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REGISTRATION NO. 333-58153
PROSPECTUS
ANTHRACITE CAPITAL, INC.
DIVIDEND REINVESTMENT AND
STOCK PURCHASE PLAN
The Dividend Reinvestment and Stock Purchase Plan (the "Plan") of Anthracite
Capital, Inc. (the "Company") provides both existing stockholders (the
"Stockholders") of the Company's common stock ("Common Stock") and interested
new investors with a convenient and cost effective method to purchase shares
of the Common Stock. A participant in the Plan may purchase additional shares
of Common Stock by reinvesting some or all cash dividends paid on the
Company's outstanding Common Stock. Stockholders that elect to participate in
the Plan may also make monthly optional cash purchases ("Optional Cash
Purchases") which are subject to a minimum monthly purchase limit of $100 and
a maximum monthly purchase limit of $5,000. Interested investors not currently
stockholders may make initial cash purchases ("Initial Cash Purchases") which
are subject to a minimum monthly purchase limit of $250 and a maximum monthly
purchase limit of $5,000. The price to be paid for each share of Common Stock
purchased directly from the Company under the Plan will be a price equal to
the market price (as defined herein) of the Common Stock less a discount
ranging from 0% to 5% (the "Discount Rate"). The price of the shares of Common
Stock purchased on the open market will be the average price of all shares of
Common Stock purchased for all Participants in the Plan without any discount.
The Prospectus relates to the offer and sale of up to 2,000,000 authorized
but unissued shares of Common Stock under the Plan. Participants should retain
this prospectus for future reference. The Company's Common Stock is listed on
the New York Stock Exchange under the symbol "AHR".
Plan Highlights:
--Any registered stockholder may elect to participate in the Plan.
--Interested investors, not currently stockholders of the Company, may make
their initial investment in the Company through the Plan.
--0% to 5% discount on shares of Common Stock purchased directly from the
Company.
--No brokerage fees on purchases made in the open market except to the
extent such fees exceed 5%.
--Certificate safekeeping in book entry form at The Bank of New York, at no
charge to Participant.
--Recordkeeping and reporting will be provided, at no charge to
Participant.
--Full or partial dividend reinvestment options.
--Optional and Initial Cash Purchases.
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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 PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
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The date of this Prospectus is December 11, 1998.
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AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information filed by the Company can be inspected and
copied (at prescribed rates) at the public reference facilities maintained by
the Commission at 450 Fifth Street N.W., Washington, D.C. 20549, and at its
Regional Offices located at Northwestern Atrium Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661 and 7 World Trade Center, Suite
1300, New York, New York 10048. The Company files information electronically
with the Commission, and the Commission maintains a web site that contains
reports, proxy and information statements and other information regarding
registrants (including the Company) that file electronically with the
Commission. The address of the Commission's web site is http://www.sec.gov.
The Company maintains a web site that contains information regarding the
Company. The address of the Company's web site is http://ahr.blackrock.com.
This Prospectus constitutes a part of a Registration Statement on Form S-3
together with all exhibits referred to in the Registration Statement (the
"Registration Statement") filed by the Company with the Commission under the
Securities Act of 1933, as amended (the "Securities Act"). This prospectus
omits certain information contained in the Registration Statement, and
reference is hereby made to the Registration Statement for further information
with respect to the Company and the shares offered hereby. Any statement
contained or incorporated by reference herein concerning the provisions of any
document is not necessarily complete, and in each instance, reference is made
to the copy of such document filed as an exhibit to the Registration Statement
or otherwise filed with the Commission. Each such statement is qualified in
its entirety by such statement.
INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents, filed with the Commission pursuant to the 1934 Act,
are incorporated by reference in this Prospectus:
1. The audited balance sheet of the Company at March 5, 1998 contained in
the Company's Registration Statement on Form S-11 (File No. 333-40813);
2. The Company's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1998, including exhibits thereto; and
3. The description of the Company's Common Stock contained in the
Company's Registration Statement on Form 8-A under the Exchange Act,
including any amendment or report filed to update the description.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 and
15(d) of the Exchange Act, prior to filing a post-effective amendment which
indicates that all securities offered hereby have been sold or which
deregisters all securities offered hereby then remaining unsold, shall be
deemed to be incorporated by reference herein and shall be deemed to be a part
hereof from the date of the filing of such documents. Any statement contained
in a document incorporated or deemed to be incorporated by reference herein
shall be deemed to be modified, superseded or replaced by a statement or
information contained in any other subsequently filed document incorporated
herein by reference. Any such statement so modified, superseded or replaced
shall not be deemed, except as so modified, superseded or replaced, to
constitute a part of this Prospectus.
Anyone receiving a copy of this Prospectus may obtain, without charge, a
copy of any of the documents incorporated by reference herein, except for any
exhibits to such documents. Written requests should be sent to Anthracite
Capital, Inc., 345 Park Avenue, New York, New York 10154 or sent via e-mail to
the Company at its e-mail address, [email protected], or call (212)
409-3333.
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THE COMPANY
Anthracite Capital, Inc. (the "Company"), a Maryland corporation, was formed
in November 1997 to invest in multifamily, commercial and residential mortgage
loans, mortgage-backed securities and other real estate related assets in both
U.S. and non-U.S. markets. The Company uses its equity capital and borrowed
funds to seek to achieve strong investment returns by maximizing the spread of
investment income (net of credit losses) earned on its real estate assets over
the cost of financing and hedging these assets. The Company will elect to be
taxed as a real estate investment trust ("REIT") under the Internal Revenue
Code of 1986, as amended (the "Code"). The Company generally will not be
subject to federal income tax to the extent that it distributes its net income
to its stockholders and maintains its qualification as a REIT.
The day-to-day operations of the Company are managed by BlackRock Financial
Management, Inc. (the "Manager"), subject to the direction and oversight of
the Company's Board of Directors, which consists of six members, four of whom
are unaffiliated with the Manager or its affiliates. The Manager, a Delaware
corporation, is a subsidiary of PNC Bank, N.A.
DIVIDEND AND DISTRIBUTION POLICY
The Company intends to pay dividends and to make such distributions to its
stockholders in amounts such that all or substantially all of its taxable
income in each year (subject to certain adjustments) is distributed so as to
qualify as a REIT under the Code. Taxable income, if any, not distributed
through regular dividends will be distributed annually in a special dividend.
All distributions will be made by the Company at the discretion of the Board
of Directors and will depend on the earnings of the Company, financial
condition of the Company, maintenance of REIT status and such other factors as
the Board of Directors may deem relevant from time to time.
USE OF PROCEEDS
The net proceeds to the Company from the sale of shares of Common Stock
offered hereby will be used for general corporate purposes.
SUMMARY OF THE PLAN
The Plan provides Stockholders and other investors with a convenient and
economical way to purchase shares of Common Stock through the reinvestment of
all or a portion of their cash dividends paid on Common Stock in additional
shares of Common Stock. There is no minimum or maximum limitation on the
amount of dividends a Participant may reinvest under the Plan. In addition to
the reinvestment of dividends, Stockholders who are Participants in the Plan
may invest additional funds through Optional Cash Purchases of not less than
$100 and not more than $5,000 per month (except in cases covered by a Request
for Waiver, as discussed below). Persons not currently Stockholders of the
Company may become Participants by making an Initial Cash Purchase of not less
than $250 and not more than $5,000 to purchase shares under the Plan (except
in cases covered by a Request for Waiver). For purposes of these limitations,
all Plan accounts under the common control or management of a Participant may
be aggregated at the Company's sole discretion. Optional Cash Purchases and
Initial Cash Purchases (collectively "Cash Purchases") in excess of $5,000 may
be made only upon acceptance by the Company of a completed Request for Waiver
form from a Participant.
