<PAGE>
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 (Amendment No. )
Filed by the Registrant / /
Filed by a party other than the Registrant /X/
Check the appropriate box:
/X/ Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
TIS Mortgage Investment Company
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
Totally Ignored Stockholders Committee
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11
(1) Title of each class of securities to which transaction applies:
Shares of Common Stock, par value $001 per share
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / 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:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
<PAGE>
[Preliminary Copy]
PROXY STATEMENT
IN OPPOSITION TO THE BOARD OF DIRECTORS OF
TIS MORTGAGE INVESTMENT COMPANY
ANNUAL MEETING OF STOCKHOLDERS
SCHEDULED FOR MAY 29, 1997
TO ALL STOCKHOLDERS OF
TIS MORTGAGE INVESTMENT COMPANY:
This Proxy Statement is furnished by the Totally Ignored Stockholders
Committee ("TIS Committee") in connection with its solicitation of proxies
to be used at the Annual Meeting of Stockholders of TIS Mortgage Investment
Company ("TIS" or the "Company") scheduled to be held on Thursday, May 29,
1997, at the Hyatt Burlingame, 1333 Bayshore Highway, Burlingame, California
94010 at 10:00 A.M., local time, and at any adjournments or postponements
thereof. This Proxy Statement and the accompanying BLUE Proxy Card are first
being sent to the Company's Stockholders on or about May 5, 1997.
The Company has set April 23, 1997, as the record date for determination
of Stockholders entitled to notice of, and to vote at, the Annual Meeting.
According to the Company most recent filing with the Securities and Exchange
Commission, as of March 26, 1997, there were outstanding and entitled to vote
at the Annual Meeting a total of 8,105,880 shares of Common Stock, $.001 par
value (the "Shares"). Each Share is entitled to one vote on all matters
submitted to a vote of the Stockholders at the Annual Meeting. The
affirmative vote of the holders of a plurality of the Shares cast at the
Annual Meeting is required for the election of Directors. As of the record
date, the TIS Committee had the right to vote an aggregate of 793,700 Shares
constituting approximately 9.8% of the total votes eligible to be cast at the
Annual Meeting. See "The Fund."
THE TIS COMMITTEE URGES YOU TO SIGN, DATE AND RETURN THE ENCLOSED BLUE
PROXY CARD TO VOTE FOR THE ELECTION OF THE TIS COMMITTEE'S NOMINEES AS
DIRECTORS. A POSTAGE-PAID ENVELOPE HAS BEEN PROVIDED FOR YOUR CONVENIENCE.
REASONS FOR THIS SOLICITATION
The TIS Committee is urgently soliciting your proxy to enable us to
salvage and then revive the Company. The TIS Committee seeks your help to
elect three Directors with substantial commercial real estate experience who
will constitute one-third of the Board of Directors. We believe these new
Directors will be more knowledgeable in real estate investment and
management, more responsive to stockholder concerns and more responsible in
their direction of the management of the Company. We believe that the TIS
Committee's nominees will implement the policies necessary to maximize
stockholder value.
<PAGE>
We send you this request for your proxy and ask for your vote for a number
of reasons:
(1) The Company's Shares, which traded in 1988 at $10.00 per share, have
steadily declined in value, hovering in the $1.00 - $2.00 range for most of
the past year.
(2) The average stock price for all real estate investment trusts over
the past five years, as compiled by the National Association of Real Estate
Investment Trusts (NAREIT), has more than doubled.
(3) The Company's current Directors and executive officers have shown
little faith in the Company - their total investment amounts to only 155,250
Shares (excluding unexercised options), or only 1.9% of the outstanding
Shares.
(4) From 1992 through 1996, the Company reported net losses totaling
more than $47,000,000! In the last eight years, the Company's net worth has
declined from almost $74,000,000 as of December 31, 1988, to about
$11,000,000 as of December 31, 1996!
(5) As of December 31, 1996, the average dividend yield of 115 real
estate investment trusts was approximately 6.7%. (Source: A.G. Edwards &
Sons, Inc., Quarterly REIT Review, February 3, 1997.) The yield on Shares of
TIS was less than 2% in 1996.
SOLUTIONS TO THE PROBLEMS
Our nominees have proven experience in investing, managing and analyzing
real estate in a profitable manner. They are committed to:
(1) An urgent review of all the Company's real estate investments with a
view toward improving the performance of the portfolio;
(2) The development of a plan to increase the dividends payable to
Stockholders;
(3) The imposition of strict controls on overhead expenses and the
implementation of necessary steps to cut overhead costs;
(4) The termination of all stock option plans that benefit management at
the expense of Stockholders; and
(5) The implementation of a continuous, effective stockholder relations
program to keep Stockholders informed about the Company.
