SNC Trust Information


•  An ANCSA Trust allows our Native Corporation to set aside funds for Shareholder distribution of benefits and provides significant cost savings through favorable tax treatment.

•  Benefits to Shareholders include future tax-free dividends!

•  Vote YES and help dedicate more benefits to Shareholders and Descendants while allowing Sitnasuak to maximize federal tax savings as an Alaska Native Village Corporation.

SNC’S Board requests that you VOTE YES on Shareholder Resolution 2018-01 to establish the SNC Trust as an ANCSA Settlement Trust.


The Board of Directors of Sitnasuak Native Corporation (SNC) is conducting a Shareholder vote on whether the SNC Trust (the “Trust”) should be established as a Settlement Trust under the Alaska Native Claims Settlement Act (“ANCSA”). At the Meeting of Shareholders, Shareholders will vote “YES” or “NO” on the following Shareholder Resolution 2018-01:

  • Resolved that the SNC Trust shall be established as an ANCSA Settlement Trust effective September 22, 2018.



A majority of the shares of SNC voting stock that are voted on Shareholder Resolution 2018-01 must vote “YES” to adopt the Shareholder Resolution and thereby establish the SNC Trust as an ANCSA Settlement Trust. Each share of SNC voting stock will have one vote and cumulative voting will not apply. The exact number of shares of SNC voting stock that must be voted “YES” to approve Shareholder Resolution 2018-01 will be determined at the Meeting of Shareholders.



This section summarizes the provisions of the Trust Agreement that will govern the Trust if sufficient shares of SNC voting stock are voted “YES.” A copy of the Trust Agreement accompanies the Proxy Statement (which was mailed to all Shareholders on July 27, 2018) for you to study. Please realize that the following paragraphs are only summaries of what the actual Trust Agreement says, and in case there is any difference between this summary and the Trust Agreement, the Trust Agreement will control over this summary.

The SNC Board presently intends to transfer sufficient amounts to the Trust from time to time so that the purposes of the Trust can be achieved, primarily from SNC’s future profits. In addition, SNC may transfer other assets from time to time to the Trust. The exact contributions that will be made to the Trust are not certain at this time, as SNC’s future financial status (including its future profits) are unknown and will depend on a wide variety of factors. These factors include without limitation the actual cash flow from SNC’s business operations. The present Board intends to retain sufficient assets in SNC so that SNC can conduct its operations and pay all its debts and obligations following any and all Trust contributions. Once assets are placed in the Trust, the assets cannot go back to SNC.

If SNC’s Shareholders approve the Trust, the existing Shareholders of SNC automatically will be the Beneficiaries under the Trust Agreement and will hold exactly the same number of Trust Units under the Trust Agreement as the number of shares of SNC Settlement Common Stock that they hold. The Trust Agreement provides that the Trust Units in the Trust can only be transferred when that Beneficiary transfers his or her shares of SNC stock. The Trust Units are not transferable without also transferring the corresponding shares of SNC. When SNC shares are transferred, such as through a gift of shares or upon the death of a Shareholder, the same number of Trust Units will automatically be transferred to the same person who receives the SNC shares. The Trust Units under the Trust Agreement are either voting or non-voting, depending on whether or not the holder is a Native or a Descendant of a Native. This is the same as with the Settlement Common Stock of SNC. In the event SNC no longer has Settlement Common Stock, then rules similar to those presently used to determine voting and nonvoting status for SNC’s Settlement Common Stock would apply to the Trust Units. If SNC’s Shareholders vote in the future whether to issue additional Settlement Common Stock under ANCSA, such as to those born after 1971, or to the “Elders,” then additional Trust Units will be automatically issued to those who would receive the additional SNC Settlement Common Stock.

The Trust also provides that if SNC Shareholders vote on whether or not to terminate the ANCSA alienation restrictions presently applicable to SNC’s Settlement Common Stock, then there will be a contemporaneous vote as to whether the Trust Units will become transferable. If the vote is unsuccessful, then: (i) the Beneficiaries of the Trust would remain the same, (ii) the Trust Units in the Trust are transferable only in the same circumstances SNC’s Settlement Common Stock could have been transferred before the alienation restrictions were lifted, (iii) no additional Trust Units in the Trust would be issued if SNC issues additional stock, and (iv) the Trustees for the Trust would be elected each year by the holders of the Trust Units with voting rights. Similar rules apply if SNC is dissolved or if SNC merges with another Alaska Native corporation under the provisions of ANCSA. These provisions are included to prevent outsiders from taking over or benefiting from the Trust.

