<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 19, 1997.
REGISTRATION NO.
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM S-3
REGISTRATION STATEMENT
Under The Securities Act of 1933
----------------
IMPERIAL CREDIT MORTGAGE HOLDINGS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
----------------
20371 IRVINE AVENUE
SANTA ANA HEIGHTS, CA 92707
MARYLAND (714) 556-0122 33-0675505
(STATE OR OTHER (ADDRESS, INCLUDING ZIP CODE, (I.R.S. EMPLOYER
JURISDICTION OF AND TELEPHONE NUMBER, INCLUDING IDENTIFICATION
INCORPORATION OR AREA CODE, OF REGISTRANTS' NUMBER)
ORGANIZATION) PRINCIPAL EXECUTIVE OFFICES)
JOSEPH R. TOMKINSON
CHIEF EXECUTIVE OFFICER
IMPERIAL CREDIT MORTGAGE HOLDINGS, INC.
20371 IRVINE AVENUE
SANTA ANA HEIGHTS, CA 92707
(714) 556-0122
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
COPIES TO:
THOMAS J. POLETTI, ESQ.
KATHERINE J. BLAIR, ESQ.
FRESHMAN, MARANTZ, ORLANSKI,
COOPER & KLEIN
9100 WILSHIRE BOULEVARD, 8TH FLOOR
BEVERLY HILLS, CALIFORNIA 90212
TELEPHONE (310) 273-1870
----------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: FROM TIME
TO TIME AFTER THE REGISTRATION STATEMENT BECOMES EFFECTIVE.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box: [X]
If any of the securities being registered on the Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box: [_]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering: [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering: [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box: [_]
CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
PROPOSED
PROPOSED MAXIMUM
TITLE OF EACH CLASS OF MAXIMUM AGGREGATE AMOUNT OF
SECURITIES TO BE AMOUNT TO OFFERING PRICE OFFERING REGISTRATION
REGISTERED BE REGISTERED PER SECURITY(1) PRICE(1) FEE(2)
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<S> <C> <C> <C> <C>
Common Stock, $.01 par
value per share........ 1,700,000 $23.50 $39,950,000 $12,106.06
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</TABLE>
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(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457, based on the average of the high and low sales
prices of the Common Stock on February 13, 1997 as reported on the
American Stock Exchange.
(2) Paid by wire transfer to the Securities and Exchange Commission's account
at Mellon Bank.
----------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT THAT SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION,
ACTING PURSUANT TO SUCH SECTION 8(A), MAY DETERMINE.
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<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED FEBRUARY 19, 1997
PROSPECTUS
[Logo of Imperial Credit Mortgage Holdings, Inc. appears here]
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 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 no 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. In order to preserve the Company's status as a
real estate investment trust ("REIT"), no discount is currently available for
shares purchased pursuant to the optional cash payment feature of the Plan.
However, the Board of Directors may in the future determine to offer a discount
on optional cash purchases if, based on the advice of tax counsel or a
favorable ruling from the Internal Revenue Service ("IRS"), it determines that
such a discount will not jeopardize the Company's status as a REIT. Except with
respect to the Waiver Discount (as defined below), the Company will provide
participants with written notice of a change in the applicable discount rate at
least thirty days prior to the relevant record date.
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.
(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 February , 1997
<PAGE>
(Continued from previous page)
A participant in the Plan may obtain additional shares of Common Stock by
reinvesting dividends on all or part of the shares of Common Stock held by the
participant, 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 by 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.
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 17) from the applicable Market Price (as defined in
Question 12). Currently, under the Plan, the price per share purchased in
excess of $10,000 will not be at a 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 27.
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"). 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.
This Prospectus relates to 1,700,000 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.
