following:
Current Protection Against Creditor Claims
As a result of the Alienability Restrictions, the Common
Stock, dividends and distributions in respect thereof, and other
economic benefits relating thereto, are generally not subject to
the claims of shareholders' creditors and will not be included as
an asset available to creditors of the bankruptcy estate of an
insolvent shareholder. The Board considered this to be a
significant benefit to shareholders. Notwithstanding the
Alienability Restrictions, the Internal Revenue Service has
previously enforced claims to, and required withholding of,
dividends and distributions on shares of Common Stock held by
certain shareholders of the Company, although such shareholders
retained ownership of the shares. The Internal Revenue Service's
legal right to enforce its claim against Common Stock dividends
or to require withholding of such dividends, however, has not
adjudicated in a case involving a shareholder of the Company.
Current Lack of Liquidity
Although shareholders of the Company receive periodic
dividends on their shares of Common Stock, the Alienability
Restrictions prevent shareholders from selling or liquidating
their Common Stock for cash or other consideration, pledging
their Common Stock as security for loans or other obligations,
and otherwise transferring their Common Stock except as
specifically authorized by ANCSA.
Factors Considered by Board in Choosing Alternative 4
In reconsidering the liquidity alternatives listed above,
the Board considered various factors, both pro and con, relating
to each alternative. The Board rejected Alternative 1 because
terminating the Alienability Restrictions with respect to all
existing Common Stock would deprive all shareholders of the
protection against claims of creditors referred to above, even if
certain shareholders had no desire to obtain greater liquidity
for their Common Stock. The Board considered that this would be
unfair to those shareholders for whom the Alienability
Restrictions provide important assurance that their Common Stock,
rights to dividends and distributions thereon and other economic
rights with respect thereto, will not be potentially available to
creditors. Many shareholders have expressed to Company
management from time to time that this protection is very
important.
The Board again rejected Alternative 2 because it decided
that, by permitting shareholders the unfettered right to sell or
transfer their shares, the shares would likely become much more
widely held than would likely be the case under Alternative 4.
The Board regards the potentially rapid dispersion of ownership
of the shares to persons other than the original ANCSA
shareholders as undesirable because this circumstance might cause
a dramatic change in the Company's culture, mode of operation,
and ability to fulfill its perceived charge under ANCSA to manage
its assets for the long term benefit of its original Native
shareholders. The Board decided that it would prefer to provide
a more limited liquidity option that would likely result in fewer
share transfers by the original ANCSA shareholders and would
permit the Company to continue to manage its assets consistent
with the spirit of ANCSA. In addition, during a Securities and
Exchange Commission audit of the Company in the summer of 1995,
the SEC field auditors had expressed concern that permitting free
transferability of Class C Stock and Class D Stock might trigger
an obligation on the part of the Company to calculate the
Company's net asset value on a daily basis under the 1940 Act
regulations applicable to open-end investment companies (the
Company is currently a closed-end investment company). Given
that there is no easily ascertainable market value for the
Company's real property and mineral rights, the Board of
Directors wanted to avoid any possible obligation on the part of
the Company to perform such periodic net asset valuations.
The Board again rejected Alternative 3 because it was not
flexible enough, might cause some shareholders to rush to
judgment about converting to the new classes of stock to avoid
losing that option after the applicable time period expired and
would preclude later conversion by those shareholders who did not
convert during the applicable time period but whose circumstances
(including possible emergency need to obtain some liquidity for
their shareholdings) had since changed.
The Board again determined to select Alternative 4 because
the Board believes that Alternative 4 provides a reasonable
opportunity for a shareholder desiring additional liquidity to
obtain some liquidity by borrowing money secured by the
shareholder's Class C Stock or Class D Stock, and continuing the
creditor protection attributes afforded by the Alienability
Restrictions for those who do not desire additional liquidity.
Because transfers of Class C Stock and Class D Stock will be
permitted only in connection with a shareholder's loan default
and the lender's subsequent foreclosure against the shareholder's
Class C Stock or Class D Stock, by will or intestate succession
or in other limited circumstances, Alternative 4 is also likely
to result in minimal immediate changes in the existing ANCSA
shareholder group. To the extent that the Company in the future
makes loans to shareholders secured by shares of their Class C or
Class D Stock and is forced to foreclose against a shareholder's
shares following his or her loan default, the Company will have
the option, with the defaulted shareholder's consent, to further
minimize transfers to persons other than the original ANCSA
shareholders by retaining the foreclosed shares in satisfaction
of the shareholder's loan balance.
Maintenance of Voting Control
The Alienability Restrictions currently assure that voting
control of the Company will remain in the hands of Natives, as
the Common Stock can now only be transferred to persons who are
not Natives by inheritance and any Common Stock acquired by non-
Natives by inheritance is nonvoting. The Board believes that,
given the Company's status as a Village Corporation under ANCSA,
and consistent with the spirit and intent of ANCSA, it is in the
best interests of the shareholders to ensure that voting control
of the Company remains in the hands of persons who are Natives.
