<PAGE>
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 [_]
<TABLE>
<CAPTION>
Check the appropriate box:
<S> <C>
[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
[X] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
</TABLE>
TIS MORTGAGE INVESTMENT COMPANY
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(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:
-------------------------------------------------------------------------
(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>
TIS MORTGAGE INVESTMENT COMPANY
655 MONTGOMERY STREET, SUITE 800
SAN FRANCISCO, CALIFORNIA 94111
May 22, 1999
Dear Stockholder:
We will hold our annual meeting of stockholders to elect directors of TIS
Mortgage Investment Company on June 11, 1999, at 10:00 a.m., local time, at the
Park Hyatt Hotel, located at 333 Battery Street, San Francisco, California. We
have included a formal notice of the meeting on page 3. There are currently six
positions on the Board of Directors, all of which are to be filled at the
meeting.
We are not sending our proxy statement or soliciting your proxy to vote at
the annual meeting at this time, because we have not finalized them. As soon as
they are final, we will send you our proxy statement and a WHITE proxy card with
more detailed information about the election of directors and our Board's
nominees for director.
We would like to bring to your attention several key issues that you should
consider before voting in the election of directors.
We have received a letter from Frederick G. Tobin purporting to nominate
himself and five other individuals for election as directors. WE STRONGLY
OPPOSE MR. TOBIN'S ATTEMPT TO NOMINATE SIX DIRECTORS TO THE COMPANY'S BOARD, AND
WE PROPOSE THE ELECTION OF ALL SIX CURRENT DIRECTORS. We believe that his
purported nominations are not valid, because Mr. Tobin was not a stockholder of
record on the date he gave notice and on the record date for the meeting, two
important conditions required by the Company's bylaws to be eligible to nominate
directors at an annual meeting. We have asked a court to rule that his
purported nominations are invalid. We took this action to avoid the confusion
that would be caused by the Tobin group's solicitation for candidates who cannot
be validly and legally nominated and to avoid the substantial expense and
disruption to the Company's business and operations that a proxy contest will
entail. In any event, we intend to oppose vigorously Mr. Tobin's purported
nominees for the reasons described on the next page.
WE ASK YOU NOT TO RUSH TO JUDGMENT ON THE ELECTION OF DIRECTORS. WE URGE
YOU TO WAIT UNTIL YOU RECEIVE OUR PROXY STATEMENT. PLEASE GIVE THIS MATERIAL
YOUR CAREFUL ATTENTION.
In the meantime, if you receive any materials from Mr. Tobin or his
"Committee to Save Our TIS Investment," we urge you not to make any decisions at
this time. With the annual meeting planned for June 11, there is no reason to
rush to judgment. In particular, WE STRONGLY RECOMMEND THAT YOU DO NOT SIGN ANY
PROXY CARD FROM MR. TOBIN OR HIS COMMITTEE. WE URGE YOU TO TAKE NO ACTION UNTIL
YOU HEAR FURTHER FROM US AND YOU RECEIVE OUR WHITE PROXY CARD.
<PAGE>
WE BELIEVE THAT THE ELECTION OF THE INDIVIDUALS PURPORTEDLY NOMINATED BY
MR. TOBIN WOULD RUN DIRECTLY COUNTER TO THE BEST INTERESTS OF THE COMPANY'S
STOCKHOLDERS. Mr. Tobin's purported nominees have not explained their
objectives in seeking election as directors, their plans for management of the
Company or the business strategy they intend to pursue. We have not received
any information to indicate that they have any coherent business plan or
strategy for the Company. Furthermore, we firmly believe that Board
representation is not warranted by the size of their investment in the Company.
Preliminary proxy materials filed with the SEC by Mr. Tobin and his Committee
indicate that Mr. Tobin's purported nominees beneficially own only a total of
183,100 shares, or approximately 2% of the outstanding shares of the Company.
OUR BOARD IS INTIMATELY FAMILIAR WITH THE COMPANY AND THE REAL ESTATE
INDUSTRY. WE FURTHER BELIEVE THAT A CHANGE IN THE BOARD AT THIS TIME WOULD BE
HIGHLY DISRUPTIVE TO THE STRATEGY THE COMPANY IS ACTIVELY PURSUING. We are
fully committed to returning the Company to profitability by changing its core
business from investment in mortgage instruments to investment in a variety of
real properties, such as multi-family, shopping centers and development
projects. To assist in the implementation of the Company's business strategy,
we have revitalized the Board by accepting the resignations of five directors
and reducing the number of directors from nine to six. We have also filled the
resulting vacancies with two new directors, who we believe will advance our
stockholders' interests through their energy, skills and expertise.
