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FILED PURSUANT TO RULE 424(b)(3)
REGISTRATION NO. 333-38517
[LOGO OF IMPERIAL CREDIT MORTGAGE HOLDINGS, INC.]
DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN
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TO THE STOCKHOLDERS:
Attached is the Imperial Credit Mortgage Holdings, Inc. Dividend
Reinvestment and Stock Purchase Plan (the "Plan"). This Plan provides the
stockholders of Imperial Credit Mortgage Holdings, Inc. (the "Company") a
simple and convenient method of investing cash dividends in additional shares
of Common Stock of the Company at a market discount or to make additional cash
investments in new shares each month. Carefully read the attached Prospectus
for more information about the Dividend Reinvestment and Stock Purchase Plan.
PARTICIPATION IS EASY AND FLEXIBLE. You can reinvest all or just a portion
of your dividend income each quarter. And you can make additional cash
investments in Imperial Credit Mortgage Holdings, Inc. Common Stock--from a
minimum of $50 up to $10,000 each month (or more pursuant to the Company's
consent)--whether or not you're currently reinvesting dividends. Either option
is available once you enroll in the Plan.
DISCOUNTED PURCHASE PRICES ARE AVAILABLE ON REINVESTED DIVIDENDS. Currently,
common shares you purchase from Imperial Credit Mortgage Holdings, Inc. under
this Plan with reinvested dividends that are newly issued will be priced at a
3% discount. Common shares you purchase with additional cash investments (that
do not exceed $10,000) and that are purchased directly from the Company will
be priced at 97.5% (subject to change) of the average of the high and low
sales prices of the Common Stock as reported on the American Stock Exchange
for the three trading days immediately preceding the Investment Date (as
described in the Plan).
PURCHASES ARE FREE OF NORMAL TRADING COMMISSIONS AND FEES. As long as shares
are issued by Imperial Credit Mortgage Holdings, Inc., there will be no
brokerage commissions to pay. Currently, brokerage commissions apply to open
market transactions.
THE PLAN ADMINISTRATOR HANDLES ALL THE PAPER WORK SO RECORD-KEEPING IS EASY.
Once you enroll, the Plan Administrator will send you regular account
statements and provide free custodial services for all shares purchased under
the Plan, protecting you against loss, theft or destruction of stock
certificates.
ENROLLING IN THE PLAN IS SIMPLE. This Prospectus provides a detailed
description of the Plan and all of your participation options. If you are
presently enrolled in the existing Imperial Credit Mortgage Holdings, Inc.
Dividend Reinvestment and Stock Purchase Plan, then you will continue to be
enrolled in the Plan unless you notify the Company otherwise. After reviewing
the Plan, just complete the attached Authorization Form and return it in the
postage-paid envelope provided, or, if your stock is registered in the name of
a nominee, contact your bank or broker for further information. Your
participation can begin with the Company's next dividend payment, as long as
we receive your written authorization by the next Record Date (as described in
the Plan).
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PROSPECTUS
[LOGO OF IMPERIAL CREDIT MORTGAGE HOLDINGS, INC.]
DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN
The Dividend Reinvestment and Stock Purchase Plan (the "Plan") of Imperial
Credit Mortgage Holdings, Inc. (the "Company") provides holders of record and
beneficial owners of shares of Common Stock, $.01 par value, of the Company
(the "Common Stock") with a simple and convenient method of investing cash
dividends in additional shares of stock at a current 3% discount (subject to
change) from the market price (as determined in accordance with the Plan), to
the extent shares are acquired directly from the Company. If the shares are
acquired in open market transactions by the Plan Administrator (as defined in
Question 4), the discount will not be available. Common Stock may also be
purchased on a monthly basis with optional cash payments made by participants
in the Plan at a current 2.5% discount (subject to change) from the market
price (as determined in accordance with the Plan). Each of the discounts is
subject to change (but will not vary from the range of 0% to 5%) from time to
time or discontinuance at the Company's discretion after a review of current
market conditions, the level of participation in the Plan and the Company's
current and projected capital needs. PARTICIPANTS MAY ASCERTAIN THE APPLICABLE
DISCOUNT RATE BY CONTACTING THE COMPANY'S INVESTOR RELATIONS DEPARTMENT AT
(714) 438- 2100.
Brokers and nominees may reinvest dividends and make optional cash payments
on behalf of beneficial owners. Those holders of Common Stock who do not
participate in the Plan will receive cash dividends, as declared, in the usual
manner.
To enroll in the Plan, simply complete the enclosed Authorization Form and
return it in the envelope provided. Enrollment in the Plan is entirely
voluntary and participants in the Plan may terminate their participation at
any time. A broker, bank or other nominee may reinvest dividends and make
optional cash payments on behalf of beneficial owners. Stockholders who are
presently enrolled in the existing Imperial Credit Mortgage Holdings, Inc.
Dividend Reinvestment and Stock Purchase Plan will continue to be enrolled in
the Plan unless you notify the Company otherwise. The Plan amends and restates
in its entirety the existing Imperial Credit Mortgage Holdings, Inc. Dividend
Reinvestment and Stock Purchase Plan.
A participant in the Plan may obtain additional shares of Common Stock by
(i) reinvesting dividends on all or part of the shares of Common Stock held by
the participant, (ii) making optional cash payments of not less than $50 and
up to $10,000 per month, whether or not dividends on shares held by the
participant are being reinvested, and (iii) making optional cash payments in
excess of $10,000 per month with the permission of the Company whether or not
dividends on shares held by the participant are being reinvested.
(Continued on next page)
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is November 3, 1997
<PAGE>
(Continued from previous page)
Optional cash payments in excess of $10,000 may be made only pursuant to an
accepted request for waiver. It is expected that a portion of the shares of
Common Stock available for issuance under the Plan will be issued pursuant to
such waivers. The price to be paid for shares of Common Stock purchased under
the Plan in excess of $10,000 pursuant to the optional cash payment feature of
the Plan will be a price reflecting a discount of 0% to 5% (the "Waiver
Discount") (see Question 18) from the applicable Market Price (as defined in
Question 13). Currently, under the Plan, the price per share purchased in
excess of $10,000 will be at a 2.5% discount and shares may be purchased
either directly from the Company or on the open market. There is no pre-
established maximum limit applicable to optional cash payments that may be
made pursuant to accepted requests for waiver. Optional cash payments that do
not exceed $10,000 and the reinvestment of dividends in additional shares of
Common Stock will not be subject to the Waiver Discount. Participants in the
Plan may request that any or all of their shares held in Plan accounts be sold
by the Plan Administrator. See Question 28.
To the extent that shares of Common Stock issued hereunder are authorized
but previously unissued shares rather than shares acquired in the open market,
the Plan will raise additional capital for the Company. The Company currently
intends to issue such shares and, therefore, the Plan is expected to raise
capital for the Company. Each month a portion of the shares available for
issuance under the Plan may be purchased by owners of shares (including
brokers or dealers) who, in connection with any resales of such shares, may be
deemed to be underwriters within the meaning of the Securities Act of 1933, as
amended (the "Securities Act"). See "Plan of Distribution." These sales will
be effected through the Company's ability to waive limits applicable to the
amounts which participants may invest pursuant to the Plan's optional cash
payment feature.
From time to time, financial intermediaries, including brokers and dealers,
may engage in positioning transactions in order to benefit from the discount
from market price of the Common Stock acquired through the reinvestment of
dividends under the Plan. Such transactions may cause fluctuations in the
trading volume of the Common Stock. Financial intermediaries which engage in
positioning transactions may be deemed to be underwriters within the meaning
of the Securities Act. See "Plan of Distribution."
This Prospectus relates to 1,376,430 shares of Common Stock offered hereby
and registered for sale under the Plan. Participants should retain this
Prospectus for future reference.
This Prospectus does not constitute an offer to sell or a solicitation of an
offer to buy any of the securities offered hereby in any jurisdiction to any
person to whom it is unlawful to make such an offer or solicitation in such
jurisdiction. No person has been authorized to give any information or to make
any representations other than those contained in this Prospectus in
connection with the offering made hereby, and if given or made, such
information or representations must not be relied upon as having been
authorized by the Company. Neither the delivery of this Prospectus nor any
sale made hereunder shall, under any circumstances, create any implication
that information herein is correct as of any time subsequent to the date
hereof.
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TABLE OF CONTENTS
<TABLE>
<S> <C>
AVAILABLE INFORMATION....................................................... 4
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE............................. 4
IMPERIAL CREDIT MORTGAGE HOLDINGS, INC...................................... 5
SUMMARY OF PLAN............................................................. 5
THE PLAN.................................................................... 7
PURPOSE..................................................................... 7
OPTIONS AVAILABLE TO PARTICIPANTS........................................... 7
ADVANTAGES AND DISADVANTAGES................................................ 8
ADMINISTRATION.............................................................. 9
PARTICIPATION............................................................... 9
PURCHASE AND PRICES OF SHARES............................................... 14
DIVIDENDS ON FRACTIONS...................................................... 20
CERTIFICATES FOR COMMON SHARES.............................................. 20
WITHDRAWALS AND TERMINATION................................................. 20
OTHER INFORMATION........................................................... 21
DIVIDENDS................................................................... 26
USE OF PROCEEDS............................................................. 26
PLAN OF DISTRIBUTION........................................................ 26
LEGAL OPINION............................................................... 27
EXPERTS..................................................................... 27
INDEMNIFICATION............................................................. 27
GLOSSARY.................................................................... 28
SCHEDULE A.................................................................. 30
</TABLE>
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AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") and, in accordance
therewith, files periodic reports and other information with the Securities
and Exchange Commission (the "Commission"). Reports, proxy statements and
other information concerning the Company can be inspected and copied, at
prescribed rates, at the public reference facilities of the Commission at
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 and at the
following regional offices of the Commission: New York (Seven World Trade
Center, Suite 1300, New York, New York 10048), and Chicago (Northwestern
Atrium Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661-
2511), and copies of such material can be obtained from the Public Reference
Section of the Commission at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates. The Commission maintains a web
site that contains reports, proxy and information statements and other
information regarding registrants that file electronically with the
Commission. The address of the site is http://www.sec.gov. Reports, proxy
statements and other information concerning the Company also may be inspected
at the offices of the American Stock Exchange where the Company's Common Stock
is listed. This Prospectus does not contain all information set forth in the
Registration Statement and Exhibits thereto which the Company has filed with
the Commission under the Securities Act and to which reference is hereby made.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Securities and Exchange Commission by
the Company are incorporated by reference in this Prospectus: (1) the
Company's Annual Report on Form 10-K for the year ended December 31, 1996; (2)
the Company's Quarterly Report on Form 10-Q for the quarter ended March 31,
1997; (4) the Company's Quarterly Report on Form 10-Q for the quarter ended
June 30, 1997; (5) the Company's current report on Form 8-K filed on October
17, 1997; and (6) the section of the Company's Registration Statement on Form
S-11, filed with the Commission on October 25, 1996 and as amended by
Amendment No. 1 filed with the Commission on November 4, 1996, entitled
"Description of Securities."
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior
to the termination of the offering of the securities offered hereby shall be
deemed incorporated by reference into this Prospectus and to be a part hereof
from the date of filing such documents.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be modified or superseded for purposes
of this Prospectus to the extent that a statement contained herein or in any
other subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute part of this Prospectus.
