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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
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))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
Chateau Communities, Inc.
- --------------------------------------------------------------------------------
(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:
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Notes:
Reg. (S) 240.14a-101.
SEC 1913 (3-99)
<PAGE>
CHATEAU COMMUNITIES, INC.
6160 South Syracuse Way
Greenwood Village, Colorado 80111
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 18, 2000
To the Stockholders of Chateau Communities, Inc.:
The Annual Meeting of the Stockholders of Chateau Communities, Inc., a
Maryland corporation (the "Company"), will be held at the Company's
headquarters, 6160 South Syracuse Way, Greenwood Village, Colorado 80111 on
May 18, 2000, at 9:00 a.m., Mountain Daylight Time, for the following purpose
and any other business:
1. To elect four Class I directors to serve for a term of three years,
expiring at the 2003 Annual Meeting of Stockholders or until their
respective successors shall be elected and shall qualify.
The Board of Directors has fixed the close of business on March 24, 2000 as
the record date for the determination of stockholders entitled to notice of
and to vote at such meeting and any adjournments thereof.
We hope all stockholders who can do so will attend the Annual Meeting in
person. Whether or not you plan to attend, we urge you to complete, date and
sign the enclosed proxy and return it promptly in the enclosed postage-prepaid
envelope provided for that purpose. By returning your proxy promptly you can
help the Company avoid the expense of further proxy solicitations. To make it
easier for you to vote, this year we are introducing Internet and telephone
voting. Prior to being voted, the proxy may be withdrawn in the manner
specified in the proxy statement.
By Order of the Board of Directors,
John A. Boll,
Chairman
April 4, 2000
<PAGE>
CHATEAU COMMUNITIES, INC.
6160 South Syracuse Way
Greenwood Village, Colorado 80111
PROXY STATEMENT
For
ANNUAL MEETING OF STOCKHOLDERS
To Be Held May 18, 2000
GENERAL INFORMATION
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors (the "Board") of Chateau Communities, Inc.
(the "Company") for use at the Annual Meeting of Stockholders of the Company
(the "Annual Meeting") to be held at the Company's headquarters, 6160 South
Syracuse Way, Greenwood Village, Colorado 80111 on May 18, 2000 at 9:00 a.m.
Mountain Daylight Time, or at any adjournments thereof, for the purpose set
forth in the attached Notice of Meeting.
This Proxy Statement and the accompanying form of proxy are first being sent
to stockholders on or about April 4, 2000.
When proxies in the enclosed form are returned properly executed, the shares
represented thereby will be voted at the meeting and, where instructions have
been given by the stockholder, will be voted in accordance therewith. If the
stockholder does not otherwise specify, the stockholder's shares will be voted
FOR the election of the listed nominees for the Board and in accordance with
the best judgment of the proxy holders with respect to any other matter which
may properly come before the Annual Meeting. Any person signing and mailing
the enclosed proxy may, nevertheless, revoke the proxy at any time before it
is voted either by written notice received by the Company (Attention: Tamara
D. Fischer, Secretary) at its address stated herein or at the Annual Meeting.
Only stockholders of record at the close of business on March 24, 2000 (the
"Record Date") will be entitled to notice of or to vote at the meeting. As of
the Record Date, there were 28,432,195 shares of common stock, $0.01 par value
("Common Stock"), outstanding and entitled to vote. Each outstanding share of
Common Stock is entitled to one vote. There is no cumulative voting with
respect to the election of directors. Presence in person or by proxy of
holders of a majority of outstanding shares of Company Common Stock will
constitute a quorum at the Annual Meeting.
PROPOSAL I--ELECTION OF DIRECTORS
The directors of the Company are divided into three classes, and one class
is elected at each Annual Meeting of the Stockholders for a term of three
years. The terms of the Class I directors expire at the 2000 Annual Meeting.
They have been nominated for an additional term to expire at the 2003 Annual
Meeting of Stockholders. The terms of the other two classes of directors
expire at the 2001 Annual Meeting (Class II) and the 2002 Annual Meeting
(Class III).
Nominees for Election as Class I Directors
The following information is furnished regarding the nominees for election
as Class I directors (who serve until the Annual Meeting of the Stockholders
to be held in 2003 or until their respective successors are elected and
qualified):
Gebran S. Anton, Jr., 67, first became a director of the Company in 1993. He
is the owner of Gebran Anton Development Co. and Anton, Zorn & Associates,
Inc., a commercial and industrial real estate broker and former
1
<PAGE>
owner of Anton's, a men's retail chain. He is an incorporator and Director of
Community Central Bank, and a former Chairman of the Board for First National
Bank, St. Joseph Hospital, and Downtown Development Committee.
Rhonda G. Hogan, 47, has served as a director of the Company since March
1997. Ms. Hogan is presently a partner of Tishman Speyer Properties. She
recently served on the Board of Directors and as President of The Water Club
Condominium Association, Inc. and is on the Silver Council of the Urban Land
Institute. In addition, she served on the Board of Directors of Barnett Bank
of South Florida, N.A. from 1986 to 1996. Ms. Hogan has also served or
currently serves on several other Boards of Directors and as a member of
several councils or institutes, including appointments to State Boards by the
Governor and Cabinet of the State of Florida. Ms. Hogan received her B.B.A.
from the University of Iowa.
James M. Lane, 70, first became a director of the Company in 1993. He
retired as the Senior Vice President and Chief Investment Officer of the
Investment Management Division, NBD Bank, Detroit, where he served for
approximately thirteen years. Mr. Lane was associated with the Chase Manhattan
Corporation from 1953 to 1978, attaining the position of Executive Vice
President while also serving as President and Chief Executive Officer of Chase
Investors Management Corporation. He has a B.A. degree in economics from
Wheaton College and an MBA in finance from the University of Chicago.
Gary P. McDaniel, 54, has been Chief Executive Officer and a director of the
Company since February 1997. He served as the Chairman of the Board, President
and Chief Executive Officer of ROC Communities, Inc. ("ROC") since 1993 and
had been a principal of ROC's predecessors since 1979. He has been active in
the manufactured home industry since 1972. He is a Trustee of N'Tandem Trust.
