This Pre-Effective Amendment No. 1 also constitutes
Post-Effective Amendment No. 4 to
Registration Statement No. 33-55583
As filed with the Securities and Exchange Commission on
December 9, 1997.
Registration No. 333-41373
- -----------------------------------------------------------------
- -----------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------
PRE-EFFECTIVE AMENDMENT NO. 1
to
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-------------------
CRIIMI MAE Inc.
(Exact name of Registrant as specified in its charter)
Maryland 52-1622022
(State of incorporation) (I.R.S. Employer Identification No.)
William B. Dockser
Chairman of the Board
11200 Rockville Pike 11200 Rockville Pike
Rockville, Maryland 20852 Rockville, Maryland 20852
(301) 816-2300 (301) 816-2300
(Address, including zip code, (Name, address, including zip
and telephone number, code and telephone number,
including area code, of including area code, of agent
Registrant's principal for service)
executive offices)
Copy to:
Morris F. DeFeo, Jr., Esq.
Swidler & Berlin, Chartered
3000 K Street, NW, Suite 300
Washington, DC 20007
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable on or 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 this Form are
to be offered on a delayed or continuous basis pursuant to Rule
415 under the Securities Act of 1933, other than securities
offered only in connection with dividend or 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. [ ]
PURSUANT TO RULE 429 UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, THE PROSPECTUS INCLUDED HEREIN ALSO COVERS 748,976
SHARES OF COMMON STOCK OF THE REGISTRANT REGISTERED UNDER
REGISTRATION STATEMENT NO. 33-55583, AS AMENDED BY POST-EFFECTIVE
AMENDMENT NO. 1 FILED ON SEPTEMBER 23, 1994, POST-EFFECTIVE
AMENDMENT NO. 2 FILED ON MARCH 1, 1996 AND POST-EFFECTIVE
AMENDMENT NO. 3 FILED ON DECEMBER 2, 1997. IN THE EVENT ANY OF
THE PREVIOUSLY REGISTERED COMMON STOCK IS OFFERED PRIOR TO THE
EFFECTIVE DATE OF THIS REGISTRATION STATEMENT, IT WILL NOT BE
INCLUDED IN ANY PROSPECTUS HEREUNDER. THE AMOUNT OF COMMON STOCK
OF THE REGISTRANT BEING REGISTERED HEREBY, TOGETHER WITH THE
COMMON STOCK REGISTERED UNDER REGISTRATION STATEMENT NO. 33-55583, REPRESENTS
THE MAXIMUM AMOUNT OF COMMON STOCK OF THE
REGISTRANT WHICH IS EXPECTED TO BE OFFERED FOR SALE.
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, AS AMENDED, OR UNTIL THE REGISTRATION
STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION,
ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
- -----------------------------------------------------------------
- -----------------------------------------------------------------
<PAGE>
<PAGE>
PROSPECTUS
- ----------
CRIIMI MAE INC.
Dividend Reinvestment and Stock Purchase Plan
CRIIMI MAE Inc. ("CRIIMI MAE" or the "Company") hereby
offers participation in its Dividend Reinvestment and Stock
Purchase Plan (the "Plan"). The Plan is designed to provide
investors with a convenient and economical way to purchase shares
of CRIIMI MAE's Common Stock, par value $.01 per share ("Common
Shares"), without paying any service fees, brokerage commissions
or other charges, and to reinvest all or a portion of their cash
dividends in additional Common Shares, in most cases at a
discount to the market price. Participants in the Plan and
interested investors may:
- Invest by making optional cash payments at any time up
to a maximum of $10,000 per month, regardless of
whether the participants' dividends are being
reinvested.
- Make an initial cash investment up to a maximum of
$10,000.
- Invest by making an initial cash investment in excess
of $10,000, or optional cash payments in excess of
$10,000 per month, subject to permission of the
Company, regardless of whether the participants'
dividends are being reinvested.
- Automatically reinvest cash dividends on all or a
portion of their Common Shares.
To fulfill the Plan's requirements, Common Shares may be
purchased in the open market, in privately negotiated
transactions or from the Company. Common Shares purchased in the
open market or in privately negotiated transactions will be
credited to participant accounts at the average price per share
of all Common Shares purchased with respect to the relevant
Dividend Reinvestment Date or Investment Date, as applicable,
less any applicable discount. When the Company elects to make
Common Shares available for purchase under the Plan, the purchase
price of the Common Shares so purchased will be the average of
the daily high and low sales prices of the Common Shares as
reported on the New York Stock Exchange (i) with respect to
Common Shares purchased with reinvested dividends, on the five
Trading Days prior to the Dividend Reinvestment Date less any
discount and (ii) with respect to Common Shares purchased with
optional cash payments or initial cash investments, on the ten
Trading Days prior to the Investment Date (in the case of
optional cash payments less any discount). The price to
participants of Common Shares purchased with reinvested dividends
or with optional cash payments that do not exceed $10,000 will
reflect a discount, initially, of 2% from the market price.
Common Shares purchased with optional cash payments exceeding
$10,000 (as approved by the Company) may reflect a discount
ranging from 0% to 5%. No discount will be offered on Common
Shares purchased under the Plan with initial cash investments.
The closing price of the Common Shares on November 28, 1997,
as reported on the New York Stock Exchange ("NYSE"), was $14.8125
per share.
This Prospectus relates to 3,000,000 Common Shares offered
for purchase under the Plan. We suggest that you read the
Prospectus carefully and retain it for future reference.
Holders of Common Shares who do not choose to participate in
the Plan will continue to receive cash dividends, as declared, in
the usual manner.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is December 8, 1997<PAGE>
<PAGE>
AVAILABLE INFORMATION
CRIIMI MAE and certain of its subsidiaries are subject to
the informational requirements of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and in accordance
therewith file reports, proxy statements and other information
with the Securities and Exchange Commission (the "SEC" or
"Commission"). Reports, proxy statements and other information
filed by CRIIMI MAE can be inspected and copied at the SEC's
Public Reference Room, 450 Fifth Street, NW, Washington, D.C.
20549 and the SEC's Regional Offices at 7 World Trade Center,
13th Floor, New York, New York 10048 and 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661; and copies of such material
can be obtained from the Public Reference Section of the SEC, 450
Fifth Street, NW, Washington, D.C. 20549, at prescribed rates.
In addition, reports, proxy material and other information
concerning CRIIMI MAE may be inspected at the NYSE, 20 Broad
Street, New York, New York 10005 or reviewed through the
Commission's Electronic Data Gathering Analysis and Retrieval
System, which is publicly available through the Commission's Web
Site (http://www.sec.gov).
This Prospectus constitutes part of a Registration Statement
on Form S-3 (together with all amendments and exhibits, the
"Registration Statement") filed by CRIIMI MAE with the SEC under
the Securities Act of 1933, as amended (the "Securities Act").
This Prospectus does not contain all of the information included
in the Registration Statement, certain parts of which are omitted
in accordance with the rules and regulations of the SEC.
Reference is made to the Registration Statement for further
information with respect to CRIIMI MAE and the Common Shares.
Statements contained in this Prospectus concerning the provisions
or contents of any contract, agreement or any other document
referred to herein are not necessarily complete. With respect to
each such contract, agreement or document filed as an exhibit to
the Registration Statement, reference is made to such exhibit for
a more complete description of the matters involved, and each
such statement shall be deemed qualified in its entirety by such
reference to the copy of the applicable document filed with the
SEC. The Registration Statement, including the exhibits and
schedules thereto, may be inspected without charge at the SEC's
principal office at 450 Fifth Street, NW, Washington, D.C. and
copies of it or any part thereof may be obtained from such
office, upon payment of the fees prescribed by the SEC.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents heretofore filed by CRIIMI MAE with
the SEC (File No. 1-10360) are incorporated herein by reference:
1. Annual Report on Form 10-K for the year ended
December 31, 1996.
2. Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1997, June 30, 1997 and September 30, 1997.
3. Definitive Proxy Statements dated April 28, 1995 and
April 6, 1993.
4. Form 8-K, as filed with the SEC on November 19, 1997.
5. Form 8-K, as filed with the SEC on October 3, 1997.
6. Form 8-A, as filed with the SEC on October 16, 1989.
7. Form 8-B, as filed with the SEC on October 27, 1993.
All documents filed by CRIIMI MAE pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of
this Prospectus and prior to the termination of the offering of
the Common Shares offered hereby shall be deemed to be
incorporated by reference in this Prospectus from the date of
filing of such documents. Any statement contained herein or in a
document incorporated or deemed to be incorporated by reference
herein shall be deemed to be modified or superseded for purposes
of this Prospectus to the extent that a statement contained
herein or in any other subsequently filed document which also is
or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this Prospectus.
CRIIMI MAE will provide without charge to each person,
including any beneficial owner, to whom a copy of this Prospectus
has been delivered, on the written or oral request of any such
person, a copy of any or all of the documents referred to above
which have been or may be incorporated in this Prospectus by
reference, other than exhibits to such documents, unless such
exhibits are specifically incorporated by reference. Requests
for such copies should be directed to CRIIMI MAE's principal
executive offices: CRIIMI MAE Inc., Investor Services, 11200
Rockville Pike, Rockville, Maryland 20852, or telephone (301)
816-2300 or toll-free (800) 266-0535.
<PAGE>
<PAGE>
SUMMARY OF THE PLAN
The following is a summary of certain features of the Plan
and is qualified in its entirety by, and should be read in
conjunction with, the more detailed information appearing
elsewhere in this Prospectus. Capitalized terms that are used
but not defined in this summary have the meanings given to them
in "CRIIMI MAE Inc. Dividend Reinvestment and Stock Purchase
Plan Definitions."
The Plan provides holders of Common Shares and other
investors with a convenient and economical way to purchase Common
Shares through the reinvestment of all or a portion of their cash
dividends in additional Common Shares. There is no minimum or
maximum limitation on the amount of cash dividends a participant
may reinvest under the Plan. In addition to reinvestment of
dividends, participants in the Plan may invest additional funds
through optional cash payments of not less than $100 and not more
than $10,000 per month (except in cases covered by a Request for
Waiver, as discussed below). Persons not currently holders of the
Company's Common Shares may become participants by making an
initial cash investment of not less than $500 and not more than
$10,000 to purchase Common Shares through the Plan (except in
cases covered by a Request for Waiver, as described below). For
purposes of these limitations, all Plan accounts under the common
control or management of a participant may be aggregated at the
Company's sole discretion. Optional cash payments that exceed
$10,000 and initial cash investments that exceed $10,000 may be
made only upon acceptance by the Company of a completed Request
for Waiver form. Participants may also make optional cash
payments by having their bank checking accounts debited directly
on a monthly basis (without charge to participants) to purchase
Common Shares through the Plan.
To fulfill Plan requirements, Common Shares may be purchased
in the open market or in privately negotiated transactions, or
directly from the Company. Common Shares purchased with
reinvested dividends or with optional cash payments that do not
exceed $10,000 will be issued at a discount, initially, of 2% to
the market price of Common Shares. This discount is subject to
change from time to time or may be discontinued at the Company's
discretion, without prior notice to participants, after a review
of current market conditions, the level of participation in the
Plan and the Company's current and projected capital needs. The
Company may establish a different discount (ranging from 0% to
5%, the "Waiver Discount") regarding Common Shares purchased from
the Company with optional cash payments exceeding $10,000 that
are approved by the Company pursuant to a Request for Waiver.