The plan adopted by the Board and being submitted to the
shareholders for consideration could result in the outstanding
shares of Class A Stock representing less than a majority of the
total voting power of the Company for purposes of electing
directors. However, because neither Class B Stock nor, if
authorized, Class D Stock (both of which classes are the only
ones issuable to non-Natives) have voting rights, Native
shareholders will retain the power to elect directors on the
board and decide other matters submitted to the vote of
shareholders from time to time even if the shareholders approve
the proposed plan.
ANCSA contains two provisions which, were they applicable to
the proposed amendment, would require the Company to make certain
special disclosures in Native language(s) spoken by the Company's
shareholders in connection with this proxy solicitation and which
would prevent the Company from issuing Class C Stock after
thirteen months after the vote on the proposed amendment if, as a
result of such issuance, the Class A shareholders lost the power
to elect a majority of the Company's directors. The Board
believes, however, that these provisions are technically
inapplicable to the proposed amendment and has therefore
determined not to make the special disclosure in Native languages
or to put any time restriction on conversion of shares. However,
the matter is not free from doubt. It is possible, though the
Board believes unlikely, that the failure to follow these
requirements could cast doubt on the validity of the amendment or
on those conversions of Class A Stock into Class C Stock after
the thirteen month period that result in a shift of voting
control from the Class A shareholders to the Class C
shareholders.
Proposed Amendment to the Company's Articles
As described above, the implementation of Alternative 4
requires that the Company's Articles be amended to authorize the
Class C Stock and the Class D Stock and to amend the terms of the
existing Class A Stock and Class B Stock to make each share of
Class A Stock and Class B Stock convertible, at the option of the
holder, into one share of Class C Stock and Class D Stock,
respectively. A copy of the Company's Articles as currently in
effect is attached as Exhibit A. The proposed amendment is
attached as Exhibit B to this Proxy Statement (the "Proposed
Amendment"). The Board of Directors has determined that the
Proposed Amendment is in the best interests of the shareholders
and, as required under both ANCSA and Alaska corporation law, has
voted unanimously to approve the Proposed Amendment and to submit
it to a vote of the shareholders. To become effective, the
Proposed Amendment must be approved by the holders of Class A
Stock. Without the required shareholder approval, the Proposed
Amendment will not be effective.
The following is a summary of the Proposed Amendment and its
effect on the Company's Articles as currently in effect. The
summary is qualified in its entirety by reference to the
Company's existing Articles attached as Exhibit A and the
Proposed Amendment attached as Exhibit B:
Authorization of Class C Stock and Class D Stock
Under the Company's existing Articles, the authorized
capital stock of the Company consists of 1,000,000 shares of
Class A Stock and 500,000 shares of Class B Stock. As of the
Record Date, there were 11,576.83 shares of Class A Stock and
423.17 shares of Class B Stock outstanding. If the Proposed
Amendment is approved by shareholders, the authorized capital
stock of the Company will consist of 1,000,000 shares of Class A
Stock, 500,000 shares of Class B Stock, 1,000,000 shares of Class
C Stock and 500,000 shares of Class D Stock.
Voting Rights
As set forth in the Proposed Amendment, each share of Class
A Stock and each share of Class C Stock will be entitled to one
vote on all matters submitted to a vote of the shareholders.
Except as required by Alaska law, the Class A Stock and the Class
C Stock will vote together as a single class on all matters
presented for shareholder vote. The Class B Stock and the Class
D Stock will have no voting rights except as otherwise required
by applicable law.
Dividend Rights
Each share of Common Stock of the Company (Class A, Class B,
Class C and Class D) will be entitled, under the Proposed
Amendment to share ratably in dividends if, as and when declared
by the Board of Directors out of any funds legally available
therefore. Identical dividends, if any, must be paid on each
class of Common Stock, except that dividends and distributions
payable in shares of Common Stock of the Company may be paid only
in shares of the appropriate class.
Liquidation Rights
As provided in the Proposed Amendment, in the event of the
dissolution of the Company, after satisfaction of amounts payable
to creditors, the holders of Class A Stock, Class B Stock, Class
C Stock and Class D Stock will be entitled to share ratably in
the assets available for distribution to the shareholders.
