Dividend Reinvestment Plan
Timbercreek Senior Mortgage Investment Corporation (the “Company”) has established this dividend reinvestment plan (the “Plan”) to provide beneficial holders of class A shares of the Company (“Class A Shares”) with a means to reinvest dividends on the Class A Shares declared and payable to them in additional Class A Shares, as described herein.
The following section answers frequently asked questions regarding the Plan but does not describe all of the provisions of the Plan. For more information please see the Canadian Dividend Reinvestment Plan Offering Circular.
Frequently Asked Questions
What is Timbercreek Senior Mortgage Investment Corporation’s Dividend Reinvestment Plan?
The Plan provides eligible Shareholders a convenient means to purchase additional Class A Shares by reinvesting their cash dividends. Class A Shares acquired under the Plan will be automatically enrolled in the Plan.
Shareholders who do not enroll their Class A Shares in the Plan will continue to receive dividends in the usual manner.
Can I enroll only some of my Class A Shares in the Plan?
Shareholders may elect to enroll either 50% or 100% of their Class A Shares for dividend reinvestment under the Plan.
What are some advantages of participating in the Plan?
The Plan offers Shareholders a cost-effective means to purchase additional Class A Shares through the reinvestment of dividends on a regular basis and in a convenient manner.
Participants in the Plan will dollar cost-average their common share purchases by reinvesting dividends under the Plan on a regular monthly basis. There will be a discount of 5% from the Average Market Price (as defined below) if the Company issues Class A Shares from the treasury of the Company in connection with the reinvestment of dividends. The discount will not apply to Class A Shares purchased on the open market under the Plan.
No administration fees are charged to participants by the Company or the Plan Agent for their participation in the Plan. The Company will pay for any brokerage commissions on purchases of shares under the Plan.
Who is eligible to participate in the Plan?
Participation in the Plan is restricted to holders of Class A Shares who are residents of Canada for the purposes of the Tax Act (as defined below).
How do I enroll in the Plan?
To participate in the Plan, you should contact the intermediary through which you hold your Class A Shares (the “CDS Participant”) to participate in the Plan.
Once you have enrolled in the Plan, participation continues automatically until you terminate it, or until the Plan is terminated.
How will Class A Shares be purchased for participants under the Plan?
Cash dividends payable on Class A Shares enrolled in the Plan will be aggregated and then used by the Plan Agent, to arrange for the purchase of Class A Shares, either on the open market through a registered broker-dealer on the Toronto Stock Exchange, or through a treasury issue by the Company at the discretion of the Board of Directors of the Company. These new Class A Shares issued pursuant to the Plan will be automatically enrolled in the Plan.
When will Class A Shares be purchased for participants?
For dividend reinvestment, Class A Shares will be purchased on the Dividend Payment Date (which is a date no later than the 15th day of the month or the immediately preceding Business Day in the event that the 15th day is not a Business Day) following a Dividend Record Date on which a Dividend has been declared. In the event that the Class A Shares available in the market on the Dividend Payment Date is insufficient, the Plan Agent will purchase the remaining shares from Treasury.
What will be the price of the Class A Shares purchased under the Plan?
If Class A Shares are issued from treasury, the price will be 95% of the average of the daily volume weighted average trading prices of the Class A Shares on the Toronto Stock Exchange (the “TSX”) for the 10 trading days in the Trading Period on which at least a board lot of Class A Shares is traded, which price will not be less than the NRV per Class A Share.
If purchases of Class A Shares under the Plan will be made on the open market, such additional Class A Shares can be acquired at prevailing market rates not exceeding 115% of the volume weighted average trading price of the Class A Shares on the TSX for the ten trading days in the Trading Period on which at least a board lot of Class A Shares is traded immediately preceding the date that Class A Shares are purchased.
The Company will announce by way of press release in dividend announcements whether purchases of Class A Shares under the Plan will be made on the open market or from treasury.
What kind of statements will I receive if I participate in the Plan?
You will receive information regarding reinvestment of dividends from your intermediary in accordance with your intermediary’s administrative practices.
How do I withdraw some or all of my Class A Shares from the Plan?
To terminate your participation in the Plan, you should contact the intermediary through which you hold your Class A Shares sufficiently in advance of a particular Dividend Record Date. Each intermediary will have specific procedures on how to terminate participation in the Plan.
How do I sell Class A Shares from the Plan?
You should contact the intermediary through which you hold your Class A Shares if you wish to sell your Class A Shares enrolled in the Plan.
What is the cost of participation in the Plan
The Company will be responsible for all administrative costs of the Plan, including any brokerage commissions on share purchases or the fees or other expenses of the Plan Agent. There are no charges payable by a participant upon termination of participation in the Plan.
What are the tax consequences of participating in the Plan? Generally, you will be taxed on dividends that are reinvested in Class A Shares under the Plan in the same manner as you would have if you had received the dividends in cash. For a summary of the general Canadian income tax implications of participating in the Plan please refer to “Canadian Tax Considerations” at the end of this Offering Circular. The summary is of a general nature only and shareholders should consult their own advisors for advice in respect of tax consequences relating to the Plan.
For more information please see the Canadian Dividend Reinvestment Plan Offering Circular.