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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (date of earliest event reported) December 22, 1998
IMPAC MORTGAGE HOLDINGS, INC.
(Name of registrant as specified in its charter)
Maryland 33-0675505
(State or other jurisdiction (I.R.S. employer
of incorporation or organization) identification number)
20371 Irvine Avenue
Santa Ana Heights, California 92707
(Address of principal executive offices) (Zip Code)
Issuer's telephone number: (714) 556-0122
_________________________________________________
(Former name or former address, if changed since last report)
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Item 5. Other Events
Risk Factor.
In order to update and supplement those risk factors previously filed with
the Commission by the Registrant, and to provide current information for
secondary trading purposes, Registrant is hereby filing this Risk Factor
identifying important factors that could cause Registrant's actual consolidated
results of operations to differ materially from those projected in the forward-
looking statements made by or on behalf of the Registrant. This Risk Factors
are also intended to inform investors of the most significant factors that
should be considered in making an investment in the Registrant's securities.
The information contained in the Risk Factor, which is attached as Exhibit 99
hereto, is incorporated herein by reference.
Series B Preferred Stock.
On December 22, 1998, Registrant sold 1,200,000 shares of Series B 10.5%
Cumulative Convertible Preferred Stock, for net proceeds of approximately $28.5
million.
A description of the Series B 10.5% Cumulative Convertible Preferred Stock,
contained in Registrant's Articles Supplementary filed as an exhibit to
Registrant's Current Report on Form 8-K on December 23, 1998, is incorporated
herein by reference.
Description of Capital Stock.
Certain provisions of the Maryland General Corporations Law ("MGCL") and of
the Registrant's Charter and Bylaws effect holder's of the Registrant's Capital
Stock. The following is a summary of those certain provisions of the MGCL and
of the Registrant's Charter and Bylaws and does not purport to be complete and
is subject to and qualified in its entirety by reference to MGCL and to the
Registrant's Charter and Bylaws, copies of which are filed with the Commission.
Removal of Directors
The Charter provides that a director may be removed from office at any time
but only by the affirmative vote of the holders of at least two-thirds of the
votes entitled to be cast in the election of directors.
Business Combinations
Under the MGCL, certain "business combinations" (including a merger, the
share
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exchange or, in certain circumstances, an asset transfer or issuance of
reclassification of equity securities) between a Maryland corporation and any
person who beneficially owns 10% or more of the voting power of the
corporation's shares or an affiliate of the corporation who, at any time within
the two year period prior to the date in question, was the beneficial owner of
10% or more of the voting power of the then outstanding voting stock of the
corporation (an "Interested Stockholder") or an affiliate of such interested
stockholder are prohibited for five years after the most recent date on which
the Interested Stockholder becomes an Interested Stockholder. Thereafter, any
such business combination must be recommended by the board of directors of such
corporation and approved by the affirmative vote of at least (a) 80% of the
votes entitled to be cast by holders of voting stock of the stock of the
corporation and (b) two-thirds of the votes entitled to be cast by holders of
voting stock other than shares held by the Interested Stockholder with whom (or
with whose affiliate) the business combination is to be effected, unless, among
other conditions, the corporation's common stockholders receive a minimum price
(as defined in MGCL) for their shares and the consideration received in cash or
in the same form as previously paid by the Interested Stockholder for its
shares. These provisions of Maryland law do not apply, however, to business
combinations that are approved or exempted by the board of directors of the
corporation prior to the time the Interested Stockholder becomes an Interested
Stockholder. Pursuant to the statute, Registrant has exempted any business
combinations involving Imperial Credit Industries, Inc. ("ICII") and,
consequently, the five-year prohibition and the super-majority vote requirements
of the statute will not in any event apply to business combinations between ICII
and the Registrant. As a result, ICII may be able to enter into business
combinations with the Registrant which may not be in the best interest of the
stockholders, without compliance by the Registrant with the super-majority vote
requirements and the other provisions of the statute.
Control Share Acquisitions
The MGCL provides that "control shares" of a Maryland corporation acquired
in a "control share acquisition" have no voting rights except to the extent
approved by a vote of two-thirds of the votes entitled to be cast on the matter,
excluding shares of stock owned by the acquiror by officers or by directors who
are employees of the corporation. "Control shares" are voting shares of stock
which, if aggregated with all other such shares of stock previously acquired by
the acquiror or in respect of which the acquiror is able to exercise or direct
the exercise of voting power in electing directors within one of the following
ranges of voting power: (1) one-fifth or more but less than one-third, (2) one-
third or more but less than the majority, or (3) a majority or more of all
voting power. Control shares do not include shares the acquiring person is
then entitled to vote as a result of having previously obtained stockholder
approval. A "control share acquisition" means the acquisition of control
shares, subject to certain exceptions.
A person who has made or proposes to make a control share acquisition, upon
satisfaction of certain conditions (including an undertaking to pay expenses),
may compel the board of directors of the corporation to call a special meeting
of stockholders to be held within 50 days of
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demand to consider the voting rights of the shares. If no request for a meeting
is made, the corporation may itself present the question at any stockholders
meeting.