2
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
AVAILABLE INFORMATION....................................................... 4
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE............................. 4
IMPERIAL CREDIT MORTGAGE HOLDINGS, INC...................................... 4
SUMMARY OF PLAN............................................................. 5
THE PLAN.................................................................... 6
PURPOSE..................................................................... 7
OPTIONS AVAILABLE TO PARTICIPANTS........................................... 7
ADVANTAGES AND DISADVANTAGES................................................ 8
ADMINISTRATION.............................................................. 9
PARTICIPATION............................................................... 9
PURCHASE AND PRICES OF SHARES............................................... 13
DIVIDENDS ON FRACTIONS...................................................... 18
CERTIFICATES FOR COMMON SHARES.............................................. 19
WITHDRAWALS AND TERMINATION................................................. 19
OTHER INFORMATION........................................................... 20
DIVIDENDS................................................................... 24
USE OF PROCEEDS............................................................. 24
PLAN OF DISTRIBUTION........................................................ 25
LEGAL OPINION............................................................... 25
EXPERTS..................................................................... 25
INDEMNIFICATION............................................................. 26
GLOSSARY.................................................................... 26
SCHEDULE A.................................................................. 28
</TABLE>
3
<PAGE>
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 reports and other information with the Securities and
Exchange Commission (the "Commission"). Reports, proxy statements and other
information concerning the Company can be inspected at Room 1024, Judiciary
Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 and at the following
regional offices of the Commission: New York (7 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 Room 1024, 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 the Company. 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, 1995; (2)
the Company's Quarterly Report on Form 10-Q for the quarter ended March 31,
1996; (3) the Company's Quarterly Report on Form 10-Q for the quarter ended
June 30, 1996; (4) the Company's Quarterly Report on Form 10-Q for the quarter
ended September 30, 1996; and (5) 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 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) 556-0122.
IMPERIAL CREDIT MORTGAGE HOLDINGS, INC.
The Company is a REIT 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's principal
executive office is located at 20371 Irvine Avenue, Santa Ana Heights,
California 92707.
4
<PAGE>
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 12) and without payment of any brokerage
commission or service charge), and investing optional cash payments in
additional shares of Common Stock. See Question 21 regarding brokerage
commissions. 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, to the
extent shares are purchased on the open market, (iii) a 0% to 5% discount,
which is currently at 0%, (subject to change) from the Market Price for the
investment of optional cash payments of up to $10,000, whether purchased
directly from the Company or on the open market, 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. In order to preserve the Company's status as a
REIT, currently no discounts are offered on shares purchased through optional
cash payments under the Plan. However, the Board of Directors may in the
future determine to offer a discount on optional cash purchases if, based on
the advice of tax counsel or a favorable ruling from the IRS, it determines
that such a discount will not jeopardize the Company's status as a REIT.
Except with respect to the Waiver Discount (see Question 17), the Company will
provide Participants (as defined in Question 2) with written notice of a
change in the applicable discount rate at least thirty days prior to the
relevant record date. 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 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
17. 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 17. Each month, at least three business days prior
to each record date (as defined in Question 18), the Company will establish
the Waiver Discount (as defined in Question 17), 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 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 27.
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-
5
<PAGE>
established maximum limit applies to optional cash payments that may be made
pursuant to Requests for Waiver. As of the date hereof, 1,700,000 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.
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.
THE PLAN
The Plan was adopted by the Board of Directors of Imperial Credit Mortgage
Holdings, Inc. (the "Company") on February 14, 1997. 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.
6
<PAGE>
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 12), to
the extent shares are purchased directly from the Company, and by investing
optional cash payments in additional shares of Common Stock at 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 17 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?
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.
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 17 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.
7
<PAGE>
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 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 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 22 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 11.
(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 Investment Date. Therefore, during the Investment Date
Participants will not know the actual number of shares they have purchased.
(c) Because optional cash payments must be received by the Plan
Administrator prior to the related Investment Date, 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 request is directed to the Plan
Administrator at least two business days prior to the Investment Date with
respect to which optional cash payments have been delivered by such
Participant. See Questions 18 and 20.
(d) 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 21 and 27.
8
<PAGE>
ADMINISTRATION
4. WHO ADMINISTERS THE PLAN?
The Company has retained Boston Equiserve 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 22 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) 556-0122.
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 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.
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
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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?
