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As filed with the Securities and Exchange Commission on April 28, 1998
Registration No. 333-50041
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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POST-EFFECTIVE AMENDMENT NO. 1
TO
FORM S-3D
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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THORNBURG MORTGAGE ASSET CORPORATION
(Exact name of registrant as specified in its charter)
119 EAST MARCY STREET
SANTA FE, NEW MEXICO 87501
(505) 989-1900
(Name, address and telephone number of Registrant)
MARYLAND 85-0404134
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
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GARRETT THORNBURG, CHAIRMAN
THORNBURG MORTGAGE ASSET CORPORATION
119 EAST MARCY STREET
SANTA FE, NEW MEXICO 87501
(505) 989-1900
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
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Copies to:
MICHAEL B. JEFFERS, ESQ.
JEFFERS, WILSON, SHAFF & FALK, LLP
18881 VON KARMAN AVENUE, SUITE 1400
IRVINE, CALIFORNIA 92612
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
as soon as effective
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. [ ]
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PROSPECTUS
THORNBURG MORTGAGE ASSET CORPORATION
DIVIDEND REINVESTMENT AND
STOCK PURCHASE PLAN
The Dividend Reinvestment and Stock Purchase Plan (the "Plan") of
Thornburg Mortgage Asset Corporation (the "Company") provides both existing
shareholders of the Company's common stock ("Common Stock") and preferred stock
("Preferred Stock") (the "Shareholders") of the Company and interested new
investors with a convenient and cost effective method to purchase shares of the
Common Stock. A participant in the Plan may purchase additional shares of Common
Stock by reinvesting some or all cash dividends paid on the Company's
outstanding Common Stock and Preferred Stock (collectively, the "Company
Stock"). Shareholders that elect to participate in the Plan may also make
monthly optional cash purchases ("Optional Cash Purchases") which are subject to
a minimum monthly purchase limit of $100 and a maximum monthly purchase limit of
$5,000. Interested investors not currently shareholders may make initial cash
purchases ("Initial Cash Purchases") which are subject to a minimum monthly
purchase limit of $500 and a maximum monthly purchase limit of $5,000. The
aggregate number of shares of Common Stock that may be purchased and issued
through the Optional and Initial Cash Purchases shall not exceed 2,150,000
shares. The price to be paid for each share of Common Stock purchased directly
from the Company under the Plan will be a price equal to the market price (as
defined herein) of the Common Stock less a discount ranging from 0% to 5% (the
"Discount Rate"). The price of the shares of Common Stock purchased on the open
market will be the average price of all shares of Common Stock purchased for all
Participants in the Plan without any discount.
The Prospectus relates to the offer and sale of 5,268,845 authorized but
unissued shares of Common Stock under the Plan, of which not more than 2,150,000
may be issued through the Optional and Initial Cash Purchases. Participants
should retain this prospectus for future reference. The Company's Common Stock
and Preferred Stock are listed on the New York Stock Exchange under the symbols
"TMA" and "TMAPrA," respectively.
Plan Highlights:
- Any registered shareholder may elect to participate in the Plan.
- Interested investors, not currently shareholders of the Company,
may make their initial investment in the Company through the Plan.
- 0% to 5% discount on shares of Common Stock purchased directly
from the Company.
- No brokerage fees on purchases made in the open market unless in
excess of 5%.
- Certificate safekeeping in book entry form at Continental Stock
Transfer & Trust Company, at no charge to Participant.
- Full or partial dividend reinvestment options.
- Optional and Initial Cash Purchases.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
No person has been authorized to give any information or to make any
representations not contained in this Prospectus regarding the Company or the
offering made hereby and, if given or made, such information or representations
must not be relied upon as having been authorized by the Company. This
Prospectus does not constitute an offer to sell or a solicitation of an offer to
buy any securities other than the securities to which it relates, nor does it
constitute an offer to or solicitation of any person in any jurisdiction in
which such offer or solicitation would be unlawful. Neither delivery of this
Prospectus nor any sale made hereunder shall create an implication that
information contained herein is correct as of any time subsequent to the date
hereof.
The date of this Prospectus is April __, 1998.
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AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information filed by the Company can be inspected and
copied (at prescribed rates) at the public reference facilities maintained by
the Commission at 450 Fifth Street N.W., Washington, D.C. 20549, and at its
Regional Offices located at Northwestern Atrium Center, 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661 and 7 World Trade Center, Suite 1300, New
York, New York, 10048. The Company files information electronically with the
Commission, and the Commission maintains a Web Site that contains reports, proxy
and information statements and other information regarding registrants
(including the Company) that file electronically with the Commission. The
address of the Commission's web site is (http://www.sec.gov).
This prospectus constitutes a part of a Registration Statement on Form
S-3 together with all exhibits referred to as the Registration Statement (the
"Registration Statement") filed by the Company with the Commission under the
Securities Act of 1933, as amended (the "Securities Act"). This prospectus omits
certain information contained in the Registration Statement, and reference is
hereby made to the Registration Statement for further information with respect
to the Company and the shares offered hereby. Any statement contained or
incorporated by reference herein concerning the provisions of any document is
not necessarily complete, and in each instance, reference is made to the copy of
such document filed as an exhibit to the Registration Statement or otherwise
filed with the Commission. Each such statement is qualified in its entirety by
such statement.
INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents, filed with the Commission pursuant to the 1934
Act, are incorporated by reference in this Prospectus:
1. The Company's Annual Report on Form 10-K for the year ended
December 31, 1997, including exhibits thereto; and
2. The description of the Company's Common Stock contained in the
Company's Registration Statement on Form 8-A under the 1934 Act,
including any amendment or report filed to update the description.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14
and 15(d) of the Exchange Act of 1934, prior to filing a post-effective
amendment which indicates that all securities offered hereby have been sold or
which deregisters all securities offered hereby then remaining unsold, shall be
deemed to be incorporated by reference herein and shall be deemed to be a part
hereof from the date of the filing of such documents. Any statement contained in
a document incorporated or deemed to be incorporated by reference herein shall
be deemed to be modified, superseded or replaced by a statement or information
contained in any other subsequently filed document incorporated herein by
reference. Any such statement so modified, superseded or replaced shall not be
deemed, except as so modified, superseded or replaced, to constitute a part of
this Prospectus.
Anyone receiving a copy of this Prospectus may obtain, without charge, a
copy of any of the documents incorporated by reference herein, except for any
exhibits to such documents. Written requests should be mailed to Thornburg
Mortgage Asset Corporation, 119 E. Marcy Street, Santa Fe, New Mexico 87501, or
call (505) 989-1900.
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THE COMPANY
Thornburg Mortgage Asset Corporation (the "Company") is a special
purpose financial institution that primarily invests in adjustable-rate mortgage
("ARM") securities, thereby indirectly providing capital to the single-family
residential housing market. ARM securities represent interests in pools of
adjustable-rate mortgage loans, which often include guarantees or other credit
enhancements against losses from loan defaults. While the Company is not a bank
or savings and loan, its business purpose, strategy, method of operation and
risk profile are best understood in comparison to such institutions. The Company
leverages its equity capital using borrowed funds, invests in ARM securities and
seeks to generate income based on the difference between the yield on its ARM
securities portfolio and the cost of its borrowings. The corporate structure of
the Company differs from most lending institutions in that the Company is
organized for tax purposes as a real estate investment trust ("REIT") and,
therefore, generally passes through substantially all of its earnings to
shareholders without paying federal income tax at the corporate level.
DIVIDEND AND DISTRIBUTION POLICY
The Company intends to pay dividends and to make such distributions to
its shareholders in amounts such that all or substantially all of its taxable
income in each year (subject to certain adjustments) is distributed so as to
qualify for the tax benefits accorded to a REIT under the Internal Revenue Code
of 1986, as amended (the "Code"). Taxable income, if any, not distributed
through regular dividends will be distributed annually in a special dividend.
Such dividend must be declared prior to the timely filing of the Company's tax
return for such year and paid not later than the next regular dividend payment
date after such declaration. All distributions will be made by the Company at
the discretion of the Board of Directors and will depend on the earnings of the
Company, financial condition of the Company, maintenance of REIT status and such
other factors as the Board of Directors may deem relevant from time to time.
USE OF PROCEEDS
The net proceeds to the Company from the sale of shares of Common Stock
offered hereby will be used for general corporate purposes.
SUMMARY OF THE PLAN
The Plan provides Shareholders and other investors with a convenient and
economical way to purchase shares of Common Stock through the reinvestment of
all or a portion of their cash dividends paid on Company Stock in additional
shares of Common Stock. There is no minimum or maximum limitation on the amount
of dividends a Participant may reinvest under the Plan. In addition to the
reinvestment of dividends, Shareholders who are Participants in the Plan may
invest additional funds through Optional Cash Purchases of not less than $100
and not more than $5,000 per month (except in cases covered by a Request for
Waiver, as discussed below). Persons not currently Shareholders of the Company
may become Participants by making an Initial Cash Purchase of not less than $500
and not more than $5,000 to purchase shares under the Plan (except in cases
covered by a Request for Waiver). For purposes of these limitations, all Plan
accounts under the common control or management of a Participant may be
aggregated at the Company's sole discretion. Optional Cash Purchases and Initial
Cash Purchases (collectively "Cash Purchases") in excess of $5,000 may be made
only upon acceptance by the Company of a completed Request for Waiver form from
a Participant.
