<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant [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.
SUN 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)(1) 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> 2
SUN COMMUNITIES, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 14, 2000
To the Shareholders:
Notice is hereby given that the Annual Meeting of Shareholders of Sun
Communities, Inc. (the "Company") will be held at the Best Western Executive
Hotel & Suites, 31525 West Twelve Mile Road, Farmington Hills, Michigan 48334,
on Wednesday, June 14, 2000, at 11:00 a.m., local time, for the following
purposes:
(1) To elect two Directors to serve until the Annual Meeting of
Shareholders to be held in 2003 or until their successors
shall have been duly elected and qualified; and
(2) To transact such other business as may properly come before
the meeting.
A Proxy Statement containing information relevant to the Annual Meeting
appears on the following pages.
Only holders of Common Stock of record at the close of business on
April 24, 2000, are entitled to notice of and to vote at the meeting or any
adjournments.
If you do not plan to attend the meeting and you wish to vote in
accordance with the Board of Director's recommendations, it is not necessary to
specify your choices; merely sign, date, and return the enclosed Proxy Card. If
you attend the meeting, you may withdraw your Proxy and vote your own shares.
By Order of the Board of Directors
JEFFREY P. JORISSEN
Secretary
Dated: May 8, 2000
ALL SHAREHOLDERS ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON.
HOWEVER, TO ENSURE YOUR REPRESENTATION AT THE MEETING, YOU ARE ENCOURAGED TO
SIGN, DATE AND RETURN THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE IN THE
POSTAGE-PAID ENVELOPE ENCLOSED FOR THAT PURPOSE.
<PAGE> 3
SUN COMMUNITIES, INC.
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 14, 2000
PROXIES AND SOLICITATIONS
This Proxy Statement is furnished to shareholders in connection with
the solicitation of proxies by the Board of Directors (the "Board") of Sun
Communities, Inc. ("Sun" or the "Company") to be used at the Annual Meeting of
Shareholders (the "Annual Meeting") and at any adjournments. If received in time
for the Annual Meeting, the shares represented by a valid proxy will be voted in
accordance with the specifications, if any, contained in such executed proxy. If
no instructions are given, proxies will be voted: (a) FOR election of the two
nominees for the Board; and (b) at the discretion of Gary A. Shiffman and Arthur
A. Weiss, the Board's designated representatives for the Annual Meeting, with
respect to such other business as may properly come before the Annual Meeting or
any adjournment or postponement thereof. A proxy executed in the enclosed form
may be revoked by the person signing it at any time before it is exercised.
Proxies may be revoked by filing with the Secretary of the Company, any time
prior to the time set for commencement of the Annual Meeting, a written notice
of revocation bearing a later date than the proxy, or by attending the Annual
Meeting and voting in person (although attendance at the Annual Meeting will not
in and of itself constitute revocation of a proxy).
In addition to the use of mails, proxies may be solicited by personal
interview, telephone and telegram, by directors, officers and employees of the
Company. Arrangements may also be made with brokerage houses or other
custodians, nominees and fiduciaries to forward solicitation material to the
beneficial owners of shares of the Company's common stock (the "Common Stock")
held of record by such persons, and the Company may reimburse such persons for
reasonable out-of-pocket expenses incurred in forwarding material. The Company
anticipates that fees and expenses for the foregoing parties will not exceed
$1,000. The costs of all proxy solicitation will be borne by the Company.
The executive offices of the Company are located at 31700 Middlebelt
Road, Suite 145, Farmington Hills, Michigan 48334. The approximate date of
mailing of this Proxy Statement and the enclosed Proxy materials to the
Company's shareholders is May 8, 2000.
TIME AND PLACE OF MEETING
The Annual Meeting will be held at the Best Western Executive Hotel &
Suites, 31525 West Twelve Mile Road, Farmington Hills, Michigan 48334, on
Wednesday, June 14, 2000, at 11:00 a.m., local time.
VOTING RIGHTS AND
PRINCIPAL HOLDERS OF VOTING SECURITIES
Only shareholders of record at the close of business on April 24, 2000
are entitled to notice of and to vote at the Annual Meeting or at any
adjournments. As of that date, the Company had 17,498,687 shares of Common Stock
issued, outstanding and entitled to vote held by 1,092 holders of record. Each
outstanding share entitles the record holder to one vote. Shares cannot be voted
at the Annual Meeting unless the holder is present in person or represented by
proxy. The presence, in person or by proxy, of shareholders entitled to vote a
majority of the voting shares that are outstanding and entitled to vote will
constitute a quorum.
Information concerning principal holders of the Common Stock is
discussed under "Security Ownership of Certain Beneficial Owners and
Management."
INCORPORATION BY REFERENCE
To the extent this Proxy Statement has been or will be specifically
incorporated by reference into any filing by the Company under the Securities
Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, the
sections of this Proxy Statement entitled "Report of the Compensation
1
<PAGE> 4
Committee on Executive Compensation" and "Shareholder Return Performance
Presentation" shall not be deemed to be so incorporated unless specifically
otherwise provided in any such filing.
ANNUAL REPORT
Shareholders are concurrently being furnished with a copy of the
Company's 1999 Annual Report which contains its audited financial statements as
of December 31, 1999. In addition, copies of the Company's Annual Report on Form
10-K for the year ended December 31, 1999, as filed with the Securities and
Exchange Commission (the "SEC"), will be sent to any shareholder, without
charge, upon written request to Sun Communities Investor Services, 31700
Middlebelt Road, Suite 145, Farmington Hills, Michigan 48334.
ELECTION OF DIRECTORS
(SOLE PROPOSAL)
The only matter expected to be considered at the Annual Meeting will be
the election of two directors. It is proposed that these positions be filled by
persons nominated to the Board by management. Each director shall be elected by
a plurality of the votes cast at the Annual Meeting. Therefore, if a quorum is
present, abstentions and broker non-votes will have no effect on the election of
directors. Proxies will be tabulated by the Company's transfer agent. The
Inspector of Elections appointed at the Annual Meeting will then combine the
proxy votes with the votes cast at the Annual Meeting. Each director elected at
the Annual Meeting will serve for a term commencing on the date of the Annual
Meeting and continuing until the Annual Meeting of Shareholders to be held in
2003 or until his successor is duly elected and qualified. In the absence of
directions to the contrary, proxies will be voted in favor of the election of
the two nominees listed below.
If any of the nominees named below are unavailable to serve for any
reason, then a valid proxy may be voted for the election of such other persons
as the person or persons voting the proxy may deem advisable in accordance with
their best judgment. Management has no present knowledge that any of the persons
named will be unavailable to serve. In any event, the enclosed proxy can be
voted for only the two nominees named in this Proxy Statement or their
substitutes.
THE BOARD RECOMMENDS A VOTE "FOR" EACH OF THE NOMINEES NAMED BELOW.
PROXIES SOLICITED BY THE BOARD WILL BE VOTED "FOR" THE NOMINEES UNLESS
INSTRUCTIONS TO WITHHOLD OR TO THE CONTRARY ARE GIVEN.
The following list identifies each incumbent director and nominee for
election to the Board at the Annual Meeting and describes each person's
principal occupation for the past five years. Each of the directors has served
continuously from the date of his election to the present time.
