WELCOME TO THE SECOND EDITION OF THE SITNASUAK MESSENGER

This e-newsletter is a supplement to our quarterly Venture newsletter. If you are a new subscriber, we welcome you to this new and exciting way for your Board of Directors to communicate openly and often with what’s happening in the Corporation. We encourage you to share The Sitnasuak Messenger with your friends and family so they, too, may subscribe and keep informed.

Shareholder Update on Lawsuit

Sitnasuak Native Corporation is providing Shareholders an update on Sitnasuak Native Corporation v. Fagerstrom et al., a case currently pending in Anchorage Superior Court.  We hope that this proceeding will resolve the lengthy and divisive misinformation campaign by certain individuals who seek to obtain seats on the Sitnasuak Board of Directors.

Sitnasuak filed this case in order to protect Shareholders’ ability to exercise their voting rights in a clean election, untainted by false information.  As noted in Sitnasuak’s court filing, “the free and intelligent voting rights of…Shareholders will be forfeited if such votes are exercised based upon false and misleading information.” A vote based on misleading information would irreparably harm Sitnasuak and its Shareholders.

The court filings are part of the public record and available to any Shareholder interested in reviewing them. The filings discuss important factual background information to understand the case and why it is important to Shareholders. The court docket (Case No. 3AN-17-08648CI) can be found online on Alaska Courtview at https://records.courts.alaska.gov

The following are allegations from Sitnasuak’s court filings, and provide helpful background to Sitnasuak Shareholders:

• Like the federal laws that govern publicly traded companies, Alaska’s securities laws prohibits false and misleading statements in proxy solicitations to Shareholders of Alaska Native Corporations, including Sitnasuak.
• In 2014, Barbara Amarok and Marie Tozier were involved in the publication of a false and misleading proxy solicitation in The Nome Nugget. This proxy solicitation contained false and misleading statements about discretionary proxy voting.
• In addition to her involvement in the publication of this false and misleading statement in The Nome Nugget, Barbara Amarok, a sitting director, filed a request for investigation with the Alaska Division of Banking and Securities against Sitnasuak without first bringing her concerns directly to Sitnasuak’s Board of Directors. In doing so, Ms. Amarok breached her fiduciary duties as a director to Sitnasuak by distributing privileged, attorney-client information about the Corporation without permission or consent.
• In 2016, the Alaska Division of Banking and Securities determined that Defendant Charles E. Fagerstrom’s father, Charles W. Fagerstrom, violated the Alaska securities laws by sending anonymous postcards to Sitnasuak Shareholders that wrongly accused the board of engaging in “ISIS style leadership” and engaging in wrongful conduct by using discretionary proxy voting. Charles W. Fagerstrom was ordered to cease and desist from distributing false and misleading proxy solicitations.
• In 2016, Banking and Securities determined that Defendant Marie Tozier published an unlawful proxy solicitation on Facebook about discretionary proxy voting.
• In January 2017, Defendant Marie Tozier published another proxy solicitation without filing with Alaska’s Division of Banking and Securities. That proxy solicitation again contained false statements about discretionary proxy voting.
• In May 2017, Defendants Charles E. Fagerstrom, Edna “Becka” Baker, and Barbara Amarok were involved in the creation of a false and misleading proxy solicitation sent anonymously to Sitnasuak Shareholders. This proxy solicitation contained false statements about discretionary proxy voting, and falsely implied the current Board was engaged in unethical voting practices, disrespecting elders and Shareholders and unfair hiring practices. Defendants Charles E. Fagerstrom and Edna “Becka” Baker were both serving on the Sitnasuak proxy committee at the time, and their false and misleading statements to Shareholders breached their fiduciary duties as directors.
• Sitnasuak’s annual meeting on June 3, 2017 was vacated due to lack of quorum.
• In August 2017, Defendants Marie Tozier and Barbara Amarok published false and misleading proxy solicitations in The Nome Nugget and on Facebook, and sent false and misleading proxy solicitations to Sitnasuak Shareholders via direct mail. This proxy solicitation falsely accused Sitnasuak of various practices once again, including false and misleading statements about discretionary proxy voting.

Against this extensive backdrop of false and misleading proxy solicitations, Sitnasuak has asked the Superior Court for an injunction that would invalidate Barbara Amarok and Marie Tozier’s write-in proxies, as these proxies were obtained in violation of Alaska’s securities laws. However, Sitnasuak has also asked that the court to rule those proxies remain valid for quorum purposes and for the Shareholders’ vote on whether to lower the quorum requirement for future Shareholder meetings. Because Amarok and Tozier’s proxy solicitations did not contain false and misleading statements about the quorum issue, these proxies remain valid for that purpose. It is a common practice for Alaska Native-owned corporations to lower the quorum requirement for annual Shareholder meetings.

The process for conducting Shareholder meetings is a critical part of a successful operation, and we’re hopeful that the circumstances are resolved soon. We will share news with Sitnasuak Shareholders of any developments in the court case and ability to proceed with the Sitnasuak annual meeting.