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To fulfill Plan requirements, shares of Common Stock may be purchased
directly from the Company or, at the Company's election, in the open market or
in privately negotiated transactions. Shares purchased directly from the
Company under the Plan (whether in connection with Cash Purchases of $5,000 or
less per month or reinvestment of dividends) may be issued at a discount of 0%
to 5% (the "Discount Rate") below the Market Price for Dividend Reinvestments
and the Market Price for Cash Purchases (both as defined herein). As of the
date of this Prospectus, the discount is 3%, but is subject to change from
time to time or discontinuance at the Company's discretion for future
investment periods, without prior notice to the Participants, after a review
of current market conditions, the level of participation in the Plan, the
Company's current and projected capital needs, and the Company's need to
maintain its status as a REIT for tax purposes. The Company may establish a
different discount ranging from 0% to 5% (the "Waiver Discount") regarding
shares purchased from the Company for Cash Purchases exceeding $5,000 per
month and approved by the Company pursuant to a Request for Waiver. The
Company may also, without prior notice to Participants, change its
determination that shares of Common Stock will be purchased by the Plan
Administrator directly from the Company or on the open market. No discount
will be offered on shares purchased under the Plan in the open market or in
privately negotiated transactions.
Each month, at least three business days prior to the first day of the
relevant Pricing Period (as defined herein), the Company may establish a
Waiver Discount and Threshold Price applicable to Cash Purchases exceeding
$5,000. The Waiver Discount, which may vary each month from 0% to 5%, 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. With respect to Cash Purchases that exceed $5,000
only, for each Trading Day (as defined herein) of the related twelve-day
Pricing Period on which the Threshold Price is not satisfied, one-twelfth of a
Participant's Cash Purchase will be returned without interest. Cash Purchases
that do not exceed $5,000, and the reinvestment of dividends in additional
shares of Common Stock, will not be subject to such Threshold Price, if any.
If shares are purchased under the Plan other than directly from the Company,
no discount will be offered and no Threshold Price will be applicable.
In deciding whether to approve a Request for Waiver, the Company will
consider relevant factors including, but not limited to, whether the Plan is
then acquiring newly issued or treasury shares directly from the Company or
acquiring shares from third parties in the open market or in privately
negotiated transactions, the Company's needs for additional funds, the
attractiveness of obtaining such additional funds through the sale of Common
Stock as compared to other sources of funds, the purchase price likely to
apply to any sale of Common Stock under the Plan, the Participant submitting
the request, the extent and nature of such Participant's prior participation
in the Plan, the number of shares of Common Stock held by such Participant and
the aggregate amount of cash investments for which Requests for Waiver have
been submitted by all Participants. If such requests are submitted for any
Cash Purchase Investment Date (as defined herein) for an aggregate amount in
excess of the amount the Company is then willing to accept, the Company may
honor such requests in order of receipt, pro rata or by any other method that
the Company in its sole discretion determines to be appropriate. A broker,
bank or other nominee may reinvest dividends and make Cash Purchases on behalf
of Beneficial Owners. Cash Purchases submitted by brokerage firms or other
nominees on behalf of Participants will be aggregated for purposes of
determining whether the $5,000 limit would be exceeded.
From time to time, financial intermediaries, including brokers and dealers,
and other persons may engage in positioning transactions in order to benefit
from the discount from market price of the Common Stock acquired under the
Plan. Such transactions may cause fluctuations in the trading volume of the
Common Stock. Financial intermediaries and such other persons who engage in
positioning transactions may be deemed to be underwriters. The Company has no
arrangements or understandings, formal or informal, with any person relating
to the sale of
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shares to be received pursuant to the Plan. The Company reserves the right to
modify, suspend or terminate participation in the Plan by otherwise eligible
persons in order to eliminate practices which are inconsistent with the
purpose of the Plan.
Subject to the availability of shares of Common Stock registered for
issuance under the Plan, there is no total maximum number of shares that can
be issued pursuant to the reinvestment of dividends and no pre-established
maximum limit applicable to cash investments that may be made pursuant to Cash
Purchases. As of the date hereof, 2,000,000 shares of Common Stock have been
registered and are available for sale under the Plan.
Shares purchased directly from the Company through dividend reinvestment and
Cash Purchases under the Plan will be issued without a sales commission. If
the shares of Common Stock to be purchased under the Plan are purchased in the
open market instead of directly from the Company, the Company will pay any
brokerage fees or commissions on such purchases, up to 5% of the purchase
price of the shares of the Common Stock. Any commissions in excess of 5% will
be paid by the Participants on a pro rata basis. The Discount Rate will not
apply to open market purchases or to privately negotiated purchases of Common
Stock.
Participants in the Plan who reinvest dividends will be treated as having
received a dividend for federal income tax purposes. See "Federal Income Tax
Consequences." Participants will have limited control regarding the specific
timing of optional cash purchases and sales under the Plan. Furthermore,
Participants will generally be unable to depend on the availability of a
market discount regarding shares acquired under the Plan. See "The Plan--
Advantages and Disadvantages."
THE PLAN
The Dividend Reinvestment and Stock Purchase Plan was adopted by the Board
of Directors on June 10, 1998.
ADVANTAGES AND DISADVANTAGES
Advantages
. The Plan provides Participants with the opportunity to purchase
additional shares of Common Stock, if desired, by automatically
reinvesting all or a portion of their cash dividends on Common Stock in
the Plan.
. In addition to the reinvestment of dividends, the Plan provides
Stockholders with the opportunity to make monthly investments of Common
Stock through Optional Cash Purchases, subject to a minimum and maximum
amount. Optional Cash Purchases may be made by check, money order, or
electronic funds transfer from a pre-designated bank account. Optional
Cash Purchases may be made occasionally or at regular intervals, as the
Participant desires. Participants may make Optional Cash Purchases even
if dividends on their shares of Common Stock are not being reinvested.
. The Plan also provides non-stockholders of the Company the opportunity to
become Participants by making an Initial Cash Purchase in the Company's
Common Stock, subject to a minimum and maximum amount.
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. Shares purchased directly from the Company through dividend reinvestment
under the Plan will be issued without a sales commission and may be
issued at the Discount Rate to the Market Price for Dividend
Reinvestments (as defined herein). If the Company should elect that the
shares of Common Stock to be purchased under the Plan are to be purchased
in the open market instead of directly from the Company, the Company will
pay any brokerage fees or commissions on such purchases, up to 5% of the
purchase price of the shares of the Common Stock. Any commissions in
excess of 5% will be paid by the Participants on a pro rata basis. The
Discount Rate will not apply to open market purchases or to privately
negotiated purchases of Common Stock.
. Shares purchased directly from the Company for investment through Cash
Purchases under the Plan will be issued without a sales commission and
may be issued at the Discount Rate to the Market Price for Cash Purchases
(as defined herein). If the Company elects that the shares of Common
Stock to be purchased under the Plan are to be purchased in the open
market instead of directly from the Company, the Company will pay any
brokerage fees or commissions on such purchases, up to 5% of the purchase
price of the shares of the Common Stock. Any commissions in excess of 5%
will be paid by the Participants on a pro rata basis. The Discount Rate
will not apply to open market purchases or to privately negotiated
purchases of Common Stock.
. Funds invested in the Plan are fully invested through the purchase of
fractions of shares, as well as whole shares, and proportionate cash
dividends on fractions of shares are used to purchase additional shares.
. Participants may direct the Plan Administrator to transfer, at any time
and at no cost to the Participant, all or a portion of the Participant's
shares in the Plan to a Plan account for another person.
. The Plan offers a "share safekeeping" service whereby, at no cost,
Participants may deposit their Common Stock certificates with the Plan
Administrator and have their ownership of such Common Stock maintained on
the Plan Administrator's records as part of their Plan account.
. Participants will receive statements containing year-to-date information
on all Plan transactions in a Participant's account within a reasonable
time after a transaction occurs, designed to simplify the Participants'
record keeping.
Disadvantages
. Participants in the Plan who reinvest dividends will be treated as having
received dividend income on the dividend payment date (the "Dividend
Payment Date") for federal income tax purposes; such dividend will
generally give rise to a tax liability notwithstanding the fact that no
cash was paid to Participants. See "Federal Income Tax Consequences."
. No interest will be paid by the Company or the Plan Administrator on
dividends or funds for Cash Purchases held pending reinvestment or
investment or to be returned to the Participant. In addition, Cash
Purchases exceeding $5,000 per month may be subject to return to the
Participant (in whole or proportionate part) without interest in the
event that (i) a Threshold Price has been established with respect to
shares to be purchased from the Company, and (ii) such Threshold Price is
not met for any day on which the New York Stock Exchange ("NYSE") is open
for trading ("Trading Day") during the twelve Trading Days prior to the
date scheduled for investment of the funds contributed for Cash Purchases
for that month (the "Pricing Period").