CRIIMI MAE reserves the right to modify the pricing or any other
provision of the Plan at any time. No participant shall have any
authority or power to direct the time or price at which or the
manner by which Common Shares may be purchased. There will be no
discount on Common Shares purchased with initial cash
investments.
Each month, at least three Trading Days prior to the first
day of the relevant Pricing Period, the Company may establish a
Waiver Discount applicable to optional cash payments exceeding
$10,000 and a minimum price (the "Threshold Price") applicable to
all optional cash payments and all initial cash investments. The
Waiver Discount, which may vary each month from 0% to 5%, will be
established in the Company's sole discretion after a review of
current market conditions, the level of participation in the Plan
and the Company's current and projected capital needs. The
Threshold Price will apply to Common Shares purchased through the
Plan directly from the Company but will not apply to Common
Shares purchased in the open market or through negotiated
transactions. Further, the reinvestment of dividends in
additional Common Shares will not be subject to such Threshold
Price, if any.
Common Shares purchased for the Plan directly from the
Company with reinvested dividends will be acquired on the
relevant Dividend Reinvestment Date at a price to participants,
computed to four decimal places, obtained by averaging the daily
high and low sales price of the Common Shares on the New York
Stock Exchange on the five Trading Days immediately preceding the
relevant Dividend Reinvestment Date, less a discount of 2% (or
such other discount, if any, then in effect). Common Shares
purchased for the Plan directly from the Company with optional
cash payments and initial cash investments will be acquired on
the relevant Investment Date at a price to participants, computed
to four decimal places, obtained by averaging the daily high and
low sales price of the Common Shares on the New York Stock
Exchange on the ten Trading Days immediately preceding the
relevant Investment Date, in the case of optional cash payments
less any discount. In the event that the Threshold Price is not
satisfied for a Trading Day<PAGE>
<PAGE>
during the Pricing Period, then such Trading Day and the trading
prices for that day will be excluded from (i) the Pricing Period
and (ii) the determination of the purchase price of the Common
Shares for all Common Shares purchased with optional cash
payments and initial cash investments on that Investment Date.
Thus, for example, if the Threshold Price is not satisfied for
three of the ten Trading Days in the Pricing Period, then the
purchase price of the Common Shares purchased directly from the
Company with optional cash payments and initial cash investments
on the Investment Date will be based upon the remaining seven
Trading Days for which the Threshold Price was satisfied.
With respect to optional cash payments that exceed $10,000,
for each Trading Day of the related Pricing Period on which the
Threshold Price is not satisfied, one-tenth of a participant's
optional cash payment will be returned to the participant without
interest. No part of a participant's optional cash payment that
does not exceed $10,000 or an initial cash investment of any
amount will be returned for any Trading Day of the related
Pricing Period on which the Threshold Price is not satisfied.
Rather, the full amount of the optional cash payment that does
not exceed $10,000 or initial cash investment will be used to
purchase Common Shares (excluding from the calculation of the
purchase price, however, any Trading Day on which the Threshold
Price is not satisfied).
In deciding whether to approve a Request for Waiver, the
Company will consider relevant factors including, but not limited
to, whether the Plan is then acquiring newly issued or treasury
shares directly from the Company or acquiring Common Shares from
third parties in the open market or in privately negotiated
transactions, the Company's needs for additional funds, the
attractiveness of obtaining such additional funds through the
sale of Common Shares as compared to other sources of funds, the
purchase price likely to apply to any sale of Common Shares under
the Plan, the participant submitting the request, the extent and
nature of such participant's prior participation in the Plan, the
number of Common Shares held by such participant and the
aggregate amount of optional cash payments and initial cash
investments for which Requests for Waiver have been submitted by
all participants. If such requests are submitted for any
Investment Date for an aggregate amount in excess of the amount
the Company is then willing to accept, the Company may honor such
requests in order of receipt, pro rata or by any other method
that the Company in its sole discretion determines to be
appropriate.
From time to time, financial intermediaries, including
brokers and dealers, and other persons may engage in positioning
transactions in order to benefit from the discount from the
market price of the Common Shares acquired under the Plan. Such
transactions may cause fluctuations in the trading volume of the
Common Shares. Financial intermediaries and such other persons
that engage in positioning transactions may be deemed to be
underwriters within the meaning of Section 2(11) of the
Securities Act. The Company has no arrangements or
understandings, formal or informal, with any person relating to
the sale of Common Shares to be received pursuant to the Plan.
Subject to the availability of Common Shares registered for
issuance under the Plan, there is no total maximum number of
Common Shares that can be issued pursuant to the reinvestment of
dividends and no preestablished maximum limit applicable to
optional cash payments and initial cash investments that may be
made pursuant to Requests for Waiver. As of the date hereof,
3,000,000 Common Shares have been registered and are available
for sale under the Plan.
Participants in the Plan will pay no commissions or
brokerage fees on open market purchases of Common Shares made in
connection with dividend reinvestments, optional cash payments
and initial cash investments. All costs of administering the
Plan and all fees, commissions and expenses incurred in
connection with any open market purchases made pursuant to the
Plan will be paid by CRIIMI MAE.
If a participant wishes to sell Common Shares held in the
Plan, the participant may elect to have such Common Shares sold
through the Plan. Common Shares sold through the Plan will be
effected by the Agent through a registered broker-dealer and will
be subject to an administrative charge of $10.00, applicable
brokerage fees and commissions and transfer taxes, if any. A
participant that wishes to sell Common Shares held in the Plan
other than through the Plan may request that the Agent deliver a
certificate for such Common Shares to the participant, which the
participant may then sell through his or her registered broker-dealer.
Participants in the Plan who reinvest dividends will be
treated for federal income tax purposes as having received a
dividend (to the extent the Company has current or accumulated
earnings and profits) equal to (i) in the case of<PAGE>
<PAGE>
Common Shares purchased from the Company, the fair market value
of Common Shares received, and (ii) in the case of Common Shares
purchased on the open market, the amount of cash provided by the
Company to purchase the Common Shares plus the amount of any
brokerage commissions paid by the Company with respect to the
Common Shares, without receiving cash to pay any tax payment
obligation which arises as a result of such dividend.
Participants in the Plan who make optional cash payments will be
treated for federal income tax purposes as having received a
dividend equal to the excess of the fair market value on the
Investment Date of such Common Shares over the amount of the
optional cash payment made by the participant. Participants will
not be able to control the specific timing of optional cash
payments, initial cash investments and sales of Common Shares
under the Plan. The market discount for purchases of Common
Shares may change from time to time or may be eliminated at any
time. See "CRIIMI MAE Inc. Dividend Reinvestment and Stock
Purchase Plan-Disadvantages."<PAGE>
<PAGE>
CRIIMI MAE
CRIIMI MAE is a full service commercial mortgage company
structured as a self-administered real estate investment trust
("REIT"). CRIIMI MAE specializes in the acquisition, origination,
securitization and servicing of multifamily and commercial
mortgages and mortgage-related assets throughout the United
States.
CRIIMI MAE INC. DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN
The following is a complete statement of the Plan.
PURPOSE
The purpose of the Plan is to provide holders of CRIIMI
MAE's Common Shares and other investors with a convenient and
economical way to purchase Common Shares and to reinvest all or a
portion of their cash dividends in additional Common Shares.
The Plan may also have the effect of raising additional
capital through the direct sale of Common Shares by the Company.
These sales may be effected, in part, through the Company's
approval from time to time, in its sole discretion, of Requests
for Waiver regarding the limitations applicable to the initial
cash investment and optional cash payment features of the Plan.
DEFINITIONS
The following is a list of certain capitalized terms and
their meanings for purposes of this Prospectus.
- Agent means Registrar and Transfer Company, the Company's
agent and administrator for the Plan.
- Beneficial Owner means a holder of Common Shares who
beneficially owns Common Shares that are registered in a
name other than such holder's name (for example, where
Common Shares are held in the name of a broker, bank or
other nominee).
- Dividend Reinvestment Date means the first Trading Day
after the date on which the Company pays quarterly
dividends. Dividends on Common Shares have historically
been paid on the last Trading Day of each quarter ended
March 31, June 30, September 30 and December 31.
- Holder of Record means a holder of Common Shares who owns
Common Shares in his or her own name.
- Investment Date means for all optional cash payments and
initial cash investments, including optional cash
payments and initial cash investment exceeding $10,000,
the eleventh Trading Day after the commencement of the
Pricing Period each month. Please see Schedule A for a
list of the Investment Dates for each month through the
month ending December 31, 1999.
- Pricing Period means, (i) with respect to optional cash
payments and initial cash investments, the period
encompassing the ten Trading Days immediately preceding
the relevant Investment Date and (ii) with respect to the
reinvestment of cash dividends, the period encompassing
the five Trading Days immediately preceding the relevant
Dividend Reinvestment Date.
- Threshold Price means the stated dollar amount that the
average of the high and low sales price of the Common
Shares on the New York Stock Exchange for a Trading Day
in a Pricing Period must equal or exceed in order to be
included in the calculation of the purchase price for
newly issued Common Shares acquired from the Company.
With respect to initial cash investments and optional
cash payments (in each case regardless of dollar amount),
if the Threshold Price is not satisfied for a Trading Day
in the Pricing Period, then the high and low sales price
for that Trading Day will be excluded from the
calculation of the purchase price of Common Shares.
See "-Source and Price of Common Shares" below.
- Trading Day means a day on which trades of the Common
Shares are reported on the NYSE.
<PAGE>
<PAGE>
ADVANTAGES
- Common Shares purchased under the Plan with reinvested
dividends and optional cash payments that do not exceed
$10,000, whether purchased in the open market or directly
from the Company, will be issued commission free and at a
discount,initially, of 2% to the market price. If it is
determined that Common Shares to be purchased under the
Plan will be made in the open market instead of directly
from the Company, participants will not pay any brokerage
fees or commissions on open market purchases or in
privately negotiated purchases of Common Shares.
- In addition to reinvestment of dividends, participants
may invest additional funds in Common Shares through
optional cash payments of not less than $100 and not more
than $10,000 per month, unless a Request for Waiver is
approved by the Company. Optional cash payments may be
made by sending to the Agent a check or money order
payable to "Registrar and Transfer Company." Optional
cash payments may be made occasionally or at regular
intervals, as the participant desires. Participants may
also make optional cash payments by having their bank
checking accounts debited directly, without paying a fee,
on a monthly basis to purchase Common Shares through the
Plan. Participants may make optional cash payments even
if dividends on their Common Shares are not being
reinvested.
- Persons not currently holders of Common Shares may become
participants by making an initial cash investment of not
less than $500 and not more than $10,000, or a greater
amount if a Request for Waiver is approved by the
Company, to purchase Common Shares under the Plan.
- Funds invested in the Plan for Holders of Record are
fully invested through the purchase of fractions of
Common Shares, as well as full Common Shares, and
proportionate cash dividends on fractions of Common
Shares are used to purchase additional Common Shares.
See "-Participation Option" for a discussion of
fractional shares owned by Beneficial Owners.
- A participant may make a gift, at any time and at a
nominal cost to the participant, of all or a portion of
the Common Shares held in the Plan in the name of the
participant to a Plan account for another person by
instructing the Agent of the request and enclosing a
check for the processing fee made payable to the Agent.
