<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. 2)
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
- --------------------------------------------------------------------------------
(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
(415) 393-8000
- -------------------------------------------------------------------------------
PROXY STATEMENT
- -------------------------------------------------------------------------------
GENERAL
This proxy statement is being 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, and any and all adjournments or postponements of the meeting, to
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. This proxy
statement and the accompanying form of WHITE proxy card are first being mailed
to the stockholders on or about June 1, 1999.
At the meeting, Company stockholders will (i) elect two Class III directors
to serve until the 2000 annual meeting of stockholders and until their
successors are elected and qualify, (ii) elect two Class I directors to serve
until the 2001 annual meeting of stockholders and until their successors are
elected and qualify, and (iii) elect two Class II directors to serve until the
2002 annual meeting of stockholders and until their successors are elected and
qualify.
Record Date
Only stockholders of record at the close of business on the record date,
April 19, 1999, are entitled to notice of and to vote at the meeting. On the
record date, there were issued and outstanding 8,893,250 shares of the Company's
common stock, par value $.001 per share (the "Common Stock").
Voting
Under the Company's amended and restated by-laws (the "Bylaws"), the
presence, in person or by proxy, of stockholders entitled to cast at least a
majority of all the votes entitled to be cast at the meeting constitutes a
quorum for the transaction of business at the meeting. One of Mr. Tobin's
nominees, who is the plaintiff in a previously filed California action, has
filed a motion asking the court to order the Company to hold the meeting and
elect directors, even if a quorum as defined in the Bylaws is not present. The
Company intends to oppose vigorously this motion. For additional information on
the California action, the plaintiff's motion and the Company's response, see
"Certain Information Concerning Nominations by Frederick G. Tobin - Nominations"
below. If the California court does not grant the plaintiff's motion before the
meeting, then in the absence of a quorum as defined in the Bylaws, the
stockholders present, in person or by proxy, by majority vote and without notice
other than by announcement at the meeting, may adjourn the meeting from time to
time in accordance with the Bylaws. See also "Additional Information - Other
Matters" below.
<PAGE>
If a proxy is properly signed and returned, the shares represented by the
proxy will be voted at the meeting in accordance with the instructions on the
proxy. However, if no instructions are specified and WHITE proxy card is
returned, such shares will be voted FOR each nominee of the Board for director.
If a proxy is accompanied by instructions to withhold authority, 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 for each share of Common Stock held for each nominee for director. In the
election of directors, the six nominees receiving the highest number of votes
cast at the meeting will be elected. If any of the nominees for director named
in "Election of Directors" are not elected, the nominee for director who is
elected will be elected to the class of the nominee for director who was not
elected. An abstention in the election of directors will have no effect on the
result of the vote. Cumulative voting in the election of directors is NOT
permitted. On any other matters, one vote may be cast for each share of Common
Stock held. Approval of any proposal, other than the election of directors,
requires the affirmative vote of holders of a majority of the votes cast on the
proposal. Abstentions and 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 the shares on a particular
matter for which the brokers or nominees do not have discretionary power), will
have no effect on the election of directors.
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 of an instrument of revocation or a
duly signed 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. However,
mere attendance at the meeting will not revoke a proxy.
Solicitation
The Company will bear the expense of printing and mailing the proxy
materials. In addition to the solicitation of proxies by mail, directors,
officers and other employees of the Company may solicit proxies by personal
interview, telephone, fax or other electronic communications. Such persons will
not receive any additional compensation for doing that solicitation. Copies of
the proxy materials will be furnished to brokerage firms, 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 the proxy materials to, and obtaining authority to execute proxies
from, such beneficial owners. The Company has retained MacKenzie Partners, Inc.
("MacKenzie") to assist in the solicitation of proxies from brokers, nominees,
institutions and individuals. For additional information concerning solicitation
of proxies, see "Certain Information Concerning Nominations by Frederick G.
Tobin - Solicitation Information" below.
2
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the ownership
of shares of Common Stock as of April 19, 1999, by (i) each person known to the
Company to beneficially own more than five percent of the outstanding Common
Stock, (ii) each director and nominee for director, (iii) each individual named
in the summary compensation table below and (iv) all directors and executive
officers as a group. Except as otherwise indicated, each stockholder has sole
voting and investment power with respect to the shares beneficially owned,
subject to community property rights where applicable.
<TABLE>
<CAPTION>
Name Number of Shares Percentage of Common
---- ---------------- --------------------
<S> <C> <C>
Pacific Securitization, Inc.
Lorraine O. Legg 1,613,070 (1) 18.1%
Patricia M. Howe
John V. Winfield
The Intergroup Corporation 774,200 (2) 8.6%
Santa Fe Corporation
Anthony H. Barash 7,000 *
Douglas B. Fletcher 15,600 (3) *
Patricia M. Howe 154,820 (4) 1.7%
Robert W. Ledoux 9,050 (5) *
Lorraine O. Legg 206,700 (6) 2.3%
J. David Schemel 0
John E. Castello 76,000 (7) *
All directors and executive officers as a 2,082,240 (8) 22.6%
group (7 persons)
</TABLE>
_________
*Holds less than 1%.
(1) Represents shares held of record by Pacific Securitization, Inc.
("Pacific"), a wholly-owned subsidiary of E & L Associates, Inc. ("E&L"),
which is in turn a wholly-owned subsidiary of Corporate Capital Investment
Advisors ("CCIA"). CCIA is principally owned by Lorraine O. Legg, the
President, Chief Executive Officer and a director of the Company, and
Patricia M. Howe, a director of the Company. The business address of
Pacific, E&L, CCIA, Ms. Legg and Ms. Howe is 655 Montgomery Street, Suite
800, San Francisco, California 94111. See also notes (4) and (6) below.
