SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material pursuant to Rule 14a-11(c) or Rule 14a-12
TIS MORTGAGE INVESTMENT COMPANY
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(Exact Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-
6(i)(2) or Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules
14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
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pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
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[ ] Fee paid previously with preliminary materials.
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[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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<PAGE>
TIS MORTGAGE INVESTMENT COMPANY
655 Montgomery Street, Suite 800
San Francisco, California 94111
(415) 393-8000
__________________________________________________
Notice of Annual Meeting of Stockholders
To Be Held on May 13, 1996
__________________________________________________
To Our Stockholders:
The 1996 Annual Meeting of Stockholders of TIS Mortgage Investment Company
will be held at The Holiday Inn, 750 Kearny Street, San Francisco,
California on Monday, May 13, 1996 at 4:00 p.m., Pacific time, to consider
and act upon the following matters:
1. To elect three (3) Class II directors to serve for three years.
2. To vote on a proposal to ratify the appointment of Arthur
Andersen LLP as the independent accountants of the Company for
the fiscal year ending December 31, 1996.
3. To transact such other business as may properly come before the
Meeting or any adjournments thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
Only stockholders of record at the close of business on April 3, 1996, the
record date, will be entitled to vote at the Meeting.
The Board of Directors recently amended the Company's By-Laws to provide a
new procedure to be followed by stockholders of the Company to nominate
directors for election or to propose business to be considered at annual
meetings of stockholders. A copy of the By-Law amendment was filed with
the Securities and Exchange Commission on April 5, 1996 as an exhibit to a
Form 8-K. The new procedures require a stockholder to deliver timely
written notice to the Secretary of the Company setting forth certain
detailed information regarding such stockholder and the person such
stockholder proposes to nominate for election as a director or the business
such stockholder is proposing for consideration at an annual meeting. To
be timely, such written notice to the Secretary must be delivered to or
mailed and received at the principal executive offices of the Company not
less than 60 days nor more than 90 days prior to the meeting, provided that
in the event less than 70 days' notice or public disclosure of the date of
the meeting is given or made to stockholders, notice from the stockholder
will be timely if received by the Company not later than the close of
business on the 10th day after such notice of the meeting date was mailed
to stockholders or such public disclosure was made, whichever first occurs.
Accordingly, any stockholder desiring to nominate directors or propose
business to be considered at the Annual Meeting must deliver written
notice, in a form complying with the By-Law requirements, that is received
by the Company no later than the close of business on April 19, 1996.
All stockholders are cordially invited to attend the Meeting in person. To
assure your representation at the Meeting, however, you are urged to mark,
sign, date and return the enclosed proxy card as promptly as possible in
the postage-prepaid envelope enclosed for that purpose. Any stockholder
attending the Meeting may vote in person even if he or she has previously
returned a proxy.
By Order of the Board of Directors
John E. Castello, Executive Vice President and
Chief Financial Officer
San Francisco, California
April 5, 1996
The Proxy Statement for the Annual Meeting follows this page. The Annual
Report of the Company to its stockholders for the calendar year ended
December 31, 1995 accompanies this Proxy Statement.
<PAGE>
TIS MORTGAGE INVESTMENT COMPANY
655 Montgomery Street, Suite 800
San Francisco, California 94111
___________________________________
PROXY STATEMENT
___________________________________
General
This Proxy Statement, which is first being sent to stockholders on or
about April 8, 1996, is furnished in connection with the solicitation by
the Board of Directors of TIS Mortgage Investment Company, a Maryland
corporation (the "Company"), of proxies for use at the Annual Meeting of
Stockholders of the Company (the "Meeting") to be held at The Holiday Inn
in San Francisco, California on Monday, May 13, 1996, at 4:00 p.m., Pacific
time, and any adjournments thereof.
Record Date
Stockholders of record at the close of business on April 3, 1996 (the
"Record Date") are entitled to vote at the Meeting. On the Record Date,
there were issued and outstanding 8,105,880 shares of the Company's Common
Stock, $.001 par value (the "Common Stock").
Revocability of Proxies
A proxy may be revoked in writing at any time before it is exercised
by delivery to the Secretary of the Company at the Company's principal
executive offices, no later than the start of the Meeting, an instrument of
revocation or a duly executed proxy bearing a later date than the revoked
proxy. A proxy may also be revoked by attending the Meeting and electing
to vote in person, but mere attendance at the Meeting will not revoke a
proxy.