Any person receiving a copy of this Prospectus may obtain without charge,
upon request, a copy of any of the documents incorporated by reference herein,
except for the exhibits to such documents. Written requests should be
addressed to Investor Relations, Imperial Credit Mortgage Holdings, Inc.,
20371 Irvine Avenue, Santa Ana Heights, California 92707. Telephone requests
may be directed to Investor Relations at (714) 438-2100.
4
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IMPERIAL CREDIT MORTGAGE HOLDINGS, INC.
Imperial Credit Mortgage Holdings, Inc. is a specialty finance company
which, together with its subsidiaries and related companies, operates three
businesses: (1) the Long-Term Investment Operations, (2) the Conduit
Operations, and (3) the Warehouse Lending Operations. The Long-Term Investment
Operations invests primarily in non-conforming residential mortgage loans and
securities backed by such loans. The Conduit Operations purchases and sells or
securitizes primarily non-conforming mortgage loans, and the Warehouse Lending
Operations provides warehouse and repurchase financing to originators of
mortgage loans. The Company is organized as a real estate investment trust
("REIT") for federal income tax purposes, which generally allows it to pass
through qualified income to stockholders without federal income tax at the
corporate level. The Company's principal executive office is located at 20371
Irvine Avenue, Santa Ana Heights, California 92707.
SUMMARY OF PLAN
The Plan provides owners of Common Stock with a convenient and attractive
method of investing cash dividends (in some cases, at a discount from the
Market Price (as defined in Question 13) and without payment of any brokerage
commission or service charge), and investing optional cash payments in
additional shares of Common Stock. See Question 22 regarding brokerage
commissions. As of the date of this Prospectus, the price to be paid for
shares of Common Stock purchased under the Plan will be a price reflecting (i)
a discount of 3% (subject to change) from the Market Price for the
reinvestment of cash dividends to the extent shares are purchased directly
from the Company, (ii) no discount (subject to change) from the market price
for the reinvestment of cash dividends or the investment of optional cash
payments, to the extent shares are purchased on the open market, (iii) a 0% to
5% discount, which is currently at 2.5%, (subject to change) from the Market
Price for the investment of optional cash payments of up to $10,000, to the
extent purchased directly from the Company, and (iv) a discount of 0% to 5%
(the "Waiver Discount") from the Market Price for the investment of optional
cash payments that exceed $10,000. Each of the discounts is subject to change
(but will not vary from the range of 0% to 5%) from time to time or
discontinuance at the Company's discretion after a review of current market
conditions, the level of participation in the Plan and the Company's current
and projected capital needs. PARTICIPANTS MAY ASCERTAIN THE APPLICABLE
DISCOUNT RATE BY CONTACTING THE COMPANY'S INVESTOR RELATIONS DEPARTMENT AT
(714) 438-2100. In addition, Participants are currently responsible for their
share of brokerage commissions incurred in connection with the purchase of
shares on the open market. However, the Board of Directors may in the future
determine that the Company will pay such brokerage commissions on behalf of
Participants if, based on the advice of tax counsel or a favorable ruling from
the Internal Revenue Service ("IRS"), it determines that the Company's payment
of such expenses will not jeopardize the Company's status as a REIT.
Subject to the availability of shares of Common Stock registered for
issuance under the Plan, there is no minimum or maximum limitation on the
amount of dividends a Participant may reinvest under the Plan. See Question 2.
Participants electing to invest optional cash payments in additional shares
of Common Stock are subject to a minimum per month purchase limit of $50 and a
maximum per month purchase limit of $10,000 (subject to waiver). See Question
18. Optional cash payments in excess of $10,000 may be made only upon
acceptance by the Company of a completed Request for Waiver form from a
Participant. See Question 18. Each month, at least three business days prior
to each record date (as defined in Question 19), the Company will establish
the Waiver Discount (as defined in Question 18), applicable to optional cash
payments that exceed $10,000. The Waiver Discount, which may vary each month,
will be established in the Company's sole discretion after a review of
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current market conditions, the level of participation in the Plan and the
Company's current and projected capital needs. Optional cash payments that do
not exceed $10,000 and the reinvestment of dividends in additional shares of
Common Stock will not be subject to the Waiver Discount. Optional cash
payments of less than $50 and that portion of any optional cash payment which
exceeds the maximum monthly purchase limit of $10,000, unless such limit has
been waived, are subject to return to the Participant without interest.
Participants may request that any or all shares held in the Plan be sold by
the Plan Administrator on behalf of such Participants. See Question 28.
Subject to the availability of shares of Common Stock registered for
issuance under the Plan, there is no total maximum number of shares that can
be issued pursuant to the reinvestment of dividends and no pre-established
maximum limit applies to optional cash payments that may be made pursuant to
Requests for Waiver. As of the date hereof, 1,376,430 shares of Common Stock
have been registered and are available for sale under the Plan.
The Company expects to grant Requests for Waiver to financial
intermediaries, including brokers and dealers, and other Participants in the
future. Grants of Requests for Waiver will be made in the sole discretion of
the Company based on a variety of factors, which may include: the Company's
current and projected capital needs, the alternatives available to the Company
to meet those needs, prevailing market prices for Common Stock, general
economic and market conditions, expected aberrations in the price or trading
volume of the Common Stock, the potential disruption of the price of the
Common Stock by a financial intermediary, the number of shares of Common Stock
held by the Participant submitting the waiver request, the past actions of a
Participant under the Plan, the aggregate amount of optional cash payments for
which such waivers have been submitted and the administrative constraints
associated with granting such waivers. If such Requests for Waiver are
granted, a portion of the shares available for issuance under the Plan will be
purchased by Participants (including brokers or dealers) who, in connection
with any resales of such shares, may be deemed to be underwriters within the
meaning of the Securities Act. See "Plan of Distribution."
To the extent that Requests for Waiver are granted, it is expected that a
greater number of shares will be issued under the optional cash payment
feature of the Plan as opposed to the dividend reinvestment feature of the
Plan.
Financial intermediaries may purchase a significant portion of the shares of
Common Stock issued pursuant to the optional cash payment feature of the Plan.
The Company does not have any formal or informal understanding with any such
organizations and, therefore, the extent of such financial intermediaries'
participation under the Plan cannot be estimated at this time. Participants
that are financial intermediaries that acquire shares of Common Stock under
the Plan with a view to distribution of such shares or that offer or sell
Shares for the Company in connection with the Plan may be deemed to be
underwriters within the meaning of the Securities Act.
From time to time, financial intermediaries, including brokers and dealers,
may engage in positioning transactions in order to benefit from the discount
from the Market Price of the shares of Common Stock acquired through the
reinvestment of dividends under the Plan. Such transactions may cause
fluctuations in the trading volume of the Common Stock. Financial
intermediaries which engage in positioning transactions may be deemed to be
underwriters within the meaning of the Securities Act. The Plan is intended
for the benefit of investors in the Company and not for individuals or
investors who engage in transactions which may cause aberrations in the price
or trading volume of the Common Stock.
6
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THE PLAN
The existing Imperial Credit Mortgage Holdings, Inc. Dividend Reinvestment
and Stock Purchase Plan (the "Original Plan") was adopted by the Board of
Directors of Imperial Credit Mortgage Holdings, Inc. (the "Company") on
February 14, 1997 and was amended and restated by the Board of Directors on
October 21, 1997, including but not limited to authorizing additional shares
to be issued under the Plan. Because the Company currently expects to continue
the Plan indefinitely, it expects to authorize for issuance and register under
the Securities Act additional shares from time to time as necessary for
purposes of the Plan. The following questions and answers explain and
constitute the Plan. Stockholders who do not participate in the Plan will
receive cash dividends, as declared, and paid in the usual manner. A person
participating in the Original Plan will be enrolled automatically in the Plan,
unless the person gives written notice to the contrary. See Question 11.
PURPOSE
1. WHAT IS THE PURPOSE OF THE PLAN?
The primary purpose of the Plan is to provide eligible holders of shares of
Common Stock of the Company with a convenient and simple method of increasing
their investment in the Company by investing cash dividends in additional
shares of Common Stock without payment of any brokerage commission or service
charge and at a discount from the Market Price (as defined in Question 13), to
the extent shares are purchased directly from the Company, and by investing
optional cash payments in additional shares of Common Stock at a discount from
the Market Price (and without payment of any brokerage commission or service
charge, to the extent shares are purchased directly from the Company). See
Question 5 for a description of the holders who are eligible to participate in
the Plan. The Plan may also be used by the Company to raise additional capital
through the sale each month of a portion of the shares available for issuance
under the Plan to owners of shares (including brokers or dealers) who, in
connection with any resales of such shares, may be deemed to be underwriters.
These sales will be effected through the Company's ability to waive
limitations applicable to the amounts which Participants (as defined in
Question 2) may invest pursuant to the Plan's optional cash payment feature.
See Question 18 for information concerning limitations applicable to
optional cash payments and certain of the factors considered by the Company in
granting waivers. To the extent shares are purchased from the Company under
the Plan, it will receive additional funds for general corporate purposes. The
Plan is intended for the benefit of investors in the Company and not for
individuals or investors who engage in transactions which may cause
aberrations in the price or trading volume of Common Stock. From time to time,
financial intermediaries may engage in positioning transactions in order to
benefit from the discount from the Market Price of the shares of Common Stock
acquired through the reinvestment of dividends under the Plan. Such
transactions may cause fluctuations in the trading volume of the Common Stock.
The Company reserves the right to modify, suspend or terminate participation
in the Plan by otherwise eligible holders of Common Stock in order to
eliminate practices which are not consistent with the purposes of the Plan.
OPTIONS AVAILABLE TO PARTICIPANTS
2. WHAT OPTIONS ARE AVAILABLE TO ENROLLED PARTICIPANTS?
Dividend Reinvestment
---------------------
Eligible holders of Common Stock who wish to participate in the Plan (each a
"Participant") may elect to have cash dividends paid on all or a portion of
their shares of Common Stock automatically reinvested in additional shares of
Common Stock. Cash dividends are paid on the Common Stock when and as declared
by the Company's Board of Directors. Subject to the availability of shares of
Common Stock registered for issuance under the Plan, there is no minimum
limitation on the amount of dividends a Participant may reinvest under the
dividend reinvestment feature of the Plan.
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Optional Cash Payments
----------------------
Each month, Participants may also elect to invest optional cash payments in
additional shares of Common Stock, subject to a minimum per month purchase
limit of $50 and a maximum per month purchase limit of $10,000, subject to
waiver. See Question 18 for information concerning limitations applicable to
optional cash payments and the availability of waivers with respect to such
limitations. Participants may make optional cash payments each month even if
dividends on their shares of Common Stock are not being reinvested and whether
or not a dividend has been declared.
ADVANTAGES AND DISADVANTAGES
3. WHAT ARE THE ADVANTAGES AND DISADVANTAGES OF THE PLAN?
Advantages:
----------
(a) The Plan provides Participants with the opportunity to reinvest cash
dividends paid on all or a portion of their shares of Common Stock in
additional shares of Common Stock without payment of any brokerage
commission or service charge and, as of the date of this Prospectus, at a
3% discount from the Market Price (subject to change), to the extent shares
are purchased directly from the Company.
(b) The Plan provides Participants with the opportunity to make monthly
investments of optional cash payments, subject to minimum and maximum
amounts, for the purchase of additional shares of Common Stock at, as of
the date of this Prospectus, a 2.5% discount from the Market Price (subject
to change) (and without payment of any brokerage commission or service
charge, to the extent shares are purchased directly from the Company).