Alienability
Under the Proposed Amendment, existing provisions of the
Articles that apply the Alienability Restrictions to the
Company's Common Stock through December 1991, which were rendered
ineffective by the 1991 Amendments to ANCSA, will be deleted in
their entirety and replaced with new provisions which indicate
that the existing Class A Stock and the Class B Stock will be
subject to the Alienability Restrictions unless and until the
Alienability Restrictions are terminated in accordance with the
provisions of ANCSA. The Proposed Amendment expressly provides
that, like the Class A and Class B shares, the shares of Class C
Stock or Class D Stock may be transferred pursuant to a court
decree of separation, divorce, or child support; by a holder who
is a member of a professional organization that limits his or her
ability to practice his or her profession because he or she holds
such stock; by inter vivos gift from a holder to his or her
lineal descendants or certain other relatives; or by will or
intestate succession. Class C Stock and Class D Stock, unlike
Class A Stock and Class B Stock, may be pledged as security for a
loan to the holder of Class C Stock or Class D Stock. The sale
or assignment in present or future of the Class C Stock and Class
D Stock shall not otherwise be permitted, except that a lender
that has taken shares of Class C Stock or Class D Stock as
security for a loan to a shareholder may, subject to applicable
law, sell such shares, or retain such shares in satisfaction of
such loan, following default and foreclosure of the lender's
security interest in the shares. Under the Proposed Amendment,
each outstanding share of Class A Stock is convertible at any
time at the option of the holder into Class C Stock on a share-
for-share basis, and each outstanding share of Class B Stock is
convertible at any time at the option of the holder into Class D
Stock on a share-for-share basis. Once shareholders have
exchanged shares of Class A Stock or Class B Stock, as the case
may be, for shares of Class C Stock or Class D Stock, as the case
may be, those shares will no longer be subject to or benefit from
the creditor protection attributes of the Alienability
Restrictions. Pursuant to ANCSA, shareholders are not entitled
to convert Class C shares or Class D shares back into Class A
shares or Class B shares, respectively.
Consistent with ANCSA, the Proposed Amendment clarifies that
Class B Stock (nonvoting) shall be issued to any person who is
not a Native who acquires shares of Class A Stock in a manner
permitted by ANCSA. In addition, the Proposed Amendment provides
that Class D Stock shall be issued to any non-Native who lawfully
acquires shares of Class C Stock.
It may be argued that, under ANCSA, Alienability
Restrictions may be terminated only by a shareholder vote to
terminate the restrictions in their entirety through amendment of
the articles of incorporation of the Village Corporation. If
this argument were to prevail, there is a risk that a court would
determine that adoption of the Proposed Amendment effectively
terminated the Alienability Restrictions for all classes of
Common Stock, including Class A and Class B Stock or was simply
ineffective. While not free from doubt, management, on advice of
counsel, believes that the better argument is that the Proposed
Amendment is permitted by ANCSA and that, following adoption of
the Proposed Amendment, Class A and Class B Stock will retain the
Alienability Restrictions, including the insulation from
creditors' claims afforded thereby.
In connection with the Twenty-second Annual Meeting at
which the Proposed Amendment described above was first considered
by the shareholders, the Board of Directors adopted and submitted
to the shareholders at that Annual Meeting a proposal to amend
the Company's investment policy to permit the Company, effective
upon the date that an amendment to the Company's registration
statement to implement such change becomes effective: (i) to
make loans to shareholders who own shares of Class C Stock and
Class D Stock secured by such shares; (ii) to sell such shares,
or retain such shares in satisfaction of any loan secured by such
shares, following default and foreclosure of the Company's
security interest in the shares; and (iii) to borrow up to ten
percent (10%) of the net asset value of the Company's securities
portfolio, secured by United States obligations owned by the
Company which are backed by the full faith and credit of the
United States government, the proceeds of which borrowings may be
used to fund loans to holders of Class C Stock and Class D Stock
who borrow money from the Company. At that Annual Meeting, the
shareholders voted to approve the proposal to amend the Company's
investment policy as described above. However, since that
proposal was tied to the proposal considered at that Annual
Meeting to amend the Company's articles of incorporation to
authorize the two new classes of stock, the Board of Directors
desires that the shareholders ratify the earlier vote on the
investment policy as described above. A vote in favor of the
Proposed Amendment described above will be deemed to be a
ratification of the earlier shareholder vote approving the
proposed change to the Company's investment policy.
VOTING, SOLICITATION
Voting, Quorum
Only shareholders of record at the close of business on
September 9, 1996 (the "Record Date"), are entitled to vote at
the annual meeting in person or by proxy. Each shareholder of
record of Class A Stock is entitled to one (1) vote for each
share of Class A Stock owned and may vote the total number of
shares of Class A Stock on each matter submitted to a vote of the
shareholders; other than Proposal No. 1 on which shareholders
have cumulative voting rights (See "Proposal No. 1, Election of
Directors - Cumulative Voting"), no shares have cumulative voting
rights.
Approval of Proposal No. 3 requires the affirmative vote of
more than 50% of the outstanding shares of Class A Common,
provided that a quorum is present. A quorum for the transaction
of business is constituted with respect to the Company by the
presence in person or by proxy of the holders of not less than a
majority of the outstanding shares of Class A Stock. If, by the
time scheduled for the meeting, a quorum of shareholders of the
Company is not present the Board may propose one or more
adjournments of the meeting to permit further solicitation of
proxies from shareholders. Any such adjournment will require the
affirmative vote of a majority of the shares of Class A Stock,
present in person or represented by proxy at the session of the
meeting to be adjourned. The persons named as proxies will vote
in favor of any such adjournment if they determine that such
adjournment and additional solicitation are reasonable and in the
interests of the Company's shareholders. If a quorum is present
but sufficient votes in favor of Proposal No. 3 are not received,
such Proposal will not be approved.
In tallying shareholder votes, abstentions and executed
proxies for which no specification as to how shares are to be
voted will be counted for purposes of determining whether a
quorum is present for purposes of convening the meeting.