Solicitation
The expense of printing and mailing proxy materials will be borne by
the Company. In addition to the solicitation of proxies by mail,
solicitation may be made by certain directors, officers and other employees
of the Company by personal interview, telephone or telefax. No additional
compensation will be paid to such persons for such solicitation. Copies of
proxy materials will be furnished to brokerage houses, fiduciaries and
custodians to forward to beneficial owners of Common Stock held in their
names. The Company will reimburse such persons for their reasonable
expenses in forwarding proxy materials to such beneficial owners. The
Company has retained McKenzie Partners, at an estimated cost of $7,500,
plus reimbursement of expenses, to assist in the solicitation of proxies
from brokers, nominees, institutions and individuals.
Voting
The presence, in person or by proxy, of the holders of a majority of
the total shares of Common Stock outstanding constitutes a quorum for the
transaction of business at the Meeting. If a proxy is properly executed
and returned, the shares represented thereby will be voted at the Meeting
in accordance with the instructions thereon. However, if no instructions
are specified, such shares will be voted FOR each nominee for director, and
FOR each other proposal described in this Proxy Statement. If a proxy is
accompanied by instructions to withhold authority, or is marked with an
abstention, the shares represented thereby will be considered to be present
at the Meeting for purposes of determining the existence of a quorum for
the transaction of business.
Each stockholder voting at the Meeting in person or by proxy may cast
one vote per share of Common Stock held for each nominee for director. In
the election of directors, the three nominees receiving the highest number
of votes cast at the Meeting will be elected. The withholding of voting
authority with respect to the election of directors will have no legal
effect on the election of directors. Cumulative voting in the election of
directors is not permitted. On all other matters, one vote may be cast for
each share of Common Stock held. Approval of all proposals other than the
election of directors requires approval by a majority of votes cast on the
proposal. Abstentions do not constitute a vote "for" or "against" a matter
and will be disregarded in determining the "votes cast" on an issue and
will have no legal effect. Broker "non-votes" (i.e., proxies from brokers
or nominees indicating that such persons have not received instructions
from the beneficial owner or other persons entitled to vote shares on a
particular matter with respect to which the brokers or nominees do not have
discretionary power) will be treated the same as abstentions.
The Board of Directors recently amended the Company's By-Laws to
provide a new procedure to be followed by stockholders of the Company to
nominate directors for election or to propose business to be considered at
annual meetings of stockholders. A copy of the By-Law amendment was filed
with the Securities and Exchange Commission on April 5, 1996 as an exhibit
to a Form 8-K. The new procedures require a stockholder to deliver timely
written notice to the Secretary of the Company setting forth certain
detailed information regarding such stockholder and the person such
stockholder proposes to nominate for election as a director or the business
such stockholder is proposing for consideration at an annual meeting. To
be timely, such written notice to the Secretary must be delivered to or
mailed and received at the principal executive offices of the Company not
less than 60 days nor more than 90 days prior to the meeting, provided that
in the event less than 70 days' notice or public disclosure of the date of
the meeting is given or made to stockholders, notice from the stockholder
will be timely if received by the Company not later than the close of
business on the 10th day after such notice of the meeting date was mailed
to stockholders or such public disclosure was made, whichever first occurs.
Accordingly, any stockholder desiring to nominate directors or propose
business to be considered at the Meeting must deliver written notice, in a
form complying with the By-Law requirements, that is received by the
Company no later than the close of business on April 19, 1996.
Beneficial Ownership of Third Parties
The following table sets forth, as of the date of this Proxy
Statement, certain information with respect to the beneficial ownership of
Common Stock by all persons known by the Company to beneficially own more
than five percent of the Common Stock.
<TABLE>
Common Shares Percent of
Beneficial Owner Beneficially Owned Common Stock
- - ---------------- ------------------ ------------
<S> <C> <C>
Thomas B. Akin 524,700 (1) 6.47%
Karen H. Akin
Genevieve Hochster Trust
Blair S. Akin
Kyle P. Akin
10 Via Elverano
Tiburon, CA 94920
__________
<FN>
(1) Based on the most recent available filing with the Securities and
Exchange Commission on Schedule 13D by the reporting group, the individual
members of the group own the following shares: Thomas Akin - 443,700;
Karen H. Akin (wife of Thomas Akin) - 37,000; Genevieve Hochster Trust
(Thomas Akin, Trustee) - 20,000; Kyle P. Akin (son of Thomas Akin) -
13,000; and Blair S. Akin (daughter of Thomas Akin) - 11,000.
</TABLE>
Annual Report
The Company's 1995 Annual Report to Stockholders, which was mailed to
stockholders with this Proxy Statement, contains financial and other
information about the activities of the Company but is not incorporated
into this Proxy Statement and is not to be considered a part of these proxy
solicitation materials.
