<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 2, 1997
REGISTRATION NO. 33-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
CAPSTEAD MORTGAGE CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
MARYLAND 75-2027937
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
2711 NORTH HASKELL AVENUE
SUITE 900
DALLAS, TEXAS 75204
(214) 874-2323
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING
AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
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ANDREW F. JACOBS
2711 NORTH HASKELL AVENUE
SUITE 900
DALLAS, TEXAS 75204
(214) 874-2350
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
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THE COMMISSION IS REQUESTED TO SEND COPIES OF ALL COMMUNICATIONS TO:
DAVID BARBOUR
ANDREWS & KURTH L.L.P.
4400 THANKSGIVING TOWER
1601 ELM STREET
DALLAS, TEXAS 75201
(214) 979-4400
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this Registration Statement pursuant to
Rule 415.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [_]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
reinvestment plans, please check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
TITLE OF EACH CLASS OF PROPOSED MAXIMUM PROPOSED MAXIMUM
SECURITIES AMOUNT TO BE OFFERING PRICE AGGREGATE AMOUNT OF
TO BE REGISTERED REGISTERED PER UNIT(1) OFFERING PRICE(1) REGISTRATION FEE
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<S> <C> <C> <C> <C>
Common Stock, $0.01 par
value................. 4,713,059 shares $21.9375 $103,392,731.81 $31,331.13
</TABLE>
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(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c), based upon the average of the high and low sales
prices of the Common Stock on April 30, 1997 as reported on the New York
Stock Exchange.
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
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<PAGE>
PROSPECTUS
CAPSTEAD MORTGAGE CORPORATION
STOCKHOLDER INVESTMENT PROGRAM
Capstead Mortgage Corporation (the "Company") hereby offers participation in
its Stockholder Investment Program (the "Program"), as amended and restated
through May 1, 1997. The Program is designed to provide investors with a
convenient and economical way to purchase shares of the Company's Common
Stock, par value $.01 per share ("Common Stock"), and to reinvest all or a
portion of their cash dividends in additional shares of Common Stock, in most
cases at a discount to the market price. Participants in the Program and
interested investors may:
.Automatically reinvest cash dividends on all or a portion of their shares.
. Invest by making optional cash payments at any time up to a maximum of
$10,000 per month, regardless of whether the participants' dividends are
being reinvested.
. Make an initial cash investment up to a maximum of $10,000.
. Invest by making an initial cash investment in excess of $10,000, or
optional cash payments in excess of $10,000 per month, subject to
permission of the Company, regardless of whether the participants'
dividends are being reinvested.
To fulfill Program requirements, shares of Common Stock may be purchased in
the open market or in privately negotiated transactions, or from the Company.
Shares purchased in the open market or in privately negotiated transactions
will be credited to participant accounts at the average price per share of all
shares purchased with respect to the relevant dividend payment date or
Investment Date, as applicable. When the Company elects to make shares
available for purchase under the Program, the purchase price of the shares of
Common Stock so purchased may reflect a discount (ranging from 0% to 5%) from
the market price. Discounts for shares purchased through initial cash
investments and optional cash investments exceeding $10,000 (as approved by
the Company) may vary from discounts applicable to shares purchased through
cash investments of less than $10,000 and through dividend reinvestments. At
present, it is expected that shares available for purchase under the Program
will be purchased from the Company.
The closing price of the Common Stock on April 30, 1997, as reported on the
New York Stock Exchange, was $22 1/8 per share.
This Prospectus relates to 4,800,000 shares of Common Stock offered for
purchase under the Program.
Stockholders who do not choose to participate in the Program will continue
to receive cash dividends, as declared, in the usual manner.
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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 OR ANY STATE SECURITIES
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 May , 1997
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934 (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 can be inspected and copied at the public reference
facilities maintained by the Commission at 450 Fifth Street, N.W., Room 1024,
Washington, D.C., and at the Commission's regional offices at 7 World Trade
Center, Suite 1300, New York, New York 10048, and 14th Floor, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661. Copies of such material can also
be obtained from the Public Reference Section of the Commission, 450 Fifth
Street, N.W., Room 1024, Washington, D.C. 20549, at prescribed rates. The
Commission maintains a Web site that contains reports, proxy and information
statements and other information regarding registrants that file
electronically with the Commission at http:// www.sec.gov. Reports, proxy
statements, and other information can also be inspected at the offices of the
New York Stock Exchange, Inc., 20 Broad Street, New York, New York 10005, on
which the Common Stock is listed.
DOCUMENTS INCORPORATED BY REFERENCE
The following documents heretofore filed by the Company with the Commission
are incorporated herein by reference:
1. Annual Report on Form 10-K for the year ended December 31, 1996, filed
on March 14, 1997.
2. Current Report on Form 8-K dated March 26, 1997, filed on March 26,
1997.
3. The description of the Common Stock contained in the Company's
Registration Statement under Section 12 of the Securities Exchange Act of
1934 and all amendments and reports filed for the purpose of updating that
description.
In addition, all documents filed by the Company pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this
Prospectus, prior to the termination of the offering of the securities offered
hereby, shall be deemed incorporated by reference in this Prospectus and to be
a part hereof from the date of filing of such documents. Any statement
contained in a document incorporated or deemed to be incorporated by reference
herein shall be modified or superseded for purposes of this Prospectus to the
extent that a statement contained in any other subsequently filed document
which also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute part of this
Prospectus.
The Company will provide without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, upon written or oral
request of such person, a copy of any or all of the documents incorporated
herein by reference, other than exhibits to such documents. Requests for such
copies should be directed to Capstead Mortgage Corporation, 2711 North Haskell
Avenue, Suite 900, Dallas, Texas 75204, Attention: Treasurer. The Company's
telephone number is (214) 874-2323.
THE ATTORNEY GENERAL OF THE STATE OF NEW YORK HAS NOT PASSED ON OR ENDORSED
THE MERITS OF THIS OFFERING. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
2
<PAGE>
SUMMARY OF THE STOCKHOLDER INVESTMENT PROGRAM
The following is a summary of certain features of the Program and is
qualified in its entirety by, and should be read in conjunction with, the more
detailed information appearing elsewhere in this Prospectus.
The Program 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 in additional shares of Common Stock.
There is no minimum or maximum limitation on the amount of dividends a
participant may reinvest under the Program. In addition to reinvestment of
dividends, participants in the Program may invest additional funds through
optional cash investments of not less than $50 and not more than $10,000 per
month (except in cases covered by a Request for Waiver, as discussed below).
Persons not presently stockholders of the Company may become participants by
making an initial cash investment of not less than $250 and not more than
$10,000 to purchase shares under the Program (except in cases covered by a
Request for Waiver). For purposes of these limitations, all Program accounts
under the common control or management of a participant may be aggregated at
the Company's sole discretion. Optional cash investments and initial cash
investments in excess of $10,000 may be made only upon acceptance by the
Company of a completed Request for Waiver form from a participant.
To fulfill Program requirements, shares of Common Stock may be purchased in
the open market or in privately negotiated transactions, or directly from the
Company. Shares purchased directly from the Company under the Program (whether
in connection with optional cash investments or initial cash investments of
less than $10,000 per month, or reinvestment of dividends) may be issued at a
discount of 0% to 5% to the market price. As of the date of this Prospectus,
such discount is 3%, but is subject to change from time to time or
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 Program and the Company's current and projected capital
needs. The Company may establish a different discount (ranging from 0% to 5%,
the "Waiver Discount") regarding shares purchased from the Company for optional
cash investments and initial cash investments exceeding $10,000 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 Program's administrator directly from the
Company or on the open market. No discount will be offered on shares purchased
under the Program in the open market or in privately negotiated transactions
instead of directly from the Company.
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 minimum price applicable to optional cash investments and initial
cash investments exceeding $10,000. 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
Program and the Company's current and projected capital needs. With respect to
cash investments that exceed $10,000 only, for each Trading Day (as defined
herein) of the related ten-day Pricing Period on which the minimum price is not
satisfied, one-tenth of a participant's cash investment will be returned
without interest. Cash investments that do not exceed $10,000, and the
reinvestment of dividends in additional shares of Common Stock, will not be
subject to such minimum price, if any. If shares are purchased under the
Program other than directly from the Company, no discount will be offered and
no minimum 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 Program 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 Program, the participant submitting the
request, the extent and nature of such participant's prior
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<PAGE>
participation in the Program, 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 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.
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
Program. Such transactions may cause fluctuations in the trading volume of the
Common Stock. Financial intermediaries and such other persons that engage in
positioning transactions may be deemed to be underwriters within the meaning of
Section 2(11) of the Securities Act of 1933. The Company has no arrangements or
understandings, formal or informal, with any person relating to the sale of
shares to be received pursuant to the Program.