<TABLE>
<CAPTION>
NAME AGE OFFICE
---- --- ------
<S> <C> <C>
Gary A. Shiffman................................. 45 Chief Executive Officer, President and
Director
Paul D. Lapides.................................. 45 Director (Nominee)
Clunet R. Lewis.................................. 53 Director
Ronald L. Piasecki............................... 61 Director
Ted J. Simon..................................... 69 Director (Nominee)
Arthur A. Weiss.................................. 51 Director
</TABLE>
GARY A. SHIFFMAN is the President and Chief Executive Officer, and has
been an executive officer of Sun since its inception. He has been actively
involved in the management, acquisition, construction and development of
manufactured housing communities and has developed an extensive network of
industry relationships over the past 16 years. He has overseen the land
acquisition, rezoning, development and marketing of numerous manufactured home
expansion projects. Mr. Shiffman is also the President and a director of Sun
Home Services, Inc. ("Home Services"), Sun Management, Inc. ("Sun Management"),
Sun QRS, Inc. ("Sun QRS"), Sun Florida QRS, Inc. ("Sun Florida QRS"), and Sun
2
<PAGE> 5
Water Oak Golf, Inc. ("Sun Golf"). Mr. Shiffman is the Chairman of the Board and
Secretary of Bingham Financial Services Corporation ("Bingham"), which is a
specialized financial services company providing financing for manufactured
homes. Bingham was initially formed as an affiliate of Sun but became publicly
held in November 1997.
PAUL D. LAPIDES has been a director since December 1993. Mr. Lapides is
Director of the Corporate Governance Center in the Coles College of Business at
Kennesaw State University, where he is a professor of management and
entrepreneurship. He is the author of more than 80 articles and books on real
estate and management. His real estate experience includes managing a $3 billion
national portfolio of income-producing real estate consisting of 42,000
multi-family units and 16 million square feet of commercial space.
CLUNET R. LEWIS has been a director since December 1993. Since August
1995, Mr. Lewis has served in various capacities, including as a director, of
Eltrax Systems, Inc. ("Eltrax"), an international provider of information
technology services supporting internet and private network E-commerce
applications. Mr. Lewis currently serves as General Counsel of Eltrax. From 1993
to September 1994, Mr. Lewis was the Executive Vice President of Military
Communications Center, Inc., a company that provides long distance
telecommunication services to military personnel.
RONALD L. PIASECKI has been a director since May 1996, upon completion
of the Company's acquisition of twenty-five manufactured housing communities
(the "Aspen Properties") owned by affiliates of Aspen Enterprises, Ltd.
("Aspen"). Mr. Piasecki is the executive vice president and a director of Aspen,
which he co-founded in 1973. Prior to the Company's acquisition of the Aspen
Properties, Aspen was one of the largest privately-held developers and owners of
manufactured housing communities in the U.S. Mr. Piasecki serves as chairman of
the board of directors of Kurdziel Industries, Inc., the world's largest
producer of counter weights for the material handling industry.
TED J. SIMON has been a director since December 1993. Since February
1999, Mr. Simon has been a principal in Grand Sakwa Simon Properties LLC, a
commercial real estate development company located in Farmington Hills,
Michigan. From 1981 until January 1999, Mr. Simon was the Vice President-Real
Estate (Midwest Group) of The Great Atlantic & Pacific Tea Company, Inc. and Mr.
Simon was a Vice President-Real Estate and a director of Borman's Inc., a wholly
owned subsidiary of The Great Atlantic & Pacific Tea Company, Inc. Mr. Simon is
also a director of Clarkston State Bank, a wholly-owned subsidiary of Clarkston
Financial Corporation.
ARTHUR A. WEISS has been a director since October 1996. Since 1976, Mr.
Weiss has practiced law with the law firm of Jaffe, Raitt, Heuer & Weiss,
Professional Corporation ("JRH&W"), which represents the Company in various
matters. Mr. Weiss is currently a shareholder, director and Vice President of
JRH&W. Mr. Weiss is also a director of Bingham.
To the best of the Company's knowledge, there are no material
proceedings to which any nominee is a party, or has a material interest, adverse
to the Company. To the best of the Company's knowledge, there have been no
events under any bankruptcy act, no criminal proceedings and no judgments or
injunctions that are material to the evaluation of the ability or integrity of
any nominee during the past five years.
BOARD OF DIRECTORS AND COMMITTEES
Pursuant to the terms of the Company's charter, the directors are
divided into three classes. The class up for election at the Annual Meeting will
hold office for a term expiring at the annual meeting of shareholders to be held
in 2003. A second class will hold office for a term expiring at the annual
meeting of shareholders to be held in 2001 and a third class will hold office
for a term expiring at the annual meeting of shareholders to be held in 2002.
Each director will hold office for the term to which he is elected and until his
successor is duly elected and qualified. Ted J. Simon and Paul D. Lapides have
terms expiring at the Annual Meeting and are nominees for the class to hold
office for a term expiring at the annual meeting of shareholders to be held in
2003. Gary A. Shiffman, Ronald L. Piasecki and Arthur A. Weiss have terms
expiring at annual meeting of shareholders to be held in 2002 and Clunet R.
Lewis has a term expiring in 2001. At each annual meeting of the shareholders of
the Company, the successors to the class of directors whose terms expire at such
meeting will be elected to hold office for a term expiring at the annual meeting
of shareholders held in the third year following the year of their election.
3
<PAGE> 6
The Board met four (4) times during 1999 and took various actions
pursuant to resolutions adopted by unanimous written consent. All directors
attended at least 75% of the meetings of the Board and each committee on which
they served.
Several important functions of the Board may be performed by committees
that are comprised of members of the Board. The Company's Bylaws authorize the
formation of these committees and grant the Board the authority to prescribe the
functions of each committee and the standards for membership of each committee.
In addition, the Board appoints the members of each committee. The Board has
four standing committees: an Audit Committee, a Compensation Committee, an
Indemnification Committee and an Executive Committee.
The Audit Committee was established to: (i) annually recommend a firm
of independent public accountants to the Board to act as auditors of the
Company; (ii) review the scope of the annual audit with the auditors in advance
of the audit; (iii) generally review the results of the audit and the adequacy
of the Company's accounting, financial and operating controls; (iv) review the
Company's accounting and reporting principles, policies and practices; and (v)
perform such other duties as may be delegated to it by the Board. The current
members of the Audit Committee are Messrs. Paul D. Lapides and Clunet R. Lewis.
The Audit Committee held two (2) formal meetings during the fiscal year ended
December 31, 1999.
The Compensation Committee was established to: (i) review and modify
the compensation (including salaries and bonuses) of the Company's officers as
initially set by the Company's President; (ii) administer the Company's 1993
Stock Option Plan (the "Employee Option Plan"); and (iii) perform such other
duties as may be delegated to it by the Board. The current members of the
Compensation Committee are Messrs. Ted J. Simon and Ronald L. Piasecki. During
the fiscal year ended December 31, 1999, the Compensation Committee held one (1)
formal meeting and took various actions pursuant to resolutions adopted by
unanimous written consent. See "Report of the Compensation Committee on
Executive Compensation".
The Indemnification Committee was established to: (i) perform such
duties as provided in Article XII of the Company's Bylaws; and (ii) perform such
other duties as may be delegated to it by the Board. The current members of the
Indemnification Committee are Messrs. Ted J. Simon and Clunet R. Lewis. The
Indemnification Committee did not hold any formal meetings in 1999.