Abstentions will be considered to be both present and issued and
outstanding and, as a result, will have the effect of being
counted as votes against Proposal No. 3. However, duly executed
proxies as to which no specification is made will grant
discretionary authority as to how the shares evidenced thereby
may be voted. Management intends to vote the shares represented
by such proxies as to which no specification has been made in
favor of Proposal No. 3.
If the accompanying form or forms of proxy are properly
completed, executed and returned in time to be voted at the
meeting, the shares convened thereby will be voted in accordance
with the instructions thereon by the shareholder (including
discretionary authority with respect to proxies as to which no
specification is made). Any proxy may be revoked at any time
prior to its exercise by providing written notice of revocation
to the Company, by delivering a duly executed proxy bearing a
later date, or by attending the meeting and voting in person.
Solicitation of Proxies
Proxies are being solicited by and on behalf of the Board of
Directors. In addition to the solicitation of proxies by mail or
expedited delivery service, the Directors of the Company and
officers, employees and agents of the Company may solicit proxies
in person or by telephone. The cost of preparing, assembling,
mailing, transmitting proxy materials and of soliciting proxies
on behalf of the Board of Directors will be borne by the Company.
Outstanding Shares and Beneficial Ownership
On the Record Date, there were 11,576.83 shares of Class A
Stock of the Company outstanding.
The following table shows the beneficial ownership of the
officers and Directors of the Company, individually and as a
group, of Class A Stock as of September 9, 1996:
<TABLE>
<CAPTION>
Positions and Term Office
Offices With as Director Director
Name Age the Company Expires Since
- ---- --- ----------- ------- -----
<S> <C> <C> <C> <C>
Louis A. Thompson 60 President/CEO 1998 1972
Chairman
Director
Louis Jones, Sr. 59 Vice President 1997 1979
Director
John Campbell 27 Director/ 1997 1994
Secretary
Rosemarie Trambitas 56 Director 1996 1978
Ramona Hamar 53 Director 1996 1973
Robert Young, Sr. 51 Director 1998 1992
Laird A. Jones 41 Director 1998 1994
Kenneth Gordon 36 Director 1997 1994
Dr. Jeane Breinig 41 Director 1996 1993
Scott Burns 50 Chief
Financial
Officer
<CAPTION>
Principal Amount and
Occupation Nature of
and Employment Beneficial
During Past Ownership/ % of
Name Five Years Class A at 9/9/96
- ---- ---------- -----------------
<S> <C> <C> <C>
Louis A. Thompson Field Operations 100 .86%
Manager in AK
for Kavilco
Louis Jones, Sr. Dept. of Marine 100 .86%
Highway, St. of
AK
John Campbell Student, Self- 162 1.40%
Employed
Rosemarie Trambitas Culinary 100 .86%
Ramona Hamar Dental Assist. 120 1.03%
Robert Young, Sr. Fisherman, Const. 100 .86%
Worker
Laird A. Jones Executive Director, 100 .86%
St. of AK, Dept. of
Fish & Game
Kenneth Gordon Self-employed 100 .86%
Dr. Jeane Breinig University of 140 1.21%
Alaska, English
Professor
Scott Burns Chief Financial -0- 0%
Officer for
Kavilco
All Directors & Officers 1,022 8.80%
as a Group (10 persons)
</TABLE>
The Company is aware of no person who beneficially owns 5
percent or more of the outstanding Class A Stock.
SHAREHOLDER PROPOSALS
Shareholders wishing to submit a proposal for inclusion for
the 1997 annual meeting of shareholders should send their written
proposal to the Secretary of the Company by August 9, 1997.
OTHER MATTERS
Management does not know of any other matters to be
presented at the meeting other than those mentioned in this Proxy
Statement. However, if any other business should come before the
meeting, it is management's intention that proxies which do not
contain specific restrictions to the contrary will be voted on
such matters in accordance with the judgment of the persons named
in the enclosed form of proxy.
By Order of the
Board of Directors
John Campbell
Secretary
Seattle, Washington
September 18, 1996
EXHIBIT A
ARTICLES OF INCORPORATION
OF
KAVILCO INCORPORATED
The undersigned natural persons; all of whom are above the
age of 19 years, acting as incorporators of a corporation under
the provisions of the Alaska Business Corporation Act
(hereinafter referred to as the "Corporation Act"), and the
Alaska Native Claims Settlement Act of December 18, 1971,
85 Stat. 688 (hereinafter referred to as the "Settlement Act"),
do hereby adopt the following Articles of Incorporation:
ARTICLE I
NAME
The name of the Corporation is KAVILCO INCORPORATED.
ARTICLE II
DURATION
The Corporation shall have perpetual existence.
ARTICLE III
PURPOSES AND POWERS
The purposes of the Corporation are to be the village
corporation authorized by Section 8 of the Settlement Act for the
Natives of the village of KASAAN; to secure and administer the
benefits of said Act for the Natives enrolled in said village
pursuant to Section 5 thereof; and to engage in any and all
lawful enterprises, businesses, undertakings and activities
permitted or not denied corporations under the Corporation Act or
the Settlement Act.