(c) Subject to the availability of shares of Common Stock registered for
issuance under the Plan, all cash dividends paid on Participants' shares
can be fully invested in additional shares of Common Stock because the Plan
permits fractional shares to be credited to Plan accounts. Dividends on
such fractional shares, as well as on whole shares, will also be reinvested
in additional shares which will be credited to Plan accounts.
(d) The Plan Administrator, at no charge to Participants, provides for
the safekeeping of stock certificates for shares credited to each Plan
account.
(e) Periodic statements reflecting all current activity, including share
purchases and latest Plan account balance, simplify Participants' record
keeping. See Question 23 for information concerning reports to
Participants.
Disadvantages:
-------------
(a) No interest will be paid by the Company or the Plan Administrator on
dividends or optional cash payments held pending reinvestment or
investment. See Question 12.
(b) With respect to optional cash payments, the actual number of shares
to be issued to a Participant's Plan account will not be determined until
the end of the relevant Pricing Period. Therefore, during the Pricing
Period Participants will not know the actual number of shares they have
purchased.
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(c) Even if a Discount from the Market Price is in effect during the
Pricing Period, the Market Price, as so discounted, may exceed the price at
which shares of the Common Stock are trading on the Investment Date (as
defined in Question 12) when the shares are issued or thereafter.
(d) Because optional cash payments must be received by the Plan
Administrator prior to the related Pricing Period, such payments may be
exposed to changes in market conditions for a longer period of time than in
the case of typical secondary market transactions. In addition, optional
cash payments once received by the Plan Administrator will not be returned
to Participants unless a written or telephonic request is directed to the
Plan Administrator at least two business days prior to the commencement of
the Pricing Period with respect to which optional cash payments have been
delivered by such Participant. See Questions 19 and 21.
(e) Resales of shares of Common Stock credited to a Participant's account
under the Plan will involve a brokerage commission and any applicable stock
transfer taxes on the resales. See Questions 22 and 28.
ADMINISTRATION
4. WHO ADMINISTERS THE PLAN?
The Company has retained Boston Equiserve, L.P. as plan administrator (the
"Plan Administrator"), to administer the Plan, keep records, send statements
of account activity to each Participant and perform other duties relating to
the Plan. See Question 23 for information concerning reports to Participants.
Shares purchased under the Plan and held by the Plan Administrator will be
registered in the Plan Administrator's name or the name of its nominee for the
benefit of the Participants. In the event that the Plan Administrator resigns
or otherwise ceases to act as plan administrator, the Company will appoint a
new plan administrator to administer the Plan.
The Plan Administrator also acts as dividend disbursing agent, transfer
agent and registrar for the Company's Common Stock.
PARTICIPATION
For purposes of this section, responses will generally be based upon the
method by which the stockholder holds his or her shares of Common Stock.
Generally, stockholders are either Record Owners or Beneficial Owners. A
Record Owner is a stockholder who owns shares of Common Stock in his or her
own name. A Beneficial Owner is a stockholder who beneficially owns shares of
Common Stock that are registered in a name other than his or her own name (for
example, the shares are held in the name of a broker, bank or other nominee).
A Record Owner may participate directly in the Plan, whereas a Beneficial
Owner will have to either become a Record Owner by having one or more shares
transferred into his or her own name or coordinate his or her participation in
the Plan through the broker, bank or other nominee in whose name the
Beneficial Owner's shares are held. If a Beneficial Owner who desires to
become a Participant encounters any difficulties in coordinating his or her
participation in the Plan with his or her broker, bank or other nominee, he or
she should call the Company's Investor Relations department at (714) 438-2100.
5. WHO IS ELIGIBLE TO PARTICIPATE?
All Record Owners or Beneficial Owners of at least one share of Common Stock
are eligible to participate in the Plan. A Record Owner may participate
directly in the Plan. A Beneficial Owner must either become a
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Record Owner by having one or more shares transferred into his or her own name
or arrange with the broker, bank or other nominee who is the record holder to
participate on his or her behalf. See Question 6.
To facilitate participation by Beneficial Owners, the Company has made
arrangements with the Plan Administrator to reinvest dividends, on a per
dividend basis, and accept optional cash payments under the Plan by record
holders such as brokers, banks and other nominees, on behalf of Beneficial
Owners. See Question 6. Notwithstanding anything in the Plan to the contrary,
the Company reserves the right to exclude from participation in the Plan, at
any time, persons or entities who attempt to circumvent the Plan's standard
$10,000 per month maximum by accumulating accounts over which they have
control or any other persons or entities, as determined in the sole discretion
of the Company. See Question 1.
Furthermore, the Company may terminate, by written notice, at any time any
Participant's individual participation in the Plan if such participation would
be in violation of the restrictions contained in the Charter or Bylaws of the
Company. Because the Company expects to continue to qualify as a REIT, the
Charter contains restrictions on the transfer of Common Stock which are
intended to assist the Company in complying with these requirements. The
Ownership Limit (as defined in the Charter) prohibits any person, subject to
certain specified exceptions, from owning, actually or constructively, shares
of Common Stock in excess of 9.5% (in value or in number, whichever is more
restrictive) of the outstanding shares of Common Stock. The constructive
ownership rules are complex, and may cause shares of Common Stock owned
actually or constructively by a group of related individuals and/or entities
to be constructively owned by one individual or entity. As a result, the
acquisition of less than 9.5% of the shares of Common Stock (or the
acquisition of an interest in an entity that owns, actually or constructively,
shares of Common Stock) by an individual or entity, could nevertheless cause
that individual or entity, or another individual or entity, to own
constructively in excess of 9.5% of the outstanding shares of Common Stock and
thus violate the Ownership Limit, or such other limit as provided in the
Charter or as otherwise permitted by the Board of Directors. The Board of
Directors may, but in no event will be required to, exempt a person from the
Ownership Limit if it determines that such person's ownership of shares of
Common Stock will not jeopardize the Company's status as a REIT. As a
condition of such waiver, the Board of Directors may require a ruling from the
IRS or opinion of counsel satisfactory to it and/or undertakings or
representations from the applicant with respect to the Company's status as a
REIT. Pursuant to the Charter, if any purported transfer of Common Stock or
any other event would otherwise result in any person owning shares of Common
Stock in excess of the Ownership Limit or otherwise cause the Company to fail
to qualify as a REIT, then that number of shares of Common Stock the actual or
constructive ownership of which otherwise would cause such person to violate
such restrictions (rounded to the nearest whole share) will be automatically
transferred to a trustee as trustee of a trust for the exclusive benefit of
one or more charitable beneficiaries, and the intended transferee will not
acquire any rights in such shares.
6. HOW DOES AN ELIGIBLE STOCKHOLDER PARTICIPATE?
Stockholders who are presently enrolled in the existing Imperial Credit
Mortgage Holdings, Inc. Dividend Reinvestment and Stock Purchase Plan will
continue to be enrolled in the Plan unless you notify the Company otherwise.
The Plan amends and restates in its entirety the existing Imperial Credit
Mortgage Holdings, Inc. Dividend Reinvestment and Stock Purchase Plan.
Stockholders who are not participants in the Plan and who do not want to
become participants need do nothing and will continue to receive their cash
dividend, if and when declared, as usual.
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Record Owners
-------------
Record Owners may join the Plan by completing and signing the Authorization
Form included with the Plan and returning it to the Plan Administrator. A
postage-paid envelope is provided for this purpose. If shares are registered
in more than one name (e.g., joint tenants, trustees), all registered holders
of such shares must sign the Authorization Form exactly as their names appear
on the account registration. Authorization Forms may be obtained at any time
by written request to:
Boston Equiserve, L.P.
Dividend Reinvestment Unit
P.O. Box 8040
Boston, Massachusetts 02266-8040
Telephone: (617) 575-3120
Beneficial Owners
-----------------
Beneficial Owners who wish to join the Plan must instruct their broker, bank
or other nominee to complete and sign the Authorization Form. The broker, bank
or other nominee will forward the completed Authorization Form to its
securities depository and the securities depository will provide the Plan
Administrator with the information necessary to allow the Beneficial Owner to
participate in the Plan. See Question 8 for a discussion of the Broker and
Nominee Form (the "B&N Form"), which is required to be used for optional cash
payments of a Beneficial Owner whose broker, bank or other nominee holds the
Beneficial Owner's shares in the name of a major securities depository. See
also Question 17.
Incomplete Forms
----------------
If a Record Owner or the broker, bank or other nominee on behalf of a
Beneficial Owner submits a properly executed Authorization Form without
electing an investment option, such Authorization Form will be deemed to
indicate the intention of such Record Owner or Beneficial Owner, as the case
may be, to apply all cash dividends and optional cash payments, if applicable,
toward the purchase of additional shares of Common Stock. See Question 7 for
investment options.
7. WHAT DOES THE AUTHORIZATION FORM PROVIDE?
The Authorization Form appoints the Plan Administrator as agent for the
Participant and directs the Company to pay to the Plan Administrator each
Participant's cash dividends on all or a specified number of shares of Common
Stock owned by the Participant on the applicable record date ("Participating
Shares"), as well as on all whole and fractional shares of Common Stock
credited to a Participant's Plan account ("Plan Shares"). The Authorization
Form directs the Plan Administrator to purchase on the Investment Date (as
defined in Question 12) additional shares of Common Stock with such dividends
and optional cash payments, if any, made by the Participant. See Question 8
for a discussion of the B&N Form which is required to be used for optional
cash payments of a Beneficial Owner whose broker, bank or other nominee holds
the Beneficial Owner's shares in the name of a major securities depository.
The Authorization Form also directs the Plan Administrator to reinvest
automatically all subsequent dividends on Plan Shares. Dividends will continue
to be reinvested on the number of Participating Shares and on all Plan Shares
until the Participant specifies otherwise by contacting the Plan
Administrator, in writing, withdraws from the Plan (see Questions 27 and 28),
or the Plan is terminated. See Question 6 for additional information about the
Authorization Form.
11
<PAGE>
The Authorization Form provides for the purchase of additional shares of
Common Stock through the following investment options:
(1) If "Full Dividend Reinvestment" is elected, the Plan Administrator
will apply all cash dividends on all shares of Common Stock then or
subsequently registered in the Participant's name, and all cash dividends
on all Plan Shares, together with any optional cash payments, toward the
purchase of additional shares of Common Stock.
(2) If "Partial Dividend Reinvestment" is elected, the Plan Administrator
will apply all cash dividends on only the number of Participating Shares
registered in the Participant's name and specified on the Authorization
Form and all cash dividends on all Plan Shares, together with any optional
cash payments, toward the purchase of additional shares of Common Stock.
(3) If "Optional Cash Payments Only" is elected, the Participant will
continue to receive cash dividends on shares of Common Stock registered in
that Participant's name in the usual manner. However, the Plan
Administrator will apply all cash dividends on all Plan Shares, together
with any optional cash payments received from the Participant, toward the
purchase of additional shares of Common Stock. See Question 8 for a
discussion of the B&N Form which is required to be used for optional cash
payments of a Beneficial Owner whose broker, bank or other nominee holds
the Beneficial Owner's shares in the name of a major securities depository.