The Executive Committee was established to generally manage the
day-to-day business and affairs of the Company between regular Board meetings.
In no event may the Executive Committee, without the prior approval of the Board
acting as a whole: (i) recommend to the shareholders an amendment to the
Company's Charter; (ii) amend the Company's Bylaws; (iii) adopt an agreement of
merger or consolidation; (iv) recommend to the shareholders the sale, lease or
exchange of all or substantially all of the Company's property and assets; (v)
recommend to the shareholders a dissolution of the Company or a revocation of a
dissolution; (vi) fill vacancies on the Board; (vii) fix compensation of the
directors for serving on the Board or on a committee of the Board; (viii)
declare dividends or authorize the issuance of the Company's stock; (ix) approve
or take any action with respect to any related party transaction involving the
Company; or (x) take any other action which is forbidden by the Company's
Bylaws. All actions taken by the Executive Committee must be promptly reported
to the Board as a whole and are subject to ratification, revision and alteration
by the Board, except that no rights of third persons created in reliance on
authorized acts of the Executive Committee can be affected by any such revision
or alteration. The current members of the Executive Committee are Messrs. Gary
A. Shiffman and Ted J. Simon. The Executive Committee did not hold any formal
meetings during the fiscal year ended December 31, 1999 but did take various
actions pursuant to resolutions adopted by unanimous written consent.
The Board does not have a standing committee responsible for nominating
individuals to become directors. The entire Board performs the function of such
a committee.
4
<PAGE> 7
MANAGEMENT AND COMPENSATION
EXECUTIVE OFFICERS
The persons listed below are the current executive officers of the
Company. Each is annually appointed by, and serves at the pleasure of, the
Board.
<TABLE>
<CAPTION>
NAME AGE OFFICE
---- --- ------
<S> <C> <C>
Gary A. Shiffman................................. 45 Chief Executive Officer and President
Jeffrey P. Jorissen.............................. 55 Senior Vice President, Treasurer, Chief
Financial Officer and Secretary
Brian W. Fannon.................................. 51 Senior Vice President and Chief Operating
Officer
Jonathan M. Colman............................... 44 Senior Vice President - Acquisitions
</TABLE>
Background information for Gary A. Shiffman is provided under "Election
of Directors," above. Background information for the other three executive
officers is set forth below.
JEFFREY P. JORISSEN has been Chief Financial Officer and Secretary
since August 1993, and Senior Vice President and Treasurer since December 1993.
As a certified public accountant, he was with the international accounting firm
of Coopers & Lybrand for sixteen years, including eight years as a partner.
During his tenure at Coopers & Lybrand, Mr. Jorissen specialized in real estate
and directed financial statement examinations of numerous public companies. Mr.
Jorissen is also the Chief Financial Officer and Secretary of Home Services, Sun
Management, Sun QRS and Sun Florida QRS, and Mr. Jorissen is also the Secretary
and Treasurer of Sun Golf.
BRIAN W. FANNON joined the Company in May 1994 as Senior Vice
President-Operations and became Chief Operating Officer in 1995. Prior to
joining the Company, he worked for Lautrec, Ltd., then the largest manufactured
housing community owner-operator in the United States, where he was responsible
for operations comprising 25,000 sites and 300 employees, and Quality Homes,
Inc., its sales and marketing division. He joined that organization in 1978 as a
regional manager and became President in 1986. Mr. Fannon was appointed by
Governor Milliken to the Michigan Mobile Home Commission in 1977, the year of
its inception. Subsequent appointments by Governors Blanchard and Engler have
enabled Mr. Fannon to serve on such commission, including serving as its
chairman from 1986 to 1994, and Mr. Fannon has again been serving as the
chairman of the Michigan Mobile Home Commission since 1998. Mr. Fannon is also
the Vice President-Operations of Sun Golf and the Chief Executive Officer of
Home Services.
JONATHAN M. COLMAN joined the Company in 1994 as Vice
President-Acquisitions and became a Senior Vice President in 1995. A certified
public accountant, Mr. Colman has over sixteen years of experience in the
manufactured housing community industry. He has been involved in the
acquisition, financing and management of over 75 manufactured housing
communities for two of the 10 largest manufactured housing community owners,
including Uniprop, Inc. during its syndication of over $90 million in public
limited partnerships in the late 1980s. Mr. Colman is also the Vice President of
Sun Golf.
To the best of the Company's knowledge, there have been no events under
any bankruptcy act, no criminal proceedings and no judgments or injunctions that
are material to the evaluation of the ability or integrity of any executive
officer during the past five years.
EXECUTIVE COMPENSATION
The following table sets forth all compensation paid to the Chief
Executive Officer and each executive officer whose remuneration from the Company
exceeded $100,000 during the fiscal year ended December 31, 1999.
5
<PAGE> 8
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL
------
COMPENSATION LONG TERM COMPENSATION
------------ ----------------------
RESTRICTED
STOCK ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) OPTIONS(#) AWARDS($) COMPENSATION($)
- --------------------------- ---- --------- -------- ---------- --------- ---------------
<S> <C> <C> <C> <C> <C> <C>
1999 $355,666 $175,000 25,000 0 $5,552(2)
Gary A. Shiffman, 1998 $350,000 $175,000 25,000 $2,559,375(1) $29,412(2)
Chief Executive Officer and President.... 1997 $250,000 $175,000 0 0 $17,588(2)
Jeffrey P. Jorissen,
Senior Vice President, Treasurer, Chief 1999 $240,000 $120,000 10,000 0 $3,664(2)
Financial Officer and 1998 $199,500 $99,750 20,000 $1,706,250(3) $19,608(2)
Secretary................................ 1997 $190,000 $95,000 0 0 $11,702(2)
Brian W. Fannon, 1999 $325,000 $162,500 0 0 0
Senior Vice President and Chief Operating 1998 $210,000 $170,000 5,000 $853,125(4) 0
Officer.................................. 1997 $250,000 $150,000 0 0 0
1999 $130,000 $30,000 5,000 0 0
Jonathan M. Colman, 1998 $122,000 $40,000 7,500 $511,875(5) 0
Senior Vice President-Acquisitions....... 1997 $112,000 $45,000 0 0 0
</TABLE>
- ------------------------
(1) On June 5, 1998, the Company granted Mr. Shiffman 75,000 shares of
Common Stock, which are subject to the terms and conditions of a
Restricted Stock Award Agreement. As of December 31, 1999, the value of
such restricted shares (as determined in accordance with the rules
promulgated by the Securities and Exchange Commission) was
$2,414,062.50. Mr. Shiffman receives any dividends paid on such
restricted shares.
(2) Dividend distribution from Sun Home Services, Inc.
(3) On June 5, 1998, the Company granted Mr. Jorissen 50,000 shares of
Common Stock, which are subject to the terms and conditions of a
Restricted Stock Award Agreement. As of December 31, 1999, the value of
such restricted shares (as determined in accordance with the rules
promulgated by the Securities and Exchange Commission) was
$1,609,375.00. Mr. Jorissen receives any dividends paid on such
restricted shares.
(4) On June 5, 1998, the Company granted Mr. Fannon 25,000 shares of Common
Stock, which are subject to the terms and conditions of a Restricted
Stock Award Agreement. As of December 31, 1999, the value of such
restricted shares (as determined in accordance with the rules
promulgated by the Securities and Exchange Commission) was $804,687.50.