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. Authorization Forms may be
obtained at any time by written request to Boston Equiserve, Dividend
Reinvestment Unit, Mail Stop: 45:01-20, P.O. Box 1681, Boston, Massachusetts
02105-1681, or by telephoning the Plan Administrator at (617) 573-2900.
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 16.
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
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in Question 11) 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, withdraws from the Plan (see Questions 26 and 27), or the Plan
is terminated. See Question 6 for additional information about the
Authorization Form.
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, or withdraws from the Plan
altogether (see Questions 26 and 27), 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
26 and 27 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 37. See Question 11 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. B&N Forms will be
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furnished at any time upon request to the Plan Administrator at the address or
telephone number specified in Question 37.
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.
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 27 regarding withdrawal from the
Plan.
11. 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 ten 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 ten 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 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
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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 17 for information concerning limitations on the minimum and
maximum amounts of optional cash payments that may be made each month and
Question 18 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
THE INVESTMENT DATE.
PURCHASE AND PRICES OF SHARES
12. WHAT WILL BE THE PRICE TO PARTICIPANTS OF SHARES PURCHASED UNDER THE PLAN?
With respect to reinvested dividends, the price per share of Common Stock
acquired directly from the Company will be 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
11), 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 15. 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 15.)
With respect to optional cash payments that do not exceed $10,000 (see
Question 17 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 100% (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 relevant Investment Date (as defined in
Question 11 above) or, if no trading occurs in the Common Stock on such
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Investment Date, for the Trading Day 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.
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. Although no discounts are currently offered on shares acquired
through optional cash purchases, the Board of Directors may determine to offer
such discounts if, based on the advice of tax counsel or a favorable ruling
from the IRS, it determines such discounts would not jeopardize the Company's
status as a REIT. Except with respect to the Waiver Discount (see Question
17), the Company will provide Participants with written notice of a change in
the applicable discount rate at least thirty days prior to the relevant record
date.
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.
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 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 on the Investment Date. 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.
13. 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
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in open market transactions will be no later than ten business days following
the dividend payment date. Dividends will be reinvested on the Investment Date
using the applicable Market Price (as defined in Question 12). 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 18 for a discussion of the Record Dates and Investment Dates
applicable to optional cash payments.
14. 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 12, 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.
15. 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) 556-0122.
16. 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 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.
Currently, there will be no discount from the Market Price applicable to
optional cash payments. However, based on the advice of tax counsel or a
favorable ruling from the IRS, the Company may offer a discount applicable to
optional cash payments. The Company will provide Participants with written
notice of a change in the applicable discount rate at least thirty days prior
to the relevant record date. Refer to Question 17 for a
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discussion of the possible limitations on the purchase price applicable to the
purchase of shares made with optional cash payments.
17. WHAT LIMITATIONS APPLY TO OPTIONAL CASH PAYMENTS?
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
after the relevant Investment Date.
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 18) 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 37.
Participants interested in obtaining further information about a Request for
Waiver should contact the Company's Investor Relations at (714) 556-0122.
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.
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.
Each month, at least three business days prior to the applicable Record Date
(as defined in Question 18), 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. As stated above, the Company currently is not
offering a discount on shares of Common Stock purchased with optional cash
payments, including shares purchased pursuant to Requests for Waiver. (See
Question 12). 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
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may be obtained by contacting the Company's Investor Relations at (714) 556-
0122. Setting a Waiver Discount for an 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 12 for a
description of the price per share in each case.
18. 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 Investment Date 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 ten 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 at least one
business day prior to the Investment Date will be applied to the purchase of
shares of Common Stock on the Investment Date. 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
Investment Date will be promptly returned to Participants without interest
after the Investment Date; such optional cash payments may be resubmitted by a
Participant prior to the next or a later Investment Date.
For a schedule of expected Record Dates and Investment Dates in 1997, see
Schedule A.
19. 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
18. 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 Investment Date and such
check, money order or wire transfer must have cleared on or before the related
Investment Date. 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 THE
INVESTMENT DATE.