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. Participants will have limited control regarding the specific timing of
purchases and sales under the Plan. Because purchases under the Plan will
be made no earlier than twelve Trading Days following receipt of an
investment instruction, and because sales under the Plan will be effected
by the Plan Administrator only as soon as practicable after its receipt
of such instructions, Participants may be unable to achieve the same
level of control over purchase and sale timing that they might have for
investments made outside the Plan. The market price of the shares of
Common Stock may fluctuate between the time of receipt of an investment
instruction and the time at which the shares of Common Stock are
purchased.
. A Participant's investment in the shares of Common Stock held in a
Participant's Account is no different than an investment in directly held
shares of Common Stock in this regard. A Participant bears the risk of
loss and the benefits of gain from market price changes for all of a
Participant's shares of Common Stock. NEITHER THE COMPANY NOR THE PLAN
ADMINISTRATOR CAN GUARANTEE THAT SHARES OF COMMON STOCK PURCHASED UNDER
THE PLAN WILL, AT ANY PARTICULAR TIME, BE WORTH MORE OR LESS THAN THEIR
PURCHASE PRICE.
. The Company, in its sole discretion, without prior notice to
Participants, may change its determination as to whether shares of Common
Stock will be purchased by the Plan Administrator directly from the
Company or through open market or privately negotiated purchases, instead
of directly from the Company. No Discount Rate will be applied on shares
purchased under the Plan in the open market or in privately negotiated
purchases. The Company, without prior notice to Participants, may lower
or eliminate the Discount Rate on shares to be purchased directly from
the Company for future investment periods. As a result, Participants will
generally be unable to depend on the availability of a market discount
regarding shares acquired under the Plan. Participants may obtain the
applicable Discount Rate by telephoning the Plan Administrator at (800)
524-4458 three business days prior to the first day of the Pricing
Period.
. With respect to Cash Purchases (including Cash Purchases exceeding $5,000
per month), while the Plan allows the Company to establish a Discount
Rate from the Market Price for Cash Purchases of the shares, there can be
no assurance that such Market Price for Cash Purchases, as so discounted,
will not be equal to or greater than the purchase price of the shares on
the relevant date of investment of the funds contributed for Cash
Purchases (the "Cash Purchase Investment Date").
ADMINISTRATION
The Plan is administered by The Bank of New York (the "Plan Administrator"),
the Transfer Agent and Registrar for the Company. As the agent for
participating stockholders ("Participants"), the Plan Administrator will
administer the Plan in accordance with the terms and conditions of the Plan as
set forth herein.
PARTICIPATION
Participation in the Plan is open to any person or entity, whether or not a
Stockholder of the Company, who fulfills the requirements for participation
described below under "Participation Options." A Stockholder who owns shares
of Common Stock in their own name is referred to herein as a "Stockholder of
Record." A Stockholder of Record may participate directly in the Plan. A
Stockholder who beneficially owns shares of Common Stock that are registered
in a name other than such Stockholder's name (for example, where shares are
held in the name of a broker, bank or other nominee) is referred to herein as
a "Beneficial Owner." Beneficial Owners may participate in the Plan by either
(i) becoming a Stockholder of Record by having one or more shares
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transferred into its own name, or (ii) coordinating their participation with
their broker, bank or other nominee who is the record holder to participate on
their behalf. A prospective investor who holds no shares of Common Stock may
also participate, at their option, either directly or through a broker, bank
or other nominee by following the enrollment procedures described below.
Stockholders who are not citizens or residents of the United States for
federal income tax purposes, and Stockholders owning, actually or
constructively (taking into account the constructive ownership provisions
applicable to REITs in the Code), Common Stock in an amount equal to or
greater than 9.8% of the outstanding Common Stock (the "Ownership Limit") will
not be eligible to participate in the Plan. To the extent consistent with
Sections 856 through 860 of the Code, and in accordance with the provisions of
the Company's Amended and Restated Articles of Incorporation, the Company's
Board of Directors may waive the Ownership Limit for, and at the request of,
certain purchasers to allow participation in the Plan.
The Plan is intended for the benefit of investors in the Company and not for
persons or entities who accumulate accounts under the Plan over which they
have control for the purpose of exceeding the $5,000 per month maximum without
seeking the advance approval of the Company or who engage in transactions that
cause or are designed to cause aberrations in the price or trading volume of
the Common Stock. Notwithstanding anything in the Plan to the contrary, the
Company reserves the right to exclude from participation in the Plan, at any
time, (i) persons or entities who attempt to circumvent the Plan's standard
$5,000 per month maximum by accumulating accounts over which they have control
or (ii) any other persons or entities, as determined in the sole discretion of
the Company. For purposes of this limitation, the Company reserves the right
to aggregate all Cash Purchases for Participants with more than one account
using the same name, address or social security or taxpayer identification
number. For Participants unable to supply a social security or taxpayer
identification number, participation may be limited by the Company to only one
Participant's Account. Also for the purpose of such limitations, all
Participant's Accounts that the Company believes to be under common control or
management or to have common ultimate beneficial ownership may be aggregated.
In the event the Company exercises its right to aggregate investments and the
result would be an investment in excess of $5,000 without an approved Request
for Waiver, the Company will return, without interest, as promptly as
practicable, any amount in excess of the investment limitations.
PARTICIPATION OPTIONS
The Authorization Form appoints the Plan Administrator as agent for the
Participant and directs the Company to pay to the Plan Administrator such
Participant's cash dividends on all or a specified number of shares of Common
Stock owned by the Participant ("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 Dividend Reinvestment Date additional shares of Common
Stock with such dividends. The Authorization Form also directs the Plan
Administrator to purchase on the relevant Cash Purchase Investment Date
additional shares of Common Stock with Cash Purchases of not more than $5,000,
if any, made by Participants. See "Cash Purchases--Waiver of Maximum Cash
Purchase Limitation" below for a discussion of the requirements for Cash
Purchases exceeding $5,000. See "Broker and Nominee Form" below for a
discussion of the requirements for Optional Cash Purchases of a Beneficial
Owner and Initial Cash Purchases of an investor who is not a Stockholder of
the Company, whose broker, bank or other nominee holds or will hold such
investor'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 until the Participant specifies otherwise by contacting the
Plan Administrator, withdraws from the Plan, or the Plan is terminated.
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The Authorization Form provides for the purchase of additional shares of
Common Stock through the following investment options:
Full Dividend Reinvestment. The Plan Administrator will apply any cash
dividends on all shares of the Common Stock then or subsequently registered in
the Plan under the Participant's name, and all cash dividends on Plan Shares,
together with any Optional Cash Purchases or Initial Cash Purchase, toward the
purchase of additional shares of Common Stock.
Partial Dividend Reinvestment. The Plan Administrator will apply cash
dividends on shares of Common Stock then registered in the Plan under the
Participant's name and specified on the Authorization Form, and all cash
dividends on Plan Shares, together with any Optional Cash Purchases or Initial
Cash Purchase, toward the purchase of additional shares of Common Stock.
Cash Purchases. The Plan Administrator will only apply voluntary cash
contributions for Cash Purchases received from the Participant toward the
purchase of additional shares of Common Stock. The Participant will continue
to receive cash dividends on shares of Common Stock registered in the Plan
under the Participant's name in the usual manner.
Each Participant may select either one of the dividend reinvestment options
and/or the Cash Purchase option. In each case, dividends will be reinvested on
all Participating Shares and on all Plan Shares held in the Plan account,
including dividends on Common Stock purchased with any Initial Cash Purchases,
until a Participant specifies otherwise by contacting the Plan Administrator,
or withdraws from the Plan altogether, or until the Plan is terminated. If a
Participant would prefer to receive cash payments of dividends on Plan Shares
rather than reinvest such dividends, those shares must be withdrawn from the
Plan by written notification to the Plan Administrator using the transaction
request form attached to the bottom portion of the Account Statement. See
"Termination of Participation" below. Participants may change their investment
options at any time by requesting a new Authorization Form and returning it to
the Plan Administrator.
