-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, NpYu263EQykIqew8pu34Pch/jvVUfWFcPULP4wT5emzUHkzmJxzYpdschDZIdzax voh8xrZPZavCxUDq7Qmvkg== 0000930661-96-000345.txt : 19960529 0000930661-96-000345.hdr.sgml : 19960529 ACCESSION NUMBER: 0000930661-96-000345 CONFORMED SUBMISSION TYPE: S-3D PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 19960506 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CAPSTEAD MORTGAGE CORP CENTRAL INDEX KEY: 0000766701 STANDARD INDUSTRIAL CLASSIFICATION: 6798 IRS NUMBER: 752027937 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3D SEC ACT: 1933 Act SEC FILE NUMBER: 333-03187 FILM NUMBER: 96556516 BUSINESS ADDRESS: STREET 1: 2711 NORTH HASKELL AVE STREET 2: STE 900 CITY: DALLAS STATE: TX ZIP: 75204 BUSINESS PHONE: 2148742323 MAIL ADDRESS: STREET 1: 2711 NORTH HASKELL AVENUE STREET 2: STE 900 CITY: DALLAS STATE: TX ZIP: 75204 FORMER COMPANY: FORMER CONFORMED NAME: LOMAS MORTGAGE CORP DATE OF NAME CHANGE: 19891105 S-3 1 FORM S-3 As filed with the Securities and Exchange Commission on May 6, 1996 Registration No. 33-_____ ================================================================================ SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _______________ Form S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 _______________ Capstead Mortgage Corporation (Exact name of Registrant as specified in its Charter) Maryland 75-2027937 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 2711 North Haskell Avenue Suite 900 Dallas, Texas 75204 (214) 874-2323 (Address, including zip code, and telephone number, including area code, of Registrant's principal executive offices) _______________ RONN K. LYTLE 2711 North Haskell Avenue Suite 900 Dallas, Texas 75204 (214) 874-2323 (Name, address, including zip code, and telephone number, including area code, of agent for service) _______________ The Commission is requested to send copies of all communications to: DAVID BARBOUR ANDREW F. JACOBS Andrews & Kurth L.L.P. Capstead Mortgage Corporation 4400 Thanksgiving Tower 2711 North Haskell Avenue 1601 Elm Street Suite 900 Dallas, Texas 75201 Dallas, Texas 75204 (214) 979-4444 (214) 874-2350 Approximate date of commencement of proposed sale to the public: From time to time after the effective date of this Registration Statement pursuant to Rule 415. If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. [X] 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 reinvestment plans, please check the following box. [X] If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. [ ] CALCULATION OF REGISTRATION FEE
================================================================================ PROPOSED MAXIMUM MAXIMUM PROPOSED OFFERING AGGREGATE TITLE OF SECURITIES AMOUNT BEING PRICE OFFERING REGISTRATION BEING REGISTERED REGISTERED PER SHARE(1) PRICE(1) FEE(2) - - -------------------------------------------------------------------------------- $1.26 Cumulative Convertible Preferred Stock, Series B ($.10 Par Value)...... 1,500,000 $13.125 $19,687,500 $6,788.79 shares - - -------------------------------------------------------------------------------- Common Stock, par value $.01 per share............. (3) (3) (3) (3) ================================================================================
(1) Estimated solely for the purpose of calculating the registration fee. (2) Calculated pursuant to Rule 457(c) based upon the average of the high and low prices of Series B Preferred Stock reported on the New York Stock Exchange composite tape as of April 29, 1996. (3) Such indeterminable number of shares of Common Stock as may be required upon conversion of the Series B Preferred Stock registered hereunder. Pursuant to Rule 429 of the General Rules and Regulations under the Securities Act of 1933, as amended, the Prospectus which is part of this Registration Statement is a combined Prospectus relating also to the 102,831 shares of Series B Preferred Stock registered under Registration Statement No. 33-57164 and remaining unissued as of the date hereof. The registration fee for the securities registered under Registration Statement No. 33-57164 was paid upon filing with the Commission of said Registration Statement. ================================================================================ PROSPECTUS CAPSTEAD MORTGAGE CORPORATION SERIES B PREFERRED STOCK DIVIDEND REINVESTMENT PLAN This Prospectus relates to shares of $1.26 Cumulative Convertible Preferred Stock, Series B, par value $.10 per share (the "Series B Preferred Stock"), of Capstead Mortgage Corporation, a Maryland corporation ("Capstead" and, when taken together with its special purpose finance subsidiaries and other entities that are consolidated with Capstead for financial accounting purposes, the "Company"), offered pursuant to the Series B Preferred Stock Dividend Reinvestment Plan of Capstead, as amended (the "Series B Plan"). The Series B Plan provides holders of the Series B Preferred Stock with a method of purchasing additional shares of Series B Preferred Stock without payment of any brokerage commission or service charge. Any holder of record of Series B Preferred Stock is eligible to participate in the Series B Plan. In addition, brokers or nominees are eligible (but are not required) to participate in the Series B Plan on behalf of beneficial owners for whom they are holding shares. See "Description of the Series B Preferred Stock Dividend Reinvestment Plan-- Participation." Society National Bank (the "Agent") will act as agent for the participants in the Series B Plan. The Agent will receive all of the cash dividends (whether such dividends are from earnings or are a return of capital) paid on participants' Series B Preferred Stock and will use such dividends to acquire shares of Series B Preferred Stock for the accounts of such participants. At the option of Capstead, the Agent will either acquire shares on the open market or purchase shares directly from Capstead. Shares purchased in the open market will be deemed to be purchased at the average price of all shares purchased for participants in the Series B Plan with the proceeds of the dividends then being invested. When Capstead elects to make shares available for purchase for the Series B Plan, the purchase price of the shares of Series B Preferred Stock purchased from Capstead may reflect a discount from 0% to 5%. Capstead will pay any brokerage commission or service charge for the purchase of shares under the Series B Plan. Capstead will not, however, pay any fees charged by brokers or nominees in connection with their participation in the Series B Plan on behalf of the beneficial owners for whom they are holding shares. Any participant who directs the Agent to sell shares of Series B Preferred Stock held in such participant's account in the Series B Plan will pay any brokerage commissions or service charges incurred in connection with such sale. Any participant in the Series B Plan may withdraw at any time. This Prospectus relates to 1,602,831 shares of Series B Preferred Stock of Capstead. It is suggested that this Prospectus be retained for future reference. ---------------- THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. ---------------- THE DATE OF THIS PROSPECTUS IS MAY 3, 1996 1 AVAILABLE INFORMATION Capstead is subject to the informational requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act") and, in accordance therewith, files reports and other information with the Securities and Exchange Commission (the "Commission"). Reports and proxy and information statements filed by Capstead with the Commission pursuant to the informational requirements of the Exchange Act may be inspected and copied at the public reference facilities maintained by the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, and at the following regional offices of the Commission: New York Regional Office, 7 World Trade Center, 13th Floor, New York, New York 10048; and Chicago Regional Office, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511. Copies of such material may be obtained from the Public Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates. In addition, reports, proxy statements and other information concerning Capstead (symbol: "CMO") can be inspected and copied at the offices of the New York Stock Exchange, Inc., 20 Broad Street, New York, New York 10005-2601, on which the Series B Preferred Stock of Capstead is listed. ADDITIONAL INFORMATION Capstead has filed with the Commission a Registration Statement under the Securities Act of 1933, as amended (the "Securities Act") with respect to the securities offered hereby. This