Each Participant may select any one of these three options. In each case,
dividends will be reinvested on all Participating Shares and on all Plan
Shares held in the Plan account, including dividends on shares of Common Stock
purchased with any optional cash payments, until a Participant specifies
otherwise by contacting the Plan Administrator, in writing, or withdraws from
the Plan altogether (see Questions 27 and 28), or until the Plan is
terminated. If a Participant would prefer to receive cash payments of
dividends paid on Plan Shares rather than reinvest such dividends, those
shares must be withdrawn from the Plan by written notification to the Plan
Administrator. See Questions 27 and 28 regarding withdrawal of Plan Shares.
Participants may change their investment options at any time by requesting a
new Authorization Form and returning it to the Plan Administrator at the
address set forth in Question 38. See Question 12 for the effective date for
any change in investment options.
8. WHAT DOES THE B&N FORM PROVIDE?
The B&N Form provides the only means by which a broker, bank or other
nominee holding shares of a Beneficial Owner in the name of a major securities
depository may invest optional cash payments on behalf of such Beneficial
Owner. A B&N Form must be delivered to the Plan Administrator each time such
broker, bank or other nominee transmits optional cash payments on behalf of a
Beneficial Owner. The B&N Form must be executed by the broker, bank or other
nominee for the Beneficial Owner. A broker, bank or other nominee holding
shares for a Beneficial Owner in the name of a major securities depository may
also participate in the Plan through the Depository Trust Company ("DTC").
Currently, only the dividend reinvestment option is available through DTC. B&N
Forms will be furnished at any time upon request to the Plan Administrator at:
Boston EquiServe, L.P.
Dividend Reinvestment Unit
P.O. Box 8040
Boston, Massachusetts 02266-8040
Telephone: (617) 575-3120
PRIOR TO SUBMITTING THE B&N FORM, THE BROKER, BANK OR OTHER NOMINEE FOR A
BENEFICIAL OWNER MUST SUBMIT A COMPLETED AUTHORIZATION FORM ON BEHALF OF THE
BENEFICIAL OWNER. SEE QUESTIONS 6 AND 7.
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THE B & N FORM AND APPROPRIATE INSTRUCTIONS MUST BE RECEIVED BY THE PLAN
ADMINISTRATOR NOT LATER THAN THE APPLICABLE RECORD DATE OR THE OPTIONAL CASH
PAYMENT WILL NOT BE INVESTED UNTIL THE FOLLOWING INVESTMENT DATE.
9. IS PARTIAL PARTICIPATION POSSIBLE UNDER THE PLAN?
Yes. Record Owners or the broker, bank or other nominee for Beneficial
Owners may designate on the Authorization Form a number of shares for which
dividends are to be reinvested. Dividends will thereafter be reinvested only
on the number of shares specified, and the Record Owner or Beneficial Owner,
as the case may be, will continue to receive cash dividends on the remainder
of the shares.
10. WHEN MAY AN ELIGIBLE STOCKHOLDER JOIN THE PLAN?
A Record Owner or a Beneficial Owner may join the Plan at any time. Once in
the Plan, a Participant remains in the Plan until he or she withdraws from the
Plan, the Company terminates his or her participation in the Plan or the
Company terminates the Plan. See Question 28 regarding withdrawal from the
Plan.
11. WILL A STOCKHOLDER PRESENTLY ENROLLED IN THE ORIGINAL PLAN CONTINUE TO BE
ENROLLED IN THE PLAN?
Yes. A stockholder enrolled in the Original Plan will continue to be
enrolled in the Plan in accordance with the investment option chosen under the
Original Plan, provided he or she is an eligible stockholder as set forth in
Question 5, and thus entitled to participate in the Plan.
If an eligible stockholder enrolled in the Original Plan does not wish to
participate in the Plan, he or she should withdraw from the Plan in the manner
described in Questions 27 and 28. If an eligible stockholder wishes to change
the nature of his or her participation from that in the Original Plan, he or
she should return an Authorization Form as described in Question 6. If an
eligible stockholder enrolled in the Original Plan does not wish to withdraw
or change the nature of his or her participation, he or she will continue to
be enrolled in the Plan and the nature of his or her investment option will
remain the same under the Plan.
12. WHEN WILL DIVIDENDS BE REINVESTED AND/OR OPTIONAL CASH PAYMENTS BE
INVESTED?
When shares are purchased from the Company, such purchases will be made on
the "Investment Date" in each month. The Investment Date with respect to
Common Stock acquired directly from the Company and relating to a dividend
reinvestment will be the dividend payment date declared by the Board of
Directors (unless such date is not a business day in which case it is the
first business day immediately thereafter) or, in the case of open market
purchases, no later than thirty business days following the dividend payment
date. The Investment Date with respect to Common Stock acquired directly from
the Company and relating to an optional cash payment will generally be on or
about the twenty-ninth day of each month or, in the case of open market
purchases, no later than thirty business days following the related Investment
Date. In no event, however, will the Investment Date relating to dividend
reinvestments be less than ten days from the Investment Date relating to
optional cash payments.
When open market purchases are made by the Plan Administrator, such
purchases may be made on any securities exchange where the shares are traded,
in the over-the-counter market or by negotiated transactions, and may be
subject to such terms with respect to price, delivery and other matters as
agreed to by the Plan Administrator. Neither the Company nor any Participant
shall have any authorization or power to direct the time
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<PAGE>
or price at which shares will be purchased or the selection of the broker or
dealer through or from whom purchases are to be made by the Plan
Administrator. However, when open market purchases are made by the Plan
Administrator, the Plan Administrator shall use its best efforts to purchase
the shares at the lowest possible price.
If the Authorization Form is received prior to the record date for a
dividend payment, the election to reinvest dividends will begin with that
dividend payment. If the Authorization Form is received on or after any such
record date, reinvestment of dividends will begin on the dividend payment date
following the next record date if the Participant is still a stockholder of
record. Record dates for payment of dividends normally precede payment dates
by approximately two to three weeks.
See Question 18 for information concerning limitations on the minimum and
maximum amounts of optional cash payments that may be made each month and
Question 19 for information as to when optional cash payments must be received
to be invested on each Investment Date.
Shares will be allocated and credited to Participants' accounts as follows:
(1) shares purchased from the Company will be allocated and credited on the
appropriate Investment Date; and (2) shares purchased in market transactions
will be allocated and credited as of the date on which the Plan Administrator
completes the purchases of the aggregate number of shares to be purchased on
behalf of all Participants with dividends to be reinvested or optional cash
payments, as the case may be, during the month.
NO INTEREST WILL BE PAID ON CASH DIVIDENDS OR OPTIONAL CASH PAYMENTS PENDING
INVESTMENT OR REINVESTMENT UNDER THE TERMS OF THE PLAN. SINCE NO INTEREST IS
PAID ON CASH HELD BY THE PLAN ADMINISTRATOR, IT NORMALLY WILL BE IN THE BEST
INTEREST OF A PARTICIPANT TO DEFER OPTIONAL CASH PAYMENTS UNTIL SHORTLY BEFORE
COMMENCEMENT OF THE PRICING PERIOD.
PURCHASE AND PRICES OF SHARES
13. WHAT WILL BE THE PRICE TO PARTICIPANTS OF SHARES PURCHASED UNDER THE PLAN?
Dividend Reinvestment
---------------------
With respect to reinvested dividends, the price per share of Common Stock
acquired directly from the Company will be, as of the date of this Prospectus,
97% (subject to change) of the average of the high and low sales prices,
computed to three decimal places, of the Common Stock on the AMEX on the
Investment Date (as defined in Question 12), or if no trading occurs in the
Common Stock on the Investment Date, the average of the high and low sales
prices for the first trading day immediately preceding the Investment Date for
which trades are reported.
No discount will be available for dividends reinvested in Common Stock
acquired in open market purchases. See Question 16. The price per share of
Common Stock acquired through open market purchases with reinvested dividends
will be the weighted average of the actual prices paid, computed to three
decimal places, for all of the Common Stock purchased by the Plan
Administrator with all Participants' reinvested dividends for the related
quarter. Additionally, each Participant will be charged a pro rata portion of
any brokerage commissions or other fees or charges paid by the Plan
Administrator in connection with such open market purchases. (If a Participant
desires to opt out of the dividend reinvestment feature of the Plan when the
Common Stock relating to dividend reinvestments will be purchased in the open
market, a Participant must notify the Plan Administrator no later than the
record date for the related dividend payment date. For information as to the
source of the Common Stock to be purchased under the Plan see Question 16.)
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<PAGE>
Optional Cash Payments
----------------------
With respect to optional cash payments that do not exceed $10,000 (see
Question 18 for a discussion of the discount applicable to optional cash
payments in excess of $10,000), the price per share of Common Stock acquired
directly from the Company will be, as of the date of this Prospectus, 97.5%
(subject to change) of the average of the high and low sales prices, computed
to three decimal places, of the Common Stock as reported on the AMEX for the
three Trading Days immediately preceding the relevant Investment Date (as
defined in Question 12 above) or, if no trading occurs in the Common Stock on
one or more of such Trading Days, for the three Trading Days immediately
preceding the Investment Date for which trades are reported. A "Trading Day"
means a day on which trades in the Common Stock are reported on the AMEX. With
respect to all optional cash payments, regardless of the amount being
invested, the period encompassing the three Trading Days which relate to an
Investment Date constitutes the relevant "Pricing Period."
The price per share of Common Stock acquired through open market purchases
with optional cash payments will be 100% (subject to change) of the weighted
average of the actual prices paid, computed to three decimal places, for all
of the Common Stock purchased by the Plan Administrator with all Participants'
optional cash payments for the related month.
The price per share of Common Stock purchased with dividends reinvested in
Common Stock acquired directly from the Company and all optional cash
payments, currently reflects a discount which is subject to change (but will
not vary from the range of 0% to 5%) from time to time or discontinuance at
the Company's discretion after a review of current market conditions, the
level of participation in the Plan and the Company's current and projected
capital needs.
Each month, at least three business days prior to the applicable Record
Date, the Company, in its sole discretion, may establish a discount from the
Market Price that otherwise would be applicable for reinvested dividends,
optional cash payments and optional cash payments pursuant to a Request for
Waiver. Participants may ascertain the discount applicable to the next Pricing
Period by contacting the Company's Investor Relations Department at (714) 438-
2100. Setting a discount for a particular month will not affect the setting of
a discount for any subsequent month.
Neither the Company nor any Participant shall have any authorization or
power to direct the time or price at which shares will be purchased or the
selection of the broker or dealer through or from whom purchases are to be
made by the Plan Administrator. However, when open market purchases are made
by the Plan Administrator, the Plan Administrator shall use its best efforts
to purchase the shares at the lowest possible price.
Market Price
------------
All references in the Plan to the "Market Price" when it relates to dividend
reinvestments which will be reinvested in Common Stock acquired directly from
the Company shall mean the average of the high and low sales prices, computed
to three decimal places, of the Common Stock on the AMEX on the Investment
Date, or if no trading occurs in the Common Stock on the Investment Date, the
average of the high and low sales prices for the first trading day immediately
preceding the Investment Date for which trades are reported. With respect to
dividend reinvestments which will be reinvested in Common Stock purchased in
the open market, "Market Price" shall mean the weighted average of the actual
prices paid, computed to three decimal places, for all of the Common Stock
purchased by the Plan Administrator with all Participants' reinvested
dividends for the related
15
<PAGE>
quarter. All references in the Plan to the "Market Price" for optional cash
payments which will be invested in Common Stock acquired directly from the
Company shall mean the average of the high and low sales prices, computed to
three decimal places, of the Common Stock as reported on the AMEX during the
Pricing Period (as defined above). With respect to optional cash payments
which will be reinvested in Common Stock purchased in the open market, "Market
Price" shall mean the weighted average of the actual prices paid, computed to
three decimal places, for all of the Common Stock purchased by the Plan
Administrator with all Participants' optional cash payments for the related
month.