Mr. Fannon receives any dividends paid on such restricted shares.
(5) On June 5, 1998, the Company granted Mr. Colman 15,000 shares of Common
Stock, which are subject to the terms and conditions of a Restricted
Stock Award Agreement. As of December 31, 1999, the value of such
restricted shares (as determined in accordance with the rules
promulgated by the Securities and Exchange Commission) was $482,812.50.
Mr. Colman receives any dividends paid on such restricted shares.
6
<PAGE> 9
OPTION/SAR GRANTS TABLE
<TABLE>
<CAPTION>
================================================================================================================================
SHARES % OF TOTAL
UNDERLYING OPTIONS/SARS POTENTIAL REALIZABLE VALUE AT
OPTIONS/SARS GRANTED TO EXERCISE ASSUMED ANNUAL RATES OF
GRANTED EMPLOYEES PRICE EXPIRATION STOCK PRICE APPRECIATION FOR
NAME IN 1999 IN 1999 ($/SH.) DATE OPTION TERM
-------------------------------
5% 10%
($) ($)
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Gary A. Shiffman 25,000 29.59% $30.03 12/15/09 $472,147 $1,196,470
- --------------------------------------------------------------------------------------------------------------------------------
Jeffrey P. Jorissen 10,000 11.83% $30.03 12/15/09 $188,859 $478,588
- --------------------------------------------------------------------------------------------------------------------------------
Brian W. Fannon 0 N/A N/A N/A N/A N/A
- --------------------------------------------------------------------------------------------------------------------------------
Jonathan M. Colman 5,000 5.92% $30.03 12/15/09 $94,429 $239,294
================================================================================================================================
</TABLE>
AGGREGATED OPTION/SAR EXERCISES AND
FISCAL YEAR-END OPTION/SAR VALUES TABLE
<TABLE>
<CAPTION>
===================================================================================================================================
NO. OF UNEXERCISED VALUE OF UNEXERCISED
OPTIONS/SARS AT IN-THE-MONEY OPTIONS/SARS AT
FISCAL YEAR-END FISCAL YEAR-END(1)
----------------------------------------------------------------
SHARES ACQUIRED
ON EXERCISE VALUE NOT NOT
NAME IN 1999 RECEIVED EXERCISABLE EXERCISABLE EXERCISABLE EXERCISABLE
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Gary A. Shiffman(2) 0 N/A 325,000 75,000 $1,565,168 $213,457
- -----------------------------------------------------------------------------------------------------------------------------------
Jeffrey P. Jorissen(3) 0 N/A 109,167 13,333 $765,193 $14,381
- -----------------------------------------------------------------------------------------------------------------------------------
Brian W. Fannon(4) 0 N/A 33,333 1,667 $214,937 $0
- -----------------------------------------------------------------------------------------------------------------------------------
Jonathan M. Colman(5) 0 N/A 39,167 5,833 $250,406 $7,191
===================================================================================================================================
</TABLE>
(1) Assumes a value equal to the difference between the closing sales price
on December 31, 1999, which was $32.1875 per share, and the exercise
price of in-the-money options.
(2) Includes: (a) 50,000 stock options granted December 21, 1993 pursuant
to the Employee Option Plan with an exercise price of $20.00 per share,
which options must be exercised by December 21, 2003; (b) 25,000 stock
options granted March 11, 1996 pursuant to the Employee Option Plan
with an exercise price of $26.625 per share, which options must be
exercised by March 11, 2006; (c) 275,000 stock options granted October
28, 1996 pursuant to the Employee Option Plan with an exercise price of
$28.6375 per share, which options must be exercised by October 28,
2006; (d) 25,000 stock options granted January 14, 1998 pursuant to the
Employee Option Plan with an exercise price of $33.75 per share, which
options must be exercised by January 14, 2008; and (e) 25,000 stock
options granted December 15, 1999 pursuant to the Employee Option Plan
with an exercise price of $30.03 per share, which options must be
exercised by December 15, 2009.
(3) Includes: (a) 20,000 stock options granted December 1, 1993 pursuant to
the Employee Option Plan with an exercise price of $20.00 per share,
which options must be exercised by December 1, 2003; (b) 35,000 stock
options granted May 23, 1995 pursuant to the Employee Option Plan with
an exercise price of $22.00 per share, which options must be exercised
by May 23, 2005; (c) 15,000 stock options granted February 26, 1996
pursuant to the Employee Option Plan with an
7
<PAGE> 10
exercise price of $27.00 per share, which options must be exercised by
February 26, 2006; (d) 22,500 stock options granted October 28, 1996
pursuant to the Employee Option Plan with an exercise price of $28.6375
per share, which options must be exercised by October 28, 2006; (e)
20,000 stock options granted January 14, 1998 pursuant to the Employee
Option Plan with an exercise price of $33.75 per share, which options
must be exercised by January 14, 2008; and (f) 10,000 stock options
granted December 15, 1999 pursuant to the Employee Option Plan with an
exercise price of $30.03 per share, which options must be exercised by
December 15, 2009.
(4) Includes: (a) 15,000 stock options granted July 18, 1994 pursuant to
the Employee Option Plan with an exercise price of $22.50 per share,
which options must be exercised by July 18, 2004; (b) 10,000 stock
options granted February 26, 1996 pursuant to the Employee Option Plan
with an exercise price of $27.00 per share, which options must be
exercised by February 26, 2006; (c) 5,000 stock options granted October
28, 1996 pursuant to the Employee Option Plan with an exercise price of
$28.6375 per share, which options must be exercised by October 28,
2006; and (d) 5,000 stock options granted January 14, 1998 pursuant to
the Employee Option Plan with an exercise price of $33.75 per share,
which options must be exercised by January 14, 2008.
(5) Includes: (a) 20,000 stock options granted July 18, 1994 pursuant to
the Employee Option Plan with an exercise price of $22.50 per share,
which options must be exercised by July 18, 2004; (b) 7,500 stock
options granted February 26, 1996 pursuant to the Employee Option Plan
with an exercise price of $27.00 per share, which options must be
exercised by February 26, 2006; (c) 5,000 stock options granted October
28, 1996 pursuant to the Employee Option Plan with an exercise price of
$28.6375 per share, which options must be exercised by October 28,
2006; (d) 7,500 stock options granted January 14, 1998 pursuant to the
Employee Option Plan with an exercise price of $33.75 per share, which
options must be exercised by January 14, 2008; (e) 5,000 stock options
granted December 15, 1999 pursuant to the Employee Option Plan with an
exercise price of $30.03 per share, which options must be exercised by
December 15, 2009.
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
Policy of Executive Officer Compensation
The executive compensation program is administered by the Compensation
Committee of the Board (the "Committee") which is comprised of Non-Employee
Directors, Messrs. Ted J. Simon and Ronald L. Piasecki. The program supports the
Company's commitment to providing superior shareholder value. It is designed to
attract and retain high-quality executives, to encourage them to make career
commitments to the Company, and to accomplish the Company's short and long term
objectives. The Committee attempts to structure a compensation program for the
Company that will reward its top executives with bonuses and stock and option
awards upon attainment of specified goals and objectives while striving to
maintain salaries at reasonably competitive levels. The Committee reviews the
compensation (including salaries, bonuses and stock options) of the Company's
officers and performs such other duties as may be delegated to it by the Board.