Prospectus does not contain all of the information set forth in such Registration Statement, certain parts of which are omitted in accordance with the rules and regulations of the Commission. For further information with respect to the Company and the securities offered hereby, reference is made to such Registration Statement and to the exhibits thereto. Statements contained herein concerning the provisions of certain documents are 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 reference. The Registration Statement and the exhibits thereto may be inspected without charge at the office of the Commission, 450 Fifth Street, N.W., Washington, D.C. 20549, and copies thereof may be obtained from the Commission upon payment of the prescribed fees. INCORPORATION OF CERTAIN INFORMATION BY REFERENCE The following documents, heretofore filed by Capstead with the Commission pursuant to the Exchange Act, are hereby incorporated by reference, except as superseded or modified herein: 1. Capstead's Annual Report on Form 10-K for the fiscal year ended December 31, 1995; and 2. The description of the Series B Preferred Stock contained in Capstead's Registration Statement on Form 8-A as filed with the Commission on October 27, 1992. Each document filed subsequent to the date of this Prospectus pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act prior to termination of the offering of the Series B Preferred Stock shall be deemed to be incorporated by reference in this Prospectus and shall be part hereof from the date of filing of such document. Any statement contained in a document that is deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Prospectus to the extent that a statement contained herein or in any other subsequently filed document that is also deemed to be incorporated by reference herein modifies or supersedes such statement, and any statement contained in this Prospectus shall be deemed to be modified or superseded to the extent that a statement contained in any subsequently filed document that also is deemed to be incorporated by reference herein modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Prospectus. Capstead will provide without charge to each person, including any beneficial owner, to whom a copy of this Prospectus is delivered, upon the written or oral request of any such person, a copy of any document 2 described above (other than exhibits). Requests for such copies should be directed to Capstead Mortgage Corporation, 2711 N. Haskell Ave., Suite 900, Dallas, Texas 75204, Attention: Treasurer. Capstead's telephone number is (214) 874-2323. THE COMPANY Capstead was incorporated on April 15, 1985 in the state of Maryland and commenced operations in September 1985. Capstead generates earnings from the interest income on its consolidated mortgage loan portfolio which includes its investments in whole mortgage loans, AAA-rated private mortgage pass-through securities and mortgage backed securities issued by various government sponsored entities; from its investment in mortgage loans pledged to secure collateralized mortgage obligations ("CMOs") or pooled in connection with the issuance of publicly-offered pass-through securities; and from the servicing fees on mortgage loans in its servicing portfolio. The mortgage pass-through securities and CMOs were issued by certain affiliated entities of Capstead. Mortgage loan servicing includes collection activities, accounting for principal and interest payments, escrow administration and other responsibilities relating to the administration of the mortgage loans. In exchange for providing this service, Capstead will receive periodically a servicing fee representing an annualized percentage of the outstanding principal balance of each such mortgage loan. Capstead may enter into other short or long-term investment strategies as opportunities arise. Capstead, and its qualified real estate investment trust ("REIT") subsidiaries, have elected to be taxed as a REIT under the Internal Revenue Code of 1986, as amended (the "Code"), and intend to continue to do so. As a result of this election, the Company and such subsidiaries are not taxed at the corporate level on taxable income distributed to stockholders, provided that certain REIT qualification tests are met. Certain other affiliated entities which are consolidated with Capstead for financial reporting purposes are not consolidated for federal income tax purposes because such entities were not established as REITs or qualified REIT subsidiaries. All taxable income of these affiliated entities are subject to federal and state income taxes, where applicable. USE OF PROCEEDS Capstead has no basis for estimating either the number of shares of Series B Preferred Stock, if any, that will ultimately be purchased from Capstead under the Series B Plan or the prices at which such shares will be sold. Proceeds from the shares of Series B Preferred Stock purchased from Capstead will be used for general corporate purposes. DESCRIPTION OF THE SERIES B PREFERRED STOCK DIVIDEND REINVESTMENT PLAN Capstead is offering the holders of its Series B Preferred Stock the opportunity to purchase additional shares of Series B Preferred Stock through the Series B Preferred Stock Dividend Reinvestment Plan. The following is a numbered question-and-answer format setting forth the provisions of the Series B Plan: PURPOSE 1. What is the purpose of the Series B Plan? The purpose of the Series B Plan is to provide holders of Series B Preferred Stock of Capstead with a convenient method of investing cash dividends in additional shares of Series B Preferred Stock without payment of any brokerage commissions or service charges. To the extent shares of Series B Preferred Stock purchased under the Series B Plan are acquired from Capstead, the Series B Plan will provide Capstead with additional equity capital that will be available to be used for general corporate purposes. 3 INVESTMENT IN THE SERIES B PLAN 2. What funds may a participant invest in the Series B Plan? Participants in the Series B Plan may have dividends on their shares of Series B Preferred Stock automatically reinvested in Series B Preferred Stock. No commission or service charge is paid by participants in connection with the purchases of Series B Preferred Stock under the Series B Plan. Full investment of funds is possible because the Series B Plan permits fractions of shares, as well as full shares, to be credited to participants' accounts. Statements of account will be provided as soon as practicable after each investment. ADMINISTRATION 3. Who administers the Series B Plan for participants? Society National Bank (the "Agent"), or such other trust company or bank as Capstead may from time to time designate as agent for the participants, administers the Series B Plan and, in such capacity, keeps a continuing record of participants' accounts, sends statements of account to participants and performs for participants other duties relating to the Series B Plan. Shares of Series B Preferred Stock purchased under the Series B Plan will be registered in the name of the Agent or the nominee of the Agent for participants in the Series B Plan. As record holder of the shares held in participants' accounts under the Series B Plan, the Agent will receive dividends on all shares of Series B Preferred Stock held in the Series B Plan on each respective dividend record date, will credit such dividends to participants' accounts on the basis of full and fractional shares held in such accounts, and will automatically reinvest such dividends in additional shares of Series B Preferred Stock. All communications regarding the Series B Plan should be sent to the Agent at the following address: Society National Bank c/o Key Corp. Shareholder Services 5050 Renaissance Tower 1201 Elm Street Dallas, Texas 75270-2014 The Agent may also be contacted by telephone toll free at (800) 527-7844 between 9:00 a.m. and 5:00 p.m. central time. PARTICIPATION 4. Who is eligible to participate? All record holders of Series B Preferred Stock are eligible to participate in the Series B Plan. Participation is entirely voluntary and may be discontinued at any time. Brokers or nominees are eligible (but are not required) to participate in the Series B Plan on behalf of beneficial owners for whom they are holding shares. NEITHER THE AGENT NOR CAPSTEAD WILL BE RESPONSIBLE, HOWEVER, FOR THE MAINTENANCE OF THE INDIVIDUAL ACCOUNTS OF ANY BROKER OR NOMINEE WHO ELECTS TO PARTICIPATE NOR WILL IT BE RESPONSIBLE FOR ANY FEES CHARGED BY SUCH BROKER OR NOMINEE IN THE PERFORMANCE OF ITS DUTIES ON BEHALF OF SUCH BENEFICIAL OWNERS. 