-3-
<PAGE>
OUR PROMISE TO STOCKHOLDERS
(1) We will NOT terminate employees simply for the sake of cutting
costs; our grievance is with the Company's Directors, not its professional
staff. We trust that with stability, a coherent business plan, professional
management and stockholder oversight, their talents can be put to profitable
use.
(2) We will NOT increase the pay and benefits of officers or reward them
with grants of options on Shares or "golden parachutes" at a time when the
price of Shares of TIS is little more than $1.00.
(3) We will NOT take any action to impair the status of TIS as a REIT
under the Internal Revenue Code of 1986.
WHY STOCKHOLDER INVESTMENTS WILL BE LOST
IF THE BOARD IS NOT CHANGED
We have summarized the events and failures which have led us to believe
that management must change. We have invested more than $885,000 in the
Company. We describe below in further detail why we believe that the
stockholders of TIS deserve a prompt and comprehensive change in the way TIS
is doing business.
1. THE MARKET'S REJECTION OF TIS
From a high of $10.00 per share in the last quarter of 1988, TIS's
stock has sunk to $0.6875 on December 31, 1996. As of April 22, 1997, due in
part to purchase of Shares by the Fund, the closing price was $1.125. This
steep per share decline shows that the market is trying to send a message to
TIS. We seek your proxy because the Board of Directors is not getting the
message.
2. TIS SHARES CONTINUALLY UNDERPERFORM THE MARKET
The following line graph compares the cumulative total return of a
hypothetical investment in the Shares of TIS with the cumulative total return
of a hypothetical investment in each of the Standard & Poor's 500 Stock Index
and the NAREIT All REIT index and assumes the initial investment of $100 on
December 31, 1991, with dividends reinvested when paid and share prices as of
the last day of each calendar year.
Measurement Period
(Fiscal Year Covered) Shares of TIS S& P 500 Index All REIT
12/31/91 100 100 100
12/31/92 41 108 112
12/31/93 22 118 133
12/31/94 22 120 134
-4-
<PAGE>
12/31/95 19 165 159
12/31/96 9 203 215
As the graph indicates, a $100 investment in TIS Shares on December 31,
1991 would be worth $9 on December 31, 1996. The same $100 would be worth
$203 if invested in the S&P 500 Index or $215 if invested in All REITs.
3. NET WORTH HAS DECLINED PRECIPITOUSLY
The following chart shows the decline in net worth, or stockholders'
equity, over the past eight years.
12/31/88 $73,970,000
12/31/89 72,072,000
12/31/90 69,468,000
12/31/91 67,779,000
12/31/92 41,489,000
12/31/93 15,780,000
12/31/94 16,093,000
12/31/95 11,981,000
12/31/96 11,081,000
THE TIS COMMITTEE
The members of the TIS Committee are Richard M. Osborne, Christopher L.
Jarratt and James G. Lewis. As of the record date, members of the TIS
Committee beneficially owned 793,700 Shares, representing approximately 9.8%
of the outstanding Shares. All of these Shares are owned by the Turkey
Vulture Fund XIII, Ltd., an Ohio limited liability company (the "Fund"), that
was formed to acquire, hold, sell or otherwise invest in all types of
securities and other instruments. The Fund is the largest stockholder in TIS.
Mr. Osborne, as the sole manager of the Fund, is the beneficial owner of the
793,700 Shares.
Additional information concerning the TIS Committee and the Fund and the
Fund's holdings of Shares is set forth in Appendix A hereto.
-5-
<PAGE>
WE ARE STOCKHOLDERS
Neither the TIS Committee nor the Fund are attempting to benefit
themselves at the expense of any other Stockholders. Rather, the TIS
Committee is seeking to increase value to all Stockholders. Neither the TIS
Committee nor its nominees will acquire any of the operations or assets of
TIS or be compensated either as principal or agent in transactions relating
to the redeployment of the assets of TIS, or earn any profits, commissions or
other fees from TIS for their services in connection therewith, other than
(1) such compensation, if any, as might be payable to any of the nominees
solely in their capacities as Directors of TIS, (2) payments received by the
Fund in its capacity as a holder of stock of TIS, (3) reimbursement from
TIS of the expenses of the solicitation of proxies or (4) in any transaction
approved by a majority of TIS stockholders.