14. WHAT ARE THE RECORD DATES AND INVESTMENT DATES FOR DIVIDEND REINVESTMENT?
For the reinvestment of dividends, the "Record Date" is the record date
declared by the Board of Directors for such dividend. Likewise, the dividend
payment date declared by the Board of Directors constitutes the Investment
Date applicable to the reinvestment of such dividend with respect to Common
Stock acquired directly from the Company, except that if any such date is not
a business day, the first business day immediately following such date shall
be the Investment Date. The Investment Date with respect to Common Stock
purchased in open market transactions will be no later than thirty business
days following the dividend payment date. Dividends will be reinvested on the
Investment Date using the applicable Market Price (as defined in Question 13).
Generally, record dates for quarterly dividends on the Common Stock will
precede the dividend payment dates by approximately two to three weeks. Please
refer to Question 19 for a discussion of the Record Dates and Investment Dates
applicable to optional cash payments.
15. HOW WILL THE NUMBER OF SHARES PURCHASED FOR A PARTICIPANT BE DETERMINED?
A Participant's account in the Plan will be credited with the number of
shares, including fractions computed to three decimal places, equal to the
total amount to be invested on behalf of such Participant divided by the
purchase price per share as calculated pursuant to the methods described in
Question 13, as applicable. The total amount to be invested will depend on the
amount of any dividends paid on the number of Participating Shares and Plan
Shares in such Participant's Plan account and available for investment on the
related Investment Date, or the amount of any optional cash payments made by
such Participant and available for investment on the related Investment Date.
Subject to the availability of shares of Common Stock registered for issuance
under the Plan, there is no total maximum number of shares available for
issuance pursuant to the reinvestment of dividends.
16. WHAT IS THE SOURCE OF COMMON STOCK PURCHASED UNDER THE PLAN?
Plan Shares will be purchased either directly from the Company, in which
event such shares will be authorized but unissued shares, or on the open
market, at the option of the Company, after a review of current market
conditions and the Company's current and projected capital needs. The Company
will determine the source of the Common Stock to be purchased under the Plan
at least three business days prior to the relevant Record Date, and will
notify the Plan Administrator of the same. Neither the Company nor the Plan
Administrator shall be required to provide any written notice to Participants
as to the source of the Common Stock to be purchased under the Plan, but
current information regarding the source of the Common Stock may be obtained
by contacting the Company's Investor Relations at (714) 438-2100.
17. HOW DOES THE OPTIONAL CASH PAYMENT FEATURE OF THE PLAN WORK?
All Record Holders who have timely submitted signed Authorization Forms
indicating their intention to participate in this feature of the Plan, and all
Beneficial Owners whose brokers, banks or other nominees have
16
<PAGE>
timely submitted signed Authorization Forms indicating their intention to
participate in this feature of the Plan (except for Beneficial Owners whose
brokers, banks or other nominees hold the shares of the Beneficial Owners in
the name of a major securities depository), are eligible to make optional cash
payments during any month, whether or not a dividend is declared. If a broker,
bank or other nominee holds shares of a Beneficial Owner in the name of a
major securities depository, optional cash payments must be made through the
use of the B&N Form. See Question 8. Optional cash payments must be
accompanied by an Authorization Form or a B&N Form, as applicable. Each month
the Plan Administrator will apply any optional cash payment received from a
Participant no later than one business day prior to the commencement of that
month's Pricing Period (as defined in Question 13) to the purchase of
additional shares of Common Stock for the account of the Participant on the
following Investment Date (as defined in Question 12).
As of the date of this Prospectus, the discount from the Market Price
applicable to optional cash payments will be 2.5% (subject to change) of the
Market Price (as defined in Question 13). Refer to Question 18 for a
discussion of the possible limitations on the purchase price applicable to the
purchase of shares made with optional cash payments.
18. WHAT LIMITATIONS APPLY TO OPTIONAL CASH PAYMENTS?
Optional Cash Payments up to $10,000
------------------------------------
Each optional cash payment is subject to a minimum per month purchase limit
of $50 and a maximum per month purchase limit of $10,000. For purposes of
these limitations, all Plan accounts under the common control or management of
a Participant will be aggregated. Generally, optional cash payments of less
than $50 and that portion of any optional cash payment which exceeds the
maximum monthly purchase limit of $10,000, unless such limit has been waived
by the Company, will be promptly returned to Participants without interest at
the end of the relevant Pricing Period.
Requests for Waiver
-------------------
Participants may make optional cash payments of up to $10,000 each month
without the prior approval of the Company. Optional cash payments in excess of
$10,000 may be made by a Participant only upon acceptance by the Company of a
completed Request for Waiver form from such Participant. There is no pre-
established maximum limit applicable to optional cash payments that may be
made pursuant to accepted Requests for Waiver. A Request for Waiver form must
be received and accepted by the Company each month no later than the Record
Date (as defined in Question 19) for the applicable Investment Date. Request
for Waiver forms will be furnished at any time upon request to the Plan
Administrator at the address or telephone number specified in Question 38.
Participants interested in obtaining further information about a Request for
Waiver should contact the Company's Investor Relations Department at (714)
438-2100.
The Company expects to grant Requests for Waiver to financial
intermediaries, including brokers and dealers, and other Participants in the
future. Waivers will be considered on the basis of a variety of factors, which
may include the Company's current and projected capital needs, the
alternatives available to the Company to meet those needs, prevailing market
prices for Common Stock and other Company securities, general economic and
market conditions, expected aberrations in the price or trading volume of the
Common Stock, the potential disruption of the price of the Common Stock by a
financial intermediary, the number of shares of Common Stock held by the
Participant submitting the waiver request, the past actions of a Participant
under the Plan, the aggregate amount of optional cash payments for which such
waivers have been submitted and the administrative constraints associated with
granting such waivers. Grants of waivers will be made in the absolute
discretion of the Company.
17
<PAGE>
PARTICIPANTS IN THE PLAN ARE NOT OBLIGATED TO PARTICIPATE IN THE OPTIONAL
CASH PAYMENT FEATURE OF THE PLAN AT ANY TIME. OPTIONAL CASH PAYMENTS NEED NOT
BE IN THE SAME AMOUNT EACH MONTH.
The Waiver Discount
Each month, at least three business days prior to the applicable Record Date
(as defined in Question 19), the Company will establish the discount from the
Market Price applicable to optional cash payments made pursuant to Requests
for Waiver and will notify the Plan Administrator of the same. Such discount
(the "Waiver Discount") will be between 0% and 5% of the Market Price and may
vary each month, but once established will apply uniformly to all optional
cash payments made pursuant to Requests for Waiver during that month. The
Waiver Discount will be established in the Company's sole discretion after
advice from counsel, a review of current market conditions, the level of
participation in the Plan, and the Company's current and projected capital
needs. The Waiver Discount applies only to optional cash payments made
pursuant to Requests for Waiver and does not apply to other optional cash
payments. NEITHER THE COMPANY NOR THE PLAN ADMINISTRATOR SHALL BE REQUIRED TO
PROVIDE ANY WRITTEN NOTICE TO PARTICIPANTS AS TO THE WAIVER DISCOUNT, BUT
CURRENT INFORMATION REGARDING THE WAIVER DISCOUNT APPLICABLE TO THE NEXT
INVESTMENT DATE MAY BE OBTAINED BY CONTACTING THE COMPANY'S INVESTOR RELATIONS
AT (714) 438-2100. Setting a Waiver Discount applicable to the next Investment
Date shall not affect the setting of a Waiver Discount for any subsequent
Investment Date. The Waiver Discount feature discussed above applies only to
optional cash payments made pursuant to Requests for Waiver and does not apply
to the reinvestment of dividends.
Shares acquired from optional cash payments in excess of $10,000 that are
granted pursuant to a Request for Waiver may be acquired either directly from
the Company or through open market purchases. See Question 13 for a
description of the price per share in each case.
ONLY OPTIONAL CASH PAYMENTS MADE PURSUANT TO REQUESTS FOR WAIVER WILL BE
AFFECTED BY THE WAIVER DISCOUNT. ALL OTHER OPTIONAL CASH PAYMENTS WILL BE MADE
AT A 2.5% (SUBJECT TO CHANGE) DISCOUNT FROM THE MARKET PRICE, WITHOUT REGARD
TO ANY WAIVER DISCOUNT.
19. WHAT ARE THE RECORD DATES AND INVESTMENT DATES FOR OPTIONAL CASH PAYMENTS?
Optional cash payments will be invested every month on the related
Investment Date. The "Record Date" for optional cash payments is two business
days prior to the related Pricing Period and the "Investment Date" is
generally on or about the twenty-ninth day of each month or, in the case of
open market purchases, no later than thirty business days following the
Investment Date. In no event, however, will the Investment Date relating to
optional cash payments be less than ten days from the Investment Date relating
to dividend reinvestments.
Optional cash payments received by the Plan Administrator, and such funds
have cleared, at least one business day prior to the commencement of a Pricing
Period will be applied to the purchase of shares of Common Stock on the
Investment Date which relates to that Pricing Period. No interest will be paid
by the Company or the Plan Administrator on optional cash payments held
pending investment. Generally, optional cash payments received on or after the
commencement of a Pricing Period will be promptly returned to Participants
without interest at the end of the Pricing Period; such optional cash payments
may be resubmitted by a Participant prior to the next or a later Pricing
Period.
For a schedule of expected Record Dates and Investment Dates in 1997 and
1998, see Schedule A.
18
<PAGE>
20. WHEN MUST OPTIONAL CASH PAYMENTS BE RECEIVED BY THE PLAN ADMINISTRATOR?
Each month the Plan Administrator will apply any optional cash payment for
which good funds are timely received to the purchase of shares of Common Stock
for the account of the Participant on the next Investment Date. See Question
19. In order for funds to be invested on the next Investment Date, the Plan
Administrator must have received a check, money order or wire transfer by the
end of the business day immediately preceding the ensuing Pricing Period and
such check, money order or wire transfer must have cleared on or before the
end of the business day immediately preceding such ensuing Pricing Period.
Wire transfers may be used only if approved verbally in advance by the Plan
Administrator. Checks and money orders are accepted subject to timely
collection as good funds and verification of compliance with the terms of the
Plan. Checks or money orders should be made payable to Boston Equiserve--
Imperial Credit Mortgage Holdings, Inc. DRIP. Checks returned for any reason
will not be resubmitted for collection.
NO INTEREST WILL BE PAID BY THE COMPANY OR THE PLAN ADMINISTRATOR ON
OPTIONAL CASH PAYMENTS HELD PENDING INVESTMENT. SINCE NO INTEREST IS PAID ON
CASH HELD BY THE PLAN ADMINISTRATOR, IT NORMALLY WILL BE IN THE BEST INTEREST
OF A PARTICIPANT TO DEFER OPTIONAL CASH PAYMENTS UNTIL SHORTLY BEFORE
COMMENCEMENT OF THE PRICING PERIOD.
In order for payments to be invested on the Investment Date, in addition to
the receipt of good funds by the end of the business day immediately preceding
the commencement of a Pricing Period, the Plan Administrator must be in
receipt of an Authorization Form or a B&N Form, as appropriate, as of the same
date. See Questions 6 and 8.