Subject to the availability of shares of Common Stock registered for issuance
under the Program, 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 Requests for
Waiver. As of the date hereof, 4,800,000 shares of Common Stock have been
registered and are available for sale under the Program.
Participants in the Program will pay no commissions or brokerage fees on
purchases made regarding dividend reinvestment. Participants will pay a pro
rata portion of commissions and brokerage fees on open market purchases of
Common Stock in connection with optional cash investments and initial cash
investments. Sales of shares under the Program will be effected through the
Program's administrator and will be subject to an administrative charge of $5,
applicable brokerage fees and commissions and transfer taxes, if any.
Participants in the Program who reinvest dividends will be treated for
federal income tax purposes as having received a dividend, without receiving
cash to pay any tax payment obligation which arises as a result of such
dividend. Participants will have limited control regarding the specific timing
of optional cash purchases and sales under the Program. Furthermore,
participants will generally be unable to depend on the availability of a market
discount regarding shares acquired under the Program. See "Capstead Mortgage
Corporation Stockholder Investment Program--Disadvantages".
4
<PAGE>
CAPSTEAD MORTGAGE CORPORATION STOCKHOLDER INVESTMENT PROGRAM
The following is a complete statement of the Program.
PURPOSE
The purpose of the Program is to provide stockholders and other investors
with a convenient and economical way to purchase shares of Common Stock and to
reinvest all or a portion of their cash dividends in additional shares of
Common Stock.
The Program may also have the effect of raising additional capital through
the direct sale of Common Stock by the Company. These sales may be effected,
in part, through the Company's approval from time to time, in its sole
discretion, of Requests for Waiver regarding the limitations applicable to the
initial cash investment and optional cash investment features of the Program.
ADVANTAGES
. Shares purchased directly from the Company under the Program will be
issued commission free and may be issued at a discount (ranging from 0%
to 5%) to the market price. As of the date of this Prospectus the
discount is 3% (except for cash investments exceeding $10,000 per month
pursuant to Requests for Waiver approved by the Company, for which a
different discount may apply). If it is determined that shares of Common
Stock to be purchased under the Program will be made in the open market
instead of directly from the Company, the participants will not pay any
brokerage fees or commissions on open market purchases or in privately
negotiated purchases of Common Stock in connection with the reinvestment
of dividends. However, participants will pay a pro rata portion of
brokerage fees and commissions on open market purchases or privately
negotiated purchases of Common Stock in connection with optional cash
investments and initial cash investments. No discount will be offered by
the Company on shares not issued by the Company.
. In addition to reinvestment of dividends, participants may invest
additional funds in Common Stock through optional cash investments of not
less than $50 and not more than $10,000 per month, unless a Request for
Waiver is approved by the Company. Optional cash investments may be made
by check, money order, wire transfer, or electronic funds transfer from a
predesignated bank account. Optional cash investments may be made
occasionally or at regular intervals, as the participant desires.
Participants may make optional investments even if dividends on their
shares of Common Stock are not being reinvested.
. Persons not presently stockholders of the Company may become participants
by making an initial cash investment of not less than $250 and not more
than $10,000, unless a Request for Waiver is approved by the Company, to
purchase shares of Common Stock under the Program.
. Funds invested in the Program are fully invested through the purchase of
fractions of shares, as well as full shares, and proportionate cash
dividends on fractions of shares are used to purchase additional shares.
. Participants may direct the Program Administrator to transfer, at any
time and at no cost to the participant, all or a portion of the
participant's Program shares to a Program account for another person.
. The Program offers a "share safekeeping" service whereby participants may
deposit their Common Stock certificates with the Program Administrator
and have their ownership of such Common Stock maintained on the
Administrator's records as part of their Program account.
. Participants will receive statements containing year-to-date information
on all Program transactions in a participant's account within a
reasonable time after a transaction occurs.
DISADVANTAGES
. Participants in the Program who reinvest dividends will be treated for
federal income tax purposes as having received a dividend on the dividend
payment date; such dividend may give rise to a tax payment
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obligation without providing the participant with immediate cash to pay
such tax when it becomes due. See "Tax Consequences."
. Participants will have limited control regarding the specific timing of
purchases and sales under the Program. Because purchases under the
Program will be made no earlier than ten business days following receipt
of an investment instruction, and because sales under the Program will be
effected by the Program Administrator only as soon as practicable after
its receipt of such instructions, a participant may be unable to achieve
the same level of control over purchase and sale timing that he or she
might have regarding investments made outside the Program.
. The Company may, without prior notice to participants, change its
determination that shares of Common Stock will be purchased by the
Program Administrator directly from the Company or through open market or
privately negotiated purchases. No discount will be offered on shares
purchased under the Program in the open market or in privately negotiated
purchases instead of directly from the Company. The Company may also,
without prior notice to participants, lower or eliminate the discount on
shares to be purchased directly from the Company. As a result,
participants will generally be unable to depend on the availability of a
market discount regarding shares acquired under the Program.
. No interest will be paid by the Company or the Program Administrator on
dividends, initial cash investments or optional cash investments held
pending reinvestment or investment or to be returned to the participant.
In addition, cash investments exceeding $10,000 per month may be subject
to return to the participant (in whole or proportionate part) without
interest in the event that (i) a minimum price has been established with
respect to shares to be purchased from the Company, and (ii) such minimum
price is not met for any Trading Day during the related Pricing Period.
. With respect to cash investments, including cash investments exceeding
$10,000 per month, while the Program allows the Company to establish a
discount from the average market price of the shares during the Pricing
Period, there can be no assurance that such average market price, as so
discounted, will equal or exceed the market price of the shares on the
relevant Investment Date.
ADMINISTRATION
Harris Trust and Savings Bank (the "Administrator") will administer the
Program, purchase and hold shares of Common Stock acquired under the Program,
keep records, send statements of account activity to participants, and perform
other duties related to the Program. Participants may contact the
Administrator by writing to:
Direct Stock Services
Harris Trust and Savings Bank
P.O. Box A3309
Chicago, Illinois 60690-3309
or by telephoning the Administrator toll free at (800) 969-6715. Written
communications may also be sent to the Administrator by telefax. Participants
should contact the Administrator for current telefax numbers.
The Administrator also currently serves as transfer agent and dividend
paying agent for the Company and may have other business relationships with
the Company from time to time.
PARTICIPATION
Participation in the Program is open to any person or entity, whether or not
a stockholder of the Company, provided that such person or entity fulfills the
prerequisites for participation described below under "Enrollment Procedures".
A stockholder who owns shares of Common Stock in his or her own name is
referred to herein as a "Stockholder of Record." A Stockholder of Record may
participate directly in the Program. 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."
A Beneficial Owner may participate in the Program by either (i) becoming a
Stockholder of Record by having one or more shares transferred into such
stockholder's own name, or (ii) coordinating such
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stockholder's participation with his or its broker, bank or other nominee who
is the record holder to participate on such stockholder's behalf. A
prospective investor who holds no shares of Common Stock may participate, at
his or its option, either directly or through a broker, bank or other nominee.
See "Enrollment Procedures" below.
The Program is intended for the benefit of investors in the Company and not
for persons or entities who accumulate accounts under the Program over which
they have control for the purpose of exceeding the $10,000 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 Program to
the contrary, the Company reserves the right to exclude from participation in
the Program, at any time, (i) persons or entities who attempt to circumvent
the Program's standard $10,000 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.
PREVIOUS SALES UNDER THE PROGRAM
Since the inception of the Program in June 1995, the Company has issued
2,163,059 shares of Common Stock under the Program. A total of 1,383,254
shares of Common Stock have been issued pursuant to the optional cash
investment feature of the program.
ENROLLMENT PROCEDURES
After being furnished a copy of this Prospectus:
(a) Stockholders of Record may become a participant by delivering a
completed Enrollment Form to the Administrator.
(b) Beneficial Owners are eligible to participate in the reinvestment of
dividends, however, such Beneficial Owners must instruct their broker, bank
or other nominee to complete and sign the Enrollment Form and forward it to
its securities depository, which will provide the Administrator with the
information necessary to allow the Beneficial Owner to participate in the
Program. To facilitate participation by beneficial owners, the Program is
eligible for the Depository Trust Dividend Reinvestment Services. A Broker
and Nominee Form is required to be used for optional cash investments and
initial cash investments of a Beneficial Owner whose broker, bank or other
nominee holds the Beneficial Owner's shares in the name of a major
securities depository. See "Broker and Nominee Form" below.