I. ELECTION OF DIRECTORS
The Company's Articles of Incorporation and By-Laws provide that the
Board of Directors shall be divided into three classes as nearly equal in
number as possible. There are currently eight directors. Class II which
comes up for election at the Meeting consists of three directors. The
Board of Directors has nominated, and recommends the election of, the
following three persons to serve as directors of the Company in Class II
until the 1999 Annual Meeting and until their successors are elected and
have qualified:
Patricia M. Howe
Robert W. Ledoux
Melvin W. Petersen
Each of the nominees is presently serving as a director of the
Company. Although the Board of Directors has no reason to believe that any
of them will be unable to serve, if such should occur, proxies will be
voted (unless marked to the contrary) for such alternative person or
persons as shall be recommended by the Board of Directors, unless the Board
of Directors decides to reduce the number of directors.
The Company has an agreement (the "Management Agreement") with TIS
Financial Services, Inc. (the "Manager") which provides that the Manager
shall be responsible for the day-to-day operations of the Company. The
Manager is a Delaware corporation, 75% of the common stock of which is held
by Corporate Capital Investment Advisors, a California corporation. The By-
Laws of the Company provide that a majority of the members of the Board of
Directors, and any committee thereof, must be "Unaffiliated Directors",
i.e. persons who (i) are not "Affiliates" of the Manager, as that term is
defined in the By-Laws or Affiliates of persons who are Affiliates of the
Manager, and (ii) are not employed by, or receiving any compensation
(except for serving as a director) from, the Company.
Beneficial Ownership of Nominees, Directors and Executive Officers
The following table sets forth, as of April 3, 1996, certain
information with respect to each nominee for election as a director, each
director whose term of office will continue after the Annual Meeting, each
executive officer, and all nominees, continuing directors and executive
officers of the Company as a group:
<TABLE>
Present Common Shares
Director Term Beneficially Percent of
Name Since Expires Owned * Common Stock
- - ---- ----- ------- ------------- ------------
<S> <C> <C> <C> <C>
John D. Boyce 1988 1998 7,000 (3) ***
Robert H. Edelstein 1988 1997 2,000 (4) ***
Patricia M. Howe(1) 1988 1996 150,000 (5) 1.83%
Douglas B. Fletcher(2) 1988 1998 6,100 (6) ***
Robert W. Ledoux 1988 1996 4,550 (7) ***
Lorraine O. Legg(1) 1988 1997 186,000 (8) 2.25%
Melvin W. Petersen 1996 1996 13,800 (9) ***
Will M. Storey 1988 1997 26,000 (10) ***
John E. Castello(1) ** ** 64,800 (11) ***
All directors and 460,250 (12) 5.47%
executive officers as a
group (9 persons)
<FN>
* Unless otherwise indicated, the beneficial owner has sole voting and
investment power.
** Not a director
*** Less than 1%
(1) Affiliated with the Manager.
(2) Mr. Fletcher is a partner of a partnership that indirectly owns
stock in the Manager.
(3) Includes 1,000 shares issuable pursuant to outstanding options
exercisable within 60 days of the date of this Proxy Statement.
(4) Includes 1,000 shares issuable pursuant to outstanding options
exercisable within 60 days of the date of this Proxy Statement.
(5) Includes 100,000 shares issuable pursuant to outstanding options
exercisable within 60 days of the date of this Proxy Statement.
(6) Includes 1,000 shares issuable pursuant to outstanding options
exercisable within 60 days of the date of this Proxy Statement.
(7) Includes 500 shares held in an individual retirement account for
the benefit of Mr. Ledoux's wife as to which Mr. Ledoux shares
voting and investment power, and includes 1,000 shares issuable
pursuant to outstanding options exercisable within 60 days of the
date of this Proxy Statement.
(8) Includes 100 shares as to which Ms. Legg shares voting and
investment power, and 150,000 shares issuable pursuant to
outstanding options exercisable within 60 days of the date of this
Proxy Statement.
(9) Includes 5,000 shares held in a revocable living trust of which Mr.
Petersen and his wife are co-trustees with shared voting and
investment power.
(10)Includes 1,000 shares issuable pursuant to outstanding options
exercisable within 60 days of the date of this Proxy Statement.
(11)Includes 2,300 shares held in an individual retirement account for
the benefit of Mr. Castello's wife, as to which Mr. Castello shares
voting and investment power, and includes 50,000 shares issuable
pursuant to outstanding options exercisable within 60 days of the
date of this Proxy Statement.
(12)Does not include shares beneficially owned by Harvie M. Merrill,
who retired as a director of the Company on March 6, 1996. Mr.