If voting rights are not approved at the meeting or if the acquiring person
does not deliver an acquiring person statement as required by the statute then,
subject to certain conditions and limitations, the corporation may redeem any or
all of the control shares (except those for which voting rights have previously
been approved) for fair value determined, without regard to the absence of
voting rights for the control shares as of the date of the last control share
acquisition by the acquiror or at any meeting of stockholders at which the
voting rights of such shares are considered and not approved. If voting rights
for control shares are approved at a stockholder meeting and the acquiror
becomes entitled to vote a majority of the shares entitled to vote, all other
stockholders may exercise appraisal rights. The fair value of the shares as
determined for purposes of such appraisal rights may not be less than the
highest price per share paid by the acquiror in the control share acquisition.
The control share acquisition statute does not apply (a) to shares acquired
in a merger, consolidation or share exchange if the corporation is a party to
the transaction or (b) to acquisitions approved or exempted by the charter or
bylaws of the corporation and adopted at any time before the acquisition of
shares.
The Bylaws of the Registrant contain a provision exempting from the control
share acquisition statute any and all acquisitions by any person of the
Registrant's shares of stock. There can be no assurance that such provision
will not be amended or eliminated at any time in the future.
Amendment to the Charter
The Registrant reserves the right from time to time to make any amendment
to its Charter, now or hereafter authorized by law, including any amendment
which alters the contract rights as expressly set forth in the charter, of any
shares of outstanding stock. The Charter may be amended only by the affirmative
vote of holders of shares entitled to cast not less than a majority of all the
votes entitled to be cast on the matter, provided, however, that provisions on
removal of directors may be amended only by the affirmative vote of holders of
shares entitled to cast not less than two-thirds of all the votes entitled to be
cast in the election directors.
Dissolution of the Registrant
The dissolution of the Registrant must be approved by the affirmative vote
of holders of shares entitled to cast not less than a majority of all votes
entitled to be cast on the matter.
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Advance Notice of Director Nominations and New Business
The Bylaws provided that (a) with respect to an annual meeting of
stockholders, nominations of persons for election to the Board of Directors and
the proposal of business to be considered by stockholders may be made only (1)
pursuant to Registrant notice of meeting, (2) by the Board of Directors or (3)
by a stockholder who is entitled to vote at the meeting and has complied with
the advance notice procedures set forth in the Bylaws and (b) with respect to
special meetings of stockholders, only the business specified in the
Registrant's notice of meeting may be brought before the meeting of stockholders
and nominations of persons for election to the Board of Directors may be made
only (1) pursuant to the Registrant's notice of meeting, (2) by the Board of
Directors or (3) provided that the Board of Directors has determined that
directors shall be elected at such meeting, by a stockholder who is entitled to
vote at the meeting and has complied with the advance notice provisions set
forth in the Bylaws.
Possible Anti-takeover Effect of Certain Provisions of Maryland Law of the
Charter and Bylaws
The business combination provisions and, if the applicable provision in the
Bylaws is rescinded, the control share acquisition provisions of the MGCL, the
provisions of the Charter on ownership and transfer of stock and on removal of
directors and the advance notice provisions of the Bylaws could delay, defer or
prevent a transaction or a change in control of the Registrant or other
transaction that might involve a premium price for holders of the Registrant's
common stock or otherwise be in their best interest.
Item 7. Financial Statements and Exhibits
(c) Exhibits
3.1b Articles Supplementary*
99 Risk Factor.
* Previously filed with the Securities and Exchange Commission as an Exhibit to
the Company's Current Report on Form 8-K on December 23, 1998, and incorporated
herein by reference.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned, hereunto duly authorized.
Date: January 26, 1999
IMPAC MORTGAGE HOLDINGS, INC.
BY: /s/ Richard Johnson
___________________________
Richard Johnson
Executive Vice President Finance
and Chief Financial Officer
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Exhibit 99
Risk Factor
Grant of Excepted Holder Status to the Purchasers of Registrant's Series B
Preferred Stock May Affect Registrant's Status as a REIT
The Internal Revenue Code prohibits ownership of more than 50% of a REIT's
shares by five or fewer individuals during the last half of a REIT's taxable
year. Our charter generally precludes anyone from beneficially owning in excess
of 9.5% of our capital stock to ensure that 50% of our capital stock is not held
by five or fewer individuals at any time. However, our charter permits our
board of directors to make exceptions to this ownership limitation, upon the
provision of certain representations and undertakings by a prospective purchaser
of our capital stock, with such person becoming an excepted holder. In
connection with the offering of the Series B Preferred Stock, our board of
directors authorized excepted holder status to the initial two purchasers of the
Series B Preferred Stock. While our charter permits us to redeem the Series B
Preferred Stock at any time if necessary to preserve our REIT status, we cannot
assure holders of Series B Preferred Stock that we will have the funds legally
available to redeem a sufficient number of shares of Series B Preferred Stock to
remain a REIT. The loss of REIT status will have a material adverse affect on
our business, financial condition and results of operations.