(c) Interested investors not presently stockholders of the Company may
become a participant by directly delivering a completed Enrollment Form to
the Administrator, or through coordination with their broker, bank or other
nominee as described in (b) above for Beneficial Owners, along with an
initial cash investment of not less than $250 and not more than $10,000;
provided, that initial cash investments of more than $10,000 may be made if
a Request for Waiver therefor is approved by the Company.
Enrollment Forms and, if applicable, Broker and Nominee Forms, will be
processed as promptly as practicable. Participation in the Program will begin
after the properly completed Enrollment Form and/or Broker and Nominee Form
has been reviewed and accepted by the Administrator (and, in cases of cash
investments exceeding $10,000, a properly completed Request for Wavier form
has been reviewed and approved by the Company).
PARTICIPATION OPTION
The Enrollment Form appoints the Administrator as agent for the participant
and directs the Company to pay to the 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 Program account ("Program
Shares"). The Enrollment Form directs the Administrator to purchase on the
dividend payment date additional shares of Common Stock with such dividends.
The Enrollment Form also directs the Administrator to purchase on the relevant
Investment Date (as
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<PAGE>
defined below under "Investment Date") additional shares of Common Stock with
optional cash investments and initial cash investments of not more than
$10,000, if any, made by Stockholders of Record. See "Cash Investments
Exceeding $10,000" below for a discussion of the requirements for optional
cash investments and initial cash investments exceeding $10,000. See "Broker
and Nominee Form" below for a discussion of the requirements for optional cash
investments of a Beneficial Owner, and initial cash investments 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 Enrollment Form also directs the Administrator to reinvest
automatically all subsequent dividends on Program Shares. Dividends will
continue to be reinvested until the participant specifies otherwise by
contacting the Administrator, withdraws from the Program, or the Program is
terminated.
The Enrollment Form provides for the purchase of additional shares of Common
Stock through the following investment options:
(a) Full Dividend Reinvestment--The Administrator will apply any cash
dividends on all shares of the Common Stock registered in the Program under
the participant's name, and all cash dividends on Program Shares, together
with any optional cash investments or initial cash investment, toward the
purchase of additional shares of Common Stock.
(b) Partial Dividend Reinvestment--The Administrator will apply cash
dividends on shares of Common Stock registered in the Program under the
participant's name and specified on the Enrollment Form, and all cash
dividends on Program Shares, together with any optional cash investments or
initial cash investment, toward the purchase of additional shares of Common
Stock.
(c) Optional Cash Investment and Initial Cash Investment Only--The
participant will continue to receive cash dividends on shares of Common
Stock registered in the Program under the participant's name in the usual
manner. However, the Administrator will apply all cash dividends on all
Program Shares, together with any optional cash investments or initial cash
investment received from the participant, toward the purchase of additional
shares of Common Stock.
Each participant may select any one of these three options. In each case,
dividends will be reinvested on all Participating Shares and on all Program
Shares held in the Program account, including dividends on Common Stock
purchased with any optional cash investments or initial cash investments,
until a participant specifies otherwise by contacting the Administrator, or
withdraws from the Program altogether, or until the Program is terminated. If
a participant would prefer to receive cash payments of dividends on Program
Shares rather than reinvest such dividends, those shares must be withdrawn
from the Program by written notification to the Administrator. See
"Withdrawal" below.
Participants may change their investment options at any time by requesting a
new Enrollment Form and returning it to the Administrator.
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 optional cash
investments or initial cash investments within the minimum and maximum
investment limitation established for the Program (see "Optional Cash
Investments and Initial Cash Investments" below) on behalf of such Beneficial
Owner or interested investor. A Broker and Nominee Form must be delivered to
the Administrator each time such broker, bank or other nominee transmits
optional cash investments or initial cash investments. Broker and Nominee
Forms will be furnished at any time upon request to the Administrator.
The Broker and Nominee Form and appropriate instructions must be received by
the Administrator not later than 12:00 p.m. (Noon) Central time on the
business day immediately preceding the relevant Pricing Period (as defined
below under "Source and Price of Shares") in order to be invested on the
Investment Date, otherwise the optional cash investment or initial cash
investment will be returned, without interest.
8
<PAGE>
Shares issued pursuant to a properly completed Broker and Nominee Form will
not be deemed Program Shares, therefore, subsequent dividends will be paid in
cash unless otherwise instructed by the Beneficial Owner (See "Enrollment
Procedures" above for a discussion of the requirements for Beneficial Owner
participation in the reinvestment of dividends).
REINVESTMENT OF CASH DIVIDENDS
Participants may elect to reinvest cash dividends paid on all or a portion
of the shares of Common Stock registered in the Program under the
participant's name by designating their election on the Enrollment Form.
Reinvestment levels may be changed from time to time as a participant desires
by submitting a new election to the Administrator. To be effective with
respect to a particular Common Stock dividend, any change in the reinvestment
election must be received by the Administrator on or before the record date
for such dividend. The record date is usually about ten days prior to the
payment of the dividend. The Company has historically paid cash dividends on
the last business day of each calendar quarter.
Once a participant elects reinvestment, cash dividends paid on shares of
Common Stock held in the Program under the participant's name will be
reinvested in additional shares of Common Stock on the dividend payment date
if the shares are purchased from the Company. The Administrator may, in its
discretion, initiate purchase transactions for the reinvestment of dividends
prior to the actual payment of dividends in order to minimize, to the extent
possible, the delay between the payment of dividends and the settlement of
purchase transactions (see "Source and Price of Shares" below). If the
participant has specified partial reinvestment of dividends or optional cash
investment and initial cash investment only, the portion of such dividend
payment not being reinvested will be sent to the participant by check in the
usual manner.
OPTIONAL CASH INVESTMENTS AND INITIAL CASH INVESTMENTS
Participants or other investors directly enrolling in the Program may make
optional cash investments by personal check or money order, wire investment,
or automatic deduction from a bank account. Beneficial Owners wanting to
participate in optional cash investments must instruct their broker, bank or
other nominee to complete a Broker and Nominee Form and transmit the optional
cash payment to the Administrator. Optional cash investments must be at least
$50 for any single investment and may not exceed $10,000 per month. (For the
purposes of these limitations, all Program accounts under the common control
or management of a participant may be aggregated, at the Company's sole
discretion.) Optional cash investments exceeding $10,000 per month may be made
only upon approval by the Company of a properly completed Request for Waiver
form. There is no obligation to make an optional cash investment at any time,
and the amount of such investments may vary from time to time.
Interested investors not presently stockholders of the Company may become a
participant by directly enrolling in the Program by delivering a completed
Enrollment Form to the Administrator and making an initial cash investment in
the form of a personal check, money order or wire transfer. Interested
investors not presently stockholders of the Company and not wanting to
directly enroll in the Program must instruct their broker, bank or other
nominee to complete a Broker and Nominee Form and transmit the initial cash
investment to the Administrator. Initial cash investments must be at least
$250 but less than $10,000. (For the purpose of these limitations, all Program
accounts under the common control or management of a participant may be
aggregated, at the Company's sole discretion). Initial cash investments
exceeding $10,000 per month may be made only upon approval by the Company of a
properly completed Request for Waiver form.
Optional cash investments and initial cash investments must be received by
the Administrator NO EARLIER THAN the 23rd day of the calendar month
immediately preceding the Investment Date (as defined below under "Investment
Date") and NO LATER THAN 12:00 p.m. (Noon) Central time on the business day
immediately preceding the relevant Pricing Period (as defined below under
"Source and Price of Shares") and any payment in the form of check, money
order or wire transfer must have cleared on or before the Investment Date in
order to be invested on the Investment Date. Optional cash investments and
initial cash investments exceeding $10,000 must be received (together with a
completed Request for Waiver form) by the Administrator in good funds not
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later than 12:00 p.m. (Noon) Central time on the business day immediately
preceding the related Pricing Period in order for such funds to be invested on
the related Investment Date. Otherwise, the optional cash investment or
initial cash investment amount will be returned automatically by the
Administrator to the participant as soon as is practicable. Furthermore, upon
a participant's written request received by the Administrator no later than
two business days prior to the Pricing Period, a timely optional cash
investment or initial cash investment not already invested under the Program
will be cancelled or returned to the participant, as appropriate. However, in
such latter event, no refund of a check or money order will be made until the
funds have been actually received by the Administrator. Accordingly, such
refunds may be delayed by up to three weeks.
The Administrator will apply the optional cash investment or initial cash
investment received from a participant to the purchase of shares of the Common
Stock for the account of the participant on the related Investment Date (see
"Source and Price of Shares" and "Cash Investments Exceeding $10,000" below).
