The Concerned Shareholder of Sierra Geothermal Power Corp.

January 26, 2010 11:08 ET

Sierra Geothermal Power Concerned Shareholder Alarmed by Total Lack of Transparency

As Special Meeting Nears, Management and Conflicted Chair Continue to Ignore Meeting Protocols

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Jan. 26, 2010) - Sierra Geothermal Power Corp. ("Sierra" or the "Company" or "SGP") Concerned Shareholder announced that after being stonewalled by the so-called "independent" Chair of today's Special Meeting for well over a week, the hand-picked Chair refused to convene a meeting of all parties, at the request of the Concerned Shareholder, including opposing counsel and independent counsel for the Meeting Scrutineers to resolve the many outstanding contentious issues prior to the Meeting. Rather, Mr. Alfred Sorensen, a member of the impugned Board, chose to meet first with the Concerned Shareholder's legal counsel yesterday afternoon, and then to meet privately with and report back to Sierra's management and counsel.

Yesterday's meeting heightened the Concerned Shareholder's fears that this conflicted Chair will make whatever self-serving rulings are necessary to ensure that the entrenched Board remains in control, despite shareholders sending a loud and clear message with their YELLOW proxies that confidence in the current Board is lost and the time has come for change.

Among the most disturbing messages conveyed to the Concerned Shareholder -- only after the close of business and the Courts:

- The Chair ruled, only late last night, that "there will be no access
by either side to the proxies of the opposing side at or before the
meeting" - a remarkable departure from long accepted best practice at
all shareholders meetings - and goes on to state "the Chair will be
accepting the final scrutineer report of Computershare as the
definitive vote tally." An extraordinary ruling by a Chair who
professes, four days after closing of the proxy deadline, not to have
yet seen the proxy record and an absolute repudiation of the
fundamental principle of transparency in governance of the Meeting.
In a letter to the Concerned Shareholder's legal counsel January 24,
Mr. Sorensen's counsel pledged that the chairman would "discharge his
duties properly and in good faith". It is now plain for all to see
that this compromised Chair has no intention of so doing. The outcome
of the Meeting turns on the accuracy and integrity of the proxy
record: it is essential that this information be disclosed and shared
with all parties prior to the Meeting.

- The Chair will wait to decide whether to waive the proxy deadline less
than an hour before the Meeting. The notion that the Company's own
proxy delivery deadline, published in its Circular fully a month ago
would now be waived without notice to the market or to shareholders
is outrageous. The hand-picked Chair provided no explanation for
taking his position, notwithstanding the fact it flies in the face
of accepted practice. The waiver or extension of a proxy deadline can
only ever be justified where there are compelling extenuating
circumstances which may have precluded shareholders to submit their
proxies on time; those circumstances are not present in this case.
The only reason this Chair might extend the deadline will be to allow
his Sierra colleagues more time to stuff the ballot box - Mr. Sorensen
sits on the company's special committee charged with the solicitation
of proxies for the Sierra management team. It would be manifestly
unfair to Sierra shareholders to now waive the delivery deadline,
without notice.

- The Chair, through legal counsel, has repeatedly stated that
"fairness" must be balanced against "decorum", "control" and
"efficiency" at the Meeting, a message which strongly suggests that
the Chair will be quick to attempt to silence shareholders at the
Meeting. The Concerned Shareholder is committed to the conduct of an
open and fair Meeting and will take the steps necessary to ensure
as much.

"To call the stonewalling and lack of transparency alarming is an understatement," said the Concerned Shareholder's spokesman, Rick Rule. "Now, more than ever, it is apparent that Sierra's current Board are completely willing to ignore their shareholders. The Concerned Shareholder remains committed to doing everything it can - on behalf of all shareholders - to ensure shareholders' voices are not unfairly silenced."

The defiant position taken by the Chair is consistent with Management and the Chair's actions throughout the proxy contest process. In its release on January 21, the Concerned Shareholder alerted its fellow shareholders to Management's legal counsel rejecting or declining to accede to any of the following routine requests, including that:

- The Board would not approve any material transactions prior to the
Meeting without shareholder approval,
- No attempt be made to postpone or adjourn the Meeting,
- Management refrain from altering or waiving the proxy delivery
- The Chair grant the Concerned Shareholder access to the proxy records
prior to the Meeting and would agree to conventional meeting procedure
and protocols relating to governance of the Meeting, and
- Most significantly, that Management would agree to the appointment of
a mutually acceptable Independent Chair to preside over the Meeting.

The Concerned Shareholder disputes that the appointed Meeting Chair, Mr. Alfred Sorensen, qualifies as independent in the context of the issues to be considered at the Meeting. Mr. Sorensen has at all relevant times been a member of the incumbent Board that considered the issues in play in July, 2009, he was a part of the Board that approved the Management Circular for the Meeting, and he is, by Sierra's own admission in its news releases, a participant in Management's solicitation of proxies for this Meeting. In the context of the issues before the Meeting, Mr. Sorensen is clearly not independent as he is a sitting Director and has allied himself with management in opposing the agenda put forward by the Concerned Shareholder. Under such circumstances, it is implausible to maintain that he could reasonably be expected to preside fairly and dispassionately over the Meeting.

About the Concerned Shareholder

The Concerned Shareholder is Exploration Capital Partners 2005 Limited Partnership ("Exploration"). Exploration and Rick Rule, President of Resource Capital Investments Corp., General Partner to Exploration, are among the largest and most experienced investors in the small to mid-cap geothermal space. The Concerned Shareholder holds 6,927,019 shares or approximately 5.40% of Sierra's issued and outstanding shares as of the Record Date.

Contact Information

  • Investors:
    Kingsdale Shareholder Services Inc.
    Kingsdale Communications Inc.
    Joel Shaffer