Participation in the Plan will begin upon receipt of a properly completed
Authorization Form and/or Broker and Nominee Form (and, in cases of cash
investments exceeding $5,000, receipt and approval by the Company of a
properly completed Request for Waiver). The funds for a Cash Purchase may be
submitted with the initial Authorization Form. Thereafter, it will not be
necessary to submit an additional Authorization Form and Cash Purchases may be
made monthly or periodically at the election of the Participant. Once an
Authorization Form has been submitted, it is not necessary to submit one with
subsequent Cash Purchases. See "The Plan--Purchase and Price of Shares" for
more details on Cash Purchases and Dividend Reinvestments.
With respect to the dividend reinvestment portion of the Plan, the
Authorization Form (and the Broker and Nominee Form if necessary) must be
received by the Plan Administrator at least two (2) calendar days prior to the
Record Date established for a particular dividend in order for a Stockholder
to be eligible for reinvestment of such dividends under the Plan for that
related dividend; otherwise, reinvestment will begin on the Dividend
Reinvestment Date following the next record date. With respect to Cash
Purchases, the Plan Administrator must receive the Authorization Form, good
funds, and the Broker and Nominee Form if necessary, at least one business day
prior to the commencement of the Pricing Period in order for a Participant's
Cash Purchase to be invested on the related Cash Purchase Investment Date;
otherwise, such authorization will be effective as of the next Cash Purchase
Investment Date and the funds will be returned to the Participant as provided
in "The Plan--Purchase and Price of Shares." With respect to existing
Stockholders, if the Authorization Form (and the Broker and Nominee Form if
necessary) is received in the period between any Record Date and Dividend
Payment Dates that dividend will be paid in cash and the initial dividend
reinvestment will begin on the next Dividend Reinvestment Date.
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BROKER AND NOMINEE FORM
The Broker and Nominee Form provides the only means by which a broker, bank
or other nominee holding shares of a Beneficial Owner, or planning to hold
shares of an interested investor who is not currently a Stockholder of the
Company, in the name of a major securities depository may invest Cash
Purchases within the minimum and maximum investment limitation established for
the Plan (see "Cash Purchases" below) on behalf of such Beneficial Owner or
interested investor. A Broker and Nominee Form must be delivered to the Plan
Administrator each time such broker, bank or other nominee transmits Cash
Purchases. Broker and Nominee Forms may be obtained at any time by telephoning
the Plan Administrator at (800) 524-4458.
The Broker and Nominee Form and appropriate instructions must be received by
the Plan Administrator not later than 12:00 Noon, New York City time, on the
business day immediately preceding the relevant Pricing Period in order to be
invested on the Cash Purchase Investment Date, otherwise the Cash Purchase
will be returned, without interest.
Shares issued pursuant to a properly completed Broker and Nominee Form will
not be deemed Plan Shares. Therefore, subsequent dividends will be paid in
cash unless otherwise instructed by the Beneficial Owner (see "Participation"
above for a discussion of the requirements for Beneficial Owner participation
in the reinvestment of dividends).
COSTS
The Company will pay all administrative costs of the Plan. Participants pay
no brokerage commissions, fees, expenses or service charges under the Plan in
connection with purchases under the Plan; provided, however, a Beneficial
Owner may be required to pay a fee to a broker, bank or other nominee
participating on behalf of such Beneficial Owner. If the Company elects that
the shares of Common Stock to be purchased under the Plan are to be purchased
in the open market instead of directly from the Company, the Company will pay
any brokerage fees or commissions on such purchases up to 5% of the purchase
price of the shares of Common Stock. Any commissions in excess of 5% will be
paid by the Participants on a pro rata basis. When shares of Common Stock are
sold by the Plan Administrator for a Participant, the Participant will be
responsible for any commissions, fees, expenses, service charges or other
expenses incurred pursuant to the sale of such shares of Common Stock. No
service fees will be charged to Participants making optional cash purchases
through electronic fund transfers. However, the financial institution
designated by a Participant on the Authorization Form (and the Broker and
Nominee Form if necessary) may charge a fee for participating in the
electronic fund transfer. Participants will be charged the Plan
Administrator's prevailing fees for dishonored checks and failed electronic
fund transfers due to insufficient funds.
ACCOUNTS AND STATEMENTS
The Plan Administrator will establish an account under the Plan for each
Participant (the "Participant's Account"), and will credit to the
Participant's Account cash received by the Plan Administrator for the
Participant from cash dividends paid on the shares of Common Stock, including
those full and fractional shares of Common Stock (computed to four decimal
places) acquired under the Plan, and all voluntary cash contributions for Cash
Purchases received by the Plan Administrator from the Participant.
As soon as practicable after the purchases of shares of Common Stock have
been completed, the Plan Administrator will send each Participant a statement
of their account ("Account Statement"). The Account Statement will confirm the
transaction and itemize any previous investment activity for the calendar
year. Each Participant, by participating in the Plan, agrees to notify the
Plan Administrator promptly in writing of any change of address. ACCOUNT
STATEMENTS SHOULD BE RETAINED BY THE PARTICIPANT FOR HIS OR HER OWN RECORDS.
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PURCHASE AND PRICE OF SHARES
Dividend Reinvestment. The Plan Administrator will apply cash credited to
the Participant's Account to the purchase of full and/or fractional interests
in shares of Common Stock and will credit the number of shares of Common Stock
so purchased to the Participant's Account. The Plan Administrator will apply
such funds toward the purchase of shares of Common Stock in the open market or
from authorized but unissued shares of Common Stock for the Participant's
Account.
(1) Discount Rate on Dividend Reinvestments. The price of the authorized
but unissued shares of Common Stock purchased by the Plan Administrator
directly from the Company pursuant to the reinvestment of dividends will be
issued at the Discount Rate to the then current Market Price for Dividend
Reinvestments as of the Dividend Reinvestment Date (as defined below). The
Discount Rate is subject to change for future dividend reinvestments, or
complete discontinuance at the Company's discretion, without prior notice
to the Participants after a review of current market conditions, the level
of participation in the Plan and the Company's current and projected
capital needs. Participants may obtain the applicable Discount Rate by
telephoning the Plan Administrator at (800) 524-4458 three business days
prior to the Dividend Reinvestment Date. The Discount Rate will only be in
effect for purchases of shares of Common Stock directly from the Company;
if the Company elects to purchase the shares in the open market or in
privately negotiated transactions, the Discount Rate will not be applied to
such purchases for the Participant's Account.
(2) Price per Share for Reinvested Dividends. The "Market Price for
Dividend Reinvestments" per share of Common Stock acquired directly from
the Company shall be the average of the daily high and low sales prices,
computed to four decimal places, of the shares of Common Stock as reported
on the NYSE on the Dividend Reinvestment Date, or if no trading occurs in
the Common Stock on the Dividend Reinvestment Date, the average of the high
and low sales prices for the first Trading Day immediately preceding the
Dividend Reinvestment Date for which trades are reported. If publication of
the sales price of the Common Stock on any Dividend Reinvestment Date does
not take place or contains a reporting error, the Market Price for Dividend
Reinvestments purchased from the Company shall be determined by the Plan
Administrator or the Company on the basis of such market quotation as they
deem appropriate. No shares of Common Stock will be purchased from the
Company under the Plan at less than par value ($.001 per share of Common
Stock). In addition, no shares of Common Stock will be purchased at a price
which reflects a greater than 5% discount from the fair market value of
such shares on the date of purchase. If the Company elects to purchase the
shares on the open market or in privately negotiated transactions, the
price per share of Common Stock acquired through such open market or
privately negotiated transactions will be the weighted average of the
actual prices paid, computed to four decimal places, for all the Common
Stock purchased by the Plan Administrator in connection with such open
market purchases, without application of the Discount Rate. The Plan
Administrator shall pay brokerage commissions in an amount determined by
the prevailing rates at the time of purchase. Such commissions will be
reimbursed by the Company, but in no event shall the Company be obligated
to pay commissions in excess of five percent (5%) of the purchase price of
the shares of Common Stock. Any commissions in excess of five percent (5%)
will be paid by the Participants on a pro rata basis. Such open market
purchases may be made, at the Plan Administrator's option, on any
securities exchange where the shares of Common Stock are traded, in the
over-the-counter market or in negotiated transactions with third persons,
and may be on such terms as to price, delivery, and otherwise as the Plan
Administrator may determine.