21. MAY OPTIONAL CASH PAYMENTS BE RETURNED?
Upon telephone or written request to the Plan Administrator received at
least two business days prior to the commencement of the Pricing Period with
respect to which optional cash payments have been delivered to the Plan
Administrator, such optional cash payments will be returned to the Participant
as soon as practicable. Requests received less than two business days prior to
such date will not be returned but instead will be invested on the next
related Investment Date. Also, each optional cash payment, to the extent that
it does not either conform to the limitations described in Question 19 or
clear within the time limit described in Question 20, will be subject to
return to the Participant as soon as practicable.
22. ARE THERE ANY EXPENSES TO PARTICIPANTS IN CONNECTION WITH THEIR
PARTICIPATION UNDER THE PLAN?
Participants will have to pay brokerage fees or commissions on shares of
Common Stock purchased with reinvested dividends and optional cash payments on
the open market, which sums are not expected to exceed $.15 per share (subject
to change) and which will be first deducted before determining the number of
shares to be purchased. However, the Board of Directors may in the future
determine that the Company will pay such brokerage fees or commissions. The
Plan Administrator will effect open market purchases and sales of shares for
the Plan through itself and it will not receive a commission for effecting
such transactions. Participants will incur no brokerage commissions or service
charges in connection with the reinvestment of dividends and optional cash
purchases when shares of Common Stock are acquired directly from the Company.
The Company will pay all other costs of administration of the Plan. However,
Participants that request that the Plan Administrator sell all or any portion
of their shares (see Question 28) must pay any related brokerage commissions
and applicable stock transfer taxes.
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23. WHAT KIND OF REPORTS WILL BE SENT TO PARTICIPANTS IN THE PLAN?
Each Participant in the Plan will receive a statement of his or her account
following each purchase of additional shares. These statements are
Participants' continuing record of the cost of their purchases and should be
retained for income tax purposes. In addition, Participants will receive
copies of other communications sent to holders of the Common Stock, including
the Company's annual report to its Stockholders, the notice of annual meeting
and proxy statement in connection with its annual meeting of Stockholders and
Internal Revenue Service information for reporting dividends paid.
DIVIDENDS ON FRACTIONS
24. WILL PARTICIPANTS BE CREDITED WITH DIVIDENDS ON FRACTIONS OF SHARES?
Yes.
CERTIFICATES FOR COMMON SHARES
25. WILL CERTIFICATES BE ISSUED FOR SHARES PURCHASED?
No. Common Stock purchased for Participants will be held in the name of the
Plan Administrator or its nominee. No certificates will be issued to
Participants for shares in the Plan unless a Participant submits a written
request to the Plan Administrator or until participation in the Plan is
terminated. At any time, a Participant may request the Plan Administrator to
send a certificate for some or all of the whole shares credited to a
Participant's account. This request should be mailed to the Plan Administrator
at the address set forth in the answer to Question 38. Any remaining whole
shares and any fractions of shares will remain credited to the Plan account.
Certificates for fractional shares will not be issued under any circumstances.
26. IN WHOSE NAME WILL CERTIFICATES BE REGISTERED WHEN ISSUED?
Each Plan account is maintained in the name in which the related
Participant's certificates were registered at the time of enrollment in the
Plan. Stock certificates for whole shares purchased under the Plan will be
similarly registered when issued upon a Participant's request. If a
Participant is a Beneficial Owner, such request should be placed through such
Participant's banker, broker or other nominee. See Question 6. A Participant
who wishes to pledge shares credited to such Participant's Plan account must
first withdraw such shares from the account.
WITHDRAWALS AND TERMINATION
27. WHEN MAY PARTICIPANTS WITHDRAW FROM THE PLAN?
Participants may withdraw from the Plan with respect to all or a portion of
the shares held in his or her account in the Plan at any time. If the request
to withdraw is received prior to a dividend record date set by the Board of
Directors for determining stockholders of record entitled to receive a
dividend, the request will be processed on the day following receipt of the
request by the Plan Administrator.
If the request to withdraw is received by the Plan Administrator on or after
a dividend record date, but before payment date, the Plan Administrator, in
its sole discretion, may either pay such dividend in cash or
20
<PAGE>
reinvest it in shares for the Participant's account. The request for
withdrawal will then be processed as promptly as possible following such
dividend payment date. All dividends subsequent to such dividend payment date
or Investment Date will be paid in cash unless a stockholder re-enrolls in the
Plan, which may be done at any time. Any optional cash payments which have
been sent to the Plan Administrator prior to a request for withdrawal will
also be invested on the next Investment Date unless a Participant expressly
requests return of that payment in the request for withdrawal, and the request
for withdrawal is received by the Plan Administrator at least two business
days prior to the commencement of the Pricing Period.
28. HOW DOES A PARTICIPANT WITHDRAW FROM THE PLAN?
A Participant who wishes to withdraw from the Plan with respect to all or a
portion of the shares held in his or her account in the Plan must notify the
Plan Administrator in writing at its address set forth in the answer to
Question 38. Upon a Participant's withdrawal from the Plan or termination of
the Plan by the Company, certificates for the appropriate number of whole
shares credited to his or her account under the Plan will be issued. A cash
payment will be made for any fraction of a share.
Upon withdrawal from the Plan, a Participant may also request in writing
that the Plan Administrator sell all or part of the shares credited to his or
her account in the Plan. The Plan Administrator will sell the shares as
requested within ten business days after processing the request for
withdrawal. The Participant will receive the proceeds of the sale, less any
brokerage fees or commissions and any applicable stock transfer taxes,
generally within five business days of the sale.
29. ARE THERE ANY AUTOMATIC TERMINATION PROVISIONS?
Participation in the Plan will be terminated if the Plan Administrator
receives written notice of the death or adjudicated incompetency of a
Participant, together with satisfactory supporting documentation of the
appointment of a legal representative, at least five business days before the
next Record Date for purchases made through the reinvestment of dividends or
optional cash payments, as applicable. In the event written notice of death or
adjudicated incompetency and such supporting documentation is received by the
Plan Administrator less than five business days before the next Record Date
for purchases made through the reinvestment of dividends or optional cash
payments, as applicable, shares will be purchased for the Participant with the
related cash dividend or optional cash payment and participation in the Plan
will not terminate until after such dividend or payment has been reinvested.
Thereafter, no additional purchase of shares will be made for the
Participant's account and the Participant's shares and any cash dividends paid
thereon will be forwarded to such Participant's legal representative.
OTHER INFORMATION
30. WHAT HAPPENS IF A PARTICIPANT SELLS OR TRANSFERS ALL OF THE SHARES
REGISTERED IN THE PARTICIPANT'S NAME?
If a Participant disposes of all shares registered in his or her name, and
is not shown as a Record Owner on a dividend record date, the Participant may
be terminated from the Plan as of such date and such termination treated as
though a withdrawal notice had been received prior to the record date.
31. WHAT HAPPENS IF THE COMPANY DECLARES A DIVIDEND PAYABLE IN SHARES OR
DECLARES A STOCK SPLIT?
Any dividend payable in shares and any additional shares distributed by the
Company in connection with a stock split in respect of shares credited to a
Participant's Plan account will be added to that account. Stock
21
<PAGE>
dividends or split shares which are attributable to shares registered in a
Participant's own name and not in his or her Plan account will be mailed
directly to the Participant as in the case of stockholders not participating
in the Plan.
32. HOW WILL SHARES HELD BY THE PLAN ADMINISTRATOR BE VOTED AT MEETINGS OF
STOCKHOLDERS?
If the Participant is a Record Owner, the Participant will receive a proxy
card covering both directly held shares and shares held in the Plan. If the
Participant is a Beneficial Owner, the Participant will receive a proxy
covering shares held in the Plan through his or her broker, bank or other
nominee.
If a proxy is returned properly signed and marked for voting, all the shares
covered by the proxy will be voted as marked. If a proxy is returned properly
signed but no voting instructions are given, all of the Participant's shares
will be voted in accordance with recommendations of the Board of Directors of
the Company, unless applicable laws require otherwise. If the proxy is not
returned, or if it is returned unexecuted or improperly executed, shares
registered in a Participant's name may be voted only by the Participant in
person.
33. WHAT ARE THE RESPONSIBILITIES OF THE COMPANY AND THE PLAN ADMINISTRATOR
UNDER THE PLAN?
The Company and the Plan Administrator will not be liable in administering
the Plan for any act done in good faith or required by applicable law or for
any good faith omission to act including, without limitation, any claim of
liability arising out of failure to terminate a Participant's account upon his
or her death, with respect to the prices at which shares are purchased and/or
the times when such purchases are made or with respect to any fluctuation in
the market value before or after purchase or sale of shares. Notwithstanding
the foregoing, nothing contained in the Plan limits the Company's liability
with respect to alleged violations of federal securities laws.
The Company and the Plan Administrator shall be entitled to rely on
completed forms and the proof of due authority to participate in the Plan,
without further responsibility of investigation or inquiry.
34. MAY THE PLAN BE CHANGED OR DISCONTINUED?
Yes. The Company may suspend, terminate, or amend the Plan at any time.
Notice will be sent to Participants of any suspension or termination, or of
any amendment that alters the Plan terms and conditions, as soon as
practicable after such action by the Company.
The Company may substitute another administrator or agent in place of the
Plan Administrator at any time; Participants will be promptly informed of any
such substitution.
Any questions of interpretation arising under the Plan will be determined by
the Company and any such determination will be final.
35. WHAT ARE THE FEDERAL INCOME TAX CONSEQUENCES OF PARTICIPATION IN THE PLAN?
The following summary of certain federal income tax considerations regarding
the Plan is based on current law, is for general information only, and is not
tax advice. This discussion does not purport to deal with all aspects of
taxation that may be relevant to particular investors in light of their
personal investment circumstances, or to certain types of investors subject to
special treatment under the federal income tax laws, including, without
limitation, life insurance companies, certain financial institutions, dealers
in securities or currencies, stockholders
22
<PAGE>
holding Common Stock as part of a conversion transaction, as part of a hedge
or hedging transaction, or as a position in a straddle for tax purposes, tax-
exempt organizations, or foreign corporations, foreign partnerships or persons
who are not citizens or residents of the United States. In addition, the
summary below does not consider the effect of any foreign, state, local or
other tax laws that may be applicable to prospective Participants.
EACH PROSPECTIVE PARTICIPANT IS ADVISED TO CONSULT HIS OR HER OWN TAX
ADVISOR REGARDING THE SPECIFIC TAX CONSEQUENCES TO HIM OR HER THAT MAY RESULT
FROM PARTICIPATING IN THE PLAN AND DISPOSING OF SHARES ACQUIRED PURSUANT TO
THE PLAN, INCLUDING THE FEDERAL, STATE, LOCAL, FOREIGN AND OTHER TAX
CONSEQUENCES OF SUCH PARTICIPATION AND DISPOSITION AND OF POTENTIAL CHANGES IN
APPLICABLE TAX LAWS.
Dividend Reinvestment. Dividends paid with respect to Common Stock that a
Participant reinvests in Common Stock that is acquired directly from the
Company will be treated for federal income tax purposes as having been
received by the Participant in the form of a taxable stock distribution. In
that case, an amount equal to the fair market value on the date of purchase of
the Common Stock acquired directly from the Company will be treated as a
dividend to the extent the Company has current or accumulated earnings and
profits for federal income tax purposes. For federal income tax purposes, the
Company intends to take the position that the fair market value of the shares
acquired directly from the Company with reinvested dividends under the Plan
will be equal to the average of the high and low sale prices of shares on the
related Investment Date.