Merrill beneficially owns 4,000 shares of Common Stock, including
2,000 shares held jointly by Mr. Merrill's wife and mother-in-law
as to which Mr. Merrill shares voting and investment power, and
1,000 shares issuable pursuant to outstanding options exercisable
within 60 days of the date of this Proxy Statement.
</TABLE>
Biographical Information
Biographical information with respect to the three nominees for
election, as well as for each continuing director and each executive
officer of the Company, furnished in part by each such person, appears on
the following pages. Except as otherwise noted, the named individuals have
had the occupations indicated (other than directorships) for at least 5
years. Officers of the Company are elected annually to serve for one-year
terms and until their successors are elected and have qualified.
John D. Boyce, 69, Retired. From 1975 to September 1993, Vice
President Financial Affairs, University of San Diego, in which capacity he
was responsible for investments, controllership, administration,
facilities, construction and communications; from 1970 to 1979, owner and
operator of North County Cable TV, Incorporated, serving San Diego County;
from 1966 to 1975, Partner, Lomas Santa Fe Development Company and Lomas
Santa Fe Realty (over one thousand single family homes and condominiums,
shopping centers, and country club and office buildings); Founder of Rancho
Santa Fe Thrift & Loan Association, San Diego, California.
Robert H. Edelstein, 52, Real Estate Development Professor and Co-
Chairman, Center for Real Estate, Haas School of Business, University of
California at Berkeley; from 1982 to 1985, Professor of Finance and Co-
Director, Real Estate Center, The Wharton School, The University of
Pennsylvania.
Patricia M. Howe, 67, Chairman of the Company (since 1988); Chairman
and Chief Executive Officer, Capitalcorp, Inc.; Chairman, Capitalcorp Asset
Management; Chairman, Pacific Securities, Inc.; Chairman, Chief Financial
Officer and Managing Director, Corporate Capital Investment, Advisors;
Chairman, TIS Asset Management (since 1991); Chairman, TIS Financial
Services, Inc. (formerly Thrift Investment Services) (financial products);
Director, TIS Mortgage Acceptance Corporation (subsidiary of the Company).
Douglas B. Fletcher, 70, Chairman and Chief Executive Officer,
Fletcher Capital Advisors Incorporated (investment advisor); Partner,
Newport Partners (privately-owned venture capital firm); Vice Chairman and
Director, The Pacific Horizon Group of mutual funds managed by Bank of
America; from 1962 to 1982, Chairman and Chief Executive Officer of Angeles
Corporation (AMEX), with over $2 billion of securities and approximately
$400 million of real estate assets under management; former Allied Member,
New York Stock Exchange; Chartered Financial Analyst.
Robert W. Ledoux, 54, Associate, Bryan & Edwards (private venture
capital) since 1984; for the prior 11 years, Vice President, BA Investment
Management Co. (wholly-owned subsidiary of Bank of America).
Lorraine O. Legg, 56, President and Chief Executive Officer of the
Company (since 1988); President and Director, Capitalcorp, Inc.; President
and Director, Pacific Securities, Inc.; President, Chief Executive Officer
and Managing Director, Corporate Capital Investment Advisors; President,
Chief Executive Officer and Director, TIS Asset Management (since 1991);
President, Chief Executive Officer and Director, TIS Financial Services,
Inc. (financial products); Director (since 1993) and President and Chief
Executive Officer (since February 1996), Meridian Point Realty Trust '83;
Director (since 1993) and President and Chief Executive Officer (since
December 1995), Meridian Point Realty Trust #VIII Co.; Director, Downtown
Association of San Francisco; Director, Children's Garden of California;
Director, Planned Giving Foundation; Director, Thermaltech Development,
Inc.; Director, CFI ProServices, Inc.
Melvin W. Petersen, 60, Retired. Director (1992-1994), Executive Vice
President (1991-1994) and Investment Manager (1986-1990) at McMorgan & Co.
(registered investment advisor); Director, McM Fund, 1994-1995; from 1983
to 1986, Vice President, Seafirst Bank; from 1972-1983, Chief of
Investments for California Public Employees' Retirement System and
California State Teachers' Retirement System.
Will M. Storey, 64, Retired. Former Executive Vice President, Chief
Financial Officer and Director, American President Companies, Ltd. (holding
company) from 1991 to 1995; Director, Manville Corporation (since 1989);
Director, Albertsons Inc. (since 1992)(supermarkets); Director, Riverwood
International Corp. (since 1992); from 1982 to 1988, Vice Chairman,
Executive Vice President and Chief Financial Officer of Federated
Department Stores Inc. in which capacity he was responsible for research,
finance and planning of all real estate activities; prior to 1982,
Executive Vice President and Chief Financial Officer, Boise Cascade
Corporation.
