So how would you make all this happen? What sort of structure and procedures would have to be in place? How would reward shares be bought and allocated? How would the custody of such shares be organized? What sort of overall controls would the process demand, not only to inspire confidence among the new shareholders but to win the SEC’s necessary OK?
Nowadays, in the shareholder services community, there might be a number of suitable vehicles for awarding and keeping track of reward shares. At the time we’re speaking of there was but one, the direct stock purchase plan that had become and still is a standard offering of transfer agents (TA’s) for issuers of publicly traded stock. Through such a plan shares could be bought on the open market, if necessary, allocated in whole and fractional amounts, and held in a secure, orderly manner.
So the basic vehicle was there. But how would a standard stock purchase system be induced to function in a different context? How would the hotel’s reservation system “talk” to the TA system? And what about the new shareholders themselves? Through what mechanism would they be addressed and given the reports that would be due to them from time to time?
It was questions such as these that brought us to the scene, through an inquiry from a transfer agent. For many years we’d been known, as we still are known, as specialists in non-routine – sometimes called “odd-ball” processing - as it relates to various shareholder services. Given such a background, could we come up with a way to make Mr. Kitchen’s idea work? The challenge was a big one. And our answer, after we’d taken a hard look at what would be involved, was “yes.”Next » « Back