<PAGE>
As filed with the Securities and Exchange Commission on June 9, 1995
Registration No. 33-____________________ and
Post-Effective Amendment No. 1 (No. 33-48159)
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------
FORM S-3
REGISTRATION STATEMENT
and
POST-EFFECTIVE
AMENDMENT NO. 1
Under
THE SECURITIES ACT OF 1933
-------------------
CWM MORTGAGE HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
35 North Lake Avenue
Pasadena, CA 91101
Delaware 95-3983415
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
(800) 669-2300
(Registrant's telephone number, including area code)
-------------------
MICHAEL W. PERRY, Executive Vice President
CWM Mortgage Holdings, Inc.
35 North Lake Avenue
Pasadena, California 91101
(800) 669-2300
(Name, address and telephone number of Agent for Service)
-------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From
time to time after the effective date of this Registration Statement.
-------------------
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 the Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. [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
-------------------------------
<TABLE>
<CAPTION>
TITLE OF EACH AMOUNT PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
CLASS OF SECURITIES TO BE OFFERING PRICE PER AGGREGATE OFFERING REGISTRATION
TO BE REGISTERED REGISTERED UNIT (1) PRICE (1) FEE (2)
<S> <C> <C> <C> <C>
Common Stock, $.01 par value 1,300,000 shares $12.125 $15,762,500 $5,440
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457, based on the average of the high and low sales prices
of the Common Stock on June 6, 1995 as reported on the New York Stock
Exchange.
(2) Paid by wire transfer to the Securities and Exchange Commission's account
at Mellon Bank.
-----------------------------
This document is both a new registration statement (the "New
Registration Statement") and Post-Effective Amendment No. 1 to the Registrant's
Registration Statement on Form S-3 (No. 33-48159) effective June 14, 1992 (the
"Prior Registration Statement"). Pursuant to Rule 429 under the Securities Act
of 1933, as amended (the "Act"), the Prospectus included in this document is a
combined prospectus relating to the New Registration Statement and to the Prior
Registration Satement. Post-Effective Amendment No. 1 to the Prior Registration
Statement shall, in accordance with Section 8(c) of the Act, hereafter become
effective concurrently with the effectiveness of the New Registration Statement.
------------------------------
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 THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
<PAGE>
+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+ Information contained herein is subject to completion or amendment. A +
+ registration statement relating to these securities has been filed with the +
+ Securities and Exchange Commission. These securities may not be sold nor +
+ may offers to buy be accepted prior to the time the registration statement +
+ becomes effective. This prospectus shall not constitute an offer to sell +
+ or the solicitation of an offer to buy nor shall there be any sale of these +
+ securities in any State in which such offer, solicitation or sale would be +
+ unlawful prior to registration or qualification under the securities laws +
+ of any such State. +
+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED JUNE 9, 1995
PROSPECTUS
CWM MORTGAGE HOLDINGS, INC.
DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN
The Dividend Reinvestment and Stock Purchase Plan (the "Plan") of CWM Mortgage
Holdings, Inc. (the "Company") provides holders of record and beneficial owners
of shares of Common Stock, $.01 par value, of the Company (the "Common Stock")
with a simple and convenient method of investing cash dividends in additional
shares of stock at a 1% discount (subject to change) from the market price (as
determined in accordance with the Plan), to the extent shares are acquired
directly from the Company. (If the shares are acquired in open market
transactions by the Plan Administrator (as defined in Question 4), the discount
will not be available). Common Stock may also be purchased on a monthly basis
with optional cash payments made by participants in the Plan at a 3% discount
(subject to change) from the market price (as determined in accordance with the
Plan). Each of the discounts is subject to change (but will not vary from the
range of 0% to 5%) from time to time or discontinuance at the Company's
discretion after a review of current market conditions, the level of
participation in the Plan and current and projected capital needs.
Brokers and nominees may reinvest dividends and make optional cash payments on
behalf of beneficial owners. Those holders of Common Stock who do not
participate in the Plan will receive cash dividends, as declared, in the usual
manner.
To enroll in the Plan, simply complete the enclosed Authorization Card and
return it in the envelope provided. Enrollment in the Plan is entirely
voluntary and participants in the Plan may terminate their participation at any
time. A broker, bank or other nominee may reinvest dividends and make optional
cash payments on behalf of beneficial owners.
A participant in the Plan may obtain additional shares of Common Stock by:
. reinvesting dividends on all or part of the shares of Common Stock held by
the participant.
. making optional cash payments of not less than $50 up to $10,000 per month
whether or not dividends on shares held by the participant are being
reinvested.
. making optional cash payments in excess of $10,000 per month with the
permission of the Company whether or not dividends on shares held by the
participant are being reinvested.
Optional cash payments in excess of $10,000 may be made only pursuant to an
accepted written request for waiver. It is expected that a portion of the
shares of Common Stock available for issuance under the Plan will be issued
pursuant to such waivers. Each month, at least three business days prior to the
related record date, the Company will establish the Threshold Price, if any (as
defined in Question 17 below), applicable to optional cash payments that exceed
$10,000. The price to be paid for shares of Common Stock purchased under the
Plan in excess of $10,000 pursuant to the optional cash payment feature of the
Plan will be a price reflecting a discount of 0% to 5% ("Waiver Discount") from
the applicable Market Price (as defined in Question 12). There is no pre-
established maximum limit applicable to optional cash payments that may be made
pursuant to accepted requests for waiver. Optional cash payments that do not
exceed $10,000 and the reinvestment of dividends in additional shares of Common
Stock will not be subject to the Waiver Discount or the Threshold Price, if any.
Participants in the Plan
<PAGE>
(Cover, continued)
may request that any or all of their shares held in Plan accounts be sold by the
Plan Administrator. See Question 27.
To the extent that shares of Common Stock issued hereunder are authorized but
previously unissued shares or treasury shares rather than shares acquired in the
open market, the Plan will raise additional capital for the Company. The
Company currently intends to issue such shares and, therefore, the Plan is
expected to raise capital for the Company. Each month a portion of the shares
available for issuance under the Plan may be purchased by owners of shares
(including brokers or dealers) who, in connection with any resales of such
shares, may be deemed to be underwriters. These sales will be effected through
the Company's ability to waive limits applicable to the amounts which
participants may invest pursuant to the Plan's optional cash payment feature.
From time to time, financial intermediaries, including brokers and dealers, may
engage in positioning transactions in order to benefit from the discount from
market price of the Common Stock acquired through the reinvestment of dividends
under the Plan. Such transactions may cause fluctuations in the trading volume
of the Common Stock.
This Prospectus relates to 3,800,000 shares of Common Stock offered hereby and
registered for sale under the Plan. Participants should retain this Prospectus
for future reference.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THE 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.
The date of this Prospectus is June __, 1995
2
<PAGE>
This Prospectus does not constitute an offer to sell or a solicitation of an
offer to buy any of the securities offered hereby in any jurisdiction to any
person to whom it is unlawful to make such an offer or solicitation in such
jurisdiction. No person has been authorized to give any information or to make
any representations other than those contained in this Prospectus in connection
with the offering made hereby, and if given or made, such information or
representations must not be relied upon as having been authorized by the
Company. Neither the delivery of this Prospectus nor any sale made hereunder
shall, under any circumstances, create any implication that information herein
is correct as of any time subsequent to the date hereof.
TABLE OF CONTENTS
<TABLE>
<S> <C>
Available Information..................................................... 4
Incorporation of Certain Documents by Reference........................... 4
CWM Mortgage Holdings, Inc................................................ 4
Summary of Plan........................................................... 4
The Plan.................................................................. 6
Purpose................................................................... 6
Options Available to Participants......................................... 6
Advantages and Disadvantages.............................................. 7
Administration............................................................ 8
Participation............................................................. 8
Purchases and Prices of Shares............................................ 11
Reports to Participants................................................... 17
Dividends on Fractions.................................................... 17
Certificates for Common Shares............................................ 17
Withdrawals and Termination............................................... 17
Other Information......................................................... 18
Dividends................................................................. 22
Use of Proceeds........................................................... 22
Plan of Distribution...................................................... 22
Legal Opinion............................................................. 23
Experts................................................................... 23
Indemnification........................................................... 23
Glossary.................................................................. 24
Schedule A................................................................ 26
</TABLE>
3
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") and, in accordance
therewith, files reports and other information with the Securities and Exchange
Commission (the "Commission"). Reports, proxy statements and other information
concerning the Company can be inspected at Room 1024, Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549 and at the following regional offices of
the Commission: 7 World Trade Center, 13th Floor, New York, New York 10048 and
Chicago (Northwestern Atrium Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661), and copies of such material can be obtained from the
Public Reference Section of the Commission at Room 1024, Judiciary Plaza, 450
Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. Reports, proxy
statements and other information concerning the Company also may be inspected at
the offices of the New York Stock Exchange where the Company's Common Stock is
listed. This Prospectus does not contain all information set forth in the
Registration Statement and Exhibits thereto which the Company has filed with the
Commission under the Securities Act of 1933, as amended and to which reference
is hereby made.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Securities and Exchange Commission by the
Company are incorporated by reference in this Prospectus: (1) The Company's
Annual Report on Form 10-K for the year ended December 31, 1994; (2) the
Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 1995;
and (3) the description of the Common Stock contained in the Company's
registration statement under Section 12 of the Exchange Act and all amendments
and reports filed for the purpose of updating that description.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or 15(d)
of the Exchange Act subsequent to the date of this Prospectus and prior to the
termination of the offering of the securities offered hereby shall be deemed
incorporated by reference into this Prospectus and to be a part hereof from the
date of filing such documents.
Any person receiving a copy of this Prospectus may obtain without charge, upon
request, a copy of any of the documents incorporated by reference herein, except
for the exhibits to such documents. Written requests should be addressed to
Investor Relations, CWM Mortgage Holdings, Inc., 155 North Lake Avenue, P.O. Box
7137, Pasadena, California 91109-7137. Telephone requests may be directed to
Investor Relations at (818) 304-7523.
CWM MORTGAGE HOLDINGS, INC.
The Company is a real estate investment trust which currently operates four
businesses: its principal business, a non-conforming mortgage loan conduit, a
warehouse lending division, a construction lending division and a division that
purchases and securitizes lower credit quality mortgage loans. The Company's
principal executive office is located at 35 North Lake Avenue, Pasadena,
California 91101.