Mr. McDaniel has been active in several state and national manufactured home
associations, including associations in Florida and Colorado. In 1996, he was
named "Industry Person of the Year" by the National Manufactured Housing
Industry Association. Mr. McDaniel is the Vice Chairman of the Board of
Directors of the Manufactured Housing Institute. He is a graduate of the
University of Wyoming and served as a Captain in the United States Air Force.
Continuing Class II Directors
The following information is furnished regarding the continuing Class II
directors (who serve until the Annual Meeting of the Stockholders to be held
in 2001 or until their respective successors are elected and qualified):
Edward R. Allen, 59, has served as a director of the Company since 1993. Mr.
Allen is the Chief Executive Officer and a director of Give Kids the World. He
was, for the five years preceding the formation of the Company, Chairman and
Chief Executive Officer of InterCoastal Communities, Inc., a Florida
corporation which was engaged in operating manufactured home communities in
Florida. Prior to joining InterCoastal, Mr. Allen developed a chain of
restaurants which he and his partner sold in 1977 to Green Giant Corporation.
Mr. Allen is a graduate of Cornell University.
James M. Hankins, 65, served as a director of ROC from August 1993 to
February 1997, and has served as a director of the Company since February
1997. He is managing general partner of Hankins Enterprises, a partnership
which owns and operates destination RV resorts in Arizona. Prior to organizing
the partnership in 1985, Mr. Hankins was a founder of Mobile Home Communities,
Inc. in 1969, and served as President and Chief Executive Officer from 1973 to
1984. He holds a B.S. from the University of South Carolina and an MBA from
Harvard University, and has served as a Captain in the United States Air
Force.
C.G. ("Jeff") Kellogg, 56, has been President and a director of the Company
since its inception, and was Chief Executive Officer of the Company from its
inception to February 1997. For the five years preceding the formation of the
Company, Mr. Kellogg was President and Chief Operating Officer of Chateau
Estates. He is extremely active in local and national industry associations,
often in leadership positions. Mr. Kellogg is a past President of the Michigan
Manufactured Housing Association and is an active member of the Manufactured
2
<PAGE>
Housing Institute's National Communities Council. He is a graduate of Michigan
Technological University with a B.S. in Civil Engineering. Mr. Kellogg is the
husband of Tamara D. Fischer, who is the Company's Executive Vice President
and Chief Financial Officer.
Donald E. Miller, 69, served as a director of ROC from August 1993 to
February 1997, and has served as a director of the Company since February
1997. From May 1994 through July 1996, Mr. Miller was Vice Chairman of the
Board of Directors of The Gates Corporation. From 1982 to May 1994, he was
President, Chief Operating Officer and director of The Gates Corporation and
The Gates Rubber Company, which engage in the production and manufacture of
rubber products, primarily for automotive needs. Mr. Miller is a director of
Sentry Insurance Company, OEA, Inc., CoorsTek and Lennox Industries, Int'l.
Mr. Miller is a graduate of the Colorado School of Mines.
Continuing Class III Directors
The following information is furnished regarding the continuing Class III
directors (who serve until the Annual Meeting of the Stockholders to be held
in 2002 or until their respective successors are elected and qualified):
John A. Boll, 70, has been Chairman of the Board of Directors of the Company
since its inception in 1993. Prior to the formation of the Company, Mr. Boll
was the co-founder, partner and Chief Executive Officer of Chateau Estates,
which was formed in 1966. He was inducted into the Manufactured
Housing/Recreational Vehicle Hall of Fame in 1992 for his outstanding
contributions to the manufactured housing industry. Mr. Boll was appointed by
the Governor of the State of Michigan to become the first Chairman of the
Michigan Mobile Home Commission, which is the principal Michigan authority
regulating manufactured housing, a position he held for six years.
James L. Clayton, 66, served as a director of ROC from August 1993 until
February 1997 and as a director of the Company since February 1997. He is the
founder, and since 1966 has been the Chairman of the Board and Chief Executive
Officer of, Clayton Homes, Inc. ("Clayton Homes"), a company which owns and
operates manufactured home factories, sales centers, financing and insurance
units and communities (NYSE:CMH). Mr. Clayton is a director of Dollar General
Stores and Chairman of the Board of BankFirst Corp. In 1992, Mr. Clayton was
inducted into the Manufactured Housing/Recreational Vehicle Hall of Fame. Mr.
Clayton received an undergraduate degree in electrical engineering and a law
degree from the University of Tennessee.
Steven G. Davis, 50, served as a director of ROC from August 1993 until
February 1997 and as a director of the Company since February 1997. He is
currently the owner of East Silent Advisors, a real estate consulting firm.
Mr. Davis currently serves on the Board of Directors of Bidland.Com, an
internet auction company. He served as Chief Financial Officer, Executive Vice
President and a director of ROC from 1993 to 1997. From 1990 to 1993, Mr.
Davis served as an officer and director of The Windsor Group, an
owner/operator of 42 manufactured home communities, and, from 1991 through
March 1993, as that company's President. Mr. Davis served as a director of ASR
Investments, a REIT owning apartments in the Southwest, until 1999. Mr. Davis
is a Certified Public Accountant and is a graduate of the University of San
Diego.
3
<PAGE>
REQUIRED VOTE AND RECOMMENDATION
Proxies will be voted for the election of all persons nominated to be a
director above unless contrary instructions are set forth on the proxy. In the
event any nominee should become unable or unwilling to serve as a director,
which the Board of Directors does not expect, the person named in the
accompanying proxy will vote for such nominee, if any, as may be recommended
by the Board of Directors.
Directors are elected by a plurality of the votes cast by the holders of
Common Stock. The individuals who receive the largest number of votes cast,
assuming presence of a quorum at the Annual Meeting, are elected as directors;
therefore, if a quorum is present, any shares not voted (whether due to
abstention or broker non-vote) do not affect the election of directors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE NOMINEES.
EXECUTIVE OFFICERS OF THE COMPANY
The following information is presented with respect to the current executive
officers of the Company:
Gary P. McDaniel is the Chief Executive Officer and a director of the
Company. Biographical information on Mr. McDaniel may be found under "PROPOSAL
1--ELECTION OF DIRECTORS--Continuing Class I Directors," above.
