SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
Filed by Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/X/ Preliminary Proxy Statement / / Confidential, for Use of the
/ / Definitive Proxy Statement Commission Only (as permitted)
/ / Soliciting Material Pursuant to Section by Rule 14a-6(e)(2))
240.14a-11(c) or Section 240.14a-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/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1) 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:
---------------------------------------------------------------
October 1998
Dear Shareholder:
Enclosed is the notice for the Twenty-fifth Annual Shareholders Meeting of
Kavilco Incorporated being held November 7, 1998. Also enclosed are a proxy and
postage paid envelope for your convenience in returning your vote.
The meeting will be at the Ted Ferry Civic Center, Ketchikan, Alaska, beginning
at 1:00 p.m. Dinner will follow at 6:00 p.m., at the Westmark Cape Fox Lodge.
You are cordially invited to attend.
The purpose for this Twenty-fifth Annual Meeting is the elections of three
directors for a three year term expiring in 2001, or until their successors are
elected and qualified, and to vote on the independent public accountants of the
corporation.
The bylaws of the corporation state that persons holding at least a majority of
the total number of shares of outstanding common stock entitled to vote, must be
present either in person or by proxy to establish a quorum at the meeting.
Conducting business will begin when a quorum is established.
All Shareholders should complete and mail their proxy even if they plan to
attend the meeting. Your proxy can be voted if for some reason you are not able
to attend the meeting. Pursuant to Section 14(c) of the Securities and Exchange
Act of 1934, any proxy and accompanying materials solicited must first be
submitted to the Securities and Exchange Commission for review.
By completing and returning the enclosed proxy, you will authorize John
Campbell, Kenneth Gordon, and Louis Jones, Sr., a majority of them or any of
them acting alone in the absence of others to vote your shares for you. As your
proxy, you are authorizing them to vote all of your shares with all the powers
you would have if you were present personally.
If you do not want to appoint the individuals named in the proxy card to act as
your proxy (that is vote your shares for you) you may as provided in the
by-laws, appoint someone else to act as your proxy by giving such person a
written authorization to vote your shares of stock on your behalf at the annual
meeting. Nominations for all candidates to the Board of Directors must be made
at the Annual Shareholders Meeting.
Management does not know of any other matters requiring action at the meeting
other than the election of directors.
The other members of the Board of Directors and I encourage you to take an
interest in the affairs of Kavilco Incorporated. We urge you to attend the
Annual Meeting if possible and to vote, either in person or by proxy.
Sincerely,
/s/Louis A. Thompson
Louis A. Thompson
President
K A V I L C O I N C O R P O R A T E D
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
The Twenty-fifth Annual Meeting of the Shareholders of KAVILCO INCORPORATED
being held at the Ted Ferry Civic Center, Ketchikan, Alaska, on November 7,
1998.
Registration will begin at 11:00 a.m. and end at 12:00 noon.
The meeting will begin at 1:00 p.m.
The meeting is for the following purposes:
1. To elect three (3) directors of the corporation in the first class.
2. To approve independent public accountants.
3. To transact any other business that may properly come before the meeting or
any adjournment thereof.
Only the Shareholders of record, at the close of business on October 7, 1998,
are entitled to vote at this meeting. The stock transfer records of the
Corporation closed on that date.
Shareholders should promptly complete, sign and return the enclosed proxy in the
enclosed postage paid envelope.
All Shareholders should complete and return the enclosed proxy card even if they
plan to attend the meeting. If you do attend the meeting and wish to vote in
person, you may do so even though you have previously signed and mailed a proxy.
The following are the current directors up for re-election: Laird A. Jones,
Melanie Locklear, and Louis A. Thompson.
