As Alaska Native Corporations start preparing for annual meetings held in summer and fall, ANCs may note that Alaska law gives them the opportunity to reduce costs by mailing a single set of annual meeting materials to a household, as opposed to mailing multiple packets to the same address.
ANCs seeking to reduce paper and save costs in the dissemination of shareholder information may want to consider the following.
Alaska law, specifically AS 10.06.411, permits a corporation to deliver one copy of the “annual report, proxy statement, or other information” (the “Shareholder Materials”) to all shareholders residing at the same address if the corporation addresses the Shareholder Materials to those shareholders as a group and either (a) obtains their respective, individual written consent or (b) provides the shareholders in the household with notice of the corporation’s intent to send one packet to the household.
Most of the below requirements are specific to providing prior notice of the corporation’s intent to send one packet to the household, but some items are required for obtaining shareholder consent to a household mailing. Accordingly, as a practical matter, whether seeking consent from shareholders in a single household or providing notice of the corporation’s intent to send one packet to the household, the law requires the ANC to inform the shareholders, in writing:
- that only one copy of Shareholder Materials will be delivered to the shared address unless the shareholder otherwise instructs the corporation (and in the case of seeking shareholder consent, unless the shareholder does not consent or revokes consent);
- of a toll-free phone number and/or a pre-addressed, postage-paid reply form by which the shareholder indicates a desire to receive their own, separate copy of Shareholder Materials (this may be used for revoking consent; otherwise the process for revocation of consent must be explained);
- that, if the shareholder provides notice that they want to receive their own copy, the corporation will begin sending the shareholder individual copies of Shareholder Documents within 30 days of such notice;
- include the phrase “Important Notice Regarding Delivery of Shareholder Documents,” in bold, within the text of the notice and on the envelope containing the notice. This is not required when seeking shareholder consent to household delivery, but you may want to consider using a similar call to attention;
- how long the corporation will or intends to provide one copy of Shareholder Materials to the shared address. This must be provided when obtaining consent from shareholders in a single household. However, if providing prior notice in lieu of obtaining shareholder consent, Native Corporations should consider informing shareholders how long the corporation intends to deliver a single set of Shareholder Materials to the household.
There are some restrictions on mailing a single packet of materials to a household. These restrictions give certain advantages and disadvantages to seeking shareholder consent as opposed to simply providing prior notice to shareholders that a single packet will be delivered to a household.
- Prior Notice
- The prior notice of the corporation’s intent to send one packet to the household must be sent at least 60 days before proceeding to send one copy of Shareholder Materials to the shared address.
- Both the prior notice of the intent to send one packet and the copy of Shareholder Materials may only be sent to shareholders sharing an address if, to the reasonable belief of the corporation, the shareholders have a familial relationship.
- The shared address must be a P.O. box or residential street address.
- Shareholder Consent
- The corporation must obtain the consent of each of the shareholders at the shared address.
The advantage of obtaining explicit consent from shareholders in a household is that the shareholders’ familial relationship is irrelevant, the shared address is not restricted to a P.O. box or residential street address, and the delivery of one copy of Shareholder Materials to a shared address may commence any time after consent is obtained. The disadvantage to obtaining shareholder consent is that it may be difficult to obtain consent from each shareholder in a single household, such as where a shareholder never returns a consent form.
The advantage of not seeking affirmative consent from shareholders in a household, and merely providing prior notice to shareholders that a single packet will be delivered to a household, is that the obligation is placed on the shareholder to then request their own, individual copy of Shareholder Materials that is separate from the copy shared by the other shareholders at the shared address. The disadvantages to providing prior notice to shareholders that a single packet will be delivered to a household is that shareholders may be confused or alarmed about the notice, and the corporation will have to verify that all shareholders in a single household are members of the same family, which may increase administrative burdens.
As a final note, AS §10.06.411(d) defines “address” to include “a street address, a post office box number, an electronic mail address, a facsimile telephone number, or another similar destination to which paper or electronic documents are delivered, unless otherwise provided in this section” (emphasis added). This definition may permit a corporation to go paperless, but only if the corporation proceeds on the basis of shareholder consent rather than the basis of prior notice. As noted above, there is a restriction related to prior notice, limiting the delivery of Shareholder Materials to a P.O. box or residential street address, and the use of an electronic address may be complicated by the fact that the address must be shared by the shareholders who reside at the same address, meaning all the shareholders would need to provide the same shared electronic address.
This article summarizes aspects of the law and does not constitute legal advice. For legal advice for your situation, you should contact an attorney.
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