C.G. ("Jeff") Kellogg is President and a director of the Company.
Biographical information on Mr. Kellogg may be found under "PROPOSAL 1--
ELECTION OF DIRECTORS--Continuing Class II Directors," above.
Tamara D. Fischer, 44, is Executive Vice President, Chief Financial Officer
of the Company, having served in these roles since the Company's formation.
Prior to joining the Company, Ms. Fischer was employed by Coopers & Lybrand
for 11 years. Ms. Fischer is a CPA and a graduate of Case Western Reserve
University. Ms. Fischer is the wife of Mr. Kellogg who is the President and a
Director of the Company.
Rees F. Davis, Jr., 41, is Executive Vice President-Acquisitions of the
Company, having served in such capacity since February 1997. He served as
Executive Vice President of Acquisitions and Sales for ROC from 1993 to
February 1997. Prior to that, Mr. Davis previously served as Vice President of
Acquisitions and Sales and a director for ROC's predecessors since 1986. Mr.
Davis is a two-term past officer of the Colorado Manufactured Housing
Association. He is also an active member of The Manufactured Housing
Institute. Mr. Davis is a graduate of Colorado State University.
James B. Grange resigned as the Company's Chief Operating Officer effective
April 15, 1999.
4
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of March 24, 2000, certain information
regarding the beneficial ownership of the Company's Common Stock by (i) each
of the directors (nominated and continuing), (ii) executive officers of the
Company named in the Summary Compensation Table, (iii) all directors and
executive officers as a group and (iv) each person or entity known to the
Company to be the beneficial owner of more than 5% of the Common Stock.
<TABLE>
<CAPTION>
Shares of
Stock
Beneficially
Owned as of
March 24, Percent
Name 2000** of Class
- ---- ------------ --------
<S> <C> <C>
John A. Boll(1)*........................................ 3,577,563 12.3
Gary P. McDaniel(2)*.................................... 510,326 1.8
C.G. ("Jeff") Kellogg(3)*............................... 388,261 1.4
Tamara D. Fischer(4).................................... 179,176 ***
Rees F. Davis, Jr.(5)................................... 227,756 ***
Edward R. Allen(6)*..................................... 402,179 1.4
Gebran S. Anton, Jr.(7)*................................ 48,418 ***
James L. Clayton(8)*.................................... 230,700 ***
Steven G. Davis(9)*..................................... 167,164 ***
James M. Hankins(10)*................................... 43,232 ***
Rhonda G. Hogan (11)*................................... 18,776 ***
James M. Lane(12)*...................................... 38,047 ***
Donald E. Miller(13)*................................... 39,767 ***
All directors and executive officers as a group (13
persons)............................................... 5,871,365 19.9
Morgan Stanley Dean Witter Investment Management,
Inc.(14)............................................... 2,404,578 8.5
Morgan Stanley Dean Witter & Co.(15).................... 2,534,122 8.9
EII Realty Securities Inc. (16) ........................ 1,598,940 5.6
</TABLE>
- --------
* Designates a director.
** For purposes of this table, a person is deemed to be the beneficial owner
of shares of Common Stock if that person has the right to acquire such
shares within 60 days by the exercise of any stock option or any other
right to convert or exchange outstanding securities. Certain persons named
in the table also hold OP Units in CP Limited Partnership, which is the
operating partnership of the Company. Such OP Units are exchangeable on a
one-for-one basis for shares of the Company's Common Stock, subject to
certain limitations relating to the Company's ownership limit. All OP Units
held by a person and such person's stock options (to the extent
exchangeable or exercisable within such 60-day period) are deemed to have
been exchanged or exercised for the purpose of computing the percentage of
outstanding shares of Common Stock beneficially owned by such person, but
shall not be deemed to have been exchanged or exercised for the purpose of
computing the percentage of outstanding shares of Common Stock beneficially
owned by any other person. Additionally, for the purposes of this table, a
person or entity shall be deemed to be a beneficial owner of shares of
Common Stock if such person or entity has or shares either investment or
voting power with respect to such shares. Shares owned in each case
constitute less than 1% of the Company's outstanding common stock.
(1) Reflects 2,855,721 shares of Common Stock, 685,482 OP Units exchangeable
for an equal number of shares of Common Stock and options to purchase
36,360 shares of Common Stock.
(2) Reflects 486,426 shares of Common Stock and options to purchase 23,900
shares of Common Stock.
(3) Reflects 364,361 shares of Common Stock and options to purchase 23,900
shares of Common Stock.
(4) Reflects 165,100 shares of Common Stock, 776 OP Units exchangeable for an
equal number of shares of Common Stock and options to purchase 13,300
shares of Common Stock.
(5) Reflects 214,456 shares of Common Stock and options to purchase 13,300
shares of Common Stock.
5
<PAGE>
(6) Reflects 365,819 shares of Common Stock and options to purchase 36,360
shares of Common Stock.
(7) Reflects 12,058 shares of Common Stock and options to purchase 36,360
shares of Common Stock.
(8) Reflects 194,860 shares of Common Stock and options to purchase 35,840
shares of Common Stock. Common Stock beneficially owned by Mr. Clayton
includes 182,779 shares of Common Stock owned by Clayton Homes, Inc. Mr.
Clayton disclaims beneficial ownership of the shares of Common Stock
owned by Clayton Homes, Inc. except to the extent of his approximate 26%
equity interest in Clayton Homes, Inc. Shares owned by Clayton Homes,
Inc. are held by its wholly-owned subsidiary CHM Parks, Inc.
(9) Reflects 152,164 shares of Common Stock and options to purchase 15,000
shares of Common Stock.
(10) Reflects 7,392 shares of Common Stock and options to purchase 35,840
shares of Common Stock. Common Stock beneficially owned by Mr. Hankins
includes 1,303 shares of Common Stock owned by Mr. Hankins' spouse and
2,605 shares of Common Stock held by Mr. Hankins' individual retirement
account.
(11) Reflects 3,776 shares of Common Stock and options to purchase 15,000
shares of Common Stock.
(12) Reflects 7,027 shares of Common Stock and options to purchase 31,020
shares of Common Stock.