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 Investment Date, 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.
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20. MAY OPTIONAL CASH PAYMENTS BE RETURNED?
Upon telephone or written request to the Plan Administrator received at
least two business days prior to the Investment Date 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 18 or clear within
the time limit described in Question 19, will be subject to return to the
Participant as soon as practicable.
21. 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 if,
based on the advice of tax counsel or a favorable ruling from the IRS, it
determines that the Company's payment of such expenses will not jeopardize the
Company's REIT status. 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 to sell all or any portion of their shares (see
Question 27) must pay any related brokerage commissions and applicable stock
transfer taxes.
22. 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
23. WILL PARTICIPANTS BE CREDITED WITH DIVIDENDS ON FRACTIONS OF SHARES?
Yes.
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CERTIFICATES FOR COMMON SHARES
24. 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 37. 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.
25. 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
26. 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 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
Investment Date.
27. 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 37. 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.
19
<PAGE>
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.
28. 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
29. 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.
30. 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 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.
31. 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.
20
<PAGE>
32. 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.
33. 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.
34. 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 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
21
<PAGE>
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 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
long-term capital gain. 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
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, including 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. The Company currently offers no discount on, and
will not pay brokerage commissions with respect to, shares of Common Stock
acquired pursuant to an optional cash purchase under the
22
<PAGE>
Plan. Accordingly, for federal income tax purposes Participants are not
treated as receiving a distribution upon the acquisition of such shares.
Participants will have a tax basis in shares acquired through optional cash
purchases equal to the amount of the optional cash payment. 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.
In the event the Board of Directors determines to offer Common Stock at a
discount from the fair market value of such shares, or to pay 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. 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. Participants are urged to consult their own tax advisors
with respect to the tax treatment of any such actions.
Assuming the Board of Directors determines to offer shares acquired pursuant
to optional cash purchases at a discount, 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 (including a proportionate amount of the
brokerage fees paid by the Company, if any), plus a proportionate amount of
the brokerage commissions paid by the Company, if any.
The IRS has ruled with respect to dividend reinvestment plans similar to the
Plan as currently in effect that such plan will not adversely affect the
qualification of a REIT. In addition, a REIT should be able to include amounts
deemed distributed as dividends under such a plan for purposes of the
dividends paid deduction.
35. 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.
If a Participant is a foreign stockholder whose dividends are subject to
federal income tax withholding at the 30% rate (or a lower treaty rate), the
appropriate amount will be withheld and the balance in shares will be credited
to such Participant's account.
36. 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.
23
<PAGE>
37. WHO SHOULD BE CONTACTED WITH QUESTIONS ABOUT THE PLAN?
All correspondence regarding the Plan should be directed to:
BOSTON EQUISERVE
DIVIDEND REINVESTMENT UNIT
MAIL STOP: 45-01-20, P.O. BOX 1681
BOSTON, MASSACHUSETTS 02105-1681
TELEPHONE: (617) 573-2900
Please mention Imperial Credit Mortgage Holdings, Inc. and this Plan in all
correspondence.
38. 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.
39. 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.
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 April,
July, October and January. 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.
24
<PAGE>
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.
LEGAL OPINION
The validity of the securities offered hereby has been passed upon by
Freshman, Marantz, Orlanski, Cooper & Klein, counsel to the Company.
EXPERTS
The consolidated financial statements of the Company as of December 31, 1995
and 1994, and for each of the years in the three-year period ended December
31, 1995, have been incorporated in this Prospectus by reference to the
Company's Annual Report on Form 10-K, in reliance on the report of KPMG Peat
Marwick LLP, independent certified public accountants, and upon the authority
of said firm as experts in accounting and auditing.
25
<PAGE>
INDEMNIFICATION
The Company's Charter eliminates, to the fullest extent permitted by
Maryland law, director liability for monetary damage for breaches of the
directors' fiduciary duty of care. 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
as agents of the Company. 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.
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 ten 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 ten 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
26
<PAGE>
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 on the Investment Date. 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.