SUMMARY OF PLAN
The Plan provides owners of Common Stock with a convenient and attractive method
of investing cash dividends and optional cash payments in additional shares of
Common Stock at a discount from the Market Price (as defined in Question 12) and
without payment of any brokerage commission or service charge. The price to be
paid for shares of Common Stock purchased under the Plan will be a price
reflecting a discount of 1% (subject to change) from the Market Price for the
reinvestment of cash dividends, to the extent shares are purchased directly from
the Company, a discount of 3% (subject to change) from the Market Price for the
investment of optional cash payments of up to $10,000, and a discount of 0% to
5% (the "Waiver Discount") from the Market Price for the investment of optional
cash payments that exceed $10,000.
Subject to the availability of shares of Common Stock registered for issuance
under the Plan, there is no minimum or maximum limitation on the amount of
dividends a Participant (as defined in Question 2) may reinvest under the Plan.
See Question 2.
4
<PAGE>
Participants electing to invest optional cash payments in additional shares of
Common Stock are subject to a minimum per month purchase limit of $50 and a
maximum per month purchase limit of $10,000 (subject to waiver). See Question
17. Optional cash payments in excess of $10,000 may be made only upon
acceptance by the Company of a completed Request for Waiver form from a
Participant. See Question 17. Each month, at least three business days prior
to each Record Date (as defined in Question 18), the Company will establish the
Waiver Discount and Threshold Price, if any (each as defined in Question 17),
applicable to optional cash payments that exceed $10,000. The Waiver Discount,
which may vary each month, will be established in the Company's sole discretion
after a review of current market conditions, the level of participation and
current and projected capital needs. With respect to optional cash payments
that exceed $10,000 only, for each Trading Day of the related Pricing Period
(each as defined in Question 12) on which the Threshold Price is not satisfied,
one-twelfth of a Participant's optional cash payment will be returned without
interest. Optional cash payments that do not exceed $10,000 and the
reinvestment of dividends in additional shares of Common Stock will not be
subject to the Waiver Discount or Threshold Price, if any. Optional cash
payments of less than $50 and that portion of any optional cash payment which
exceeds the maximum monthly purchase limit of $10,000, unless such limit has
been waived, are subject to return to the Participant without interest.
Participants may request that any or all shares held in the Plan be sold by the
Plan Administrator on behalf of such Participants. See Question 27.
Subject to the availability of shares of Common Stock registered for issuance
under the Plan, there is no total maximum number of shares that can be issued
pursuant to the reinvestment of dividends and no pre-established maximum limit
applies to optional cash payments that may be made pursuant to written Requests
for Waiver. As of the date hereof, 3,800,000 shares of Common Stock have been
registered and are available for sale under the Plan.
The Company expects to grant Requests for Waiver to financial intermediaries,
including brokers and dealers, and other Participants in the future. Grants of
Requests for Waiver will be made in the sole discretion of the Company based on
a variety of factors, which may include: the Company's current and projected
capital needs, the alternatives available to the Company to meet those needs,
prevailing market prices for Common Stock, general economic and market
conditions, expected aberrations in the price or trading volume of the Common
Stock, the potential disruption of the price of the Common Stock by a financial
intermediary, the number of shares of Common Stock held by the Participant
submitting the waiver request, the past actions of a Participant under the Plan,
the aggregate amount of optional cash payments for which such waivers have been
submitted and the administrative constraints associated with granting such
waivers. If such Requests for Waiver are granted, a portion of the shares
available for issuance under the Plan will be purchased by Participants
(including brokers or dealers) who, in connection with any resales of such
shares, may be deemed to be underwriters within the meaning of the Securities
Act of 1933, as amended (the "Securities Act"). To the extent that Requests for
Waiver are granted, it is expected that a greater number of shares will be
issued under the optional cash payment feature of the Plan as opposed to the
dividend reinvestment feature of the Plan.
Financial intermediaries may purchase a significant portion of the shares of
Common Stock issued pursuant to the optional cash payment feature of the Plan.
The Company does not have any formal or informal understanding with any such
organizations and, therefore, the extent of such financial intermediaries'
participation under the Plan cannot be estimated at this time. Participants
that are financial intermediaries that acquire shares of Common Stock under the
Plan with a view to distribution of such shares or that offer or sell Shares for
the Company in connection with the Plan may be deemed to be underwriters within
the meaning of the Securities Act.
From time to time, financial intermediaries may engage in positioning
transactions in order to benefit from the discount from the Market Price of the
shares of Common Stock acquired through the reinvestment of dividends under the
Plan. Such transactions may cause fluctuations in the trading volume of the
Common Stock. The Plan is intended for the benefit of investors in the Company
and not for individuals or investors who engage in transactions which may cause
aberrations in the price or trading volume of the Common Stock.
5
<PAGE>
THE PLAN
The Plan was adopted by the Board of Directors of CWM Mortgage Holdings, Inc.
(the "Company") on October 31, 1985 and was significantly amended by the Board
of Directors on March 23, 1992 and May 17, 1995. The following questions and
answers explain and constitute the Plan as in effect for cash dividends paid and
optional cash payments received on or after August 1, 1995. Shareholders who do
not participate in the Plan will receive cash dividends, as declared, and paid
in the usual manner. A CURRENT PARTICIPANT IN THE PLAN WILL BE ENROLLED
AUTOMATICALLY IN THE PLAN, AS AMENDED AND RESTATED, UNLESS THE PARTICIPANT GIVES
WRITTEN NOTICE TO THE CONTRARY.
PURPOSE
1. What is the purpose of the Plan?
The primary purpose of the Plan is to provide eligible holders of
shares of common stock (the "Common Stock") of the Company with a
convenient and simple method of increasing their investment in the Company
by investing cash dividends in additional shares of Common Stock without
payment of any brokerage commission or service charge and at a discount
from the Market Price (as defined in Question 12) to the extent shares are
purchased directly from the Company, and by investing optional cash
payments in additional shares of Common Stock at a discount from the Market
Price and without payment of any brokerage commission or service charge.
See Question 5 for a description of the holders who are eligible to
participate in the Plan. The Plan may also be used by the Company to raise
additional capital through the sale each month of a portion of the shares
available for issuance under the Plan to owners of shares (including
brokers or dealers) who, in connection with any resales of such shares, may
be deemed to be underwriters. These sales will be effected through the
Company's ability to waive limitations applicable to the amounts which
Participants (as defined in Question 2) may invest pursuant to the Plan's
optional cash payment feature. See Question 17 for information concerning
limitations applicable to optional cash payments and certain of the factors
considered by the Company in granting waivers. To the extent shares are
purchased from the Company under the Plan, it will receive additional funds
for general corporate purposes. The Plan is intended for the benefit of
investors in the Company and not for individuals or investors who engage in
transactions which may cause aberrations in the price or trading volume of
Common Stock. From time to time, financial intermediaries may engage in
positioning transactions in order to benefit from the discount from the
Market Price of the shares of Common Stock acquired through the
reinvestment of dividends under the Plan. Such transactions may cause
fluctuations in the trading volume of the Common Stock. The Company
reserves the right to modify, suspend or terminate participation in the
Plan by otherwise eligible holders of Common Stock in order to eliminate
practices which are not consistent with the purposes of the Plan.
OPTIONS AVAILABLE TO PARTICIPANTS
2. What options are available to enrolled Participants?
Eligible holders of Common Stock who wish to participate in the Plan (each
a "Participant") may elect to have cash dividends paid on all or a portion
of their shares of Common Stock automatically reinvested in additional
shares of Common Stock. Cash dividends are paid on the Common Stock when
and as declared by the Company's Board of Directors. Subject to the
availability of shares of Common Stock registered for issuance under the
Plan, there is no minimum limitation on the amount of dividends a
Participant may reinvest under the dividend reinvestment feature of the
Plan.
Each month, Participants may also elect to invest optional cash payments in
additional shares of Common Stock, subject to a minimum per month purchase
limit of $50 and a maximum per month purchase limit of $10,000, subject to
waiver. See Question 17 for information concerning limitations applicable
to optional cash payments and the availability of waivers with respect to
such limitations. Participants may
6
<PAGE>
make optional cash payments each month even if dividends on their shares of
Common Stock are not being reinvested and whether or not a dividend has
been declared.
ADVANTAGES AND DISADVANTAGES
3. What are the advantages and disadvantages of the Plan?
Advantages:
(a) The Plan provides Participants with the opportunity to reinvest
cash dividends paid on all or a portion of their shares of Common Stock in
additional shares of Common Stock without payment of any brokerage
commission or service charge and at a 1% discount from the Market Price
(subject to change), to the extent shares are purchased directly from the
Company.
(b) The Plan provides Participants with the opportunity to make
monthly investments of optional cash payments, subject to minimum and
maximum amounts, for the purchase of additional shares of Common Stock at a
3% discount from the Market Price (subject to change) and without payment
of any brokerage commission or service charge.
(c) Subject to the availability of shares of Common Stock registered
for issuance under the Plan, all cash dividends paid on Participants'
shares can be fully invested in additional shares of Common Stock because
the Plan permits fractional shares to be credited to Plan accounts.
Dividends on such fractional shares, as well as on whole shares, will also
be reinvested in additional shares which will be credited to Plan accounts.
(d) The Plan Administrator, at no charge to Participants, provides
for the safekeeping of stock certificates for shares credited to each Plan
account.
(e) Periodic statements reflecting all current activity, including
share purchases and latest Plan account balance, simplify Participants'
record keeping. See Question 22 for information concerning reports to
Participants.
Disadvantages:
(a) No interest will be paid by the Company or the Plan Administrator
on dividends or optional cash payments held pending reinvestment or
investment. See Question 11. In addition, optional cash payments in excess
of $10,000 may be subject to return to the Participant without interest in
the event that the Threshold Price, if any, is not met for any Trading Day
during the related Pricing Period. See Question 17.
(b) With respect to optional cash payments, the actual number of
shares to be issued to a Participant's Plan account will not be determined
until after the end of the relevant Pricing Period. Therefore, during the
Pricing Period Participants will not know the actual number of shares they
have purchased.
(c) With respect to optional cash payments, while the Plan
currently provides for a 3% discount from the Market Price (subject to
change) during the Pricing Period, the Market Price, as so discounted, may
exceed the price at which shares of the Common Stock are trading on the
Investment Date when the shares are issued or thereafter.
(d) Because optional cash payments must be received by the Plan
Administrator prior to the related Pricing Period, such payments may be
exposed to changes in market conditions for a longer period of time than in
the case of typical secondary market transactions. In addition, optional
cash payments
7
<PAGE>
once received by the Plan Administrator will not be returned to
Participants unless a written request is directed to the Plan Administrator
at least five business days prior to the record date for the Investment
Date with respect to which optional cash payments have been delivered by
such Participant. See Questions 18 and 20.