NOMINEES FOR ELECTION AS DIRECTORS
The Company's Board of Directors is presently composed of nine Directors,
divided into three classes of Directors who serve for three-year terms. The
Directors elected at the Annual Meeting will serve in such capacity until the
2000 Annual Meeting of Stockholders and thereafter until their successors
shall have been elected and qualified. In opposition to the incumbent Class
of the Board of Directors the TIS Committee is proposing a slate of three
experienced and well-qualified nominees for election as Directors of the
Company who, if elected, would constitute one-third of the Board of
Directors.
Each nominee named below has consented to serve as a director of the
Company if elected. The TIS Committee does not expect that any of the nominees
will be unable to stand for election but, in the event that a vacancy in the
slate of nominees should occur unexpectedly, the Shares represented by the
enclosed BLUE Proxy Card will be voted for a substitute candidate selected by
the TIS Committee.
The following information concerning business address, age, and principal
occupation has been furnished by the TIS Committee's nominees.
NAME AND BUSINESS ADDRESS PRINCIPAL OCCUPATION FOR PAST FIVE YEARS
Richard M. Osborne Mr. Osborne is President and Chief Executive
7001 Center Street Officer of OsAir, Inc., Mentor, Ohio ("OsAir"), a
Mentor, Ohio 44060 company he founded in 1963. OsAir is a
manufacturer of industrial gases for pipeline
delivery and a real property developer. Mr.
Osborne is also a director of Brandywine Realty
Trust, a publicly-held REIT, and a director of
Great Lakes Bank, Mentor, Ohio. Through
OsAir or personally, Mr. Osborne has over 30
years of experience in real estate development
and management. During his career as a real
estate entrepreneur, he has developed, managed
or sold over 1,000,000 square feet of
industrial space, over 1,000,000 square feet of
commercial space, over 1,000,000 square feet of
apartment space and over 1,000,000 square feet
of self-storage facilities . Since its formation
in 1994, Mr. Osborne has been the sole manager
of the Fund. Mr. Osborne is 51 years old.
-6-
<PAGE>
Christopher L. Jarratt For the past nine years, Mr. Jarratt has been
314 Church Street the President of Jarratt Associates, Inc.,
Nashville, TN 37201 Nashville, Tennessee, a corporation engaged in
commercial mortgage banking and commercial real
estate investment activities. Since September
1996, Mr. Jarratt has also been the Chief
Executive Officer of Third Capital, LLC,
Nashville, Tennessee, a company engaged in
various real estate investment and advisory
activities. Mr. Jarratt has been involved in
more than $100 million of commercial mortgage
and real estate transactions. For the past five
years, through Jarratt Associates, Inc., Third
Capital, LLC and their various affiliates, Mr.
Jarratt has specialized in the acquisition of
undervalued real estate assets and securities.
Mr. Jarratt has a Bachelor of Business
Administration degree from Southern Methodist
University, Dallas, Texas. Mr. Jarratt is 35
years old.
James G. Lewis Since September 1996, Mr. Lewis has been the
314 Church Street Chief Operating Officer and General Counsel of
Nashville, TN 37201 Third Capital, LLC, Nashville Tennessee, a
company engaged in various real estate
investment and advisory activities. From May
1994 through August 1996, Mr. Lewis was
employed as an attorney with the law firm
Shumaker, Loop & Kendrick, Tampa, Florida,
where he specialized in mergers and
acquisitions, corporate and securities law.
From September 1990 until May 1994, Mr. Lewis
was employed as an attorney with the law firm
of Johnson, Blakely, Pope, Bokor, Ruppel &
Burns, P.A., Clearwater, Florida where he
specialized in mergers and acquisitions,
corporate and securities law. Mr. Lewis
received a JD degree from Vanderbilt University
School of Law. Mr. Lewis is 31 years old.
None of the nominees has been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors) during the past ten
years.
VOTING OF PROXIES
Unless otherwise indicated, the persons named in the accompanying BLUE
Proxy Card will vote properly executed and duly returned proxies (i) FOR the
election of three TIS Committee nominees as members of the Class of the Board
of Directors of the Company to serve for a term of three years until the 2000
annual meeting of Stockholders and until their successors are elected and
qualified, and (ii) in accordance with their judgment on such other business
as may be properly presented to the meeting and any adjournment or
postponement thereof.
-7-
<PAGE>
BLUE Proxy Cards should be signed, dated and returned in the postage-paid
envelope provided. Execution of the enclosed BLUE Proxy Card will not affect
a stockholder's right to attend the Annual Meeting and vote in person. A
stockholder who has given a proxy may revoke it at any time before such proxy
is voted either by a later dated proxy or by voting in person at the Annual
Meeting. Attendance at the Annual Meeting will not in and of itself
constitute a revocation. If you were a stockholder of record on the Record
Date, you will retain the voting rights in connection with the Annual Meeting
even if you sell or sold such Shares after the Record Date. Accordingly, it
is important that you vote the Shares held by you on the Record Date or grant
a proxy to vote such Shares whether or not you still own such Shares.