(3) Dividend Reinvestment Date. The date for the reinvestment of
dividends (the "Dividend Reinvestment Date") will be on or within thirty
(30) days after the Dividend Payment Date except where
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<PAGE>
reinvestment of such funds at a later date is necessary or advisable under
applicable securities laws. Under normal market conditions, the funds are
expected to be reinvested on the Dividend Payment Date.
Cash Purchases. A Stockholder may also make Optional Cash Purchases of
shares of Common Stock, subject to a minimum of $100 and a maximum of $5,000
(except in cases covered by a Request for Waiver as discussed below). New
investors, not currently Stockholders of the Company, may make Initial Cash
Purchases subject to a minimum of $250 and a maximum of $5,000 (except in
cases covered by a Request for Waiver). For purposes of these limitations on
Cash Purchases, all Plan accounts under the common control or management of a
Participant may be aggregated at the Company's sole discretion.
(1) Discount Rate on Cash Purchases. The price of the authorized but
unissued shares of Common Stock purchased by the Plan Administrator
directly from the Company for Cash Purchases not in excess of the $5,000
maximum may be issued at the Discount Rate to the then current Market Price
for Cash Purchases as of the Cash Purchase Investment Date. The Discount
Rate is subject to change for future investment periods, or complete
discontinuance at the Company's discretion, without prior notice to the
Participants after a review of current market conditions, the level of
participation in the Plan and the Company's current and projected capital
needs. Participants may obtain the applicable Discount Rate by telephoning
the Plan Administrator at (800) 524-4458 three business days prior to the
Dividend Reinvestment Date. The Discount Rate will only be in effect for
purchases of shares of Common Stock directly from the Company; the Discount
Rate will not be applied to purchases for the Participant's Account in the
open market or in privately negotiated transactions.
(2) Price per Share for Cash Purchases. The "Market Price for Cash
Purchases" per share shall be the average of the daily high and low sales
prices, computed to four decimal places, of the shares of Common Stock as
reported on the NYSE during the Pricing Period prior to the related Cash
Purchase Investment Date; provided, however, that the Market Price for Cash
Purchases shall not be less than a price which reflects a 5% discount from
the fair market value of such shares on the date of purchase. If
publication of the sales price of the Common Stock on the Cash Purchase
Investment Date does not take place or contains a pricing error, the Market
Price for Cash Purchases purchased from the Company shall be determined by
the Plan Administrator or the Company on the basis of such market quotation
as they deem appropriate. No shares of Common Stock will be purchased from
the Company under the Plan at less than par value ($.001 per share of
Common Stock). No commission shall be paid with respect to purchases of
authorized but unissued shares of Common Stock directly from the Company.
If the Company elects to purchase the shares on the open market or in
privately negotiated transactions, the price per share of Common Stock
acquired through such open market or privately negotiated transactions will
be the weighted average of the actual prices paid, computed to four decimal
places, for all the Common Stock purchased by the Plan Administrator in
connection with such open market purchases, without application of the
Discount Rate. The Plan Administrator shall pay brokerage commissions in an
amount determined by the prevailing rates at the time of purchase. Such
commissions will be reimbursed by the Company, but in no event shall the
Company be obligated to pay commissions in excess of five percent (5%) of
the purchase price of the shares of Common Stock. Any commissions in excess
of five percent (5%) will by paid by the Participants on a pro rata basis.
Such open market purchases may be made, at the Plan Administrator's option,
on any securities exchange where the shares of Common Stock are traded, in
the over-the-counter market or in negotiated transactions with third
persons, and may be on such terms as to price, delivery, and otherwise as
the Plan Administrator may determine.
(3) Waiver of Maximum Cash Purchase Limitation. Cash Purchases in excess
of $5,000 may be made only upon acceptance in writing by the Company of a
completed written Request for Waiver form
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from the Participant. A Request for Waiver must be received by the Company
at its corporate address or via facsimile at (212) 754-8777 no later than
2:00 p.m., New York City time, on the second business day preceding the
relevant Pricing Period. Request for Waiver forms may be obtained from the
Plan Administrator by telephone at (800) 524-4458. The Company may
establish a discount rate different than the Discount Rate, ranging from 0%
to 5% (the "Waiver Discount") regarding shares purchased from the Company
for Cash Purchases exceeding $5,000 per month and approved by the Company
pursuant to a Request for Waiver. Participants may obtain the applicable
Waiver Discount by telephoning the Plan Administrator at (800) 524-4458
three business days prior to the first day of the Pricing Period. It is
solely within the Company's discretion as to whether any such approval for
cash investments in excess of $5,000 will be granted. In deciding whether
to approve a Request for Waiver, the Company will consider relevant factors
including, but not limited to: whether the Plan is then acquiring newly
issued or treasury shares directly from the Company or acquiring shares
from third parties in the open market or in privately negotiated
transactions; the Company's need for additional funds; the attractiveness
of obtaining such additional funds through the sale of Common Stock as
compared to other sources of funds; the purchase price likely to apply to
any sale of Common Stock under the Plan; the Participant submitting the
request; the extent and nature of such Participant's prior participation in
the Plan; the number of shares of Common Stock held by such Participant and
the aggregate amount of cash investments for which Requests for Waiver have
been submitted by all Participants. If such requests are submitted for any
Cash Purchase Investment Date for an aggregate amount in excess of the
amount the Company is then willing to accept, the Company may honor such
requests in order of receipt, pro rata or by any other method that the
Company determines in its sole discretion to be appropriate. The Company
anticipates that it will respond to each Request for Waiver by the close of
business (7:00 p.m., New York City time) on the second business day
preceding the relevant Pricing Period. Any Request for Waiver accepted by
the Company will be subject to all the terms and conditions otherwise
applicable to Cash Purchases, except those terms and conditions expressly
changed by this Section.
(4) Threshold Price. Notwithstanding anything contained herein to the
contrary, the Company may establish for each Pricing Period a threshold
price applicable to Cash Purchases made pursuant to Requests for Waiver
approved by the Company (the "Threshold Price"). The Threshold Price, if
any, will be established by the Company at least three business days prior
to the first day of the Pricing Period, and will be established in the
Company's sole discretion after a review of current market conditions and
other relevant factors. Participants may obtain the applicable Threshold
Price and Waiver Discount by telephoning the Plan Administrator at (800)
524-4458. The Threshold Price will be a stated dollar amount that the
average of the high and low sale prices of the Common Stock on the New York
Stock Exchange for a Trading Day of the Pricing Period must equal or
exceed. In the event that such Threshold Price is not satisfied for a
Trading Day of the Pricing Period, then such Trading Day and the trading
prices for that day will be excluded from (i) the Pricing Period and (ii)
the determination of the purchase price of the Common Stock for all cash
investments made pursuant to Requests for Waiver approved by the Company.
Thus, for example, if the Threshold Price is not satisfied for three of the
twelve Trading Days, then the price of the Common Stock will be based upon
the remaining nine Trading Days for which the Threshold Price was
satisfied.
Each Trading Day of a Pricing Period for which the Threshold Price is not
satisfied will cause the return of a portion of any cash investments made
pursuant to Requests for Waiver approved by the Company. The returned
amount will equal one-twelfth of such cash investments for each Trading Day
that the Threshold Price is not satisfied. Thus, for example, if the
Threshold Price is not satisfied for three Trading Days, then 3/12 (i.e.,
25%) of such cash investments will be returned without interest.
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<PAGE>
The Threshold Price and return procedure discussed above apply only to
Cash Purchases made pursuant to Requests for Waiver approved by the Company
and not to the reinvestment of dividends or Cash Purchases that do not
exceed $5,000.
(5) Cash Purchase Investment Date. The Cash Purchase Investment Date for
Cash Purchases will occur on or about the third from the last business day
of each month, or in the case of purchases in the open market, no later
than the last business day of each month.