NO INTEREST WILL BE PAID ON AMOUNTS HELD BY THE ADMINISTRATOR PENDING
INVESTMENT OR TO BE RETURNED TO THE PARTICIPANT. Accordingly, investors should
transmit all optional cash investments and initial cash investments, including
cash investments exceeding $10,000 made pursuant to Requests for Waiver
approved by the Company, so as to reach the Administrator shortly (but not
later than 12:00 p.m. (Noon) Central time) on the business day immediately
preceding the relevant Pricing Period. All optional cash investments and
initial cash investments are subject to collection by the Administrator for
full face value in U.S. funds.
Shares issued pursuant to a properly completed Broker and Nominee Form or
exceeding the $10,000 per month limitation pursuant to a Request for Waiver
will not be deemed Program Shares, therefore, subsequent dividends will be
paid in cash unless otherwise instructed by the Beneficial Owner (See
"Enrollment Procedures" above for a discussion of the requirements for
Beneficial Owner participation in the reinvestment of dividends).
SOURCE AND PRICE OF SHARES
Source
To fulfill Program requirements, the Administrator may purchase or sell
shares in the open market or in privately negotiated transactions subject to
such terms and conditions, including price and delivery, as the Administrator
may accept. The Administrator may also purchase shares from or sell shares to
the Company, to the extent the Company makes shares available or is willing to
purchase or sell shares. The Administrator may commingle each participant's
funds with those of other participants for the purpose of executing purchases.
The Administrator will purchase shares as soon as practicable beginning on
the relevant dividend payment date or Investment Date and in no event later
than 30 days after the relevant dividend payment date or Investment Date and
will sell shares on the open market as soon as practicable, except where and
to the extent necessary under any applicable federal securities laws or other
government or stock exchange regulations. For the reinvestment of cash
dividends for shares purchased in the open market, the Administrator may, in
its discretion, purchase shares prior to the actual payment of dividends (see
"Reinvestment of Cash Dividends" above).
Dividend and voting rights on shares purchased in the open market will
commence upon settlement, which is normally three business days after
purchase. However, shares purchased in the open market within a period of
three business days prior to and including a dividend record date are
considered purchased "ex-dividend" and therefore are not entitled to payment
of that dividend or voting rights.
Price
Shares purchased pursuant to the reinvestment of dividends will be credited
to the participant's account at the weighted average price per share of all
shares purchased with respect to the relevant dividend payment date. Shares
purchased for the Program directly from the Company will be acquired on the
relevant dividend payment date at a price to participants, computed to four
decimal places, obtained by averaging the daily high and low sales price of
the Common Stock on the New York Stock Exchange for the three trading days
immediately
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preceding the dividend payment date and subtracting from such average a
discount, determined at the sole discretion of the Company, ranging from 0% to
5%.
Shares purchased pursuant to optional cash investments and initial cash
investments will be credited to the participant's account at the WEIGHTED
AVERAGE PRICE PER SHARE OF ALL SHARES PURCHASED with respect to the relevant
Investment Date. Except in the case of cash investments exceeding $10,000 made
pursuant to Requests for Waiver approved by the Company, as detailed below
under "Cash Investments Exceeding $10,000", shares purchased for the Program
directly from the Company will be acquired on the relevant Investment Date at
a price to participants, computed to four decimal places, obtained by
averaging the daily high and low sales price of the Common Stock on the New
York Stock Exchange for the ten Trading Days (as defined below) immediately
preceding the relevant Investment Date and subtracting from such average a
discount, determined at the sole discretion of the Company, ranging from 0% to
5%. A "Trading Day" means a day on which trades of the Common Stock are
reported on the New York Stock Exchange; the period encompassing the ten
Trading Days immediately preceding the relevant Investment Date is the
relevant "Pricing Period." See "Plan of Distribution; Expenses" below; also
see Schedule A for a list of Investment Dates and associated cash investment
due dates and Pricing Periods.
As of the date of this Prospectus, the discount for purchases directly from
the Company is 3% (except for cash investments exceeding $10,000 made pursuant
to Requests for Waiver approved by the Company, for which a different discount
may apply), but may be changed or eliminated by the Company without prior
notice to participants at any time. In all instances the discount on shares
issued directly by the Company shall not exceed 5% of the closing price for
the Common Stock as reported on the New York Stock Exchange on the relevant
dividend payment date or Investment Date, as applicable. Shares purchased on
the open market will not be eligible for the discount to market price.
CASH INVESTMENTS EXCEEDING $10,000
Request for Waiver
Initial cash investments in excess of $10,000, and optional cash investments
in excess of $10,000 per month, may be made only pursuant to a written Request
for Waiver accepted in writing by the Company. A Request for Waiver must be
received by the Company at its corporate address or via facsimile at (214)
874-2398 no later than 12:00 p.m. (Noon) Central time on the second business
day preceding the relevant Pricing Period. Request for Waiver forms may be
obtained from the Company at (214) 874-2375. It is solely within the Company's
discretion as to whether any such approval for cash investments in excess of
$10,000 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 Program 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 Program, the participant
submitting the request, the extent and nature of such participant's prior
participation in the Program, 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 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 (5:00 p.m. Central time) on the second business day
preceding the relevant Pricing Period. GOOD FUNDS ON ALL APPROVED REQUESTS FOR
WAIVER MUST BE RECEIVED BY THE ADMINISTRATOR NOT LATER THAN 12:00 P.M. (NOON)
CENTRAL TIME ON THE BUSINESS IMMEDIATELY PRECEDING THE RELEVANT PRICING PERIOD
IN ORDER FOR SUCH FUNDS TO BE INVESTED ON THE RELEVANT INVESTMENT DATE.
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See "Plan of Distribution; Expenses" below; also see Schedule A for a list
of important dates applicable to the Request for Waiver.
Purchase Price
Shares purchased in connection with approved Requests for Waiver directly
from the Company will be acquired on the Investment Date at a price to
participants, computed to four decimal places, obtained by averaging the daily
high and low sales price of the Common Stock on the New York Stock Exchange
for the ten Trading Days immediately preceding the relevant Investment Date
and subtracting from such average the Waiver Discount, if any, applicable to
such shares (see "--Waiver Discount and Minimum Price" below).
Discount and Minimum Price
Each month, at least three business days prior to the first day of the
Pricing Period, the Company may establish a Waiver Discount applicable to cash
investments exceeding $10,000. The Waiver Discount, which may vary each month
between 0% and 5%, will be established in the Company's sole discretion after
a review of current market conditions, the level of participation in the
Program and current and projected capital needs of the Company. The Waiver
Discount will apply only to shares of Common Stock purchased directly from the
Company.
Notwithstanding anything contained herein to the contrary, the Company may
establish for each Pricing Period 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. This minimum 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 Waiver Discount
and minimum price by telephoning the Company at (214) 874-2375. The minimum
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 minimum 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 minimum price is not satisfied for three of
the ten Trading Days, then the purchase price of the Common Stock will be
based upon the remaining seven Trading Days for which the minimum price was
satisfied.
Each Trading Day of a Pricing Period for which the minimum 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-tenth of such cash investments for each Trading Day that the
minimum price is not satisfied. Thus, for example, if the minimum price is not
satisfied for three Trading Days, then 3/10 (i.e., 30%) of such cash
investments will be returned without interest.
The minimum price and return procedure discussed above apply only to cash
investments made pursuant to Requests for Waiver approved by the Company and
not to the reinvestment of dividends or investments that do not exceed
$10,000.
INVESTMENT DATE
The Program's "Investment Date" for all optional cash investments and
initial cash investments, including cash investment exceeding $10,000, is the
17th day of each month. If any Investment Date is not a day on which financial
markets in New York City are open for business, the Investment Date will be
the next day on which they are so open. See Schedule A for a list of
Investment Dates and associated cash investment due dates and Pricing Periods
(defined below).
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INVESTMENTS MAY BE MADE IN THE FOLLOWING WAYS:
Check Investment
Optional cash investments and initial cash investments may be made by
personal check or money order payable in U.S. dollars to "Harris Trust and
Savings Bank." Optional cash investments mailed to the Administrator should
include the Voluntary Purchase Form attached to each statement of account sent
to participants. Additional Voluntary Purchase Forms are available upon
request from the Administrator.
Wire Investment
Optional cash investments may be made by wire transfer to the Administrator.
Participants who wish to make a wire transfer should contact the Administrator
for instructions. Participants making wire investments may be charged fees by
the commercial bank initiating the transfer.
Automatic Investment from a Bank Account
Participants may make automatic monthly investments of a specified amount
(not less than $50 per month and, unless a Request for Waiver is approved by
the Company, not more than $10,000 per month) by electronic funds transfer
from a pre-designated U.S. bank account.