(e) Resales of shares of Common Stock credited to a Participant's
account under the Plan will involve a nominal fee per transaction paid to
the Plan Administrator (if such resale is made by the Plan Administrator at
the request of a Participant), a brokerage commission and any applicable
transfer taxes on the resales. See Questions 21 and 27.
ADMINISTRATION
4. Who administers the Plan?
The Company has retained The Bank of New York as plan administrator (the
"Plan Administrator"), to administer the Plan, keep records, send
statements of account activity to each Participant and perform other duties
relating to the Plan. See Question 22 for information concerning reports to
Participants. Shares purchased under the Plan and held by the Plan
Administrator will be registered in the Plan Administrator's name or the
name of its nominee for the benefit of the Participants. In the event that
the Plan Administrator resigns or otherwise ceases to act as plan
administrator, the Company will appoint a new plan administrator to
administer the Plan.
The Plan Administrator also acts as dividend disbursing agent, transfer
agent and registrar for the Company's Common Stock and the trustee for
securities issued by CWMBS, Inc. in which an affiliate of the Company has
an interest.
PARTICIPATION
For purposes of this section, responses will generally be based upon the
method by which the shareholder holds his or her shares of Common Stock.
Generally, shareholders are either Record Owners or Beneficial Owners. A
Record Owner is a shareholder who owns shares of Common Stock in his or her
own name. A Beneficial Owner is a shareholder who beneficially owns shares
of Common Stock that are registered in a name other than his or her own
name (for example, the shares are held in the name of a broker, bank or
other nominee). A Record Owner may participate directly in the Plan,
whereas a Beneficial Owner will have to either become a Record Owner by
having one ore more shares transferred into his or her own name or
coordinate his or her participation in the Plan through the broker, bank or
other nominee in whose name the Beneficial Owner's shares are held. If a
Beneficial Owner who desires to become a Participant encounters any
difficulties in coordinating his or her participation in the Plan with his
or her broker, bank or other nominee, he or she should call the Company's
Investor Relations department at (818) 304-7523.
5. Who is eligible to participate?
All Record Owners or Beneficial Owners of at least one share of Common
Stock are eligible to participate in the Plan. A Record Owner may
participate directly in the Plan. A Beneficial Owner must either become a
Record Owner by having one or more shares transferred into his or her own
name or arrange with the broker, bank or other nominee who is the record
holder to participate on his or her behalf. (See Question 6).
To facilitate participation by Beneficial Owners, the Company has made
arrangements with the Plan Administrator to reinvest dividends, on a per
dividend basis, and accept optional cash payments under the Plan by record
holders such as brokers, banks and other nominees, on behalf of beneficial
owners. (See Question 6).
8
<PAGE>
The Company may terminate, by written notice, at any time any Participant's
individual participation in the Plan if such participation would be in
violation of the restrictions contained in the Certificate of Incorporation
or Bylaws of the Company. Such restrictions relate principally to
shareholdings in excess of specified limits.
6. How does an eligible Shareholder participate?
Record Owners may join the Plan by completing and signing the Authorization
Card included with the Plan and returning it to the Plan Administrator. A
postage-paid envelope is provided for this purpose. Authorization Cards may
be obtained at any time by written request to The Bank of New York,
Dividend Reinvestment, P.O. Box 1958, Newark, New Jersey 07101-9774, or by
telephoning the Plan Administrator at (800) 524-4458.
Beneficial Owners who wish to join the Plan must instruct their broker,
bank or other nominee to complete and sign the Authorization Card and
return it to the Plan Administrator. See Question 8 for a discussion of the
Broker and Nominee form (the "B&N Form"), which is required to be used for
optional cash payments of a Beneficial Owner whose broker, bank or other
nominee holds the Beneficial Owner's shares in the name of a major
securities depository. See also Question 16.
If a Record Owner or the broker, bank or other nominee for a Beneficial
Owner returns a properly executed Authorization Card to the Plan
Administrator without electing an investment option, such Authorization
Card will be deemed to indicate the intention of such Record Owner or
Beneficial Owner, as the case may be, to apply all cash dividends and
optional cash payments, if applicable, toward the purchase of additional
shares of Common Stock. See Question 7 for investment option elections.
7. What does the Authorization Card provide?
The Authorization Card appoints the Plan Administrator as agent for the
Participant and directs the Company to pay to the Plan Administrator each
Participant's cash dividends on all or a specified number of shares of
Common Stock owned by the Participant on the applicable record date
("Participating Shares"), as well as on all whole and fractional shares of
Common Stock credited to a Participant's Plan account ("Plan Shares"). The
Authorization Card directs the Plan Administrator to purchase on the
Investment Date (as defined in Question 11) additional shares of Common
Stock with such dividends and optional cash payments, if any, made by the
Participant. See Question 8 for a discussion of the B&N Form which is
required to be used for optional cash payments of a Beneficial Owner whose
broker, bank or other nominee holds the Beneficial Owner's shares in the
name of a major securities depository. The Authorization Card also directs
the Plan Administrator to reinvest automatically all subsequent dividends
on Plan Shares. Dividends will continue to be reinvested on the number of
Participating Shares and on all Plan Shares until the Participant specifies
otherwise by contacting the Plan Administrator, withdraws from the Plan
(see Questions 26 and 27), or the Plan is terminated. See Question 6 for
additional information about the Authorization Card.
The Authorization Card provides for the purchase of additional
shares of Common Stock through the following investment options:
(1) If "Full Dividend Reinvestment" is elected, the Plan
Administrator will apply all cash dividends on all shares of
Common Stock then or subsequently registered in the Participant's
name, and all cash dividends on all Plan Shares, together with
any optional cash payments, toward the purchase of additional
shares of Common Stock.
(2) If "Partial Dividend Reinvestment" is elected, the Plan
Administrator will apply all cash dividends on only the number of
Participating Shares registered in the Participant's name and
specified on the Authorization Card and all cash dividends on all
Plan Shares,
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together with any optional cash payments, toward the purchase of
additional shares of Common Stock.
(3) If "Optional Cash Payments Only" is elected, the Participant will
continue to receive cash dividends on shares of Common Stock
registered in that Participant's name in the usual manner.
However, the Plan Administrator will apply all cash dividends on
all Plan Shares, together with any optional cash payments
received from the Participant, toward the purchase of additional
shares of Common Stock. (See Question 8 for a discussion of the
B&N Form which is required to be used for optional cash payments
of a Beneficial Owner whose broker, bank or other nominee holds
the Beneficial Owner's shares in the name of a major securities
depository).
Each Participant may select any one of these three options. In each case,
dividends will be reinvested on all Participating Shares and on all Plan
Shares held in the Plan account, including dividends on shares of Common
Stock purchased with any optional cash payments, until a Participant
specifies otherwise by contacting the Plan Administrator, or withdraws from
the Plan altogether (See Questions 26 and 27), or until the Plan is
terminated. If a Participant would prefer to receive cash payments of
dividends paid on Plan Shares rather than reinvest such dividends, those
shares must be withdrawn from the Plan by written notification to the Plan
Administrator. See Questions 26 and 27 regarding withdrawal of Plan Shares.
Participants may change their investment options at any time by requesting
a new Authorization Card and returning it to the Plan Administrator at the
address set forth in Question 37. See Question 11 for the effective date
for any change in investment options.
8. What does the B&N Form provide?
The B&N Form provides the only means by which a broker, bank or other
nominee holding shares of a Beneficial Owner in the name of a major
securities depository may invest optional cash payments on behalf of such
Beneficial Owner. A B&N Form must be delivered to the Plan Administrator
each time that such broker, bank or other nominee transmits optional cash
payments on behalf of a Beneficial Owner. B&N Forms will be furnished at
any time upon request to the Plan Administrator at the address or telephone
number specified in Question 37.
Prior to submitting the B&N Form, the broker, bank or other nominee for a
Beneficial Owner must submit a completed Authorization Card on behalf of
the Beneficial Owner. See Questions 6 and 7.
THE B & N FORM AND APPROPRIATE INSTRUCTIONS MUST BE RECEIVED BY THE PLAN
ADMINISTRATOR NOT LATER THAN THE APPLICABLE RECORD DATE OR THE OPTIONAL
CASH PAYMENT WILL NOT BE INVESTED UNTIL THE FOLLOWING INVESTMENT DATE.
9. Is partial participation possible under the Plan?
Yes. Record Owners or the broker, bank or other nominee for Beneficial
Owners may designate on the Authorization Card a number of shares for which
dividends are to be reinvested. Dividends will thereafter be reinvested
only on the number of shares specified, and the Record Owner or Beneficial
Owner, as the case may be, will continue to receive cash dividends on the
remainder of the shares.
10. When may an eligible shareholder join the Plan?
A Record Owner or a Beneficial Owner may join the Plan at any time. Once
in the Plan, a Participant remains in the Plan until he or she withdraws
from the Plan, the Company terminates his or her participation in the Plan
or the Company terminates the Plan. See Question 27 regarding withdrawal
from the Plan.
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11. When will dividends be reinvested and/or additional optional cash purchases
be made?
When shares are purchased from the Company, such purchases will be made on
the "Investment Date" in each month. The Investment Date with respect to
Common Stock acquired directly from the Company and relating to a dividend
reinvestment will be the dividend payment date declared by the Board of
Directors (unless such date is not a business day in which case it is the
first business day immediately thereafter) or, in the case of open market
purchases, no later than ten business days following the dividend payment
date. The Investment Date with respect to Common Stock acquired directly
from the Company and relating to an optional cash payment will generally be
on or about the twenty-second day of each month or, in the case of open
market purchases, no later than the last business day of each month. In
no event, however, will the Investment Date relating to dividend
reinvestments be less than 10 days from the Investment Date relating to
optional cash payments.
When open market purchases are made by the Plan Administrator, such
purchases may be made on any securities exchange where the shares are
traded, in the over-the-counter market or by negotiated transactions, and
may be subject to such terms with respect to price, delivery and other
matters as agreed to by the Plan Administrator. Neither the Company nor
any Participant shall have any authorization or power to direct the time
or price at which shares will be purchased or the selection of the broker
or dealer through or from whom purchases are to be made by the Plan
Administrator. However, when open market purchases are made by the Plan
Administrator, the Plan Administrator shall use its best efforts to
purchase the shares at the lowest possible price.
If the Authorization Card is received prior to the record date for a
dividend payment, the election to reinvest dividends will begin with that
dividend payment. If the Authorization Card is received on or after any
such record date, reinvestment of dividends will begin on the dividend
payment date following the next record date if the Participant is still a
Shareholder of record. Record dates for payment of dividends normally
precede payment dates by approximately five weeks.
