Dividend Reinvestment Plan
Timbercreek Senior Mortgage Investment Corporation (the “Company”) has established this dividend reinvestment plan (the “Plan”) to provide beneficial holders of common shares of the Company (“Common Shares”) with a means to reinvest dividends on the Common Shares declared and payable to them in additional Common Shares, as described herein.
For the purpose of the Plan, “Common Shares” includes any Class A shares of the Corporation prior to their conversion into Common Shares on November 30, 2013 (or such other date as the Corporation may determine) pursuant to the amendment to the articles of the Corporation that came into effect on September 13, 2013.
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 Common Shares by reinvesting their cash dividends. Common Shares acquired under the Plan will be automatically enrolled in the Plan.
Shareholders who do not enroll their Common Shares in the Plan will continue to receive dividends in the usual manner.
Can I enroll only some of my Common Shares in the Plan?
Shareholders may elect to enroll either 50% or 100% of their Common 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 Common 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 Common Shares from the treasury of the Company in connection with the reinvestment of dividends. The discount will not apply to Common 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 Common 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 Common 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 Common Shares be purchased for participants under the Plan?
Cash dividends payable on Common Shares enrolled in the Plan will be aggregated and then used by the Plan Agent, to arrange for the purchase of Common 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 Common Shares issued pursuant to the Plan will be automatically enrolled in the Plan.
When will Common Shares be purchased for participants?
For dividend reinvestment, Common 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 Common 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 Common Shares purchased under the Plan?
If Common Shares are issued from treasury, the price will be 95% of the average of the daily volume weighed average trading prices of the Common Shares on the TSX for the five trading days in the Trading Period on which at least a board lot of Common Shares is traded.
If purchases of Common Shares under the Plan will be made on the open market, such additional Common Shares can be acquired at prevailing market rates.
The Corporation will announce by way of press release in dividend announcements whether purchases of Common 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 Common Shares from the Plan?
To terminate your participation in the Plan, you should contact the intermediary through which you hold your Common 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 Common Shares from the Plan?
You should contact the intermediary through which you hold your Common Shares if you wish to sell your Common 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 Common 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.