(13) Reflects 3,745 shares of Common Stock, options to purchase 35,840 shares
of Common Stock and 182 OP Units exchangeable for an equal number of
shares of Common Stock. Common Stock beneficially owned by Mr. Miller
includes 1,042 shares of Common Stock owned by Mr. Miller's spouse.
(14) Based on the Form 13-G filed by Morgan Stanley Dean Witter Investment
Management, Inc., it has shared voting power for 1,759,678 shares and
shares dispositive power for 2,404,578 shares. The address of Morgan
Stanley Asset Management, Inc. is 1221 Avenue of the Americas, New York,
NY 10020.
(15) Based on the Form 13-G filed by Morgan Stanley Dean Witter & Co., it has
shared voting power for 1,880,412 shares and shares dispositive power for
2,534,122 shares. The address of Morgan Stanley, Dean Witter, Discover &
Co. is 1221 Avenue of the Americas, New York, NY 10020.
(16) Based on the Form 13-G filed by EII Realty Securities Inc., it has sole
voting power for 1,422,672 shares and sole dispositive power for
1,598,940 shares. The address of EII Realty Securities Inc. is 667
Madison Avenue, New York, New York 10021.
6
<PAGE>
BOARD MATTERS
Board Meetings
The Board of Directors held four meetings during 1999.
Committees of the Board of Directors
Audit Committee. The Audit Committee reviews and acts or reports to the
Board with respect to various auditing and accounting matters, including the
selection and fees of the Company's independent auditors, the scope of audit
procedures, the nature of services to be performed for the Company by the
independent auditors, and the accounting practices of the Company. During
1999, the Audit Committee (which consisted of Ms. Hogan and Messrs. Anton,
Clayton and Lane) held three meetings.
Executive Committee. The Executive Committee may act on certain matters
between Board meetings. During 1999, the Executive Committee (which consisted
of Messrs. Boll, McDaniel, Kellogg and Hankins) held nine meetings.
Executive Compensation Committee. The Executive Compensation Committee
administers the Company's equity compensation plans and annually reviews and
approves recommendations from senior management and makes recommendations to
the Board regarding the policies and procedures that govern the various
compensation programs for the CEO and executives of the Company. During 1999,
the Executive Compensation Committee (which consisted of Messrs. Allen, S.
Davis, Hankins and Miller) held two meetings.
Nominating and Corporate Governance Committee. In 1998, the Company
established a Nominating and Corporate Governance Committee, which functions
as the nominating committee of the Board and also analyzes and develops
policies and makes recommendations to the Board relating to corporate
governance issues affecting the Company. During 1999, the Nominating and
Corporate Governance Committee (which consisted of Ms. Hogan and Messrs.
Hankins, Lane and Miller) held one meeting.
Director Compensation
Each director is reimbursed for travel and other expenses related to
attendance at Board and committee meetings and, other than Messrs. McDaniel
and Kellogg, receives an annual director's fee of $18,000, which may be taken
in stock at the Director's option. The independent directors also receive an
annual grant of options to purchase 5,000 shares of the Common Stock at an
exercise price equal to the fair market value of the Common Stock at the date
of grant.
7
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth the summary compensation for the last three
years for the Chief Executive Officer and the four most highly compensated
other executive officers of the Company whose salary and bonus compensation
for the year ended December 31, 1999 exceeded $100,000. The information
presented in the following tables gives retroactive effect to the merger with
ROC in February 1997 (the "Merger") and assumes that the five individuals
named below were employed in their current capacities by the Company during
each of 1997, 1998 and 1999.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term Compensation
Annual Compensation Awards
----------------------------- ------------------------
Common Stock
Underlying Restricted
Name and Principal Stock Stock All Other
Position Year Salary(1)(2) Bonus(1)(2) Options(1)(2) Award(3) Compensation(4)
------------------ ---- ------------ ----------- ------------- ---------- --------------
<S> <C> <C> <C> <C> <C> <C>
Gary P. McDaniel........ 1999 $244,000 $127,100 29,500 -- $13,550
Chief Executive Officer 1998 $235,000 $117,000 45,000 -- $18,726
1997 $225,000 $180,000 -- $577,500 $12,790
C.G. ("Jeff") Kellogg... 1999 $244,000 $127,100 29,500 -- $10,250
President 1998 $235,000 $117,000 45,000 -- $10,250
1997 $225,000 $180,000 -- $577,500 $18,372
James B. Grange (5)..... 1999 $410,000 -- 16,500 -- $ 4,350
Chief Operating Officer 1998 $199,000 $ 98,800 25,000 -- $17,000
1997 $190,000 $152,000 -- $315,000 $ 9,690
Tamara D. Fischer....... 1999 $190,000 $ 99,000 16,500 -- $11,581
Chief Financial Officer 1998 $183,000 $ 91,000 25,000 -- $13,413
1997 $175,000 $140,000 -- $315,000 $18,356
Rees F. Davis, Jr....... 1999 $174,000 $ 45,200 16,500 -- $18,128
Executive Vice Presi-
dent-- 1998 $167,000 $311,822 25,000 -- $18,263
Acquisitions 1997 $160,000 $105,000 -- $315,000 $ 9,690
</TABLE>
- --------
(1) Messrs. McDaniel, Grange and R. Davis were employed by ROC until the date
of the Merger, and their compensation was paid and their options were
granted by ROC prior to the Merger. At the effective time of the Merger,
each outstanding option of ROC was assumed by the Company and such options
became exercisable for the number of shares of Company Common Stock into
which the number of shares underlying the ROC options would have been
exchangeable if such shares had been outstanding at the effective time of
the Merger. Accordingly, the number of shares of Common Stock underlying
the options granted to Messrs. McDaniel, Grange and R. Davis prior to the
Merger is restated to give effect to the exchange ratio in the Merger of
1.042 shares of Company Common Stock for each share of ROC stock.