- The Plan offers a "share safekeeping" service whereby
participants may deposit their Common Share certificates
with the Agent and have their ownership of such Common
Shares maintained on the Agent's records as part of their
Plan accounts. Participants will not be charged a fee for
this service.
- Participants will not pay any service fees, brokerage
commissions or other charges in connection with purchases
of Common Shares under the Plan.
DISADVANTAGES
- Participants in the Plan who reinvest dividends will be
treated for federal income tax purposes as having
received a dividend on the dividend payment date. In
addition, participants in the Plan who make optional cash
payments will be treated for federal income tax purposes
as having received a dividend at the time they receive
Common Shares purchased with such optional cash payments
to the extent of any discount received as a result of
such optional cash payments. Such dividends may give
rise to a tax payment obligation without providing the
participant with immediate cash to pay such tax when it
becomes due. See "Certain United States Federal Income
Tax Considerations."
- Participants will not be able to control the specific
timing of purchases and sales of Common Shares under the
Plan. Because purchases under the Plan will be made no
earlier than eleven Trading Days following receipt of an
investment instruction, and because sales under the Plan
will be effected by the Agent through a registered
broker-dealer only as soon as practicable after the Agent
receives such instructions, a participant may be unable
to achieve the same level of control over purchase and
sale timing that he or she might have regarding
investments made outside the Plan.
- The Company may, without prior notice to participants,
change or eliminate the discount on Common Shares to be
purchased through the Plan pursuant to the dividend
reinvestment and optional cash payment features. As a
result, participants will generally be unable to depend
on the availability of a market discount regarding<PAGE>
<PAGE>
Common Shares acquired through the Plan.
- No interest will be paid by the Company or the Agent to a
participant on dividends, initial cash investments or
optional cash payments held pending reinvestment or
investment or to be returned to the participant. In
addition, optional cash payments exceeding $10,000 per
month may be subject to return to the participant (in
whole or proportionate part) without interest in the
event that (i) a Threshold Price has been established
with respect to Common Shares to be purchased from the
Company and (ii) such Threshold Price is not met for a
Trading Day during the related Pricing Period.
- With respect to optional cash payments exceeding $10,000,
while the Plan allows the Company to establish a discount
from the average market price of the Common Shares during
the Pricing Period, there can be no assurance that such
average market price, as so discounted, will equal or
exceed the market price of the Common Shares on the
relevant Investment Date. Similarly, there can be no
assurance that the average market price of Common Shares
purchased with optional cash payments that do not exceed
$10,000, less any discount (initially 2%), will equal or
exceed the market price of the Common Shares on the
relevant Investment Date.
ADMINISTRATION
CRIIMI MAE has retained Registrar and Transfer Company as
plan administrator and agent (the "Agent") to administer the
Plan, keep records, send statements of account activity to each
participant and perform other duties relating to the Plan.
Common Shares purchased under the Plan and held by the Agent will
be registered in the Agent's name or the name of its nominee for
the benefit of the participants. If the Agent resigns or
otherwise ceases to act as plan administrator and agent, the
Company will appoint a new plan administrator and agent to
administer the Plan.
Questions regarding the Plan may be directed to the Agent
either by phone at (800) 998-9151 or in writing to the following
address:
Registrar and Transfer Company
Attention: CRIIMI MAE Dividend Reinvestment and Stock
Purchase Plan
10 Commerce Drive
Cranford, New Jersey 07016
PARTICIPATION
Participation in the Plan is open to any person or entity,
whether or not a holder of Common Shares, provided that such
person or entity fulfills the prerequisites for participation
described below under "Enrollment Procedures." A holder of Common
Shares who owns the Common Shares in his or her own name is
referred to herein as a "Holder of Record." A Holder of Record
may participate directly in the Plan. A holder of the Common
Shares who beneficially owns Common Shares that are registered in
a name other than such holder's name (for example, where Common
Shares are held in the name of a broker, bank or other nominee)
is referred to herein as a "Beneficial Owner." A Beneficial Owner
may participate in the Plan by either (i) becoming a Holder of
Record by having one or more Common Shares transferred into such
holder's own name or (ii) coordinating such holder's
participation with his or her broker, bank or other nominee who
is the record holder to participate on such holder's behalf. A
prospective investor who holds no Common Shares may participate,
at his or her option, either directly or through a broker, bank
or other nominee. See "-Enrollment Procedures" below.
The Plan is intended for the benefit of investors in CRIIMI
MAE and not for persons or entities who accumulate accounts under
the Plan over which they have control for the purpose of
exceeding the $10,000 per month maximum without seeking the
advance approval of the Company or who engage in transactions
that cause or are designed to cause aberrations in the price or
trading volume of the Common Shares. Notwithstanding anything in
the Plan to the contrary, CRIIMI MAE reserves the right to
exclude from participation in the Plan, at any time, (i) persons
or entities who attempt to circumvent the Plan's standard $10,000
per month maximum by accumulating accounts over which they have
control<PAGE>
<PAGE>
or (ii) any other persons or entities, as determined in the sole
discretion of the Company.
Participants currently enrolled in the CRIIMI MAE Inc.
Dividend Reinvestment and Stock Purchase Plan, the predecessor to
the Plan, will automatically be enrolled in the Plan.
Participants currently enrolled in the CRIIMI MAE Inc. Dividend
Reinvestment and Stock Purchase Plan who do not wish to enroll in
the Plan may withdraw from the Plan by sending written notice to
the Agent. See "-Withdrawal."
PREVIOUS SALES UNDER THE PLAN
Under the CRIIMI MAE Inc. Dividend Reinvestment and Stock
Purchase Plan in effect from August 1990 until the adoption of
this Plan by the Company's board of directors, the Company issued
251,024 Common Shares. A total of 37,786 Common Shares were
issued pursuant to the optional cash payment feature of such
predecessor plan.
ENROLLMENT PROCEDURES
After being furnished a copy of this Prospectus:
(a) Holders of Record may become participants by delivering
a completed Enrollment Form to the Agent. Participants
currently enrolled in the CRIIMI MAE Inc. Dividend
Reinvestment and Stock Purchase Plan need not do anything
to continue their participation in the Plan.
(b) Beneficial Owners are eligible to participate in the
reinvestment of dividends. However, Beneficial Owners must
instruct their broker, bank or other nominee who is a
Depository Trust Company ("DTC") participant to participate
on their behalf in the Plan. See " Broker and Nominee
Form."
(c) Interested persons not currently holders of Common
Shares may become participants by (i) directly delivering a
completed Enrollment Form to the Agent or (ii) instructing
their broker, bank or other nominee to deliver a completed
and signed Enrollment Form to the Agent together with an
initial cash investment of not less than $500 and not more
than $10,000; provided, that initial cash investments of
more than $10,000 may be made if a Request for Waiver
therefor is approved by the Company.
Enrollment Forms will be processed as promptly as
practicable. Participation in the Plan will begin after the
properly completed Enrollment Form has been reviewed and accepted
by the Agent (and, in cases of initial cash investments exceeding
$10,000, a properly completed Request for Wavier form has been
reviewed and accepted by the Company).
PARTICIPATION OPTION
The Enrollment Form appoints the Agent as agent for the
participants and directs the Company to pay to the Agent such
participants' cash dividends on all or a specified number of
Common Shares owned by the participants ("Participating Shares"),
as well as on all whole and fractional Common Shares credited to
participants' Plan accounts ("Plan Shares"). The Enrollment Form
directs the Agent to purchase, on the Dividend Reinvestment Date,
additional Common Shares with such dividends. The Enrollment Form
also directs the Agent to purchase on the relevant Investment
Date additional Common Shares with optional cash payments and
initial cash investments of not more than $10,000, if any, made
by Holders of Record. See "-Cash Investments Exceeding $10,000"
below for a discussion of the requirements for optional cash
payments and initial cash investments exceeding $10,000.
See "-Broker and Nominee Form" below for a discussion of the
requirements for optional cash payments of a Beneficial Owner,
and initial cash investments of an investor who is not currently
a holder of Common Shares, whose broker, bank or other nominee
holds or will hold such person's Common Shares. The Enrollment
Form also directs the Agent to automatically reinvest all
subsequent dividends on Plan Shares. Dividends will continue to
be reinvested until the participant specifies otherwise by
contacting the Agent, withdraws from the Plan or the Plan is
terminated.
<PAGE>
<PAGE>
The Enrollment Form provides for the purchase of additional
Common Shares through the following investment options:
(a) Full Dividend Reinvestment The Agent will apply any cash
dividends on all Common Shares held in certificate form by
the participant and all cash dividends on Plan Shares,
together with any optional cash payments or initial cash
investment, toward the purchase of additional Common
Shares.
(b) Partial Dividend Reinvestment The Agent will apply cash
dividends on Common Shares held in certificate form by the
participant and specified on the Enrollment Form, and all
cash dividends on Plan Shares, together with any optional
cash payments or initial cash investment, toward the
purchase of additional Common Shares.
(c) Optional Cash Payment and Initial Cash Investment
Only The participant will continue to receive cash
dividends on Common Shares held in certificate form by the
participant in the usual manner. However, the Agent will
apply all cash dividends on all Plan Shares, together with
any optional cash payments or initial cash investment
received from the participant, toward the purchase of
additional Common Shares.
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 Common Shares purchased with any optional cash
payments or initial cash investment, until a participant
specifies otherwise by contacting the Agent, or withdraws from
the Plan altogether, or until the Plan is terminated. If a
participant would prefer to receive cash payments of dividends on
Plan Shares rather than reinvest such dividends, those Common
Shares must be withdrawn from the Plan by written notification to
the Agent. See "-Withdrawal" below.
Beneficial Owners may have their dividends reinvested in
additional Common Shares if the Beneficial Owner's broker, bank
or other nominee is a DTC participant. The Beneficial Owner
should instruct his or her broker, bank or other nominee to
provide instructions to DTC to reinvest all or a portion of his
or her cash dividends. Common Shares issued as a result of
reinvested dividends pursuant to a request by a Beneficial Owner
will be in certificated form. A Beneficial Owner can make
optional cash payments or an initial cash investment by
instructing his or her broker, bank or other nominee to complete
a Broker and Nominee Form and transmit funds to the Agent. A
Beneficial Owner that wishes to purchase Common Shares by making
an optional cash payment or initial cash investment through a
broker, bank or other nominee may not receive fractions of Common
Shares, in which event uninvested cash will be returned via check
to the broker, bank or other nominee on behalf of the Beneficial
Owner. See "-Broker and Nominee Form" below.
The Enrollment Form also permits a participant to authorize
automatic deductions from his or her personal bank checking
account. If this option is selected, the Agent will automatically
deduct from the participant's designated bank account the amount
indicated on the Enrollment Form (not less than $100 or more than
$10,000 per month) on or about the fifteenth day of each month.
A participant may change his or her investment option at any
time by completing a new Enrollment Form and returning it to the
Agent.
BROKER AND NOMINEE FORM
The Broker and Nominee Form provides the only means by which
a broker, bank or other nominee holding Common Shares on behalf
of a Beneficial Owner, or planning to hold Common Shares on
behalf of an interested investor who is not currently a holder of
Common Shares, may make optional cash payments or an initial cash
investment within the minimum and maximum investment limitations
established for the Plan (see "-Optional Cash Payments and
Initial Cash Investments" below) on behalf of such Beneficial
Owner or interested investor. A Broker and Nominee Form must be
delivered to the Agent each time such broker, bank or other
nominee transmits optional cash<PAGE>
<PAGE>
payments or an initial cash investment. Broker and Nominee Forms
will be furnished at any time upon request to the Agent.