Subject to these Articles, the Corporation shall have and
may exercise any and all powers that are permitted or not denied
corporations under the Corporation Act or the Settlement Act.
ARTICLE IV
SHARES
A. The capital stock of the Corporation shall be divided into
two classes: 1,000,000 shares thereof being known as
Class A stock, and 500,000 shares thereof being known as
Class B stock. The Class B stock shall be distinguished
from Class A stock, in that it shall have no further
privileges or power. In other instances Class B stock shall
have full rights, privileges, and power with Class A stock.
The shares of Class A and Class B common stock shall be
without par value and shall be deemed fully paid and
non-assessable upon issuance.
B. Until December 18, 1991, shares issued by the Corporation
inchoate rights thereto, and any dividends paid or
distributions made with respect thereto may not be sold,
pledged, subjected to a lien or judgment execution, assigned
in present or future, or otherwise alienated, except
pursuant to a court decree of separation, divorce or child
support.
C. Shares issued by the Corporation shall:
1. Except as provided in paragraph D of this Article,
carry a right to vote in elections for the board of
directors and on such other matters as are presented to
the shareholders;
2. Permit the holders to receive dividends and other
distributions from the Corporation; and
3. Vest in the holders all rights of a shareholder in a
business corporation organized under the laws of the
State of Alaska.
D. Upon the death of a shareholder ownership of his shares
shall be transferred in accordance with this last will and
testament or under the applicable laws of intestacy, except
that until December 13, 1991:
1. Such shares shall carry voting rights only if the
holder thereof through inheritance in a Native; and
2. In the event a deceased shareholder fails to dispose of
his shares by will and has no heirs who are natural
persons under the applicable laws of intestacy, such
shares shall escheat to the Corporation.
E. On January 1, 1992, all stock previously issued by the
Corporation shall be deemed to be canceled, and shares will
be issued which shall not be subject to the restrictions set
forth in this Article.
ARTICLE V
COMMENCEMENT BUSINESS
If so restricted by law, the Corporation will not commence
business until consideration of the value of at least $1,000 had
been received.
ARTICLE VI
PREEMPTIVE RIGHTS
Except as may otherwise be provided by the Board of
Directors, no stockholder of the Corporation shall have any
preemptive rights to purchase, subscribe for or otherwise acquire
any shares of stock of the Corporation now or hereafter
authorized, or any securities exchangeable for or convertible
into such shares, or any warrants or other instruments evidencing
rights or options to subscribe for, purchase or otherwise require
such shares.
ARTICLE VII
MANAGEMENT
The management of the Corporation shall be vested in a Board
of Directors. The number, terms, and method of election of
Directors shall be as prescribed in the Bylaws of the
Corporation.
ARTICLE VIII
ARBITRATION
A. In the event of disagreement between the KAVILCO
INCORPORATED and the Regional Corporation (SEALASKA
CORPORATION), over the provisions of a plan or plans
formulated pursuant to Section 7(1) of the Settlement Act,
the issues in disagreement shall be submitted to arbitration
under the terms and conditions as provided for in the
Articles of Incorporation of the Regional Corporation
(SEALASKA CORPORATION).
ARTICLE IX
OFFICE AND AGENT
The address of the Corporation's initial registered office
is:
Box 745
Ward Cove, Alaska 99928
The name of the Corporation's initial registered agent at
that address is:
WILLARD L. JONES
ARTICLE X
INITIAL BOARD OF DIRECTORS
The initial Board of Directors shall be composed of seven
(7) persons who shall serve until the first annual meeting of
shareholders or until their successors are elected and qualified.
The names and addresses of the members of the initial Board of
Directors are:
Willard L. Jones Box 745, Ward Cove, Alaska 99928
Robert I. Olsen Rt. 1, Box 907, Ketchikan, Alaska 99901
Rosemarie Ramiskey Box 873, Ketchikan, Alaska 99901
Della A. Dukes Box 1322, Ketchikan, Alaska 99901
Louis A. Thompson Rt. 1, Box 704, Ketchikan, Alaska 99901
Estelle I. Thompson Rt. 1, Box 704, Ketchikan, Alaska 99901
Robert R. Young Kasaan, Alaska 99950
ARTICLE XI
INCORPORATORS
The names and addresses of the incorporators are:
Willard L. Jones Box 745, Ward Cove, Alaska 99928
Robert I. Olsen Rt. 1, Box 907, Ketchikan, Alaska 99901
Rosemarie Ramiskey Box 873, Ketchikan, Alaska 99901
Louis A. Thompson Rt. 1, Box 704, Ketchikan, Alaska 99901
Robert R. Young Kasaan, Alaska 99950
ARTICLE XII
AMENDMENT
Subject to Section 8(b) of the Settlement Act, these
Articles may be amended, restated or repealed from time to time
in accordance with the Corporation Act.