"Participant" means an eligible holder of Common Stock who wishes to
participate in the Plan.
"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.
"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 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.
"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 Investment Date.
"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.
27
<PAGE>
SCHEDULE A
OPTIONAL CASH PAYMENTS
The following table sets forth the applicable dates for optional cash payments
for 1997. 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) 556-
0122 on the 1st of December of each year.
<TABLE>
<CAPTION>
WAIVER DISCOUNT OPTIONAL CASH INVESTMENT
SET DATE RECORD DATE PAYMENT DUE DATE DATE
- ------------------ ------------------ ------------------ ------------------
<S> <C> <C> <C>
April 23, 1997 April 28, 1997 April 29, 1997 April 30, 1997
May 20, 1997 May 23, 1997 May 27, 1997 May 28, 1997
June 23, 1997 June 26, 1997 June 27, 1997 June 30, 1997
July 23, 1997 July 28, 1997 July 29, 1997 July 30, 1997
August 21, 1997 August 26, 1997 August 27, 1997 August 28, 1997
September 22, 1997 September 25, 1997 September 26, 1997 September 29, 1997
October 23, 1997 October 28, 1997 October 29, 1997 October 30, 1997
November 19, 1997 November 24, 1997 November 25, 1997 November 26, 1997
December 18, 1997 December 23, 1997 December 26, 1997 December 29, 1997
</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 ten 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 ten 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.
. Optional cash payments must be received by the Plan Administrator by the end
of the business day immediately preceding the relevant Investment Date.
. 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 Investment
Date.
. The Waiver Discount, if any, is set three business days prior to the
applicable Record Date.
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PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION:
<TABLE>
<S> <C>
Registration fee................................................... $12,106.06
Listing fees....................................................... $17,500.00
Printing expenses.................................................. $20,000.00*
Accounting fees and expenses....................................... $ 3,000.00*
Legal fees and expenses............................................ $20,000.00*
Blue sky fees and expenses......................................... $ 1,500.00*
Miscellaneous expenses............................................. $ 5,893.94*
----------
TOTAL............................................................ 80,000.00*
==========
</TABLE>
- --------
*Estimated
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Maryland General Corporation Law, as amended from time to time ("MGCL")
permits a Maryland corporation to include in its charter a provision limiting
the liability of its directors and officers to the corporation 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 Charter of the Company contains such a
provision which eliminates such liability to the maximum extent permitted by
Maryland law.
The Charter of the Company authorizes it, to the maximum extent permitted by
Maryland law, to obligate itself to indemnify and to pay or reimburse
reasonable expenses in advance of final disposition of a proceeding to (1) any
present or former Director or officer or (2) any individual who, while a
Director of the Company and at the request of the Company, serves or has
served another corporation, partnership, joint venture, trust, employee
benefit plan or any other enterprise as a director, officer, partner or
trustee of such corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise from and against any claim or liability to
which such person may become subject or which such person may incur by reason
of his status as a present or former Director or officer of the Company. The
Bylaws of the Company obligate it, to the maximum extent permitted by Maryland
law, to indemnify and to pay or reimburse reasonable expenses in advance of
final disposition of a proceeding to (1) any present or former Director or
officer who is made a party to the proceeding by reason of his service in that
capacity or (2) any individual who, while a Director of the Company and at the
request of the Company, serves or has served another corporation, partnership,
joint venture, trust, employee benefit plan or any other enterprise as a
director, officer, partner or trustee of such corporation, partnership, joint
venture, trust, employee benefit plan or other enterprise and who is made a
party to the proceeding by reason of his service in that capacity. The Charter
and Bylaws also permit the Company to indemnify and advance expenses to any
person who served a predecessor of the Company in any of the capacities
described above and to any employee or agent of the Company or a predecessor
of the Company.