The Broker and Nominee Form and appropriate instructions
must be received by the Agent not later than 12:00 p.m. (noon)
Eastern time on the Trading Day immediately preceding the
commencement of the relevant Pricing Period in order to be
invested on the Investment Date, otherwise the optional cash
payment or initial cash investment will be returned, without
interest.
Common Shares issued pursuant to a properly completed Broker
and Nominee Form will not be deemed Plan Shares. Therefore,
subsequent dividends will be paid in cash unless otherwise
instructed by the Beneficial Owner. See "-Enrollment Procedures"
above for a discussion of the requirements for a Beneficial Owner
participating in the reinvestment of dividends.
REINVESTMENT OF CASH DIVIDENDS
A participant may elect to reinvest cash dividends paid on
all or a portion of the Common Shares held in certificate form by
the participant by designating his or her election on the
Enrollment Form. Reinvestment levels may be changed from time to
time as a participant desires by submitting a new election to the
Agent on a properly completed Enrollment Form. To be effective
with respect to a particular dividend payment date, any change in
the reinvestment election must be received by the Agent no later
than three Trading Days before the record date for such dividend.
The record date is usually about ten days prior to the dividend
payment date.
Dividends on Common Shares are expected to be paid on the
last Trading Day of each quarter ended March 31, June 30,
September 30 and December 31. The reinvestment of dividends will
generally begin on the Dividend Reinvestment Date and will
normally extend over a period of two to five Trading Days in the
case of open market purchases. Newly issued Common Shares will be
purchased from CRIIMI MAE on the Dividend Reinvestment Date. If
the participant has specified partial reinvestment of dividends
or optional cash payment or initial cash investment only, the
portion of such dividend payment not being reinvested will be
sent to the participant by check in the usual manner.
OPTIONAL CASH PAYMENTS AND INITIAL CASH INVESTMENTS
Participants in the Plan may make optional cash payments by
personal check or money order made payable to "Registrar and
Transfer Company." An optional cash payment may also be made by a
broker, bank or other nominee acting on behalf of a Beneficial
Owner. Optional cash payments must be at least $100 for any
single investment and may not exceed $10,000 per month. (For
purposes of these limitations, all Plan accounts under the common
control or management of a participant may be aggregated, at the
Company's sole discretion). Optional cash payments exceeding
$10,000 per month may be made only upon acceptance by CRIIMI MAE
of a properly completed Request for Waiver form. See "-Cash
Investments Exceeding $10,000" below. There is no obligation to
make an optional cash payment at any time, and the amount of such
payments may vary from time to time. Participants may also make
optional cash payments by arranging to have their bank checking
accounts debited directly on a monthly basis to have Common
Shares purchased through the Plan. To initiate direct debiting, a
participant must complete the "Automatic Cash Investment" portion
of the Enrollment Form and return to the Agent the Enrollment
Form and a voided check on the account the participant wishes to
be debited. Debits to participants' accounts will be processed on
or about the fifteenth day of each month, but will not commence
until the month following the Agent's receipt of the completed
Enrollment Form and voided check. The minimum monthly account
debit is $100 and the maximum is $10,000. Participants will not
be charged a fee in connection with making optional cash payments
by direct debit. Cash contributions may not be accepted by the
Agent if a participant imposes any restrictions with respect to
the number of Common Shares to be purchased, the price at which
the Common Shares are to be purchased or the timing of the
purchase.
An interested person not currently a holder of Common Shares
may become a participant by directly enrolling in the Plan by
delivering a completed Enrollment Form to the Agent and making an
initial cash investment in the form<PAGE>
<PAGE>
of a personal check or money order payable to "Registrar and
Transfer Company." An interested person not currently a holder of
Common Shares and not wanting to enroll directly in the Plan must
instruct his or her broker, bank or other nominee to complete a
Broker and Nominee Form and transmit the initial cash investment
to the Agent. Initial cash investments must be at least $500 and
may not exceed $10,000 (without the prior approval of the Company
pursuant to a Request for Waiver). (For purposes of these
limitations, all Plan accounts under the common control or
management of a participant may be aggregated, at CRIIMI MAE's
sole discretion). Initial cash investments exceeding $10,000 per
month may be made only upon acceptance by the Company of a
properly completed Request for Waiver form.
Optional cash payments and initial cash investments that do
not exceed $10,000 must be received by the Agent no later than
12:00 p.m. (noon) Eastern time on the Trading Day immediately
preceding the commencement of the relevant Pricing Period, and
any payment in the form of check or money order must have cleared
on or before the Investment Date in order to be invested on the
Investment Date. Optional cash payments and initial cash
investments that are received or cleared after such time will be
returned to the participant, without interest. OPTIONAL CASH
PAYMENTS AND INITIAL CASH INVESTMENTS EXCEEDING $10,000 MUST BE
RECEIVED (TOGETHER WITH A COMPLETED REQUEST FOR WAIVER FORM) BY
THE AGENT IN GOOD FUNDS NOT LATER THAN 12:00 P.M. (NOON) EASTERN
TIME ON THE TRADING DAY IMMEDIATELY PRECEDING THE COMMENCEMENT OF
THE RELEVANT PRICING PERIOD IN ORDER FOR SUCH FUNDS TO BE
INVESTED ON THE RELATED INVESTMENT DATE. Upon a participant's
written request received by the Agent no later than two Trading
Days prior to the Pricing Period, a timely optional cash payment
or initial cash investment not already invested under the Plan
will be canceled or returned to the participant, as appropriate.
However, in such latter event, no refund of a check or money
order will be made until the funds have been actually received by
the Agent. Accordingly, such refunds may be delayed by up to
three weeks.
The Agent will establish an escrow account for the deposit
of optional cash payments that exceed $10,000 and initial cash
investments that exceed $10,000 pending their investment in
Common Shares. Interest that accrues on funds deposited in the
escrow account pending their investment on the relevant
Investment Date will be paid to CRIIMI MAE. No interest will be
paid to CRIIMI MAE from funds deposited with the Agent in
connection with optional cash payments not exceeding $10,000 and
initial cash investments not exceeding $10,000. NO INTEREST WILL
BE PAID TO PARTICIPANTS ON AMOUNTS HELD BY THE AGENT PENDING
INVESTMENT OR TO BE RETURNED TO THE PARTICIPANT. All optional
cash payments and initial cash payments are subject to collection
by the Agent for full face value in U.S. funds.
The Agent will apply the optional cash payment or initial
cash payment received from a participant to the purchase of
Common Shares for the account of the participant on the relevant
Investment Date. See "-Source and Price of Shares" and "-Cash
Investments Exceeding $10,000" below. See Schedule A for a list
of Investment Dates.
SOURCE AND PRICE OF COMMON SHARES
Source
To fulfill the Plan's requirements, the Agent may purchase
or sell Common Shares in the open market or in privately
negotiated transactions subject to such terms and conditions,
including price and delivery, as the Agent may accept. The Agent
may also purchase Common Shares from CRIIMI MAE, to the extent
CRIIMI MAE makes Common Shares available. The Agent may commingle
each participant's funds with those of other participants for the
purpose of executing purchases.
For open market purchases in connection with optional cash
payments and initial cash investments, Common Shares purchased by
the Agent will be acquired through open market transactions
conducted by a registered broker-dealer commencing on the first
Trading Day that follows the end of the Pricing Period; open
market purchases will typically extend over two to five Trading
Days. Newly issued Common Shares acquired with optional cash
payments and initial cash investments will be purchased from
CRIIMI MAE on the Investment Date.
<PAGE>
<PAGE>
Dividend and voting rights on Common Shares purchased in the
open market will commence upon settlement, which is normally
three Trading Days after purchase. However, Common Shares
purchased in the open market within a period of three Trading
Days prior to and including a dividend record date are considered
purchased "ex-dividend" and therefore are not entitled to payment
of that dividend.
Price
Reinvested Dividends. Common Shares purchased in the open
--------------------
market pursuant to the reinvestment of dividends will be credited
to participants' accounts at the weighted average price per share
of all Common Shares purchased with respect to the relevant
Dividend Reinvestment Date less a discount, initially, of 2%.
Common Shares purchased for the Plan directly from CRIIMI MAE
will be acquired on the Dividend Reinvestment Date at a price to
participants, computed to four decimal places, obtained by
averaging the daily high and low sales price of the Common Shares
as reported on the New York Stock Exchange on the five Trading
Days immediately preceding the Dividend Reinvestment Date and
subtracting from such average a discount, initially, of 2%.
Optional Cash Payments That Do Not Exceed $10,000. Common
-------------------------------------------------
Shares purchased in the open market with optional cash payments
that do not exceed $10,000 will be credited to participants'
accounts at the weighted average price per share of all Common
Shares purchased with respect to the relevant Investment Date,
less a discount, initially, of 2%. Common Shares purchased for
the Plan directly from CRIIMI MAE with optional cash payments
that do not exceed $10,000 will be acquired on the relevant
Investment Date at a price to participants, computed to four
decimal places, obtained by (i) averaging the daily high and low
sales price of the Common Shares on the New York Stock Exchange
on the Trading Days during the Pricing Period immediately
preceding the relevant Investment Date on which the Threshold
Price, if any, is satisfied and (ii) subtracting from such
average a discount, initially, of 2%. See "-Cash Investments
Exceeding $10,000-Waiver Discount and Threshold Price" for a
discussion of the price of and discount for Common Shares
purchased with optional cash payments that exceed $10,000.
Initial Cash Investments. Common Shares purchased in the
------------------------
open market with initial cash investments will be credited to
participants' accounts at the weighted average price per share of
all Common Shares purchased with respect to the relevant
Investment Date. Common Shares purchased for the Plan directly
from CRIIMI MAE with initial cash investments will be acquired on
the relevant Investment Date at a price to participants, computed
to four decimal places, obtained by averaging the daily high and
low sales price of the Common Shares on the New York Stock
Exchange on the Trading Days during the relevant Pricing Period
on which the Threshold Price, if any, is satisfied. There is no
discount for Common Shares purchased in the open market or
directly from the Company with initial cash investments.
Threshold Price. Notwithstanding anything contained
---------------
herein to the contrary, CRIIMI MAE may establish for each Pricing
Period a Threshold Price applicable to the purchase of newly
issued Common Shares purchased through optional cash payments and
initial cash investments. The Threshold Price, if any, will be
established by the Company, in its sole discretion, at least
three Trading Days prior to the first day of the Pricing Period
based upon a review of current market conditions and other
relevant factors. Participants may obtain the applicable
Threshold Price by telephoning the Company at (800) 266-0535 and
requesting "CRIIMI MAE Investor Services." The Threshold Price
will be a stated dollar amount that the average of the high and
low sales price of the Common Shares on the New York Stock
Exchange for a Trading Day of the Pricing Period must equal or
exceed in order to be included in the calculation of the purchase
price for newly issued Common Shares acquired from CRIIMI MAE. In
the event that such Threshold Price is not satisfied for a
Trading Day of the Pricing Period, then such Trading Day and the
trading prices of the Common Shares for that day will be excluded
from (i) the Pricing Period and (ii) the determination of the
purchase price of the Common Shares for all optional cash
payments and initial cash investments. Thus, for example, if the
Threshold Price is not satisfied for three of the ten Trading
Days in the Pricing Period, then the purchase price of the Common
Shares will be based upon the remaining seven Trading Days for
which the Threshold Price was satisfied.