(2) All information with respect to Mr. Winfield, The Intergroup Corporation
("Intergroup") and Santa Fe Corporation ("Santa Fe") is based solely on a
Schedule 13D dated July 31, 1997, as amended by an Amendment No. 2 to
Schedule 13D dated February 27, 1999, filed by them with the Securities and
Exchange Commission (the "SEC"). Mr. Winfield has sole voting and
dispositive power with respect to 193,000 shares owned by him directly. As
the Chairman, President, Chief Executive Officer and controlling
shareholder of Intergroup, Mr. Winfield shares voting and dispositive power
with Intergroup with respect to 471,100 shares owned by Intergroup
directly. As the Chairman, President and Chief Executive Officer of Santa
Fe, he shares voting and dispositive power with Santa Fe with respect to
110,100 shares owned by Santa Fe directly. The business address of Mr.
Winfield and Intergroup is 2121 Avenue of the
3
<PAGE>
Stars, Suite 2020, Los Angeles, California 90067. The business address of
Santa Fe is 2251 San Diego Avenue, Suite A-151, San Diego, California
92110.
(3) Includes 3,000 shares issuable under options exercisable within 60 days of
the date of this proxy statement.
(4) Includes 50,000 shares held through an individual retirement account and
101,000 shares issuable under options exercisable within 60 days of the
date of this proxy statement. Does not include 1,613,070 shares held of
record by Pacific (see note (1) above). Ms. Howe shares voting and
dispositive power with respect to the 1,613,070 shares held by Pacific
directly. Ms. Howe has sole voting and dispositive power over all other
shares held by her.
(5) 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 3,000 shares issuable under options exercisable
within 60 days of the date of this proxy statement.
(6) Includes 56,600 shares held through certain trusts or an individual
retirement account, and 150,000 shares issuable under options exercisable
within 60 days of the date of this proxy statement. Does not include
1,613,070 shares held of record by Pacific (see note (1) above). Ms. Legg
shares voting and dispositive power with respect to the 1,613,070 shares
held by Pacific directly. Ms. Legg has sole voting and dispositive power
over all other shares held by her.
(7) 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, 4,000 shares held in custody for Mr. Castello's two sons,
as to which Mr. Castello shares voting and investment power, and 50,000
shares issuable under options exercisable within 60 days of the date of
this proxy statement.
(8) Includes 1,613,070 shares held of record by Pacific (see notes (1), (4) and
(6) above) and 307,000 shares issuable under options exercisable within 60
days of the date of this proxy statement.
CERTAIN INFORMATION CONCERNING NOMINATIONS BY FREDERICK G. TOBIN
Nominations
In a letter dated April 26, 1999, Frederick G. Tobin notified the Company
that he intended to nominate himself and five other individuals for election to
the Board. The Company anticipates that you may receive proxy materials from
Mr. Tobin's "Committee to Save Our TIS Investment" (the "Tobin Committee")
recommending that you vote for Mr. Tobin's nominees instead of the Board of
Directors' nominees.
The Board believes that Mr. Tobin's nominations are invalid because Mr.
Tobin was not a stockholder of record on April 19, 1999, the record date for the
meeting, or April 26, 1999, the date he sent notice to the Company. The
Company's Bylaws permit a stockholder to nominate candidates for election as
directors by giving timely notice, provided that the stockholder is a
stockholder of record both at the time that the stockholder gives notice and on
the record date for the meeting. See "Additional Information - Nomination of
Directors/Stockholder Proposals" below.
4
<PAGE>
On May 18, 1999, the Company brought an action (which was amended on May
21, 1999) against Mr. Tobin (a resident of Rhode Island) 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 on May 28, 1999 heard
testimony on the Company's request for a preliminary injunction. While Mr. Tobin
only claims that his stock is in his brokerage accounts, he contends that the
term "stockholder of record" is unclear and that he was one on the relevant
dates within his understanding of the term. He also claims that the Company is
not entitled to injunctive or equitable relief for various reasons. The Court is
expected to hear final arguments on the Company's preliminary injunction motion
on June 1, 1999. Mr. Tobin has filed a motion seeking to dismiss the action for
failure to join his other nominees in the action or in the alternative to
abstain from issuing an injunction or stay the proceedings pending the outcome
of the California action described below. The Company intends to oppose
vigorously this motion.
On January 27, 1999, Henry G. Elkins, Jr., who claims to be a stockholder
of the Company and is a nominee of Mr. Tobin, brought an action against the
Company in the California Superior Court, San Francisco, to compel the Company
to hold an annual meeting. Because the Company was intending to have a meeting
anyway, it voluntarily agreed to a stipulated order on February 12, 1999,
without contesting the issue. The stipulated order required it to hold a 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. After the Company brought its Rhode
Island action, Mr. Elkins filed a motion requesting the Superior Court to hold
the Company in contempt or to sanction it for violation of the stipulated order.
On May 22, 1999, the Company mailed notice of the meeting to all stockholders of
record entitled to notice of and to vote at the meeting. The Superior Court
heard arguments on Mr. Elkins' request on May 27, 1999 and took the matter under
advisement pending its decision. The Company believes that it has made all
efforts to comply in good faith with the stipulated order, that the mailing of
the notice moots Mr. Elkins' request and that the Company should not be held in
contempt or sanctioned. On May 25, 1999, Mr. Elkins filed a motion for further
injunctive relief asking the Superior Court to determine the validity of Mr.
Tobin's nominations. The motion further sought the Superior Court's application
of certain provisions of the California Corporations Code (including a provision
permitting less than a quorum as defined in the Bylaws to act at the meeting) to
the Company. The Company believes that the provisions of California law cited by
Mr. Elkins are not applicable to the Company and would violate the Company's
Bylaws and applicable Maryland law. The Company intends to oppose vigorously Mr.
Elkins' motion.
If Mr. Tobin nevertheless attempts to place his candidates in nomination,
the Board intends to direct the chairman of the meeting to rule Mr. Tobin's
nominations out of order unless a court rules that Mr. Tobin's nominations are
valid or otherwise orders the Company to entertain Mr. Tobin's nominations. The
Company may, however, pursue an appeal from any such ruling or order prior to
the final disposition of the vote at the meeting. In any event, the Board
intends to oppose vigorously Mr. Tobin's nominees.