(2) Mr. Kellogg and Ms. Fischer were each employed by the Company prior to the
Merger and their compensation amounts reflect compensation they received
from the Company. In connection with the Merger, stockholders of the
Company received a stock dividend of 0.0326 shares of Common Stock per
share. In addition, certain holders of OP Units who exchanged their OP
Units for shares of Common Stock in connection with the Merger waived
their right to receive the shares of Common Stock that they would
otherwise have received from the Company as a result of the stock dividend
with respect to the exchanged OP Units for reallocation to the other
Company stockholders, which effectively increased the amount of the stock
dividend to Company stockholders to 0.068 shares of Common Stock for each
share outstanding. Accordingly, the number of shares of Common Stock
underlying the options granted to Mr. Kellogg and Ms. Fischer prior to the
Merger has been adjusted to give effect to the effective 0.068 stock
dividend.
(3) Represents an award of restricted stock granted in May 1997 when the stock
price was $26.25. The stock vests after three years, cannot be sold for
five years, and pays dividends to the executive officers.
(4) Represents primarily profit-sharing contributions and car allowances.
(5) Mr. Grange resigned from the Company effective April 15, 1999. Included in
the salary amount for 1999 is a severance payment.
8
<PAGE>
OPTION/SAR GRANTS DURING 1999
The following table sets forth information with respect to options granted
during 1999 to the executive officers named in the Summary Compensation Table.
<TABLE>
<CAPTION>
Potential
Realizable Value at
Assumed Annual
Rates of Stock
Price Appreciation
for Option Term
-------------------
(a) (b) (c) (d) (e) (f) (g)
- ------------------------ ------------ ------------ ----------- ---------- -------- ----------
Number of % of Total Weighted
Securities Options/SARs Average
Underlying Granted to Exercise or
Options/SARs Employees in Base Price Expiration
Name Granted 1999 ($/Sh) Date 5%($) 10%($)
---- ------------ ------------ ----------- ---------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
Gary P. McDaniel........ 29,500 8.9% $27.4375 2/24/2009 $509,031 $1,289,985
C.G. ("Jeff") Kellogg... 29,500 8.9% $27.4375 2/24/2009 $509,031 $1,289,985
James B. Grange(1)...... 16,500 5.0% $27.4375 2/24/2009 $284,712 $ 721,517
Tamara D. Fischer....... 16,500 5.0% $27.4375 2/24/2009 $284,712 $ 721,517
Rees F. Davis, Jr....... 16,500 5.0% $27.4375 2/24/2009 $284,712 $ 721,517
</TABLE>
- --------
(1) Mr. Grange resigned from the Company effective April 15, 1999.
AGGREGATED OPTION/SAR EXERCISES DURING 1999
AND OPTION/SAR VALUES AT DECEMBER 31, 1999
The following table provides information with respect to the unexercised
options held as of December 31, 1999 by the executive officers named in the
Summary Compensation Table.
<TABLE>
<CAPTION>
Number of Securities Value of
Underlying Unexercised Unexercised In-the-Money
Option/SARs at December Options/SARs at
Shares 31, 1999(1) December 31, 1999(1)
Acquired on Value ------------------------- -------------------------
Name Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
---- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Gary P. McDaniel........ 38,850 65,500 $ 77,308 --
C.G. ("Jeff") Kellogg... 125,120 65,500 $468,190 --
James B. Grange(2)...... 29,850 $162,152
Tamara D. Fischer....... 66,128 36,500 $252,838 --
Rees F. Davis, Jr....... 34,850 36,500 $ 77,308 --
</TABLE>
- --------
(1) See Note 1 and Note 2 to the Summary Compensation Table.
(2) Mr. Grange resigned from the Company effective April 15, 1999.
Employment Agreements
Consistent with the goal of the Company to retain the skills and expertise
of certain members of senior management of the Company and ROC following the
Merger, the Merger Agreement provided for the Company to execute employment
agreements (each, an "Employment Agreement"), effective as of the Merger, with
each of the following senior officers: Gary P. McDaniel, C.G. ("Jeff")
Kellogg, James B. Grange, Tamara D. Fischer and Rees F. Davis, Jr. Mr. Kellogg
and Ms. Fischer were previously employed by the Company, and their existing
employment agreements with the Company were terminated upon consummation of
the Merger. Each Employment Agreement had an initial term of three years with
automatic one-year extensions commencing on the third anniversary of the
Merger unless notice of non-extension is given at least 180 days prior to such
anniversary. Each of the Employment Agreements with senior officers of the
Company, other than the Employment Agreement with James B. Grange, the term of
which expired in connection with his resignation
9
<PAGE>
from the Company, has been extended for a one year period. Each Employment
Agreement provides for: (i) an initial base salary for Gary P. McDaniel
($225,000); C.G. ("Jeff") Kellogg ($225,000); Tamara D. Fischer ($175,000);
and Rees F. Davis, Jr. ($160,000) (to be adjusted annually based on the
average increases awarded to the employees of the Company in the previous
year, as well as market conditions and individual and Company performance
factors); (ii) an annual target bonus of up to 80% of such executive's base
salary upon the attainment of increases in funds from operations per share of
the Company (with the maximum bonus being earned for increases of at least
10%); (iii) grants of stock options and shares of restricted stock under the
Company's 1997 and 1999 Equity Compensation Plans; and (iv) benefits
(including retirement, group life, medical, dental and disability benefits) on
a basis reasonably comparable in the aggregate to those provided to the
executive immediately prior to the Merger. Each Employment Agreement provides
that, if the executive's employment is terminated by the Company other than
for "cause," disability or death or by the executive for "good reason" or if
the Employment Agreement is not renewed, the executive will be entitled to
receive a payment equal to two times (or one and one-half times in the case of
non-renewal) the sum of the executive's annual base salary and bonus, the
continuation of welfare and pension benefits during the 24-month period (or
18-month period in the case of non-renewal) following termination and the
accelerated vesting of equity based incentives. If the employment of either
Mr. McDaniel or Mr. Kellogg is terminated as a result of a "change of
control," "two times" and "24 months" in the preceding sentence is replaced
with "three times" and "36 months. "Further, if the executive's employment is
terminated for any other reason, other than for "cause," including voluntary
resignation, disability, or death, "two times" and "24 months" in such
sentence is replaced by "one time" and "12 months."
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
General
The Executive Compensation Committee (the "Committee") annually reviews and
approves recommendations from senior management and makes recommendations to
the Board of Directors regarding the policies and procedures that govern the
various compensation programs for the CEO and executives of the Company. The
Committee also administers the Company's equity compensation plans.