<PAGE>
<PAGE>
No portion of any optional cash payment that does not exceed
$10,000, and no portion of any initial cash investment, will be
returned to participants for any Trading Day of a Pricing Period
for which the Threshold Price is not satisfied.
See Schedule A for a list of Investment Dates and associated
optional cash payment and initial cash investment due dates and
Pricing Periods.
The discount for purchases of Common Shares with optional
cash payments that do not exceed $10,000 and reinvested dividends
will initially be 2% but may be changed or eliminated by CRIIMI
MAE, without prior notice to participants, at any time.
CASH INVESTMENTS EXCEEDING $10,000
Request for Waiver
Initial cash investments in excess of $10,000 and optional
cash payments in excess of $10,000 per month may be made only
pursuant to a written Request for Waiver accepted in writing by
CRIIMI MAE. A Request for Waiver must be received by CRIIMI MAE
at its corporate address or via facsimile at (301) 231-0334 no
later than 12:00 p.m. (noon) Eastern time on the third Trading
Day preceding the relevant Pricing Period. Request for Waiver
forms may be obtained by calling the Company at (800) 266-0535
and requesting "CRIIMI MAE Investor Services." It is solely
within CRIIMI MAE's discretion as to whether any such approval
for initial cash investments in excess of $10,000 or optional
cash payments in excess of $10,000 will be granted. In deciding
whether to approve a Request for Waiver, CRIIMI MAE will consider
relevant factors including, but not limited to, whether the Plan
is then acquiring newly issued or treasury shares directly from
the Company or acquiring Common Shares from third parties in the
open market or in privately negotiated transactions, the
Company's need for additional funds, the attractiveness of
obtaining such additional funds through the sale of Common Shares
as compared to other sources of funds, the purchase price likely
to apply to any sale of Common Shares under the Plan, the
participant submitting the request, the extent and nature of such
participant's prior participation in the Plan, the number of
Common Shares held by such participant and the aggregate amount
of cash investments for which Requests for Waiver have been
submitted by all participants. If such requests are submitted for
any Investment Date for an aggregate amount in excess of the
amount CRIIMI MAE is then willing to accept, CRIIMI MAE may honor
such requests in order of receipt, pro rata or by any other
method that CRIIMI MAE determines in its sole discretion to be
appropriate.
The Company anticipates that it will respond to each Request
for Waiver by the close of business (5:00 p.m. Eastern time) on
the second Trading Day preceding the relevant Pricing Period.
GOOD FUNDS ON ALL APPROVED REQUESTS FOR WAIVER MUST BE RECEIVED
BY THE AGENT NOT LATER THAN 12:00 P.M. (NOON) EASTERN TIME ON THE
TRADING DAY IMMEDIATELY PRECEDING THE COMMENCEMENT OF THE
RELEVANT PRICING PERIOD IN ORDER FOR SUCH FUNDS TO BE INVESTED ON
THE RELEVANT INVESTMENT DATE. A participant who has delivered an
optional cash payment in excess of $10,000 or an initial cash
investment in excess of $10,000 to the Agent may request the
return of such optional cash payment or initial cash payment at
any time prior to the second Trading Day immediately preceding
the commencement of the relevant Pricing Period.
The Agent will establish an escrow account for the deposit
of optional cash payments that exceed $10,000 and initial cash
investments that exceed $10,000 pending their investment in
Common Shares. Interest that accrues on funds deposited in the
escrow account pending their investment on the Investment Date
will be paid to CRIIMI MAE.
See "-Plan of Distribution; Expenses" below; also see
Schedule A for a list of important dates applicable to the
Request for Waiver.
<PAGE>
<PAGE>
Purchase Price
Common Shares purchased in connection with approved Requests
for Waiver in open market purchases or directly from the Company
will be acquired on the Investment Date at a price to
participants, computed to four decimal places, obtained by (i)
averaging the daily high and low sales price of the Common Shares
on the New York Stock Exchange on the Trading Days during the
related Pricing Period on which the Threshold Price, if any, is
satisfied and (ii) subtracting from such average the Waiver
Discount, if any, applicable to such Common Shares. See " Waiver
Discount and Threshold Price" below. Only Common Shares purchased
with optional cash payments that exceed $10,000 (pursuant to an
approved Request for Waiver) will receive the Waiver Discount, if
any. The purchase price to participants of Common Shares
purchased with initial cash investments that exceed $10,000 will
not be reduced by the Waiver Discount.
Waiver Discount and Threshold Price
Each month, at least three Trading Days prior to the first
day of the Pricing Period, the Company may establish a Waiver
Discount applicable to optional cash payments exceeding $10,000.
The Waiver Discount, which may vary each month from 0% to 5%,
will be established in the Company's sole discretion after a
review of current market conditions, the level of participation
in the Plan and current and projected capital needs of the
Company. The Waiver Discount will apply both to Common Shares
purchased directly from the Company and Common Shares acquired in
open market purchases or in negotiated transactions.
Notwithstanding anything contained herein to the contrary,
CRIIMI MAE may establish for each Pricing Period a Threshold
Price applicable to the purchase of newly issued Common Shares
purchased through optional cash payments and initial cash
investments. This Threshold Price, if any, will be established by
the Company, in its sole discretion, at least three Trading Days
prior to the first day of the Pricing Period based upon a review
of current market conditions and other relevant factors. The
Threshold Price will be a stated dollar amount that the average
of the high and low sales price of the Common Shares on the New
York Stock Exchange for a Trading Day of the Pricing Period must
equal or exceed in order to be included in the calculation of the
purchase price for newly issued Common Shares acquired from the
Company. In the event that such Threshold Price is not satisfied
for a Trading Day of the Pricing Period, then such Trading Day
and the trading prices of the Common Shares for that day will be
excluded from (i) the Pricing Period and (ii) the determination
of the purchase price of the Common Shares for all optional cash
payments and initial cash investments. Thus, for example, if the
Threshold Price is not satisfied for three of the ten Trading
Days, then the purchase price of the Common Shares will be based
upon the remaining seven Trading Days for which the Threshold
Price was satisfied.
Each Trading Day of a Pricing Period for which the Threshold
Price is not satisfied will cause the return of a portion of any
optional cash payments made pursuant to Requests for Waiver
approved by the Company. The returned amount will equal one-tenth
of such optional cash payments for each Trading Day that the
Threshold Price is not satisfied. Thus, for example, if the
Threshold Price is not satisfied for three Trading Days, then
3/10 (i.e., 30%) of such optional cash payments will be returned
without interest.
The Threshold Price applies to all optional cash payments
and initial cash investments. The return procedure discussed
above applies only to optional cash payments made pursuant to
Requests for Waiver approved by the Company and not to the
reinvestment of dividends, optional cash payments that do not
exceed $10,000 or initial cash investments.
Participants may obtain the applicable Waiver Discount and
Threshold Price by telephoning the Company at
(800) 266-0535 and requesting "CRIIMI MAE Investor Services."
Any person who acquires Common Shares through the Plan and
resells them shortly before or after acquiring them may be
considered to be an underwriter within the meaning of the
Securities Act. The Company expects that<PAGE>
<PAGE>
certain persons will acquire Common Shares pursuant to a Request
for Waiver and resell such Common Shares in order to obtain the
financial benefit of any Waiver Discount then being offered under
the Plan. The Company has no arrangements or understandings,
informal or formal, with any person relating to a distribution of
Common Shares to be received pursuant to the Plan.
INVESTMENT DATE
The Plan's "Investment Date'' for all optional cash payments
and initial cash investments, including cash investments
exceeding $10,000, is the eleventh Trading Day after the
commencement of the Pricing Period each month. See Schedule A
for a list of Investment Dates and associated optional cash
payment and initial cash investment due dates and Pricing
Periods.
WAYS TO MAKE INVESTMENTS
Personal Check or Money Order
Optional cash payments that do not exceed $10,000 and
initial cash investments that do not exceed $10,000 may be made
by personal check or money order payable in U.S. dollars to
"Registrar and Transfer Company." Optional cash payments mailed
to the Agent should include the Optional Cash Payment Form
attached to the quarterly statement of account sent to
participants or available upon request from the Agent or CRIIMI
MAE.
Automatic Investment from a Bank Account
Participants may also make optional cash payments by
arranging to have their bank checking accounts debited directly
on a monthly basis to have Common Shares purchased through the
Plan. To initiate direct debiting, a participant must complete
the "Automatic Cash Investment" portion of the Enrollment Form.
Debits to participants' accounts will be processed on or about
the fifteenth day of each month. The minimum monthly account
debit is $100 and the maximum is $10,000. Participants will not
pay any fee in connection with optional cash payments made by
direct debit. Cash contributions may not be accepted by the Agent
if a participant imposes any restrictions with respect to the
number of Common Shares to be purchased, the price at which the
Common Shares are to be purchased or the timing of the purchase.
To initiate automatic monthly deductions, the participant
must provide written authorization to the Agent together with a
voided blank check for the account from which funds are to be
drawn. The written request for automatic monthly deduction will
be processed and will become effective as promptly as
practicable.
Participants may change or terminate their automatic monthly
deduction election by providing new written instructions to the
Agent. To be effective with respect to a particular month,
however, the new instructions must be received by the Agent prior
to the last Trading Day of the preceding calendar month.
Cashiers Check or Wire (for optional cash payments exceeding
$10,000 and initial cash investments exceeding $10,000)
Optional cash payments exceeding $10,000 and initial cash
investments exceeding $10,000 must be made by cashiers check
payable to "Registrar and Transfer Company" or by wire transfer,
or by such other method that is expressly approved by CRIIMI MAE
on the Request for Waiver Form with respect to such optional cash
payment or initial cash investment.
<PAGE>
<PAGE>
SALE OF COMMON SHARES
Participants may elect to sell Common Shares held in their
Plan accounts through the Plan. Participants who wish to sell
Common Shares through the Plan should request the Agent to sell
any number of whole Common Shares held in their Plan accounts by
giving written instruction to the Agent. The Agent will sell
Common Shares on the open market through a registered broker-dealer as soon as
practicable, except where and to the extent
necessary under any applicable federal securities laws or other
government or stock exchange regulations. Participants will
generally be unable to terminate the sale after submitting the
request. The Company will have no influence over sales of Common
Shares on behalf of participants in the Plan. Participants will
receive the proceeds, less an administrative charge of $10.00 and
applicable brokerage fees and commissions, if any, and any
transfer taxes. Net proceeds of Common Shares sold through the
Plan will be paid to participants normally by check upon
settlement of trade. A participant that wishes to sell Common
Shares held in the Plan other than through the Plan may request
that the Agent deliver a certificate for such Common Shares to
the participant, which the participant may then sell through his
or her registered broker-dealer.
If instructions for the sale of Common Shares are received
on or after an ex-dividend date but before the related dividend
payment date, the sale will be processed as described above and a
separate check for the dividend will be mailed following the
dividend payment date. A request to sell all Common Shares held
in a participant's account will be treated as a withdrawal from
the Plan (see "-Withdrawal" below).
SHARE SAFEKEEPING
At the time of enrollment in the Plan, or at any later time,
participants may use the Plan's share safekeeping service to
deposit any Common Share certificates in their possession with
the Agent. Participants will not be charged a fee for this
service. Common Shares deposited will be transferred into the
name of the Agent or its nominee and credited to the
participant's account under the Plan.