By Order of the Board of Directors of
Kavilco Incorporated
/s/John Campbell
John Campbell
Secretary
KAVILCO INCORPORATED
PROXY STATEMENT
This proxy statement furnished accompanying the solicitation of proxies by the
Board of Directors of Kavilco, Incorporated (the "Company"), for use at the
annual meeting of stockholders being held November 7, 1998, and any adjournments
thereof. Stockholders who execute and return proxies may revoke them at any time
before voting by notifying Scott Burns, the Chief Financial Officer of the
Company. The complete mailing address of the business office of the Company is
Kavilco Incorporated, Suite 3010, 600 University Street, Seattle, Washington
98101. The approximate mailing date of these proxy materials being October 7,
1998, but proxies may also be solicited personally, by telephone, by employees,
officers, and agents of the Company. All costs of solicitation of the proxies
are borne by the Company.
Only stockholders of record at the close of business on October 7, 1998, are
entitled to vote at the annual meeting. On that date, there were 11,596.83
shares of Class A (voting) stock of the Company outstanding. Each stockholder is
entitled to one (1) vote for each share owned and may vote the total number of
his/her shares for as many persons as there are directors being elected.
Alternatively, stockholders are entitled to cumulative voting and may give a
nominee as many votes as equal to the number of directors to be elected
multiplied by the number of shares owned. Also, stockholders may allocate these
votes on the same principle among any number of nominees. The management, as of
October 7, 1998, knows of no person to be the beneficial owner of more than five
percent (5%) of the outstanding stock of the Company.
ELECTION OF DIRECTORS
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 who are presently Board
members, to serve a three (3) year term 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:
Laird A. Jones
Melanie Locklear
Louis A. Thompson
Outstanding Shares and Beneficial Ownership
- -------------------------------------------
On the Record Date, there were 11,596.83 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
October 7, 1998:
Name Age Positions & Term Director Principal Amount & Nature of
Offices with the Office Since Occupation & Beneficial
Company as Employment During Ownership/% of Class
Director Past Five Years A at 10/7/98
Expires
- --------------------------- ------------------- ---------- -------- ------------------- ---------------------
Louis A. Thompson 62 President/CEO 1998 1972 Chief Executive 100 .86%
Chairman Officer
Director
Louis Jones, Sr. 60 Director/Vice 2000 1979 Chief Engineer 100 .86%
President Dept. Of Marine
Hwy, St. of AK
John Campbell 29 Director/ 2000 1994 Student,, 162 1.40%
Secretary Self-employed
Dr. Jeane Breinig 43 Director 1999 1993 Univ. Of AK, 140 1.21%
English Professor
Kenneth Gordon 38 Director 2000 1994 Self-employed 100 .86%
Ramona Hamar 55 Director 1999 1973 Office Manager 150 1.29%
Laird A. Jones 43 Director 1998 1994 Exec. Director, St. 100 .86%
Of AK, Dept. of
Fish & Game
Melanie Locklear 28 Director 1998 1997 Advertising 100 .86%
Executive
Rosemarie Trambitas 58 Director 1999 1978 Culinary 100 .86%
Scott Burns 52 Chief Financial Chief Financial -0- -0-%
Officer Officer for Kavilco
All Directors & 1,022 9.07%
Officers as a Group
(10 persons)
The Securities and Exchange Commission defines family relationships as directors
and officers that are members of the same household. Accordingly, there are no
family relationships between any of the directors or executive officers of the
Company.
The Company does not have an auditing, nominating or compensation committee.
The Board of Directors held five regular bimonthly meetings for the year ended
December 31, 1997.
COMPENSATION OF OFFICERS AND DIRECTORS
All cash compensation paid by the Company for the year ended December 31, 1997,
to each of the five most highly paid executive Officers, whose cash compensation
exceeds $60,000.00, and to all executive officers as a group, is as shown in the
following table:
Cash Compensation Table
-----------------------
(A) (B) (C)
Name of Individual Capacities Cash
or Number in Group Which Served Compensation
------------------ ------------ ------------
Louis A. Thompson Chief Executive $ 78,354.24
Officer, President
and Director
Scott Burns Chief Financial $ 90,658.00
Officer
All the executive
officer as a group
(2 persons) $ 169,512.24
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.