The MGCL requires a corporation (unless its charter provides otherwise,
which the Company's Charter does not) to indemnify a director or officer who
has been successful, on the merits or otherwise, in the defense of any
proceeding to which he is made a party by reason of his service in that
capacity. The MGCL permits a
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corporation to indemnify its present and former directors and officers, among
others, against judgments, penalties, fines, settlements and reasonable
expenses actually incurred by them in connection with any proceeding to which
they may be made a party by reason of their service in those or other
capacities unless it is established that (1) the act or omission of the
director or officer was material to the matter giving rise to the proceeding
and (i) was committed in bad faith or (ii) was the result of active and
deliberate dishonesty, (2) the director or officer actually received an
improper personal benefit in money, property or services or (3) in the case of
any criminal proceeding, the director or officer had reasonable cause to
believe that the act or omission was unlawful. However, a Maryland corporation
may not indemnify for an adverse judgment in a suit by or in the right of the
corporation. In addition, the MGCL requires the Company, as a condition to
advancing expenses, to obtain (1) a written affirmation by the director or
officer of his good faith belief that he has met the standard of conduct
necessary for indemnification by the Company as authorized by the Bylaws and
(2) a written statement by or on his behalf to repay the amount paid or
reimbursed by the Company if it shall ultimately be determined that the
standard of conduct was not met.
In addition, the Registrant has entered into an Indemnity Agreement (Exhibit
10.4 of its Registration Statement on Form S-11 (File No. 33-96670) and
Amendments No. 1, 2 and 3 filed with the Securities and Exchange Commission on
September 7, 1995, October 23, 1995, October 30, 1995 and November 8, 1995,
respectively) with its officers and Directors.
ITEM 16. EXHIBITS.
<TABLE>
<C> <S>
4. --Dividend Reinvestment and Stock Purchase Plan (included in the
Prospectus)
5. --Opinion of Freshman, Marantz, Orlanski, Cooper & Klein
23.1 --Consent of KPMG Peat Marwick LLP
23.2 --Consent of Freshman, Marantz, Orlanski, Cooper & Klein (included in
Exhibit 5)
24.1 --Power of Attorney of Certain Officers and Directors (included on
Signature Page)
</TABLE>
ITEM 17. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the Registration Statement (or the most recent post-
effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
Registration Statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high and of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than 20 percent change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee" table in
the effective Registration Statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or any
material change to such information in the Registration Statement;
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<PAGE>
provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the Registrant pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in this Registration
Statement;
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
Registration Statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof; and
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of
the offering.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's Annual Report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
Registration Statement shall be deemed to be a new Registration Statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the
Registrant in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with
the securities being registered, the Registrant will, unless in the opinion of
its counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Act and will be governed by
the final adjudication of such issue.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
Certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the Undersigned, thereunto duly
authorized, in the City of Santa Ana Heights, State of California, on February
18, 1997.
IMPERIAL CREDIT MORTGAGE HOLDINGS,
INC.
/s/ Joseph R. Tomkinson
By:____________________________________
Joseph R. Tomkinson
Chief Executive Officer and
Vice Chairman of the Board
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints, jointly and severally, Joseph R. Tomkinson and
Richard J. Johnson and each one of them, individual and without the other, his
or her true and lawful attorneys-in-fact and agents, with full powers of
substitution and resubstitution, for him or her and in his or her name, place
and stead, in any and all capacities, to sign any and all amendments
(including post-effective amendments) to this Registration Statement, and any
registration statement relating to the same offering as the Registration
Statement that is to be effective upon filing pursuant to Rule 462(b) of the
Securities Act of 1933, and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, each acting
alone, full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he or she might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, each
acting alone, or his substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ Joseph R. Tomkinson Vice Chairman of the Board February 18, 1997
____________________________________ and Chief Executive Officer
Joseph R. Tomkinson (Principal Executive
Officer)
/s/ Richard J. Johnson Chief Financial Officer February 18, 1997
____________________________________ (Principal Financial and
Richard J. Johnson Accounting Officer)
/s/ H. Wayne Snavely Chairman of the Board February 18, 1997
____________________________________
H. Wayne Snavely
/s/ James Walsh Director February 18, 1997
____________________________________
James Walsh
/s/ Frank Filipps Director February 14, 1997
____________________________________
Frank Filipps
/s/ Stephan R. Peers Director February 18, 1997
____________________________________
Stephan R. Peers
</TABLE>
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<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT
------- -------
<C> <S>
4. --Dividend Reinvestment and Stock Purchase Plan (included in the
Prospectus)
5. --Opinion of Freshman, Marantz, Orlanski, Cooper & Klein
23.1 --Consent of KPMG Peat Marwick LLP
23.2 --Consent of Freshman, Marantz, Orlanski, Cooper & Klein (included in
Exhibit 5)
24.1 --Power of Attorney of Certain Officers and Directors (included on
Signature Page)
</TABLE>
<PAGE>
EXHIBIT 5
[LETTERHEAD OF FRESHMAN, MARANTZ, ORLANSKI, COOPER & KLEIN]
February 19, 1997
Imperial Credit Mortgage Holdings, Inc.