The Committee held one (1) formal meeting during the fiscal year ended December
31, 1999 and took various actions pursuant to resolutions adopted by unanimous
written consent.
In reviewing the compensation to be paid to the Company's executive
officers during the fiscal year ended December 31, 1999, the Committee sought to
ensure that executive officers were rewarded for long term strategic management,
for increasing the Company's value for its shareholders, and for achieving
internal goals established by the Board.
The key components of executive officer compensation are salary,
bonuses, restricted stock awards and stock option awards. Salary is generally
based on factors such as an individual officer's level of responsibility, prior
years' compensation, comparison to compensation of other officers in the
Company, and compensation provided at competitive companies and companies of
similar size. Bonuses, restricted stock awards and stock option awards are
intended to reward exceptional performances. Benchmarks for determining base
salary and bonus levels include targeted funds from operations levels, strength
of the balance sheet and creation of shareholder value. Restricted stock awards
and stock option awards are also intended to increase an officer's interest in
the Company's long-term success as measured by the market and book value of its
Common Stock. Stock awards may be granted to officers and directors of the
Company and its subsidiaries and to certain employees who have managerial or
8
<PAGE> 11
supervisory responsibilities under the Employee Option Plan. Stock awards may be
stock options, stock appreciation rights, restricted share rights or any
variation thereof.
CEO Compensation
During the fiscal year ended December 31, 1999, Gary A. Shiffman served
in the capacity of Chief Executive Officer of the Company. Under Mr. Shiffman's
leadership, the Company's funds from operations increased by more than 14.1% in
1999 as compared to 1998, and the Company continued its growth by acquiring an
additional nine (9) manufactured housing communities in 1998. See "Shareholder
Return Performance Presentation."
As of December 31, 1996, the Company entered into an employment
agreement with Mr. Shiffman which governed the salary and bonus paid to Mr.
Shiffman during the fiscal year ended December 31, 1999. Pursuant to this
employment agreement, Mr. Shiffman was paid a salary of $355,666 and received
incentive compensation of $175,000 on the basis of the Company's performance.
Based upon market studies of pay levels for chief executive officers of publicly
traded REITs (conducted by the National Association of Real Estate Investment
Trusts), the Committee believes that Mr. Shiffman's total compensation in 1999
was competitive with the appropriate level for his position, particularly in
view of his performance. See "Certain Transactions."
Respectfully submitted,
Ted J. Simon
Ronald L. Piasecki
EMPLOYMENT AGREEMENTS
Gary A. Shiffman
The Company has entered into an employment agreement with Gary A.
Shiffman pursuant to which Mr. Shiffman serves as Chief Executive Officer and
President of the Company. Mr. Shiffman's employment agreement is for an initial
term of five years ending December 31, 2001. Pursuant to his employment
agreement, Mr. Shiffman is paid an annual base salary of $350,000, which will be
increased by an annual cost of living adjustment beginning with calendar year
1999. In addition to his base salary and in accordance with the terms of his
employment agreement, Mr. Shiffman is entitled to incentive compensation of up
to 50% of his then base salary in accordance with the incentive compensation
formula set forth in the employment agreement. A copy of Mr. Shiffman's
employment agreement is attached as an exhibit to the Company's periodic filings
under the Exchange Act.
The non-competition clauses of Mr. Shiffman's employment agreement
preclude him from engaging, directly or indirectly: (a) in the real estate
business or any ancillary business of the Company during the period he is
employed by the Company; and (b) in the manufactured housing community business
or any ancillary business of the Company for a period of eighteen months
following the period he is employed by the Company. However, Mr. Shiffman's
employment agreement does allow him to make passive investments relating to real
estate in general or the housing industry in particular (other than in
manufactured housing communities) during the period he is employed by the
Company.
Jeffrey P. Jorissen
The Company has entered into an employment agreement with Jeffrey P.
Jorissen pursuant to which Mr. Jorissen serves as Senior Vice President, Chief
Financial Officer, Treasurer and Secretary of the Company. Mr. Jorissen's
employment agreement is for an initial term of five years ending December 31,
2003. Pursuant to his employment agreement, Mr. Jorissen must devote his entire
productive time, ability and attention to the Company and, in consideration for
his services, Mr. Jorissen will be paid an annual base salary of $240,000, which
will be increased by an annual cost of living adjustment beginning with calendar
year 2000. In addition to this base salary, Mr. Jorissen is entitled to
incentive compensation of up to 50% of his then base salary in accordance with
the incentive compensation formula set forth in the employment agreement. A copy
of Mr. Jorissen's employment agreement is attached as an exhibit to the
Company's periodic filings under the Exchange Act.
9
<PAGE> 12
The non-competition clauses of Mr. Jorissen's employment agreement
preclude him from engaging, directly or indirectly, in the real estate business
or any ancillary business of the Company during the period he is employed by the
Company and for a period of eighteen months thereafter.
Brian W. Fannon
The Company has entered into an employment agreement with Brian W.
Fannon pursuant to which Mr. Fannon serves as Chief Operating Officer of the
Company and Sun Home Services, Inc. has entered into an employment with Brian W.
Fannon pursuant to which Mr. Fannon serves as Chief Executive Officer of Home
Services. Each of Mr. Fannon's employment agreements is for an initial term of
three years ending December 31, 2001. Pursuant to his employment agreements, Mr.
Fannon must devote his entire productive time, ability and attention to the
Company and Home Services. In consideration for his services, Mr. Fannon will be
paid an annual base salary of $100,000 from the Company and Mr. Fannon will be
paid an annual base salary of $225,000 from Home Services, each of which will be
increased by 5% per year beginning with calendar year 2000. In addition to this
base salary, Mr. Fannon may be entitled to incentive compensation of up to 50%
of his then base salary in accordance with an executive bonus plan to be
established by the Company. Copies of Mr. Fannon's employment agreements are
attached as exhibits to the Company's periodic filings under the Exchange Act.
The non-competition clauses of Mr. Fannon's employment agreements
preclude him from engaging, directly or indirectly, in the real estate business
or any ancillary business of the Company during the period he is employed by the
Company and for a period of twelve months thereafter.
OUTSIDE DIRECTOR COMPENSATION
Directors who are not employees of the Company are entitled to an
annual retainer fee of $12,000, payable $3,000 per calendar quarter, plus a
$1,000 fee for each quarterly meeting of the Board. For services during the
fiscal year ended December 31, 1999, Ted J. Simon, Paul D. Lapides, Clunet R.
Lewis and Ronald L. Piasecki each earned directors' fees of $16,000. Although
Arthur A. Weiss earned director's fees of $16,000 for services during the fiscal
year ended December 31, 1999, he declined such fees.
10
<PAGE> 13
SHAREHOLDER RETURN PERFORMANCE PRESENTATION
Set forth below is a line graph comparing the yearly percentage change
in the cumulative total shareholder return on the Common Stock against the
cumulative total return of a broad market index composed of all issuers listed
on the New York Stock Exchange and an industry index composed of 38 publicly
traded real estate investment trusts, for the five (5) year period ending on
December 31, 1999. This line graph assumes a $100 investment on December 31,
1994, a reinvestment of dividends and actual increase of the market value of the
Company's Common Stock relative to an initial investment of $100. The
comparisons in this table are required by the SEC and are not intended to
forecast or be indicative of possible future performance of the Company's Common
Stock.