(6) Timing and Procedure for Cash Purchases. Each month the Plan
Administrator will apply a Cash Purchase for which good funds are timely
received to the purchase of shares of Common Stock for the account of the
Participant on the next Cash Purchase Investment Date. In order for funds
to be invested on the next Cash Purchase Investment Date, the Plan
Administrator must have received the following in a timely fashion: (i) the
Authorization Form (if the person is not yet enrolled as a Participant) and
the Broker and Nominee Form (if necessary) at least one business day before
the commencement of the Pricing Period; (ii) the Request for Waiver (if
applicable) no later than 2:00 p.m., New York City time, two business days
before the commencement of the Pricing Period; and (iii) a check or money
order no later than one business day prior to the commencement of the
related Pricing Period (the "Cash Purchase Due Date") although the Company
may, within its sole discretion, accept such funds after the Cash Purchase
Due Date in cases of unanticipated delay or inadvertence by the
Participant. Such check or money order must have cleared before the related
Cash Purchase Investment Date. Instructions for electronic funds transfers
can be obtained by telephoning the Plan Administrator at (800) 524-4458.
Electronic funds transfers are deducted monthly from the Participant's
designated account through any financial institution that participates in
the Automatic Clearing House. Deductions are made on the 25th day of each
month, or if such date is not a business day, on the preceding business
day. 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 "The Bank of New York--
Anthracite Capital, Inc. Dividend Reinvestment and Stock Purchase Plan."
Checks must be drawn on a U.S. bank payable in U.S. funds or they will be
returned to the Participant. In addition, third party checks will be
returned to the Participant. Checks returned for any reason will not be
resubmitted for collection. Participants will be charged the Plan
Administrator's prevailing fees for dishonored checks and failed electronic
funds transfers due to insufficient funds. Generally, Cash Purchases
received more than ten business days before the commencement of the Pricing
Period or after the Cash Purchase Due Date will be returned to Participants
without interest at the end of the Pricing Period; such Cash Purchases may
be resubmitted by a Participant prior to the commencement of the next or a
later Pricing Period.
Upon a Participant's written request using the transaction request form
attached to the bottom portion of the Account Statement and received by the
Plan Administrator no later than two business days prior to the Pricing
Period, a timely Cash Purchase not already invested under the Plan will be
canceled or returned to the Participant as soon as practical. However, in the
latter event, no refund of a check or money order will be made until the funds
have been actually received by the Plan Administrator. Accordingly, such
refunds may be delayed up to three weeks. In making purchases for the
Participant's Account, the Plan Administrator may commingle the Participant's
funds with those of other Participants in the Plan. NO INTEREST WILL BE PAID
ON FUNDS HELD BY THE PLAN ADMINISTRATOR PENDING INVESTMENT OR RETURN TO THE
PARTICIPANT. FUNDS FOR CASH PURCHASES DO NOT CONSTITUTE DEPOSITS OR SAVINGS
ACCOUNTS AND ARE NOT INSURED BY ANY GOVERNMENTAL AGENCY OR INSTRUMENTALITY.
RETURNED CHECKS OR ELECTRONIC FUNDS TRANSFERS POLICY
The Plan Administrator reserves the right to debit additional shares of
Common Stock from a Participant's Account if the sale of the shares purchased
is not sufficient to cover the returned check amount or electronic funds
transfer amount and associated fees.
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<PAGE>
BROKERAGE
All purchases and sales of Common Stock on the open market will be executed
through BNY ESI & Co., Inc., 101 Barclay Street, New York, New York 10286. BNY
ESI & Co., Inc. receives a commission in connection with any such transactions
it processes.
VOTING OF SHARES HELD UNDER THE PLAN
Each Participant will be able to vote all shares of Common Stock (including
fractional shares) credited to the Participant's Account. The Plan
Administrator will not vote shares of Common Stock that it holds for a
Participant's Account except as directed by the Participant. All shares of
Common Stock in the Participant's Account will be added to the shares of
Common Stock registered in the Participant's name on the stockholder records
of the Company, if any, and the Participant will receive one proxy for all
such shares of Common Stock which proxy will be voted as the Participant
directs or the Participant may vote all shares of Common Stock in person at
the stockholders' meeting.
CERTIFICATES
Shares of Common Stock purchased under the Plan are registered in the name
of a nominee and shown on each Participant's Account Statement. However, a
Participant may request a certificate for any of the whole shares of Common
Stock which have accumulated in such Participant's Account by written
notification to the Plan Administrator using the transaction request form
attached to the bottom portion of the Account Statement. Each certificate
issued will be registered in the name or names in which the account is
maintained, unless otherwise instructed in writing. If the certificate is to
be issued in a name other than the name on the Participant's Account, the
Participant or Participants must have his or her signature(s) guaranteed by a
commercial bank or a broker that is a member of the medallion signature
guarantee program. Certificates for fractional shares of Common Stock will not
be issued in any case. Dividends will continue to be paid on the cumulative
holdings of both full and fractional shares of Common Stock remaining in the
Participant's Account and will automatically be reinvested until such time as
the shares of Common Stock are sold or otherwise transferred or until the
Participant terminates participation in the Plan. A book-to-book transfer
involves transferring shares from an existing Participant's Account in the
Plan to a new Participant's Account. Book-to-book transfers will be permitted
if all proper transfer requirements are satisfied. If the new Participant is
an existing Stockholder, all shares in that new Participant's Account will be
coded for reinvestment unless the Plan Administrator is notified otherwise.
For more information on book-to-book transfers, telephone the Plan
Administrator at (800) 524-4458.
Participants who wish to do so may deposit currently held certificates
registered in their names with the Plan Administrator for credit under the
Plan. There is no charge for such deposits, and by making such deposit the
Participant will be relieved of the responsibility for loss, theft or
destruction of the certificate. Shares of Common Stock credited to a
Participant's Account may not be pledged or assigned, and any attempted pledge
or assignment is void. A Participant who wishes to pledge or assign shares of
Common Stock credited to the Participant's Account must first withdraw such
shares of Common Stock from such Participant's Account.
TERMINATION OF PARTICIPATION
A Participant may terminate participation in the Plan at any time by written
notification to the Plan Administrator using the transaction request form
attached to the bottom portion of the Account Statement. Unless the
termination notice is received by the Plan Administrator at least two (2)
business days prior to any Dividend Record Date or Cash Purchase Investment
Date, it cannot be processed until after purchases made from the dividends
paid or Cash Purchases submitted have been completed and credited to the
Participant's Account. All dividends with a record date after timely receipt
of notice for termination will be sent directly to
15
<PAGE>
the Participant. The Plan Administrator may terminate the Participant's
Account by notice in writing mailed to the Participant. Any full or fractional
interests in shares of Common Stock may be aggregated and sold with the other
terminating Participants. The proceeds to each Participant, in each case, will
be the average sales price per share of all shares so aggregated and sold
multiplied by the number of full or fractional shares of Common Stock sold by
the Participant, less the Participant's pro rata share of any brokerage
commissions and other costs of sale. Once termination has been effected, the
Plan Administrator will issue to the Participant, without charge, certificates
for the full shares of Common Stock held in the Participant's Account or, if
so requested, sell the full shares of Common Stock held under the Plan, deduct
brokerage commissions, transfer taxes and a service charge (if any) and
deliver the proceeds to the Participant. The value of the Participant's
interest in any fractional share of Common Stock held in his account at
termination will be paid by check, less the Participant's share of any related
expenses. A Participant will also be entitled to the uninvested portion of any
funds received for Optional Cash Purchases if notice of termination is
received prior to the date when the Plan Administrator becomes obligated to
pay for purchased shares of Common Stock.
If a Participant disposes of all shares of Common Stock represented by
certificates registered in his own name on the books of the Company but does
not give notice of termination under the Plan, the Plan Administrator may
continue to reinvest the dividends on the shares of Common Stock under the
Plan until otherwise directed.
A Participant who changes his or her address must notify the Plan
Administrator immediately. If a Participant changes residences to a state
where the shares of Common Stock offered pursuant to the Plan are not
registered or exempt from registration under applicable securities laws, the
Company may deem the Participant to have terminated participation in the Plan.
STOCK DIVIDENDS, STOCK SPLITS AND STOCKHOLDER RIGHTS OFFERINGS
Any stock dividends or stock splits distributed by the Company on shares of
Common Stock held by the Plan Administrator for the Participant will be
credited to the Participant's Account. In the event the Company makes
available to its stockholders rights to purchase additional shares of Common
Stock or other securities, the Participant will receive appropriate
instructions in connection with all such rights directly from the Plan
Administrator in order to permit a Participant to determine what action he or
she desires to take. Transaction processing under the Plan may be curtailed or
suspended until the completion of any stock dividend, stock split or
stockholder rights offering.