To initiate automatic monthly deductions, the participant must provide
written authorization to the Administrator together with a voided blank check
for the account from which funds are to be drawn. The written request for
automatic monthly deduction will be processed and will become effective as
promptly as practicable.
Once automatic monthly deduction is initiated, funds will be drawn from the
participant's designated bank account on the business day immediately
preceding the relevant Pricing Period, and will be invested in Common Stock
beginning on the Investment Date.
Participants may change or terminate automatic monthly deduction by
providing new written instructions to the Administrator. To be effective with
respect to a particular month, however, the new instructions must be received
by the Administrator prior to the last business day of the preceding calendar
month.
SALE OF SHARES
Participants may request the Administrator to sell any number of whole
shares held in their Program accounts by giving written instruction to the
Administrator. The Administrator will make the sale on the open market (at the
market price at the time of sale) as soon as practicable following receipt of
the request; participants will generally be unable to terminate the sale after
submitting the request. The Company will have no influence over sales of
shares on behalf of participants in the Program. The participant will receive
the proceeds, less an administrative charge of $5 and applicable brokerage
fees and commissions, if any, and any transfer taxes. Proceeds of shares sold
through the Program will be paid to the participant normally by check upon
settlement of trade.
If instructions for the sale of shares are received on or after an ex-
dividend date but before the related dividend payment date, the sale will be
processed as described above and a separate check for the dividends will be
mailed following the payment date. A request to sell all shares held in a
participant's account will be treated as a withdrawal from the Program (see
"Withdrawal" below).
SHARE SAFEKEEPING
At the time of enrollment in the Program, or at any later time, participants
may use the Program's share safekeeping service to deposit any Common Stock
certificates in their possession with the Administrator. Shares deposited will
be transferred into the name of the Administrator or its nominee and credited
to the participant's account under the Program.
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By using the Program's share safekeeping service, participants no longer
bear the risk associated with loss, theft or destruction of stock
certificates. Also, because shares deposited with the Administrator are
treated in the same manner as shares purchased through the Program, they may
be transferred or sold through the Program in a convenient and efficient
manner. See "Sale of Shares" above and "Withdrawal" and "Gift/Transfer of
Shares Within the Program" below.
Participants who wish to deposit their Common Stock certificates with the
Administrator must complete and return to the Administrator, by registered,
insured mail, the Common Stock certificates to be deposited, along with a
properly completed Enrollment Form, if applicable. The certificate should not
be endorsed.
GIFT/TRANSFER OF SHARES WITHIN THE PROGRAM
If a participant wishes to transfer the ownership of all or part of the
shares held in the participant's Program account to a Program account for
another person, whether by gift, private sale or otherwise, the participant
may effect such transfer by written request, along with an executed stock
assignment (stock power), to the Administrator. Requests for transfer are
subject to the same requirements as for the transfer of Common Stock
certificates, including requirements of a signature guarantee on the stock
assignment.
Shares so transferred will continue to be held by the Administrator under
the Program. An account will be opened in the name of the transferee, if he or
she is not already a participant, and such transferee will automatically be
enrolled in the Program. If the transferee is not already a registered
stockholder or a Program participant, the donor may make a reinvestment
election for the transferee at the time of the gift. The transferee may change
the reinvestment election after the gift has been made as described under
"Reinvestment of Cash Dividends" above.
The transferee will receive a statement showing the number of shares
transferred to and held in the transferee's Program account.
REPORTS TO PARTICIPANTS
Each participant will receive a statement after each transaction showing the
amount invested, purchase price, the number of shares purchased, deposited,
sold, transferred, or withdrawn, the total number of shares accumulated and
other information. The statement will consolidate all Program and certificated
shares standing in the participant's name. The statement will reflect all
account activity for the year. Each participant should retain these statements
so as to be able to establish the cost basis of shares purchased under the
Program for income tax and other purposes. Duplicate statements will be
available from the Administrator at the participant's expense.
In addition, each participant will receive copies of the same communications
sent to all other holders of shares of Common Stock, including the Company's
annual report to stockholders, a notice of the annual meeting and accompanying
proxy statement, and Internal Revenue Service information return, if so
required, for reporting dividend income received.
All notices, statements and reports from the Administrator to a participant
will be addressed to the participant at his or her latest address of record
with the Administrator. Therefore, participants must promptly notify the
Administrator of any change of address. To be effective with respect to
mailings of dividend checks and quarterly statements and reports for a
particular quarter, address changes must be received by the Administrator
prior to the record date for that quarter's dividend.
CERTIFICATES FOR SHARES
Shares purchased and held under the Program will be held in safekeeping by
the Administrator in its name or the name of its nominee. The number of shares
(including fractional interests) held for each participant will be shown on
each statement of account. Participants may obtain a new certificate for all
or some of the whole
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shares of Common Stock held in their Program accounts upon written request to
the Administrator. Any remaining whole or fractional Program shares will
continue to be held by the Administrator. Withdrawal of shares in the form of
a certificate in no way affects dividend reinvestment (see "Reinvestment of
Cash Dividends" above).
Except as described above under "Gift/Transfer of Shares Within the
Program," shares of stock held by the Administrator for a participant's
Program account may not be pledged or assigned. A participant who wishes to
pledge or assign any such shares must request that a certificate for such
shares be issued in the participant's name.
PLAN OF DISTRIBUTION; EXPENSES
Except to the extent the Administrator purchases Common Stock in open market
transactions or privately negotiated purchases, the Common Stock acquired
under the Program will be sold directly by the Company through the Program.
The Company may sell Common Stock to owners of shares (including brokers or
dealers) who, in connection with any resales of such shares, may be deemed to
be underwriters. Such shares, including shares acquired pursuant to Requests
for Waiver approved with respect to the optional cash investment and initial
cash investment features of the Program, 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 Program will be issued pursuant to such
Requests for Waiver. The difference between the price such owners pay to the
Company for shares of Common Stock acquired under the Program, after deduction
of the applicable discount from the market price, 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 Program, there is no total maximum number of shares that
can be issued pursuant to the reinvestment of dividends. From time to time,
financial intermediaries may engage in positioning transactions in order to
benefit from the discount from the market price of Common Stock acquired
through the reinvestment of dividends under the Program.
Shares purchased for a participant with respect to a particular Investment
Date will be credited to the participant's account at the weighted average
price per share of all shares purchased with respect to that Investment Date.
Shares purchased in the open market or in privately negotiated transactions
are subject to such terms and conditions, including price and delivery, as the
Administrator may accept. Shares purchased on the open market will not be
eligible for the discount to market price.
The Company will pay the costs of administering the Program, including
charges by the Administrator for bank services on each dividend reinvestment.
There will be no brokerage commissions on purchases of shares of Common Stock
by the Administrator directly from the Company. In addition, the Company will
pay all brokerage commissions related to purchases of shares of Common Stock
on the open market pursuant to the reinvestment of dividends. For shares
purchased on the open market pursuant to optional cash investments or on
behalf of persons not presently stockholders of the Company, participants will
pay a pro rata portion of brokerage commissions for such purchase. Such
brokerage commissions are currently expected to range from $0.10 per share to
$0.25 per share. The Administrator may charge a participant for additional
services not provided under the Program or where specified charges are
indicated. Certain expenses will be incurred by the participant if the
participant requests that shares of Common Stock be sold. Brokers or nominees
who participate on behalf of beneficial owners for whom they are holding
shares may charge such beneficial owners fees in connection with such
participation, for which neither the Administrator nor the Company will be
responsible.
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WITHDRAWAL
A participant may withdraw from the Program at any time by giving written
instructions to the Administrator. Upon withdrawal from the Program, a
certificate for the whole shares held in the Program for the participant will
be issued. Alternatively, a participant may specify in the withdrawal notice
that all (but not less than all) whole Program shares be sold. The
Administrator will make the sale on the open market as soon as practicable
after receipt of the withdrawal notice (see "Source and Price of Shares"
above), and the participant will receive a check for the proceeds, less an
administrative charge of $5 and applicable brokerage fees and commissions and
any transfer taxes.
Whether whole Program shares are withdrawn or sold, participants terminating
participation in the Program will receive a check for the cash value of any
fractional share held in their Program accounts. Fractions of shares will be
valued at the same effective price as whole shares sold.
If notice of withdrawal is received on or after an ex-dividend date but
before the related dividend payment date, the withdrawal will be processed as
described above and a separate check for the dividends will be mailed
following the payment date.
After participation in the Program has been terminated, no further
investments may be made without re-enrolling in the Program.