John E. Castello, 51, Executive Vice President and Chief Financial
Officer of the Company (since 1988) and its Treasurer (since June, 1993);
Senior Vice President, TIS Financial Services, Inc. (formerly Thrift
Investment Services) (financial products); Director, TIS Mortgage
Acceptance Corporation (subsidiary of the Company); Director and Senior
Vice President, TIS Asset Management (since 1991); Senior Vice President
and Chief Financial Officer of Meridian Point Realty Trust '83 (since
February 1996); Senior Vice President and Chief Financial Officer of
Meridian Point Realty Trust #VIII Co. (since December 1995); Assistant
Secretary, INVG Mortgage Securities Corp. (since 1992).
Information Concerning Meetings and Certain Committees
The Board of Directors held eight meetings during 1995. The Company
has a standing Audit Committee and a standing Compensation Committee.
Messrs. Boyce, Edelstein, Ledoux, Petersen and Storey are members of the
Audit Committee. The Audit Committee makes recommendations to the Board of
Directors concerning the engagement, retention and discharge of independent
auditors, reviews with the Company's independent auditors the plans and
results of the auditing engagement and the adequacy of the Company's system
of internal accounting controls, and directs any investigations into
matters within the scope of the foregoing duties. The Audit Committee met
one time during 1995.
Messrs. Boyce, Edelstein, Petersen and Storey are members of the
Compensation Committee. The Compensation Committee adopts and administers
compensation plans for executive officers of the Company and others,
including the Company's 1995 Stock Option Plan. The Compensation Committee
held two meetings in 1995. The Company does not have a standing nominating
committee or any other such committee which performs similar functions.
During 1995, no director attended fewer than 75% of the aggregate of
all meetings of the Board of Directors and the committees, if any, upon
which such director served and which were held during the period of time
that such person served on the Board or such committee.
Compensation of Executive Officers and Directors
Executive Compensation. The Company does not pay cash compensation to
its executive officers. The Company has a Management Agreement with the
Manager, pursuant to which the Company pays certain fees and expenses to
the Manager. Ms. Legg and Mr. Castello are employees of the Manager and
Ms. Legg is a stockholder of the parent of the Manager. See "IV.
MANAGEMENT AGREEMENT" below.
The following sets forth certain information regarding option
compensation to Ms. Legg and Mr. Castello (the "Named Executives") in 1995,
1994 and 1993:
<TABLE>
Summary Compensation Table
Long-Term Compensation
----------------------
# Securities
Name and Principal Position Fiscal Year Underlying Options
- - --------------------------- ----------- -------------------
<S> <C> <C>
Lorraine O. Legg 1995 150,000
President and Chief 1994 --
Executive Officer 1993 --
John E. Castello 1995 50,000
Executive Vice President 1994 --
and Chief Executive Officer 1993 --
</TABLE>
The following table sets forth information with respect to options
granted to the Named Executives during 1995:
<TABLE>
Option Grants in 1995
Individual Grants
-----------------------------------------------------
% of total
options
granted to
employees of
the Manager
Number of or the Exercise
options Company in price per Expiration
Name granted fiscal year share date
- - ---- ------------ ------------ ---------- ----------
<S> <C> <C> <C> <C>
Lorraine O. Legg 150,000 45.5% $2.25 9/12/05
John E. Castello 50,000 15.2% $2.25 9/12/05
____________
<FN>
(1) These options were exercisable upon the date of grant. The
exercise price of the options shall be reduced by up to 50% by the
amount of cash dividends per share of Common Stock declared by the
Company between the grant date and the exercise price.
</TABLE>
No stock options were exercised by any of the Named Executive Officers
during 1995. The following table sets forth information regarding the
number and value of unexercised stock options held by the Named Executives
at December 31, 1995.
<TABLE>
Aggregated Fiscal Year-End Option Values
Value of unexercised
in-the-money options
Name Exercisable Unexercisable at Year-End(1)
- - ---- ----------- ------------- -------------------
<S> <C> <C> <C>
Lorraine O. Legg 150,000 -- --
John E. Castello 50,000 -- --
____________
<FN>
(1) The exercise price of shares represented by these options was
higher than the closing price of the Common Stock on December 31,
1995 with the result that the options were out-of-the-money on
that date.
</TABLE>
Directors' Compensation. The Company pays an annual director's fee of
$12,000 to each director who is not an Affiliate of the Manager and a fee
of $300 for each meeting of the Board of Directors attended by each such
director (except meetings by conference telephone) and of each committee of
the Board of Directors. The Company reimburses directors for costs and
expenses incurred in attending such meetings.