Alternatively, dividends paid with respect to Common Stock that a
Participant reinvests in Common Stock through purchases by the Plan
Administrator in the open market will be treated for federal income tax
purposes as having been received by the Participant in the form of a taxable
cash distribution. The amount of the cash distribution, plus the amount of any
discount, will be treated as a dividend to the extent the Company has current
or accumulated earnings and profits for federal income tax purposes.
Distributions in excess of the Company's current and accumulated earnings
and profits will not be taxable to a Participant to the extent that such
distributions do not exceed the adjusted basis of the Participant's shares. To
the extent such distributions exceed the adjusted basis of a Participant's
shares, they will be included in income as capital gain. In addition, in the
event that the Company designates a part or all of the amount so distributed
as a capital gain dividend, such amount may be treated by the Participant as
gain from the sale or exchange of a capital asset held for more than one year,
without regard to the period for which the Participant has held its Common
Stock. It is not clear whether such amounts will be taxable at mid-term
capital gain rates (applicable to gains from the sale of capital assets held
for more than one year but not more than eighteen months), long-term capital
gain rates (applicable to gains from the sale of capital assets held for more
than eighteen months), or some other rate. This uncertainty may be clarified
by future legislation or regulations. Participants' statements of account will
show the fair market value on the date of purchase of the Common Stock
purchased with reinvested dividends, and a Form 1099-DIV mailed to
Participants at year-end will show total dividend income, the amount of any
return of capital distribution and the amount of any capital gain dividend.
The IRS has ruled in private letter rulings that brokerage commissions paid
by a corporation with respect to open market purchases on behalf of
participants in a dividend reinvestment plan were to be treated as
constructive distributions to such participants. Such constructive
distributions were subject to income tax in the same manner as distributions
and includible in the Participants' cost basis of the shares purchased.
Accordingly, in the event the Board of Directors determines that the Company
will pay brokerage commissions with respect to any open market purchases made
by the Plan Administrator, the Company intends to take the position that
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<PAGE>
Participants received their proportionate amount of such commissions as
additional distributions. While the matter is not free from doubt, the Company
intends to take the position that administrative expenses of the Plan paid by
the Company are not constructive distributions to Participants.
The tax basis of newly issued Common Stock purchased directly from the
Company for a Participant under the Plan by reinvestment of dividends will be
equal to the fair market value of the Common Stock on the relevant Investment
Date. The tax basis of Common Stock purchased in the open market pursuant to
the dividend reinvestment feature of the Plan will be equal to the amount paid
for such shares, plus the amount of any income recognized by the Participant
upon such purchase as a result of any discount or the Company's payment of the
Participant's share of brokerage commissions, if any. The holding period of
Common Stock acquired under the Plan will begin on the day following the
Investment Date.
A Participant in the Plan will not realize any taxable income when the
Participant receives certificates for whole shares of Common Stock credited to
the Participant's account, either upon a Participant's request for such
certificates or upon withdrawal from or termination of the Plan. However, a
Participant will recognize gain or loss when whole shares of Common Stock or
rights applicable to Common Stock acquired under the Plan are sold or
exchanged. A Participant will also recognize gain or loss when the Participant
receives a cash payment for a fractional share of Common Stock credited to the
Participant's account upon withdrawal from or termination of the Plan. The
amount of such gain or loss will be the difference between (i) the amount
received for the Participant's shares or fractional shares of Common Stock or
rights applicable to Common Stock and (ii) the tax basis thereof.
Optional Cash Purchases. To the extent the Company offers Common Stock at a
discount from the fair market value of such shares on the Investment Date, or
pays brokerage commissions with respect to the purchase of such shares,
pursuant to the optional cash purchase feature of the Plan, the tax treatment
of such activities is unclear. The Company presently intends to take the
position that any such discount or payment of brokerage commissions does not
constitute a distribution from the Company to Participants in the optional
cash payment feature of the Plan. However, it is possible that Participants
will be treated as having received a distribution from the Company, upon the
purchase of Common Stock with an optional cash payment, in an amount equal to
the excess, if any, of the fair market value of the shares on the Investment
Date over the amount of the optional cash payment, plus the amount of
brokerage commissions paid by the Company, if any. The Company may take this
position in future reports to Participants or the I.R.S. Participants are
urged to consult their own tax advisors with respect to the tax treatment of
any such actions. Shares acquired under the optional cash payment feature of
the Plan will have a tax basis equal to the amount of the optional cash
payment plus the income, if any, recognized by the Participant upon such
acquisition.
Participants will recognize gain or loss when shares of Common Stock
acquired pursuant to optional cash purchases are sold or exchanged. The amount
of such gain or loss will be the difference between the amount received for
the Participant's shares and the tax basis thereof.
36. HOW ARE INCOME TAX WITHHOLDING PROVISIONS APPLIED TO STOCKHOLDERS WHO
PARTICIPATE IN THE PLAN?
If a Participant fails to provide certain federal income tax certifications
in the manner required by law, dividends on shares of Common Stock, proceeds
from the sale of fractional shares and proceeds from the sale of shares held
for a Participant's account will be subject to federal income tax withholding
at the rate of 31%. If withholding is required for any reason, the appropriate
amount of tax will be withheld. Certain stockholders (including most
corporations) are, however, exempt from the above withholding requirements.
24
<PAGE>
Participants which are foreign stockholders are urged to consult their tax
advisors regarding the tax consequences to them of participation in the Plan.
In general, if a Participant is a foreign stockholder, the appropriate amount
will be withheld and the balance in shares will be credited to such
Participant's account.
37. WHO BEARS THE RISK OF MARKET FLUCTUATIONS IN THE COMPANY'S COMMON STOCK?
A Participant's investment in shares held in the Plan account is no
different from his or her investment in directly held shares. The Participant
bears the risk of any loss and enjoys the benefits of any gain from market
price changes with respect to such shares.
38. WHO SHOULD BE CONTACTED WITH QUESTIONS ABOUT THE PLAN?
All correspondence regarding the Plan should be directed to:
BOSTON EQUISERVE, L.P.
DIVIDEND REINVESTMENT UNIT
P.O. BOX 8040
BOSTON, MASSACHUSETTS 02266-8040
TELEPHONE: (617) 575-3120
Please mention Imperial Credit Mortgage Holdings, Inc. and this Plan in all
correspondence.
39. HOW IS THE PLAN INTERPRETED?
Any question of interpretation arising under the Plan will be determined by
the Company and any such determination will be final. The Company may adopt
rules and regulations to facilitate the administration of the Plan. The terms
and conditions of the Plan and its operation will be governed by the laws of
the State of California.
40. WHAT ARE SOME OF THE PARTICIPANT RESPONSIBILITIES UNDER THE PLAN?
Plan Shares are subject to escheat to the state in which the Participant
resides in the event that such shares are deemed, under such state's laws, to
have been abandoned by the Participant. Participants, therefore, should notify
the Plan Administrator promptly in writing of any change of address. Account
statements and other communications to Participants will be addressed to them
at the last address of record provided by Participants to the Plan
Administrator.
Participants will have no right to draw checks or drafts against their Plan
accounts or to instruct the Plan Administrator with respect to any shares of
Common Stock or cash held by the Plan Administrator except as expressly
provided herein.
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DIVIDENDS
The Company has paid dividends since its incorporation. In order to
accommodate the provisions of this Plan, the Company anticipates that
dividends will be payable on or about the fifteenth business day of January,
April, July and October. However, the actual dates may vary and will be
determined at the discretion of the Board of Directors.
USE OF PROCEEDS
The Company does not know either the number of shares of Common Stock that
will be ultimately sold pursuant to the Plan or the prices at which such
shares will be sold. However, the Company proposes to use the net proceeds
from the sale of newly issued shares of Common Stock for general corporate
purposes.
PLAN OF DISTRIBUTION
Except to the extent the Plan Administrator purchases Common Stock in open
market transactions, the Common Stock acquired under the Plan will be sold
directly by the Company through the Plan. The Company may sell Common Stock to
owners of shares (including brokers or dealers) who, in connection with any
resales of such shares, may be deemed to be underwriters. Such shares,
including shares acquired pursuant to waivers granted with respect to the
optional cash payment feature of the Plan, may be resold in market
transactions (including coverage of short positions) on any national
securities exchange on which shares of Common Stock trade or in privately
negotiated transactions. The Common Stock is currently listed on the American
Stock Exchange. Under certain circumstances, it is expected that a portion of
the shares of Common Stock available for issuance under the Plan will be
issued pursuant to such waivers. The difference between the price such owners
pay to the Company for shares of Common Stock acquired under the Plan, after
deduction of the applicable discount from the Market Price, if any, and the
price at which such shares are resold, may be deemed to constitute
underwriting commissions received by such owners in connection with such
transactions.
Subject to the availability of shares of Common Stock registered for
issuance under the Plan, there is no total maximum number of shares that can
be issued pursuant to the reinvestment of dividends. From time to time,
financial intermediaries may engage in positioning transactions in order to
benefit from the discount from the Market Price of Common Stock acquired
through the reinvestment of dividends under the Plan.
Except with respect to open market purchases of Common Stock, the Company
will pay any and all brokerage commissions and related expenses incurred in
connection with purchases of Common Stock under the Plan. Upon withdrawal by a
Participant from the Plan by the sale of Common Stock held under the Plan, the
Participant will receive the proceeds of such sale less any related brokerage
commissions and any applicable transfer taxes.
Common Stock may not be available under the Plan in all states. This
Prospectus does not constitute an offer to sell, or a solicitation of an offer
to buy, any Common Stock or other securities in any state or any other
jurisdiction to any person to whom it is unlawful to make such offer in such
jurisdiction.
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LEGAL OPINION
The validity of the securities offered hereby has been passed upon by
Freshman, Marantz, Orlanski, Cooper & Klein, Beverly Hills, California,
counsel to the Company and certain legal matters with respect to Maryland law
by Ballard Spahr Andrews & Ingersoll, Baltimore, Maryland.
EXPERTS
The financial statements of Imperial Credit Mortgage Holdings, Inc. and ICI
Funding Corporation incorporated in the Prospectus by reference to the
Company's Annual Report on Form 10-K for the year ended December 31, 1996 have
been so incorporated by reference therein in reliance upon the reports of KPMG
Peat Marwick LLP, independent auditors, and upon the authority of said firm as
experts in auditing and accounting. Each of the reports of KPMG Peat Marwick
LLP covering the December 31, 1996 financial statements contains an
explanatory paragraph that states the Company adopted the provisions of
Statement of Financial Accounting Standards No. 122, "Accounting for Mortgage
Servicing Rights" for the year ended December 31, 1995.
INDEMNIFICATION
The Company's Charter contains a provision which limits the liability of its
directors and officers to the Company and its stockholders for money damages
except for liability resulting from (a) actual receipt of an improper benefit
or profit in money, property or services or (b) active and deliberate
dishonesty established by a final judgment as being material to the cause of
action. The Company's Charter and Bylaws also provide that the Company shall
indemnify directors and officers under certain circumstances for liabilities
and expenses incurred by reason of their actions in such capacities. In
addition, the Company maintains an insurance policy that indemnifies directors
and officers against certain liabilities.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers or persons controlling the Company
pursuant to the foregoing provisions, the Company has been informed that in
the opinion of the Commission such indemnification is against public policy as
expressed in said Act and is therefore unenforceable.