5. How does an eligible stockholder participate? A stockholder whose shares are registered in such stockholder's own name may become a participant in the Series B Plan by execution and delivery to the Agent of an Enrollment Authorization Card. These forms will be provided from time to time by mail to all stockholders of record and will also be furnished at any time upon written or oral request to the Agent. 4 STOCKHOLDERS WHOSE SHARES ARE HELD IN A NAME OTHER THAN THEIR OWN SHOULD CONSULT THEIR BROKER OR NOMINEE TO DETERMINE WHETHER THEY MAY PARTICIPATE AND, IF SO, HOW AND WHETHER ANY FEES WILL BE CHARGED BY THE BROKER OR NOMINEE IN CONNECTION WITH SUCH PARTICIPATION. 6. When may a stockholder join the Series B Plan? An eligible stockholder may join the Series B Plan at any time. Participation will begin with the next dividend payable following receipt by the Agent of the Enrollment Authorization Card unless there is insufficient time to process the participant's enrollment prior to the payment of such dividend, in which case participation will begin with the next following dividend payment. 7. What does the Enrollment Authorization Card provide? The Enrollment Authorization Card directs the Agent to apply all of the participant's dividends on (i) the number of shares of Series B Preferred Stock held by the participant on the applicable record date and designated to be included in the Series B Plan and (ii) all whole and fractional shares of Series B Preferred Stock that have been credited to a participant's Series B Plan account through the reinvestment of dividends toward the purchase of additional shares of Series B Preferred Stock. PURCHASES 8. What will be the price of shares of Series B Preferred Stock purchased under the Series B Plan? At Capstead's option, the Agent will either acquire shares on the open market or purchase shares directly from Capstead. Shares of Series B Preferred Stock purchased by the Agent in the open market will be purchased as promptly as practicable following each dividend payment date and, in any event, within 30 days thereafter (unless observance of the rules and regulations of the Commission or any other regulatory authority may require temporary suspension of such purchases, in which event such purchases will be made or resumed as permitted by such rules and regulations) on any securities exchange where such shares are traded, in the over-the-counter market or in negotiated transactions, on such terms as the Agent may determine. The purchase price will be deemed to be the average price of all shares purchased for participants in the Series B Plan with the proceeds of the dividends being invested as of the particular dividend payment date. Shares purchased for the Series B Plan directly from the Company will be acquired on the relevant dividend payment date at the average of the high and low sales price of the Common Stock as reported in the New York Stock Exchange composite transaction listing on the dividend payment date, less a discount from the market price (ranging from 0% to 5%), as determined at the sole discretion of the Company. As of the date of this Prospectus, the discount for purchases directly from the Company is 3%, but may be changed or eliminated by the Company without prior notice to participants at any time. The discount on shares issued directly by the Company shall not exceed 5% of the closing price for the Common Stock as reported in the New York Stock Exchange composite transaction listing on the relevant dividend payment date. Shares purchased on the open market will not be eligible for the discount to market price. Pending investment, funds shall be held in non-interest bearing accounts maintained by the Agent. 9. How many shares of Series B Preferred Stock will be purchased for participants? The number of shares to be purchased depends on the amount of the participant's dividend and the price of the Series B Preferred Stock acquired for such participant. Each participant's account will be credited with the number of shares, including fractions computed to three decimal places, equal to the total amount of the dividend invested divided by the purchase price of the Series B Preferred Stock acquired. 5 EXPENSES 10. What are the expenses to participants in the Series B Plan? There are no brokerage commissions related to purchases of shares of Series B Preferred Stock by the Agent directly from Capstead. Capstead will pay all brokerage commissions relating to any purchase of shares of Series B Preferred Stock by the Agent on the open market. Capstead will pay the costs of administration of the Series B Plan, including charges by the Agent for bank services on each dividend reinvestment by each participant in the Series B Plan. The Agent may charge a participant for additional services, not provided under the Series B Plan, performed at a participant's request. Certain expenses will be incurred by the participant if the participant requests that shares of Series B Preferred Stock be sold. See Question 14. Brokers or nominees who participate on behalf of beneficial owners for whom they are holding shares may charge such beneficial owners fees in connection with such participation, for which neither the Agent nor Capstead will be responsible. REPORTS TO PARTICIPANTS 11. What reports will be sent to participants in the Series B Plan? The Agent will mail to each participant in the Series B Plan, as promptly as practicable after each purchase of Series B Preferred Stock for the participant's account, a statement showing (i) dividends received on full or fractional shares held in such participant's account or in the name of the Series B Plan for the account of such participant; (ii) full and fractional shares purchased; and (iii) the beginning and new share balance of such participant's account. These statements are a participant's continuing record of the cost of such participant's purchases under the Series B Plan and will contain the only records of the purchase prices of shares acquired and should be retained for income tax purposes. The Agent may charge additional fees to participants requesting copies of past statements. In addition, participants will receive the same information distributed to all stockholders, including IRS information for reporting dividends received. CERTIFICATES FOR SHARES 12. Will certificates be issued for shares of Series B Preferred Stock purchased under the Series B Plan? Normally, certificates for shares of Series B Preferred Stock purchased under the Series B Plan will not be issued to participants until the participant withdraws from the Series B Plan. The Agent will maintain an account for each participant in the Series B Plan. Whole and fractional shares purchased on behalf of the participants by the Agent pursuant to the Series B Plan will be credited to the participants' accounts as "unissued certificate" shares. No share certificate will be issued to participants for shares credited to their accounts unless the participant requests otherwise. Such requests must be made in writing to the Agent. Certificates will be issued to participants with respect to full shares only. Issuance of such certificates will not terminate the participant's participation in the Series B Plan. Shares credited to the account of a participant under the Series B Plan may not be pledged as collateral. A participant who wishes to pledge such shares must request that certificates for such shares be issued in the participant's name. Certificates for fractions of shares will not be issued under any circumstances. 13. In whose name will certificates be registered when issued? Certificates for whole shares issued upon the request of participants will be registered in the names in which such participants' accounts are maintained at the time of such request. 