Pending the final outcome of the various court actions and in order to mail
to stockholders and hold the meeting on the scheduled date, the Company is
providing information in this proxy statement about Mr. Tobin's nominees and
information that would be required about the Company's anticipated solicitation
in opposition to Mr. Tobin if in fact Mr. Tobin's nominations were valid. The
information that the Company is adding is the information under this caption as
well as in Appendices A and B hereto.
According to the preliminary proxy materials of the Tobin Committee filed
with the SEC on May 10, 1999, Mr. Tobin is an attorney in general practice in
Coventry, Rhode Island, one of his
5
<PAGE>
nominees is a portfolio manager for a division of Lincoln Property Company, one
is a sociologist and software developer, one is a vice president of Braman &
White LLC, one is a senior vice president for Mellon U.S. Leasing and one is a
retail property investment sales specialist with Marcus & Millichap of San
Francisco. Additional information about these nominees is included in such
preliminary proxy materials.
The Company is not responsible for the accuracy of any information provided
by or relating to Mr. Tobin, the Tobin Committee or Mr. Tobin's nominees
contained in any proxy materials filed or disseminated by the Tobin Committee or
any other statement Mr. Tobin, the Tobin Committee or Mr. Tobin's nominees may
make.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR EACH OF THE NOMINEES OF
THE BOARD OF DIRECTORS BY SIGNING AND RETURNING THE WHITE PROXY CARD. THE BOARD
OF DIRECTORS URGES YOU NOT TO SIGN ANY PROXY CARD SENT TO YOU BY THE TOBIN
COMMITTEE.
Solicitation Information
The Company has retained MacKenzie to assist in the solicitation of
proxies. Pursuant to the Company's agreement with MacKenzie, it will provide
various proxy advisory and solicitation services for the Company at a cost of
approximately $25,000, plus reasonable out-of-pocket expenses and
indemnification against certain liabilities. It is expected that MacKenzie will
use approximately 30 persons in such solicitation.
Certain information concerning the directors, executive officers and other
representatives of the Company who may solicit proxies is attached to this proxy
statement as Appendix A. Certain information concerning the Common Stock
----------
purchased or sold within the past two years by the persons listed in Appendix A
----------
is set forth in Appendix B.
----------
The Company estimates that the aggregate amount to be spent by the Company
in connection with the solicitation of proxies and the conduct of the related
litigation (described in "Certain Information Concerning Nominations by
Frederick G. Tobin - Nominations" above) by the Company will be approximately
$550,000, of which approximately $350,000 has been incurred to date. However,
no precise estimate of the final aggregate amount to be spent (which may be
substantially higher than that estimated) can be made at this time, due to,
among other things, the inherently uncertain nature of the proxy contest with
Mr. Tobin and the Tobin Committee, and the litigation process. The amount
estimated includes the fees payable to MacKenzie, but excludes (i) the salaries
and expenses of officers, directors, and employees of the Company and (ii) the
normal expenses of an uncontested election.
PLEASE COMPLETE, DATE AND SIGN THE ENCLOSED WHITE PROXY CARD AND RETURN IT
PROMPTLY IN THE ENVELOPE PROVIDED. IF YOUR SHARES ARE HELD IN "STREET NAME,"
ONLY YOUR BANK OR BROKER CAN VOTE YOUR SHARES AND ONLY UPON YOUR SPECIFIC
INSTRUCTIONS. PLEASE CONTACT THE PERSON RESPONSIBLE FOR YOUR ACCOUNT AND
INSTRUCT HIM OR HER TO VOTE THE WHITE PROXY CARD AS SOON AS POSSIBLE.
THE BOARD OF DIRECTORS URGES YOU NOT TO SIGN ANY PROXY CARD SENT TO YOU BY
THE TOBIN COMMITTEE. IF YOU HAVE ALREADY DONE SO, YOU MAY REVOKE YOUR
PREVIOUSLY SIGNED PROXY BY DELIVERING A WRITTEN NOTICE OF REVOCATION OR A LATER
DATED WHITE PROXY CARD IN THE ENCLOSED ENVELOPE.
6
<PAGE>
ELECTION OF DIRECTORS
The Company's Bylaws divide the Board of Directors into three classes,
Class I, Class II and Class III, as nearly equal in number as possible. There
are currently six directors. The term of office for the directors in Class I
would have expired at the annual meeting of stockholders in 1998, and the term
of office for the directors in Class II expires with the meeting. Because of the
deferral of the annual meeting of stockholders from 1998 until this year, the
terms of directors in both Classes I and II will expire at the meeting. In
addition, since the last annual meeting of stockholders, Ms. Lorraine O. Legg
and Messrs. Anthony H. Barash and J. David Schemel have been elected to the
Board to fill existing vacancies, and their terms of office will expire at the
meeting.
The Board of Directors has nominated, and recommends the election of, the
following persons to serve as directors of the Company in the classes indicated
below until the annual meetings of stockholders in the years indicated below and
until their successors are elected and qualify:
<TABLE>
<CAPTION>
Director Year Term Would
Name Since Class Expire
--------------------------- --------------- -------------- ---------------------
<S> <C> <C> <C>
Patricia M. Howe 1988 III 2000
Robert W. Ledoux 1988 III 2000
Douglas B. Fletcher 1988 I 2001
J. David Schemel 1999 I 2001
Anthony H. Barash 1999 II 2002
Lorraine O. Legg 1988 II 2002
</TABLE>
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 continue to serve, if that should occur, proxies will be voted for
such alternative person or persons as shall be recommended by the Board of
Directors. The Bylaws provide that during such time as the Company qualifies or
seeks to qualify as a REIT, except in the case of a vacancy, a majority of the
Board of Directors shall be composed of persons who are not affiliates of any
third-party manager, if any, responsible for directing and performing the day-
to-day business affairs of the Company or of any affiliate of such third-party
manager, and who are not employed by, or receiving any compensation (except for
serving as a director) from, the Company ("Unaffiliated Directors").
Biographical Information
Except as otherwise noted, the following individuals have had the
occupations indicated (other than directorships) for at least the past five
years. Officers of the Company are elected by the Board of Directors annually
to serve for one-year terms, subject to earlier termination, and until their
successors are elected. However, both of the Company's executive officers have
entered into employment agreements with the Company (see "Employment Agreements"
below).