PLAN ADMINISTRATOR'S RESPONSIBILITIES
The Plan Administrator shall not be liable hereunder for any act done in
good faith, or for any good faith omission to act, including without
limitation, any claims of liability (1) arising out of failure to terminate
any Participant's Account upon such Participant's death prior to receipt of
notice in writing of such death and (2) with respect to the prices at which
shares of Common Stock are purchased or sold for the Participant's Account and
the times such purchases or sales are made.
All notices from the Plan Administrator to a Participant will be mailed to
the Participant's last address of record, which will satisfy the Plan
Administrator's responsibility to give notice.
TERMINATION OF THE PLAN
The Company reserves the right to suspend or terminate the Plan in whole or
part at any time. Notice will be sent to Participants of any suspension or
termination as soon as practicable after such action by the Company.
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<PAGE>
AMENDMENTS TO THE PLAN
The Plan may be amended or supplemented by the Plan Administrator or the
Company at any time or times, including the period between the Dividend Record
Date and the related Dividend Reinvestment Date. Any such amendment may
include an appointment by the Plan Administrator of a successor Plan
administrator under the terms and conditions contained herein. Notice will be
sent to Participants of any amendments as soon as practicable after such
action by the Company. Any amendment or supplement shall conclusively be
deemed to be accepted by the Participant unless, prior to the effective date
thereof, the Plan Administrator receives written notice of termination of the
Participant's Account.
APPLICABLE LAW
The terms and conditions of the Plan and its operation shall be governed by
the internal laws of the State of Maryland.
INTERPRETATION AND REGULATION OF THE PLAN
THE COMPANY RESERVES THE RIGHT, WITHOUT NOTICE TO PARTICIPANTS, TO INTERPRET
AND REGULATE THE PLAN AS IT DEEMS NECESSARY OR DESIRABLE IN CONNECTION WITH
ITS OPERATION. ANY SUCH INTERPRETATION AND REGULATION SHALL BE CONCLUSIVE.
Neither the Company nor the Plan Administrator, in administering, interpreting
or performing their duties under the Plan, will be liable for any act
committed or omitted in good faith, including, without limitation, any act
giving rise to a claim of liability arising from (i) the times and prices at
which shares of Common Stock are purchased or sold for a Participant's Account
or (ii) fluctuations in the market price of the Common Stock.
INQUIRIES ABOUT THE PLAN
All terminations, withdrawals, sale of shares and change of addresses should
be directed to:
The Bank of New York
Dividend Reinvestment Department
P.O. Box 1958
Newark, New Jersey 07101-9774
All other correspondence and questions regarding the Plan, a Participant's
Account, and the Discount Rate, Waiver Rate, or Threshold Price should be
directed to:
Anthracite Capital, Inc.
Dividend Reinvestment and Stock Purchase Plan
c/o The Bank of New York
P.O. Box 1258
Church Street Station
New York, New York 10286-1254
Telephone: (800) 524-4458
E-mail address: [email protected]
Web site address: http://stkxfer.bankofny.com
or
Anthracite Capital, Inc.
Dividend Reinvestment and Stock Purchase Plan
345 Park Avenue
New York, New York 10154
Telephone: (212) 409-3333
Facsimile: (212) 754-8777
E-mail address: [email protected]
Web site address: http://ahr.blackrock.com
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FEDERAL INCOME TAX CONSEQUENCES
The following discussion summarizes the principal federal income tax
consequences, under current law, of participation in the Plan. It does not
address all potentially relevant federal income tax matters, including
consequences peculiar to persons subject to special provisions of the federal
income tax law (such as banks, insurance companies, and foreign persons). The
discussion is based on the Code, regulations promulgated thereunder, and
rulings of the Internal Revenue Service (the "IRS") all of which are subject
to change, possibly with retroactive effect. No ruling of the IRS has been
issued or will be received regarding the Plan. THE FOLLOWING DISCUSSION IS
GENERAL INFORMATION ONLY, AND PARTICIPANTS SHOULD CONSULT THEIR TAX ADVISORS
TO DETERMINE THE PARTICULAR TAX CONSEQUENCES THAT MAY RESULT FROM
PARTICIPATION IN THE PLAN AND THE DISPOSITION OF ANY SHARES OF COMMON STOCK
PURCHASED PURSUANT TO THE PLAN.
REINVESTED DIVIDENDS
Participants in the Plan should be treated for federal income tax purposes
as having received, on the Dividend Payment Date, a distribution in an amount
equal to the fair market value of the shares of Common Stock acquired with
reinvested dividends.
Shares of Common Stock acquired for Participants in the Plan should have an
initial tax basis to the Participant equal to the amount the Participant is
treated as having received as a dividend. The holding period for shares of
Common Stock purchased through the Plan (including fractional shares)
generally will begin on the day after the Dividend Reinvestment Date upon
which the shares of Common Stock were acquired.
The reinvestment of dividends does not relieve the Participant of any income
tax and will constitute dividend income to the same extent that a cash
distribution would otherwise be treated. Participants who are qualified
pension or profit sharing plans or individual retirement accounts should be
able to exclude such dividend income from unrelated business taxable income
unless such Participants have borrowed to acquire their shares of Common Stock
or such Common Stock is otherwise used in an unrelated trade or business. The
Plan Administrator will report to each Participant for tax purposes the
dividends to be credited to his account as well as any discounts or costs
incurred by the Company. Such information will also be furnished to the IRS to
the extent required by law. In addition, the Code imposes certain reporting
obligations on brokers and other intermediaries. As a result, the Plan
Administrator will be required to report to the IRS and the Participant any
sale of Common Stock by it on behalf of a Participant.
CASH PURCHASES
The IRS has privately ruled that stockholders who participate in optional
cash purchases under a dividend reinvestment plan of a REIT will not be
treated as receiving a dividend equal to the discount unless such stockholders
also participate in the reinvestment of dividends under such plan. Private
letter rulings are not precedent and may not be relied upon by taxpayers other
than the taxpayers to whom they are issued. Nevertheless, such rulings often
reflect the current thinking of the IRS. Thus, in the view of the IRS,
Participants who elect dividend reinvestment under the Plan might be treated
as having received a distribution upon the purchase of Optional Cash Purchases
and Initial Cash Purchases in an amount equal to the excess, if any, of the
fair market value of the shares of Common Stock on the date on which they were
acquired over the amount of the Optional Cash Purchases and Initial Cash
Purchases. Such shares of Common Stock should have an initial tax basis equal
to the fair market value of the shares of the Optional Cash Purchases and
Initial Cash Purchases. The amount treated as a distribution will constitute a
dividend for federal income tax purposes to the same extent that a cash
distribution would be so treated. The holding period for a share of Common
Stock (including fractions thereof) generally begins on the day after the date
that the share of Common Stock was acquired.
18
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Participants making Cash Purchases but who do not elect dividend
reinvestment under the Plan should have a tax basis in the purchased stock
equal to the actual purchase price paid to the Participant.
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
Stockholders (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 Request for Waivers granted with respect
to the Cash Purchases 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 New York
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 Common Stock acquired under the Plan, after deduction
of the applicable discount from the Market Price for Cash Purchases, 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 for Dividend Reinvestments of
Common Stock acquired through the reinvestment of dividends under the Plan.
Except with respect to open market purchases of Common Stock relating to
reinvested dividends or Cash Purchases, the Company will pay any and all
brokerage commissions and related expenses incurred in connection with
purchases of Common Stock under the Plan, up to 5% of the Market Price for
Dividend Reinvestments and the Market Price for Cash Purchases of the Common
Stock. 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 a nominal fee per transaction paid to the Plan Administrator (if
such resale is made by the Plan Administrator at the request of a
Participant), 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 soliciting 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.
INDEMNIFICATION
As permitted by the Maryland General Corporation Law ("MGCL"), the Company's
Amended and Restated Articles of Incorporation obligate the Company to
indemnify in advance of the final disposition of a proceeding to the maximum
extent permitted from time to time by Maryland law (a) its present and former
directors and officers, whether serving the Company or at its request any
other entity, to the fullest extent required by the MGCL and to pay or
reimburse reasonable expenses for such persons and (b) other employees and
agents of the Company to such extent as shall be authorized by the Board of
Directors of the Company or the Company's Bylaws and as permitted by the MGCL,
officers, directors and controlling persons. The MGCL permits a corporation to
indemnify its present and former directors and officers, among others, against
judgments,
19
<PAGE>
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 (a) the act or omission of the director or officer was material to the
matter giving rise to such proceeding and (i) was committed in bad faith, or
(ii) was the result of active and deliberate dishonesty, or (b) the director
or officer actually received an improper personal benefit in money, property
or services, or (c) in the case of any criminal proceeding, the director or
officer had reasonable cause to believe that the act or omission was unlawful.