6 WITHDRAWAL 14. How does a participant withdraw from the Series B Plan? Participants may discontinue their participation in the Series B Plan at any time upon written notice to the Agent. To be effective for any dividend payment, such notice must be received by the Agent in sufficient time to process such notice of withdrawal prior to payment of such dividend. In the event of insufficient time to process such notice of withdrawal, the participant's account will be terminated after dividends paid for such period have been credited to the participant's account and invested pursuant to the Series B Plan. As soon as practicable after the effective date of a participant's withdrawal, the Agent will send to the participant certificates, registered in the name of such participant, for the number of whole shares of Series B Preferred Stock in the participant's account and a cash payment for any fraction of a share of Series B Preferred Stock. Such cash payment will be based on the then current market value of the shares of Series B Preferred Stock, less a $5.00 liquidation fee. All subsequent dividends will be paid in cash by check sent to the stockholder unless the stockholder elects to re- enroll in the Series B Plan. A participant may request that all or a part of the whole shares of Series B Preferred Stock credited to the participant's account in the Series B Plan be sold. A request to sell shares must be in writing delivered to the Agent. If a participant requests such sale, the sale will be made by the Agent for the participant's account in brokerage transactions regular way on a national securities exchange within five business days after receipt of the participant's request. The participant will receive the proceeds from such sale, less any brokerage fees or commissions, transfer tax and other costs of sale and less a $5.00 liquidation fee. A participant requesting such sale should be aware that the price of shares of Series B Preferred Stock may fall during the period between a request for sale, its receipt by the Agent, and the ultimate sale in the open market. This risk should be evaluated, and will be borne solely, by the participant. No redemption check will be mailed prior to settlement of funds from the brokerage firm through which the sale is executed, which settlement is normally three business days after the sale of the stock. In the event of the death or incompetence of a participant, the Agent shall withdraw the participant from the Series B Plan after receipt of satisfactory written notice of such event and satisfactory proof of appointment of a legal representative and of such legal representative's right to receive shares or payments from the participant's account. MODIFICATION OR TERMINATION 15. May Capstead modify or terminate the Series B Plan or terminate a participant's participation? Capstead reserves the right to modify the Series B Plan at any time. All participants will be sent notice of any such modification, which shall be deemed conclusively accepted by each participant except those participants from whom the Agent receives written notice to discontinue participation prior to the effective date thereof. Capstead may terminate the Series B Plan for any reason at any time, upon written notice mailed to all participants at the addresses shown on their accounts; provided that no such termination shall be made on or after a record date for payment of a dividend until after the corresponding dividend payment date and investment of such dividend payment in accordance with the terms of the Series B Plan, unless Capstead pays to such participants in cash the dividend that would have been payable on the shares in each such participant's account on such record dated. Upon any such termination, the Agent will send promptly to each such participant a certificate, registered in the name of such participant, for the number of whole shares of Series B Preferred Stock held in the account of such participant, to the registered address of such participant. Any fractional shares will be liquidated at the then current market price on the date the shares are sold, with the net proceeds thereof to be sent to such participants by check. Capstead reserves the right (in its sole discretion) to terminate a participant's participation in, or exclude any person from participation in, the Series B Plan. 7 OTHER INFORMATION 16. What happens when a participant sells or transfers all of the shares of Series B Preferred Stock registered in the participant's name? If a participant ceases to be a stockholder of record, the Agent will continue to reinvest the dividends on the shares of Series B Preferred Stock held for the participant in the Series B Plan until otherwise notified. 17. Can I convert my Series B Preferred Stock into common stock? Yes. The Series B Preferred Stock is convertible into common stock at a ratio as of the date of this prospectus of .4794 shares of common stock for each share of Series B Preferred Stock converted. A participant may request in writing that all or part of the whole shares of Series B Preferred Stock be converted into shares of common stock. Upon receipt of the request, the Agent will withdraw the number of whole shares designated by the participant and convert such shares into shares of common stock at the applicable conversion ratio. The participant may request that (i) certificates be issued for whole shares of common stock with any fractional shares resulting from the conversion paid in cash, (ii) common shares, including fractional shares, be deposited into the Stockholder Investment Program ("SIP") of Capstead (subject to delivery of a SIP prospectus) or (iii) common shares be sold, in which case the sale will be deemed a termination in accordance the Series B Plan with applicable fees applied. 18. What happens if Capstead issues a stock dividend or declares a stock split or has a rights offering? Shares of Series B Preferred Stock distributed either as a result of a stock dividend or a stock split on shares of Series B Preferred Stock held by the Agent for participants will be credited to the participants' accounts. In the event that Capstead makes available to its holders of Series B Preferred Stock rights to purchase additional shares of Series B Preferred Stock or other securities, the shares of Series B Preferred Stock held for each participant under the Series B Plan will be added to other shares of Series B Preferred Stock held by each such participant in calculating the number of rights to be issued to each such participant. 19. How will a participant's shares be voted at meetings of holders of Series B Preferred Stock? Series B Preferred Stockholders are not entitled to vote except in certain circumstances as defined in the Articles Supplementary of the Series B Preferred Stock or as otherwise required by applicable Maryland law. In the event that the Series B Preferred Stockholders are entitled to vote, the Agent will distribute to the participants any proxy solicitation materials received by it from Capstead attributable to Series B Preferred Stock in the Series B Plan, and full shares credited to a participant's account will be voted in accordance with such participant's direction. 20. What are the federal income tax consequences of participation in the Series B Plan? The federal income tax consequences that might occur as a result of participation in the Series B Plan are not well established. Therefore, participants are advised to consult their tax advisors with respect to tax implications that may be applicable to their specific situations. Based upon published Internal Revenue Service rulings and private Internal Revenue Service rulings issued to other companies, and other factors with respect to similar plans and circumstances, the following tax implications should occur as a result of participation in the Series B Plan: (1) Dividends reinvested in additional shares of Series B Preferred Stock purchased directly from Capstead or by the Agent on the open market will be treated for federal income tax purposes as having been received in the form of a cash distribution in an amount described in (2) below. The amount of the distribution may be increased by the amount of any brokerage commissions paid by Capstead. To the extent Capstead has earnings and profits for federal income tax purposes, the distribution will be treated as a taxable dividend. The amount of the distribution should not be increased as a result of Capstead's payment of administrative fees or other expenses of the Series B Plan. However, should it be determined by the 8 Internal Revenue Service that Capstead's payment of such administrative expenses increases the amount of the distribution, the amount includable in income would be deductible as an expense incurred for the production of income by corporations and individuals who itemize deductions (subject to the two percent of adjusted gross income limitation under the Tax Reform Act of 1986). Participants who do not itemize may be liable for additional taxes including interest on any amount due to the government. (2) The taxable amount and tax basis of shares acquired through the Series B Plan participation will depend on whether shares are purchased on the open market or by direct purchase from Capstead. If shares are purchased by the Agent on the open market by reinvestment of dividends, the taxable amount of the