Leading up to the 2008 CIRI Board election, the CIRI Board of Directors determined that campaign materials distributed by the New Alliance candidates and used to solicit proxies included false and misleading statements, in violation of Alaska securities laws. CIRI was not successful in attempting to obtain corrected statements from the New Alliance directly, so it filed a complaint with the Alaska Division of Banking and Securities, and then filed suit in Superior Court.
On May 5, 2009, the court agreed that the New Alliance’s proxy solicitation materials contained material misrepresentations in violation of the Alaska Securities Act and Alaska proxy regulations, and ordered that “the proxies given to the New Alliance for CIRI’s 2008 annual shareholder meeting must be declared void.” CIRI asked the independent Inspector of Election, Steve Seward, to give effect to the court order with respect to CIRI’s 2008 annual meeting board election results.
Guided by precedent from past disputes, and with the objective of giving maximum effect to the votes and proxies submitted by CIRI shareholders that have not been invalidated by the court, the Inspector removed from the election count all proxies invalidated by Judge Christen’s orders, and reactivated all otherwise valid proxies provisionally superseded by the invalidated proxies.
All 2008 proxyholders were notified of the Inspector’s decision and provided with a new ballot. Those proxyholders with valid discretionary voting authority submitted new ballots exercising their discretionary authority.
On June 4, 2009, a majority of CIRI’s 2008 proxyholders convened and reallocated CIRI’s discretionary votes to the five Board-recommended candidates. In accordance with these procedures, the Inspector of Election certified on June 5, 2008, that Agnes Brown, Penny Carty, Roy Huhndorf, Katrina Jacuk and Patrick Marrs received the highest number of votes, represented by the stock of shareholders present in person or by valid proxy and entitled to vote at the 2008 annual meeting.
While the time and resources devoted to the matter is regrettable, CIRI believes that it was necessary to protect the fairness and integrity of the election process and CIRI shareholders’ rights to cast votes based upon accurate information.