Stockholders cannot select Directors from among those proposed by the
Company and the TIS Committee. Therefore, if you wish to support the TIS
Committee's nominees, your last dated properly executed proxy must be a BLUE
Proxy Card.
PROXY SOLICITATION; EXPENSES
Proxies may be solicited by mail, telephone, telecopier and personal
solicitation. Any of the members of the TIS Committee and any regular
employee of Mr. Osborne may be used to solicit proxies, and will not receive
additional compensation therefor. Banks, brokerage houses and other
custodians, nominees and fiduciaries will be requested to forward the
soliciting material of the TIS Committee to their customers for whom they
hold shares and the TIS Committee will reimburse them for their reasonable
out-of-pocket expenses.
The TIS Committee has retained Beacon Hill Partners, 90 Broad Street, New
York, New York, 10004, to assist in the solicitation of proxies. The TIS
Committee has agreed to pay Beacon Hill Partners a fee of $25,000 and to
reimburse it for its reasonable out-of-pocket expenses. Approximately 25
people will be used by Beacon Hill Partners in its solicitation efforts.
The TIS Committee anticipates that its total expenditures relating to the
solicitation will be approximately $100,000 (excluding costs represented by
salaries and wages of regular employees of Mr. Osborne); total expenditures
to date have been less than $10,000. The entire expense of preparing,
assembling, printing and mailing this Proxy Statement and related materials
and the cost of soliciting proxies for the nominees proposed by the TIS
Committee will be borne by the Fund or Mr. Osborne in a manner to be
dtermined by Mr. Osborne. The Fund or Mr. Osborne will seek reimbursement
from the Company for those expenses and does not intend to seek stockholder
approval for such reimbursement at a subsequent meeting unless such approval
is required under Maryland law.
STOCKHOLDER PROPOSALS FOR 1998 ANNUAL MEETING
In order to be included in the Company proxy statement for the 1998 Annual
Meeting, any stockholder proposal to be presented at the 1998 Annual Meeting
must be received in the office of the Secretary of the Company at its
principal executive offices by the date specified in the Company proxy
statement for this year's Annual Meeting.
-8-
<PAGE>
OTHER MATTERS
The TIS Committee is not aware of any other matters to be considered at
the Annual Meeting other than the election of Directors. However, if any
other matters properly come before the meeting, the persons named in the
enclosed BLUE Proxy Card will have discretionary authority to vote all
proxies with respect to such matters in accordance with their judgment.
Sincerely,
May 5, 1997 TOTALLY IGNORED STOCKHOLDERS COMMITTEE
-9-
<PAGE>
APPENDIX A
On the date hereof, Richard M. Osborne, as the sole manager of the Fund,
is the beneficial owner of 793,700 Shares, representing approximately 9.8% of
the 8,105,880 Shares outstanding according to the most recently available
filing by the Company with Securities and Exchange Commission.
Under the terms of the Operating Agreement of the Fund, Mr. Osborne as the
sole manager, manages all day-to-day operations involving, and makes all
decisions concerning, the business and affairs of the Fund. Other than Mr.
Osborne, the members have no authority or power to bind the Fund, vote
securities owned by the Fund, make investment decisions for the Fund or
dispose of any securities held by the Fund. Each member has agreed, under
the terms of the Operating Agreement, to indemnify the Fund for any costs or
damages incurred by the Fund as a result of the exercise of any unauthorized
authority by each such member.
Under Rule 13d-3 promulgated by the Securities and Exchange Commission, "a
beneficial owner of a security includes any person, who, directly or
indirectly, through any contract, arrangement, understanding, relationship,
or otherwise has or shares:
(1) Voting power which includes the power, to vote, or to direct the
voting of, such security, and/or
(2) Investment power which includes the power to dispose, or to direct
the disposition of, such security."
Because the members of the Fund, other than Mr. Osborne, lack any of the
requisite powers of beneficial ownership, none of them, other than Mr.
Osborne, are beneficial owners of the Shares solely because of their
investment as members in the Fund.
The Shares beneficially owned by the Fund were acquired for an approximate
aggregate purchase price of approximately $885,000 with working capital of
the Fund.
A-1
<PAGE>
The table below sets forth all Shares purchased by the Fund within the
past two years, the dates on which such purchases were made and the amount of
such purchases. Neither the Fund nor Mr. Osborne sold any shares during the
two year period.