dividend and the tax basis of the shares acquired normally will be equal to the amount of the cash dividend plus the allocable share of brokerage commissions paid by Capstead. If shares are purchased from Capstead with reinvested dividends, the taxable amount of the dividends and the tax basis of the shares normally will be the fair market value of the shares on the dividend payment date. (3) The holding period of shares acquired directly from Capstead and shares purchased by the Agent on the open market will begin the day after such shares are credited to the participant's account, which in no event will be earlier than the dividend payment date. (4) A participant will not realize any taxable income when he or she receives certificates for whole shares credited to his or her account under the Series B Plan, either upon his or her request for certificates or upon withdrawal from or termination of the Series B Plan. However, a participant who receives, upon withdrawal from or termination of the Series B Plan, a cash adjustment from a fractional share credited to his or her account may realize a gain or loss (which, for most participants, should be capital gain or loss) in respect of such cash adjustment. Gain or loss may also be realized by a participant when whole shares are sold either by the Agent upon the participant's request or by the participant after withdrawal from the Series B Plan. The amount of such gain or loss will be the difference between the amount the participant receives for his or her shares or fractional share and his or her tax basis thereof. Under Section 3406(a)(1) of the Internal Revenue Code, Capstead is required to withhold for United States income tax purposes 31% of all dividend payments to a stockholder of Capstead if (i) such stockholder has failed to furnish to Capstead such participant's taxpayer identification number ("TIN"), which for an individual is such individual's social security number, (ii) the Internal Revenue Service has notified Capstead that the TIN furnished by the stockholder is incorrect, (iii) the Internal Revenue Service notifies Capstead that back-up withholding should be commenced because the stockholder has failed to properly report interest or dividends or (iv) the stockholder has failed to certify, under penalties of perjury, that such stockholder is not subject to back-up withholding. If a participant is a foreign stockholder whose dividends are subject to United States income tax withholding, the amount of dividends to be reinvested will be determined after deducting the withholding tax. Statements of account will be sent to each participant in the Series B Plan as promptly as practicable after each purchase of shares of Series B Preferred Stock for such participant's account. Copies of required Internal Revenue Service Form 1099, or Form 1042s for foreign stockholders, will be sent to participants showing reportable dividends and/or tax withheld. These statements of account and copies of Internal Revenue Service forms should be retained for tax purposes. The statements of account are the only record of purchase prices for shares acquired through the Series B Plan and will be required to establish the tax basis of such shares when sold. The tax consequences under state and local tax laws will vary from jurisdiction to jurisdiction. Participants should consult their own tax advisors to determine the particular tax consequences which may result from participation in the Series B Plan and subsequent disposal of shares purchased pursuant to the Series B Plan. 9 The Company believes the foregoing is an accurate summary of the tax consequences of participation in the Series B Plan as of the date of this Prospectus, but participants should consult with their own tax advisors for advice applicable to their particular situation. 21. What are the responsibilities of the Company and the Agent under the Series B Plan? Neither the Company nor the Agent will be liable in administering the Series B Plan for any act done in good faith, or for any good-faith omission to act, including, without limitation, any claims of liability (i) arising out of failure to terminate a participant's account upon such participant's death or adjudication of incompetence prior to receipt of satisfactory written notice of such death or incompetence as described in Question 14, (ii) with respect to the prices at which shares are purchased or sold for a participant's account or the times when such purchases or sales are made, or (iii) with respect to any fluctuation in the market value prior to or after purchase or sale of shares. Government regulation or other circumstances may require the temporary curtailment or suspension of purchases under the Series B Plan. Neither the Company nor the Agent will have any liability in connection with any inability to purchase or sell shares of Series B Preferred Stock under the Series B Plan. 22. Does participation in the Series B Plan involve any risk? The risk to participants is the same as with any other investment in shares of Series B Preferred Stock of Capstead. A participant may lose an advantage otherwise available from being able to select more specifically the timing of investment in or sale of the shares. Participants must recognize that neither the Company nor the Agent can assure a profit or protect against a loss on the shares purchased under the Series B Plan. ALTHOUGH THE SERIES B PLAN CONTEMPLATES THE CONTINUATION OF MONTHLY DIVIDEND PAYMENTS, THE PAYMENT OF FUTURE DIVIDENDS WILL DEPEND UPON FUTURE EARNINGS, THE FINANCIAL CONDITION OF THE COMPANY AND OTHER FACTORS. 23. Where are notices and other communications to participants under the Series B Plan sent? Notices and other communications sent to participants under the Series B Plan will be addressed to the participant's last known address as reflected on the Agent's records. Therefore, the participant should notify the Agent promptly in writing of any change in address. 24. May the Agent resign and, if so, how is it to be replaced? The Agent, upon thirty (30) days prior written notice to Capstead, may resign as Agent hereunder. Likewise, Capstead, upon thirty (30) days prior written notice to the Agent, may remove the Agent from its duties under the Series B Plan. Capstead may appoint a successor agent, who shall commence to serve as Agent hereunder upon its agreement, in writing, for the benefit of participants, to be bound by and comply with the terms hereof. LEGAL MATTERS The validity of the Series B Preferred Stock offered hereby has been passed on for Capstead by Andrews & Kurth L.L.P., Dallas, Texas. Andrews & Kurth L.L.P. will rely as to all matters of Maryland law on Piper & Marbury L.L.P., Baltimore, Maryland. Attorneys at Andrews & Kurth L.L.P. beneficially own approximately 14,700 shares of Common Stock and 32,600 shares of Series B Preferred Stock of Capstead. 10 EXPERTS The consolidated financial statements of Capstead Mortgage Corporation incorporated by reference in Capstead Mortgage Corporation's Annual Report (Form 10-K) for the year ended December 31, 1995, have been audited by Ernst & Young LLP, independent auditors, as set forth in their report thereon incorporated by reference therein and incorporated herein by reference. Such consolidated financial statements are incorporated herein by reference in reliance upon such report given upon the authority of such firm as experts in accounting and auditing. 11 - - ------------------------------------------------------------------------------- - - ------------------------------------------------------------------------------- NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS IN CONNECTION WITH THIS OFFERING OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION AND REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE REGISTERED SECURITIES TO WHICH IT RELATES. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY SUCH SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL. ----------------- TABLE OF CONTENTS
PAGE ---- Available Information...................................................... 2 Additional Information..................................................... 2 Incorporation of Certain Information By Reference.......................... 2 The Company................................................................ 3 Use of Proceeds............................................................ 3 Description of the Series B Preferred Stock Dividend Reinvestment Plan..... 3 Legal Matters.............................................................. 10 Experts.................................................................... 11