See Question 17 for information concerning limitations on the minimum and
maximum amounts of optional cash payments that may be made each month and
Question 18 for information as to when optional cash payments must be
received to be invested on each Investment Date.
Shares will be allocated and credited to Participants' accounts as follows:
(1) shares purchased from the Company will be allocated and credited on the
appropriate Investment Date; and (2) shares purchased in market
transactions will be allocated and credited as of the date on which the
Plan Administrator completes the purchases of the aggregate number of
shares to be purchased on behalf of all Participants with dividends to be
reinvested or optional cash payments, as the case may be, during the month.
NO INTEREST WILL BE PAID ON CASH DIVIDENDS OR OPTIONAL CASH PAYMENTS
PENDING INVESTMENT OR REINVESTMENT UNDER THE TERMS OF THE PLAN. SINCE NO
INTEREST IS PAID ON CASH HELD BY THE PLAN ADMINISTRATOR, IT NORMALLY WILL
BE IN THE BEST INTEREST OF A PARTICIPANT TO DEFER OPTIONAL CASH PAYMENTS
UNTIL SHORTLY BEFORE COMMENCEMENT OF THE PRICING PERIOD.
PURCHASES AND PRICES OF SHARES
12. What will be the price to Participants of shares purchased under the Plan?
With respect to reinvested dividends, the price per share of Common Stock
acquired directly from the Company will be 99% (subject to change) of the
average of the high and low sales prices, computed to three decimal places,
of the Common Stock on the NYSE on the Investment Date (as defined in
Question 11), or if no trading occurs in the Common Stock on the Investment
Date, the average of the high and low sales prices for the first trading
day immediately preceding the Investment Date for which trades are
reported.
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No discount will be available for dividends reinvested in Common Stock
acquired in open market purchases. See Question 15. The price per share
of Common Stock acquired through open market purchases with reinvested
dividends will be the weighted average of the actual prices paid, computed
to three decimal places, for all of the Common Stock purchased by the Plan
Administrator with all Participants' reinvested dividends for the related
quarter. Additionally, each Participant will be charged a pro rata portion
of any brokerage commissions or other fees or charges paid by the Plan
Administrator in connection with such open market purchases. If a
Participant desires to opt out of the dividend reinvestment feature of the
Plan when the Common Stock relating to dividend reinvestments will be
purchased in the open market, a Participant must notify the Plan
Administrator no later than the record date for the related dividend
payment date. For information as to the source of the Common Stock to be
purchased under the Plan see Question 15.
With respect to optional cash payments that do not exceed $10,000 (see
Question 17 for a discussion of the discount applicable to optional cash
payments in excess of $10,000), the price per share of Common Stock
acquired directly from the Company will be 97% (subject to change) of the
average of the daily high and low sale prices, computed to three decimal
places, of the Common Stock as reported on the NYSE for the twelve Trading
Days immediately preceding the relevant Investment Date (as defined in
Question 11 above) or, if no trading occurs in the Common Stock on one or
more of such Trading Days, for the twelve Trading Days immediately
preceding the Investment Date for which trades are reported. A "Trading
Day" means a day on which trades in the Common Stock are reported on the
NYSE. With respect to all optional cash payments, regardless of the amount
being invested, the period encompassing the twelve Trading Days which
relate to an Investment Date constitutes the relevant "Pricing Period".
The price per share of Common Stock acquired through open market purchases
with optional cash payments will be 97% (subject to change) of the weighted
average of the actual prices paid, computed to three decimal places, for
all of the Common Stock purchased by the Plan Administrator with all
Participants' optional cash payments for the related month.
Neither the Company nor any Participant shall have any authorization or
power to direct the time or price at which shares will be purchased or the
selection of the broker or dealer through or from whom purchases are to be
made by the Plan Administrator. However, when open market purchases are
made by the Plan Administrator, the Plan Administrator shall use its best
efforts to purchase the shares at the lowest possible price.
All references in the Plan to the "Market Price" when it relates to
dividend reinvestments which will be reinvested in Common Stock acquired
directly from the Company shall mean the average of the high and low sales
prices, computed to three decimal places, of the Common Stock on the NYSE
on the Investment Date, or if no trading occurs in the Common Stock on the
Investment Date, the average of the high and low sales prices for the first
trading day immediately preceding the Investment Date for which trades are
reported. With respect to dividend reinvestments which will be reinvested
in Common Stock purchased in the open market, "Market Price" shall mean the
weighted average of the actual prices paid, computed to three decimal
places, for all of the Common Stock purchased by the Plan Administrator
with all Participants' reinvested dividends for the related quarter. All
references in the Plan to the "Market Price" for optional cash payments
which will be invested in Common Stock acquired directly from the Company
shall mean the average of the daily high and low sales prices of the Common
Stock as reported on the NYSE during the Pricing Period (as defined above).
With respect to optional cash payments which will be reinvested in Common
Stock purchased in the open market, "Market Price" shall mean the weighted
average of the actual prices paid, computed to three decimal places, for
all of the Common Stock purchased by the Plan Administrator with all
Participants' optional cash payments for the related month.
13. What are the Record Dates and Investment Dates for dividend reinvestment?
For the reinvestment of dividends, the "Record Date" is the record date
declared by the Board of Directors for such dividend. Likewise, the
dividend payment date declared by the Board of Directors constitutes the
Investment Date applicable to the reinvestment of such dividend with
respect to Common Stock acquired directly from the Company, except that if
any such date is not a business day, the first business day immediately
following such date shall be the Investment Date. The Investment Date with
respect to
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<PAGE>
Common Stock purchased in open market transactions will be no later than
ten business days following the dividend payment date. Dividends will be
reinvested on the Investment Date using the applicable Market Price (as
defined in Question 12). Generally, record dates for quarterly dividends on
the Common Stock will precede the dividend payment dates by approximately
five weeks. See Schedule A for a list of the future dividend record dates
and payment dates. Please refer to Question 18 for a discussion of the
Record Dates and Investment Dates applicable to optional cash payments.
14. How will the number of shares purchased for a Participant be determined?
A Participant's account in the Plan will be credited with the number of
shares, including fractions computed to three decimal places, equal to the
total amount to be invested on behalf of such Participant divided by the
purchase price per share as calculated pursuant to the methods described in
Question 12, as applicable. The total amount to be invested will depend on
the amount of any dividends paid on the number of Participating Shares and
Plan Shares in such Participant's Plan account and available for investment
on the related Investment Date, or the amount of any optional cash payments
made by such Participant and available for investment on the related
Investment Date. Subject to the availability of shares of Common Stock
registered for issuance under the Plan, there is no total maximum number of
shares available for issuance pursuant to the reinvestment of dividends.
15. What is the source of Common Stock purchased under the Plan?
Plan Shares will be purchased either directly from the Company, in which
event such shares will be either authorized but unissued shares or shares
held in the treasury, or on the open market, or by a combination of the
foregoing, at the option of the Company, after a review of current market
conditions and the Company's current and projected capital needs. The
Company will determine the source of the Common Stock to be purchased under
the Plan at least three business days prior to the relevant Record Date,
and will notify the Plan Administrator of the same. Neither the Company nor
the Plan Administrator shall be required to provide any written notice to
Participants as to the source of the Common Stock to be purchased under
the Plan, but current information regarding the source of the Common Stock
may be obtained by contacting the Company's Chief Accounting Officer,
Treasurer or Controller at (800) 669-2300.
16. How does the optional cash payment feature of the Plan work?
All Record Holders who have timely submitted signed Authorization Cards
indicating their intention to participate in this feature of the Plan, and
all Beneficial Owners whose brokers, banks or other nominees have timely
submitted signed Authorization Cards indicating their intention to
participate in this feature of the Plan (except for Beneficial Owners whose
brokers, banks or other nominees hold the shares of the Beneficial Owners
in the name of a major securities depository), are eligible to make
optional cash payments during any month, whether or not a dividend is
declared. If a broker, bank or other nominee holds shares of a Beneficial
Owner in the name of a major securities depository, optional cash payments
must be made through the use of the B&N Form. See Question 8. Optional
cash payments must be accompanied by an Authorization Card or a B&N Form,
as applicable. Each month the Plan Administrator will apply any optional
cash payment received from a Participant no later than one business day
prior to the commencement of that month's Pricing Period (as defined in
Question 12) to the purchase of additional shares of Common Stock for the
account of the Participant on the following Investment Date (as defined in
Question 11).
The discount from the Market Price applicable to optional cash payments
will be 3% (subject to change) of the Market Price (as defined in Question
12). Refer to Question 17 for a discussion of the possible limitations on
the purchase price applicable to the purchase of shares made with optional
cash payments.
17. What limitations apply to optional cash payments?
Each optional cash payment is subject to a minimum per month purchase limit
of $50 and a maximum per month purchase limit of $10,000. For purposes of
these limitations, all Plan accounts under the common control or management
of a Participant will be aggregated. Optional cash payments of less than
$50 and that portion of any optional cash payment which exceeds the maximum
monthly purchase limit of $10,000, unless such limit has been waived by the
Company, are subject to return to the Participant without interest.
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<PAGE>
Participants may make optional cash payments of up to $10,000 each month
without the prior approval of the Company. Optional cash payments in excess
of $10,000 may be made by a Participant only upon acceptance by the Company
of a completed Request for Waiver form from such Participant. There is no
pre-established maximum limit applicable to optional cash payments that may
be made pursuant to accepted Requests for Waiver. A Request for Waiver
form must be received and accepted by the Company each month no later than
the Record Date (as defined in Question 18) for the applicable Investment
Date. Request for Waiver forms will be furnished at any time upon request
to the Plan Administrator at the address or telephone number specified in
Question 37. Participants interested in obtaining further information
about a Request for Waiver should contact the Company's Chief Accounting
Officer, Treasurer or Controller at (800) 669-2300.
Waivers will be considered on the basis of a variety of factors, which may
include the Company's current and projected capital needs, the alternatives
available to the Company to meet those needs, prevailing market prices for
Common Stock and other Company securities, general economic and market
conditions, expected aberrations in the price or trading volume of the
Common Stock, the potential disruption of the price of the Common Stock by
a financial intermediary, the number of shares of Common Stock held by the
Participant submitting the waiver request, the past actions of a
Participant under the Plan, the aggregate amount of optional cash payments
for which such waivers have been submitted and the administrative
constraints associated with granting such waivers. Grants of waivers will
be made in the absolute discretion of the Company.
PARTICIPANTS IN THE PLAN ARE NOT OBLIGATED TO PARTICIPATE IN THE OPTIONAL
CASH PAYMENT FEATURE OF THE PLAN AT ANY TIME. OPTIONAL CASH PAYMENTS NEED
NOT BE IN THE SAME AMOUNT EACH MONTH.