To fulfill Plan requirements, shares of Common Stock may be purchased
directly from the Company or, at the Company's election, in the open market or
in privately negotiated transactions. Shares purchased directly from the Company
under the Plan (whether in connection with Cash Purchases of $5,000 or less
per month or reinvestment of dividends) may be issued at a discount of 0% to 5%
(the "Discount Rate") below the Market Price for Dividend Reinvestments and the
Market Price for Cash Purchases (both as defined herein). As of the date of this
Prospectus, the discount is 3%, but is subject to change from time to time or
discontinuance at the Company's discretion for future investment periods,
without prior notice to the Participants, after a review of current market
conditions, the level of participation in the Plan, the Company's current and
projected capital needs, and the Company's need to maintain its status as a REIT
for tax purposes. The Company may establish a different discount ranging from 0%
to 5% (the "Waiver Discount") regarding shares purchased from the Company for
Cash Purchases exceeding $5,000 per month and approved by the Company pursuant
to a Request for Waiver. The Company may also, without prior notice to
Participants, change its determination that shares of Common Stock will be
purchased
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by the Plan's Agent directly from the Company or on the open market. No discount
will be offered on shares purchased under the Plan in the open market or in
privately negotiated transactions.
Each month, at least three business days prior to the first day of the
relevant Pricing Period (as defined herein), the Company may establish a Waiver
Discount and Threshold Price applicable to Cash Purchases exceeding $5,000. The
Waiver Discount, which may vary each month from 0% to 5%, will be established in
the Company's sole discretion after a review of current market conditions, the
level of participation in the Plan and the Company's current and projected
capital needs. With respect to Cash Purchases that exceed $5,000 only, for each
Trading Day (as defined herein) of the related twelve-day Pricing Period on
which the Threshold Price is not satisfied, one-twelfth of a Participant's Cash
Purchase will be returned without interest. Cash Purchases that do not exceed
$5,000, and the reinvestment of dividends in additional shares of Common Stock,
will not be subject to such Threshold Price, if any. If shares are purchased
under the Plan other than directly from the Company, no discount will be offered
and no Threshold Price will be applicable.
In deciding whether to approve a Request for Waiver, the Company will
consider relevant factors including, but not limited to, whether the Plan is
then acquiring newly issued or treasury shares directly from the Company or
acquiring shares from third parties in the open market or in privately
negotiated transactions, the Company's needs for additional funds, the
attractiveness of obtaining such additional funds through the sale of Common
Stock as compared to other sources of funds, the purchase price likely to apply
to any sale of Common Stock under the Plan, the Participant submitting the
request, the extent and nature of such Participant's prior participation in the
Plan, the number of shares of Common Stock held by such Participant and the
aggregate amount of cash investments for which Requests for Waiver have been
submitted by all Participants. If such requests are submitted for any Cash
Purchase Investment Date (as defined herein) for an aggregate amount in excess
of the amount the Company is then willing to accept, the Company may honor such
requests in order of receipt, pro rata or by any other method that the Company
in its sole discretion determines to be appropriate. A broker, bank or other
nominee may reinvest dividends and make Cash Purchases on behalf of Beneficial
Owners. Cash Purchases submitted by brokerage firms or other nominees on behalf
of Participants will be aggregated for purposes of determining whether the
$5,000 limit would be exceeded.
From time to time, financial intermediaries, including brokers and
dealers, and other persons may engage in positioning transactions in order to
benefit from the discount from market price of the Common Stock acquired under
the Plan. Such transactions may cause fluctuations in the trading volume of the
Common Stock. Financial intermediaries and such other persons who engage in
positioning transactions may be deemed to be underwriters. The Company has no
arrangements or understandings, formal or informal, with any person relating to
the sale of shares to be received pursuant to the Plan.
Subject to the availability of shares of Common Stock registered for
issuance under the Plan, there is no total maximum number of shares that can be
issued pursuant to the reinvestment of dividends and no pre-established maximum
limit applicable to cash investments that may be made pursuant to Requests for
Waiver. As of the date hereof, 5,268,845 shares of Common Stock have been
registered and are available for sale under the Plan; however, the aggregate
number of shares of Common Stock that may be purchased and issued through the
Optional and Initial Cash Purchases shall not exceed 2,150,000 shares.
Shares purchased directly from the Company through dividend reinvestment
and Cash Purchases under the Plan will be issued without a sales commission. If
the shares of Common Stock to be purchased under the Plan are purchased in the
open market instead of directly from the Company, the Company will pay any
brokerage fees or commissions on such purchases, up to 5% of the purchase price
of the shares of the Common Stock. Any commissions in excess of 5% will be paid
by the Participants on a pro rata basis. The Discount Rate will not apply to
open market purchases or to privately negotiated purchases of Common Stock.
Participants in the Plan who reinvest dividends will be treated for
federal income tax purposes as having received a dividend, without receiving
cash to pay any tax payment obligation that could arise as a result of such
dividend. Participants will have limited control regarding the specific timing
of optional cash purchases and sales under the Plan. Furthermore, Participants
will generally be unable to depend on the availability of a market discount
regarding shares acquired under the Plan. See "The Plan--Advantages and
Disadvantages."
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THE PLAN
The original Dividend Reinvestment Plan was adopted by the Board of
Directors on August 30, 1994. The Plan was amended by the Board of Directors as
of January 8, 1997 to permit the reinvestment of dividends paid on the Company's
outstanding Preferred Stock as well as on the Common Stock. The Plan was amended
again on September 17, 1997 to allow for investment through the Plan by
interested investors who were not current shareholders of the Company.
ADVANTAGES AND DISADVANTAGES
Advantages
. The Plan provides Participants with the opportunity to purchase
additional shares of Common Stock, if desired, by automatically
reinvesting all or a portion of their cash dividends on Company
Stock in the Plan.
. In addition to the reinvestment of dividends, the Plan provides
Shareholders with the opportunity to make monthly investments of
Common Stock through Optional Cash Purchases, subject to a
minimum and maximum amount. Optional Cash Purchases may be made
by check, money order, wire transfer, or electronic funds
transfer from a pre-designated bank account. Optional Cash
Purchases may be made occasionally or at regular intervals, as
the Participant desires. Participants may make Optional Cash
Purchases even if dividends on their shares of Common Stock are
not being reinvested.
. The Plan also provides non-shareholders of the Company the
opportunity to become Participants by making an Initial Cash
Purchase in the Company's Common Stock, subject to a minimum and
maximum amount.
. Shares purchased directly from the Company through dividend
reinvestment under the Plan will be issued without a sales
commission and may be issued at the Discount Rate to the Market
Price for Dividend Reinvestments (as defined herein). If the
Company should elect that the shares of Common Stock to be
purchased under the Plan are to be purchased in the open market
instead of directly from the Company, the Company will pay any
brokerage fees or commissions on such purchases, up to 5% of the
purchase price of the shares of the Common Stock. Any commissions
in excess of 5% will be paid by the Participants on a pro rata
basis. The Discount Rate will not apply to open market purchases
or to privately negotiated purchases of Common Stock.
. Shares purchased directly from the Company for investment through
Cash Purchases under the Plan will be issued without a sales
commission and may be issued at the Discount Rate to the Market
Price for Cash Purchases (as defined herein). If the Company
elects that the shares of Common Stock to be purchased under the
Plan are to be purchased in the open market instead of directly
from the Company, the Company will pay any brokerage fees or
commissions on such purchases, up to 5% of the purchase price of
the shares of the Common Stock. Any commissions in excess of 5%
will be paid by the Participants on a pro rata basis. The
Discount Rate will not apply to open market purchases or to
privately negotiated purchases of Common Stock.
. Funds invested in the Plan are fully invested through the
purchase of fractions of shares, as well as whole shares, and
proportionate cash dividends on fractions of shares are used to
purchase additional shares.
. Participants may direct the Agent to transfer, at any time and at
no cost to the Participant, all or a portion of the Participant's
shares in the Plan to a Plan account for another person.
. The Plan offers a "share safekeeping" service whereby, at no
cost, Participants may deposit their Company Stock certificates
with the Agent and have their ownership of such Company Stock
maintained on the Agent's records as part of their Plan account.
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. Participants will receive statements containing year-to-date
information on all Plan transactions in a Participant's account
within a reasonable time after a transaction occurs, designed to
simplify the Participants' record keeping.