Patricia M. Howe, 70, Director of the Company since 1988; and Chairman of
the Company from 1988 to 1997. Chairman, Pacific Securitization Inc. (asset
securitization); Chairman, Chief Financial Officer and a Director, Corporate
Capital Investment Advisors (holding company); Chairman, TIS Asset Management
since 1991; and Chairman, TIS Financial Services, Inc. (financial products)
since 1984.
7
<PAGE>
Robert W. Ledoux, 57, Director of the Company since 1988. General Partner,
Venture Growth Associates (investment partnership) since 1998; Associate, Bryan
& Edwards (private venture capital) from 1984 to 1998; for the prior 11 years,
Vice President, BA Investment Management Co. (wholly-owned subsidiary of Bank of
America); and Chartered Financial Analyst.
Douglas B. Fletcher, 73, Chairman of the Company since 1997. Chairman and
Chief Executive Officer, Fletcher Capital Advisors Incorporated (investment
advisor); Partner, Newport Partners (privately-owned venture capital firm); from
1985 to 1999, 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); former Allied Member, New York
Stock Exchange; and Chartered Financial Analyst.
J. David Schemel, 43, Director of the Company since February, 1999.
Managing Member, Vista Marin, LLC (owner and manager of an office building in
Redwood City, California) since 1998; Managing Member, DSDI, LLC (owner of
apartment buildings in San Francisco and on the San Francisco Peninsula) since
1994; Managing Member, Oxford Associates, LLC (residential home developer) since
1996; and from 1988 to 1994, Vice President, TRI Commercial Real Estate, for
which he managed various workout transactions.
Anthony H. Barash, 56, Director of the Company since February, 1999.
Senior Vice President, Corporate Affairs, and General Counsel, Bowater
Incorporated (paper and forest products company) since April 1996; and Partner
in the Los Angeles office, Seyfarth, Shaw, Fairweather & Geraldson (a national
law firm), where he was a member of the firm's Business Law and Real Estate
Group, from May 1993 to April 1996.
Lorraine O. Legg, 59, President and Chief Executive Officer of the Company
since 1988; and Director of the Company from 1988 to May 1997 and since
September 1997. President, Chief Executive Officer and a Director, Pacific
Securitization, Inc.; President, Chief Executive Officer and a Director of
Corporate Capital Investment Advisors; President, Chief Executive Officer and
Director, TIS Asset Management since 1991; President, Chief Executive Officer
and a Director, TIS Financial Services, Inc. since 1984; Director (since 1993)
and President and Chief Executive Officer (from December 1995 to June 1998),
Meridian Point Realty Trust VIII Co.; and Director (from 1993 to September 1998)
and President and Chief Executive Officer (from February 1996 to September
1998), Meridian Point Realty Trust `83. Director, Downtown Association of San
Francisco; Chairman, Planned Giving Foundation; and Director, CFI ProServices,
Inc.
John E. Castello, 54, 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. since 1984; Director and Senior Vice
President, TIS Asset Management since 1991; Senior Vice President and Chief
Financial Officer of Meridian Point Realty Trust `83 from February 1996 to
September 1998; Senior Vice President and Chief Financial Officer of Meridian
Point Realty Trust VIII Co. from December 1995 to June 1998; and Assistant
Secretary, INVG Mortgage Securities Corp. from 1992 to 1996.
Information Concerning Meetings and Certain Committees
At the beginning of 1998, the Company's Board of Directors consisted of Mr.
Fletcher, Ms. Legg, Ms. Howe, Mr. Ledoux, John D. Boyce, Melvin W. Petersen,
Richard M. Osborne, Christopher L. Jarratt and James G. Lewis. Mr. Petersen
resigned from the Board in September 1998. In February 1999, Messrs. Osborne,
Jarratt and Lewis resigned from the Board and Messrs. Barash and Schemel were
8
<PAGE>
elected to fill vacancies on the Board. In March 1999, the Board reduced the
number of authorized directors from nine to six, and Mr. Boyce resigned and
retired from the Board. The Board of Directors met six times during 1998.
The Company has an Audit Committee and a Compensation Committee. The
Company does not have a nominating committee or any other such committee which
performs similar functions.
During 1998, Messrs. Ledoux, Boyce, Petersen and Osborne were members of
the Audit Committee. The current members of the Audit Committee are Messrs.
Ledoux, Barash and Schemel. 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 once during
1998.
During 1998, Messrs. Boyce and Petersen were members of the Compensation
Committee. Since their resignations, no current directors have been appointed
to 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 did
not meet in 1998, and no bonuses or other incremental compensation was paid to
the Company's executive officers in that year.
During 1998, no director attended fewer than 75% of the total of all
meetings of the Board of Directors, and the committees, if any, upon which such
director served, which were held during the period of time that such person
served on the Board or such committee, except Mr. Osborne who attended 14% of
the total of all meetings of the Board and the committee on which he served.
Compensation of Directors
The Company pays an annual fee of $12,000 to each non-employee director and
a fee of $300 for each Board meeting and each Board committee meeting attended
by each such director (except meetings by conference telephone). The Company
reimburses directors for costs and expenses incurred in attending such meetings.
Under the Company's 1995 Stock Option Plan, each Unaffiliated Director in
office at the close of each annual meeting is granted an option to purchase
1,000 shares of Common Stock as of 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 terminate 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, except that the exercise
price is reduced by the amount of any dividends declared after the date the
optionee is eligible to purchase such shares. In no event, however, is the
exercise price to be less than 50% of the fair market value of the optioned
share on the date the option is granted. No options were granted in 1998, as no
annual meeting of stockholders was held in that year.
Compensation of Executive Officers
The following table sets forth information regarding compensation paid or
payable by the Company to the Company's executive officers for the years
indicated below.