- - ------------------------------------------------------------------------------- - - ------------------------------------------------------------------------------- - - ------------------------------------------------------------------------------- - - ------------------------------------------------------------------------------- 1,602,831 Shares ----------------- CAPSTEAD MORTGAGE CORPORATION SERIES B PREFERRED STOCK ----------------- PROSPECTUS ----------------- Dividend Reinvestment Plan MAY 3, 1996 - - ------------------------------------------------------------------------------- - - ------------------------------------------------------------------------------- PART II INFORMATION NOT REQUIRED IN THE PROSPECTUS Item 14. Other Expenses of Issuance and Distribution
SEC Registration Fee................................................... $ 6,789 Blue Sky Fees and Expenses............................................. 2,000 Legal Fees and Expenses................................................ 2,000 Accounting Fees and Expenses........................................... 1,500 Printing and Engraving Expenses........................................ 20,000 Miscellaneous.......................................................... 730 ------- Total........................................................ $33,019 =======
Item 15. Indemnification of Directors and Officers Capstead's Articles of Incorporation provide for indemnification of directors to the full extent permitted by Maryland law, indemnification of officers who are also directors to the extent Capstead shall indemnify its directors and indemnification of officers who are not directors to such further extent as shall be authorized by the Board of Directors and be consistent with law. Section 2-418 of the Maryland General Corporation Law generally permits a Maryland corporation to indemnify any director made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative, or investigative, by reason of service in his capacity as a director, unless it is established that (i) the act or omission of the director was material to the matter giving rise to the proceeding and (a) was committed in bad faith or (b) was the result of active and deliberate dishonesty; or (ii) the director actually received an improper personal benefit in money, property, or services; or (iii) 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. 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 have been adjudged to be liable to the corporation. In addition, a director may not be indemnified in respect of any proceeding charging improper personal benefit to the director, whether or not involving action in the director's official capacity, in which the director was adjudged to be liable on the basis that personal benefit was improperly received. The termination of any proceeding by conviction, or a plea of nolo contendere or its equivalent, or an entry of an order of probation prior to judgment, creates a rebuttable presumption that the director did not meet the requisite standard of conduct. Section 2-418 also provides that a court of appropriate jurisdiction may, upon application of a director and such notice as the court shall require, order indemnification if it determines that a director is entitled to reimbursement because the director has been successful on the merits or otherwise, in any such proceeding, in which case the director shall be entitled to recover the expenses of securing such reimbursement, or if the court determines that the director is fairly and reasonably entitled to indemnification in view of all the relevant circumstances, whether or not the director has met the applicable standards of conduct or has been adjudged liable in a proceeding charging improper personal benefit to the director. Indemnification with respect to any proceeding by or in the right of the corporation or in which liability shall have been adjudged on the basis that personal benefit was improperly received shall be limited to expenses. The indemnification and advancement of expenses provided or authorized by Section 2-418 may not be deemed II-1 exclusive of any other rights, by indemnification or otherwise, to which a director may be entitled under the charter, the bylaws, a resolution of stockholders or directors, an agreement or otherwise, both as to action in an official capacity and as to action in another capacity while holding such office. A corporation may indemnify and advance expenses to an officer, employee, or agent of the corporation to the same extent that it may indemnify directors under Section 2-418 and, in addition, may indemnify and advance expenses to an officer, employee, or agent who is not a director to such further extent, consistent with law, as may be provided by its charter, bylaws, general or specific action of its board of directors or contract. Section 2-418 also provides that a corporation may purchase and maintain insurance against liabilities for which indemnification is not expressly provided by the statute. Capstead provides insurance from commercial carriers against certain liabilities incurred by the directors and officers of the Company. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of Capstead pursuant to the foregoing provisions, Capstead has been informed that in the opinion of the Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. Item 16. Exhibits
**4.1 -- Form of Series B Preferred Stock Certificate ***4.2 -- Articles Supplementary creating the Series B Preferred Stock *4.3 -- Articles Supplementary creating additional shares of Series B Preferred Stock *5.1 -- Opinion of Andrews & Kurth L.L.P., counsel to the Registrant, as to the legality of the Series B Preferred Stock being offered *5.2 -- Opinion of Piper & Marbury L.L.P. as to the legality of the Series B Preferred Stock being offered *23.1 -- Consent of Ernst & Young LLP *23.2 -- Consent of Andrews & Kurth L.L.P. (incorporated in Exhibit 5.1) *23.3 -- Consent of Piper & Marbury L.L.P. (incorporated in Exhibit 5.2) #24.1 -- Power of Attorney ***99.1 -- Enrollment Authorization Card (previously Exhibit 28.1)
__________ * Filed herewith. ** Previously filed with the Commission on October 27, 1992 as an Exhibit to the Registrant's Registration Statement on Form S-4 (File No. 33-53790). ***Previously filed with the Commission on January 19, 1993 as an Exhibit to the Registrant's Registration Statement on Form S-3 (File No. 33-57164). # Reference is made to the Power of Attorney contained on page II-4 of this Registration Statement. 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-2 (ii) To reflect in the prospectus any facts or events arising after the effective date of this 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. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high and of the estimated maximum offering rage may be reflected int he form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the change in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement; (iii) To include any material information with respect to the plan of distribution not previously disclosed in this Registration Statement or any material change to such information in this Registration Statement; Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) above do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed with or furnished to the Commission by the Registrant pursuant to Section 13 or Section 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 any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial 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, 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 this Registration Statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. II-3 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Dallas, State of Texas, on the 3rd day of May, 1996. CAPSTEAD MORTGAGE CORPORATION By: /s/ Andrew F. Jacobs ------------------------------------------- Andrew F. Jacobs Senior Vice President -- Control and Treasurer POWER OF ATTORNEY Each person whose signature appears below constitutes and appoints Ronn K. Lytle, Andrew F. Jacobs and Julie A. Moore, and each of them, his true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him in his name, place and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments) to this Registration Statement, and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully as to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or their or his substitute or substitutes, may lawfully do or cause to be done by virtue thereof. Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.