Disadvantages
. Participants in the Plan who reinvest dividends will be treated
for federal income tax purposes as having received a dividend on
the dividend reinvestment date (the "Dividend Reinvestment
Date"); such dividend may give rise to a tax payment obligation
without providing the Participant with immediate cash to pay such
tax when it becomes due. See "Tax Consequences."
. Participants will have limited control regarding the specific
timing of purchases and sales under the Plan. Because purchases
under the Plan will be made no earlier than twelve business days
following receipt of an investment instruction, and because sales
under the Plan will be effected by the Agent only as soon as
practicable after its receipt of such instructions, Participants
may be unable to achieve the same level of control over purchase
and sale timing that they might have for investments made outside
the Plan.
. The Company may, in its sole discretion, without prior notice to
Participants, change its determination as to whether shares of
Common Stock will be purchased by the Agent directly from the
Company or through open market or privately negotiated purchases.
No Discount Rate will be applied on shares purchased under the
Plan in the open market or in privately negotiated purchases. The
Company may also, without prior notice to Participants, lower or
eliminate the Discount Rate on shares to be purchased directly
from the Company for future investment periods. As a result,
Participants will generally be unable to depend on the
availability of a market discount regarding shares acquired under
the Plan. Participants may obtain the applicable Discount Rate by
telephoning the Company toll-free at (888) 898-8601 three
business days prior to the first day of the Pricing Period.
. No interest will be paid by the Company or the Agent on dividends
or Cash Purchases held pending reinvestment or investment or to
be returned to the Participant. In addition, Cash Purchases
exceeding $5,000 per month may be subject to return to the
Participant (in whole or proportionate part) without interest in
the event that (i) a Threshold Price has been established with
respect to shares to be purchased from the Company, and (ii) such
Threshold Price is not met for any day on which the New York
Stock Exchange ("NYSE") is open for trading ("Trading Day")
during the twelve Trading Days prior to the date scheduled for
investment of the funds contributed for Cash Purchases for that
month (the "Pricing Period").
. With respect to Cash Purchases (including Cash Purchases
exceeding $5,000 per month), while the Plan allows the Company to
establish a Discount Rate from the Market Price for Cash
Purchases of the shares, there can be no assurance that such
Market Price for Cash Purchases, as so discounted, will not be
equal to or greater than the purchase price of the shares on the
relevant date of investment of the funds contributed for Cash
Purchases (the "Cash Purchase Investment Date").
ADMINISTRATION
The Plan is administered by Continental Stock Transfer & Trust Company
(the "Agent"), the Transfer Agent and Registrar for the Company. As the Agent
for participating shareholders ("Participants"), the Agent will administer the
Plan in accordance with the terms and conditions of the Plan as set forth
herein.
PARTICIPATION
Participation in the Plan is open to any person or entity, whether or
not a Shareholder of the Company, who fulfills the requirements for
participation described below under "Participation Options." A Shareholder who
owns shares of Company Stock in their own name is referred to herein as a
"Shareholder of Record." A Shareholder of Record may participate directly in the
Plan. A Shareholder who beneficially owns shares of Company Stock that are
registered in a name other than such Shareholder's name (for example, where
shares are held in the name of a broker, bank or other nominee) is referred to
herein as a "Beneficial Owner." A Beneficial Owner may participate in the Plan
by either (i) becoming a Shareholder of Record by having one or more shares
transferred into its own
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name, or (ii) coordinating their participation with their broker, bank or other
nominee who is the record holder to participate on their behalf. A prospective
investor who holds no shares of Company Stock may also participate, at their
option, either directly or through a broker, bank or other nominee by following
the enrollment procedures described below.
The Plan is intended for the benefit of investors in the Company and not
for persons or entities who accumulate accounts under the Plan over which they
have control for the purpose of exceeding the $5,000 per month maximum without
seeking the advance approval of the Company or who engage in transactions that
cause or are designed to cause aberrations in the price or trading volume of the
Common Stock. Notwithstanding anything in the Plan to the contrary, the Company
reserves the right to exclude from participation in the Plan, at any time, (i)
persons or entities who attempt to circumvent the Plan's standard $5,000 per
month maximum by accumulating accounts over which they have control or (ii) any
other persons or entities, as determined in the sole discretion of the Company.
For the purpose of this limitation, the Company reserves the right to aggregate
all Cash Purchases for Participants with more than one account using the same
name, address or social security or taxpayer identification number. For
Participants unable to supply a social security or taxpayer identification
number, participation may be limited by the Company to only one Plan account.
Also for the purpose of such limitations, all Plan accounts that the Company
believes to be under common control or management or to have common ultimate
beneficial ownership may be aggregated. In the event the Company exercises its
right to aggregate investments and the result would be an investment in excess
of $5,000 without an approved Request for Waiver, the Company will return,
without interest, as promptly as practicable, any amount in excess of the
investment limitations.
PARTICIPATION OPTIONS
The Authorization Form appoints the Agent as agent for the Participant
and directs the Company to pay to the Agent such Participant's cash dividends on
all or a specified number of shares of Company Stock owned by the Participant
("Participating Shares"), as well as on all whole and fractional shares of
Common Stock credited to a Participant's Plan account ("Plan Shares"). The
Authorization Form directs the Agent to purchase on the Dividend Reinvestment
Date additional shares of Common Stock with such dividends. The Authorization
Form also directs the Agent to purchase on the relevant Cash Purchase Investment
Date additional shares of Common Stock with Cash Purchases of not more than
$5,000, if any, made by Participants. See "Cash Purchases---Waiver of Maximum
Cash Purchase Limitation" below for a discussion of the requirements for Cash
Purchases exceeding $5,000. See "Broker and Nominee Form" below for a discussion
of the requirements for Optional Cash Purchases of a Beneficial Owner and
Initial Cash Purchases of an investor who is not a Shareholder of the Company,
whose broker, bank or other nominee holds or will hold such investor's shares in
the name of a major securities depository. The Authorization Form also directs
the Agent to reinvest automatically 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.
The Authorization Form provides for the purchase of additional shares of
Common Stock through the following investment options:
Full Dividend Reinvestment. The Agent will apply any cash dividends on
all shares of the Company Stock registered in the Plan under the Participant's
name, and all cash dividends on Plan Shares, together with any Optional Cash
Purchases or Initial Cash Purchase, toward the purchase of additional shares of
Common Stock.
Partial Dividend Reinvestment. The Agent will apply cash dividends on
shares of Company Stock registered in the Plan under the Participant's name and
specified on the Authorization Form, and all cash dividends on Plan Shares,
together with any Optional Cash Purchases or Initial Cash Purchase, toward the
purchase of additional shares of Common Stock.
Cash Purchases. The Agent will only apply voluntary cash contributions
for Cash Purchases received from the Participant toward the purchase of
additional shares of Common Stock. The Participant will continue to receive cash
dividends on shares of Company Stock registered in the Plan under the
Participant's name in the usual manner.
Each Participant may select either one of the dividend reinvestment
options and/or the Cash Purchase option. In each case, dividends will be
reinvested on all Participating Shares and on all Plan Shares held in the Plan
account, including dividends on Common Stock purchased with any Initial Cash
Purchases, until a Participant specifies otherwise by contacting the 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,
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those shares must be withdrawn from the Plan by written notification to the
Agent. See "Termination of Participation" below. Participants may change their
investment options at any time by requesting a new Authorization Form and
returning it to the Agent.
Participation in the Plan will begin upon receipt of a properly
completed Authorization Form and/or Broker and Nominee Form (and, in cases of
cash investments exceeding $5,000, receipt and approval by the Company of a
properly completed Request for Wavier). The funds for a Cash Purchase may be
submitted with the initial Authorization Form. Thereafter, it will not be
necessary to submit an additional Authorization Form and Cash Purchases may be
made monthly or periodically at the election of the Participant. Once an
Authorization Form has been submitted, it is not necessary to submit one with
subsequent Cash Purchases. See "The Plan---Purchase and Price of Shares" for
more details on Cash Purchases and Dividend Reinvestments.
With respect to the dividend reinvestment portion of the Plan, the
Authorization Form (and the Broker Nominee Form if necessary) must be received
by the Agent at least two (2) calendar days prior to the Record Date established
for a particular dividend in order for a Shareholder to be eligible for
reinvestment of such dividends under the Plan for that related dividend;
otherwise, reinvestment will begin on the Dividend Reinvestment Date following
the next record date. With respect to Cash Purchases, the Agent must receive the
Authorization Form, good funds, and the Broker and Nominee Form if necessary, at
least one business day prior to the commencement of the Pricing Period in order
for a Participant's Cash Purchase to be invested on the related Cash Purchase
Investment Date, otherwise; such authorization will be effective as of the next
Cash Purchase Investment Date and the funds will be returned to the Participant
as provided in "The Plan---Purchase and Price of Shares."