9
<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Name and Principal Position Year Annual Compensation
- ----------------------------------------------- ------------- -------------------------------
<S> <C> <C>
Lorraine O. Legg 1998 $95,000
President and Chief Executive Officer 1997 95,000
1996 47,500(1)
John E. Castello 1998 $80,000
Executive Vice President and Chief 1997 80,000
Financial Officer 1996 40,000(1)
</TABLE>
- ---------------
(1) On July 1, 1996, the Company became a self-administered real estate
investment trust. Prior to that date, the Company was party to an agreement
(the "Management Agreement") with TIS Financial Services, Inc. (the "Former
Manager"), under which the Former Manager managed the Company's day-to-day
operations, subject to the supervision of the Board of Directors. Under the
Management Agreement, the Company paid certain fees and expenses to the
Former Manager and did not pay cash compensation to its executive officers.
The amounts shown as compensation paid or payable by the Company in 1996 are
the amounts earned from and after July 1, 1996, the date on which the
Company became self-administered and began paying its executive officers
salaries. See also "Certain Relationships and Related Transactions" below.
Stock Options. The following table sets forth information regarding options
held by the Company's executive officers at December 31, 1998. The Company did
not grant any options to its executive officers in 1998 and has never granted
any stock appreciation rights to such individuals.
AGGREGATED FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
Number of Securities Underlying Value of Unexercised
Unexercised Options at Fiscal In-the-Money Options at Fiscal
Year-End(#)(1) Year-End ($)(2)
Name Exercisable/Unexercisable Exercisable/Unexercisable
---- ------------------------- -------------------------
<S> <C> <C>
Lorraine O. Legg 150,000/0 $0/$0
John E. Castello 50,000/0 $0/$0
</TABLE>
- ---------------
(1) All such options were granted in 1995, have a per share exercise price of
$2.23 and expire in 2005 (subject to earlier termination in the event of
termination of employment, disability or death).
(2) The per share exercise price of such options exceeded the $0.58 and $1.22
closing prices of the Common Stock on December 31, 1998 and April 27, 1999,
respectively. Thus, no options were "in-the-money."
Employment Agreements. The Company has employment agreements with Ms. Legg
and Mr. Castello. Ms. Legg's agreement provides for an initial term through
July 1, 1999, and Mr. Castello's agreement provides for an initial term through
July 1, 1998. Both agreements have evergreen renewal provisions that
automatically extend the term of the agreements for one year, unless either
party provides
10
<PAGE>
prior written notice to terminate during the periods provided by
the agreement. Each agreement includes (i) an annual base salary of $95,000 for
Ms. Legg and $80,000 for Mr. Castello; (ii) an annual incentive performance
bonus determined at the discretion of the Board of Directors; (iii) certain
fringe benefits; (iv) payment of 50% of the cost of certain medical and
disability insurance and (v) two weeks paid vacation per calendar year for the
first four years of service (three weeks per calendar year thereafter).
Each agreement provides for the officer to receive his or her accrued base
salary to the date of termination by reason of death or disability (as defined
in the agreements). Each agreement also provides for the officer to receive his
or her base salary, incentive bonus and fringe benefits that are accrued and
unpaid up to the date of termination for "cause" (as defined in the agreements)
or if the officer terminates the agreement without "good reason" (as defined in
the agreements). If the officer is terminated other than for cause, or he or
she quits for good reason (which includes a change of control), he or she will
receive: (i) any unpaid portion of his or her base salary and incentive bonus
accrued and unpaid through the termination date; (ii) a severance payment in the
amount of 299% of the higher of the officer's combined base salary and actual
incentive bonus for the preceding fiscal year and the average of the officer's
combined base salary and incentive bonus for the three preceding years, provided
that the total severance payment is not less than $283,100 for Ms. Legg and
$239,000 for Mr. Castello; (iii) immediate vesting of all stock options held by
the officer and (iv) continuation of all fringe benefits until the earlier of
the officer's securing full-time employment or completion of the term of the
agreement remaining at the time of termination. Each agreement provides that
during the term of the agreement, and for one year after termination of the
employment relationship by the Company without cause or by the officer for good
reason, the officer will not be affiliated with a "Competing REIT" (as defined
in the agreements).
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended (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 SEC and the principal exchange
on which the Common Stock is listed. Officers, directors and greater than ten
percent stockholders are also required 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, 1998.
Certain Relationships and Related Transactions
TIS Financial Services, Inc. The Company has a Facilities and Expense
Sharing Agreement (the "Sharing Agreement") with TIS Financial Services, Inc.
(the "Former Manager"). The Sharing Agreement provides for the prorata sharing
of office space, office equipment and the expenses of certain administrative and
other personnel and ancillary services. The prorata sharing is determined based
upon the relative benefit received by each party in accordance with the amount
of space used or the relative amount of time each such resource is used, or such
other allocation method as may be reasonable and agreed to by the parties. The
Sharing Agreement continues in effect until terminated by one of the parties on
30 days' prior written notice or until the parties no longer share office space.
The Company paid the Former Manager $28,980 under the Sharing Agreement in 1998.
In April 1999, the Company entered into a financing agreement with the
Former Manager, whereby the Former Manager extended a revolving line of credit
of $1 million to the Company. This
11
<PAGE>
revolving line of credit is to provide working capital to the Company. It is for
a term of one year, is at the annual rate of prime plus one and one-half percent
and is secured by the Company's ownership in Bankers Trust Series 1988-1
Residual Interest Certificate. Payment of the line of credit can be accelerated
on certain events, including a change in control of the Company in which certain
executive officers of the Company are removed or in which a majority of the
Board is changed. In order to provide the revolving line of credit, the Former
Manager has obtained the commitments of DSDI, LLC, an entity controlled by Mr.
Schemel, for $625,000 and an unrelated lender for the remainder, both on the
same terms as the revolving line of credit.
The executive officers of the Former Manager include the following persons,
who also serve as directors and/or executive officers of the Company: Patricia
M. Howe, Chairman of the Board of the Former Manager; Lorraine O. Legg,
President and Chief Executive Officer of the Former Manager; and John E.
Castello, Senior Vice President of the Former Manager. Ms. Howe and Ms. Legg
each own 38.125% of the outstanding stock of CCIA, the parent of the Former
Manager and the indirect parent of Pacific. Management believes that the terms
and conditions of the transactions with the Former Manager described above are
at least as favorable to the Company as those that could be obtained from
unaffiliated third parties.