ARTICLE XIII
TEMPORARY LIMITATION OF POWER
For the specified period set forth below as to each
provision, which shall run from the date of filing of the
Articles of Incorporation, the powers of the Corporation shall be
subject to the limitations hereinafter set forth, except that
with the approval of the Regional Corporation (SEALASKA
CORPORATION) the Corporation may act beyond such limitations.
A. Notwithstanding the recitations contained in Article III of
the articles of Incorporation relating to the powers of the
Corporation, prior to completion of the roll required by
Section 5 of the alaska Native Claims Settlement Act of
December 18, 1971, 85 Stat. 688 (hereinafter referred to as
the "Settlement Act"), the issuance of shares to those
eligible, and the holding of the first annual meeting of
shareholders thereafter, the powers of the Corporation shall
be subject to the limitations hereafter set forth, except
that, with the approval of the Regional Corporation
(SEALASKA CORPORATION), KAVILCO INCORPORATED may act beyond
such limitations.
1. The Corporation shall not borrow funds in excess of the
aggregate amount of $104,000.
2. The Corporation shall not expend or commit funds in
excess of the aggregate amount of $104,000, nor for
purposes other than organizational and to assemble and
analyze data pertinent to land selections and related
responsibilities; nor for more than one year in
advance.
3. The Corporation shall not invest funds distributed
under the Act for periods in excess of one year,
provided that the Corporation may invest funds in
readily marketable securities qualified for the
investment of trust funds having maturities beyond one
year.
4. The Corporation shall not make land selections.
B. For a period of ten (10) years from the date of filing of
the Articles of Incorporation of KAVILCO INCORPORATED the
Corporation, prior to making any final commitment as to land
selections, land sales, leases or other transactions shall
afford the Regional Corporation (SEALASKA CORPORATION), the
opportunity to review and render advise as to any such
transaction or transactions.
C. Until otherwise legally permissible and subject to the
approval of the Regional Corporation (SEALASKA CORPORATION)
pursuant to the provisions of Section 7(o) and 8(c) of the
Settlement Act, the accounts of KAVILCO INCORPORATED shall
be audited annually in accordance with generally accepted
auditing standards by independent certified public
accountants or independent licensed public accountants,
certified or licensed by a regulatory authority of the State
or the United States. The audits shall be conducted at the
place or places where the accounts of the Corporation are
normally kept. All books, accounts, financial records,
reports, files, and other papers, things, or property
belonging to or in use by the Corporation and necessary to
facilitate the audits shall be available to the person or
persons conducting the audits, and full facilities for
verifying transactions with the balances or securities held
by depositories, fiscal agent, and custodians shall be
afforded to such person or persons. Each audit report or a
fair and reasonably detailed summary thereof shall be
transmitted to each stockholder and the Regional Corporation
(SEALASKA CORPORATION).
D. The Corporation shall for a period of five (5) years from
the date of filing the Articles of Incorporation prepare and
submit to the Regional Corporation (SEALASKA CORPORATION) an
annual budget showing the proposed income and expenses.
IN WITNESS WHEREOF the undersigned incorporators have
hereunto set their hands and seals this _____ day of __________,
19__.
_________________________ (SEAL)
_________________________ (SEAL)
_________________________ (SEAL)
_________________________ (SEAL)
_________________________ (SEAL)
V E R I F I C A T I O N
City of Juneau )
) ss.
State of Alaska )
I, the undersigned, a Notary Public duly commissioned to
take acknowledgements and administer oaths in the State of
Alaska, do hereby certify that on the
Willard L. Jones Box 745, Ward Cove, Alaska 99928
Robert I. Olsen Rt. 1, Box 907, Ketchikan, Alaska 99901
Rosemarie Ramiskey Box 873, Ketchikan, Alaska 99901
Louis A. Thompson Rt. 1, Box 704, Ketchikan, Alaska 99901
Robert R. Young Kasaan, Alaska 99950
who, being by me first duly sworn, declare that they are the
incorporators referred to in the foregoing Articles of
Incorporation, that they signed the Articles as such, that the
statements contained herein are true.
---------------------------
Notary Public
State of Alaska
My Commission expires______
ARTICLES OF AMENDMENT
TO
ARTICLES OF INCORPORATION
OF
KAVILCO INCORPORATED
Pursuant to the provisions of Section 10.05.276 of the
Alaska Business Corporation Act, Kavilco Incorporated hereby
executes in duplicate the following Articles of Amendment to its
Articles of Incorporation:
I.
The name of the corporation is KAVILCO INCORPORATED.
II.
A new Article XIV to the Articles of Incorporation has been
adopted providing for certain limitations on directors'
liability, as follows:
ARTICLE XIV
Limitation of Directors Liability
A director shall have no liability to the Company or its
shareholders for monetary damages for the breach of fiduciary
duty as a director, except for (1) a breach of director's duty of
loyalty to the Company or its shareholders, (2) acts or omissions
not in good faith or that involve intentional misconduct or a
knowing violation of law, (3) wilful or negligent conduct
involved in the payment of dividends or the repurchase of stock
from other than lawfully available funds, or (4) a transaction
from which the director derives an improper personal benefit.