Signature Title Date /s/ Ronn K. Lytle Chairman, Chief Executive Officer, May 3, 1996 - - ----------------------- President and Director (Principal Ronn K. Lytle Executive Officer) /s/ Andrew F. Jacobs Senior Vice President -- Control and May 3, 1996 - - ----------------------- Treasurer (Principal Financial and Andrew F. Jacobs Accounting Officer) /s/ Bevis Longstreth Director May 3, 1996 - - ----------------------- Bevis Longstreth /s/ Paul M. Low Director May 3, 1996 - - ----------------------- Paul M. Low /s/ Harriet E. Miers Director May 3, 1996 - - ----------------------- Harriet E. Miers /s/ William R. Smith Director May 3, 1996 - - ----------------------- William R. Smith /s/ John C. Tolleson Director May 3, 1996 - - ----------------------- John C. Tolleson
II-4 INDEX TO EXHIBITS
Sequentially Numbered Exhibits Description Page - - -------- ----------- ----------- **4.1 -- Form of Series B Preferred Stock Certificate ***4.2 -- Articles Supplementary creating the Series B Preferred Stock *4.3 -- Articles Supplementary creating additional shares of Series B Preferred Stock *5.1 -- Opinion of Andrews & Kurth L.L.P., counsel to the Registrant, as to the legality of the Series B Preferred Stock being offered *5.2 -- Opinion of Piper & Marbury L.L.P. as to the legality of the Series B Preferred Stock being offered *23.1 -- Consent of Ernst & Young LLP *23.2 -- Consent of Andrews & Kurth L.L.P. (incorporated in Exhibit 5.1) *23.3 -- Consent of Piper & Marbury L.L.P. (incorporated in Exhibit 5.2) #24.1 -- Power of Attorney ***99.1 -- Enrollment Authorization Card (previously Exhibit 28.1)
- - ---------- * Filed herewith. ** Previously filed with the Commission on October 27, 1992 as an Exhibit to the Registrant's Registration Statement on Form S-4 (File No. 33-53790). *** Previously filed with the Commission on January 19, 1993 as an Exhibit to the Registrant's Registration Statement on Form S-3 (File No. 33-57164). # Reference is made to the Power of Attorney contained on page II-4 of this Registration Statement. EX-4.3 2 ARTICLES SUPPLEMENTARY EXHIBIT 4.3 ARTICLES SUPPLEMENTARY $1.26 CUMULATIVE CONVERTIBLE PREFERRED STOCK, SERIES B OF CAPSTEAD MORTGAGE CORPORATION CAPSTEAD MORTGAGE CORPORATION, a Maryland corporation, having its principal office in Baltimore City, Maryland (hereinafter called the "Corporation"), hereby certifies to the State Department of Assessments and Taxation of Maryland that: Pursuant to authority conferred upon the Board of Directors by the Charter, as amended, of the Corporation, the Board of Directors on April 19, 1996 adopted a resolution, authorizing the classification and issuance of an additional 1,500,000 shares of $1.26 Cumulative Convertible Preferred Stock, Series B (the "Series B Preferred Stock") and that the powers, designations, preferences and relative, participating, optional or other special rights, and the qualifications, limitations and restrictions thereof, of the shares of such series are the same as set forth in the Articles Supplementary creating the Series B Preferred Stock (which Articles Supplementary were filed by the Corporation with the State Department of Assessments and Taxation of Maryland on December 2, 1992 and are hereby incorporated herein by reference) (the "Original Articles Supplementary"). 1. Designation and Number of Shares. One million five hundred thousand (1,500,000) shares of Preferred Stock of the Corporation, par value $.10 per share, are hereby designated as the "$1.26 Cumulative Convertible Preferred Stock, Series B". 2. Dividends. As set forth in the Original Articles Supplementary. 3. Liquidation. As set forth in the Original Articles Supplementary. 4. Voting Rights. As set forth in the Original Articles Supplementary. 5. Limitations on Certain Actions. As set forth in the Original Articles Supplementary. 6. Redemption. As set forth in the Original Articles Supplementary. 7. Conversion. As set forth in the Original Articles Supplementary. 8. Parity With Respect to Dividends and Distribution Upon Liquidation. As set forth in the Original Articles Supplementary. IN WITNESS WHEREOF, the undersigned has caused these additional Articles Supplementary to be executed this second day of May, 1996. CAPSTEAD MORTGAGE CORPORATION By: /s/ Andrew F. Jacobs ----------------------------------------- Andrew F. Jacobs, Vice President - Control and Treasurer ATTEST: /s/ David Barbour - - ------------------------------------- David Barbour, Assistant Secretary THE UNDERSIGNED, Vice President-Control and Treasurer of THE CORPORATION, who executed on behalf of the Corporation Articles Supplementary of which this Certificate is made a part, hereby acknowledges in the name and on behalf of said Corporation the foregoing Articles Supplementary to be the corporate act of said Corporation and hereby certifies that the matters and facts set forth herein with respect to the authorization and approval therefor are true in all material respects under the penalties of perjury. /s/ Andrew F. Jacobs --------------------------------------------- Andrew F. Jacobs, Vice President - Control and Treasurer -2- EX-5.1 3 OPINION OF ANDREWS & KURTH EXHIBIT 5.1 [ANDREWS & KURTH LETTERHEAD APPEARS HERE] May 3, 1996 Capstead Mortgage Corporation CityPlace Center East 2711 N. Haskell Avenue Suite 900 Dallas, Texas 75204 Ladies and Gentlemen: We have acted as counsel for Capstead Mortgage Corporation, a Maryland corporation (the "Company"), in connection with a Registration Statement on Form S-3 to be filed by the Company under the Securities Act of 1933, as amended (the "Registration Statement"), and which registers certain shares of the Company's $1.26 Cumulative Convertible Preferred Stock, Series B, par value $0.10 per share (the "Series B Preferred Stock"), to be issued pursuant