Pacific Securitization, Inc. On February 2, 1999, the Company acquired all
the shares of Novato Markets, Inc. ("Novato") from Pacific Securitization, Inc.
("Pacific"), in exchange for 1,613,070 shares of Common Stock (or approximately
18.1% of its then outstanding shares). Through a wholly-owned subsidiary,
Novato owns a shopping center located in Rohnert Park, California, named
Mountain Shadows Plaza, and a shopping center subject to a ground lease in
Petaluma, California, named Midtown Center. The shopping centers have combined
commercial and retail space totaling approximately 80,000 square feet. Pacific
is indirectly principally owned by Ms. Legg, the President and Chief Executive
Officer and a director of the Company, and Ms. Howe, a director of the Company.
The Company's acquisition of Novato by virtue of the share exchange was approved
by the Company's Board of Directors and, specifically, by directors with no
financial interest in or other relationship to Pacific or its owners.
The Company determined the fair value of the underlying assets acquired in
the share exchange to be $8,527,000, on the basis of appraisals of the assets by
independent appraisers. The net asset value of $2,443,000 was then determined
by reducing the fair value of $8,527,000 by the $5,984,000 in mortgage debt
assumed and the $100,000 in current liabilities on or related to the assets.
In accordance with generally accepted accounting principles, the assets and
liabilities acquired in the share exchange were recorded at their respective
fair values, and the shares of Common Stock issued to Pacific were recorded at
the net asset value of $2,443,000 (or approximately $1.51 per share). The
closing price of the Common Stock as reported in the over-the-counter market for
February 1, 1999 (the Pacific Exchange reported no trades in the Common Stock
for February 1 or 2, 1999 and the over-the-counter market reported no trades in
the Common Stock for February 2, 1999), was $0.8125 per share.
The shares of Common Stock were issued to Pacific under an exemption to the
registration requirements of the Securities Act of 1933, as amended (the
"Securities Act"). Accordingly, the shares are "restricted securities," as
defined in Rule 144 adopted under the Securities Act, and are not freely
transferable. The Company granted Pacific one-time demand registration rights
with respect to the shares for the period beginning June 30, 1999 and ending
February 2, 2001. It also granted Pacific piggy-back registration rights
exercisable if the Company files a registration statement under the Securities
Act in connection with the proposed offer and sale for cash of shares of Common
Stock by it or by any of its other stockholders.
12
<PAGE>
Before the closing of the share exchange, Novato caused its wholly-owned
subsidiary to transfer to Pacific all its rights under a lease, with option to
purchase, with Ignacio Properties, LLC, relating to the Ignacio Center in
Novato, California (the "Ignacio Property"), and Pacific agreed to assume all
the obligations of the subsidiary under the lease and option. The Company,
Novato, Novato's wholly-owned subsidiary and Pacific then entered into an
agreement whereby the parties clarified their respective rights and obligations
relating to the Ignacio Property and the Company's rights to an escrow
established when Pacific originally acquired Novato. Mr. Barash controls
Ignacio Properties LLC and subsequent to this transaction became a director of
the Company.
Management believes that the terms and conditions of the Pacific
transaction described above are more favorable to the Company than those that
could be obtained from unaffiliated third parties. Additional information
concerning the Pacific transaction is contained in the Company's Current Report
on Form 8-K dated February 2, 1999, as amended by an Amendment No. 1 on Form
8-K/A filed on April 5, 1999 and an Amendment No. 2 on Form 8-K/A filed on June
1, 1999. Copies of these filings may be obtained from the Company in the same
manner as copies of the Company's Annual Report on Form 10-K may be obtained.
See "Additional Information - Annual Report" below.
Turkey Vulture Fund XIII, Ltd., Third Capital LLC and Messrs. Osborne,
Jarratt and Lewis. On February 2, 1999, the Company repurchased 793,700 shares
of its Common Stock from Turkey Vulture Fund XIII, Ltd. ("TVF") for $1,984,250,
20,000 shares of its Common Stock from Mr. Jarratt for $40,000 and 12,000 shares
of its Common Stock from Mr. Lewis for $24,000, pursuant to an agreement among
the Company, TVF, Third Capital, LLC ("Third Capital") and Messrs. Osborne,
Jarratt and Lewis. The closing price of the Common Stock as reported in the
over-the-counter market for February 1, 1999 (the Pacific Exchange reported no
trades in the Common Stock for February 1 or 2, 1999 and the over-the-counter
per share market reported no trades in the Common Stock for February 2, 1999),
was $0.8125 per share. Based upon such per share closing price, TVF received a
premium of $1,339,369, Mr. Jarratt received a premium of $23,750 and Mr. Lewis
received a premium of $14,250 for their shares.
TVF, Third Capital and Messrs. Osborne, Jarratt and Lewis agreed that, for
a period of seven years, they will not directly or indirectly, among other
things, (i) effect or participate in or in any way assist any other person in
effecting or participating in (a) any acquisition of securities or rights to
acquire securities or assets of the Company or its subsidiaries, (b) any tender
or exchange offer, merger or other business combination involving the Company or
its subsidiaries, (c) any liquidation or other extraordinary transaction with
respect to the Company or its subsidiaries or (d) any solicitation of proxies or
consents to vote any voting securities of the Company; (ii) form or in any way
participate in a "group" with respect to the Company; (iii) otherwise act, alone
or in concert with others, to seek to control or influence the management, Board
of Directors or policies of the Company or its subsidiaries; (iv) take any
action to compel the holding of an annual or special meeting of stockholders or
(v) enter into any discussions or arrangements with any person relating to the
foregoing.
The parties also agreed to a mutual general release of all claims arising
out of or relating to the business or affairs of the Company or the ownership of
its stock. Messrs. Osborne, Jarratt and Lewis resigned from the Company's Board
of Directors, effective February 2, 1999.
This share repurchase was approved by the Company's Board of Directors and,
specifically, by directors with no financial interest in the transaction or the
Pacific transaction.
