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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
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))
[_] Definitive Proxy Statement
[_] Definitive Additional Materials
[X] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
TIS MORTGAGE INVESTMENT COMPANY
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(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] No Fee Required
[_] 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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(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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TIS MORTGAGE INVESTMENT COMPANY
NEWS RELEASE
FOR RELEASE: Immediately
DATE: June 2, 1999
CONTACT: John E. Castello
(415) 393-8000
RHODE ISLAND FEDERAL COURT DENIES TIS MORTGAGE INVESTMENT
COMPANY'S MOTION TO ENJOIN INSURGENTS FROM SOLICITING PROXIES
SAN FRANCISCO, June 2, 1999 - TIS Mortgage Investment Company (Pacific Exchange:
TISM) today announced that yesterday the United States District Court for the
District of Rhode Island ruled against the Company's motion for a preliminary
injunction to prevent Frederick G. Tobin from soliciting proxies for his
nominees for election as directors at the 1999 annual meeting. The court found
that the Company did not meet the requirements for the granting of a preliminary
injunction and that the Company was not entitled to equitable relief such as a
preliminary injunction because the Company has "unclean hands" in that, among
other things, it did not hold an annual meeting in 1998.
The Company had filed a definitive proxy statement and additional soliciting
materials with the Securities and Exchange Commission yesterday before it was
aware of the court's ruling. The Company has withheld the mailing of its
definitive proxy materials and additional soliciting materials until it can
obtain a transcript of the court's ruling and revise the Company's materials to
reflect appropriately the court's ruling. The court made a number of adverse
findings with respect to the credibility of Lorraine Legg, the President and
Chief Executive Officer of the Company, and certain conduct of the Company. The
court did not reach a final determination on the merits of the Company's claim
that Mr. Tobin's proposed nominations are not valid.
The Company respectfully but firmly disagrees with the findings of the court.
The Company maintains its position that Mr. Tobin's nominations are invalid
under Maryland law and the Company's Bylaws. The Company reserves the right to
pursue that position in all applicable forums whether or not Mr. Tobin's
candidates are placed in nomination or elected at the annual meeting.
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The Company will supply additional information and proxy materials reflecting
the ruling to stockholders promptly after it has had an opportunity to review
the transcript of the court's ruling.
Certain Information Concerning Participants
The following individuals, all of whom are directors (and nominees for director)
and/or executive officers of TIS Mortgage Investment Company, may be deemed
participants in the solicitation of proxies on behalf of the Company's Board of
Directors: Lorraine O. Legg (President and Chief Executive Officer of the
Company); Patricia M. Howe (Chairman, Corporate Capital Investment Advisors and
subsidiaries); Robert W. Ledoux (General Partner, Venture Growth Associates);
Douglas B. Fletcher (Chairman of the Company, and Chairman and Chief Executive
Officer, Fletcher Capital Advisors Incorporated); J. David Schemel (Managing
Member, Vista Marin, LLC, Oxford Associates, LLC and DSDI, LLC); Anthony H.
Barash (Senior Vice President and General Counsel, Bowater Incorporated); and
John E. Castello (Executive Vice President and Chief Financial Officer of the
Company).
Pacific Securitization, Inc., which is indirectly principally owned by Ms. Legg
and Ms. Howe, owns beneficially and of record 1,613,070 shares of the Company's
common stock, or 18.1% of its outstanding shares; Ms. Legg also beneficially
owns 206,700 shares of the Company's common stock (including 150,000 shares
issuable under stock options exercisable within 60 days of April 19, 1999); and
Ms. Howe also beneficially owns 154,820 shares of the Company's common stock
(including 101,000 shares issuable under options exercisable within 60 days of
April 19, 1999). None of the other directors or executive officers beneficially
owns more than 1% of the Company's common stock. The preceding share numbers
are as of April 19, 1999.
Ms. Legg and Mr. Castello are parties to employment agreements with the Company
with evergreen renewal provisions that automatically extend the terms for one
year periods, subject to earlier termination. Each agreement provides for
severance payments, vesting of options and the continuation of fringe benefits
in the event the officer is terminated other than for cause or the officer
terminates employment for good reason (which includes a change of control).
TIS Financial Services, Inc. ("TIS Financial"), which is controlled indirectly
by Ms. Legg and Ms. Howe, is a party to an agreement with the Company for the
sharing of office space, office equipment and the expenses of certain
administrative and other personnel and ancillary services. It also extended to
the Company in April 1999 a one-year $1 million revolving line of credit for
operations. The line of credit is secured by the Company's residual interest in
a pool of mortgage backed certificates guaranteed by the Government National
Mortgage Association. Payment of the line of credit can be
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accelerated on certain events, including a change of control of the Company in
which certain executive officers of the Company are removed or in which a
majority of the Board is changed. DSDI, LLC, which is controlled by Mr. Schemel,
is committed to TIS Financial for $625,000 on the same terms as the revolving
line of credit.
Forward-Looking Statements
This news release contains forward-looking statements that involve risks and
uncertainties, including the results from investments of the Company and the
outcome of the contested election of directors at the Company's 1999 annual
meeting of stockholders. Other risks and uncertainties associated with the
Company's business and prospects are identified in the Company's filings with
the Securities and Exchange Commission. The Company does not undertake to
revise these forward-looking statements to reflect events or circumstances
occurring in the future.
The Company is a San Francisco-based real estate investment trust that owns and
operates apartment communities and shopping centers located in California's
Central Valley and invests in mortgage related assets.
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