SHAREHOLDERS CURRENTLY ENROLLED IN THE PLAN MAY CONTINUE TO PARTICIPATE
IN THE PLAN WITHOUT ANY FURTHER ACTION REQUIRED ON THEIR PART UNLESS THE
PARTICIPANT WISHES TO CHANGE HIS OR HER PARTICIPATION OPTION.
BROKER AND NOMINEE FORM
The Broker and Nominee Form provides the only means by which a broker,
bank or other nominee holding shares of a Beneficial Owner, or planning to hold
shares of an interested investor who is not currently a Shareholder of the
Company, in the name of a major securities depository may invest Cash Purchases
within the minimum and maximum investment limitation established for the Plan
(see "Cash Purchases" below) on behalf of such Beneficial Owner or interested
investor. A Broker and Nominee Form must be delivered to the Agent each time
such broker, bank or other nominee transmits Cash Purchases. Broker and Nominee
Forms may be obtained at any time by telephoning the Agent at (212) 509-4000.
The Broker and Nominee Form and appropriate instructions must be
received by the Agent not later than 12:00 Noon New York City time on the
business day immediately preceding the relevant Pricing Period in order to be
invested on the Cash Purchase Investment Date, otherwise the Cash Purchase will
be returned, without interest.
Shares issued pursuant to a properly completed Broker and Nominee Form
will not be deemed Plan Shares. Therefore, subsequent dividends will be paid in
cash unless otherwise instructed by the Beneficial Owner (see "Participation"
above for a discussion of the requirements for Beneficial Owner participation in
the reinvestment of dividends).
ACCOUNTS AND STATEMENTS
The Agent will establish an account under the Plan for each Participant
(the "Participant's Account"), and will credit to the Participant's Account cash
received by the Agent for the Participant from cash dividends paid on the shares
of Common Stock, including those full and fractional shares of Common Stock
(computed to three decimal places) acquired under the Plan, and all voluntary
cash contributions for Cash Purchases received by the Agent from the
Participant.
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As soon as practicable after the purchases of shares of Common Stock
have been completed, the Agent will send each Participant a statement of their
account ("Account Statement"). The Account Statement will confirm the
transaction and itemize any previous investment activity for the calendar year.
ACCOUNT STATEMENTS SHOULD BE RETAINED BY THE PARTICIPANT FOR HIS OR HER OWN
RECORDS.
PURCHASE AND PRICE OF SHARES
DIVIDEND REINVESTMENT. The Agent will apply cash credited to the
Participant's Account to the purchase of full and/or fractional interests in
shares of Common Stock and will credit the number of shares of Common Stock so
purchased to the Participant's Account. The Agent will apply such funds toward
the purchase of shares of Common Stock in the open market or from authorized but
unissued shares of Common Stock for the Participant's Account.
(1) Discount Rate on Dividend Reinvestments. The price of the
authorized but unissued shares of Common Stock purchased by the Agent directly
from the Company pursuant to the reinvestment of dividends may be issued at the
Discount Rate to the then current Market Price for Dividend Reinvestments as of
the Dividend Reinvestment Date. The Discount Rate is subject to change for
future dividend reinvestments, or complete discontinuance at the Company's
discretion, without prior notice to the Participants after a review of current
market conditions, the level of participation in the Plan and the Company's
current and projected capital needs. Participants may obtain the applicable
Discount Rate by telephoning the Company toll-free at (888) 898-8601 three
business days prior to the Dividend Reinvestment Date. The Discount Rate will
only be in effect for purchases of shares of Common Stock directly from the
Company; if the Company elects to purchase the shares in the open market or in
privately negotiated transactions, the Discount Rate will not be applied to such
purchases for the Participant's Account.
(2) Price per Share for Reinvested Dividends. The "Market Price
for Dividend Reinvestments" per share of Common Stock acquired directly from the
Company shall be the average of the daily high and low sales prices, computed to
four decimal places, of the shares of Common Stock as reported on the NYSE on
the Dividend Reinvestment Date, or if no trading occurs in the Common Stock on
the Dividend Reinvestment Date, the average of the high and low sales prices for
the first Trading Day immediately preceding the Dividend Reinvestment Date for
which trades are reported. If the Company elects to purchase the shares on the
open market or in privately negotiated transactions, the price per share of
Common Stock acquired through such open market or privately negotiated
transactions will be the weighted average of the actual prices paid, computed to
four decimal places, for all the Common Stock purchased by the Agent in
connection with such open market purchases, without application of the Discount
Rate. The Agent shall pay brokerage commissions in an amount determined by the
prevailing rates at the time of purchase. Such commissions will be reimbursed by
the Company, but in no event shall the Company be obligated to pay commissions
in excess of five percent (5%) of the purchase price of the shares of Common
Stock. Any commissions in excess of five percent (5%) will be paid by the
Participants on a pro rata basis. Such open market purchases may be made, at the
Agent's option, on any securities exchange where the shares of Common Stock are
traded, in the over-the-counter market or in negotiated transactions with third
persons, and may be on such terms as to price, delivery, and otherwise as the
Agent may determine.
(3) Dividend Reinvestment Date. The Dividend Reinvestment Date
for the reinvestment of dividends will be on or within fifteen (15) days after
the Dividend Payment Date except where completion at a later date is necessary
or advisable under applicable securities laws. Under normal market conditions,
the funds are expected to be reinvested on the Dividend Payment Date. For a
schedule of expected Dividend Reinvestment Dates through 1999, see Schedule A.
CASH PURCHASES. A Shareholder may also make Optional Cash Purchases of
shares of Common Stock, subject to a minimum of $100 and a maximum of $5,000
(except in cases covered by a Request for Waiver as discussed below). New
investors, not currently Shareholders of the Company, may make Initial Cash
Purchases subject to a minimum of $500 and a maximum of $5,000 (except in cases
covered by a Request for Waiver). For purposes of these limitations on Cash
Purchases, all Plan Accounts under the common control or management of a
Participant may be aggregated at the Company's sole discretion. Additionally,
the aggregate number of shares which may be purchased through Optional and
Initial Cash Purchases shall not exceed 2,150,000 shares.
(1) Discount Rate on Cash Purchases. The price of the authorized
but unissued shares of Common Stock purchased by the Agent directly from the
Company for Cash Purchases not in excess of the $5,000 maximum may be issued at
the Discount Rate to the then current Market Price for Cash Purchases as of the
Cash Purchase Investment Date. The Discount Rate is subject to change for future
investment periods, or complete discontinuance at the Company's discretion,
without prior notice to the Participants after a review of current market
conditions, the level of participation in the Plan and the Company's current and
projected capital needs. Participants
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may obtain the applicable Discount Rate by telephoning the Company toll-free at
(888) 898-8601 three business days prior to the Dividend Reinvestment Date. The
Discount Rate will only be in effect for purchases of shares of Common Stock
directly from the Company; the Discount Rate will not be applied to purchases
for the Participant's Account in the open market or in privately negotiated
transactions.
(2) Price per Share for Cash Purchases. The "Market Price for
Cash Purchases" per share shall be the average of the daily high and low sales
prices, computed to four decimal places, of the shares of Common Stock as
reported on the NYSE during the Pricing Period prior to the related Cash
Purchase Investment Date. No commission shall be paid with respect to purchases
of authorized but unissued shares of Common Stock directly from the Company. If
the Company elects to purchase the shares on the open market or in privately
negotiated transactions, the price per share of Common Stock acquired through
such open market or privately negotiated transactions will be the weighted
average of the actual prices paid, computed to four decimal places, for all the
Common Stock purchased by the Agent in connection with such open market
purchases, without application of the Discount Rate. The Agent shall pay
brokerage commissions in an amount determined by the prevailing rates at the
time of purchase. Such commissions will be reimbursed by the Company, but in no
event shall the Company be obligated to pay commissions in excess of five
percent (5%) of the purchase price of the shares of Common Stock. Any
commissions in excess of five percent (5%) will by paid by the Participants on a
pro rata basis. Such open market purchases may be made, at the Agent's option,
on any securities exchange where the shares of Common Stock are traded, in the
over-the-counter market or in negotiated transactions with third persons, and
may be on such terms as to price, delivery, and otherwise as the Agent may
determine.
(3) Waiver of Maximum Cash Purchase Limitation . Cash Purchases
in excess of $5,000 may be made only upon acceptance in writing by the Company
of a completed written Request for Waiver form from the Participant. A Request
for Waiver must be received by the Company at its corporate address or via
facsimile at (505) 989-8156 no later than 2:00 p.m. New York City time on the
second business day preceding the relevant Pricing Period. Request for Waiver
forms may be obtained from the Company by telephone at (505) 989-1900 or via the
above facsimile number. The Company may establish a discount rate different than
the Discount Rate, ranging from 0% to 5% (the "Waiver Discount") regarding
shares purchased from the Company for Cash Purchases exceeding $5,000 per month
and approved by the Company pursuant to a Request for Waiver. Participants may
obtain the applicable Waiver Discount by telephoning the Company toll-free at
(888) 898-8601 three business days prior to the first day of the Pricing Period.
