ESCO Electronics Corporation (later renamed ESCO Technologies Inc.) was spun off from Emerson Electric Co. in October of 1990.
On October 19, 1990, Emerson Electric Co. distributed a trust receipt for one share of ESCO Electronics Corporation for each 20 shares of Emerson Electric Co. common stock held by Emerson stockholders of record on October 5, 1990. For tax reporting purposes, this distribution was considered to be a taxable dividend equal to $4.579 per share. In November of 1999, ESCO announced the conversion of the trust receipts to common stock.
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Effective September 1, 2016, ESCO has changed the way in which it registers its common stock by adopting the Direct Registration System, or DRS. Under DRS, shareholders hold their shares in electronic, book-entry form, which is basically the same way shares are held in a brokerage account, rather than as traditional stock certificates.
In the future, when shareholders receive shares of ESCO stock, they will be sent a written advice indicating the number of shares Computershare has registered in their name. DRS has several advantages:
- Stockholders avoid the risk of losing their stock certificates, and the time-consuming and costly process of replacing lost or stolen certificates.
- Stockholders are able to transfer shares more quickly and easily, without having to send in physical stock certificates.
- By creating an online account with Computershare, stockholders will be able to obtain information about their DRS stock holdings online, as well as transfer or sell shares through their Computershare account without having to use a broker as explained in the next question below.
Shareholders may also elect to give their currently-held ESCO stock certificates all of the above advantages by sending their paper stock certificates to Computershare to have the shares deposited into a personal DRS account.
Please note that you may still elect to receive paper certificates in lieu of DRS registration, but there will be an additional charge for this and the above benefits of DRS will not apply to those shares.
If you hold stock certificates (paper), you may sell these shares at any time through a broker. If you are a current employee, the sale of shares may be restricted to be within an applicable trading window.
In addition, shareholders who have electronic shares in a DRS account can have Computershare sell the shares without having to use a broker (although Computershare does charge a fee for stock sales). Please see the previous question regarding the Direct Registration of Shares (DRS) for a more detailed explanation of the DRS process and its advantages.