By using the Plan's share safekeeping service, participants
no longer bear the risk associated with loss, theft or
destruction of stock certificates. Also, because Common Shares
deposited with the Agent are treated in the same manner as Common
Shares purchased through the Plan, they may be transferred or
sold through the Plan in a convenient and efficient manner. See
"-Sale of Common Shares" above and "-Withdrawal" and
"-Gift/Transfer of Common Shares Within the Plan" below.
Participants who wish to deposit their Common Share
certificates with the Agent must complete and return to the
Agent, by registered, insured mail, the Common Share certificates
to be deposited, along with a properly completed Enrollment Form,
if applicable. The certificates should not be endorsed.
GIFT/TRANSFER OF COMMON SHARES WITHIN THE PLAN
If a participant wishes to transfer the ownership of all or
part of the Common Shares held in the participant's Plan account
to a Plan account for another person, whether by gift, private
sale or otherwise, the participant may effect such transfer by
written request to the Agent, together with an executed stock
assignment (stock power) and a check for $5.00 payable to
"Registrar and Transfer Company," to the Agent. Requests for
transfer are subject to the same requirements as for the transfer
of Common Share certificates, including requirements of a
signature guarantee on the stock assignment.
Common Shares so transferred will continue to be held by the
Agent under the Plan. An account will be opened in the name of
the transferee, if he or she is not already a participant, and
such transferee will automatically be enrolled in the Plan. If
the transferee is not already a registered holder of Common
Shares or a Plan participant, the donor may make a reinvestment
election for the transferee at the time of the gift. The
transferee may change the reinvestment election after the gift
has been made as described under " Reinvestment of Cash
Dividends" above.
The transferee will receive a statement showing the number
of Common Shares transferred to and held in the transferee's Plan
account.
<PAGE>
<PAGE>
REPORTS TO PARTICIPANTS
As soon as practicable after each purchase of Common Shares
by the Agent for the participant's account, a confirmation of the
transaction will be mailed to the participant by the Agent. In
addition, a statement of account will be mailed by the Agent to
the participant quarterly. These confirmation receipts and
quarterly statements are the participant's continuing record of
current activity and should be retained for tax purposes. In
addition, each participant will receive all communications sent
to other holders of the Company's Common Shares, including any
annual and quarterly reports to holders of the Company's Common
Shares, proxy statements and dividend income information for tax
reporting purposes. Participants should be aware that it is
important to retain all statements received as there could be a
fee incurred when requesting the Agent to supply past history.
All notices, statements and reports from the Agent to a
participant will be addressed to the participant at his or her
latest address of record with the Agent. Therefore, participants
must promptly notify the Agent of any change of address. To be
effective with respect to mailings of dividend checks and
quarterly statements and reports for a particular quarter,
address changes must be received by the Agent prior to the record
date for that quarter's dividend.
CERTIFICATES FOR COMMON SHARES
Common Shares purchased and held under the Plan will be held
in safekeeping by the Agent in its name or the name of its
nominee. The number of Common Shares (including fractional
shares) held for each participant will be shown on each statement
of account. Participants may obtain a new certificate for all or
some of the whole Common Shares held in their Plan accounts upon
written request to the Agent. Any remaining whole or fractional
Plan Shares will continue to be held by the Agent. Withdrawal of
Common Shares in the form of a certificate in no way affects
dividend reinvestment. See "-Reinvestment of Cash Dividends"
above.
Except as described above under "Gift/Transfer of Common
Shares Within the Plan," Common Shares held by the Agent for a
participant's Plan account may not be pledged or assigned. A
participant who wishes to pledge or assign any such Common Shares
must request that a certificate for such Common Shares be issued
in the participant's name.
PLAN OF DISTRIBUTION; EXPENSES
Except to the extent the Agent effects purchases of Common
Shares in open market transactions through a registered broker-dealer or in
privately negotiated transactions negotiated by
CRIIMI MAE, the Agent will acquire Common Shares directly from
the Company for the Plan. The Company may sell Common Shares to
owners of Common Shares (including brokers or dealers) who, in
connection with any resales of such Common Shares, may be deemed
to be underwriters. Such Common Shares, including Common Shares
acquired pursuant to Requests for Waiver approved with respect to
the optional cash payment and initial cash investment features of
the Plan, may be resold in market transactions (including
coverage of short positions) on any national securities exchange
on which Common Shares trade or in privately negotiated
transactions. The Common Shares are currently listed on the NYSE.
Under certain circumstances, it is expected that a portion
of the Common Shares available for issuance under the Plan will
be issued pursuant to such Requests for Waiver. The difference
between the price such owners pay to the Company for Common
Shares acquired under the Plan, after deduction of the applicable
discount from the market price (in the case of optional cash
payments that exceed $10,000), and the price at which such Common
Shares are resold, may be deemed to constitute underwriting
commissions received by such owners in connection with such
transactions.
Subject to the availability of Common Shares registered for
issuance under the Plan, there is no total maximum number of
Common 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 Shares acquired through the
reinvestment of dividends under the Plan.
<PAGE>
<PAGE>
Common Shares purchased for a participant with respect to a
particular Investment Date will be credited to the participant's
account at the weighted average price per share of all Common
Shares purchased with respect to that Investment Date (less any
applicable discount). Participants have no control over the terms
and conditions, including price and delivery, pursuant to which
Common Shares are purchased or whether Common Shares are
purchased in the open market through registered broker-dealers,
in private transactions negotiated by the Company or directly
from the Company.
The Company will pay the costs of administering the Plan,
including charges by the Agent for bank services on each dividend
reinvestment. Participants will not pay brokerage commissions on
Common Shares purchased directly from the Company. In addition,
the Company will pay all brokerage commissions related to
purchases of Common Shares in the open market effected through
registered broker-dealers. The Company will also pay any
processing fees associated with the direct debit feature of the
Plan. The Agent may charge a participant for additional services
not provided under the Plan or where specified charges are
indicated. Certain expenses will be incurred by the participant
if the participant requests that Common Shares be sold. Brokers
or nominees who participate on behalf of Beneficial Owners for
whom they are holding Common Shares may charge such beneficial
owners fees in connection with such participation, for which
neither the Agent nor the Company will be responsible.
WITHDRAWAL
A participant may withdraw from the Plan at any time by
giving written instructions to the Agent. Upon a participant's
withdrawal from the Plan, a certificate for the whole Common
Shares held in the Plan for the participant will be issued.
Alternatively, a participant may specify in the withdrawal notice
that all (but not less than all) whole Plan Shares be sold. The
Agent will effect the sale through a registered broker-dealer on
the open market as soon as practicable after receipt of the
withdrawal notice (see " Source and Price of Common Shares"
above), and the participant will receive a check for the
proceeds, less an administrative charge of $10.00 and applicable
brokerage fees and commissions, if any, and any transfer taxes.
Whether whole Plan Shares are withdrawn or sold,
participants terminating their participation in the Plan will
receive a check for the cash value of any fractional Common
Shares held in their Plan accounts. Fractions of Common Shares
will be valued at the same effective price as whole Common Shares
sold.
If notice of withdrawal is received on or after an ex-dividend date but
before the related dividend payment date, the
withdrawal will be processed as described above and a separate
check for the dividend will be mailed following the dividend
payment date.
After participation in the Plan has been terminated, no
further investments may be made without re-enrolling in the Plan.
MISCELLANEOUS
Stock Split, Stock Dividend or Rights Offering
Any dividends in Common Shares or split shares distributed
by the Company on Common Shares held in the Plan will be added to
the participant's account. Common Share dividends or split shares
distributed on certificated Common Shares will be credited to the
participant's account, unless otherwise instructed.
In the event of a rights offering, the participant will
receive rights based upon the total number of whole Common Shares
owned, that is, the total number of Plan Shares and certificated
Common Shares standing in the participant's name.
<PAGE>
<PAGE>
Voting of Common Shares Held in the Plan
Whole and fractional Common Shares held in a Plan account
may be voted in person or by the proxy sent to the participant.
Limitation of Liability
Neither the Company nor the Agent (nor any of their
respective agents, representatives, employees, officers,
directors or subcontractors) will be liable in administering the
Plan for any act done in good faith nor for any good faith
omission to act, including, without limitation, any claim of
liability arising with respect to the prices or times at which
Common Shares are purchased or sold for participants, or any
change in the market value of Common Shares, or from failure to
terminate a participant's account upon a participant's death. The
foregoing does not represent a waiver of any rights a participant
may have under applicable securities laws.
Change or Termination of the Plan
The Company, in its sole discretion, may suspend, modify or
terminate the Plan at any time in whole, in part, or in respect
of participants in one or more jurisdictions. Written notice of
such suspension, modification or termination will be sent to all
affected participants at least ten days prior to such action. No
such event will affect any Common Shares then credited to a
participant's account. Upon any whole or partial termination of
the Plan by the Company, certificates for whole Common Shares
held in an affected participant's account under the Plan will be
issued to the participant and a cash payment will be made for any
fractional Common Share held in his or her Plan account. Any
change in the Waiver Discount made by the Company shall not
constitute a modification of the Plan requiring notice to
participants.
Termination of a Participant
The Company may terminate any participant's participation in
the Plan for any reason (including, without limitation, the
attempted circumvention by a participant of the $10,000 monthly
maximum for cash purchases through the accumulation of Plan
accounts over which they have control) after written notice in
advance mailed to such participant at the address appearing on
the Agent's records. A participant whose participation in the
Plan has been terminated will receive certificates for whole
Common Shares held in his or her account and a check for the cash
value of any fractional Common Shares held in his or her Plan
account.
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
The following summary of certain U.S. federal income and
estate tax consequences of the reinvestment of dividends pursuant
to the Plan is based on current law, is for general information
only and is not tax advice. This discussion does not purport to
deal with all aspects of taxation that may be relevant to
particular investors in light of their personal investment
circumstances, or certain types of investors (including insurance
companies, tax-exempt organizations, financial institutions and
broker-dealers) subject to special treatment under the federal
income tax laws. THOSE CONSIDERING PARTICIPATION IN THE PLAN ARE
URGED TO CONSULT WITH THEIR OWN TAX ADVISORS REGARDING THE
SPECIFIC TAX CONSEQUENCES (INCLUDING THE FEDERAL, STATE, LOCAL
AND FOREIGN TAX CONSEQUENCES) THAT MAY RESULT FROM THEIR
PARTICIPATION IN THE PLAN AND OF POTENTIAL CHANGES IN APPLICABLE
TAX LAWS. For purposes of this discussion, a "U.S. Holder" is a
participant or Beneficial Owner that is (i) a citizen or resident
of the United States, (ii) a corporation or partnership created
or organized in the United States or under the laws of the United
States or of any state, (iii) an estate whose income is
includable in gross income for United States federal income tax
purposes regardless of its source or (iv) a trust if a United
States court is able to exercise primary supervision over the
administration of the trust and one or more United States persons
have the authority to control all substantial decisions of the
trust. Notwithstanding the preceding sentence, to the extent
provided in the regulations promulgated by the Treasury
Department, certain trusts in existence on August 20, 1996 and
treated as United States persons prior to such date that elect to
continue to be so<PAGE>
<PAGE>
treated also shall be considered United States persons. A "Non-U.S. Holder" is
any participant or Beneficial Owner that is not a
U.S. Holder. For purposes of the withholding tax on dividends
discussed below, a non-resident fiduciary of an estate or trust
will be considered a Non-U.S. Holder.