[PERFORMANCE GRAPH]
<TABLE>
<CAPTION>
FISCAL YEAR ENDING: 1994 1995 1996 1997 1998 1999
----- ----- ----- ----- ----- ----
<S> <C> <C> <C> <C> <C> <C>
SUN COMMUNITIES 100.00 123.86 173.21 190.69 198.16 191.98
REIT INDUSTRY INDEX 100.00 116.76 153.87 172.72 149.90 165.05
NYSE MARKET INDEX 100.00 129.66 156.20 205.49 244.52 267.75
</TABLE>
11
<PAGE> 14
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Company's directors, executive officers and beneficial owners of
more than 10% of the Company's capital stock to file reports of ownership and
changes of ownership with the SEC and the New York Stock Exchange. Based solely
on its review of the copies of such reports received by it, and written
representations from certain reporting persons, the Company believes, that
during the year ended December 31, 1999, its directors, executive officers and
beneficial owners of more than 10% of the Company's Common Stock have complied
with all filing requirements applicable to them.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of March 31, 2000, the shareholdings
of: (a) each person known to the Company to be the beneficial owner of more than
five percent (5%) of the Common Stock; (b) each director of the Company; (c)
each executive officer listed in the Summary Compensation Table; and (d) all
executive officers and directors of the Company as a group, based upon
information available to the Company.
<TABLE>
<CAPTION>
=================================================================================================================
AMOUNT AND NATURE OF PERCENT OF
NAME AND ADDRESS OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP OUTSTANDING SHARES(1)
- ------------------------------------ -------------------- ---------------------
<S> <C> <C>
Gary A. Shiffman 1,324,191(2) 7.29%
31700 Middlebelt Road
Suite 145
Farmington Hills, Michigan 48334
Jeffrey P. Jorissen 284,723.5(3) 1.61%
31700 Middlebelt Road
Suite 145
Farmington Hills, Michigan 48334
Brian W. Fannon 104,474.25(4) *
31700 Middlebelt Road
Suite 145
Farmington Hills, Michigan 48334
Jonathan M. Colman 68,667(5) *
31700 Middlebelt Road
Suite 145
Farmington Hills, Michigan 48334
Ted J. Simon 9,999(6) *
32000 Northwestern Highway
Farmington Hills, Michigan 48334
Paul D. Lapides 10,499(7) *
1000 Chastain Road
Kennesaw, Georgia 30144
Clunet R. Lewis 26,499(8) *
2000 Town Center
Suite 690
Southfield, Michigan 48075
</TABLE>
12
<PAGE> 15
<TABLE>
<CAPTION>
=================================================================================================================
AMOUNT AND NATURE OF PERCENT OF
NAME AND ADDRESS OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP OUTSTANDING SHARES(1)
- ------------------------------------ -------------------- ---------------------
<S> <C> <C>
Ronald L. Piasecki 58,094(9) *
4927 Stariha Drive
Muskegon, Michigan 49441
Arthur A. Weiss 35,999(10) *
One Woodward Avenue
Suite 2400
Detroit, Michigan 48226
LaSalle Advisors Capital Management, Inc. (11) 1,222,690 6.99%
200 East Randolph Drive
Chicago, Illinois 60601
European Investors Inc. (12) 1,889,329 10.80%
FMR Corp. (13) 984,100 5.62%
82 Devonshire Street
Boston, MA 02109
Wellington Management Company, LLP (14) 1,087,200 6.21%
75 State Street
Boston, MA 02109
=================================================================================================================
All current executive officers and directors as a 1,923,145.75(15) 10.33%
group (9 persons)
=================================================================================================================
</TABLE>
* Less than one percent (1%) of the outstanding shares.
(1) In accordance with SEC regulations, the percentage calculations are
based on 17,497,677 shares of Common Stock issued and outstanding as of
March 31, 2000 plus shares of Common Stock which may be acquired
pursuant to options exercisable, or limited partnership interests in
the Operating Partnership ("Common OP Units") that are convertible into
Common Stock, within sixty days of March 31, 2000 by each individual or
group listed.
(2) Includes 326,617 Common OP Units convertible into shares of Common
Stock and 333,334 shares of Common Stock which may be acquired pursuant
to options exercisable within sixty days of March 31, 2000. Does not
include shares or Common OP Units held by other family members as to
which beneficial ownership is disclaimed.
(3) Includes 100,000 Common OP Units convertible into shares of Common
Stock and 115,834 shares of Common Stock which may be acquired pursuant
to options exercisable within sixty days of March 31, 2000. Does not
include shares held by other family members as to which beneficial
ownership is disclaimed.
(4) Includes 30,000 Common OP Units convertible into shares of Common Stock
and 35,000 shares of Common Stock which may be acquired pursuant to
options exercisable within sixty days of March 31, 2000.
(5) Includes 7,500 Common OP Units convertible into shares of Common Stock
and 41,667 shares of Common Stock which may be acquired pursuant to
options exercisable within sixty days of March 31, 2000.
(6) Includes 7,499 shares of Common Stock which may be acquired pursuant to
options exercisable within sixty days of March 31, 2000.
13
<PAGE> 16
(7) Includes 6,999 shares of Common Stock which may be acquired pursuant to
options exercisable within sixty days of March 31, 2000.
(8) Includes 20,000 Common OP Units convertible into shares of Common Stock
and 6,499 shares of Common Stock which may be acquired pursuant to
options exercisable within sixty days of March 31, 2000.
(9) Includes 17,000 Common OP Units convertible into shares of Common Stock
and 5,999 shares of Common Stock which may be acquired pursuant to
options exercisable within sixty days of March 31, 2000. Includes
13,889 Common OP Units convertible into shares of Common Stock held by
Aspen Group, a Michigan co-partnership, which are attributable to Mr.
Piasecki because of his 25% general partnership interest in Aspen
Group. Includes 20,986 Common OP Units convertible into shares of
Common Stock held by Aspen Group-KC, a Michigan co-partnership, which
are attributable to Mr. Piasecki because of his 25% general partnership
interest in Aspen Group-KC.
(10) Includes 30,000 Common OP Units convertible into shares of Common Stock
and 5,999 shares of Common Stock which may be acquired pursuant to
options exercisable within sixty days of March 31, 2000.
(11) According to the Schedule 13G filed with the SEC for Calendar year
1999, this ownership includes shares held by LaSalle Investment
Management, Inc. ("LaSalle") and LaSalle Investment Management
(Securities) Limited Partnership ("LIMS"), which is a Maryland limited
partnership, the limited partner of which is LaSalle and the general
partner of which is LaSalle Investment Management (Securities), Inc., a
Maryland corporation, the sole stockholder of which is LaSalle. LaSalle
and LIMS, each registered investment advisors, have different advisory
clients. According to the Schedule 13G filed by this group, (a) LaSalle
has the: (i) sole power to vote or direct the vote of 158,850 shares of
Common Stock,(ii) shared power to vote or to direct the vote of 0
shares of Common Stock, (iii) sole power to dispose or to direct the
disposition of 158,850 shares of Common Stock, and (iv) shared power to
dispose or to direct the disposition of 201,400 shares of Common Stock;
and (b) LIMS has the: (i) sole power to vote or direct the vote of
230,000 shares of Common Stock, (ii) shared power to vote or to direct
the vote of 593,310 shares of Common Stock, (iii) sole power to dispose
or to direct the disposition of 208,200 shares of Common Stock; and
(iv) shared power to dispose or to direct the disposition of 654,240
shares of Common Stock.