Unless it waives its right to do so, the Company may establish for any
Pricing Period a minimum price (the "Threshold Price") applicable only to
the investment of optional cash payments that exceed $10,000 and that are
made pursuant to written Requests for Waiver, in order to provide the
Company with the ability to set a minimum price at which Common Stock will
be sold under the Plan each month pursuant to such requests. A Threshold
Price will only be established when shares of Common Stock will be
purchased directly from the Company on the applicable Investment Date. The
Company will, at least three business days prior to each Record Date (as
defined in Question 18), determine whether to establish a Threshold Price
and, if a Threshold Price is established, its amount and so notify the Plan
Administrator. The determination whether to establish a Threshold Price
and, if a Threshold Price is established, its amount will be made by the
Company at its discretion after a review of current market conditions, the
level of participation in the Plan and the Company's current and projected
capital needs. Neither the Company nor the Plan Administrator shall be
required to provide any written notice to Participants as to whether a
Threshold Price has been established for any Pricing Period, but current
information regarding the Threshold Price may be obtained by contacting the
Company's Chief Accounting Officer, Treasurer or Controller at
(800) 669-2300.
The Threshold Price for optional cash payments made pursuant to written
Requests for Waiver, if established for any Pricing Period, will be a
stated dollar amount that the average of the high and low sale prices of
the Common Stock on the NYSE for each Trading Day of the relevant Pricing
Period must equal or exceed. In the event that the Threshold Price is not
satisfied for a Trading Day in the Pricing Period, then that Trading Day
and the trading prices for that day will be excluded from that Pricing
Period. Thus, for example, if the Threshold Price is not satisfied for
three of the twelve Trading Days in a Pricing Period, then the average
sales price for purchases and the amount of optional cash payments which
may be invested will be based upon the remaining nine Trading Days when the
Threshold Price is satisfied. For each Trading Day on which the Threshold
Price is not satisfied, 1/12 of each optional cash payment made by a
Participant pursuant to a Request for Waiver will be returned to such
Participant, without interest, as soon as practicable after the applicable
Investment Date. In the example above, therefore, 3/12 of each
Participant's optional cash payment made pursuant to a Request for Waiver
will be returned to such Participant by check, without interest, as soon as
practicable after the applicable Investment Date.
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This return procedure will only apply when shares are purchased directly
from the Company for optional cash payments made pursuant to Requests for
Waiver and the Company has set a Threshold Price with respect to the
relevant Pricing Period. See Question 15.
Setting a Threshold Price for a Pricing Period shall not affect the setting
of a Threshold Price for any subsequent Pricing Period. The Threshold
Price concept and return procedure discussed above apply only to optional
cash payments made pursuant to written Requests for Waiver.
For any Investment Date, the Company may waive its right to set a Threshold
Price for optional cash payments made pursuant to Requests for Waiver.
Participants may ascertain whether the Threshold Price applicable to a
given Pricing Period has been set or waived, as applicable, by contacting
the Company's Chief Accounting Officer, Treasurer or Controller at (800)
669-2300.
For a list of expected dates by which the Threshold Price will be set in
1995 and 1996, see Schedule A.
Each month, at least three business days prior to the applicable Record
Date (as defined in Question 18), the Company will establish the discount
from the Market Price applicable to optional cash payments made pursuant to
Requests for Waiver and will notify the Plan Administrator of the same.
Such discount (the "Waiver Discount) will be between 0% and 5% of the
Market Price and may vary each month, but once established will apply
uniformly to all optional cash payments made pursuant to Requests for
Waiver during that month. The Waiver Discount will be established in the
Company's sole discretion after a review of current market conditions, the
level of participation in the Plan, and the Company's current and projected
capital needs. The Waiver Discount applies only to optional cash payments
made pursuant to Requests for Waiver. Neither the Company nor the Plan
Administrator shall be required to provide any written notice to
Participants as to the Waiver Discount, but current information regarding
the Waiver Discount applicable to the next Pricing Period may be obtained
by contacting the Company's Chief Accounting Officer, Treasurer or
Controller at (800) 669-2300. Only optional cash payments made pursuant to
Requests for Waiver will be affected by the Waiver Discount. Setting a
Waiver Discount for an Investment Date shall not affect the setting of a
Waiver Discount for any subsequent Investment Date. The Waiver Discount
feature discussed above applies only to optional cash payments made
pursuant to Requests for Waiver and does not apply to the reinvestment of
dividends.
THE THRESHOLD PRICE CONCEPT AND RETURN PROCEDURE DISCUSSED ABOVE APPLY ONLY
TO OPTIONAL CASH PAYMENTS MADE PURSUANT TO REQUESTS FOR WAIVER WHEN SHARES
OF COMMON STOCK ARE TO BE PURCHASED FROM THE COMPANY ON THE APPLICABLE
INVESTMENT DATE. ONLY SUCH OPTIONAL CASH PAYMENTS WILL BE AFFECTED BY THE
WAIVER DISCOUNT. ALL OTHER OPTIONAL CASH PAYMENTS WILL BE MADE AT A 3%
DISCOUNT FROM THE MARKET PRICE (SUBJECT TO CHANGE), WITHOUT REGARD TO ANY
THRESHOLD PRICE OR WAIVER DISCOUNT.
18. What are the Record Dates and Investment Dates for optional cash payments?
Optional cash payments will be invested every month on the related
Investment Date. The "Record Date" for optional cash payments is two
business days prior to the commencement of the related Pricing Period and
the "Investment Date" is generally on or about the twenty-second day of
each month or, in the case of open market purchases, no later than the
last business day of each month. In no event, however, will the Investment
Date relating to optional cash payments be less than 10 days from the
Investment Date relating to dividend reinvestments.
Optional cash payments received by the Plan Administrator at least one
business day prior to the commencement of a Pricing Period will be applied
to the purchase of shares of Common Stock on the Investment Date which
relates to that Pricing Period. Optional cash payments received on or
after the commencement of a Pricing Period will be applied to the purchase
of shares of Common Stock on the Investment Date which relates to the next
Pricing Period. No interest will be paid by the Company or the Plan
Administrator on optional cash payments held pending investment.
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For a schedule of expected Record Dates and Investment Dates in 1995 and
1996, see Schedule A.
19. When must optional cash payments be received by the Plan Administrator?
Each month the Plan Administrator will apply any optional cash payment for
which good funds are timely received to the purchase of shares of Common
Stock for the account of the Participant on the next Investment Date. See
Question 18. In order for funds to be invested on the next Investment
Date, the Plan Administrator must have received a check, money order or
wire transfer at least one business day immediately preceding the first
Trading Day of the ensuing Pricing Period and such check, money order or
wire transfer must have cleared on or before the related Investment Date.
Wire transfers may be used only if approved verbally in advance by the Plan
Administrator. Checks and money orders are accepted subject to timely
collection as good funds and verification of compliance with the terms of
the Plan. Checks or money orders should be made payable to The Bank of New
York -- CWM Mortgage Holdings, Inc. DRIP. Checks returned for any reason
will not be resubmitted for collection.
NO INTEREST WILL BE PAID BY THE COMPANY OR THE PLAN ADMINISTRATOR ON
OPTIONAL CASH PAYMENTS HELD PENDING INVESTMENT.
In order for payments to be invested on the Investment Date, in addition to
the receipt of good funds at least one business day prior to the
commencement of a Pricing Period, the Plan Administrator must be in receipt
of an Authorization Card or a B&N Form, as appropriate, as of the same
date. See Questions 6 and 8.
20. May optional cash payments be returned?
Upon telephone or written request to the Plan Administrator received at
least five business days prior to the Record Date for the Investment Date
with respect to which optional cash payments have been delivered to the
Plan Administrator, such optional cash payments will be returned to the
Participant as soon as practicable. Requests received less than five
business days prior to such date will not be returned but instead will be
invested on the next related Investment Date. Additionally, a portion of
each optional cash payment will be returned by check, without interest, as
soon as practicable after the Investment Date for each Trading Day of the
Pricing Period that does not meet the Threshold Price, if any, applicable
to optional cash payments made pursuant to written Requests for Waivers.
See Question 17. Also, each optional cash payment, to the extent that it
does not either conform to the limitations described in Question 18 or
clear within the time limit described in Question 19, will be subject to
return to the Participant as soon as practicable.
21. Are there any expenses to Participants in connection with their
participation under the Plan?
Participants will have to pay brokerage fees or commissions on shares of
Common Stock purchased with reinvested dividends on the open market, which
sums are not expected to exceed $ .15 per share (subject to change) and
which will be first deducted before determining the number of shares to be
purchased. Participants will incur no brokerage commissions or service
charges in connection with the reinvestment of dividends when shares of
Common Stock are acquired directly from the Company and in connection with
all purchases made pursuant to optional cash payments under the Plan. The
Company will pay all other costs of administration of the Plan. However,
Participants that request that the Plan Administrator sell all or any
portion of their shares (see Question 27) must pay a nominal fee per
transaction to the Plan Administrator, any related brokerage commissions
and applicable stock transfer taxes.
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REPORTS TO PARTICIPANTS
22. What kind of reports will be sent to Participants in the Plan?
Each Participant in the Plan will receive a statement of his or her account
following each purchase of additional shares. These statements are
Participants' continuing record of the cost of their purchases and should
be retained for income tax purposes. In addition, Participants will
receive copies of other communications sent to holders of the Common Stock,
including the Company's annual report to its shareholders, the notice of
annual meeting and proxy statement in connection with its annual meeting of
shareholders and Internal Revenue Service information for reporting
dividends paid.
DIVIDENDS ON FRACTIONS
23. Will Participants be credited with dividends on fractions of shares?
Yes.
CERTIFICATES FOR COMMON SHARES
24. Will certificates be issued for shares purchased?
No. Common Stock purchased for Participants will be held in the name of
the Plan Administrator or its nominee. No certificates will be issued to
Participants for shares in the Plan unless a Participant submits a written
request to the Plan Administrator or until participation in the Plan is
terminated. At any time, a Participant may request the Plan Administrator
to send a certificate for some or all of the whole shares credited to a
Participant's account. This request should be mailed to the Plan
Administrator at the address set forth in the answer to Question 37. Any
remaining whole shares and any fractions of shares will remain credited to
the Plan account. Certificates for fractional shares will not be issued
under any circumstances.
25. In whose name will certificates be registered when issued?
Each Plan account is maintained in the name in which the related
Participant's certificates were registered at the time of enrollment in the
Plan. Stock certificates for whole shares purchased under the Plan will be
similarly registered when issued upon a Participant's request. If a
Participant is a Beneficial Owner, such request should be placed through
such Participant's banker, broker or other nominee. See Question 6. A
Participant who wishes to pledge shares credited to such Participant's Plan
account must first withdraw such shares from the account.
