BBS: The Executive Network Information System - New York 914 667-4567 Date: 02-19-93 (04:30) Number: 16784 To: ALL Refer#: NONE From: DOUG D Read: NO Subj: DRIP FAQ Status: PUBLIC MSG Conf: Misc.Invest (1291) Direction: FORWARD re: DRIPs List Last Post: 2/17/93 by: Doug DePrenger, et al. at: doug_d@sdd.hp.com What is a DRIP? DRIP stands for Dividend Reinvestment Plan. DRIP is a company- sponsored way of purchasing shares of stock through the company with no brokerage fees. The dividends from the stock can be reinvested to purchase additional stock. New stock can also be purchased. Some companies require initial purchase of stock through a broker while others allow first time purchase. Some companies give you a discount on the price of the stock when purchased through the DRIP program. Many of these companies have banks administer their programs. For example, Exxon has First Chicago Trust run their account. How to buy: * Contact the DRIP administrator (the phone number listed below). They have the most up-to-date information on purchase provisions. * A.G. Edwards broker has a flat 16% of the share price special for ordering one share of stock. * Dean Witter's commission is 10% of purchase price or $50, whichever is lower. * The NAIC (National Association of Investors Corp) has a DRP program for several companies (106 as of 11/1/92). You must be a member of NAIC, but they will set you up for $5 per company. The address is NAIC Box 220 Royal Oak, Michigan 48067 (313)-543-0612 (phone) (313)-543-8442 (fax) Dues are $32/year. How to sell: * The DRIP administrator will redeem your shares. Some companies only redeem shares once a month, thus you may not get the best price for your shares. * One could request a certificate for N number of shares and sell them through a broker. Advantages: * No brokerage commissions (except possibly on the initial purchase). * Some companies offer stock at a discount. Disadvantages: * Record keeping of the dividend reinvestments (for tax purposes) can be monumental. * Stocks are generally bought/sold on a fixed day, every month...i.e. little control over price. Some companies it is done per quarter. * Some companies must be notified in writing in order to sell. * Some companies send you the stock certificates so YOU sell them. Books: "Directory of Companies Offering Dividend Reinvestment Plans" by: Evergreen Enterprises, Laurel MD. 20725-0763 $24.95 "Buying Stocks Without a Broker" by: Charles B. Carlson Lists 900 companies/closed-end funds that offer DRPS. Company profile and some plan-specifics are included. Newsletters: "The Moneypaper" 1010 Mamaroneck Ave Mamaroneck, NY 10543 Other publications: "Directory of Dividend Reinvestment Plans" by: Joseph Tigue publisher: Standard & Poors, NY Specials: Charles Schwab has DRP for *all* stocks purchased through them. For each transaction: commission: 3.5% or $3.50 (whichever is LESS) for dividends less than $250; 1.5% for dividends more than $250 Hints: * The local library may have copies of the books listed. They may also have the newsletters listed. * Contact shareholders relations dept of company (number shown below) and get a DRP prospectus. Get an annual report while you are at it. The List: * Stock symbols are in parenthesis * minimum shares: this is the minimum number of shares the purchaser must already own (usually bought through a broker) before joining DRP program. (nnnn) = minimum shares Y = 1st share purchases direct %discount MIN/MAX COMPANY NAME INVESTMENT PHONE Abbott Labs (ABT) 10/5000 (1) 708-937-3923 * Medical instruments manufacturer Continued in the next message...