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#305310 - 01/19/05 05:33 PM Offering Bank Stock as a Prize
Anonymous
Unregistered

**I had posted this in another forum but no one has responded, so I thought I would try here to see if someone else might be able to help.***
Our bank is going to conduct an essay writing contest for juniors in high school. First prize is 20 shares of company stock plus $100.00 cash. The contest is going to advertised in the newspaper. There's no mention of products, etc. so it seems pretty straight forward. However I am not sure about the stock. Is there anything we should be concerned about in offering the stock as a prize? Thank you.

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General Discussion
#305311 - 01/19/05 06:06 PM Re: Offering Bank Stock as a Prize
Rocky P Offline
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Joined: Jun 2003
Posts: 7,460
Florida
Probably irrelevant, but might there be some prohibition for the minor owning and voting stock in their name?
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#305312 - 01/19/05 06:09 PM Re: Offering Bank Stock as a Prize
Anonymous
Unregistered

The most obvious problem is the ownership of stock. Since a junior in high school is not likely to be 18, he/she cannot own stock in their own name. A guardian must be found to hold the stock or an UTMA set up.

In addition, assuming your bank stock is not publicly traded on the NYSE or NASDAQ, you must provide them with all shareholder information/communication (many closely held banks are hesitant to release any information!) and deal with the possibility of them selling the stock to anyone of their choice.

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#305313 - 01/20/05 12:39 AM Re: Offering Bank Stock as a Prize
HRH Dawnie Offline
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HRH Dawnie
Joined: Aug 2002
Posts: 7,353
Anchorage Alaska
Geeze for our bank that would be a $47,000 prize. Can I enter? Please?

A minor would need a custodian named on the stock with them. They can't vote, but the custodian can. The stocks are considered assets of the child in terms of financial aid for college, and the ownership could throw them over the limit for certain grants. Maybe not a big deal, maybe a huge deal if the stocks can't be sold right away.

All of the other issues above from anon are of concern too.

Can't ya just give them the cash? Or a savings bond in their name, which would cost you less, and be MUCH easier to deal with in the long run?
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#305314 - 01/20/05 02:39 PM Re: Offering Bank Stock as a Prize
renniks Offline
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renniks
Joined: Sep 2003
Posts: 2,162
New England
Quote:

Geeze for our bank that would be a $47,000 prize.




Dawnie, I just can't help but comment...your bank stock is worth $470 a share????

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#305315 - 01/20/05 03:01 PM Re: Offering Bank Stock as a Prize
rlcarey Online
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rlcarey
Joined: Jul 2001
Posts: 80,359
Galveston, TX
It's not unusual for closely held private bank stock to be worth $x,xxxs a share.
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#305316 - 01/20/05 11:19 PM Re: Offering Bank Stock as a Prize
Jan94 Offline
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Joined: Mar 2001
Posts: 828
USA
Thank you all for your input and the person creating this contest did go back and check and found the same information you provided. So she decided to eliminate the stock as a prize and is now offering cash ($500 max for 1st prize). However, in thinking about this something else came up. As a parent of a high school student I have had to sign releases for the school to use my daughter's picture or her name in any publication like the newspaper. It is possible that the bank may want to publicize the winners and maybe print their picture and essay in a future newspaper article. I know that there are privacy concerns but since the students are over 13 and this is not an online contest COPA doesn't apply. But since they are still minors does the bank need to disclose anything about using their images, etc.? I found an interesting website by doing a search www.caru.org (Children's Advertising Review Unit)and it does discuss some of this but mostly as it relates to online activities. Would anyone else have any information or experience with this that they might be able to share? Just want to make sure we are handling this appropriately. It may be I'll need to turn this over to legal, but thought I would ask here first since you guys are always so helpful. Thank you!

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#305317 - 01/22/05 01:38 AM Re: Offering Bank Stock as a Prize
HRH Dawnie Offline
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HRH Dawnie
Joined: Aug 2002
Posts: 7,353
Anchorage Alaska
Quote:

Dawnie, I just can't help but comment...your bank stock is worth $470 a share????


No, it's trading (or was yesterday) $2,350 a share. They said 20 shares AND 100 bucks

I still want to enter if it's my bank stock
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Dawn Coursey VP/CRA Queen

CRA Rating is in...Oh who cares...I'm home with the baby.

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#305318 - 01/24/05 05:05 PM Re: Offering Bank Stock as a Prize
renniks Offline
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renniks
Joined: Sep 2003
Posts: 2,162
New England
Wow, my math skills have certainly gone down hill since I started working in compliance! What a sheltered life I've led...I've never seen a bank stock trade at that price. (At least not any I have ever worked for!!!)

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#305319 - 01/24/05 10:08 PM Re: Offering Bank Stock as a Prize
HRH Dawnie Offline
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HRH Dawnie
Joined: Aug 2002
Posts: 7,353
Anchorage Alaska
We're kinda profitable and desirable to own. Most of us who work here just wish we could afford a small piece of the paper the certificates are written on
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Dawn Coursey VP/CRA Queen

CRA Rating is in...Oh who cares...I'm home with the baby.

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#305320 - 01/25/05 04:24 AM Re: Offering Bank Stock as a Prize
rlcarey Online
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rlcarey
Joined: Jul 2001
Posts: 80,359
Galveston, TX
Dawnie,

Just curious - your bank is not publicly held - right?
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com

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#305321 - 01/26/05 11:33 PM Re: Offering Bank Stock as a Prize
HRH Dawnie Offline
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HRH Dawnie
Joined: Aug 2002
Posts: 7,353
Anchorage Alaska
http://www.investorguide.com/cgi-bin/research.cgi?name=FBAK

While the majority of our stock is held by the family, you can also buy a share or 20 if you'd like We are public.
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Dawn Coursey VP/CRA Queen

CRA Rating is in...Oh who cares...I'm home with the baby.

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#305322 - 01/27/05 02:38 AM Re: Offering Bank Stock as a Prize
rlcarey Online
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rlcarey
Joined: Jul 2001
Posts: 80,359
Galveston, TX
Cool - I think I'll pick up a 100 shares tomorrow
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com

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#305323 - 01/27/05 03:45 AM Re: Offering Bank Stock as a Prize
Jokerman Offline
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Joined: Nov 2003
Posts: 12,846
Dawnie, what is their reasoning for not completing a 100 for 1 split? If they want to be traded, why do they make it unaffordable for most investors?

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#305324 - 01/27/05 06:52 PM Re: Offering Bank Stock as a Prize
HRH Dawnie Offline
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HRH Dawnie
Joined: Aug 2002
Posts: 7,353
Anchorage Alaska
The majority of the stock is held by the family, although there are many folks who own a share or two, and we do through our profit sharing retirement portfolio. The major shareholders just haven't felt the need. It's a very profitable stock to hold with strong dividends, etc.
_________________________
Dawn Coursey VP/CRA Queen

CRA Rating is in...Oh who cares...I'm home with the baby.

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