(12) According to the Schedule 13G filed with the SEC for calendar year
1999, (a) European Investors Inc. has: (i) the sole power to vote or
direct the vote of 278,730 shares of Common Stock, (ii) shared power to
vote or to direct the vote of 151,500 shares of Common Stock, (iii)
sole power to dispose or to direct the disposition of 340,229 shares of
Common Stock, and (iv) shared power to dispose or to direct the
disposition of 102,300 shares of Common Stock; and (b) EII Realty
Securities Inc., a wholly-owned subsidiary of European Investors Inc.,
has the sole power to vote or direct the vote of 1,290,899 shares of
Common Stock and sole power to dispose or to direct the disposition of
1,446,800 shares of Common Stock. Such Schedule 13G did not include a
business address for European Investors Inc.
(13) According to the Schedule 13G filed with the SEC for calendar year
1999, FMR Corp. has the sole power to vote or direct the vote of
515,800 shares of Common Stock and the sole power to dispose or to
direct the disposition of 984,100 shares of Common Stock.
(14) According to the Schedule 13G filed with the SEC for calendar year
1999, Wellington Management company, LLP has the sole power to vote or
direct the vote of 216,100 shares of Common Stock and the sole power to
dispose or to direct the disposition of 1,087,200 shares of Common
Stock.
(15) Includes 565,992 Common OP Units convertible into shares of Common
Stock and 558,830 shares of Common Stock which may be acquired pursuant
to options exercisable within sixty days of March 31, 2000.
14
<PAGE> 17
CERTAIN TRANSACTIONS
During 1999, the law firm of Jaffe, Raitt, Heuer & Weiss, P.C. acted as
general counsel to the Company and represented the Company in various matters.
Arthur A. Weiss, a director of the Company, is a shareholder of such firm.
On December 15, 1998, certain directors, employees and consultants of
the Company purchased approximately $25.5 million of newly issued shares of
common stock of the Company and common OP Units in Sun Communities Operating
Limited Partnership at a price of $31.75 per share/OP Unit in accordance with
the Company's 1998 Stock Purchase Plan (the "Purchase Plan"). These purchases
were financed by 5-year personal loans from Bank One Corporation, as agent, and
participants in the Purchase Plan are personally responsible for repayment of
their respective loans. In order to facilitate purchases under the Purchase
Plan, the Company guaranteed repayment of all of the loans and the participants
have agreed to fully indemnify the Company against all liabilities arising under
such guaranty. The following executive officers and/or directors of the Company
purchased the following number of OP Units under the Purchase Plan:
<TABLE>
<CAPTION>
NAME NO. OF OP UNITS PURCHASE PRICE
---- --------------- --------------
<S> <C> <C>
Gary A. Shiffman 170,000 $5,397,500
Clunet R. Lewis 20,000 $635,000
Ronald L. Piasecki 17,000 $539,750
Arthur A. Weiss 50,000 $1,587,500
Jeffrey P. Jorissen 100,000 $3,175,000
Brian W. Fannon 30,000 $952,500
Jonathan M. Colman 7,500 $238,125
</TABLE>
In 1995, the Company issued Mr. Gary A. Shiffman, the Company's Chief
Executive Officer and President, 400,000 shares of Common Stock for $8,650,000
(the "Purchase Price"). The Purchase Price is evidenced by three (3) separate
10-year promissory notes that bear interest at a rate equal to six months' LIBOR
plus 175 basis points, with a maximum interest rate of 9% per annum and a
minimum interest rate of 6% per annum (the "Promissory Notes"). Two of the
Promissory Notes are secured by shares of Common Stock (the "Secured Shares")
and/or OP Units (the "Secured Units") and the last Promissory Note is unsecured
but fully recourse to Mr. Shiffman. Mr. Shiffman's personal liability on the
secured Promissory Notes is limited to all accrued interest on such notes plus
fifty percent (50%) of the deficiency, if any, after application of the proceeds
from the sale of the Secured Shares and/or the Secured Units to the then
outstanding principal balance of the Promissory Notes. The Promissory Notes
provide for quarterly interest only payments and provide that all cash
distributions and dividends paid to Mr. Gary Shiffman on the Secured Shares and
the Secured Units (the "Distributions") will first be applied toward the accrued
and unpaid interest under the Promissory Notes and sixty percent (60%) of the
remainder of the Distributions, if any, will be applied toward the outstanding
principal balance of the Promissory Notes.
In April 1997, the Operating Partnership loaned Mr. Shiffman an
additional $2,600,391 on terms substantially identical to the terms of the other
loan to Mr. Shiffman, as described above, and such loan is secured by 80,000
shares of Common Stock (the promissory notes evidencing this loan, together with
the Promissory Notes, are hereinafter referred to as the "Shiffman Notes"). The
largest aggregate indebtedness outstanding under the Shiffman Notes since
January 1, 1999 was $11,523,753. As of March 31, 2000, the amount outstanding
under the Shiffman Notes was approximately $11,126,382. Copies of the Shiffman
Notes have been filed as exhibits to the Company's periodic filings under the
Exchange Act.
On April 8, 1996, the Company completed a $122.8 million public
offering of 4.7 million shares of its Common Stock (the "Equity Offering").
Jeffrey P. Jorissen, the Company's Senior Vice President, Treasurer, Chief
Financial Officer and Secretary, Brian W. Fannon, the Company's Senior Vice
President and Chief Operating Officer, and Jonathan M. Colman, the Company's
Senior Vice President -
15
<PAGE> 18
Acquisitions, collectively, purchased 20,000 shares of Common Stock in the
Equity Offering at the public offering price of $26.125 per share. Such
purchases in the Equity Offering were financed with loans from the Operating
Partnership on terms substantially identical to the terms of the Operating
Partnership's loan to Mr. Gary Shiffman described above. The largest aggregate
indebtedness outstanding under Mr. Jorissen's promissory notes to the Operating
Partnership, Mr. Fannon's promissory notes to the Operating Partnership and Mr.
Colman's promissory notes to the Operating Partnership since January 1, 1999
were $266,349, $159,419 and $106,540, respectively. As of March 31, 2000, the
total amounts outstanding under Mr. Jorissen's promissory notes to the Operating
Partnership, Mr. Fannon's promissory notes to the Operating Partnership and Mr.
Colman's promissory notes to the Operating Partnership were approximately
$266,296, $0 and $106,518, respectively.
Certain officers and directors of the Company are also officers and/or
directors of Bingham: Gary A. Shiffman is a director and officer of Bingham, and
Arthur A. Weiss is a director of Bingham. The Company provides financing to
Bingham pursuant to a subordinated debt facility consisting of a $4 million term
loan, bearing interest at the rate of 9.75% per annum (the "Term Loan"), and a
$28 million demand line of credit, bearing interest at a rate of 235 basis
points over LIBOR (the "Line of Credit" and, together with the Term Loan, the
"Subordinated Debt Facility"). In the discretion of the Company, the Line of
Credit can bulge up to $50 million for a limited period of time. The Term Loan
matures on September 30, 2004 and, at anytime after September 30, 2000, the Term
Loan may be paid in full or in part without payment of any prepayment fee or
penalty. The Company has a subordinated security interest in all of the assets
of Bingham to secure the Line of Credit.