NUMBER OF SHARES DATE
------------------ ---------
10,000 7/22/96
9,800 7/30/96
3,000 7/31/96
2,100 8/01/96
500 8/02/96
2,400 8/06/96
2,000 8/07/96
19,300 1/06/97
2,000 1/07/97
2,600 1/08/97
100,000 1/16/97
3,100 1/09/97
50,000 2/14/97
50,000 3/05/97
26,900 3/06/97
35,100 3/07/97
24,800 3/14/97
600 3/19/97
1,600 3/20/97
126,700 3/27/97
94,200 3/21/97
3,000 4/03/97
120,000 4/01/97
19,800 4/15/97
2,600 4/16/97
81,600 4/17/97
Neither Christopher L. Jaratt nor James G. Lewis has purchased or sold any
shares of TIS during the preceding two years.
Except as otherwise set forth in this Appendix A, neither the Fund nor any
"associate" of any of the foregoing persons or any other person who may be
deemed a "participant" in the Proxy Solicitation is the beneficial or record
owner of any Shares. Except as otherwise set forth in this Appendix A,
neither the Fund nor any "associate" of the Fund or any other person who may
be deemed a "participant" in the Proxy Solicitation has purchased or sold any
Shares within the past two years, borrowed any funds for the purpose of
acquiring or holding any Shares or is or was within the past year a party to
any contract or arrangement or understanding with any person with respect to
any Shares. There has not been any transaction since the beginning of the
Company's last fiscal year and
A-2
<PAGE>
there is not currently any proposed transaction to which the Company is a
party, in which the Fund or any "associate" of the Fund or immediate family
member of any of the foregoing persons or any other person who may be deemed
a "participant" in the Proxy Solicitation had or will have a direct material
interest.
A-3
<PAGE>
[Back cover page]
IMPORTANT
Your vote is important. No matter how many or how few TIS shares you own,
please vote FOR the TIS Committee's nominees by signing, dating and mailing
the enclosed BLUE Proxy Card today. The TIS Committee urges you NOT to
return any proxy cards sent to you by the Board of Directors of TIS.
If you have already returned a Board of Directors' proxy card before
receiving this proxy statement, you have every right to change your vote by
signing and returning the enclosed BLUE Proxy Card. Only your latest dated
properly executed proxy will count at the Annual Meeting.
If you own your TIS shares in the name of a brokerage firm, your broker
cannot vote such shares unless he received your specific instructions.
Please sign, date and return the enclosed BLUE Proxy Card in the postage-paid
envelope that has been provided.
If you have any questions about how to vote your TIS shares, please call
our proxy solicitor:
Beacon Hill Partners
90 Broad Street
New York, NY 10004
Telephone: 1-800-854-9486
<PAGE>
PROXY
TIS Mortgage Investment Company
1997 Annual Meeting of Stockholders
Unless otherwise specified, this proxy will be voted FOR Item 1 and will
be voted in the discretion of the proxies on such other matters as may
properly come before the meeting or any adjournment(s) or postponement(s)
thereof.
1. Election of Directors FOR / / WITHHOLD / /
TIS Committee nominees are:
Richard M. Osborne, Christopher L. Jarratt and James G. Lewis
(Authority to vote for any nominee(s) may be withheld by lining through or
otherwise striking out the name of such nominee(s).)
The Proxy revokes all prior proxies and voting instructions.
THE TIS COMMITTEE RECOMMENDS A VOTE FOR ITEM 1.
SOLICITED ON BEHALF OF PROXY SOLICITED IN OPPOSITION
TOTALLY IGNORED STOCKHOLDERS COMMITTEE TO THE BOARD OF DIRECTORS
The undersigned hereby appoints Richard M. Osborne and Christopher J.
Jarratt, and each of them, with full power of substitution, as proxies for
the undersigned, to represent and vote, as designated above, all shares of
beneficial interest of TIS to which the undersigned is entitled to vote at
the 1997 Annual Meeting of Stockholders of TIS scheduled to be held on May
29, 1997, and at any adjournment(s) or postponement(s) thereof, and revokes
all prior proxies with respect to the matters covered by this proxy.
Date: ________________, 1997
Signature:______________________________
Signature: _____________________________
Title or Authority: ____________________
(Please sign exactly as name appears,
indicating title or representation
capacity, where applicable)
PLEASE SIGN, DATE AND MAIL YOUR PROXY TODAY
If you have any questions on voting, please call:
Beacon Hill Partners at 1-800-854-9486