MISCELLANEOUS
Stock Split, Stock Dividend or Rights Offering
Any dividends in Common Stock or split shares distributed by the Company on
shares held in the Program will be added to the participant's account. Stock
dividends or split shares distributed on certificated shares will be mailed
directly to the participant in the same manner as to stockholders who are not
participating in the Program.
In the event of a rights offering, the participant will receive rights based
upon the total number of whole shares owned, that is, the total number of
Program and certificated shares standing in the participant's name.
Voting of Shares Held in the Program
Whole and fractional shares held in a Program account may be voted in person
or by the proxy sent to the participant.
Limitation of Liability
Neither the Company nor the Administrator (nor any of their respective
agents, representatives, employees, officers, directors, or subcontractors)
will be liable in administering the Program for any act done in good faith nor
for any good faith omission to act, including, without limitation, any claim
of liability arising with respect to the prices or times at which shares are
purchased or sold for participants, or any change in the market value of
shares, or from failure to terminate a participant's account upon such a
participant's death. The foregoing does not represent a waiver of any rights a
participant may have under applicable securities laws.
Change or Termination of the Program
The Company, in its sole discretion, may suspend, modify or terminate the
Program at any time in whole, in part, or in respect of participants in one or
more jurisdictions. Notice of such suspension, modification or termination
will be sent to all affected participants. No such event will affect any
shares then credited to a participant's account. Upon any whole or partial
termination of the Program by the Company, certificates for whole shares held
in an affected participant's account under the Program will be issued to the
participant and a cash payment will be made for any fraction of a share. Any
change in the Waiver Discount made by the Company shall not constitute a
modification of the Program requiring notice to the participants.
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Termination of a Participant
If a participant does not own in excess of one whole Program or certificated
share in the participant's name, the participant's participation in the
Program may be terminated. The Company may also terminate any participant's
participation in the Program for any reason (including, without limitation,
the attempted circumvention by a participant of the $10,000 monthly maximum
for cash purchases through the accumulation of Program accounts over which
they have control) after written notice in advance mailed to such participant
at the address appearing on the Administrator's records. Participants whose
participation in the Program has been terminated will receive certificates for
whole shares held in their accounts and a check for the cash value of any
fractional share held in their Program accounts.
THE COMPANY
The Company was incorporated on April 15, 1985 in the state of Maryland and
commenced operations in September 1985. The Company generates earnings from
investing in mortgage-backed securities, servicing mortgage loans and other
investment strategies. The Company's mortgage investment portfolio consists
primarily of adjustable-rate mortgage-backed securities issued by various
government-sponsored entities ("Agencies") and also includes investments in
AAA-rated private mortgage pass-through securities. The Company's CMO
collateral and investments includes Agency-issued interest-only mortgage
securities. Mortgage loan servicing includes collection activities, accounting
for principal and interest payments, escrow administration and other
responsibilities relating to the administration of the mortgage loans. In
exchange for providing this service, the Company receives periodically a
servicing fee representing an annualized percentage of the outstanding
principal balance of each such mortgage loan.
The Company, and its qualified real estate investment trust ("REIT")
subsidiaries, have elected to be taxed as a REIT under the Internal Revenue
Code of 1986, as amended (the "Code"), and intend to continue to do so. As a
result of this election, the Company and such subsidiaries are not taxed at
the corporate level on taxable income distributed to stockholders, provided
that certain REIT qualification tests are met. Certain other affiliated
entities which are consolidated with the Company for financial reporting
purposes, are not consolidated for federal income tax purposes because such
entities were not established as REITs or qualified REIT subsidiaries. All
taxable income of these affiliated entities are subject to federal and state
income taxes, where applicable.
TAX CONSEQUENCES
The Company believes the following is an accurate summary of the material
federal tax consequences of participation in the Program as of the date of
this Prospectus. This summary may not reflect every possible situation that
could result from participation in the Program, and, therefore, participants
in the Program are advised to consult their own tax advisors with respect to
the tax consequences (including federal, state, local and other tax laws and
U.S. tax withholding laws) applicable to their particular situations. The
discussion is based on various rulings of the Internal Revenue Service
regarding several types of dividend reinvestment plans. No ruling, however,
has been issued or requested regarding the Program.
REINVESTED DIVIDENDS
For shares purchased from the Company with reinvested dividends,
participants in the Program will 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 on that date of the shares so acquired. Such
shares will have an initial tax basis equal to the same amount. For shares
purchased by the Administrator on the open market by reinvestment of
dividends, participants in the Program will be treated for federal income tax
purposes as having received on the dividend payment date, a distribution in an
amount equal to the cash dividend such participant would otherwise have been
entitled to receive plus the participant's pro rata portion of any brokerage
cost paid by the Company. Such shares will have an initial tax basis equal to
the same amount. The amount treated as a distribution will constitute a
dividend for federal income tax purposes to the same extent that a cash
distribution
17
<PAGE>
would be so treated. The holding period for a share of Common Stock (including
a fractional share) generally will begin on the day after the Investment Date
that the share was acquired. The holding period of a whole share resulting
from the acquisition of two or more fractional shares on different Investment
Dates normally will be split between the holding periods of the fractional
components comprising the whole share.
OPTIONAL CASH PAYMENTS
Participants will be treated as having received a distribution upon the
purchase of shares with an optional cash deposit in an amount equal to the
excess, if any, of the fair market value of the shares on the date on which
they were acquired (plus a pro rata portion of any brokerage cost incurred in
open market purchases of the shares) over the amount of the optional cash
deposit. Such shares will have an initial tax basis equal to the amount of the
deposit plus the excess, if any, of the fair market value of the shares
purchased over the amount of the deposit. 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 a fractional share) generally will begin on the day
after the Investment Date that the share was acquired. The holding period of a
whole share resulting from the acquisition of two or more fractional shares on
different Investment Dates normally will be split between the holding periods
of the fractional components comprising the whole share.
RECEIPT OF SHARE CERTIFICATES AND CASH
A participant will not realize any taxable income other than that described
above upon the mere receipt of certificates for whole shares credited to the
participant's account, either upon the participant's request for certain of
those shares or upon termination in the Program. A participant will realize
gain or loss upon the sale or exchange of shares acquired under the Program. A
participant will also realize gain or loss upon receipt, following termination
of participation in the Program, of a cash payment for any fractional share
interests credited to the participant's account. The amount of any such gain
or loss will be the difference between the amount that the participant
received for the shares or fractional share interest (net of any applicable
fees or expenses) and the tax basis thereof.
MISCELLANEOUS
The above rules may not be applicable to certain participants in the
Program, such as tax-exempt entities (e.g., pension funds and IRAs) and
foreign stockholders. These particular participants should consult their own
tax advisors concerning the tax consequences applicable to their situations.
In the case of participants in the Program whose dividends are subject to
U.S. backup withholding, the Administrator will reinvest dividends less the
amount of tax required to be withheld.
In the case of foreign stockholders whose dividends are subject to U.S.
federal tax withholding, the Administrator will reinvest dividends less the
amount of tax required to be withheld. The filing of any documentation
required to obtain a reduction in U.S. withholding tax will be the
responsibility of the stockholder.
USE OF PROCEEDS
At present, it is expected that purchases of Common Stock under the Program
will be made directly from the Company. The Company, however, may determine
without prior notice to participants that shares will be purchased by the
Administrator on the open market or in privately negotiated transactions for
use in the Program; provided, the Company may not switch the source of such
shares (i.e. from the Company to the open market/privately negotiated
transactions or vice versa) more than once in a three-month period. The
Company intends to use any net proceeds from the sales of shares purchased
from the Company for general corporate purposes.
18
<PAGE>
LEGAL MATTERS
The validity of the Common Stock offered hereby has been passed on for the
Company by Andrews & Kurth L.L.P., Dallas, Texas. Andrews & Kurth L.L.P. will
rely as to all matters of Maryland law on Piper & Marbury L.L.P., Baltimore,
Maryland. Attorneys at Andrews & Kurth L.L.P. beneficially own approximately
45,600 shares of Common Stock and approximately 9,700 shares of the Company's
$1.26 Cumulative Convertible Preferred Stock, Series B.
EXPERTS
The consolidated financial statements of Capstead Mortgage Corporation
incorporated by reference in Capstead Mortgage Corporation's Annual Report
(Form 10-K) for the year ended December 31, 1996, have been audited by Ernst &
Young LLP, independent auditors, as set forth in their report thereon
incorporated by reference therein and incorporated herein by reference. Such
consolidated financial statements are incorporated herein by reference in
reliance upon such report given upon the authority of such firm as experts in
accounting and auditing.