20371 Irvine Avenue
Santa Ana Heights, California 92707
Ladies and Gentlemen:
We have acted as counsel to Imperial Credit Mortgage Holdings, Inc., a
Maryland Corporation (the "Company") in connection with the preparation of a
Registration Statement on Form S-3 (as such Registration Statement may be
subsequently amended and together with all exhibits thereto, the "Registration
Statement") under the Securities Act of 1933, as amended (the "Securities
Act"), relating to the offer of up to 1,700,000 shares (the "Shares") of
common stock of the Company, par value $.01 ("Common Stock"), to be issued
pursuant to the Imperial Credit Mortgage Holdings, Inc. Dividend Reinvestment
and Stock Purchase Plan (the "Plan").
This opinion is delivered in accordance with the requirements of Item
601(b)(5) of Regulation S-K under the Securities Act.
In connection with this opinion, we have examined and are familiar with
originals or copies, certified or otherwise identified to our satisfaction, of
(i) the Registration Statement, filed with the Securities and Exchange
Commission (the "Commission") under the Securities Act on February 19, 1997
(ii) the Plan, (iii) the Charter of the Company as currently in effect, (iv)
the By-laws of the Company as currently in effect, (v) a specimen of the
certificate to be used to represent the Common Stock, and (vi) resolutions of
the Board of Directors of the Company relating to the issuance of the Shares
and the filing of the Registration Statement. We have also examined originals
or copies, certified or otherwise identified to our satisfaction, of such
records of the Company and such agreements, certificates of public officials,
certificates of officers or representatives of the Company and others, and
such other documents, certificates and records, as we have deemed necessary or
appropriate as a basis for the opinion set forth herein.
In our examination, we have assumed the legal capacity of all natural
persons, the genuineness of all signatures, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as certified or photostatic copies and the
authenticity of the originals of such latter documents. As to any facts
material to the opinion expressed herein, we have relied upon oral or written
statements and representations of officers and other representatives of the
Company and others. We have also assumed that the Shares will be issued for
proper and sufficient consideration, in accordance with the terms of the Plan,
and that the certificates representing such Shares will be properly issued.
Based upon and subject to the foregoing, we are of the opinion that the
Shares, when issued and paid for in accordance with the Plan, will be validly
issued, fully paid and nonassessable.
We hereby consent to the filing of this opinion with the Commission as
Exhibit 5 to the Registration Statement. This opinion is furnished to you
solely in connection with the Registration Statement.
Very truly yours,
/s/ Freshman, Marantz, Orlanski,
Cooper & Klein
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement
on Form S-3 of Imperial Credit Mortgage Holdings, Inc. (the Company) of our
report dated January 25, 1996, with respect to the consolidated balance sheets
of the Company as of December 31, 1995 and 1994 and the related consolidated
statements of operations, changes in stockholders' equity and cash flows for
each of the years in the three-year period ended December 31, 1995, which
report appears in the Annual Report of the Company on Form 10-K, and to the
reference of our firm under the heading "Experts" in the Registration
Statement.
KPMG Peat Marwick LLP
Orange County, California
February 19, 1997