13
<PAGE>
ADDITIONAL INFORMATION
Independent Auditors
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, 1999. 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.
Other Matters
As of the date of this proxy statement, the Board of Directors knows of no
other matters to be brought before the meeting other than the election of
directors. Nevertheless, if any other matter properly comes before the meeting,
including among other things a motion to adjourn the meeting to another time or
place for the purpose of soliciting additional proxies, it is the intention of
the persons named as proxies in the WHITE proxy card to vote the shares they
represent in their discretion. Discretionary authority for them to do so is
contained in the enclosed form of WHITE proxy card.
Nomination of Directors/Stockholder Proposals
To nominate directors for election or to propose business to be considered
at an annual meeting of stockholders, a stockholder must deliver timely written
notice to the Company's Secretary setting forth certain detailed information
regarding the stockholder and the person the stockholder proposes to nominate
for election as a director or the business the stockholder is proposing for
consideration at an annual meeting of stockholders as is required by the Bylaws.
The stockholder must be a stockholder of record as of the date of the giving of
the notice and as of the record date for the annual meeting. To be timely, the
written notice to the Secretary must be delivered to or mailed and received at
the address of the Company set forth on page 1 of this proxy statement not less
than 60 days nor more than 90 days prior to the date of the annual meeting.
However, if less than 70 days' notice or prior public disclosure of the date of
the annual meeting is given or made, the notice from the stockholder, to be
timely, must be received by the Secretary not later than the close of business
on the 10th day following the earlier of the day on which the notice of the date
of the annual meeting was mailed or the day on which the public disclosure was
made.
Separate and apart from the required notice described in the preceding
paragraph, rules promulgated by the SEC under the Exchange Act entitle a
stockholder in certain instances to require the Company to include that
stockholder's proposal (but not that stockholder's nominees for director) in the
Company's proxy materials for the 2000 annual meeting of stockholders. Any
stockholder who wishes to present a proposal for inclusion in the Company's 2000
proxy solicitation materials must set forth the proposal in writing, file it
with the Company's Secretary at the address of the Company set forth on page 1
of this proxy statement by not later than December 28, 1999, and meet the other
requirements for inclusion contained in the SEC's rules.
Annual Report
The Company's annual report to stockholders for 1998, which is being mailed
to stockholders with this proxy statement, contains financial and other
information about the activities of the Company
14
<PAGE>
but is not incorporated into this proxy statement and is not to be considered a
part of these proxy solicitation materials. THE COMPANY, UPON REQUEST, WILL
FURNISH TO RECORD AND BENEFICIAL HOLDERS OF COMMON STOCK, FREE OF CHARGE, A COPY
OF ITS ANNUAL REPORT ON FORM 10-K (INCLUDING FINANCIAL STATEMENTS AND SCHEDULES
BUT WITHOUT EXHIBITS) FOR 1998 AND/OR COPIES OF ITS CURRENT REPORT ON FORM 8-K
DATED FEBRUARY 2, 1999 (WITHOUT EXHIBITS), AS AMENDED BY AN AMENDMENT NO. 1 ON
FORM 8-K/A FILED ON APRIL 5, 1999 AND AN AMENDMENT NO. 2 ON FORM 8-K/A FILED ON
JUNE 1, 1999. COPIES OF EXHIBITS TO THE FORM 10-K AND/OR THE FORM 8-K, AS
AMENDED, ALSO WILL BE FURNISHED UPON REQUEST AND THE PAYMENT OF A REASONABLE
FEE. ALL REQUESTS SHOULD BE DIRECTED TO THE COMPANY'S SECRETARY AT THE ADDRESS
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, Chief
Financial Officer and Secretary
San Francisco, California
June 1, 1999
15
<PAGE>
APPENDIX A
INFORMATION CONCERNING DIRECTORS, EXECUTIVES AND OTHER REPRESENTATIVES OF THE
COMPANY WHO MAY SOLICIT PROXIES FROM THE COMPANY'S STOCKHOLDERS
Set forth below are the present principal occupation or employment, and the
name, principal business and address of any corporation or organization in which
such employment is carried on, for (1) each of the Company's directors and (2)
executives and other representatives of the Company who may solicit proxies from
the Company's stockholders. Except as otherwise provided in this proxy
statement (including the appendices hereto), none of the individuals listed
below (i) directly or indirectly owns any shares of Common Stock or any other
securities of the Company, (ii) is, or was within the past year, a party to any
contracts, arrangements or understandings with any person with respect to any
securities of the Company, including but not limited to joint ventures, loan or
option arrangements, puts or calls, guarantees against loss or guarantees of
profit, division of losses or profits, or the giving or withholding of proxies,
or (iii) to the knowledge of the Company, has, directly or through an associate,
any arrangement or understanding with any person with respect to future
employment by the Company or its affiliates or with respect to any future
transactions to which the Company or any of its affiliates will or may be a
party, nor any material interest, direct or indirect, in any transaction which
has occurred since January 1, 1998 or any currently proposed transaction, or
series of similar transactions, to which the Company or any of its affiliates
was or is to be a party and in which the amount involved exceeds $60,000.
DIRECTORS AND EXECUTIVES OF THE COMPANY
---------------------------------------
<TABLE>
<CAPTION>
PRESENT OFFICE OR OTHER
NAME AND PRINCIPAL PRINCIPAL OCCUPATION OR
BUSINESS ADDRESS(1) EMPLOYMENT
----------------- ----------
<S> <C>
Patricia M. Howe Chairman, Corporate Capital Advisors and its
subsidiaries
Lorraine O. Legg President and Chief Executive Officer of the Company
Robert W. Ledoux General Partner, Venture Growth Associates
Venture Growth Associates
2479 East Bayshore Road
Palo Alto, CA 94303
Douglas B. Fletcher Chairman of the Company; Chairman and Chief Executive
Fletcher Capital Advisors Officer, Fletcher Capital Corporation
4 Upper Newport Plaza, Suite 100
Newport Beach, CA 92660
J. David Schemel Managing Member, Vista Marin, LLC, Managing Member,
Oxford Associates DSDI, LLC, and Managing Member, Oxford Associates, LLC
655 Montgomery Street, Suite 800
San Francisco, CA 94111
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PRESENT OFFICE OR OTHER
NAME AND PRINCIPAL PRINCIPAL OCCUPATION OR
BUSINESS ADDRESS(1) EMPLOYMENT
----------------- ----------
<S> <C>
Anthony H. Barash Senior Vice President, Corporate Affairs, and General
Bowater Inc. Counsel, Bowater Incorporated
55 East Camperdown Way
Post Office Box 1028
Greenville, SC 29602-1028
John E. Castello Executive Vice President and Chief Financial Officer
of the Company
</TABLE>
________________
(1) Unless otherwise indicated, the principal business address of each director
and executive of the Company is 655 Montgomery Street, San Francisco,
California 94111.