It is solely within the Company's discretion as to whether any such approval for
cash investments in excess of $5,000 will be granted. In deciding whether to
approve a Request for Waiver, the Company will consider relevant factors
including, but not limited to: whether the Plan is then acquiring newly issued
or treasury shares directly from the Company or acquiring shares from third
parties in the open market or in privately negotiated transactions; the
Company's need for additional funds; the attractiveness of obtaining such
additional funds through the sale of Common Stock as compared to other sources
of funds; the purchase price likely to apply to any sale of Common Stock under
the Plan; the Participant submitting the request; the extent and nature of such
Participant's prior participation in the Plan; the number of shares of Common
Stock held by such Participant and the aggregate amount of cash investments for
which Requests for Waiver have been submitted by all Participants. If such
requests are submitted for any Cash Purchase Investment Date for an aggregate
amount in excess of the amount the Company is then willing to accept, the
Company may honor such requests in order of receipt, pro rata or by any other
method that the Company determines in its sole discretion to be appropriate. The
Company anticipates that it will respond to each Request for Waiver by the close
of business (7:00 p.m. New York City time) on the second business day preceding
the relevant Pricing Period. Any Request for Waiver accepted by the Company will
be subject to all the terms and conditions otherwise applicable to Cash
Purchases, except those terms and conditions expressly changed by this Section.
(4) Threshold Price. Notwithstanding anything contained herein to
the contrary, the Company may establish for each Pricing Period a threshold
price applicable to Cash Purchases made pursuant to Requests for Waiver approved
by the Company (the "Threshold Price"). The Threshold Price, if any, will be
established by the Company at least three business days prior to the first day
of the Pricing Period, and will be established in the Company's sole discretion
after a review of current market conditions and other relevant factors.
Participants may obtain the applicable Threshold Price and Waiver Discount by
telephoning the Company toll-free at (888) 898-8601. The Threshold Price will be
a stated dollar amount that the average of the high and low sale prices of the
Common Stock on the New York Stock Exchange for a Trading Day of the Pricing
Period must equal or exceed. In the event that such Threshold Price is not
satisfied for a Trading Day of the Pricing Period, then such Trading Day and the
trading prices for that day will be excluded from (i) the Pricing Period and
(ii) the determination of the purchase price of the Common Stock for all cash
investments made pursuant to Requests for Waiver approved by the Company. Thus,
for example, if the Threshold Price is not satisfied for three of the twelve
Trading Days, then the purchase
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price of the Common Stock will be based upon the remaining nine Trading Days for
which the Threshold Price was satisfied.
Each Trading Day of a Pricing Period for which the Threshold Price is
not satisfied will cause the return of a portion of any cash investments made
pursuant to Requests for Waiver approved by the Company. The returned amount
will equal one-twelfth of such cash investments for each Trading Day that the
Threshold Price is not satisfied. Thus, for example, if the Threshold Price is
not satisfied for three Trading Days, then 3/12 (i.e., 25%) of such cash
investments will be returned without interest.
The Threshold Price and return procedure discussed above apply only to
Cash Purchases made pursuant to Requests for Waiver approved by the Company and
not to the reinvestment of dividends or Cash Purchases that do not exceed
$5,000.
(5) Cash Purchase Investment Date. The Cash Purchase Investment
Date for Cash Purchases will occur on or about the third from the last business
day of each month, or in the case of purchases in the open market, no later than
the last business day of each month. For a schedule of expected Cash Purchase
Due Dates and Cash Purchase Investment Dates through 1999, see Schedule A of the
Prospectus.
(6) Timing and Procedure for Cash Purchases. Each month the Agent
will apply a Cash Purchase for which good funds are timely received to the
purchase of shares of Common Stock for the account of the Participant on the
next Cash Purchase Investment Date. In order for funds to be invested on the
next Cash Purchase Investment Date, the Agent must have received the following
in a timely fashion: (i) the Authorization Form (if person is not yet enrolled
as a Participant) and the Broker and Nominee Form (if necessary) at least one
business day before the commencement of the Pricing Period; (ii) the Request for
Waiver (if applicable) no later than 2:00 p.m. New York City time two business
days before the commencement of the Pricing Period; and (iii) a check, money
order or wire transfer no later than one business day prior to the commencement
of the related Pricing Period (the "Cash Purchase Due Date") although the
Company may, within its sole discretion, accept such funds after the Cash
Purchase Due Date in cases of unanticipated delay or inadvertence by the
Participant. Such check, money order or wire transfer must have cleared before
the related Cash Purchase Investment Date. Wire transfers may be used only if
approved verbally in advance by the Agent. Instructions for Wire Transfers and
Electronic Funds Transfers can be obtained by telephoning the Agent at (212)
509- 4000. Checks and money orders are accepted subject to timely collection as
good funds and verification of compliance with the terms of the Plan. Checks or
money orders should be made payable to "Continental Stock Transfer & Trust
Company -- TMA Dividend Reinvestment and Stock Purchase Plan." Checks returned
for any reason will not be resubmitted for collection. Generally, Cash Purchases
received more than ten business days before the commencement of the Pricing
Period or after the Cash Purchase Due Date will be returned to Participants
without interest at the end of the Pricing Period; such Cash Purchases may be
resubmitted by a Participant prior to the commencement of the next or a later
Pricing Period. Upon a Participant's written request received by the Agent no
later than two business days prior to the Pricing Period, a timely Cash Purchase
not already invested under the Plan will be canceled or returned to the
Participant as soon as practical. However, in the latter event, no refund of a
check or money order will be made until the funds have been actually received by
the Agent. Accordingly, such refunds may be delayed up to three weeks. In making
purchases for the Participant's Account, the Agent may commingle the
Participant's funds with those of other Participants in the Plan. NO INTEREST
WILL BE PAID ON FUNDS HELD BY THE AGENT PENDING INVESTMENT OR RETURN TO THE
PARTICIPANT. FUNDS FOR CASH PURCHASES DO NOT CONSTITUTE DEPOSITS OR SAVINGS
ACCOUNTS AND ARE NOT INSURED BY ANY GOVERNMENTAL AGENCY OR INSTRUMENTALITY.
FEDERAL INCOME TAX CONSEQUENCES
The following discussion summarizes the principal federal income tax
consequences, under current law, of participation in the Plan. It does not
address all potentially relevant federal income tax matters, including
consequences peculiar to persons subject to special provisions of the federal
income tax law (such as banks, insurance companies, and foreign persons). The
discussion is based on various rulings of the Internal Revenue Service (the
"IRS") regarding several types of dividend reinvestment plans. No ruling,
however, has been issued or requested regarding the Plan. THE FOLLOWING
DISCUSSION IS GENERAL INFORMATION ONLY, AND PARTICIPANTS MUST CONSULT THEIR OWN
TAX ADVISORS TO DETERMINE THE PARTICULAR TAX CONSEQUENCES THAT MAY RESULT FROM
PARTICIPATION IN THE PLAN AND THE DISPOSITION OF ANY SHARES OF COMMON STOCK
PURCHASED PURSUANT TO THE PLAN.
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REINVESTED DIVIDENDS. Participants in the Plan will be treated for
federal income tax purposes as having received, on the Dividend Reinvestment
Date, a distribution in an amount equal to the fair market value of the shares
of Common Stock acquired with reinvested dividends (plus a pro rata portion of
any brokerage cost incurred on open market purchases of the shares of Common
Stock). When shares of Common Stock are purchased directly from the Company, the
amount of the dividend will be the fair market value of the shares of Common
Stock, although the Participant will have acquired such shares of Common Stock
at the Discount Rate. In effect, the amount of the distribution for tax purposes
will equal the amount of the cash dividend plus the amount of the discount on
the purchase of the shares.
Shares of Common Stock acquired for Participants in the Plan will have
an initial tax basis to the Participant equal to the amount the Participant is
treated as having received as a dividend. The holding period for a share of
Common Stock (including a fractional share) generally will begin on the day
after the Dividend Reinvestment Date upon which the share of Common Stock was
acquired.
The reinvestment of dividends does not relieve the Participant of any
income tax and will constitute a dividend to the same extent that a cash
distribution would be so treated. Participants who are qualified pension or
profit sharing plans or individual retirement accounts should be able to
continue to exclude the reinvested dividends from unrelated business taxable
income unless such Participants have borrowed to acquire their shares of Common
Stock. The Agent will report to each Participant for tax purposes the dividends
to be credited to his account as well as any discounts or costs incurred by the
Company. Such information will also be furnished to the IRS to the extent
required by law. In addition, the Code imposes certain reporting obligations on
brokers and other intermediaries. As a result, the Agent will be required to
report to the IRS and the Participant any sale of Common Stock by it on behalf
of a Participant.