Under the Company's 1995 Stock Option Plan, beginning with the
Company's 1995 Annual Meeting of Stockholders, each Unaffiliated Director
in office at the close of each annual meeting is granted an option to
purchase 1,000 shares of Common Stock on the tenth business day immediately
following each such annual meeting of stockholders. Such options are
exercisable on the date of grant, and remain exercisable for ten years from
the grant date, unless the Unaffiliated Director's services to the Company
are terminated at an earlier date. The exercise price is equal to 110% of
the fair market value of the optioned shares on the date the option is
granted, provided that the exercise price will be reduced by the amount of
dividends declared after the date the optionee is eligible to purchase such
shares. In no event, however, will the exercise price be less than 50% of
the fair market value of the optioned share on the date the option is
granted. Among the current directors, Messrs. Boyce, Edelstein, Fletcher,
Ledoux and Storey each received 1,000 options on September 13, 1995.
II. RATIFICATION OF APPOINTMENT OF ACCOUNTANTS
The Board of Directors has appointed Arthur Andersen LLP, independent
public accountants, to audit the Company's consolidated financial
statements for the fiscal year ending December 31, 1996. The stockholders
will be asked to ratify this appointment, and the Board of Directors
recommends that stockholders vote for ratification. Arthur Andersen LLP
has served as the Company's independent public accountants since the first
fiscal period ended December 31, 1988. Representatives of Arthur Andersen
LLP are expected to be present at the Meeting and will have the opportunity
to respond to appropriate questions and to make a statement if they desire.
III. OTHER MATTERS
The Company knows of no other matters to be submitted to the Meeting.
If any matters properly come before the Meeting, it is the intention of the
persons named as proxies to vote the shares they represent as the Board of
Directors may recommend. Discretionary authority for them to do so is
contained in the proxy cards.
IV. MANAGEMENT AGREEMENT
The Manager advises the Company on various aspects of its business and
manages its operations in accordance with criteria established by the
Company's Board of Directors. The executive officers of the Manager, all
of whom serve as directors and/or officers of the Company, are as follows:
Patricia M. Howe, Chairman of the Board; Lorraine O. Legg, President and
Chief Executive Officer; and John E. Castello, Senior Vice President. Ms.
Howe and Ms. Legg each own 38.125% of the outstanding stock of the parent
of the Manager.
In June 1995 the Board of Directors of the Company and the Manager
entered into a new Management Agreement through June 30, 1996. In March
1995 the Board of Directors had authorized a committee composed of four
Unaffiliated Directors to consider proposed revisions to the Management
Agreement in light of the Company's acquisition of multifamily residential
properties and recent waivers by the Unaffiliated Directors of the
requirement in the Management Agreement that the Management reimburse the
Company for Excess Expenses (as defined below). Effective October 1, 1995
the new Management Agreement increased the base management fee from .375%
of the Company's average invested assets to .65% thereof, and incentive
compensation for any calendar year was revised to equal 10% of the amount
by which the total return for the year exceeds 12% instead of quarterly
payments in an amount equal to 25% of the amount by which the Company's
annualized return on equity for the quarter exceeds the Ten-Year U.S.
Treasury Rate plus 1%. However, the Manager has voluntarily waived the
increase in base management fee for the fourth quarter of 1995 and first
quarter of 1996. Management fees of $130,000 were earned in 1995.
The Company reimburses the Manager for certain expenses incurred by
the Manager on the Company's behalf, including rent, telephone, utilities,
office furniture, equipment and machinery, computers, and computers
services, as well as expenses relating to accounting, bookkeeping and
related administrative functions (including the employment expenses of any
persons performing these functions), and fees and expenses of agents
employed directly by the Company or by the Manager at the Company's
expense. The Company also reimburses the Manager for its costs in
providing off-site operating, management and supervisory services with
respect to multifamily properties and other real estate up to 5% of gross
rents received by the Company from such properties. Reimbursable expenses
paid by the Company to the Manager totaled $510,174 for 1995. This amount
included $144,500 paid by the Company as reimbursement of 85% of the salary
of John E. Castello, the Executive Vice President, Treasurer and Chief
Financial Officer of the Company.
Unless waived by the Unaffiliated Directors, the Management Agreement
required prior to October 1, 1995 that the Manager reimburse the Company up
to the amount of the base management fee to the extent that certain of the
Company's expenses exceed the greater of 2% of the average invested assets
of the Company or 25% of the Company's net income for the year ("Excess
Expenses"). The Company experienced Excess Expenses in 1993, 1994 and
1995, and the Unaffiliated Directors waived the reimbursements that would
otherwise have been required by the Management Agreement. Under the
renewed Management Agreement, the Manager is no longer required to
reimburse the Company for Excess Expenses.