U.S. HOLDERS
Dividend Reinvestment
The reinvestment of dividends does not relieve the U.S.
Holder of any federal income tax which may be payable on such
dividends. Dividends paid with respect to Common Shares that are
reinvested in Common Shares purchased directly from CRIIMI MAE
will be treated for federal income tax purposes as having been
received by the U.S. Holder in the form of a taxable stock
dividend. Accordingly, an amount equal to the fair market value
on the date of purchase of Common Shares acquired with reinvested
dividends will be treated as a dividend to the extent that CRIIMI
MAE has current or accumulated earnings and profits for federal
income tax purposes. Dividends paid with respect to Common Shares
that are reinvested in Common Shares purchased on the open market
will be treated for federal income tax purposes as having been
received by the U.S. Holder in the form of a cash dividend.
Accordingly, the actual amount of cash provided by CRIIMI MAE
that is used to purchase the Common Shares on the open market
(whether such cash is a payment of stated dividends or an
additional amount paid by CRIIMI MAE to allow the Common Shares
to be provided to the U.S. Holders at 98% of the average closing
sales price), plus (as discussed in more detail below) the amount
of any brokerage commissions paid by CRIIMI MAE with respect to
the Common Shares, will be treated as a dividend for federal
income tax purposes to the extent that CRIIMI MAE has current or
accumulated earnings and profits for federal income tax purposes.
U.S. Holders having made optional cash payments will be deemed to
have received a dividend for federal income tax purposes equal to
the excess of the fair market value of the Common Shares
purchased with optional cash payments over the amount of such
optional cash payments.
Dividends in excess of current and accumulated earnings and
profits, if any, would not be taxable to a U.S. Holder to the
extent that such dividends do not exceed the adjusted basis of
the U.S. Holder's Common Shares. To the extent such dividends
exceed the adjusted basis of a U.S. Holder's Common Shares, they
would be includable in income as capital gain. In addition, in
the event that the Company designates a part or all of the amount
so distributed as a capital gain dividend, such amount would be
treated by the U.S. Holder as long-term capital gain. A Form
1099-DIV mailed to U.S. Holders at year-end will show total
income and the amount of any capital gain dividend.
The Internal Revenue Service ("IRS") has ruled in private
letter rulings that brokerage commissions paid by a corporation
on behalf of participants in a dividend reinvestment plan (i.e.,
in the case of open market purchases of Common Shares) were to be
treated as constructive dividends to the participants. Such
constructive dividends were subject to income tax in the same
manner as dividends and were includable in the participants' cost
basis of the Common Shares purchased. Accordingly, if the Company
pays brokerage commissions with respect to any open market
purchases made by the Agent, the Company intends to take the
position that participants will have received their proportionate
amount of such commissions as additional dividends. In addition,
consistent with the foregoing, CRIIMI MAE intends to reflect any
discount for purchases of Common Shares under the Plan as
constructive dividends to participants. The information return
sent by the Agent to you and the IRS at the end of the year will
show the amount of such dividends paid to you. While the matter
is not free from doubt, CRIIMI MAE intends to take the position
that administrative expenses of the Plan paid by CRIIMI MAE are
not constructive dividends to participants.
The tax basis of Common Shares acquired directly from CRIIMI
MAE pursuant to the reinvestment of dividends under the Plan will
be equal to the fair market value of the Common Shares on the
applicable date of purchase. The tax basis of Common Shares
acquired on the open market pursuant to the reinvestment of
dividends under the Plan will be equal to the actual purchase
price of the Common Shares provided to U.S. Holders pursuant to
the Plan plus the U.S. Holder's share of brokerage commissions,
if any. The holding period of Common Shares acquired under the
Plan will begin on the day following the date as of which the
Common Shares were purchased for the U.S. Holder's account.
<PAGE>
<PAGE>
A U.S. Holder will not realize any taxable income when the
U.S. Holder receives certificates for Common Shares credited to
the U.S. Holder's account, either upon the U.S. Holder's request
for such certificates or upon withdrawal from or termination of
the Plan. However, a U.S. Holder may recognize gain or loss when
Common Shares acquired under the Plan are sold or exchanged or
when a U.S. Holder receives cash for fractional Common Shares.
The amount of such gain or loss will be the difference between
the amount received in such sale or exchange for the U.S.
Holder's Common Shares and the tax basis thereof.
The IRS has ruled in connection with similar plans that a
dividend reinvestment plan will not adversely affect the
qualification of a REIT for federal income tax purposes. In
addition, REITs should be able to include amounts deemed
distributed as dividends under such a plan for purposes of its
dividends-paid deduction.
Optional Cash Payments and Initial Cash Purchases
The IRS has indicated in somewhat similar situations that a
participant who makes an optional cash payment for the purchase
of Common Shares under the Plan will be treated as having
received a distribution equal to the excess of the fair market
value on the Investment Date of such Common Shares over the
amount of the optional cash payment made by the participant. In
addition, if Common Shares are acquired by the Agent in an open-market
transaction, the IRS may assert that a participant has
received an additional distribution equal to a pro rata share of
any commissions or fees paid by the Company on behalf of the
participant.
The taxation of such a distribution is not entirely clear.
Participants should be aware that the Company will treat the
entire amount of any deemed distribution, for tax reporting
purposes, as a distribution taxable as a dividend to the extent
of the Company's current or accumulated earnings and profits.
Accordingly, a participant's tax basis in his or her Common
Shares acquired through optional cash payments or an initial cash
investment under the Plan will generally equal the total amount
of the optional cash payments or initial cash investment plus any
distributions the participant is deemed to have received (as
described above). A participant's holding period for Common
Shares purchased under the Plan generally will begin on the day
following the date on which Common Shares are credited to the
participant's account.
It is possible, however, that all or a portion of such
deemed 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 counsel in this regard.
NON-U.S. HOLDERS
In general, distributions to a Non-U.S. Holder of Common
Shares which are not attributable to gain from the sale or
exchange of United States real property interests and are not
designated by the Company as capital gain dividends will be
treated as dividends of ordinary income (to the extent of
earnings and profits) for U.S. federal income tax purposes. Such
distributions ordinarily will be subject to withholding of U.S.
federal income tax at a 30% rate, unless such rate is reduced by
an applicable income tax treaty. Dividends that are effectively
connected with such Non-U.S. Holder's conduct of a trade or
business in the United States or, if a tax treaty applies,
attributable to a permanent establishment in the United States
("U.S. trade or business income") generally are subject to U.S.
federal income tax at regular rates (and, in the case of a Non-U.S. Holder that
i a corporation, under certain circumstances
may be subject to an additional "branch profits tax" at a 30%
rate or such lower rate as may be applicable under an income tax
treaty), but are not generally subject to the 30% withholding tax
if the Non-U.S. Holder files the appropriate form with the payer.
If you are a Non-U.S. Holder whose dividends are subject to
United States income tax withholding, the appropriate amount will
be withheld and the remaining balance will be used to purchase
additional Common Shares.
Distributions by CRIIMI MAE which are not dividends out of
earnings and profits (as determined for U.S. federal income tax
purposes) should not be subject to U.S. withholding tax. Such
distributions are treated first as a tax-free return of capital
to the Non-U.S. Holder and reduce the tax basis of the Non-U.S.
Holder's Common Shares by the<PAGE>
<PAGE>
amount of such distribution (but not below zero). Distributions
in excess of the Non-U.S. Holder's tax basis are taxable as a
sale or exchange of Common Shares. If it cannot be determined at
the time a distribution is made whether or not such distribution
will be in excess of current and accumulated earnings and
profits, the entire amount of the distribution will be subject to
withholding at the rate applicable to dividends. However, the
Non-U.S. Holder may seek a refund of such amounts from the IRS if
it is subsequently determined that such distribution was, in
fact, in excess of current and accumulated earnings and profits
of CRIIMI MAE. CRIIMI MAE does not expect to pay dividends in
excess of current and accumulated earnings and profits.
Under the Foreign Investment in Real Property Tax Act of
1980 ("FIRPTA"), for as long as the Company qualifies as a REIT,
a distribution made by CRIIMI MAE to a Non-U.S. Holder that is
attributable to gains from the sale or exchange of U.S. real
property interests generally will be taxable as if the
distributions were gains "effectively connected" with a U.S.
trade or business. Therefore, in such circumstances, Non-U.S.
Holders generally will be taxed at the capital gain rates
applicable to U.S. Holders (subject to applicable alternative
minimum tax and a special alternative minimum tax in the case of
nonresident alien individuals). Distributions subject to FIRPTA
also may be subject to a 30% branch profits tax in the hands of a
corporate Non-U.S. Holder (unless reduced or eliminated by
treaty). In addition, the Company will be required to withhold
U.S. tax equal to 35% of the amount of dividends that could have
been designated as capital gain dividends, but such requirement
apparently is limited to the amount of such gain that is
attributable to the sale or exchange of U.S. real property
interests. The amount so withheld is creditable against the U.S.
federal income tax liability of such Non-U.S. Holder and a refund
may be available if the amount withheld exceeds the U.S. federal
income tax liability of the Non-U.S. Holder.
In order to obtain complete exemption from withholding with
respect to dividends, a Non-U.S. Holder must provide the Company
in a timely manner with either (i) an IRS Form 1001 stating that
the Non-U.S. Holder is entitled to a complete exemption under an
applicable treaty, or (ii) if such dividends are "effectively
connected" income, an IRS Form 4224. In order to obtain a partial
exemption from withholding with respect to dividends based on a
treaty, a Non-U.S. Holder must provide CRIIMI MAE in a timely
manner with an IRS Form 1001, stating that the Non-U.S. Holder is
so entitled to such a reduced rate on dividends paid. Such forms
must be signed by the Non-U.S. Holder or the Non-U.S. Holder's
agent. A Non-U.S. Holder that is required to submit a
certification on Form 1001 or 4224 to avoid the imposition of
United States federal withholding tax with respect to a dividend
on Common Shares is required to submit such certification to
CRIIMI MAE as soon as practicable after the Non-U.S. Holder
acquires such Common Shares or a beneficial interest therein. If
the Company does not physically receive such certification by the
date that is 10 days prior to a dividend payment date, the
Company may treat such certification as ineffective with respect
to any payment to such Non-U.S. Holder and may withhold tax from
such payment on such date. The Non-U.S. Holder will be
responsible for ensuring that all IRS Forms are properly updated.
If an IRS form provided by a Non-U.S. Holder is not properly
updated, CRIIMI MAE will commence withholding on the dividend
payment date on or following the date that such form becomes no
longer current.
In general, an individual who is a Non-U.S. Holder for U.S.
estate tax purposes will incur liability for U.S. federal estate
tax if the fair market value of the property included in such
individual's taxable estate for U.S. federal estate tax purposes
exceeds the statutory threshold amount. For these purposes,
Common Shares owned or treated as owned by an individual who is a
Non-U.S. Holder (for U.S. estate tax purposes) at the time of
death will be included in the individual's taxable estate for
U.S. federal estate tax purposes, unless an applicable estate tax
treaty provides otherwise.
On October 6, 1997, the Treasury Department issued final
rules with respect to withholding tax on income paid to foreign
persons and related matters (the "New Withholding Regulations").