It is the philosophy of the Committee that executive compensation should
align the financial interests of the Company's executives with the long term
interests of the Company and its stockholders. The Committee believes that a
material portion of the executive officers' pay should be linked to the
Company's stated and predetermined goals. The Committee also believes that the
Company should have a sound and competitive compensation program to attract
and retain key executives to lead the Company toward the fulfillment its
goals. The key elements of the Company's current program include a base
salary, a bonus plan linked to individual and Company financial performance
and equity participation through stock options and restricted share grants.
The Committee does not consider the provisions of Section 162(m) of the
Code, which limits the deductibility of certain compensation paid to certain
executives of the Company in excess of $1 million in any taxable year, to be
material to its approach to executive compensation matters. This is due to the
Company's status as a REIT under the Code which generally exempts the Company
from the payment of corporate federal income taxes.
Base Salary
The Committee's policy with respect to salaries is to establish base
compensation levels for executive officers which are competitive in relation
to other companies of similar size within the Company's industry. The
Committee also takes into consideration the executive's responsibilities,
experience level and individual performance. To ensure that base salary is
competitive, the Company's salary structure is periodically benchmarked
against other salaries for key positions in other companies of similar size in
the Company's industry. Salaries normally are increased annually, based on
market conditions and individual and Company performance factors. Pursuant to
employment agreements, and consistent with this policy, Mr. Kellogg, Ms.
Fischer and Mr. Davis received base salaries of $244,000, $190,000 and
$174,000, respectively, in 1999.
10
<PAGE>
Bonus
The Committee's policy with respect to bonuses of its executive officers is
to link bonuses to the Company's financial performance and in certain cases to
achievements by individual executives of goals within their areas of direct
responsibility. For 1999, the Company's executive officers participated in a
bonus plan pursuant to which they earned bonuses of up to 80% of their base
salaries tied to increases in funds from operation per share (the principal
measure used by the Company to measure its financial performance) [and, in the
case of the Mr. Davis, to additional factors relating to the achievement of
certain goals related to Company acquisitions]. The amounts of the bonuses
earned under this plan in respect of 1999 for Mr. Kellogg, Ms. Fischer and Mr.
Davis were $127,100, $99,000 and $45,200, respectively.
Stock Options and Restricted Stock
The Company adopted the 1997 Equity Compensation Plan and the 1999 Equity
Compensation Plan (together, the "Plans") which authorize the discretionary
grant by the Committee of awards of options and restricted shares of Common
Stock to key employees, directors and key consultants of the Company and its
subsidiaries. The Committee believes that the Plans provide, through the grant
of long-term incentives, a means to attract and retain key personnel and to
provide participating officers and other key employees long-term incentives
for sustained high levels of performance. The Committee grants options to
purchase Common Stock to employees of the Company (including executive
officers). Option grants become exercisable over a period of time determined
by the Committee and generally have an exercise price equal to the fair market
value of the Common Stock on the grant date, creating long-term incentives to
enhance the value of the Company's Common Stock.
In respect of 1999, Mr. Kellogg, Ms. Fischer and Mr. Davis were awarded
stock options, which vest over a five-year period from the date of grant, to
purchase 60,000, 40,000 and 40,000 shares of Common Stock, respectively, and
were also granted 15,000, 10,000 and 10,000 restricted shares of Common Stock
that vest, over a three-year period, depending on the average increase in the
Company's funds from operations per share over this period. Increases of at
least 8.5% but less than 9.25% in funds from operations per share result in
the vesting of 50% of the these restricted shares, while increases of at least
9.25% result in full vesting of these shares. The Committee awarded the stock
options and the shares of restricted stock to these executives as part of
their annual compensation review for 1999. The awards were determined based on
the executive officer's performance of specific individual and Company
objectives. The levels of these awards reflected the Committee's belief that
increasing management equity ownership will create long-term incentives to
enhance the value of the Company's Common Stock. In addition, the Committee
believes that the linking of the vesting of the restricted stock awards to the
achievement of the stated increases in funds from operation per share further
aligns the interests of these executives with those of the Company and its
stockholders. The Committee believes that the above elements assist the
Company in meeting its short-term and long-term objectives and appropriately
relate executive compensation to the Company's performance.
The Chief Executive Officer's 1999 Compensation
Gary P. McDaniel has been employed by the Company as its Chief Executive
Officer since the merger with ROC (the "Merger"). He was originally employed
pursuant to a three-year employment agreement, dated February 11, 1997, that
was determined in connection with the negotiation of the Merger Agreement. In
1999, this employment agreement was extended for an additional one-year period
expiring in February 2001, with the understanding that such employment
agreement would be replaced with a revised 3-year agreement in February 2000.
Pursuant to this agreement, Mr. McDaniel was paid a base salary during 1999 of
$244,400. Under this employment agreement, Mr. McDaniel was eligible to earn
for 1999 a bonus of up to 80% of his base salary tied to increases in funds
from operations per share of the Company. Based on the achievement by the
Company of increases in funds from operations of 9.0%, Mr. McDaniel earned a
bonus of $127,100. In addition, the Committee determined, based on this
successful performance, to grant Mr. McDaniel options to purchase 60,000
shares of Common Stock, subject to a five-year vesting schedule, and 15,000
restricted shares of Common Stock
11
<PAGE>
that vest in a manner similar to the schedule for the restricted shares
described above that were granted to the other senior executive officers of
the Company. In addition, based on the Company's performance under Mr.
McDaniel's leadership, the Committee offered to extend Mr. McDaniel's
employment agreement through February 2003 at base salary of $255,690 for
2000, with subsequent increases being tied to the average percentage raises
for other employees of the Company. In addition, Mr. McDaniel will be eligible
to receive a bonus ranging up to 80% of his base salary in any year upon
achievement by the Company of increases in funds from operations per share in
that year of between 7.0% to 9.75%, and an additional bonus of 10% of his base
salary for each 0.25% increase in funds from operations per share in that year
in excess of 9.75%.