Except as set forth above, the Manager is required to pay employment
expenses of its personnel, rent, telephone, utilities, other office
expenses, certain travel and miscellaneous administrative expenses of the
Manager and, if the Manager or an affiliate of the Manager serves as bond
administrator for a series of structured securities issued by or on behalf
of the Company, all expenses incurred by the Manager in performing
administrative services in connection with the issuance and administration
of such series of structured securities.
If the Company participates in programs operated by the Manager for
the pricing and acquisition of mortgage loans, the Company will pay the
manager a fixed expense allowance in an amount which shall be determined by
a majority of the Unaffiliated Directors.
The new Management Agreement also provides that certain termination
payments will be made to the Manager if the Management Agreement is
terminated, or is not continued on terms as favorable to the Manager as the
current Management Agreement, within three years of a Change of Control
(defined below). The termination payments are to be made quarterly for
each fiscal quarter (or portion thereof) during the period beginning with
the date of termination (the "Termination Date") and ending on the last day
of the twelfth full fiscal quarter following the Termination Date. Such
payments include (i) the standard base management fee calculated without
taking into account any investments made by the Company subsequent to the
Termination Date, and (ii) the standard incentive compensation fee that
would otherwise be payable if the total shareholders' equity were computed
without taking into account any investments made by the Company subsequent
to the Termination Date.
A "Change of Control" shall occur if
(i) any person or group, subject to certain exceptions, becomes
the beneficial owner, directly or indirectly, of securities of the
Company representing twenty (20) percent or more of the combined
voting power of the Company's outstanding securities, or such lesser
percentage of voting power as a majority of the Board of Directors,
including a majority of the Unaffiliated Directors, shall determine;
(ii) Continuing Directors shall at any time cease to constitute
a majority of the Company's Board of Directors. "Continuing
Directors" means those directors holding office on the date first
above written and those directors who were recommended to succeed
Continuing Directors by a majority of the Continuing Directors; or
(iii) The Company's stockholders or its Board of Directors shall
approve (1) any consolidation or merger of the Company in which the
Company is not the continuing or surviving corporation or pursuant to
which the Company's Common Stock would be converted into cash,
securities and/or other property, other than a merger of the Company
in which holders of Common Stock immediately prior to the merger have
the same proportionate ownership of common stock of the surviving
corporation immediately after the merger as they had in Common Stock
immediately before, (2) any sale, lease, exchange or other transfer
(in one transaction or a series of related transactions ) of all or
substantially all of the assets or earning power of the Company, or
(3) the liquidation or dissolution of the Company.
In order to compensate the Manager for certain administrative
functions that the Manager has performed with respect to each Residual
Interest projected to have cash flows in excess of $40,000 in the following
year purchased by the Company for which neither the Manager nor an
Affiliate act as bond administrator, the Company paid the Manager a fee
equal to $10,000 for each year or fraction thereof that the Company holds
such Residual Interest. A total of $90,000 of these Residual Interest
administration fees were paid to the Manager in 1995. Effective October 1,
1995, this Residual Interest administration fee was discontinued.
Directors and executive officers of the Company are required to devote
only so much of their time to the Company's affairs as is necessary or
required for the effective conduct and operation of the Company's business.
Because the Management Agreement provides that the Manager will assume
principal responsibility for managing the affairs of the Company, the
officers of the Company, in their capacities as such, are not expected to
devote substantial portions of their time to the affairs of the Company.
However, in their capacities as officers or employees of the Manager, or of
the general partner of the Manager, they will devote such portion of their
time to the affairs of the Company as is required for the performance of
the duties of the Manager under the Management Agreement.
The Board of Directors has adopted a policy that, unless the Company
is self-administered, (i) prior to entering into, renewing or extending any
management or administrative agreement (including the Management
Agreement), competitive bids from three or more persons will be secured and
(ii) prior to entering into, renewing or extending any management or
administrative agreement with any person who, directly or indirectly,
beneficially owns or controls 5% or more of the Common Stock, such
agreement will be submitted for approval by a majority of the Company's
disinterested stockholders. In light of this policy, the Board is
examining its current management arrangements and intends to comply with
the policy.