WITHDRAWALS AND TERMINATION
26. When may Participants withdraw from the Plan?
Participants may withdraw from the Plan with respect to all or a portion of
the shares held in his or her account in the Plan at any time. If the
request to withdraw is received prior to a dividend record date set by the
Board of Directors for determining Shareholders of record entitled to
receive a dividend, the request will be processed on the day following
receipt of the request by the Plan Administrator.
If the request to withdraw is received by the Plan Administrator on or
after a dividend record date, but before payment date, the Plan
Administrator, in its sole discretion, may either pay such dividend in cash
or reinvest it in shares for the Participant's account. The request for
withdrawal will then be processed as promptly as possible following such
dividend payment date. All dividends subsequent to such dividend payment
date or Investment Date will be paid in cash unless a Shareholder re-
enrolls in the Plan, which may be done at any time.
17
<PAGE>
Any optional cash payments which have been sent to the Plan Administrator
prior to a request for withdrawal will also be invested on the next
Investment Date unless a Participant expressly requests return of that
payment in the request for withdrawal, and the request for withdrawal is
received by the Plan Administrator at least two business days prior to the
first day of the Pricing Period.
27. How does a Participant withdraw from the Plan?
A Participant who wishes to withdraw from the Plan with respect to all or a
portion of the shares held in his or her account in the Plan must notify
the Plan Administrator in writing at its address set forth in the answer to
Question 37. Upon a Participant's withdrawal from the Plan or termination
of the Plan by the Company, certificates for the appropriate number of
whole shares credited to his or her account under the Plan will be issued.
A cash payment will be made for any fraction of a share.
Upon withdrawal from the Plan, a Participant may also request in writing
that the Plan Administrator sell all or part of the shares credited to his
or her account in the Plan. The Plan Administrator will sell the shares as
requested as soon as practicable after processing the request for
withdrawal. The Participant will receive the proceeds of the sale, less a
nominal fee per transaction paid to the Plan Administrator, any brokerage
fees or commissions and any applicable stock transfer taxes.
28. Are there any automatic termination provisions?
Participation in the Plan will be terminated if the Plan Administrator
receives written notice of the death or adjudicated incompetency of a
Participant, together with satisfactory supporting documentation of the
appointment of a legal representative, at least five business days before
the next Record Date for purchases made through the reinvestment of
dividends or optional cash payments, as applicable. In the event written
notice of death or adjudicated incompetency and such supporting
documentation is received by the Plan Administrator less than five business
days before the next Record Date for purchases made through the
reinvestment of dividends or optional cash payments, as applicable, shares
will be purchased for the Participant with the related cash dividend or
optional cash payment and participation in the Plan will not terminate
until after such dividend or payment has been reinvested. Thereafter, no
additional purchase of shares will be made for the Participant's account
and the Participant's shares and any cash dividends paid thereon will be
forwarded to such Participant's legal representative.
OTHER INFORMATION
29. What happens if a Participant sells or transfers all of the shares
registered in the Participant's name?
If a Participant disposes of all shares registered in his or her name, and
is not shown as a Record Owner on a dividend record date, the Participant
may be terminated from the Plan as of such date and such termination
treated as though a withdrawal notice had been received prior to the record
date.
30. What happens if the Company declares a dividend payable in shares or
declares a stock split?
Any dividend payable in shares and any additional shares distributed by the
Company in connection with a stock split in respect of shares credited to a
Participant's Plan account will be added to that account. Stock dividends
or split shares which are attributable to shares registered in a
Participant's own name and not in his or her Plan account will be mailed
directly to the Participant as in the case of Shareholders not
participating in the Plan.
18
<PAGE>
31. How will shares held by the Plan Administrator be voted at meetings of
shareholders?
If the Participant is a Record Owner, the Participant will receive a proxy
card covering both directly held shares and shares held in the Plan. If
the Participant is a Beneficial Owner, the Participant will receive a
proxy covering shares held in the Plan through his or her broker, bank or
other nominee.
If a proxy is returned properly signed and marked for voting, all the
shares covered by the proxy will be voted as marked. If a proxy is
returned properly signed but no voting instructions are given, all of the
Participant's shares will be voted in accordance with recommendations of
the Board of Directors of the Company, unless applicable laws require
otherwise. If the proxy is not returned, or if it is returned unexecuted
or improperly executed, shares registered in a Participant's name may be
voted only by the Participant in person.
32. What are the responsibilities of the Company and the Plan Administrator
under the Plan?
The Company and the Plan Administrator will not be liable in administering
the Plan for any act done in good faith or required by applicable law or
for any good faith omission to act including, without limitation, any claim
of liability arising out of failure to terminate a Participant's account
upon his or her death, with respect to the prices at which shares are
purchased and/or the times when such purchases are made or with respect to
any fluctuation in the market value before or after purchase or sale of
shares.
The Company and the Plan Administrator shall be entitled to rely on
completed forms and the proof of due authority to participate in the Plan,
without further responsibility of investigation or inquiry.
33. May the Plan be changed or discontinued?
Yes. The Company may suspend, terminate, or amend the Plan at any time.
Notice will be sent to Participants of any suspension or termination, or of
any amendment that alters the Plan terms and conditions, as soon as
practicable after such action by the Company.
The Company may substitute another administrator or agent in place of the
Plan Administrator at any time; Participants will be promptly informed of
any such substitution.
Any questions of interpretation arising under the Plan will be determined
by the Company and any such determination will be final.
34. What are the federal income tax consequences of participation in the Plan?
The following summary is based upon an interpretation of current federal
tax law. Participants should consult their own tax advisers to determine
particular tax consequences, including state income tax (and non-income
tax, such as stock transfer tax) consequences, which vary from state to
state and which may result from participation in the Plan and subsequent
disposition of shares acquired pursuant to the Plan. Income tax
consequences to Participants residing outside the United States will vary
from jurisdiction to jurisdiction.
Participants in the Plan 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 acquired with
reinvested dividends. Such shares will have a tax basis equal to the same
amount. For federal income tax purposes, the fair market value of shares
acquired with reinvested dividends under the Plan will be equal to 100% of
the average of the high and low sale prices of shares on the related
Investment Date.
Such distribution will be taxable as a dividend to the extent of the
Company's current or accumulated earnings and profits. To the extent the
distribution is in excess of the Company's current or accumulated
19
<PAGE>
earnings and profits, the distribution will be treated first as a tax-free
return of capital, reducing the tax basis in a Participant's shares, and
the distribution in excess of a Participant's tax basis will be taxable as
gain realized from the sale of its shares.
Example 1:
The following example may be helpful to illustrate the federal income tax
consequences of the reinvestment of dividends at a 1% discount from Market
Price when shares of Common Stock are purchased directly from the Company.
<TABLE>
<S> <C> <C>
Cash dividends reinvested........................... $100.00
Assumed fair market value and Market Price*......... $ 15.00
Less 1% discount per share.......................... $ (0.15)
-------
Net purchase price per share........................ $ 14.85
Number of shares purchased ($100.00/$14.85)......... 6.734
Total taxable dividend resulting from transaction
($15.00 x 6.734).................................... $101.01
</TABLE>
* These prices are assumed for illustrative purposes only, and will vary
with the market price of Common Stock.
Participants will be treated as having received a distribution, upon the
purchase of shares with an optional cash payment, in an amount equal to the
excess, if any, of the fair market value of the shares on the Investment
Date over the amount of the optional cash payment. The taxation of such a
distribution is not entirely clear. Participants should be aware that the
Company will treat the entire amount of the distribution, for tax reporting
purposes, as a distribution taxable as a dividend. It is possible,
however, that all or a portion of such distribution should be treated as a
tax-free return of capital or not treated as a taxable distribution.
Participants are encouraged to consult their own tax advisors in this
regard.
Shares acquired under the optional cash payment feature of the Plan will
have a tax basis equal to the amount of the payment plus the excess, if
any, of the fair market value of the shares purchased over the amount of
the payment. The fair market value on an acquisition date is likely to
differ from the Market Price for the Pricing Period immediately preceding
the related Investment Date (which is used to determine the number of
shares acquired).
Example 2:
The following example may be helpful to illustrate the federal income tax
consequences of the optional cash payment feature at a 3% discount from the
Market Price.
<TABLE>
<S> <C> <C>
Optional cash payment............................... $100.00
Assumed fair market value*.......................... $ 15.00
Assumed Market Price*............................... $ 14.75
Less 3% discount per share.......................... $ (0.44)
-------
Net purchase price per share........................ $ 14.31
Number of shares purchased ($100.00/$14.31)......... 6.988
Total taxable dividend resulting from transaction
(6.988 x $15.00 - $100.00).......................... $ 4.82
</TABLE>
* These prices are assumed for illustrative purposes only, and will vary
with the market price of Common Stock.
A Participant's holding period for shares acquired pursuant to the Plan
will begin on the day following the Investment Date.
20
<PAGE>
A Participant will not realize any taxable income upon 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 of participation in the Plan. A Participant will realize gain
or loss upon the sale or exchange of shares acquired under the Plan. A
Participant will also realize gain or loss upon receipt, following
termination of participation in the Plan, of a cash payment for any
fractional share equivalent 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 equivalent
and the tax basis thereof.
The foregoing discussion is based on the assumption that newly issued or
treasury shares will be purchased directly from the Company. No discount
will be available for shares purchased on the open market with reinvested
dividends. Accordingly, the tax consequences will be different from those
set forth in Example 1. With respect to open market purchases relating to
optional cash payments, the consequences will be generally the same as set
forth in Example 2. However, with respect to such optional cash payments
the payment of brokerage commissions by the Company in connection with the
purchase of shares in the open market may be treated as additional dividend
income to the Participant and, in such event, will increase the tax basis
of such shares.
35. How are income tax withholding provisions applied to Shareholders who
participate in the Plan?
If a Participant fails to provide certain federal income tax certifications
in the manner required by law, dividends on shares of Common Stock,
proceeds from the sale of fractional shares and proceeds from the sale of
shares held for a Participant's account will be subject to federal income
tax withholding at the rate of 31%. If withholding is required for any
reason, the appropriate amount of tax will be withheld. Certain
shareholders (including most corporations) are, however, exempt from the
above withholding requirements.
If a Participant is a foreign shareholder whose dividends are subject to
federal income tax withholding at the 30% rate (or a lower treaty rate),
the appropriate amount will be withheld and the balance in shares will be
credited to such Participant's account.