Any repeal or modification of the foregoing by the shareholders
of the Company shall not reduce or eliminate protection afforded
by this Article to a director of the company existing at the time
of such repeal or modification for any acts or omissions of the
director occurring prior to such repeal or modification.
III.
The date of the adoption of the amendment by the
shareholders was November 5, 1988.
IV.
The number of shares outstanding, including non-voting
stock, was 11,900 and the number of shares entitled to vote
thereon was 11,487.
V.
The number of shares voted for and against the amendment,
respectively, were as follows:
For amendment: 7,936.51 shares;
Against amendment: None.
DATED: November __, 1988.
KAVILCO INCORPORATED
By --------------------
President
By --------------------
Secretary
STATE OF ALASKA )
) ss
FIRST JUDICIAL DISTRICT )
LOUIS A. THOMPSON, being first duly sworn, on oath deposes
and says that he is the President of KAVILCO INCORPORATED, an
Alaska corporation, and as such is authorized to, and hereby
does, make this verification for and on behalf of said
corporation; and that he has read the within and foregoing
Articles of Amendment, knows the contents thereof, and believes
the same to be true.
-----------------------
Louise A. Thompson
SUBSCRIBED and SWORN to before me this 23rd day of November,
1988.
-----------------------
Notary Public for the
State of Alaska
My appointement expires_______
EXHIBIT B
ARTICLES OF AMENDMENT
OF
KAVILCO INCORPORATED
Pursuant to Section 10.06.510 of the Alaska Corporations
Code, the following Articles of Amendment to Articles of
Incorporation are herewith submitted for filing.
ARTICLE 1. The name of record of the corporation is Kavilco
Incorporated.
ARTICLE 2. The text of each amendment as adopted is as
follows:
Article IV is deleted in its entirety and the following
is substituted in its place to restate and amend the terms
of the corporation's existing Class A and Class B common
stock (whether issued or unissued) and to authorize two new
classes of common stock:
ARTICLE IV
SHARES
A. The authorized capital stock of this Corporation shall
consist four classes of common stock ("Common Stock"),
without par value, of which 1,000,000 shares shall be
designated Class A Common Stock ("Class A Stock"), 500,000
shares shall be designated Class B Common Stock ("Class B
Stock"), 1,000,000 shall be designated Class C Common Stock
("Class C Stock") and 500,000 shares shall be designated
Class D Common Stock ("Class D Stock"). Except as
specifically provided herein, all of the shares of Common
Stock shall vest in the holders thereof all rights of a
shareholder in a business corporation organized under the
Alaska Corporations Code and shall have the same rights,
preferences, privileges and restrictions, including the
right to share ratably in dividends if and when declared in
accordance with the provisions of the Alaska Native Claims
Settlement Act, as amended (43 U.S.C. Section 1601 et seq.)
("ANCSA") and in distributions on liquidation.
B. The Class A Stock shall be Settlement Common Stock as
defined in Section 3 of ANCSA (43 U.S.C. Section 1602(p))
and shall be restricted in issuance to persons who are
Natives as defined in Section 3 of ANCSA (43 U.S.C.
Section 1602(b)) or descendants of Natives. Shares of Class
A Stock shall be subject to the alienability restrictions
contained in Section 7 of ANCSA (43 U.S.C.
Section 1606(h)(1)(B), unless and until terminated in
accordance with the provisions of ANCSA. Each share of
Class A Stock shall be entitled to one (1) vote on all
matters on which shareholders are entitled to vote under
ANCSA and the Alaska Corporations Code, and, except as
required under ANCSA or the Alaska Corporations Code, shall
vote as a class together with the Class C Stock. Upon
transfer of shares of Class A Stock as permitted in Section
7 of ANCSA (43 U.S.C. Section 1606(h)(1)(C) or (h)(2)) to
any person who is not a Native as defined in Section 3 of
ANCSA (43 U.S.C. Section 1602(b)) or a descendant of a
Native, such shares shall automatically convert into an
equal number of shares of Class B Stock. Upon the death of
a holder of Class A Stock, if such holder has failed to
dispose of his or her stock by will and has no heirs under
applicable laws of intestate succession, the stock shall
escheat to the Corporation. Each share of Class A Stock
shall be convertible, at the option of the holder thereof,
at any time, into one share of Class C Stock. Dividends and
distributions payable in shares of Common Stock, shall, with
respect to Class A Stock, be paid in shares of Class A
Stock.
C. The Class B Stock shall be Settlement Common Stock as
defined in Section 3 of ANCSA (43 U.S.C. Section 1602(p)).
Shares of Class B Stock shall be subject to the alienability
restrictions contained in Section 7 of ANCSA (43 U.S.C.