<PAGE>
V. ADDITIONAL INFORMATION
Compliance with Section 16(a) of the Securities Exchange Act
Section 16(a) of the Exchange Act requires the Company's officers and
directors, and persons who own more than ten percent of the Common Stock to
file reports of ownership and changes in ownership on Forms 3, 4 and 5 with
the Securities and Exchange Commission. Officers, directors and greater
than ten percent stockholders are required by SEC regulation to furnish the
Company with copies of all Forms 3, 4 and 5 they file. Based solely on the
Company's review of the copies of such forms it has received, the Company
believes that all its officers, directors and greater than ten percent
beneficial owners complied with all filing requirements applicable to them
during the reporting period ended December 31, 1995, except that Mr. Robert
Ledoux did not file in a timely manner a Form 5 to report his receipt of an
option from the Company in 1995.
Stockholder Proposals
In order to be eligible for inclusion in the Company's proxy materials
for the 1997 Annual Meeting, stockholders' proposals to take action at such
meeting must comply with applicable Securities and Exchange Commission
Rules and Regulations, must be directed to the Secretary of the Company at
the offices set forth on page 1 of this proxy statement, and must be
received by the Company not later than December 11, 1996.
The Company, upon request, will furnish to record and beneficial
holders of its Common Stock, free of charge, a copy of its Annual Report on
Form 10-K (including financial statements and schedules but without
exhibits) for fiscal 1995. Copies of exhibits to the Form 10-K also will
be furnished upon request and the payment of a reasonable fee. All
requests should be directed to the [Secretary of the Company] at the
offices of the Company set forth on page 1 of this proxy statement.
By Order of the Board of Directors
John E. Castello,
Executive Vice President and Chief
Executive Officer
San Francisco, California
April 5, 1996
<PAGE>
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
TIS MORTGAGE INVESTMENT COMPANY
COMMON STOCK PROXY
FOR ANNUAL MEETING OF STOCKHOLDERS
May 13, 1996
The undersigned hereby appoints Lorraine O. Legg and John E.
Castello, or either of them, each with full power of substitution, as
proxies to represent the undersigned at the Annual Meeting of
Stockholders of TIS MORTGAGE INVESTMENT COMPANY to be held at the
Holiday Inn, 750 Kearny Street, San Francisco, California on Monday, May
13, 1996 at 4:00 p.m., PST, and any adjournment thereof, and to vote the
number of shares of the COMMON STOCK OF TIS MORTGAGE INVESTMENT COMPANY
that the undersigned would be entitled to vote if personally present.
The Board of Directors recommends a vote FOR Items 1 and 2.
(Continued, and to be marked, dated and signed, on the other side)
<PAGE>
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY
WILL BE VOTED FOR PROPOSALS 1 AND 2.
1. ELECTION OF DIRECTORS
FOR All nominees listed below WITHHOLD AUTHORITY
(except as marked to to vote for all nominees
the contrary below) listed below:
[ ] [ ]
NOMINEES: Patricia M. Howe, Robert W. Ledoux and Melvin Petersen
INSTRUCTION: To withhold authority to vote for any individual nominee,
write such nominee's name below:
_________________________________________________
2. PROPOSAL TO RATIFY THE APPOINTMENT OF ARTHUR ANDERSEN LLP AS
INDEPENDENT ACCOUNTANTS FOR THE CURRENT FISCAL YEAR.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF TIS
MORTGAGE INVESTMENT COMPANY. THIS PROXY WILL BE VOTED AS DIRECTED. IN
THE ABSENCE OF DIRECTION, THIS PROXY WILL BE VOTED FOR THE NOMINEES FOR
ELECTION AND FOR THE RATIFICATION OF THE APPOINTMENT OF ARTHUR ANDERSEN
LLP. In their discretion, the proxy holders are authorized to vote upon
such other business as may properly come before the meeting or any
adjournment thereof to the extent authorized by Rule 14a-4(c) promulgated
pursuant to the Securities Exchange Act of 1934 and by all applicable
state laws (including matters that the proxy holders do not know, a
reasonable time before this solicitation, are to be presented).
Please sign exactly as the name or names appear on your stock
certificates (as indicated hereon). If the shares are issued in the
name of two or more persons, all of them must sign the proxy. A proxy
executed by a corporation must be signed in its name by an authorized
officer. Executors, administrators, trustees and partners should
indicate their capacity when signing.
The undersigned acknowledges receipt of (a) the Notice of 1996 Annual
Meeting of Stockholders, (b) the accompanying Proxy Statement and (c)
the Company's Annual Report for the fiscal year ended December 31, 1995.
Dated:_____________________________________, 1996
_______________________________________________________________________
(Signature)
_______________________________________________________________________
(Signature if held jointly)
SHAREHOLDERS ARE URGED TO DATE, MARK, SIGN AND RETURN THIS PROXY PROMPTLY
IN THE ENVELOPE PROVIDED.
