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My turn: Gifting Sealaska shares kills need to dilute stock

Posted: Wednesday, January 31, 2007

I agree with Edith McHenry's recent Jan. 15th My Turn concerning the Sealaska Corp. Board of Directors' misguided intent to pass a single resolution is right on target.

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We need new directors that will look out for the interests of the current owners of Sealaska. It's time to elect some new directors who will stand up for the rights of Sealaska's original shareholder owners.

The Sealaska board needs to start trusting their shareholders to elect responsible directors. We, as shareholders, need to start moving to force the board to eliminate the use of discretionary voting to continuously re-elect themselves. Goldbelt, Juneau's urban Native corporation, did away with discretionary voting several years ago and it has not hurt them.

We need term limits reinstated. This is not 1971, when we only had a handful of educated shareholders. We now have many educated, gifted and talented shareholders who could serve.

Shareholders who have not gifted stock to their children should be ashamed of themselves. Why should shareholders who have never had children be expected to receive less in the way of dividends during their lifetime just so children can be members? All shareholders need to take responsibility for their own children and grandchildren.

Southeast's Native children born since 1971 can be enrolled members to Tlingit & Haida Indian Tribes of Alaska with all of the attendant entitlements, as long as they can prove lineal dissent. Tlingit and Haida is the true tribal entity - not Sealaska.

Sealaska already provides scholarships, internships, and preference in hiring to shareholder descendants - so our descendants are already reaping some of the rewards of being our descendants. Being Native is not connected to stock ownership, and families should take care of their own through gifting and inheritance.

If all current original shareholders would gift or will stock to their children and grandchildren, there would not be any further dilution, all children would be included with common stock and not life estate stock. We have a $300 million dollar company with 300,000-plus acres of land, and Sealaska owns all of the subsurface estate of all of the Southeast Alaska village and urban corporation lands.

This makes me think of Warren Buffett's Berkshire Hathaway stock that is worth thousands and thousands and thousands of dollars per share, and so could Sealaska's stock conceivably be someday (and conceivably already is if one took into account all of our lands and subsurface estate). So why shouldn't our children be happy with less than a hundred shares of gifted or inherited common stock instead of life estate stock that is only eligible to be paid dividends from corporate and permanent fund earnings and not be eligible to receive a portion of other region's revenue sharing paid to Sealaska and only while they are alive?

Sealaska's resolution is going to create yet another class of life-estate (not transferable on the death of the shareholder) stock for elders, new Natives and left-outs that will not be equal to what original shareholders received. Some shareholders want this new stock issued because they are too greedy to gift some of their common stock to their own children and grandchildren. But their shares will be diluted anyway if the proposed single resolution passes. What is being proposed is a perpetual enrollment so the dilution will grow exponentially as the number of shareholders increases. The Sealaska pie is a finite pie, and all of our pieces (dividends are the only tangible measure of membership since all of our land is held collectively by the corporation), and our dividends will shrink annually since the number of shareholders will increase annually.

I urge you to educate yourself about the Sealaska Board's proposed resolution and then join the fight to force the Sealaska Board to allow us to vote first on whether we will approve less than a two-thirds majority vote for adoption of resolutions and also force Sealaska to unbundled the resolution and let us vote on "New Natives," elders stock and stock for left-outs separately.

We want the annual meeting held in Juneau so it will be accessible to as many shareholders as possible. If you don't get involved you deserve whatever Sealaska does to you.

• Virgil Ward is a Sealaska shareholder and a resident of Helena, Mont.



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