TWO PROPOSED STEPS TOWARD A BETTER RESOLUTION OF THE “STRANDED DRP PROBLEM”

The first, and perhaps the most urgently needed step, we say, is for issuers to review the Terms and Conditions governing their own plan, and revise them so that any time the Plan balance is less than one full share, the Plan Agent will, henceforth, liquidate the fractional share, send a check, and close the account. And, by the way, your own plan may actually call for this now…but the agent is not following through, so do have a look. We have looked at lots and lots of shareholder records – and we have seen lots and lots of companies where a significant percentage of the registered holders have fractional shares only as a result of bad drafting and/or because no one watching…Please note that we are not expecting T-As to do this for nothing…But demanding an eight dollar fee to sell – plus keeping the sales proceeds besides…or in the alternative, charging the company ten bucks a year to maintain our seven-dollar “investment” does not make a bit of sense.

But, Because We Still Love the Idea of Dividend Reinvestment Plans – and Better, Those Direct Stock Purchase Plans That Allow Ordinary People to Invest in Companies They Admire, Without Needing a Brokerage Account – and Because We Still Love Transfer Agents Too – We Have a Bigger and Better Plan to Put on the Table:

Recently, we approached the Board of the Shareholder Services Association, to see if they would consider forming an advisory board that would oversee a service that would receive - and consolidate onto a single, quarterly e-mailed statement – a summary of each and every DRP and DSPP position held by “consenting participants” for all stock Plans where there are “consenting agents.”

The key here, is that plan participants would have to consent to receiving ALL statements and ALL voting materials ONLY over the Internet. Aside from the added convenience to investors that a consolidated, easily accessible statement would bring to the table, this, of course, will have the added benefit of saving virtually all of the postage, stationery and handling costs – making these plans far more affordable to issuers - as well as to investors too, we would presume.

There is another plus for plan agents here – in that an association like the SSA would be able to ‘market’ the availability – and the benefits of these plans – something that issuers, or Plan agents, can not do on their own under SEC rules.

We offered to help the SSA manage the entire process – by drafting RFPs to potential service providers – and by helping to develop a new fee structure – and new marketing materials, aimed at issuers AND at investors – all of which would be developed via an open, competitive billing process.

The alternative, we firmly believe, is to watch today’s Plans continue to wither and ultimately die…

READERS: We have not raised this yet with the top-four T-As, who manage the overwhelming majority of DRPs – but we will do so soon. If this makes sense to you, please contact your own best contact at your own Plan Agent – and ask them to seriously consider this proposal…And if anyone else thinks they can do a better job here, we will gladly step aside – and work with them in any way we can…