Chateau Communities, Inc. Executive Compensation Committee
Edward R. Allen
Steven G. Davis
James M. Hankins
Donald E. Miller
12
<PAGE>
PERFORMANCE GRAPH
Set forth below is a line graph comparing the cumulative total stockholder
return on the Company's Common Stock with the cumulative total return of the
S&P 500 Stock Index and the NAREIT Equity REIT Total Return Index for the
period commencing December 31, 1994 and ending December 31, 1999. The NAREIT
Equity REIT Total Return Index included 167 companies with a total market
capitalization of $118 billion. The graph assumes that a stockholder invested
$100 on December 31, 1994 in Company Common Stock, the S&P Stock Index and the
NAREIT Equity REIT Total Return Index, assuming reinvestment of dividends.
The table below sets forth the value as of each of the dates indicated of
$100 investments made on December 31, 1994 in the Company's Common Stock, the
S&P Stock Index and the NAREIT Equity REIT Total Return Index, assuming
reinvestment of dividends.
[PERFORMANCE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Chateau NAREIT Equity
Measurement Period (Fiscal Year Covered) Communities Inc. S&P 500 Index
- ---------------------------------------- ---------------- ------- -------------
<S> <C> <C> <C>
Dec. 31, 1994............................ 100.00 100.00 100.00
Dec. 31, 1995............................ 110.46 137.58 115.27
Dec. 31, 1996............................ 139.77 169.17 155.93
Dec. 31, 1997............................ 187.41 225.60 187.52
Dec. 31, 1998............................ 185.63 290.08 154.70
Dec. 31, 1999............................ 176.27 351.12 147.55
</TABLE>
The foregoing Share Performance Graph and the Report on Executive
Compensation shall not be deemed incorporated by reference by any general
statement incorporating by reference this Proxy Statement into any filing
under the Securities Act of 1933, as amended, or the Securities Exchange Act
of 1934, as amended, except to the extent that the Company specifically
incorporates such graph or report by reference and shall not otherwise be
deemed filed under such acts.
13
<PAGE>
There can be no assurance that the Company's share performance will continue
into the future with the same or similar trends depicted in the graph above.
The Company will not make or endorse any predictions as to future share
performance.
CERTAIN TRANSACTIONS
Rental expense of approximately $100,000 annually has been incurred for
leasing space in an office building owned by certain officers and equity
owners. The office lease expires November 2001.
In addition, when the Company sells homes through Community Sales, Inc.
("CSI"), the purchaser may obtain financing from Vanderbilt Mortgage and
Finance, Inc., which is affiliated with one of the Company's directors. In
certain cases, for homes sold before June 1998, Vanderbilt has recourse to the
Company if the loans are not repaid. As of December 31, 1999 there is a total
of approximately $15.6 million of such amounts that are recourse to the
Company.
In January 2000, the Company acquired the entity (the "Sales Entity") that
provided sales and marketing services to two Company-owned communities. The
assets of the Sales Entity included a fee stream from loans originated at
these communities and an inventory of homes. The Sales Entity was owned as
follows: (75% by an entity owned by James L. Clayton and 25% by an entity
owned by Gary P. McDaniel, Rees F. Davis, Jr. and James B. Grange). The
purchase price for the Sales Entity was approximately $900,000, which was
financed by cash, and the assumption of approximately $371,000 of debt.
As of December 31, 1998 the Company had a receivable of $3.3 million from a
partnership with which several officers of the Company are affiliated, which
was paid back in 1999. The partnership owned a manufactured home community
that the Company had the option to purchase. The receivable was collateralized
by the property and was approved by the directors of the Company who have no
interest in the partnership.
The Company has made loans to the Executive Officers named in the Summary
Compensation Table to allow them to purchase shares of Company Common Stock.
Such loans were evidenced by separate promissory notes in the amount of the
purchase price for such shares. These notes provide for interest, payable
quarterly, with the principal balance payable on the earlier of the
termination of the officer's employment with the Company, other than by reason
of death or disability, or the maturity date. The notes are non-recourse to
the respective officers and collateralized by a pledge of the shares of Common
Stock purchased. The following table summarizes the information relating to
the loans.
<TABLE>
<CAPTION>
Number of Highest Balance at
Shares Loan Balance March 31, Interest Maturity
Purchased During 1999 2000 Rate Date
--------- ------------ ---------- -------- --------
<S> <C> <C> <C> <C> <C>
Gary P. McDaniel.......... 30,065 $ 665,561 $ 665,561 6.92%(1) 08/31/03
29,850 -- $ 695,061 6.92%(1) 03/01/05
C.G. ("Jeff") Kellogg..... 13,750 $ 245,036 $ 233,194 7.00% 11/16/03
114,568 $2,522,795 $2,522,795 6.92%(1) 08/31/03
James B. Grange........... 30,065 $ 665,561 --
Tamara D. Fischer......... 6,875 $ 119,659 $ 111,977 7.00% 11/16/03
61,692 $1,359,684 $1,359,684 6.92%(1) 08/31/03
61,128 -- $1,328,848 6.92%(1) 03/01/05
Rees F. Davis, Jr......... 30,065 $ 742,561 $ 742,561 6.92%(1) 08/31/03
29,850 -- $ 695,061 6.92%(1) 03/01/05
</TABLE>
- --------
(1) The interest rate on these notes represents the Company's current
borrowing rate of LIBOR plus 80 basis points.
14
<PAGE>
Section 16(a) Beneficial Ownership Reporting Compliance
Directors and executive officers of the Company and beneficial owners of
more than 10% of its Common Stock are required to file initial reports of
ownership and reports of changes in ownership of Company securities pursuant
to Section 16(a) of the Securities Exchange Act of 1934 and to provide the
Company with copies of such reports. The Company has reviewed all such reports
from persons known to the Company to be subject to these Section 16(a)
provisions. Based solely on such review, the Company believes that for the
year ended December 31, 1999 all Section 16(a) filing requirements were met,
except that the Company is aware that Rhonda G. Hogan, a director of the
Company, failed to file, on a timely basis, a report disclosing the
acquisition of an aggregate of 2,000 Shares of Common Stock by her during
August and October 1999.