RELATIONSHIP WITH 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 pubic accountants since March 18, 1988. No
representative of Price Waterhouse is expected to be present at the annual
meeting.
Professional services consisted of issuing an opinion on audited financial
statements and assisting in SEC and tax matters.
OTHER MATTERS
The Board of Directors knows of no matters, other than those mentioned in the
proxy, to be brought before the meeting. There are three shareholder proposals
and Kavilco's response attached to this proxy. However, if other matters do
properly come before the meeting, it is the intention of the proxy holders to
vote proxies according to their best judgment.
SHAREHOLDER PROPOSALS
Shareholder proposals intended to be presented at the Company's 1999 annual
meeting must be received by the Company at its business office, One Union
Square, Suite 3010, 600 University Street, Seattle, Washington 98101, on or
before August 1, 1999.
By Order of the Board of Directors
/s/Louis A. Thompson
Louis A. Thompson,
President
Seattle, Washington
October 7, 1998
Shareholder Proposals:
A written response to the following proposals was made by Mr. Clare E. Doig. Mr.
Doig is a professional forester and land manager who has been providing forest
management and land management services on a consulting basis to Alaska Native
village corporations and various other Alaskan clients since 1978. He has
provided these services to Kavilco, Inc. since 1979, and is fully informed on
the subject of these proposals through his professional work throughout Alaska.
Proposal #1 submitted by Della A. Coburn:
"Shall Kavilco, Incorporated permanently ban all clear cutting and high grading
of logs on all corporate properties, at the end of all current sales and cutting
contracts, and require all waste wood to be removed or composted and then
returned to the forest by the logging contractors in all future contracts, in
order to retain the land's ability to produce commercial quality trees, and also
preserving the soils which produce the trees at the same time preserving
subsistence food animals and habitat, which Kasaan people depend upon for food?
Response:
Clear cutting is the preferred silvicultural prescription for the
management of old growth hemlock, spruce, and cedar timber stands
because these are tree species that require sunlight and proper
seed-bed preparation for adequate regeneration.
Any restriction of the choice of timber harvest management alternatives
will result in reduced future financial returns to the Corporation and
its shareholders.
The logging slash (wood waste) that is left after logging operations is
that material that is not suitable for the production of wood products
or chips. The removal of such material would necessarily be done at a
cost that would have to be subsidized by the rest of the timber. There
is no environmental, economic, or other benefit from removing logging
slash or composting it.
Removal of all logging slash (wood waste) would reduce the financial
return to the Corporation's shareholders from future timber harvest
operations.
Leaving logging slash (wood waste) provides important protection for
tree seedlings in their first years of growth.
Leaving logging slash (wood waste) enhances the productivity of the
soil by returning nutrients to the soil through the slow process of
decay. Composting of logging slash (wood waste) is unnecessary as
logging slash naturally deteriorates over time, releasing nutrients to
the soil in the process.
Leaving logging slash (wood waste) protects the soil from erosion by
acting as a protective cover for the soil.
It has been well documented that deer and other animals that are
subsistence targets thrive in and around clear-cuts due to the
increased availability of berry bushes and other forage vegetation.
Proposal #2 submitted by Della A. Coburn:
"Shall the Lincum Creek Watershed at Kasaan be placed into a conservation trust
by Kavilco, Incorporated in order to forever protect the watershed from the
adverse logging or other damaging practices, and to preserve it as a
watershed/wildlife/subsistence hunting and gathering preserve?"
Response:
There has been no demonstrated need to add further protections to the
Kasaan Watershed. The City has a watershed ordinance enacted under
state law, as well as the State of Alaska Forest Practices Act and
Regulation provide regulatory protections of water quality.
A Conservation Trust is a legal entity that would require financial
support, the sources of which have not been identified, and most likely
are not available.
Placing restrictions on the management of Kavilco's lands will
ultimately result in reduced financial returns to the Corporation and
its' shareholders.