The Bylaws of the Company implement the provisions relating to indemnification
contained in the Company's Amended and Restated Articles of Incorporation. The
MCGL permits the charter of a Maryland corporation to include a provision
limiting the liability of its directors and officers to the corporation and
its stockholders for money damages, except to the extent that (i) the person
actually received an improper benefit or profit in money, property or
services, or (ii) a judgment or other final adjudication is entered in a
proceeding based on a finding that the person's action, or failure to act, was
the result of active and deliberate dishonesty and was material to the cause
of action adjudicated in the proceeding. The Company's Amended and Restated
Articles of Incorporation contain a provision providing for elimination of the
liability of its directors or officers to the Company or its stockholders for
money damages to the maximum extent permitted by Maryland law from time to
time. The Company will maintain for the benefit of its officers and directors,
officers' and directors' insurance.
Insofar as indemnification of directors, officers, other employees and
agents of the Registrant for liabilities arising under the Securities Act of
1933 may be permitted, 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 of
whether such indemnification by the Registrant is against the public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
LEGAL MATTERS
The validity of the shares of Common Stock offered hereby will be passed
upon for the Company by Miles & Stockbridge, a Professional Corporation,
Baltimore, Maryland. Certain matters relating to federal income tax
consequences will be passed upon for the Company by Skadden, Arps, Slate,
Meagher & Flom LLP.
EXPERTS
The balance sheet of the Company at March 5, 1998, included as part of the
Company's Registration Statement on Form S-11 (File No. 333-40813), has been
audited by Deloitte & Touche LLP, independent certified public accountants, as
set forth in their report included therein and incorporated herein by
reference. Such balance sheet, and audited financial statements to be included
in subsequently filed documents, will be incorporated herein in reliance upon
the reports of Deloitte & Touche LLP and upon their authority as experts in
auditing and accounting.
20
<PAGE>
GLOSSARY
"Authorization Form" means the form used to appoint the Plan Administrator
as agent for the Participant, to direct the Company to pay to the Plan
Administrator such Participant's cash dividends on Participating Shares and
Plan Shares, and to direct the Plan Administrator to purchase on the Dividend
Reinvestment Date additional shares of Common Stock with such dividends and to
purchase on the relevant Cash Purchase Investment Date additional shares of
Common Stock with Cash Purchases.
"Beneficial Owner" means a Stockholder who beneficially owns shares of
Common Stock that are registered in a name other than such Stockholder's name,
such as in the name of a broker, bank or other nominee.
"Cash Purchase" means a voluntary cash investment in the Common Stock of the
Company through the Plan.
"Cash Purchase Due Date" means the date by which the Plan Administrator must
receive the following items in order for funds to be invested on the next Cash
Purchase Investment Date: (i) the Authorization Form (if person is not yet
enrolled as a Participant) and the Broker and Nominee Form (if necessary) at
least one business day before the commencement of the Pricing Period; (ii) the
Request for Waiver (if applicable) no later than 2:00 p.m., New York City
time, two business days before the commencement of the Pricing Period; and
(iii) a check, money order or wire transfer no later than one business day
prior to the commencement of the related Pricing Period.
"Cash Purchase Investment Date" means the date of investment of the Cash
Purchases, generally on or about the third from the last business day of each
month, or in the case of purchases on the open market, no later than the last
business day of each month.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commission" means the Securities and Exchange Commission.
"Common Stock" means the common stock, $.001 par value, of the Company.
"Company" means Anthracite Capital, Inc.
"Discount Rate" means a discount ranging from 0% to 5% from the per share
Market Price for Dividend Reinvestments and the Market Price for Cash
Purchases on shares of newly issued Common Stock purchased by the Plan
Administrator for the Plan from the Company with reinvested dividends and
funds from Cash Purchases not in excess of the $5,000 limit.
"Dividend Payment Date" means the dividend payment date announced by the
Company from time to time.
"Dividend Reinvestment Date" means the date of the reinvestment of dividends
paid on Plan Shares and Participating Shares of Common Stock, generally on or
within thirty (30) days after the Dividend Payment Date except where
completion at a later date is necessary or advisable under applicable
securities laws. Under normal market conditions, the Company expects to
reinvest the funds on the Dividend Payment Date.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Initial Cash Purchase" means a Cash Purchase by a non-stockholder.
G-1
<PAGE>
"Market Price for Cash Purchases" means the average of the daily high and
low sales prices, computed to four decimal places, of the shares of Common
Stock as reported on the NYSE during the Pricing Period prior to the related
Cash Purchase Investment Date.
"Market Price for Dividend Reinvestments" means the average of the daily
high and low sales prices, computed to four decimal places, of the shares of
Common Stock as reported on the NYSE on the Dividend Reinvestment Date.
"NYSE" means the New York Stock Exchange.
"Optional Cash Purchase" means a Cash Purchase by a Stockholder.
"Participant" means a Record Owner of the Company's Stock, the Beneficial
Owner of the Company's Stock whose bank, broker or other nominee participates
on the Beneficial Owner's behalf, or a current non-stockholder who wishes to
participate in the Plan upon making an initial investment in the Common Stock
offered herein.
"Participating Shares" means all or a specified number of shares of Common
Stock owned by the Participant.
"Plan" means the Anthracite Capital, Inc. Dividend Reinvestment and Stock
Purchase Plan, as amended, modified or supplemented from time to time in
accordance with its terms.
"Plan Administrator" means the administrator of the Plan, as of the date of
this prospectus, The Bank of New York.
"Plan Shares" means all whole and fractional shares of Common Stock credited
to a Participant's Plan account.
"Pricing Period" means the twelve Trading Days prior to the Cash Purchases
Investment Date for that month.
"Securities Act" means the Securities Act of 1933, as amended.
"Stockholder of Record" means a Stockholder who owns shares of Common Stock
in his or its own name.
"Stockholders" means record owners of the Common Stock of the Company.
"Threshold Price" means a minimum price applicable to the purchase of newly
issued shares of Common Stock purchased through cash investments made pursuant
to Requests for Waiver approved by the Company.
"Trading Day" means any day other than Saturday, Sunday or a legal holiday
on which the NYSE is closed for trading or a day on which the Plan
Administrator is authorized or obligated by law to close.
"Waiver Discount" means a discount ranging from 0% to 5% from the per share
Market Price on shares of newly issued Common Stock purchased by the Plan from
the Company with funds from Cash Purchases in excess of the $5,000 limit.
G-2
<PAGE>
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NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY IN-FORMATION OR MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING
BEEN AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER
BY THE COMPANY TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, THE SECURITIES
OFFERED HEREBY IN ANY JURISDICTION WHERE, OR TO ANY PERSON TO WHOM, IT IS
UNLAWFUL TO MAKE AN OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE
AN IMPLICATION THAT THERE HAS NOT BEEN ANY CHANGE IN THE AFFAIRS OF THE
COMPANY SINCE THE DATE HEREOF OR THAT THE INFORMATION CONTAINED HEREIN IS
CORRECT OR COMPLETE AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF.
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TABLE OF CONTENTS
<TABLE>
<S> <C>
Available Information....................................................... 2
Incorporation of Documents by Reference..................................... 2
The Company................................................................. 3
Dividend and Distribution Policy............................................ 3
Use of Proceeds............................................................. 3
Summary of the Plan......................................................... 3
The Plan.................................................................... 5
Federal Income Tax Consequences............................................. 18
Plan of Distribution........................................................ 19
Indemnification............................................................. 19
Legal Matters............................................................... 20
Experts..................................................................... 20
Glossary.................................................................... G-1
</TABLE>
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ANTHRACITE CAPITAL, INC.
DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN
2,000,000 SHARES
OF
COMMON STOCK
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PROSPECTUS
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December 11, 1998
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