In connection with the Subordinated Debt Facility, Bingham issued
common stock purchase warrants to the Company to purchase up to 400,000 shares
of Bingham common stock at its initial public offering price of $10 per share.
The Company also entered into an arrangement with Bingham whereby the Company
offers Bingham as a preferred financing source to home purchasers and home
owners in the Company's manufactured housing communities. This arrangement was
modified in April 1999 to provide that the Company shall receive a fee of 1% of
the loans originated in the Company's manufactured home communities rather than
their original arrangement which was to receive an annual fee based on average
loan balances. In connection with this arrangement, the Company received
$243,354 for the year ended December 31, 1999. Furthermore, Bingham granted the
Company options to purchase 330,000 shares of Bingham common stock, which
options vest in eight equal annual amounts beginning in January 2001. Bingham
paid the Company a fee of $37,500 for the year ended December 31, 1999 as
reimbursement for general and administrative expenses.
GENERAL INFORMATION
INDEPENDENT PUBLIC ACCOUNTANTS
The Board selected PricewaterhouseCoopers LLP as the Company's
independent public accountants for the fiscal year ended December 31, 1999.
Representatives of PricewaterhouseCoopers LLP are expected to be present at the
Annual Meeting, and will have the opportunity to make a statement if they desire
to do so and to respond to appropriate questions. It is expected that
PricewaterhouseCoopers LLP will also serve the Company in the same capacity
during the fiscal year ending December 31, 2000.
SHAREHOLDERS' PROPOSALS
Any and all shareholder proposals for inclusion in the proxy materials
for the Company's next Annual Meeting of Shareholders must comply with the rules
and regulations promulgated under the Exchange Act and must be received by the
Company, at its offices at 31700 Middlebelt Road, Suite 145, Farmington Hills,
Michigan 48334, not later than January 5, 2001. Such proposals should be
addressed to the Company's Secretary.
The Company's Bylaws also contain certain provisions which affect
shareholder proposals. The Company's Bylaws provide that: (a) with respect to an
annual meeting of shareholders, nominations of persons for election to the Board
of Directors and the proposal of business to be considered by shareholders may
be made only (i) pursuant to the Company's notice of the meeting, (ii) by the
Board of Directors, or (iii) by a shareholder who is entitled to vote at the
meeting and has complied with the
16
<PAGE> 19
advance notice procedures set forth in the Bylaws; and (b) with respect to
special meetings of shareholders, only the business specified in the Company's
notice of meeting may be brought before the meeting of shareholders, and
nominations of persons for election to the Board of Directors may be made only
(i) by the Board of Directors, or (ii) provided that the Board of Directors has
determined that directors shall be elected at such meeting, by a shareholder who
is entitled to vote at the meeting and has complied with the advance notice
provisions set forth in the Bylaws.
OTHER MATTERS
Management knows of no matters which will be presented for
consideration at the Annual Meeting other than those stated in the Notice of
Meeting. However, if any other matters do properly come before the Annual
Meeting, the person or persons named in the accompanying proxy form will vote
the proxy in accordance with their best judgment regarding such matters,
including the election of a director or directors other than those named in this
Proxy Statement should an emergency or unexpected occurrence make the use of
such discretionary authority necessary, and also regarding matters incident to
the conduct of the meeting.
Shareholders are requested to date, sign and return the enclosed proxy
in the enclosed postage-paid envelope. So that the presence, in person or by
proxy, of the holders of a majority of the shares entitled to vote at the
meeting may be assured, prompt execution and return of the proxy is requested.
By Order of the Board of Directors
JEFFREY P. JORISSEN
Secretary
Dated: May 8, 2000
17
<PAGE> 20
SUN COMMUNITIES, INC.
31700 MIDDLEBELT ROAD, SUITE 145
FARMINGTON HILLS, MICHIGAN 48334
SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF SHAREHOLDERS ON JUNE 14, 2000
The undersigned hereby appoints Gary A. Shiffman and Arthur A. Weiss, or either
of them, as attorneys and proxies of the undersigned shareholder, with full
power of substitution, to vote on behalf of the undersigned and in his or
her name and stead, all shares of the common stock of Sun Communities, Inc.
(the "Company") which the undersigned would be entitled to vote if personally
present at the Company's Annual Meeting of Shareholders to be held at the
Best Western Executive Hotel & Suites, 31525 West Twelve Mile Road, Farmington
Hills, Michigan 48334 on Wednesday, June 14, 2000, and at any adjournments
thereof.
The undersigned shareholder acknowledges receipt of the Notice of Annual
Meeting and Proxy Statement dated May 8, 2000.
The giving of this Proxy does not affect the right of the undersigned
shareholder to vote in person should the undersigned shareholder attend
the Annual Meeting. This Proxy may be revoked at any time before it is
voted.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED. IF NO DIRECTION IS
GIVEN WITH RESPECT TO A PARTICULAR PROPOSAL, THIS PROXY WILL BE VOTED FOR SUCH
PROPOSAL.
------------------------------------------------------------------------------
PLEASE VOTE, DATE AND SIGN ON REVERSE AND RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE. POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES OF AMERICA.
------------------------------------------------------------------------------
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
- ---------------------------------- ------------------------------------
- ---------------------------------- ------------------------------------
- ---------------------------------- ------------------------------------
<PAGE> 21
<TABLE>
<S><C>
[X] PLEASE MARK VOTES
AS IN THIS EXAMPLE
- ------------------------------------ 1. Election of Directors
SUN COMMUNITIES, INC. For All With- For All
- ------------------------------------ Nominees hold Except
PAUL D. LAPIDES [ ] [ ] [ ]
TED J. SIMON
NOTE: If you do not wish your shares
voted "FOR" a particular nominee, mark
the "For All Except" box and strike a
line through that nominee's name. Your
shares will be voted "For" the remaining
nominees.
CONTROL NUMBER:
RECORD DATE SHARES:
2. The above-appointed proxies are
authorized to vote upon all matters
incidental to the conduct of the Annual
Meeting and such other business as may
properly come before the Annual Meeting
in accordance with their best judgment.
Please be sure to sign Date Mark box at right if an address change [ ]
and date this Proxy. or comment has been noted on the reverse
side of this card.
Shareholder sign here Co-owner sign here
DETACH CARD DETACH CARD
</TABLE>
SUN COMMUNITIES, INC.
Dear Shareholder:
Please take note of the important information enclosed with this Proxy
Ballot. There are issues related to the management and operation of the
Corporation that require your immediate attention and approval. These are
discussed in detail in the enclosed proxy materials.
Your vote counts, and you are strongly encouraged to exercise your right
to vote your shares.
Please mark the boxes on the proxy card to indicate how your shares will be
voted. Then, sign the card, detach it and return your proxy vote in the
enclosed postage paid envelope.
Your vote must be received prior to the Annual Meeting of Shareholders,
June 14, 2000.
Thank you in advance for your prompt consideration of these matters.
Sincerely,
Sun Communities, Inc.