The New Withholding Regulations will generally be effective for
payments made after December 31, 1998, subject to certain
transition rules. Non-U.S. Holders are urged to consult with
their own tax advisors with respect to the New Withholding
Regulations.
<PAGE>
<PAGE>
BACKUP WITHHOLDING
If you fail to provide certain federal income tax
certifications in the manner required by law (such as the
taxpayer identification number), dividends on and proceeds from
the sale of any Common Shares held for your account are subject
to federal backup withholding, currently at the rate of 31%.
Certain exempt holders of the Company's Common Shares (including
most corporations) are, however, exempt from the above
withholding requirements, provided that certain certifications
are made.
Any amounts withheld under the backup withholding rules from
a payment to a person would be allowed as a refund or a credit
against that person's United States federal income tax, provided
that the required information is furnished to the IRS.
Furthermore, certain penalties may be imposed by the IRS on a
Holder who is required to supply information but who does not do
so in the proper manner.
USE OF PROCEEDS
CRIIMI MAE intends to use the net proceeds from the sale of
the Common Shares offered pursuant to the Plan (i) to acquire or
originate mortgage assets, primarily Subordinated CMBS, (ii) to
sponsor and/or participate in collateralized mortgage obligation
programs and (iii) for other general corporate purposes,
including working capital. Pending their use for the foregoing
purposes, the net proceeds are expected to be invested in short-term,
interest-bearing accounts and/or used to pay down debt on a
temporary basis.
LEGAL MATTERS
Certain legal matters will be passed upon for CRIIMI MAE by
Swidler & Berlin, Chartered, Washington, D.C.
EXPERTS
The financial statements included in CRIIMI MAE's Annual
Report on Form 10-K for the year ended December 31, 1996,
incorporated herein by reference, have been audited by Arthur
Andersen LLP, independent public accountants, as indicated in
their reports with respect thereto, and have been incorporated by
reference herein in reliance upon the authority of said firm as
experts in accounting and auditing in giving said reports.<PAGE>
<PAGE>
SCHEDULE A
LIST OF IMPORTANT DATES FOR THE PLAN
The following list sets forth, for each quarter through the
quarter ended December 31, 1999, the Dividend Reinvestment Date.
Dividend Reinvestment Date
01/02/98
04/01/98
07/01/98
10/01/98
01/04/99
04/01/99
07/01/99
10/01/99
01/03/00
The following list sets forth, for each month through the
month ended December 31, 1999, (i) the latest date on which the
Threshold Price and Waiver Discount may be set by the Company,
(ii) the date by which initial cash investments and optional cash
payments must be received by the Agent for investment on the
Investment Date, (iii) the date that the Pricing Period commences
and (iv) the Investment Date (i.e., the date on which initial
cash investments and optional cash payments will be invested in
Common Shares).
Threshold Initial Cash Investment Pricing
Price and Waiver and Optional Cash Period Investment
Discount Set Payment due Date Commences Date
- ----------------- ----------------------- --------- ----------
12/29/97 12/31/97 01/02/98 01/16/98
01/28/98 01/30/98 02/02/98 02/17/98
02/25/98 02/27/98 03/02/98 03/16/98
03/27/98 03/31/98 04/01/98 04/16/98
04/28/98 04/30/98 05/01/98 05/15/98
05/27/98 05/29/98 06/01/98 06/15/98
06/26/98 06/30/98 07/01/98 07/16/98
07/29/98 07/31/98 08/03/98 08/17/98
08/27/98 08/31/98 09/01/98 09/16/98
09/28/98 09/30/98 10/01/98 10/15/98
10/28/98 10/30/98 11/02/98 11/16/98
11/25/98* 11/30/98 12/01/98 12/15/98
12/29/98 12/31/98 01/04/99 01/19/99
01/27/99 01/29/99 02/01/99 02/16/99
02/24/99 02/26/99 03/01/99 03/15/99
03/29/99 03/31/99 04/01/99 04/16/99
04/28/99 04/30/99 05/03/99 05/17/99
05/26/99 05/28/99 06/01/99 06/15/99
06/28/99 06/30/99 07/01/99 07/16/99
07/28/99 07/30/99 08/02/99 08/16/99
08/27/99 08/31/99 09/01/99 09/16/99
09/28/99 09/30/99 10/01/99 10/15/99
10/27/99 10/29/99 11/01/99 11/15/99
11/24/99* 11/30/99 12/01/99 12/15/99
- -----------------
* Because the Company's offices will be closed on the day
following the Thanksgiving day holiday, the Company will
establish the Threshold Price and Waiver Discount one Trading
Day earlier than it otherwise would.<PAGE>
<PAGE>
No dealer, salesperson or other person is authorized in
connection with any offering made hereby to give any information
or to make any representation other than those contained or
incorporated by reference in this Prospectus and, if given or
made, such information or representation must not be relied upon
as having been authorized. This Prospectus does not constitute
an offer to sell or a solicitation of an offer to buy any
security other than the securities offered hereby, nor does it
constitute an offer to sell or a solicitation of any offer to buy
any of the securities offered hereby to any person in any
jurisdiction in which it is unlawful to make such an offer or
solicitation. Neither the delivery of this Prospectus nor any
sale made hereunder shall, under any circumstances, create any
implication that the information contained herein is correct as
of any date subsequent to the date hereof.
TABLE OF CONTENTS
Page
----
Available Information......................................2
Incorporation of Certain Documents by Reference............2
Summary of the Plan........................................3
CRIIMI MAE.................................................6
CRIIMI MAE Inc. Dividend Reinvestment and Stock
Purchase Plan............................................6
Certain United States Federal Income Tax Considerations...20
Use of Proceeds...........................................24
Legal Matters.............................................24
Experts...................................................24
List of Important Dates...........................Schedule A
DIVIDEND REINVESTMENT
AND STOCK PURCHASE PLAN
CRIIMI MAE Inc.
3,000,000 COMMON SHARES
-------------------
PROSPECTUS
-------------------
December 8, 1997
<PAGE>
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DIVIDEND
All of the expenses set forth below, except the SEC
registration fee, are estimated.
SEC registration fee $19,078
New York Stock Exchange listing fee
Printing and engraving expenses 7,000
Accounting fees and expenses
Legal fees and expenses 25,000
Blue Sky fees and expenses
(including legal fees)
Agent fees
Miscellaneous
--------
--------
Total $
--------------
All of the above are estimated, except the SEC registration
fee.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Under Maryland law, a corporation formed under Maryland law
is permitted to limit, by provisions in its articles of
incorporation, the liability of its directors and officers to the
corporation or its stockholders for money damages except for (i)
actual receipt of an improper benefit or profit in money,
property or services or (ii) active and deliberate dishonesty
established by a final judgment as being material to the cause of
action. CRIIMI MAE's Articles of Incorporation include such a
provision which limits such liability to the fullest extent
permitted by Maryland law.
CRIIMI MAE's Bylaws provide that CRIIMI MAE shall indemnify
its directors and officers, and may indemnify other persons who
may be indemnified, to the fullest extent permitted by Maryland
law against any liability and related expenses (including
attorneys' fees) incurred in conjunction with any proceeding or
threatened proceeding in which any of them may be involved, or
threatened to be involved, as a party or otherwise, arising out
of or incidental to CRIIMI MAE's business. CRIIMI MAE has
purchased and maintains liability insurance against liabilities
that may be asserted against such persons in connection with
CRIIMI MAE, whether or not indemnification against such
liabilities would be permitted under the provisions of CRIIMI
MAE's Articles of Incorporation.
Section 2-418 of the General Corporation Law of the State of
Maryland provides, together with the Bylaws described above, for
the indemnification of directors, officers and other corporate
agents in terms sufficiently broad to indemnify such persons,
under certain circumstances, for liabilities (including
reimbursements of expenses incurred) arising under the Securities
Act.<PAGE>
<PAGE>
ITEM 16. EXHIBITS
(A) EXHIBITS.
Exhibit
Number Description
------- -----------
*4.1 Articles of Incorporation, as amended,
of CRIIMI MAE Inc.
*4.2 Bylaws, as amended, of CRIIMI MAE Inc.
*4.6 Form of specimen certificate
representing Common Shares
**5 Opinion regarding validity of
securities being registered
**8 Tax Opinion
**23.1 Consent of Arthur Andersen LLP
**23.2 Consent of Swidler & Berlin, Chartered
(included in Exhibit 5)
**24.1 Power of Attorney (included on
signature page)
**99.1 Form of Enrollment Form
- --------------------------
* Incorporated herein by reference to CRIIMI MAE's Registration
Statement on Form S-3 (File No. 33-50679), as amended.
** Previously filed.<PAGE>
<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 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) for the purpose of determining any
liability under the Securities Act, each post-effective amendment
that contains a form of prospectus shall be deemed to be a new
registration statement relating to the securities offered
therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof; and (3)
to remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
The undersigned registrant also 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 that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial
bona fide offering thereof.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers
and controlling persons of the registrant pursuant to the
provisions described in Item 15, or otherwise, the registrant has
been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Securities Act of 1933 and is, therefore,
unenforceable. If a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of
the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Securities Act of 1933 and will be governed by the final
adjudication of such issue.
<PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
as amended, the registrant certifies that it has reasonable
grounds to believe that it meets 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 Rockville, State of Maryland, on the
9th day of December, 1997.
CRIIMI MAE INC.
By:/s/ William B. Dockser
------------------------
William B. Dockser
Chairman of the Board
Pursuant to the requirements of the Securities Act of 1933,
as amended, this registration statement has been signed by the
following persons in the capacities and on the dates indicated.
/s/William B. Dockser Chairman of the Board
- --------------------- Principal Executive
William B. Dockser Officer and Director) December 8, 1997
/s/H. William Willoughby Director, President and
- ------------------------ Secretary December 8, 1997
H. William Willoughby
/s/Garret G. Carlson* Director December 8, 1997
- --------------------
Garrett G. Carlson
/s/Larry H. Dale* Director December 8, 1997
- ---------------------
Larry H Dale
/s/G. Richard Dunnells* Director December 8, 1997
- -----------------------
G. Richard Dunnells
/s/Robert J. Merrick* Director December 8, 1997
- -----------------------
Robert J. Merrick
/s/Cynthia O. Azzara Chief Financial Officer
- ----------------------- (Principal Financial
Cynthia O. Azzara and Accounting Officer)December 8, 1997
* William B. Dockser, by signing his name hereto, signs this
document on behalf of each of the persons so indicated above
pursuant to powers of attorney duly executed by such persons and
filed with the Securities and Exchange Commission.
/s/ William B. Dockser
- -------------------------------
William B. Dockser, Attorney-in-fact
<PAGE>
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description
------- -----------
*4.1 Articles of Incorporation, as amended,
of CRIIMI MAE Inc.
*4.2 Bylaws, as amended, of CRIIMI MAE Inc.
*4.6 Form of specimen certificate
representing Common Shares
**5 Opinion regarding validity of
securities being registered
**8 Tax Opinion
**23.1 Consent of Arthur Andersen LLP
**23.2 Consent of Swidler & Berlin, Chartered
(included in Exhibit 5)
**24.1 Power of Attorney (included on
signature page)
**99.1 Form of Enrollment Form
- --------------------------
* Incorporated herein by reference to CRIIMI MAE's Registration
Statement on Form S-3 (File No. 33-50679), as amended.
** Previously filed.