Section 1606(h)(1)(B)) unless and until terminated in
accordance with the provisions of Section 37 of ANCSA (43
U.S.C. Section 1629c). Except as may be provided in ANCSA,
the shares of Class B Stock shall be not be entitled to
vote. Upon transfer of shares of Class B Stock as permitted
in Section 7 of ANCSA (43 U.S.C. Section 1606(h)(1)(C) or
(h)(2)) to any person who is a Native as defined in Section
3 of ANCSA (43 U.S.C. Section 1602(b)) or a descendant of a
Native, such shares shall automatically convert into an
equal number of shares of Class A Stock. Upon the death of
a holder of Class B Stock, if such holder has failed to
dispose of his or her stock by will and has no heirs under
applicable laws of intestate succession, the stock shall
escheat to the Corporation. Each share of Class B Stock
shall be convertible, at the option of the holder thereof,
at any time, into one share of Class D Stock. Dividends and
distributions payable in shares of Common Stock, shall, with
respect to Class B Stock, be paid in shares of Class B
Stock.
D. The Class C Stock shall not be Settlement Common Stock
as defined in Section 3 of ANCSA (43 U.S.C. Section
1602(p)). Shares of Class C Stock may be pledged as
security for a loan to the holder of the shares of Class C
Stock. The Class C Stock shall be subject to the
alienability restrictions contained in Section 7 of ANCSA
(43 U.S.C. Section 1606(h)(1)(B)(i) and (iv)) in that,
except as provided in these articles or applicable law, it
may not be sold or assigned in present or future; provided,
that Class C Stock may be transferred to the same extent
that Class A Stock and Class B Stock may be transferred
pursuant to Section 7 of ANCSA (43 U.S.C. Section
1606(h)(1)(C) and (h)(2)); provided further, that a pledgee
of shares of Class C Stock may sell such shares, or retain
such shares in satisfaction of any loan secured by such
shares, following default and foreclosure of the pledgee's
security interest in the shares; and, provided further that,
following any valid transfer of Class C Stock as provided
above, the shares shall remain subject to the alienability
restrictions contained in Section 7 of ANCSA. Shares of
Class C Stock shall be restricted in issuance to persons who
are Natives as defined in Section 3 of ANCSA (43 U.S.C.
Section 1602(b)) or descendants of Natives. Each share of
Class C Stock shall be entitled to one (1) vote on all
matters on which shareholders are entitled to vote under
ANCSA and the Alaska Corporations Code, and, except as
required under ANCSA or the Alaska Corporations Code, shall
vote as a class together with the Class A Stock. Upon the
lawful transfer of Class C Stock to any person who is not a
Native as defined in Section 3 of ANCSA (43 U.S.C. Section
1602(b)) or a descendant of a Native, such shares shall
automatically convert into an equal number of shares of
Class D Stock. Dividends and distributions payable in
shares of Common Stock, shall, with respect to Class C
Stock, be paid in shares of Class C Stock.
E. The Class D Stock shall not be Settlement Common Stock
as defined in Section 3 of ANCSA (43 U.S.C. Section
1602(p)). Shares of Class D Stock may be pledged as
security for a loan to the holder of the shares of Class D
Stock. The Class D Stock shall be subject to the
alienability restrictions contained in clauses Section 7 of
ANCSA (43 U.S.C. Section 1606(h)(1)(B)(i) and (iv)) in that,
except as provided in these articles or applicable law, it
may not be sold or assigned in present or future; provided,
that the Class D Stock may be transferred to the same extent
that Class A Stock and Class B Stock may be transferred
pursuant to Section 7 of ANCSA (43 U.S.C. Section
1606(h)(1)(C) and (h)(2)); provided further, that a pledgee
of shares of Class D Stock may sell such shares, or retain
such shares in satisfaction of any loan secured by such
shares, following default and foreclosure of the pledgee's
security interest in the shares; and, provided further that,
following any valid transfer of Class D Stock as provided
above, the shares shall remain subject to the alienability
restrictions contained in Section 7 of ANCSA. Except as may
be provided in ANCSA, the shares of Class D Stock shall be
not be entitled to vote. Upon the lawful transfer of shares
of Class D Stock to any person who is a Native as defined in
Section 3 of ANCSA (43 U.S.C. Section 1602(b)) or a
descendant of a Native, such shares shall automatically
convert into an equal number of shares of Class C Stock.
Dividends and distributions payable in shares of Common
Stock, shall, with respect to Class D Stock, be paid in
shares of Class D Stock.
ARTICLE 3. If an amendment provides for an exchange,
reclassification, or cancellation of issued shares, provisions
for implementing the amendment, if not contained in the text of
the amendment itself, are as follows:
Effective upon the filing of these Articles of Amendment
with the Secretary of State of the State of Alaska, the terms of
the Class A Stock and Class B Stock set forth above shall
automatically become applicable to the shares of the
Corporation's Class A Stock and Class B Stock outstanding
immediately prior thereto, without any action on the part of the
Corporation or the holders of such outstanding shares of Class A
Stock and Class B Stock.
ARTICLE 4. The date of adoption of the foregoing amendment
was _____________, 1996.
ARTICLE 5. The amendment was duly approved shareholder
action in accordance with the provisions of Section 10.06.504 of
the Alaska Corporations Code and the Alaska Native Claims
Settlement Act.
ARTICLE 6. These Articles will be effective upon filing.
Dated: _______________, 1996.
---------------------------
(Signature of Person Authorized
to Sign)
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(Type or Print Name and Title)