CASH PURCHASES. In a recently issued private letter ruling, the IRS has
taken the position that shareholders who participate in optional cash purchases
under a dividend reinvestment plan of a REIT will not be treated as receiving a
dividend equal to the discount unless such shareholders also participate in the
reinvestment of dividends under such plan. Participants who elect dividend
reinvestment under the Plan will be treated as having received a distribution
upon the purchase of Optional Cash Purchases and Initial Cash Purchases in an
amount equal to the excess, if any, of the fair market value of the shares of
Common Stock on the date on which they were acquired (plus a pro rata portion of
the brokerage cost incurred in open market purchases) over the amount of the
Optional Cash Purchases and Initial Cash Purchases. Such shares of Common Stock
will have an initial tax basis equal to the fair market value of the shares of
the Optional Cash Purchases and Initial Cash Purchases. The fair market value on
an acquisition date is likely to differ from the Market Price for Cash Purchases
for the pricing period immediately preceding the related Cash Purchase (which
determines the number of shares of Common Stock acquired). The amount treated as
a distribution will constitute a dividend for federal income tax purposes to the
same extent that a cash distribution would be so treated. The holding period for
a share of Common Stock (including fractions thereof) generally begins on the
day after the date that the share of Common Stock was acquired.
Participants making Cash Purchases but who do not elect dividend
reinvestment under the Plan will take a tax basis in the purchased stock equal
to the actual purchase price paid to the Participant.
VOTING OF SHARES HELD UNDER THE PLAN
Each Participant will be able to vote all shares of Common Stock
(including fractional shares) credited to the Participant's Account. The Agent
will not vote shares of Company Stock that it holds for a Participant's account
except as directed by the Participant.
CERTIFICATES
Shares of Common Stock purchased under the Plan are registered in the
name of a nominee and shown on each Participant's Account Statement. However, a
Participant may request a certificate for any of the whole shares of Common
Stock which have accumulated in such Participant's Account by writing a letter
of instruction to the Agent. Each certificate issued will be registered in the
name or names in which the account is maintained, unless otherwise instructed in
writing. If the certificate is to be issued in a name other than the name on the
Participant's Account, the Participant or Participants must have his or her
signature(s) guaranteed by a commercial bank or a broker. Certificates for
fractional shares of Common Stock will not be issued in any case. Dividends will
continue to be paid on the cumulative holdings of both full and fractional
shares of Common Stock remaining in the Participant's Account and will
automatically be reinvested.
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Participants who wish to do so may deposit currently held certificates
registered in their names with the Agent for credit under the Plan. There is no
charge for such deposits, and by making such deposit the Participant will be
relieved of the responsibility for loss, theft or destruction of the
certificate. Shares of Company Stock credited to a Participant's Account may not
be pledged or assigned, and any attempted pledge or assignment is void. A
Participant who wishes to pledge or assign shares of Company Stock credited to
the Participant's Account must first withdraw such shares of Company Stock from
the account.
TERMINATION OF PARTICIPATION
A Participant may terminate participation in the Plan at any time by
notifying the Agent in writing. Unless the termination notice is received by the
Agent at least two (2) business days prior to any Dividend Record Date or Cash
Purchase Investment Date, it cannot be processed until after purchases made from
the dividends paid or Cash Purchases submitted have been completed and credited
to the Participant's Account. All dividends with a record date after timely
receipt of notice for termination will be sent directly to the Participant. The
Agent may terminate the Participant's Account by notice in writing mailed to the
Participant. Once termination has been effected, the Agent will issue to the
Participant, without charge, certificates for the full shares of Common Stock
held in the Participant's Account or, if so requested, sell the full shares of
Common Stock held under the Plan, deduct brokerage commissions, transfer taxes
and a service charge (if any) and deliver the proceeds to the Participant. The
value of the Participant's interest in any fractional share of Common Stock held
in his account at termination will be paid by check, less the Participant's
share of any related expenses. A Participant will also be entitled to the
uninvested portion of any funds received for Optional Cash Purchases if notice
of termination is received prior to the date when the Agent becomes obligated to
pay for purchased shares of Common Stock.
If a Participant disposes of all shares of Common Stock represented by
certificates registered in his own name on the books of the Company but does not
give notice of termination under the Plan, the Agent may continue to reinvest
the dividends on the shares of Common Stock under the Plan until otherwise
directed.
A Participant who changes his or her address must notify the Agent
immediately. If a Participant changes residences to a state where the shares of
Common Stock offered pursuant to the Plan are not registered or exempt from
registration under applicable securities laws, the Company may deem the
Participant to have terminated participation in the Plan.
STOCK DIVIDENDS, STOCK SPLITS AND SHAREHOLDER RIGHTS OFFERINGS
Any stock dividends or stock splits distributed by the Company on shares
of Common Stock held by the Agent for the Participant will be credited to the
Participant's Account. In the event the Company makes available to its
shareholders rights to purchase additional shares of Common Stock or other
securities, the Participant will receive appropriate instructions in connection
with all such rights directly from the Agent in order to permit a Participant to
determine what action he or she desires to take.
AGENT'S RESPONSIBILITIES
The Agent shall not be liable hereunder for any act done in good faith,
or for any good faith omission to act, including without limitation, any claims
of liability (1) arising out of failure to terminate any Participant's Account
upon such Participant's death prior to receipt of notice in writing of such
death and (2) with respect to the prices at which shares of Common Stock are
purchased or sold for the Participant's Account and the times such purchases or
sales are made.
All notices from the Agent to a Participant will be mailed to the
Participant's last address of record, which will satisfy the Agent's
responsibility to give notice.
AMENDMENTS TO THE PLAN
The Plan may be amended or supplemented by the Agent or the Company at
any time or times, including the period between the Dividend Record Date and the
related Dividend Reinvestment Date. Any such amendment may include an
appointment by the Agent of a successor agent under the terms and conditions
contained herein. Notice will be sent to Participants of any amendments as soon
as practicable after such action by the Company.
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INTERPRETATION AND REGULATION OF THE PLAN
THE COMPANY RESERVES THE RIGHT, WITHOUT NOTICE TO PARTICIPANTS, TO
INTERPRET AND REGULATE THE PLAN AS IT DEEMS NECESSARY OR DESIRABLE IN CONNECTION
WITH ITS OPERATION. ANY SUCH INTERPRETATION AND REGULATION SHALL BE CONCLUSIVE.
INQUIRIES ABOUT THE PLAN
All correspondence and questions regarding the Plan, a Participant's
Account, and the Discount Rate, Waiver Rate, or Threshold Price should be
directed to:
Thornburg Mortgage Asset Corporation
Dividend Reinvestment and Stock Purchase Plan
119 E. Marcy Street
Santa Fe, New Mexico 87501
Telephone: (505) 989-1900 or
Toll Free: (888) 898-8601 (Discount Rate, Waiver Rate, Threshold
Price only)
Facsimile: (505) 989-8156
or
TMA Dividend Reinvestment and Stock Purchase Plan
c/o Continental Stock Transfer & Trust Company
2 Broadway, 19th Floor
New York, NY 10004
Telephone: (212) 509-4000
PLAN OF DISTRIBUTION
Except to the extent the Agent purchases Common Stock in open market
transactions, the Common Stock acquired under the Plan will be sold directly by
the Company through the Plan. The Company may sell Common Stock to Shareholders
(including brokers or dealers) who, in connection with any resales of such
shares, may be deemed to be underwriters. Such shares, including shares acquired
pursuant to Request for Waivers granted with respect to the Cash Payment feature
of the Plan, may be resold in market transactions (including coverage of short
positions) on any national securities exchange on which shares of Common Stock
trade or in privately negotiated transactions. The Common Stock is currently
listed on the New York Stock Exchange. Under certain circumstances, it is
expected that a portion of the shares of Common Stock available for issuance
under the Plan will be issued pursuant to such waivers. The difference between
the price such owners pay to the Company for Common Stock acquired under the
Plan, after deduction of the applicable discount from the Market Price for Cash
Purchases, and the price at which such shares are resold, may be deemed to
constitute underwriting commissions received by such owners in connection with
such transactions.
Subject to the availability of shares of Common Stock registered for
issuance under the Plan, there is no total maximum number of shares that can be
issued pursuant to the reinvestment of dividends. From time to time, financial
intermediaries may engage in positioning transactions in order to benefit from
the discount from the Market Price for Dividend Reinvestments of Common Stock
acquired through the reinvestment of dividends under the Plan.
Except with respect to open market purchases of Common Stock relating to
reinvested dividends or Cash Purchases, the Company will pay any and all
brokerage commissions and related expenses incurred in connection with purchases
of Common Stock under the Plan, up to 5% of the Market Price for Dividend
Reinvestments and the Market Price for Cash Purchases of the Common Stock. Upon
withdrawal by a Participant from the Plan by the sale of Common Stock held under
the Plan, the Participant will receive the proceeds of such sale less a nominal
fee per transaction paid to the Agent (if such resale is made by the Plan
Administrator at the request of a Participant), any related brokerage
commissions and any applicable transfer taxes.
