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benefited the community at large, and likely would have been more
difficult to implement and maintain if Kohler were public.
Accordingly, Kohler has never registered its stock with the
Securities and Exchange Commission and has never publicly sold
its stock. Kohler stock has never traded on any organized
securities exchange. Small lots, usually just one or two shares,
were sold periodically in private transactions. Bid and ask
prices for shares of Kohler stock were listed in the National
Quotations Bureau’s pink sheets. About 36 trades in Kohler stock
were listed in the pink sheets from December 1993 through March
31, 1998.
Kohler has paid dividends to its shareholders at least
annually since about 1900. Kohler’s stated policy was to
reinvest at least 90 percent of its earnings in its business each
year, with 7 to 10 percent of earnings paid to shareholders as
dividends. In recessionary times, Kohler’s policy was to
continue paying dividends even if it meant not reinvesting the 90
percent. Kohler management knew that the shareholders often
depended on their dividends for their well-being. Receiving
dividends was the primary way a Kohler shareholder could receive
a return on his or her investment because the company was
private. The shareholder could not simply sell the shares
whenever he or she wished and could not count on appreciation in
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Last modified: May 25, 2011