In March 1999, we embarked on a plan to impose limitations on major changes
in the Company's share ownership to preserve the Company's net operating loss
carryforward and to authorize our Board to terminate the Company's status as a
real estate investment trust for tax purposes at such time as that would be to
the Company's advantage. We also plan to change the Company's name to reflect
the new business focus. We included the proposals to implement this plan in our
preliminary proxy materials filed last month with the SEC. While we still
believe that these proposals are important to the future of the Company, we have
withdrawn them for now in the interests of holding a timely stockholders meeting
and resolving any uncertainty over the composition of the Board of Directors.
AGAIN, WE STRONGLY RECOMMEND THAT YOU DO NOT SIGN ANY PROXY CARD FROM MR.
TOBIN OR HIS COMMITTEE. WE FURTHER URGE YOU TO TAKE NO ACTION UNTIL YOU HEAR
FROM US AND YOU RECEIVE OUR WHITE PROXY CARD.
Your Board of Directors is committed returning the Company to
profitability. We thank you for your continued support.
Sincerely yours,
/s/ Douglas B. Fletcher
Douglas B. Fletcher
Chairman of the Board
/s/ Lorraine O. Legg
Lorraine O. Legg
President and Chief Executive Officer
2
<PAGE>
TIS MORTGAGE INVESTMENT COMPANY
655 MONTGOMERY STREET, SUITE 800
SAN FRANCISCO, CALIFORNIA 94111
_____________________________________________
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held on June 11, 1999
______________________________________________
To Our Stockholders:
The 1999 annual meeting of stockholders of TIS Mortgage Investment Company,
a Maryland corporation (the "Company"), will be held at the Park Hyatt Hotel,
located at 333 Battery Street, San Francisco, California, on Friday, June 11,
1999, at 10:00 a.m., local time, for the following purposes:
1. To elect two Class III directors, two Class I directors and two Class
II directors; and
2. To transact such other business as may properly come before the annual
meeting or any adjournments or postponements of the meeting.
Only stockholders of record at the close of business on April 19, 1999, the
record date, are entitled to notice of and to vote at the annual meeting.
By Order of the Board of Directors
John E. Castello
Executive Vice President, Chief
Financial Officer and Secretary
San Francisco, California
May 22, 1999
3
<PAGE>
Participant Information
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 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.
Other Information
On January 27, 1999, Henry G. Elkins, Jr., who claims to be a shareholder
of the Company, brought an action against the Company in the California Superior
Court, San Francisco, to compel the Company to hold an annual meeting. On
February 12, 1999, the Company voluntarily agreed to a stipulated order
requiring it to hold an annual meeting on or before June 11, 1999, subject to
there being a quorum, and to mail notice of the meeting on or before April 26,
1999. At Mr. Elkins' request, the Superior Court has scheduled a May 27, 1999
hearing to determine whether to hold the Company in contempt or to sanction it
for violation of the stipulated order. The Company believes that it has made
all efforts to comply in good faith with the stipulated order, that it was
effectively prevented from complying with the strict terms of the stipulated
order by delays in the SEC's review of the Company's preliminary proxy materials
and that the Company should not be held in contempt or sanctioned. Further, the
Company believes that issuance of the notice of meeting set forth on page 3
moots all issues to be heard at the May 27 hearing.
On May 18, 1999, the Company brought an action (which was amended on May
21, 1999) against Mr. Tobin in federal District Court for the District of Rhode
Island, seeking among other things a determination that Mr. Tobin's nominations
are invalid and to enjoin him from soliciting proxies from the Company's
stockholders. The Court declined the Company's request for a temporary
restraining order, but will hear the Company's request for a preliminary
injunction on May 28, 1999. In the absence of an order by the Court to the
contrary, the Company expects the chairman of the meeting to rule Mr. Tobin's
nominations out of order if Mr. Tobin attempts to nominate his candidates at the
annual meeting.
4