to the Company's Series B Preferred Stock Dividend Reinvestment Plan (the "Plan") and an indeterminate number of shares of the Company's Common Stock, $0.01 par value per share (the "Common Stock") into which the Series B Preferred Stock is convertible. In that capacity, we have examined the charter and by-laws of the Company, the Registration Statement, the corporate action taken by the Company that creates the Plan and provides for the issuance of up to an additional 1,500,000 shares of the Series B Preferred Stock pursuant thereto and the Common Stock into which such shares are convertible, and such other materials and matters as we have deemed necessary to the issuance of this opinion. Based upon such examination and in reliance thereon, we are of the opinion that up to 1,500,000 shares of the Company's Series B Preferred Stock and the Common Stock into which such shares are initially convertible have been duly and validly authorized and, upon issuance or delivery thereof as contemplated in the Registration Statement, will be legally issued, fully paid and non-assessable. To the extent that the opinion set forth herein is governed by the laws of the State of Maryland, we have relied solely on, and our opinion is subject to the limitations and assumptions set forth in, the opinion of Piper & Marbury L.L.P., dated of even date herewith and addressed to the Company and upon which we are authorized to rely. We have made no independent examination of the laws of the State of Maryland. Capstead Mortgage Corporation May 3, 1996 Page 2 This opinion is solely for the benefit of the addressee hereof, and, without our prior written consent, may not be quoted in whole or in part or otherwise referred to in any legal opinion, document, or other report, and may not be furnished to any person or entity. We consent to the filing of this Opinion as an exhibit to the Registration Statement and to the reference to this firm in the Registration Statement and Prospectus which is a part thereof. This opinion is delivered as of the date hereof and we disclaim any responsibility to update this opinion at any time following the date hereof. Very truly yours, ANDREWS & KURTH L.L.P. By: /s/ David Barbour ----------------------------- David Barbour, Partner EX-5.2 4 OPINION OF PIPER & MARBURY EXHIBIT 5.2 [LETTERHEAD OF PIPER & MARBURY APPEARS HERE] May 3, 1996 Capstead Mortgage Corporation 2711 North Haskell Avenue Suite 900 Dallas, Texas 75204 Ladies and Gentlemen: We have acted as special Maryland counsel for Capstead Mortgage Corporation, a Maryland corporation (the "Company"), in connection with a Registration Statement on Form S-3 which was filed by the Company under the Securities Act of 1933, as amended (the "Registration Statement"), and which registers certain shares of the Company's $1.26 Cumulative Convertible Preferred Stock, Series B, par value $0.10 per share (the "Series B Preferred Stock"), to be issued pursuant to the Company's Series B Preferred Stock Dividend Reinvestment Plan (the "Plan") and an indeterminate number of shares of the Company's Common Stock, $0.01 par value per share (the "Common Stock") into which the Series B Preferred Stock is convertible. In that capacity, we have reviewed the charter and by-laws of the Company, the Registration Statement, the corporate action taken by the Company that creates the Plan and provides for issuance of up to an additional 1,500,000 shares of the Series B Preferred Stock pursuant thereto and the Common Stock into which such shares are convertible, and such other materials and matters as we have deemed necessary to the issuance of this opinion. Based upon the foregoing, as of the date hereof, we are of the opinion that up to 1,500,000 shares of the Company's Series B Preferred Stock and the Common Stock into which such shares are initially convertible have been duly and validly authorized and, upon issuance or delivery thereof as contemplated in the Registration Statement, will be, under the general corporate law of the State of Maryland, legally issued, fully paid and non-assessable. PIPER & MARBURY L.L.P. Capstead Mortgage Corporation May 3, 1996 Page 2 This opinion is solely for the benefit of the addressee hereof, and, without our prior written consent, may not be quoted in whole or in part or otherwise referred to in any legal opinion, document, or other report, and may not be furnished to any person or entity except that Andrews & Kurth L.L.P. is authorized to rely on this opinion in rendering its opinion to be filed as an exhibit to the Registration Statement. We consent to the filing of this opinion as an exhibit to the Registration Statement and to the reference to our firm and to our opinion in the Registration Statement and Prospectus which is part thereof. This opinion is delivered as of the date hereof and we disclaim any responsibility to update this opinion at any time following the date hereof. Very truly yours, /s/ PIPER & MARBURY L.L.P. EX-23.1 5 CONSENT OF ERNST & YOUNG EXHIBIT 23.1 ------------ CONSENT OF INDEPENDENT AUDITORS We consent to the reference to our firm under the caption "Experts" in the Registration Statement (Form S-3 to be filed on or about April 29, 1996) and related Prospectus of Capstead Mortgage Corporation for the registration of a preferred stock dividend reinvestment plan and to the incorporation by reference therein of our report dated January 29, 1996, with respect to the consolidated financial statements of Capstead Mortgage Corporation incorporated by reference in its Annual Report (Form 10-K) for the year ended December 31, 1995 and the related financial statement schedules included therein, filed with the Securities and Exchange Commission. Ernst & Young LLP Dallas, Texas April 29, 1996 -----END PRIVACY-ENHANCED MESSAGE-----