Corporation Tax Advantages:

The funds that Cape Fox Corporation puts into the Settlement Trust would also be deductible from its federal taxes.

Shareholder Advantages:

Shareholders will experience a number of benefits that promote the health, education, welfare, and economic advantages through distributions of funds from the Settlement Trust.

Shareholder Tax Benefit

Shareholders would not have to pay taxes on their dividends dispersed from a Settlement Trust in the future.

Shareholder Heritage Benefit

The Heritage Benefit, if declared from time to time by the Trustees, is available to all Beneficiaries and is distributed pro rata based upon the number of Trust Units each Beneficiary holds

Shareholder Educational Benefit

This benefit is a non pro rata benefit that, to the extent the Trustees decide to provide such Benefit, is available to all Beneficiaries and their lineal descendants (including adoptees) who satisfy the eligibility requirements.

Shareholder Elder’s Benefit

The Shareholder Elder’s Benefit is a non pro rata benefit that, to the extent the Trustees decide to provide such Benefit, is available to the Beneficiaries who are original enrollees to CFC and are at least 65 years of age and that satisfy the eligibility requirements.

Shareholder Funeral/Burial/Potlatch Benefit

This benefit is a non pro rata benefit that, to the extent the Trustees decide to provide such Benefit, is available upon the death of any Beneficiary who satisfies the eligibility requirement.

How To Get A Copy Of  The Trust

The Cape Fox Shareholder Tina’a Trust will be available for review in this year’s Annual Meeting of Shareholders material when the packets are mailed out. Or, you can click the link below to download a PDF file.

                       DOWNLOAD

Cape Fox Shareholder Tina’a Trust

The CFC’s Board requests that you Vote YES on Shareholder Resolution 2019-01 to establish the Cape Fox Shareholder Tina’a Trust at the 2019 Annual Meeting of Shareholders.

Vote YES 158x116

 

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What is a Settlement Trust?

A Settlement Trust is a legal instrument organized under ANCSA and Alaska law to provide various benefits to the shareholders of a specific Native Corporation.  These benefits promote the health, education, welfare, and long-term economic stability of our company and Shareholders through distributions and tax reductions while helping to preserve our rich customs and heritage.

 

How many Settlement Trust Exist?

As of December 31, 2018, about 30 Settlement Trusts have been established by other Native Corporations and hold about $350 million in assets.

What Benefits May Be Provided Through CFC’s Trust?

Under the Trust Agreement, the Trustees may in their discretion provide four different types of discretionary cash benefits: a Heritage Benefit, Elder’s Benefit, Educational Benefit, and a Funeral/Burial/Potlatch Benefit.  Whether these benefits are provided will be decided by the Trustees. There are specific eligibility rules for each type of benefit:

The Heritage Benefit
if declared from time to time by the Trustees 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, to the extent the Trustees decide to provide such Benefit, is available to all Beneficiaries and their lineal descendants (including adoptees) who satisfy the eligibility requirements established by the Trustees.

The Elder’s Benefit
is a non pro rata benefit that, to the extent the Trustees decide to provide such Benefit, is available to the Beneficiaries who are original enrollees to CFC and are at least 65 years of age and that satisfy the eligibility requirements established by the Trustees.

The Funeral/Burial/Potlatch Benefit
is a non pro rata benefit that, to the extent the Trustees decide to provide such Benefit, is available upon the death of any Beneficiary who satisfies the eligibility requirements established by the Trustees. These categories of distributions are independent of each other, and a Beneficiary must satisfy the eligibility requirements for a specific type of benefit to be eligible to receive that benefit.  Also, the principal of the Trust can be used to provide these same benefits.

Are there any limits on the amounts of benefits that may be provided each year?

No. All benefits are in the discretion of the Trustees of the Trust, as is the amount of any benefits that may be provided.

Who will be the Trustees of the Trust and how will they be selected?

The CFC Board presently intends to transfer sufficient assets to the Trust from time to time so that the purposes of the Trust can be achieved. The exact contributions that will be made to the Trust are not certain at this time, as CFC’s future financial status (including its future profits) is unknown and will depend on a wide variety of factors such as the actual cash flow from CFC’s business operations. The present Board intends to retain sufficient assets in CFC so that CFC 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 CFC.

How long will the CFC’s Trust last and can the Trust be modified?

The Trust will last until the Beneficiaries and the Trustees jointly take action to terminate or otherwise modify the Trust.  Such action can occur at any time after the Trust is established and will require the affirmative vote of 2/3rds of the Trustees and 2/3rds of the Trust Units.

Are the Tax Rules Related to the Trust?

CFC’s Trust will make a special tax election, which permits the Trust to be taxed at rates of 10% on ordinary income such as interest income and 0% on capital gains and dividends.   CFC is taxed presently at rates of about 28%.  This alone produces a significant tax savings on income earned by the Trust versus income earned by CFC.  Shareholders also receive an important tax break by this election, which is that benefits provided by the Trust (including distributions) are normally not taxable to the shareholder/beneficiaries and do not even have to be reported on their individual tax returns. Benefits provided by CFC (including dividend distributions) are normally fully taxable to CFC’s shareholders due to CFC’s profitability.

What is the Shareholder Voting Process to establish the Trust?

A majority of CFC’s voting stock that votes on Shareholder Resolution 2019-01 must vote to approve Shareholder Resolution 2019-01 to establish the Trust as an ANCSA Settlement Trust.   Each share will have one vote. Cumulative voting will not apply to the settlement trust vote.

If CFC’s shareholders vote in favor of the Trust, how does a Shareholder receive units in the Trust?

Upon approval of the Trust, every CFC Shareholder will automatically own the same number of Trust Units as that shareholder owns CFC shares.  Thus if you own 100 CFC shares, you will own 100 Trust Units in the Trust. If the shareholder’s CFC’s shares are voting, the Trust Units of that shareholder will be voting. When CFC 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 CFC shares.

The CFC’s Board requests that you Vote YES on Shareholder Resolution 2019-01 to establish the Cape Fox Shareholder Tina’a Trust at the 2019 Annual Meeting of Shareholders.

Vote YES 158x116