STOCKHOLDER PROPOSALS
Stockholder proposals, intended to be presented at the 2001 Annual Meeting
of Stockholders of the Company, must be received by the Company at its address
stated herein by December 10, 2000 to be considered for inclusion in the
Company's Proxy Statement and form of proxy relating to such meeting.
Any stockholder who intends to submit a proposal at the 2001 Annual Meeting
of Stockholders of the Company without including the proposal in the proxy
statement for such Annual Meeting must, under the Bylaws of the Company,
notify the Company of such proposal by March 21, 2001, subject to certain
exceptions.
INDEPENDENT AUDITORS
It is not the Company's practice to submit to Stockholders a proposal for
the selection or ratification of the Company's independent certified public
accountants, and no such proposal is submitted hereby. PricewaterhouseCoopers
LLC acted in this capacity since the Company's initial public offering and
PricewaterhouseCoopers LLP is so acting during the current year.
Representatives of PricewaterhouseCoopers LLP are expected to be present and
will be available to respond to appropriate questions at the Annual Meeting.
PROXY SOLICITATION
The expense of this solicitation of proxies will be borne by the Company. If
necessary, officers and regular employees of the Company may also solicit
proxies, without extra compensation, personally and by telephone and other
means of communication. The Company may also reimburse brokers and other
persons holding stock in their names or in the names of their nominees, for
their charges and expenses in forwarding proxies and proxy material to the
beneficial owners of such stock.
OTHER MATTERS
The Board of Directors knows of no other matters to be voted upon at the
Annual Meeting. If any other matters properly come before the Annual Meeting,
it is the intention of the proxies named in the enclosed form of proxy to vote
the shares represented thereby with respect to such matters in accordance with
their best judgment.
Stockholders may obtain without charge a copy of the Company's Annual Report
on Form 10-K for the fiscal year ended December 31, 1999, filed with the SEC,
including the financial statements and schedules thereto, without the
accompanying exhibits, by writing to Ms. Marti Dowling, Chateau Communities,
Inc., 6160 South Syracuse Way, Greenwood Village, Colorado 80111. A list of
exhibits is included in the 1999 10-K, and exhibits are available from the
Company upon payment to the Company of the costs of furnishing them.
By Order of the Board of Directors,
John A. Boll, Chairman
Greenwood Village, Colorado
April 4, 2000
15
<PAGE>
CHATEAU COMMUNITIES, INC.
6160 South Syracuse Way
Greenwood Village, Colorado 80111
This Proxy is Solicited on behalf of the Board of Directors
For the Annual Meeting of Stockholders to be held May 18, 2000
---
The undersigned hereby appoints each of Gebran S. Anton, Rhonda G. Hogan,
James M. Lane and Gary P. McDaniel, or any of them, as proxies, each with the
power to appoint his substitute, and authorizes each of them to represent and to
vote, as designated below, all shares of common stock of Chateau Communities,
Inc. ("Chateau") held of record by the undersigned on March 24, 2000 at the
Annual Meeting of Stockholders of Chateau to be held on May 18, 2000, at 9:00
a.m. Mountain Daylight Time, or any adjournment or adjournments thereof. This
proxy when properly executed will be voted in the manner directed herein by the
undersigned stockholder with respect to all shares of Chateau held of record by
the undersigned stockholder. If no direction is made, this proxy will be voted
in favor of the election of all listed nominees to the Board of Directors and in
the best discretion of such proxies upon such other business as may properly
come before the meeting or any adjournment or adjournments thereof.
YOUR SHARES WILL BE VOTED AS DIRECTED ON THIS CARD. IF SIGNED AND NO DIRECTION
IS GIVEN FOR ANY ITEM, IT WILL BE VOTED IN FAVOR OF ITEM 1.
To vote by telephone or internet, please see the reverse of this card. To vote
by mail, please sign and date this card on the reverse, tear off at the
perforation, and mail promptly in the enclosed postage-paid envelope.
SEE REVERSE
SIDE
FOLD AND DETACH HERE
YOUR VOTE IS VERY IMPORTANT. THANK YOU FOR VOTING.
[logo omitted]
VISIT OUR WEB SITE AT www.chateaucomm.com
X Please mark your
votes as in this
example.
FOR WITHHELD
1. Election of Directors:
Nominees:
Class I 01. Gebran S. Anton
02. Rhonda G. Hogan
03. James M. Lane
04. Gary P. McDaniel
2. In their best discretion, the proxies are authorized to act and vote upon
----
such other business as may properly come before the Annual Meeting or any
adjournment thereof.
For, except vote withheld from the following nominee(s):
Discontinue Annual Report Mailing for this Account.
The undersigned hereby acknowledges receipt of the Notice of Annual Meeting of
Stockholders, dated April 4, 2000, and the Proxy Statement furnished therewith.
Please sign this proxy in the space provided below. When shares are held by
joint tenants, both should sign. Execution by stockholders who are not
individuals must be made by an authorized signatory. Executors, administrators,
trustees and other fiduciaries, and persons signing on behalf of corporations or
partnerships, should so indicate when signing.
SIGNATURE (S) DATE
FOLD AND DETACH HERE
<PAGE>
[logo omitted]
PROXY VOTING INSTRUCTION CARD
Your vote is important. Casting your vote in one of the three ways described on
this instruction card votes all common shares of Chateau Communications, Inc.
that you are entitled to vote.
Please consider the issue discussed in the proxy statement and cast your vote
by:
Internet Accessing the World Wide Web site
http://www.eproxyvote.com/cpj to vote via the Internet. You can
also register at this site to access future proxy materials
electronically.
Phone Using a touch-tone telephone to vote by phone toll free
from the U.S. or Canada. Simply dial 1-877-779-8683 and follow
the instructions. When you are finished voting, your vote will be
confirmed and the call will end.
Mail Completing, dating, signing and mailing the proxy card in
the postage-paid envelope included with the proxy statement or
sending it to Chateau Communications, Inc., c/o First Chicago
Trust Company, a Division of Equiserve, P.O. Box 8249, Edison,
New Jersey 08818-9184.
You can vote by phone or via the Internet anytime prior to May 18, 2000. You
will need the control number printed at the top of this instruction card to vote
by phone or via the Internet. If you do so, you do not need to mail in your
proxy card.