Common Stock may not be available under the Plan in all states. This
Prospectus does not constitute an offer to sell, or a soliciting of an offer to
buy, any Common Stock or other securities in any state or any other jurisdiction
to any person to whom it is unlawful to make such offer in such jurisdiction.
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INDEMNIFICATION
Maryland General Corporation Law provides that a Maryland corporation
may indemnify any person who is or was serving at the request of the corporation
as a director, officer, partner, trustee, employee, or agent of another foreign
or domestic corporation, partnership, joint venture, trust or other enterprise
or employee benefit plan ("director"), that is made a party to any proceeding by
reason of service in that capacity unless it is established that the act or
omission of the director was material to the matter giving rise to the
proceeding and was committed in bad faith or was the result of active and
deliberate dishonesty; or the director actually received an improper personal
benefit in money, property or services; or, in the case of any criminal
proceeding, the director had reasonable cause to believe that the act or
omission was unlawful. Indemnification may be against judgments, penalties,
fines, settlements, and reasonable expenses actually incurred by the director in
connection with the proceeding, but if the proceeding was one by or in the right
of the corporation, indemnification may not be made in respect of any proceeding
in which the director shall be adjudged to be liable to the corporation. Such
indemnification may not be made unless authorized for a specific proceeding
after a determination has been made, in a manner prescribed by law, that
indemnification is permissible in the circumstances because the director has met
the applicable standard of conduct. The director must be indemnified for
expenses, however, if he has been successful in the defense of the proceeding or
as otherwise ordered by a court. The law also prescribes the circumstances under
which a corporation may advance expenses to, or obtain insurance or similar
coverage for, directors.
The Company's Articles of Incorporation provides for indemnification of
the officers and directors of the Company and eliminates the liability of a
director or officer to the Company or its Shareholders for money damages to the
fullest extent permitted by Maryland law.
Insofar as indemnification of directors, officers and controlling
persons of the Registrant for liabilities arising under the Securities Act of
1933 may be permitted, pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission, such indemnification is against public policy as expressed in the
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question of whether such
indemnification by the Registrant is against the public policy as expressed in
the Act and will be governed by the final adjudication of such issue.
LEGAL OPINION
The validity of the Common Stock offered hereby will be passed upon for
the Company by Jeffers, Wilson, Shaff & Falk, LLP, Irvine, California. Michael
B. Jeffers, a member of Jeffers, Wilson, Shaff & Falk, LLP is the Secretary of
the Company, owns 32,369 shares of Common Stock, holds options to purchase
13,004 shares of Common Stock, DERs for 3,408 shares of Common Stock and PSRs
for 96 shares of Common Stock. Mr. Jeffers also owns 1% of the Thornburg
Mortgage Advisory Corporation, the Manager of the Company.
EXPERTS
The financial statements of the Company, included as part of the
Company's Annual Report on Form 10-K for the year ended December 31, 1997 have
been audited by McGladrey & Pullen, LLP, independent certified public
accountants, as set forth in their report included therein and incorporated
herein by reference. Such financial statements, and audited financial statements
to be included in subsequently filed documents, will be incorporated herein in
reliance upon the reports of McGladrey & Pullen, LLP and upon their authority as
experts in auditing and accounting.
15
<PAGE> 17
GLOSSARY
"Agent" means the administrator of the Plan, as of the date of this
prospectus, Continental Stock Transfer & Trust Company.
"Authorization Form" means the form used to appoint the Agent as agent
for the Participant, to direct the Company to pay to the Agent such
Participant's cash dividends on Participating Shares and Plan Shares, and to
direct the Agent to purchase on the Dividend Reinvestment Date additional shares
of Common Stock with such dividends and to purchase on the relevant Cash
Purchase Investment Date additional shares of Common Stock with Cash Purchases.
"Beneficial Owner" means a Shareholder who beneficially owns shares of
Company Stock that are registered in a name other than such Shareholder's name,
such as in the name of a broker, bank or other nominee.
"Cash Purchase" means a voluntary cash investment in the Common Stock of
the Company through the Plan.
"Cash Purchase Due Date" means the date by which the Agent must receive
the following items in order for funds to be invested on the next Cash Purchase
Investment Date: (i) the Authorization Form (if person is not yet enrolled as a
Participant) and the Broker and Nominee Form (if necessary) at least one
business day before the commencement of the Pricing Period; (ii) the Request for
Waiver (if applicable) no later than 2:00 p.m. New York City time two business
days before the commencement of the Pricing Period; and (iii) a check, money
order or wire transfer no later than one business day prior to the commencement
of the related Pricing Period.
"Cash Purchase Investment Date" means the date of investment of the Cash
Purchases, generally on or about the third from the last business day of each
month, or in the case of purchases on the open market, no later than the last
business day of each month.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commission" means the Securities and Exchange Commission.
"Common Stock" means the common stock, $.01 par value, of the Company.
"Company" means Thornburg Mortgage Asset Corporation.
"Company Stock" means the Common Stock and Preferred Stock of the
Company.
"Discount Rate" means a discount ranging from 0% to 5% from the per
share Market Price for Dividend Reinvestments and the Market Price for Cash
Purchases on shares of newly issued Common Stock purchased by the Agent for the
Plan from the Company with reinvested dividends and funds from Cash Purchases
not in excess of the $5,000 limit.
"Dividend Payment Date" means the dividend payment date announced by the
Company from time to time, as reflected through 1999 in Schedule "A".
"Dividend Reinvestment Date" means the date of the reinvestment of
dividends paid on Plan Shares and Participating Shares of Company Stock,
generally on or within fifteen (15) days after the Dividend Payment Date except
where completion at a later date is necessary or advisable under applicable
securities laws. Under normal market conditions, the Company expects to reinvest
the funds on the Dividend Payment Date.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Initial Cash Purchase" means a Cash Purchase by a non-shareholder.
"Market Price for Cash Purchases" means the average of the daily high
and low Sales Prices, computed to four decimal places, of the Shares of Common
Stock as reported on the NYSE during the Pricing Period prior to the related
Cash Purchase Investment Date.
16
<PAGE> 18
"Market Price for Dividend Reinvestments" means the average of the daily
high and low sales prices, computed to four decimal places, of the shares of
Common Stock as reported on the NYSE on the Dividend Reinvestment Date.
"NYSE" means the New York Stock Exchange.
"Optional Cash Purchase" means a Cash Purchase by a Shareholder.
"Participant" means a Record Owner of the Company's Stock, the
Beneficial Owner of the Company's Stock whose bank, broker or other nominee
participates on the Beneficial Owner's behalf, or a current non-shareholder who
wishes to participate in the Plan upon making an initial investment in the
Common Stock offered herein.
"Participating Shares" means all or a specified number of shares of
Company Stock owned by the Participant.
"Plan" means the Thornburg Mortgage Asset Corporation Dividend
Reinvestment and Stock Purchase Plan, as amended.
"Plan Shares" means all whole and fractional shares of Common Stock
credited to a Participant's Plan account.
"Preferred Stock" means the outstanding preferred stock of the Company.
"Pricing Period" means the twelve Trading Days prior to the Cash
Purchases Investment Date for that month.
"Securities Act" means the Securities Act of 1933, as amended.
"Shareholder of Record" means a Shareholder who owns shares of Company
Stock in his or its own name.
"Shareholders" means record owners of the Common Stock or Preferred
stock of the Company.
"Threshold Price" means a minimum price applicable to the purchase of
newly issued shares of Common Stock purchased through cash investments made
pursuant to Requests for Waiver approved by the Company.
"Trading Day" means any day other than Saturday, Sunday or a legal
holiday on which the NYSE is closed for trading or a day on which the Agent is
authorized or obligated by law to close.
"Waiver Discount" means a discount ranging from 0% to 5% from the per
share Market Price on shares of newly issued Common Stock purchased by the Plan
from the Company with funds from Cash Purchases in excess of the $5,000 limit.