All of Kavilco's lands are available to Kavilco's shareholders for
subsistence hunting and gathering; it does not make any rational sense
to create a limited preserve such as is being proposed.
Proposal #3 submitted by Della A. Coburn:
"Shall Kavilco, Incorporated seek ways to ensure the clean up of the clear cuts
on Kasaan Mountain and on the Kasaan Peninsula, in order for the lands in
question to (be) used for commercial wild berry farming or other local
commercial use by the corporation or other local organizations in Kasaan?"
Response:
The issue of "clean up of the clear cuts" is primarily an emotional
reaction to a timber harvest area before the new tree growth and berry
bushes grow up and obscure the stumps and slash.
No financial analysis of wild berry farming on Kavilco lands has been
conducted, however the likely outcome of such an analysis is that there
is high risk and no positive financial return to the Corporation in
such an enterprise.
Steep hillsides are inherently unsuitable for wild berry farming on a
commercial scale.
It is the responsibility of Kavilco's management to investigate and
evaluate potential commercial uses of Kavilco lands. The corporation
would welcome proposals for financially profitable enterprises
involving Kavilco lands, however it would not be responsible for the
Corporation to allow such a use that either puts the Corporation at
risk or does not result in a positive financial return to Kavilco and
it's shareholders.
Conclusion:
None of these proposals contributes to the ability of Kavilco, Incorporated to
provide additional benefits to shareholders of the corporation. Each of these
proposals seeks to in some way either prescribe management of Kavilco lands or
restrict the options available to management to generate benefits for the
corporation and its shareholders. All three of these proposals are in conflict
with the fiduciary responsibility of the Board of Directors to manage Kavilco,
Incorporated in the best interests of the corporation's shareholders.
SAMPLE
KAVILCO INCORPORATED
PROXY SOLICITED BY BOARD OF DIRECTORS
TWENTY-FOURTH ANNUAL MEETING OF SHAREHOLDERS
NOVEMBER 7, 1998
As to matters 1 and 2
below, discretionary authority is hereby
granted as 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
Choose either (A) or (B). 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 2001. The
undersigned hereby appoints John
Campbel, Kenneth Gordon and Louis
Jones, Sr. or any of them, Proxies
for the undersigned to vote on
their behalf.
If you choose (A) your shares
will be voted by the three
appointed Directors at their
discretion.
(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
three-year terms ending in 2001.
If you choose (B) you need to
specify who the Directors will be voting for.
Nominee Number of Shares X 3
= Number of Votes Cast
Laird Jones X 3
Melanie Locklear X 3
Louis A. Thompson X 3
You must vote on item (2),
either FOR, AGAINST, or
ABSTAIN
(2) To vote on the selection Price
Waterhouse as the independent
public accountants of the
Corporation.
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 , 1998
Complete all appropriate ---------------
information X
--------------------------------------------
Sign here as name appears of left.
IMPORTANT: Executors, Administrators,
Trustees, Guardians, should so indicate.
KAVILCO INCORPORATED
PROXY SOLICITED BY BOARD OF DIRECTORS
TWENTY-FOURTH ANNUAL MEETING OF SHAREHOLDERS
NOVEMBER 7, 1998
As to matters 1 and 2, 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 2001. The undersigned hereby appoints
John Campbell, Kenneth Gordon, and Louis Jones, 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 three-year terms ending in 2001.
Nominee Number of Shares X 3 = Number of Votes Cast
---------------------------------------------------------------------
Laird Jones X 3
------------------ ------------------
Melanie Locklear X 3
------------------ ------------------
Louis A. Thompson X 3
------------------ ------------------
(2) To vote on the selection Price Waterhouse as the independent public
accountants of the Corporation.
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 , 1998
---------------------- ------------
X
Name: -------------------------------------------------------
CLASS: # OF SHARES: Sign here as name appears of left
IMPORTANT: Executors, Administrators, Trustees,
Guardians, should so indicate.