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GLOSSARY
"AMEX" means the American Stock Exchange.
"Beneficial Owners" means stockholders who beneficially own shares of Common
Stock that are registered in a name other than their own (for example, in the
name of a broker, bank or other nominee).
"B&N Form" means a Broker and Nominee form.
"business day" means any day other than Saturday, Sunday or legal holiday on
which the AMEX is closed or a day on which the Plan Administrator is
authorized or obligated by law to close.
"Commission" means the Securities and Exchange Commission.
"Common Stock" means the common stock, $.01 par value, of the Company.
"Company" means Imperial Credit Mortgage Holdings, Inc.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"IRS" means Internal Revenue Service.
"Investment Date" means, with respect to Common Stock acquired directly from
the Company and relating to a dividend reinvestment, the dividend payment date
declared by the Board of Directors (unless such date is not a business day in
which case it is the first business day immediately thereafter) or, in the
case of open market purchases, no later than thirty business days following
the dividend payment date; and with respect to Common Stock acquired directly
from the Company and relating to an optional cash payment, generally on or
about the twenty-ninth day of each month; or, in the case of open market
purchases, no later than thirty business days following the Investment Date.
In no event, however, will the Investment Date relating to dividend
reinvestments be less than ten days from the Investment Date relating to
optional cash payments.
"Market Price" means, with respect to Common Stock acquired directly from
the Company and relating to a dividend reinvestment, the average of the high
and low sales prices, computed to three decimal places, of the Common Stock on
the AMEX on the Investment Date, or if no trading occurs in the Common Stock
on the Investment Date, the average of the high and low sales prices for the
first trading day immediately preceding the Investment Date for which trades
are reported. With respect to dividend reinvestments which will be reinvested
in Common Stock purchased in the open market, "Market Price" shall mean the
weighted average of the actual prices paid, computed to three decimal places,
for all of the Common Stock purchased by the Plan Administrator with all
Participants' reinvested dividends for the related quarter. With respect to
Common Stock acquired directly from the Company and relating to optional cash
payments, "Market Price" shall mean the average of the high and low sales
prices, computed to three decimal places, of the Common Stock as reported on
the AMEX during the Pricing Period. With respect to optional cash payments
which will be reinvested in Common Stock purchased in the open market, "Market
Price" shall mean the weighted average of the actual prices paid, computed to
three decimal places, for all of the Common Stock purchased by the Plan
Administrator with all Participants' optional cash payments for the related
month.
"Original Plan" means the Imperial Credit Mortgage Holdings, Inc. Dividend
Reinvestment and Stock Purchase Plan as approved by the Company's Board of
Directors on February 14, 1997.
"Participant" means an eligible holder of Common Stock who wishes to
participate in the Plan.
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"Participating Shares" means shares of Common Stock owned by a Participant
on the applicable record date as to which such Participant has directed the
Company to pay the related cash dividends to the Plan Administrator.
"Plan" means the Imperial Credit Mortgage Holdings, Inc. Dividend
Reinvestment and Stock Purchase Plan which amended and restated the Original
Plan.
"Plan Administrator" means a plan administrator that administers the Plan,
keeps records, sends statements of account to each Participant and performs
other duties related to the Plan. Boston Equiserve, L.P. currently serves as
Plan Administrator of the Plan.
"Plan Shares" means all whole and fractional shares of Common Stock credited
to a Participant's Plan account.
"Pricing Period" means the period encompassing the three Trading Days
preceding the relevant optional cash payment Investment Date.
"REIT" means real estate investment trust.
"Record Date" means, with respect to reinvestments of dividends, the record
date declared by the Board of Directors for such dividend; and with respect to
optional cash payments, two business days prior to the commencement of the
Pricing Period.
"Record Owners" means stockholders who own shares of Common Stock in their
own names.
"Requests for Waiver" means a written request from a Participant to make
optional cash payments in excess of $10,000.
"Securities Act" means the Securities Act of 1933, as amended.
"Trading Day" means a day on which trades in the Common Stock are reported
on the AMEX.
"Waiver Discount" means the discount from the Market Price applicable to
optional cash payments made pursuant to Requests for Waiver. Such discount
will vary between 0% and 5% of the Market Price and may vary each month.
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SCHEDULE A
OPTIONAL CASH PAYMENTS
The following table sets forth the applicable dates for optional cash payments
for 1997 and 1998. The Company will typically set these dates two months
before the end of each year and they will be available from Investor Relations
at (714) 438-2100 on the 1st of December of each year.
<TABLE>
<CAPTION>
WAIVER
DISCOUNT OPTIONAL CASH PRICING PERIOD INVESTMENT
SET DATE RECORD DATE PAYMENT DUE DATE COMMENCE DATE DATE
----------------- ------------------ ------------------ ------------------ ------------------
<S> <C> <C> <C> <C>
November 14, 1997 November 19, 1997 November 20, 1997 November 21, 1997 November 26, 1997
December 16, 1997 December 19, 1997 December 22, 1997 December 23, 1997 December 29, 1997
January 19, 1998 January 22, 1998 January 23, 1998 January 26, 1998 January 29, 1998
February 17, 1998 February 20, 1998 February 23, 1998 February 24, 1998 February 27, 1998
March 18, 1998 March 23, 1998 March 24, 1998 March 25, 1998 March 30, 1998
April 17, 1998 April 22, 1998 April 23, 1998 April 24, 1998 April 29, 1998
May 19, 1998 May 22, 1998 May 25, 1998 May 26, 1998 May 29, 1998
June 17, 1998 June 22, 1998 June 23, 1998 June 24, 1998 June 29, 1998
July 17, 1998 July 22, 1998 July 23, 1998 July 24, 1998 July 29, 1998
August 18, 1998 August 21, 1998 August 24, 1998 August 25, 1998 August 28, 1998
September 17, 1998 September 22, 1998 September 23, 1998 September 24, 1998 September 29, 1998
October 19, 1998 October 22, 1998 October 23, 1998 October 26, 1998 October 29, 1998
November 16, 1998 November 19, 1998 November 20, 1998 November 23, 1998 November 30, 1998
December 16, 1998 December 21, 1998 December 22, 1998 December 23, 1998 December 29, 1998
</TABLE>
SUMMARY DATE INFORMATION
. The Investment Date is, with respect to Common Stock acquired directly from
the Company and relating to a dividend reinvestment, the dividend payment
date declared by the Board of Directors (unless such date is not a business
day in which case it is the first business day immediately thereafter) or,
in the case of open market purchases, no later than thirty business days
following the dividend payment date; and with respect to Common Stock
acquired directly from the Company and relating to an optional cash payment,
generally on or about the twenty-ninth day of each month; or, in the case of
open market purchases, no later than the thirty business days following the
Investment Date. In no event, however, will the Investment Date relating to
dividend reinvestments be less than ten days from the Investment Date
relating to optional cash payments.
. The Pricing Period for optional cash payments which are invested in Common
Stock acquired directly from the Company is the three Trading Days preceding
the relevant Investment Date.
. Optional cash payments must be received by the Plan Administrator by the end
of the business day immediately preceding the commencement of the relevant
Pricing Period.
. The Record Date for dividends is set by the Board of Directors. The Record
Date for optional cash payments is two business days prior to the related
Pricing Period.
. The Waiver Discount is set three business days prior to the applicable
Record Date.
30
<PAGE>
BROKER AND NOMINEE FORM
TO BE USED ONLY BY STOCKHOLDERS ALL OF WHOSE SHARES ARE IN NOMINEE OR STREET
NAME AND WISH TO MAKE OPTIONAL CASH PAYMENTS
Name of Broker or Nominee Holding Shares for Stockholder:
- -------------------------------------------------------------------------------
Number of Shares held by Broker or Nominee_____________________________________
I wish to make optional cash payments to the Plan. My check in the amount of
$____ is enclosed. My Plan account is to be maintained as follows (PLEASE
PRINT):
- -------------------------------------------------------------------------------
Name Street City State Zip Code
- ------------------------------------- -------------------------------------
Social Security/Tax I.D. No. Date
I HEREBY CERTIFY THAT I AM THE OWNER OF THE SHARES OF IMPERIAL CREDIT MORTGAGE
HOLDINGS, INC. INDICATED ABOVE.
-------------------------------------
Signature
(To be executed by broker, bank or
other nominee for Beneficial Owner)
IF ADDRESS IS NOT PROPERLY SHOWN, PLEASE CORRECT BEFORE RETURNING.
THIS IS NOT A PROXY.
<PAGE>
AUTHORIZATION FORM
IMPERIAL CREDIT MORTGAGE HOLDINGS, INC.
DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN
Record Owners and Beneficial Owners who select either or both the Dividend
Reinvestment and/or the Optional Cash Payment feature of the Plan need to
complete an Authorization Form. Beneficial Owners need to instruct their
broker, bank or other nominee to complete the Authorization Form. Beneficial
Owners whose shares are held by a broker, bank or other nominee in the name of
a major securities depository and who select the Optional Cash Payment feature
of the Plan need to instruct their broker, bank or other nominee to also
complete a Broker and Nominee Form.
I hereby appoint Boston EquiServe, L.P. (or any successor) (the "Plan
Administrator") as my agent to receive cash dividends that may hereafter
become payable to me on shares of Common Stock of Imperial Credit Mortgage
Holdings, Inc. (the "Company") registered in my name as set forth below, and
authorize the Plan Administrator to apply such dividends, together with any
optional cash payments I may properly make, to the purchase of full shares and
fractional interests in shares of the Company's Common Stock. I wish to
participate in the Dividend Reinvestment and Stock Purchase Plan for the
purchase of whole and fractional shares of Common Stock ("Shares") of Imperial
Credit Mortgage Holdings, Inc. as follows:
Indicate selection by placing an "X" in the appropriate box(es) (note: you
cannot select both the first and second boxes)
[_] FULL DIVIDEND REINVESTMENT. I want to reinvest dividends on all Shares
now or hereafter registered in my name and on all Shares held for me by
the Plan Administrator. I may also make optional cash deposits.
[_] PARTIAL DIVIDEND REINVESTMENT. I want to reinvest cash dividends on
only _______ Shares registered in my name and want my cash dividends on
the rest of my Shares. I understand that dividends on all Shares held for
me by the Plan Administrator will be reinvested. I may also make optional
cash deposits.
[_] OPTIONAL CASH PAYMENTS ONLY. I want to make an optional cash deposit. I
understand that dividends on all Shares held for me by the Plan
Administrator will be reinvested. My check in the amount of $ is
enclosed.
My participation is subject to the provisions of the Plan as set forth in
the Prospectus relating to the Shares offered pursuant to the Plan and I may
revoke this authorization by notifying the Plan Administrator, in writing, of
my termination.
- ------------------------------------- -------------------------------------
Social Security or Tax I.D. No. Date
- ------------------------------------- -------------------------------------
Print Name(s) of Registered Owners Signature(s) of Registered Owners
Make checks payable to: BOSTON EQUISERVE-IMPERIAL CREDIT MORTGAGE HOLDINGS,
INC. DRIP
Mailing Address: Boston Equiserve, L.P.
Dividend Reinvestment Unit
P.O. Box 8040
Boston, Massachusetts 02266-8040
1443-DRP-98