17
<PAGE> 19
SCHEDULE A
CALENDAR FOR CASH PURCHASES
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
Threshold Price and
Waiver Discount
Set Date Cash Purchase Pricing Period Cash Purchase
(Waiver Request Date) Due Date Commencement Date Investment Date
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
April 6, 1998 April 8, 1998 April 9, 1998 April 28, 1998
May 5, 1998 May 7, 1998 May 8, 1998 May 27, 1998
June 5, 1998 June 9, 1998 June 10, 1998 June 26, 1998
July 8, 1998 July 10, 1998 July 13, 1998 July 29, 1998
August 6, 1998 August 10, 1998 August 11, 1998 August 27, 1998
September 4, 1998 September 9, 1998 September 10, 1998 September 28, 1998
October 7, 1998 October 9, 1998 October 12, 1998 October 28, 1998
November 4, 1998 November 6, 1998 November 9, 1998 November 25, 1998
December 7, 1998 December 9, 1998 December 10, 1998 December 29, 1998
January 5, 1999 January 7, 1999 January 8, 1999 January 27, 1999
February 2, 1999 February 4, 1999 February 5, 1999 February 24, 1999
March 8, 1999 March 10, 1999 March 11, 1999 March 29, 1999
April 7, 1999 April 9, 1999 April 12, 1999 April 28, 1999
May 5, 1999 May 7, 1999 May 10, 1999 May 26, 1999
June 7, 1999 June 9, 1999 June 10, 1999 June 28, 1999
July 7, 1999 July 9, 1999 July 12, 1999 July 28, 1999
August 6, 1999 August 10, 1999 August 11, 1999 August 27, 1999
September 7, 1999 September 9, 1999 September 10, 1999 September 28, 1999
October 6, 1999 October 8, 1999 October 11, 1999 October 27, 1999
November 4, 1999 November 8, 1999 November 9, 1999 November 26, 1999
December 7, 1999 December 9, 1999 December 10, 1999 December 29, 1999
January 5, 2000 January 7, 2000 January 10, 2000 January 27, 2000
February 3, 2000 February 7, 2000 February 8, 2000 February 25, 2000
March 8, 2000 March 10, 2000 March 13, 2000 March 29, 2000
April 4, 2000 April 6, 2000 April 7, 2000 April 25, 2000
May 5, 2000 May 9, 2000 May 10, 2000 May 26, 2000
June 7, 2000 June 9, 2000 June 12, 2000 June 28, 2000
July 6, 2000 July 10, 2000 July 11, 2000 July 27, 2000
August 8, 2000 August 10, 2000 August 11, 2000 August 29, 2000
September 6, 2000 September 8, 2000 September 11, 2000 September 27, 2000
October 6, 2000 October 10, 2000 October 11, 2000 October 27, 2000
November 6, 2000 November 8, 2000 November 9, 2000 November 28, 2000
December 5, 2000 December 7, 2000 December 8, 2000 December 27, 2000
- ----------------------------------------------------------------------------------------------------------
</TABLE>
CALENDAR FOR DIVIDEND REINVESTMENTS
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------
Record Date Dividend Reinvestment Date
- ---------------------------------------------------------------------------
<S> <C>
March 31, 1998 April 10, 1998
June 30, 1998 July 10, 1998
September 30, 1998 October 12, 1998
December 31, 1998 January 11, 1999
March 31, 1999 April 12, 1999
June 30, 1999 July 12, 1999
September 30, 1999 October 11, 1999
December 31, 1999 January 10, 2000
March 31, 2000 April 10, 2000
June 30, 2000 July 10, 2000
September 30, 2000 October 10, 2000
December 31, 2000 January 10, 2001
- ---------------------------------------------------------------------------
</TABLE>
18
<PAGE> 20
PART II
ITEM 14. Other Expenses of Issuance and Distribution:
<TABLE>
<S> <C>
Registration fee.......................................... $ 23,364.00
Listing Fees.............................................. 2,500.00
Legal fees and expenses*.................................. 5,000.00
Accounting fees and expenses*............................. 1,200.00
Printing expenses*........................................ 3,000.00
Miscellaneous expenses* .................................. 1,000.00
-------------
TOTAL EXPENSES............................................ $ 36,064.00
=============
</TABLE>
- ----------
* estimated expenses
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Maryland General Corporation Law provides that a Maryland corporation
may indemnify any person who is or was serving at the request of the corporation
as an affiliate, officer, partner, trustee, employee, or agent of another
foreign or domestic corporation, partnership, joint venture, trust or other
enterprise or employee benefit plan ("Affiliate"), that is made a party to any
proceeding by reason of service in that capacity unless it is established that
the act or omission of the Affiliate was material to the matter giving rise to
the proceeding and was committed in bad faith or was the result of active and
deliberate dishonesty; or the Affiliate actually received an improper personal
benefit in money, property or services; or, in the case of any criminal
proceeding, the Affiliate had reasonable cause to believe that the act or
omission was unlawful. Indemnification may be against judgments, penalties,
fines, settlements, and reasonable expenses actually incurred by the Affiliate
in connection with the proceeding, but if the proceeding was one by or in the
right of the corporation, indemnification may not be made in respect of any
proceeding in which the Affiliate shall be adjudged to be liable to the
corporation. Such indemnification may not be made unless authorized for a
specific proceeding after a determination has been made, in a manner prescribed
by law, that indemnification is permissible in the circumstances because the
Affiliate has met the applicable standard of conduct. The Affiliate must be
indemnified for expenses, however, if he has been successful in the defense of
the proceeding or as otherwise ordered by a court. The law also prescribes the
circumstances under which a corporation may advance expenses to, or obtain
insurance or similar coverage for, Affiliates.
The Company's Articles of Incorporation provide for indemnification of
the officers and directors of the Company and eliminate the liability of a
director or officer to the Company or its shareholders for money damages to the
fullest extent permitted by Maryland law.
ITEM 16. EXHIBITS.
<TABLE>
<S> <C>
4.0 Dividend Reinvestment and Stock Purchase Plan*
5.0 Opinion of Jeffers, Wilson, Shaff & Falk, LLP, counsel to the
Company**
20.1 Dividend Reinvestment and Stock Purchase Plan Brochure to
Shareholders*
23.1 Consent of Counsel (included in Exhibit (5))**
23.2 Consent of McGladrey & Pullen, LLP**
24.0 Power of Attorney of Certain Officers and Directors (included on
signature page)**
</TABLE>
- ----------
* Previously filed as Exhibits to Registrant's registration statement on Form
S-3D dated September 24, 1997 and incorporated by reference pursuant to
Rule 12b-32.
** Previously filed as Exhibits to Registrant's registration statement on Form
S-3D dated April 14, 1998 and incorporated by reference pursuant to Rule
12b-32.
II-1
<PAGE> 21
ITEM 17. UNDERTAKINGS
A. The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any Prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the Prospectus any facts or events
arising after the effective date to the
Registration Statement (or the most recent
post-effective amendment thereof) which,
individually or in the aggregate, represent a
fundamental change in the information set forth in
the Registration Statement;
(iii) To include any material information with respect to
the plan of distribution not previously disclosed
in the Registration Statement or any material
change to such information in the Registration
Statement;
Provided, however, that paragraphs A(1)(i) and A(1)(ii) do not apply if
the information required to be included in a post-effective amendment by those
paragraphs is contained in the periodic reports filed by the Registrant pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the Registration Statement
(2) That, for the purpose of determining liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new Registration Statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof;
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
B. The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 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 the time shall be deemed to be the initial bona fide offering thereof.
II-2
<PAGE> 22
EXHIBIT INDEX
Exhibit
4.0 Dividend Reinvestment and Stock Purchase Plan*
5.0 Opinion of Jeffers, Wilson, Shaff & Falk, LLP, counsel to the Company**
20.1 Dividend Reinvestment and Stock Purchase Plan Brochure to
Shareholders*
23.1 Consent of Counsel (included in Exhibit (5))**
23.2 Consent of McGladrey & Pullen, LLP**
24.0 Power of Attorney of Certain Officers and Directors (included on
signature page)**
- ----------
* Previously filed as Exhibits to Registrant's registration statement on Form
S-3D dated September 24, 1997 and incorporated by reference pursuant to
Rule 12b-32.
** Previously filed as Exhibits to Registrant's registration statement on
Form S-3D dated April 14, 1998 and incorporated by reference pursuant to
Rule 12b-32.
II-3
<PAGE> 23
SIGNATURES
Pursuant to the requirement of the Securities Act of 1933, as amended,
the Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
amendment to the Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Santa Fe, New Mexico,
on April 10, 1998.
THORNBURG MORTGAGE ASSET CORPORATION
By: /s/ Larry A. Goldstone
-----------------------------------
Larry A. Goldstone
Director and President
Pursuant to the requirements of the Securities Act of 1933, as amended,
this amendment to the Registration Statement has been signed below by the
following persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Name Title Date
---- ----- ----
<S> <C> <C>
* Chairman of the Board April 27, 1998
- --------------------------
Garrett Thornburg
/s/ Larry A. Goldstone Director and President April 27, 1998
- --------------------------
Larry A. Goldstone
* Chief Financial Officer and April 27, 1998
- -------------------------- Treasurer (Principal Accounting
Richard P. Story Officer)
* Director April 27, 1998
- --------------------------
David A. Ater
* Director April 27, 1998
- --------------------------
Joseph H. Badal
* Director April 27, 1998
- --------------------------
Owen M. Lopez
* Director April 27, 1998
- --------------------------
James H. Lorie
* Director April 27, 1998
- --------------------------
Stuart C. Sherman
*By /s/ Larry A. Goldstone
----------------------
Larry A. Goldstone
As Attorney-in-fact
</TABLE>