A-2
<PAGE>
APPENDIX B
SHARES OF COMMON STOCK PURCHASED OR SOLD WITHIN THE PAST TWO YEARS
BY THE COMPANY'S DIRECTORS, EXECUTIVES AND OTHER REPRESENTATIVES
WHO MAY SOLICIT PROXIES
Except as disclosed in this proxy statement (including the appendices
hereto), to the Company's knowledge, none of its directors, executives or other
representatives named herein has any interest, direct or indirect, by security
holdings or otherwise, in the Company.
Listed below are the only purchases and sales of Company Common Stock
within the past two years by the directors and executives of the Company who may
solicit proxies on the Company's behalf, and certain information concerning such
transactions. To the Company's knowledge, no director or executive who may
solicit proxies on the Company's behalf made any other transactions in Company
securities within the past two years.
<TABLE>
<CAPTION>
Number of Shares
Name Purchased Date of Transaction
---- --------- -------------------
<S> <C> <C>
Patricia M. Howe(1) 0 --
Lorraine O. Legg (1) 2,800 August 24, 1998
200 August 25, 1998
700 August 26, 1998
1,300 August 27, 1998
Robert W. Ledoux 0 --
Douglas B. Fletcher 0 --
J. David Schemel 0 --
Anthony H. Barash 0 --
John E. Castello 0 --
</TABLE>
________________
(1) Reference is made to "Election of Directors -- Certain Relationships and
Related Transactions" for a description of an acquisition of 1,613,070
shares of Company Common Stock on February 2, 1999 by Pacific
Securitization, Inc., a company principally owned by Ms. Legg and Ms. Howe.
<PAGE>
- --------------------------------------------------------------------------------
If you have any questions or need assistance in voting your shares please
contact:
[LOGO OF MACKENZIE PARTNERS, INC.]
156 Fifth Avenue
New York, New York 10010
(212) 929-5500 (Call Collect)
or
CALL TOLL-FREE (800) 322-2885
- --------------------------------------------------------------------------------
<PAGE>
[FORM OF PROXY]
TIS MORTGAGE INVESTMENT COMPANY
PROXY FOR THE
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 11, 1999
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned stockholder of TIS Mortgage Investment Company, a Maryland
corporation (the "Company") hereby appoints Douglas B. Fletcher, Lorraine O.
Legg and John E. Castello, or any one or more of them, each with full power of
substitution, as Proxies, to represent the undersigned and vote as directed on
the reverse hereof the undersigned's shares of common stock of the Company at
the Company's annual meeting of stockholders to 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, and at any and all adjournments or
postponements thereof.
THIS PROXY, WHEN PROPERLY SIGNED, WILL BE VOTED IN THE MANNER DIRECTED BY
THE UNDERSIGNED STOCKHOLDER ON THE REVERSE HEREOF. IF NO DIRECTION IS GIVEN,
THIS PROXY WILL BE VOTED FOR THE ELECTION OF THE NOMINEES FOR DIRECTOR LISTED ON
THE REVERSE HEREOF. THIS PROXY REVOKES ALL PRIOR PROXIES GIVEN BY THE
UNDERSIGNED.
(Continued and to be signed and dated on the other side.)
<PAGE>
/X/ Please mark your vote as indicated in this example
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH OF THE NOMINEES FOR
DIRECTOR LISTED BELOW.
(1) ELECTION OF DIRECTORS.
<TABLE>
<CAPTION>
Nominees Class
<S> <C> <C>
/ / FOR ALL NOMINEES LISTED AT RIGHT (EXCEPT AS Patricia M. Howe 2000
INDICATED TO THE CONTRARY BELOW) Robert W. Ledoux 2000
Douglas B. Fletcher 2001
/ / WITHHOLD AUTHORITY TO VOTE FOR ALL NOMINEES LISTED J. David Schemel 2001
AT RIGHT Anthony H. Barash 2002
Lorraine O. Legg 2002
</TABLE>
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, WRITE
THAT NOMINEE'S NAME ON THE SPACE BELOW.)
(2) OTHER BUSINESS. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE
FOR THE ELECTION OF SUCH SUBSTITUTE NOMINEE(S) FOR DIRECTOR AS THE BOARD OF
DIRECTORS SHALL SELECT IF ANY NOMINEE(S) NAMED ABOVE BECOME(S) UNABLE TO
SERVE AND UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE ANNUAL
MEETING AND ANY AND ALL ADJOURNMENTS OR POSTPONEMENTS THEREOF, INCLUDING,
AMONG OTHER THINGS, A MOTION TO ADJOURN THE ANNUAL MEETING TO ANOTHER TIME
OR PLACE FOR, AMONG OTHER THINGS, THE PURPOSE OF SOLICITING ADDITIONAL
PROXIES.
Please date this proxy and sign exactly as your name(s) appears hereon.
When signing as attorney, executor, administrator, trustee, guardian or other
representative, give your full title as such. If a corporation, sign the full
corporate name by an authorized officer, stating his or her title. If a
partnership, sign in partnership name by an authorized person.
Dated:________, 1999
_________________________
Signature
_________________________
Title
_________________________
Signature if held jointly
_________________________
Title
PLEASE VOTE, SIGN, DATE AND RETURN THIS PROXY AS PROMPTLY AS POSSIBLE IN THE
POSTAGE-PREPAID ENVELOPE PROVIDED.