The Directors of SNC will be the Trustees of the Trust. Assuming Shareholder Resolution 2018-01 is approved, when a person is elected as a director of SNC, beginning at the Meeting of Shareholders, that person will also automatically be elected as a Trustee of the Trust. If a director of SNC ceases to serve as a director (for example, by resigning or by death), then SNC is automatically deemed to have removed that person as a Trustee of the Trust. However, if (i) SNC is merged, dissolved or consolidated, or if (ii) SNC’s Shareholders vote to terminate the ANCSA nontransferability restrictions presently applicable to SNC’s Settlement Common Stock or if (iii) SNC’s Settlement Common Stock no longer elects a majority of SNC’s Board of Directors, and if (iv) the Trust’s Beneficiaries also do not vote to make the Trust Units transferable, then the Trust Beneficiaries will elect the Trustees in the same manner as the Beneficiaries presently elect directors.

The Trust Agreement provides that the Trustees will decide each year how much of the income and principal of the Trust will be distributed, just as SNC’s directors presently decide how much of SNC’s income will be distributed each year as a dividend. This applies to all categories of distributions that the Trustees could make. The Trust Agreement permits the Trustees to provide four specific types of discretionary cash benefits: a Heritage Benefit, an Elder’s Benefit, an Educational Benefit and a Funeral/Burial/Potlatch Benefit.

There are specific eligibility rules for each type of benefit:

• The Heritage Benefit is available to all Beneficiaries and is distributed pro rata based upon the number of Trust Units each Beneficiary holds.

• The Educational Benefit is a non pro rata benefit that is available to any original enrollee to SNC or their lineal descendants (including persons adopted prior to the age of majority).

• The Elder’s Benefit is a non pro rata benefit that is available only to the Beneficiaries who are original enrollees to SNC and are at least 65 years of age.

• The Bereavement Benefit is a non pro rata benefit that is available upon the death of any Beneficiary.

These categories of distributions are independent of each other, and a Beneficiary must satisfy the qualification requirements for a specific type of benefit to be eligible to receive that benefit.  The Trust Agreement also authorizes the Trustees in their discretion to use some, all, or none, of the annual Net Cash Income of the Trust to directly and indirectly provide other types and forms of benefits that promote the health, education and welfare of Alaska Natives or to preserve the heritage and culture of Natives. Such benefits may be provided to (i) the Beneficiaries of the Trust, and/or (ii) to other Alaska Natives and descendants of Alaska Natives. This is a broad authorization intended to provide the Trustees with flexibility to provide additional benefits beyond those expressly listed in the Trust Agreement.

The Trust Agreement allows the Trustees to distribute principal of the Trust to provide any of the above benefits. The amount of Net Cash Income will vary based on a variety of factors, such as the size of the fund, type of investments, the prevailing investment climate and how the Trustees decide from year to year to allocate capital transactions between income and principal. The investment policy for the Trust is under the discretion of the Trustees. The Trust Agreement allows the funds and assets within the Trust to be invested in common with any other funds for which the Trustees are also fiduciaries, so long as adequate records are maintained as to the different fiduciary funds.

Subject to the above provisions regarding termination, the Trust will continue forever unless action is taken to modify the Trust. The Trust Agreement permits the Trust to be amended every five years beginning in 2023 upon a vote of the Beneficiaries and a vote by the Trustees. During such a vote, any change can be made to the Trust Agreement or to terminate the Trust, except that no change could be made to cause the assets of the Trust to return to SNC. Two-thirds of the Trustees and a majority of the Trust’s Beneficiaries who hold voting Trust Units must each approve any modification or termination of the Trust.

SNC’s Trust will make a special tax election, which permits the Trust to be taxed at very favorable rates of 10% on ordinary income such as interest income and 0% on capital gains and dividends. By contrast, ANCSA corporations are normally taxed at rates of about 27% (unless they have net operating losses or other tax attributes that reduce taxes). These favorable tax rates produce significant tax savings for a settlement trust versus an Alaska Native corporation.

Shareholders also receive an important tax break by this election, which is that under present law, distributions and benefits paid by the Trust are not taxable to the Shareholder/Beneficiaries and do not even have to be reported on their individual tax returns. By contrast, dividend distributions and benefits paid by SNC are normally fully taxable to SNC’s Shareholders due to SNC’s profitability.