19
<PAGE>
SCHEDULE A
OPTIONAL CASH PAYMENTS
<TABLE>
<CAPTION>
THRESHOLD PRICE
AND WAIVER PRICING PERIOD
DISCOUNT SET OPTIONAL CASH COMMENCEMENT
DATE PAYMENT DUE DATE DATE INVESTMENT DATE
--------------- ---------------- -------------- ---------------
<S> <C> <C> <C>
5/29/97 6/2/97 6/3/97 6/17/97
6/27/97 7/1/97 7/2/97 7/17/97
7/30/97 8/1/97 8/4/97 8/18/97
8/28/97 9/2/97 9/3/97 9/17/97
9/30/97 10/2/97 10/3/97 10/17/97
10/31/97 11/3/97 11/4/97 11/17/97
11/28/97 12/2/97 12/3/97 12/17/97
12/30/97 1/2/98 1/5/98 1/19/97
1/28/98 1/30/98 2/2/98 2/17/98
2/28/98 3/2/98 3/3/98 3/17/98
3/30/98 4/1/98 4/2/98 4/17/98
4/29/98 5/1/98 5/4/98 5/18/98
5/29/98 6/2/98 6/4/98 6/17/98
6/29/98 7/1/98 7/2/98 7/17/98
7/29/98 7/31/98 8/3/98 8/17/98
8/28/98 9/1/98 9/2/98 9/17/98
9/30/98 10/2/98 10/5/98 10/19/98
10/28/98 11/2/98 11/3/98 11/17/98
11/30/98 12/2/98 12/3/98 12/17/98
</TABLE>
20
<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRE-
SENTATIONS IN CONNECTION WITH THIS OFFERING OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION AND REPRESENTATIONS
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY. NEITHER THE
DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIR-
CUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AF-
FAIRS OF THE COMPANY SINCE THE DATE HEREOF. THIS PROSPECTUS DOES NOT CONSTI-
TUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITIES
OTHER THAN THE REGISTERED SECURITIES TO WHICH IT RELATES. THIS PROSPECTUS DOES
NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY SUCH SE-
CURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL.
----------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information...................................................... 2
Documents Incorporated by Reference........................................ 2
Summary of the Stockholder Investment Program.............................. 3
Capstead Mortgage Corporation Stockholder Investment Program............... 5
Purpose.................................................................. 5
Advantages............................................................... 5
Disadvantages............................................................ 5
Administration........................................................... 6
Participation............................................................ 6
Previous Sales Under the Program......................................... 7
Enrollment Procedures.................................................... 7
Participation Option..................................................... 7
Broker and Nominee Form.................................................. 8
Reinvestment of Cash Dividends........................................... 9
Optional Cash Investments and Initial Investments........................ 9
Cash Investments Exceeding $10,000....................................... 10
Investment Date.......................................................... 11
Source and Price of Shares............................................... 12
Sale of Shares........................................................... 13
Share Safekeeping........................................................ 13
Gift/Transfer of Shares Within the Program............................... 14
Reports to Participants.................................................. 14
Certificates for Shares.................................................. 14
Plan of Distribution; Expenses........................................... 15
Withdrawal............................................................... 16
Miscellaneous............................................................ 16
The Company................................................................ 17
Tax Consequences........................................................... 17
Reinvested Dividends..................................................... 17
Optional Cash Payments................................................... 18
Receipt of Share Certificates and Cash................................... 18
Miscellaneous............................................................ 18
Use of Proceeds............................................................ 18
Legal Matters.............................................................. 19
Experts.................................................................... 19
</TABLE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
4,800,000 SHARES
(LOGO)
CAPSTEAD MORTGAGE
CORPORATION
COMMON STOCK
----------------
PROSPECTUS
----------------
STOCKHOLDER INVESTMENT PROGRAM
----------------
MAY , 1997
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
<TABLE>
<S> <C>
Registration Fee--Securities and Exchange Commission............. $31,331.13
Printing and Engraving Expenses.................................. 12,000
Accounting Fees and Expenses..................................... 1,000
Legal Fees and Expenses.......................................... 10,000
Blue Sky Fees and Expenses....................................... 1,000
----------
Total.......................................................... 55,331.13
==========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company's Articles of Incorporation provide for indemnification of
directors to the full extent permitted by Maryland law, indemnification of
officers who are also directors to the extent the Company shall indemnify its
directors, and indemnification of officers who are not directors to such
further extent as shall be authorized by the Board of Directors and be
consistent with law.
Section 2-418 of the Maryland General Corporation Law generally permits a
Maryland corporation to indemnify any director made a party to any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative, or investigative, by reason of service in his capacity as a
director, unless it is established that (i) the act or omission of the
director was material to the matter giving rise to the proceeding and (a) was
committed in bad faith or (b) was the result of active and deliberate
dishonesty; or (ii) the director actually received an improper personal
benefit in money, property, or services; or (iii) in the case of any criminal
proceeding, the director had reasonable cause to believe that the act or
omission was unlawful. Indemnification may be against judgments, penalties,
fines, settlements, and reasonable expenses actually incurred by the director
in connection with the proceeding. If the proceeding was one by or in the
right of the corporation, indemnification may not be made in respect of any
proceeding in which the director shall have been adjudged to be liable to the
corporation. In addition, a director may not be indemnified in respect of any
proceeding charging improper personal benefit to the director, whether or not
involving action in the director's official capacity, in which the director
was adjudged to be liable on the basis that personal benefit was improperly
received. The termination of any proceeding by conviction, a plea of nolo
contendere or its equivalent, or an entry of an order of probation prior to
judgment, creates a rebuttable presumption that the director did not meet the
requisite standard of conduct.
Section 2-418 also provides that a court of appropriate jurisdiction may,
upon application of a director and such notice as the court shall require,
order indemnification if it determines that a director is entitled to
reimbursement because the director has been successful on the merits or
otherwise, in any such proceeding, in which case the director shall be
entitled to recover the expenses of securing such reimbursement, or if the
court determines that the director is fairly and reasonably entitled to
indemnification in view of all the relevant circumstances, whether or not the
director has met the applicable standards of conduct or has been adjudged
liable in a proceeding charging improper personal benefit to the director.
Indemnification with respect to any proceeding by or in the right of the
corporation or in which liability shall have been adjudged on the basis that
personal benefit was improperly received shall be limited to expenses. The
indemnification and advancement of expenses provided or authorized by Section
2-418 may not be deemed exclusive of any other rights, by indemnification or
otherwise, to which a director may be entitled under the charter, the bylaws,
a resolution of the stockholders or directors, an agreement or otherwise, both
as to action in an official capacity and as to action in another capacity
while holding such office. A corporation may indemnify and advance expenses to
an officer, employee, or agent of the corporation to the same extent that it
may indemnify directors under Section 2-418 and, in addition, may indemnify
and advance expenses to an officer, employee, or agent who is not a director
to
II-1
<PAGE>
such further extent, consistent with law, as may be provided by its charter,
bylaws, general or specific action of its board of directors or contract.
Section 2-418 also provides that a corporation may purchase and maintain
insurance against liabilities for which indemnification is not expressly
provided by statute.
The Company provides insurance from commercial carriers against certain
liabilities incurred by the directors and officers of the Company.
ITEM 16. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION
------- -----------
<C> <S>
5.1 Opinion of Andrews & Kurth L.L.P., counsel to the Registrant, as to
the legality of the Common Stock being offered
5.2 Opinion of Piper & Marbury L.L.P. as to the legality of the Common
Stock being offered
23.1 Consent of Ernst & Young LLP
23.2 Consent of Andrews & Kurth L.L.P. (incorporated in Exhibit 5.1)
23.3 Consent of Piper & Marbury L.L.P. (incorporated in Exhibit 5.2)
24.1 Power of Attorney (included on page II-4 of this Registration
Statement)
</TABLE>
ITEM 17. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) to file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) to reflect in the prospectus any facts or events arising after
the effective date of this Registration Statement (or the most recent
post-effective amendment hereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in this Registration Statement;
(iii) to include any material information with respect to the plan of
distribution not previously disclosed in this Registration Statement or
any material change to such information in this Registration Statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if
the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the Registrant
pursuant to Section 13 or Section 15(d) of the Exchange Act that are
incorporated by reference in this Registration Statement.
(2) that, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) to remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act that is incorporated by reference in this Registration Statement
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification
II-2
<PAGE>
is against public policy as expressed in the Securities 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 it is
against public policy as expressed in the Securities Act and will be governed
by the final adjudication of such issue.
II-3
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF THE
REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY
AUTHORIZED, IN THE CITY OF DALLAS, STATE OF TEXAS, ON THE 2ND DAY OF MAY,
1997.