36. Who bears the risk of market fluctuations in the Company's Common Stock?
A Participant's investment in shares held in the Plan account is no
different from his or her investment in directly held shares. The
Participant bears the risk of any loss and enjoys the benefits of any gain
from market price changes with respect to such shares.
37. Who should be contacted with questions about the Plan?
All correspondence regarding the Plan should be directed to:
The Bank of New York
Dividend Reinvestment
P.O. Box 1958
Newark, New Jersey 07101-9774
Telephone (800) 524-4458
Please mention CWM Mortgage Holdings, Inc. and this Plan in all
correspondence.
38. How is the Plan interpreted?
Any question of interpretation arising under the Plan will be determined by
the Company and any such determination will be final. The Company may
adopt rules and regulations to facilitate the administration
21
<PAGE>
of the Plan. The terms and conditions of the Plan and its operation will be
governed by the laws of the State of California.
39. What are some of the Participant responsibilities under the Plan?
Plan Shares are subject to escheat to the state in which the Participant
resides in the event that such shares are deemed, under such state's laws,
to have been abandoned by the Participant. Participants, therefore, should
notify the Plan Administrator promptly in writing of any change of address.
Account statements and other communications to Participants will be
addressed to them at the last address of record provided by Participants to
the Plan Administrator.
Participants will have no right to draw checks or drafts against their Plan
accounts or to instruct the Plan Administrator with respect to any shares
of Common Stock or cash held by the Plan Administrator except as expressly
provided herein.
DIVIDENDS
The Company has paid dividends since its incorporation. In order to accommodate
the provisions of this Plan, the Company anticipates that dividends will be
payable on or about the first business day of March, June, September and
December.
USE OF PROCEEDS
The Company does not know either the number of shares of Common Stock that will
be ultimately sold pursuant to the Plan or the prices at which such shares will
be sold. However, the Company proposes to use the net proceeds from the sale of
newly issued or treasury shares of Common Stock for general corporate purposes.
PLAN OF DISTRIBUTION
Except to the extent the Plan Administrator purchases Common Stock in open
market transactions, the Common Stock acquired under the Plan will be sold
directly by the Company through the Plan. The Company may sell Common Stock to
owners of shares (including brokers or dealers) who, in connection with any
resales of such shares, may be deemed to be underwriters. Such shares,
including shares acquired pursuant to waivers granted with respect to the
optional cash payment feature of the Plan, may be resold in market transactions
(including coverage of short positions) on any national securities exchange on
which shares of Common Stock trade or in privately negotiated transactions. The
Common Stock is currently listed on the New York Stock Exchange. Under certain
circumstances, it is expected that a portion of the shares of Common Stock
available for issuance under the Plan will be issued pursuant to such waivers.
The difference between the price such owners pay to the Company for shares of
Common Stock acquired under the Plan, 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 Plan, there is no total maximum number of shares that can be issued
pursuant to the reinvestment of dividends. From time to time, financial
intermediaries may engage in positioning transactions in order to benefit from
the discount from the Market Price of Common Stock acquired through the
reinvestment of dividends under the Plan.
Except with respect to open market purchases of Common Stock relating to
reinvested dividends, the Company will pay any and all brokerage commissions and
related expenses incurred in connection with purchases of Common Stock under the
Plan. Upon withdrawal by a Participant from the Plan by the sale of Common
Stock held under the Plan, the Participant will receive the proceeds of such
sale less a nominal fee per transaction paid to the Plan Administrator (if such
resale is made by the Plan Administrator at the request of a Participant), any
related brokerage commissions and any applicable transfer taxes.
22
<PAGE>
Common Stock may not be available under the Plan in all states. This Prospectus
does not constitute an offer to sell, or a solicitation of an offer to buy, any
Common Stock or other securities in any state or any other jurisdiction to any
person to whom it is unlawful to make such offer in such jurisdiction.
LEGAL OPINION
The validity of the securities offered hereby has been passed upon by Richard H.
Wohl, General Counsel of the Company.
EXPERTS
The consolidated financial statements of the Company and its subsidiaries
incorporated in this Prospectus by reference to the Annual Report on Form 10-K
for the year ended December 31, 1994 have been so incorporated in reliance on
the report of Grant Thornton LLP, independent accountants, given on the
authority of said firm as experts in auditing and accounting.
INDEMNIFICATION
The Company's Certificate of Incorporation eliminates, to the fullest extent
permitted by Delaware law, director liability for monetary damage for breaches
of the directors' fiduciary duty of care. The Company's Certificate of
Incorporation and Bylaws also provide that the Company shall indemnify directors
and officers under certain circumstances for liabilities and expenses incurred
by reason of their actions as agents of the Company. In addition, the Company
maintains an insurance policy that indemnifies directors and officers against
certain liabilities.
Insofar as indemnification for liabilities arising under the Securities Act may
be permitted to directors, officers or persons controlling the Company pursuant
to the foregoing provisions, the Company has been informed that in the opinion
of the Commission such indemnification is against public policy as expressed in
said Act and is therefore unenforceable.
23
<PAGE>
GLOSSARY
"Beneficial Owners" means shareholders who beneficially own shares of Common
Stock that are registered in a name other than their own (for example, in the
name of a broker, bank or other nominee).
"B&N Form" means a Broker and Nominee form.
"business day" means any day other than Saturday, Sunday or legal holiday on
which the NYSE is closed or a day on which the Plan Administrator is authorized
or obligated by law to close.
"Commission" means the Securities and Exchange Commission.
"Common Stock" means the common stock, $.01 par value, of the Company.
"Company" means CWM Mortgage Holdings, Inc.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Investment Date" means, with respect to Common Stock acquired directly from the
Company and relating to a dividend reinvestment, the dividend payment date
declared by the Board of Directors (unless such date is not a business day in
which case it is the first business day immediately thereafter) or, in the case
of open market purchases, no later than ten business days following the dividend
payment date; and with respect to Common Stock acquired directly from the
Company and relating to an optional cash payment, generally on or about the
twenty-second day of each month; or, in the case of open market purchases, no
later than the last business day of each month. In no event, however, will the
Investment Date relating to dividend reinvestments be less than 10 days from the
Investment Date relating to optional cash payments.
"Market Price" means, with respect to Common Stock acquired directly from the
Company and relating to a dividend reinvestment, the average of the high and low
sales prices, computed to three decimal places, of the Common Stock on the NYSE
on the Investment Date, or if no trading occurs in the Common Stock on the
Investment Date, the average of the high and low sales prices for the first
trading day immediately preceding the Investment Date for which trades are
reported. With respect to dividend reinvestments which will be reinvested in
Common Stock purchased in the open market, "Market Price" shall mean the
weighted average of the actual prices paid, computed to three decimal places,
for all of the Common Stock purchased by the Plan Administrator with all
Participants' reinvested dividends for the related quarter. With respect Common
Stock acquired directly from the Company and relating to optional cash payments,
"Market Price" shall mean the average of the daily high and low sales prices of
the Common Stock as reported on the NYSE during the Pricing Period. With
respect to optional cash payments which will be reinvested in Common Stock
purchased in the open market, "Market Price" shall mean the weighted average of
the actual prices paid, computed to three decimal places, for all of the Common
Stock purchased by the Plan Administrator with all Participants' optional cash
payments for the related month.
"NYSE" means the New York Stock Exchange.
"Participant" means an eligible holder of Common Stock who wishes to participate
in the Plan.
"Participating Shares" means shares of Common Stock owned by a Participant on
the applicable record date as to which such Participant has directed the Company
to pay the related cash dividends to the Plan Administrator.
"Plan" means the CWM Mortgage Holdings, Inc. Dividend Reinvestment and Stock
Purchase Plan.
"Plan Administrator" means a plan administrator that administers the Plan, keep
records, sends statements of account to each Participant and performs other
duties related to the Plan. The Bank of New York currently serves as Plan
Administrator of the Plan.
24
<PAGE>
"Plan Shares" means all whole and fractional shares of Common Stock credited to
a Participant's Plan account.
"Pricing Period" means the period encompassing the twelve Trading Days preceding
the relevant optional cash payment Investment Date.
"Record Date" means, with respect to reinvestments of dividends, the record date
declared by the Board of Directors for such dividend; and with respect to
optional cash payments, two business days prior to the commencement of the
related Pricing Period.
"Record Owners" means shareholders who own shares of Common Stock in their own
names.
"Requests for Waiver" means a written request from a Participant to make
optional cash payments in excess of $10,000.
"Securities Act" means the Securities Act of 1933, as amended.
"Threshold Price" means the minimum price, if any, established by the Company
that the average high and low prices of the Common Stock must equal or exceed
during each Trading Day of the Pricing Period for optional cash payments made
pursuant to written Requests for Waiver.
"Trading Day" means a day on which trades in the Common Stock are reported on
the NYSE.
"Waiver Discount" means the discount from the Market Price applicable to
optional cash payments made pursuant to written Requests for Waiver. Such
discount will vary between 0% and 5% of the Market Price and may vary each
month.
25
<PAGE>
SCHEDULE A
----------
Optional Cash Payments
- ----------------------
<TABLE>
=======================================================================================================================
<CAPTION>
Threshold Price
and/1/ Pricing Period
Waiver Discount Optional Cash Commencement
Set Date Record Date Payment Due Date Date Investment Date
- ----------------- ----------- ---------------- --------------- ---------------
<S> <C> <C> <C> <C>
July 28, 1995 August 2, 1995 August 3, 1995 August 4, 1995 August 22, 1995
August 29, 1995 September 1, 1995 September 5, 1995 September 6, 1995 September 22, 1995
September 28, 1995 October 3, 1995 October 4, 1995 October 5, 1995 October 23, 1995
October 27, 1995 November 1, 1995 November 2, 1995 November 3, 1995 November 21, 1995
November 29, 1995 December 4, 1995 December 5, 1995 December 6, 1995 December 22, 1995
December 27, 1995 January 2, 1996 January 3, 1996 January 4, 1996 January 22, 1996
January 25, 1996 January 30, 1996 January 31, 1996 February 1, 1996 February 20, 1996
February 28, 1996 March 4, 1996 March 5, 1996 March 6, 1996 March 22, 1996
March 27, 1996 April 1, 1996 April 2, 1996 April 3, 1996 April 22, 1996
April 29, 1996 May 2, 1996 May 3, 1996 May 6, 1996 May 22, 1996
May 30, 1996 June 4, 1996 June 5, 1996 June 6, 1996 June 24, 1996
June 26, 1996 July 1, 1996 July 2, 1996 July 3, 1996 July 22, 1996
July 30, 1996 August 2, 1996 August 5, 1996 August 6, 1996 August 22, 1996
August 28, 1996 September 3, 1996 September 4, 1996 September 5, 1996 September 23, 1996
September 27, 1996 October 2, 1996 October 3, 1996 October 4, 1996 October 22, 1996
October 30, 1996 November 4, 1996 November 5, 1996 November 6, 1996 November 22, 1996
November 27, 1996 December 3, 1996 December 4, 1996 December 5, 1996 December 23, 1996
</TABLE>
Dividend Reinvestments /1/
- ------------------------------
===================================================
<TABLE>
<CAPTION>
Record Investment/2/
Date Date
------ -------------
<S> <C>
July 28, 1995 September 1, 1995
October 27, 1995 December 1, 1995
January 29, 1996 March 1, 1996
April 29, 1996 June 3, 1996
July 29, 1996 September 3, 1996
October 28, 1996 December 2, 1996
January 31, 1997 March 2, 1997
</TABLE>
______________
1 The dates indicated are those expected to be applicable under the Plan with
respect to future dividends, if and when declared by the Board of
Directors. The actual record and payment dates will be determined by the
Board of Directors.