Capstead Mortgage Corporation
/s/ Andrew F. Jacobs
By__________________________________:
Andrew F. Jacobs
Senior Vice President--Control and
Treasurer
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Ronn K.
Lytle, Andrew F. Jacobs and Julie A. Moore, and each and any of them, his or
her true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him or her in his or her name, place and
stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and to file the
same, with all exhibits thereto and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said attorneys-in-
fact and agents, and each and any of them, full power and authority to do and
perform each and every act and thing requisite and necessary to be done in and
about the premises, as fully as to all intents and purposes as he or she might
or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or all of them, or their or his or her substitute
or substitutes, may lawfully do or cause to be done by virtue thereof.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED.
SIGNATURE TITLE DATE
/s/ Ronn K. Lytle Chairman, Chief May 2, 1997
- ------------------------------------- Executive Officer,
RONN K. LYTLE President and
Director (Principal
Executive Officer)
/s/ Andrew F. Jacobs Senior Vice May 2, 1997
- ------------------------------------- President--Control
ANDREW F. JACOBS and Treasurer
(Principal
Financial and
Accounting Officer)
/s/ Bevis Longstreth Director May 2, 1997
- -------------------------------------
BEVIS LONGSTRETH
/s/ Paul M. Low Director May 2, 1997
- -------------------------------------
PAUL M. LOW
Director
- -------------------------------------
HARRIET E. MIERS
/s/ William R. Smith Director May 2, 1997
- -------------------------------------
WILLIAM R. SMITH
/s/ John C. Tolleson Director May 2, 1997
- -------------------------------------
JOHN C. TOLLESON
II-4
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER EXHIBIT PAGE
- ------- ------- ------------
<S> <C> <C>
5.1 Opinion of Andrews & Kurth L.L.P., counsel to the Registrant, as to the
legality of the Common Stock being offered
5.2 Opinion of Piper & Marbury L.L.P. as to the legality of the Common Stock
being offered
23.1 Consent of Ernst & Young LLP
23.2 Consent of Andrews & Kurth L.L.P. (incorporated in Exhibit 5.1)
23.3 Consent of Piper & Marbury L.L.P. (incorporated in Exhibit 5.2)
24.1 Power of Attorney (included on page II-4 of this Registration Statement)
</TABLE>
<PAGE>
[ANDREWS & KURTH LETTERHEAD APPEARS HERE]
Exhibit 5.1
May 2, 1997
Capstead Mortgage Corporation
2711 N. Haskell
Suite 900
Dallas, Texas 75204
Re: Capstead Mortgage Corporation
Registration Statement on Form S-3
Stockholder Investment Program
Ladies and Gentlemen:
We have acted as counsel for Capstead Mortgage Corporation, a Maryland
corporation (the "Company"), in connection with the registration under the
Securities Act of 1933, as amended (the "Act"), pursuant to a Registration
Statement on Form S-3 of the Company (the "Registration Statement") expected to
be filed with the Securities and Exchange Commission (the "Commission") on May
2, 1997, of an offering by the Company from time to time of up to 4,713,059
shares of common stock, par value $.01 per share (the "Common Stock"). The
Registration Statement provides that the Common Stock (the "Shares") will be
offered pursuant to the Company's Stockholder Investment Program, as amended and
restated.
In this capacity, we have examined the Registration Statement, the
Prospectus, the Charter and By-Laws of the Company, the proceedings of the Board
of Directors of the Company or a committee thereof relating to the authorization
of the issuance of the Shares, an Officer's Certificate of the Company dated the
date hereof, and such other statutes, certificates, instruments, and documents
relating to the Company and matters of law as we have deemed necessary to the
issuance of this opinion. In such examination, we have assumed, without
independent investigation, the genuineness of all signatures, the legal capacity
of all individuals who have executed any of the aforesaid documents, the
authenticity of all documents submitted to us as originals, the conformity
<PAGE>
Capstead Mortgage Corporation
May 2, 1997
Page 2
with originals of all documents submitted to us as copies (and the authenticity
of the originals of such copies), and all public records reviewed are accurate
and complete. As to factual matters, we have relied on the Officer's Certificate
and have not independently verified the matters stated therein.
Based upon the foregoing and having regard for such legal considerations as
we deem relevant, we are of the opinion and so advise you that upon issuance and
delivery of the Shares in accordance with the terms set forth in the Prospectus,
the Shares will have been duly and validly authorized and will be validly
issued, fully paid, and non-assessable.
To the extent that the opinion set forth herein is governed by the laws of
the State of Maryland, we have relied solely on, and our opinion is subject to
the limitations and assumptions set forth in, the opinion of Piper & Marbury
L.L.P., dated May 2, 1997 and addressed to the Company and upon which we are
authorized to rely. We have made no independent examination of the laws of the
State of Maryland.
This opinion is solely for the benefit of the addressee hereof, and,
without our prior written consent, may not be quoted in whole or in part or
otherwise referred to in any legal opinion, document, or other report, and may
not be furnished to any person or entity. We consent to the filing of this
opinion as an exhibit to the Registration Statement and to the reference to this
firm in the Registration Statement and Prospectus which is a part thereof. This
opinion is delivered as of the date hereof and we disclaim any responsibility to
update this opinion at any time following the date hereof.
Very truly yours,
/s/ ANDREWS & KURTH L.L.P.
<PAGE>
EXHIBIT 5.2
[LETTERHEAD OF PIPER & MARBURY APPEARS HERE]
May 2, 1997
Capstead Mortgage Corporation
2711 North Haskell Avenue, Suite 900
Dallas, Texas 75204
Registration Statement on Form S-3
----------------------------------
Gentlemen:
We have acted as special Maryland counsel to Capstead Mortgage Corporation,
a Maryland corporation (the "Company"), in connection with the registration
under the Securities Act of 1933, as amended (the "Act"), pursuant to a
Registration Statement on Form S-3 of the Company (the "Registration Statement")
expected to be filed with the Securities and Exchange Commission (the
"Commission") on May 2, 1997, of an offering by the Company from time to time of
up to 4,713,059 shares of common stock, par value $0.01 per share (the "Common
Stock"). The Registration Statement provides that the Common Stock (the
"Shares") will be offered pursuant to the Company's Stockholder Investment
Program, as amended and restated.
In this capacity, we have examined the Registration Statement, the
Prospectus, the Charter and By-Laws of the Company, the proceedings of the Board
of Directors of the Company or a committee thereof relating to the authorization
of the issuance of the Shares, an Officer's Certificate of the Company dated the
date hereof, and such other statutes, certificates, instruments, and documents
relating to the Company and matters of law as we have deemed necessary to the
issuance of this opinion. In such examination, we have assumed, without
independent investigation, the genuineness of all signatures, the legal capacity
of all individuals who have executed any of the aforesaid documents, the
authenticity of all documents submitted to us as originals, the conformity with
originals of all documents submitted to us as copies (and the authenticity of
the originals of such copies), and all public records reviewed are accurate and
complete. As to factual
<PAGE>
Capstead Mortgage Corporation
May 2, 1997
Page 2
matters, we have relied on the Officer's Certificate and have not independently
verified the matters stated therein.
Based upon the foregoing and having regard for such legal considerations as
we deem relevant, we are of the opinion and so advise you that upon the issuance
and delivery of the Shares in accordance with the terms set forth in the
Prospectus, the Shares will have been duly and validly authorized and will be
validly issued, fully paid, and non-assessable.
The opinion expressed herein is solely for the use of (i) the Company in
connection with the Registration Statement, and (ii) Andrews & Kurth L.L.P. in
giving their legality opinion to be filed as an exhibit to the Registration
Statement. This opinion may not be relied on by any other person or in any
other connection without our prior written approval. This opinion is limited to
the matters set forth herein, and no other opinion should be inferred beyond the
matters expressly stated.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to us under the heading "Legal
Matters" in the Prospectus included in the Registration Statement. In giving
our consent, we do not thereby admit that we are in the category of persons
whose consent is required under Section 7 of the Act or the rules and
regulations of the Commission thereunder.
Very truly yours,
/s/ PIPER & MARBURY L.L.P.
<PAGE>
Exhibit 23.1
CONSENT OF INDEPENDENT AUDITORS
-------------------------------
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3) to be filed on or about May 2, 1997 and
related Prospectus of Capstead Mortgage Corporation for the registration of its
Stockholder Investment Program and to the incorporation by reference therein of
our report dated January 22, 1997, with respect to the consolidated financial
statements and schedule of Capstead Mortgage Corporation included and/or
incorporated by reference in its Annual Report (Form 10-K) for the year ended
December 31, 1996, filed with the Securities and Exchange Commission.
Ernst & Young LLP
Dallas, Texas
May 1, 1997