2 The Investment Date relating to dividends is also the pricing date with
respect to Common Stock acquired directly from the Company. See Question
12.
26
<PAGE>
SUMMARY DATE INFORMATION
. The Investment Date is, with respect to Common Stock acquired directly from
the Company and relating to a dividend reinvestment, the dividend payment
date declared by the Board of Directors (unless such date is not a business
day in which case it is the first business day immediately thereafter) or,
in the case of open market purchases, no later than ten business days
following the dividend payment date; and with respect to Common Stock
acquired directly from the Company and relating to an optional cash
payment, generally on or about the twenty-second day of each month; or,
in the case of open market purchases, no later than the last business day
of each month. In no event, however, will the Investment Date relating to
dividend reinvestments be less than 10 days from the Investment Date
relating to optional cash payments.
. The Pricing Period for optional cash payments which are invested in Common
Stock acquired directly from the Company is the twelve Trading Days
preceding the relevant Investment Date.
. The due date for optional cash payments is one business day prior to the
commencement of the relevant Pricing Period.
. The Record Date for dividends is set by the Board of Directors. The Record
Date for optional cash payments is two business days prior to the
commencement of the related Pricing Period.
. The Waiver Discount and the Threshold Price, if any, are set three business
days prior to the applicable Record Date.
27
<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution (estimated):
<TABLE>
<S> <C>
Registration fee................................... $ 5,440
Listing fees....................................... $ 1,500
Printing expenses.................................. $ 6,500
Accounting fees and expenses....................... $ 9,000
Legal fees and expenses............................ $15,000
Blue sky fees and expenses......................... $ 5,500
TOTAL.............................................. $42,940
</TABLE>
Item 15. Indemnification of Directors and Officers.
Section 145 of the General Corporation Law of the State of Delaware
provides that a corporation shall have the power, and in some cases is
required, to indemnify an agent, including an officer or director, who
was or is a party or is threatened to be made a party to any
proceedings, against expenses, judgments, fines, settlements and other
amounts under certain circumstances.
The Certificate of Incorporation and Bylaws of the Company provide, in
effect, that, to the extent and under the circumstances permitted by
Section 145 of the General Corporation Law of Delaware, the Company
shall indemnify any person who was or is a party or is threatened to
be made a party to any action, suit or proceeding by reason of the
fact that he or she is or was a director, officer, employee or agent
of the Company. The Company maintains insurance covering certain
liabilities of the directors and officers of the Company. The Company
has also entered into contractual arrangements with its directors and
officers pursuant to which such persons may be entitled to indemnity
from the Company against certain liabilities arising from the
discharge of their duties in such capacities.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers or
persons controlling the Company pursuant to the foregoing provisions,
the Company has been informed that in the opinion of the Commission
such indemnification is against public policy as expressed in said Act
and is therefore unenforceable.
Item 16. Exhibits.
4. Dividend Reinvestment and Stock Purchase Plan (included in the
Prospectus)
5. Opinion of Counsel (Richard H. Wohl, General Counsel of the
Company)
24.1 Consent of Grant Thornton LLP
24.2 Consent of Counsel (included in Exhibit 5)
25.1 Power of Attorney of Certain Officers and Directors (included on
page S-3)
S-1
<PAGE>
Item 17. Undertakings.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933, unless the information
required to be included in such post-effective amendment
is contained in a periodic report filed by Registrant
pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934 and incorporated herein by reference;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or
the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the Registration
Statement, unless the information required to be included
in such post-effective amendment is contained in a
periodic report filed by Registrant pursuant to Section 13
or Section 15(d) of the Securities Exchange Act of 1934
and incorporated herein by reference;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the
Registration Statement or any material change to such
information in the Registration Statement;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall
be deemed to be a new Registration Statement relating to the
securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bonafide offering
thereof; and
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each
filing of the Registrant's Annual Report pursuant to Section 13(a) or
Section 15(d) of the Securities Exchange Act of 1934 (and, where
applicable, each filing of an employee benefit plan's annual report
pursuant to Section 14(d) of the Securities Exchange Act of 1934) that
is incorporated by reference in the Registration Statement shall be
deemed to be a new Registration Statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
S-2
<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 Pasadena, State of California, on June 9, 1995.
CWM MORTGAGE HOLDINGS, INC.
By: /s/ Michael W. Perry
---------------------
Michael W. Perry
Executive Vice President and
Chief Operating Officer
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints David S.
Loeb, Angelo R. Mozilo and Michael W. Perry his true and lawful attorneys-in-
fact and agents, each acting alone, with full powers of substitution and
resubstitutions, for him and in his name, place and stead, in any and all
capacities to sign any or 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, each acting alone,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, each acting alone, or his
substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities and
on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ David S. Loeb Director, Chief Executive June 9, 1995
------------------- Officer and Chairman of
David S. Loeb the Board of Directors
(Principal Executive Officer)
/s/ Angelo R. Mozilo Director, President June 9, 1995
-------------------- and Vice Chairman
Angelo R. Mozilo of the Board of Directors
/s/ Michael W. Perry Executive Vice President June 9, 1995
-------------------- and Chief Operating Officer
Michael W. Perry (Principal Financial Officer)
</TABLE>
S-3
<PAGE>
<TABLE>
<S> <C> <C>
/s/ Carmella L. Grahn Senior Vice President June 9, 1995
--------------------- and Chief Accounting Officer
Carmella L. Grahn (Principal Accounting Officer)
/s/ Lyle E. Gramley Director June 9, 1995
-------------------
Lyle E. Gramley
/s/ Thomas J. Kearns Director June 9, 1995
--------------------
Thomas J. Kearns
/s/ Frederick J. Napolitano Director June 9, 1995
---------------------------
Frederick J. Napolitano
</TABLE>
S-4
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIAL
EXHIBIT PAGE
NUMBER EXHIBIT NUMBER
- ------ ------- ---------
<C> <S> <C>
4. Dividend Reinvestment and Stock Purchase Plan (included
in the Prospectus)
5. Opinion of Counsel (Richard H. Wohl, General Counsel
of the Company)
24.1 Consent of Grant Thornton LLP
24.2 Consent of Counsel (included in Exhibit 5)
25.1 Power of Attorney of Certain Officers and Directors
(included on page S-3)
</TABLE>
S-5
<PAGE>
EXHIBIT 5.
[LETTERHEAD OF CWM MORTGAGE]
June 9, 1995
CWM Mortgage Holdings, Inc.
35 North Lake Avenue, 7th Floor
Pasadena, California 91101
Ladies and Gentlemen:
I have acted as counsel to CWM Mortgage Holdings, Inc., a Delaware
corporation (the "Company"), in connection with the registration of 1,300,000
shares (the "Shares") of the Company's Common Stock, par value $.01 per share
(the "Common Stock"), to be issued pursuant to the CWM Mortgage Holdings, Inc.
Dividend Reinvestment and Stock Purchase Plan (the "Plan").
This opinion is delivered in accordance with the requirements of Item
601(b)(5) of Regulation S-K under the Securities Act of 1933, as amended (the
"Securities Act").
In connection with this opinion, I have examined and am familiar with
originals or copies, certified or otherwise identified to my satisfaction, of
(i) the Registration Statement on Form S-3 relating to the Shares, filed with
the Securities and Exchange Commission (the "Commission") under the Securities
Act on June 9, 1995 (as such Registration Statement may be subsequently amended
and together with all exhibits thereto, the "Registration Statement"), (ii) the
Certificate of Incorporation of the Company as currently in effect, (iii) the
By-laws of the Company as currently in effect, (iv) a specimen of the
certificate to be used to represent the Common Stock, and (v) resolutions of the
Board of Directors of the Company relating to the issuance of the Shares and the
filing of the Registration Statement. I have also examined originals or copies,
certified or otherwise identified to my satisfaction, of such records of the
Company and such agreements, certificates of public officials, certificates of
officers or representatives of the Company and others, and such other documents,
certificates and records, as I have deemed necessary or appropriate as a basis
for the opinion set forth herein.
In my examination, I have assumed the legal capacity of all natural
persons, the genuineness of all signatures, the authenticity of all documents
submitted to me as originals, the conformity to original documents of all
documents submitted to me as certified or photostatic copies and the
authenticity of the originals of such latter documents. As to any facts
material to the opinion expressed herein, I have relied upon oral or written
statements and representations of officers and other representatives of the
Company and others.
<PAGE>
Based upon and subject to the foregoing, I am of the opinion that the
Shares, when issued in accordance with the Plan, will be validly issued, fully
paid and nonassessable.
I hereby consent to the filing of this opinion with the Commission as
Exhibit 5 to the Registration Statement and to the use of my name under the
heading "Legal Opinion" in the prospectus contained in the Registration
Statement.
This opinion is furnished to you solely in connection with the
Registration Statement and may not be relied upon by any other person or entity
or by you in any other context.
Very truly yours,
/s/ Richard H. Wohl
Richard H. Wohl
Senior Vice President and
General Counsel
2
<PAGE>
EXHIBIT 24.1
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
---------------------------------------------------
We have issued our report dated March 14, 1995, accompanying the consolidated
financial statements and schedules of CWM Mortgage Holdings, Inc. (formerly
Countrywide Mortgage Investments, Inc.) and Subsidiaries appearing in the Annual
Report on Form 10-K for the year ended December 31, 1994, which is incorporated
by reference in this Registration Statement. We consent to the incorporation by
reference in the Registration Statement of the aforementioned report and to the
use of our name as it appears under the caption "Experts."
/s/ Grant Thornton LLP
Los Angeles, California
June 7, 1995
