SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
AGREE REALTY CORPORATION
(Name of registrant as specified in its charter)
AGREE REALTY CORPORATION
(Name of person(s) Filing Proxy Statement)
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 previsouly 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>
[ AGREE LOGO ]
AGREE REALTY CORPORATION
31850 Northwestern Highway
Farmington Hills, MI 48334
- - -------------------------------------------------------------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be Held on May 11, 1998
- - -------------------------------------------------------------------------------
NOTICE IS HEREBY GIVEN that the annual meeting of stockholders of AGREE
REALTY CORPORATION, a Maryland corporation, will be held at 10:00 a.m. local
time, on May 11, 1998, at the Best Western Executive Hotel & Suites, 31525
West 12 Mile Road, Farmington Hills, Michigan for the following purposes:
1. To elect two directors to serve until the annual meeting of
stockholders in 2001, or until their successors are duly elected and
qualified.
2. To transact such other business as may properly come before the
meeting or any adjournment or adjournments thereof.
Stockholders of record at the close of business on March 23, 1998, will
be entitled to notice of and to vote at the annual meeting or at any
adjournment thereof.
Stockholders are cordially invited to attend the meeting in person.
WHETHER OR NOT YOU NOW PLAN TO ATTEND THE MEETING, YOU ARE ASKED TO COMPLETE,
DATE, SIGN AND MAIL PROMPTLY THE ENCLOSED PROXY CARD FOR WHICH A POSTAGE PAID
RETURN ENVELOPE IS PROVIDED. If you decide to attend the meeting, you may
revoke your proxy and vote your shares in person. It is important that your
shares be voted.
By Order of the Board of Directors
/s/ Kenenth R. Howe
Kenneth R. Howe
Vice President, Finance and
Secretary
March 23, 1998
Farmington Hills, Michigan
<PAGE>
[ AGREE LOGO ]
AGREE REALTY CORPORATION
31850 Northwestern Highway
Farmington Hills, MI 48334
- - -------------------------------------------------------------------------------
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
May 11, 1998
- - -------------------------------------------------------------------------------
GENERAL
This proxy statement (the "Proxy Statement") is furnished by the Board
of Directors of Agree Realty Corporation (the "Company") in connection with
the solicitation by the Board of Directors of proxies to be voted at the
annual meeting of stockholders to be held on May 11, 1998 (the "Annual
Meeting"), at the Best Western Executive Hotel & Suites, 31525 West 12 Mile
Road, Farmington Hills, Michigan, and at any adjournment or adjournments
thereof, for the purposes set forth in the accompanying notice of such
meeting. All stockholders of record at the close of business on March 23,
1998, will be entitled to vote.
Any proxy, if received in time, properly signed and not revoked, will
be voted at the Annual Meeting in accordance with the directions of the
stockholder. If no directions are specified, the proxy will be voted for the
Proposal set forth in the Proxy Statement. Any stockholder giving a proxy has
the power to revoke it at any time before it is exercised. A proxy may be
revoked (i) by delivery of a written statement to the Secretary of the
Company stating that the proxy is revoked, (ii) by preparation at the Annual
Meeting of a subsequent proxy executed by the person executing the prior
proxy, or (iii) by attendance at the Annual Meeting and voting in person.
Votes cast in person or by proxy at the Annual Meeting will be
tabulated by the election inspectors appointed for the meeting, and the
inspectors, assisted by the Company's Secretary, will determine whether or
not a quorum is present. The election inspectors will treat abstentions as
shares that are present and entitled to vote for purposes of determining the
presence or absence of a quorum, but as unvoted for purposes of determining
the approval of any matter submitted to the stockholders. If a broker submits
a proxy indicating that it does not have discretionary authority as to
certain shares to vote on a particular matter, those shares will not be
considered as present and entitled to vote with respect to such matter.
Solicitation of proxies will be primarily by mail. However, directors
and officers of the Company also may solicit proxies by telephone or telegram
or in person. All of the expenses of preparing, assembling, printing and
mailing the materials used in the solicitation of proxies will be paid by the
Company. Arrangements may be made with brokerage houses and other custodians,
nominees and fiduciaries to forward soliciting materials, at the expense of
the Company, to the beneficial owners of shares held of record by such
persons. It is anticipated that this Proxy Statement and the enclosed proxy
card first will be mailed to stockholders on or about March 27, 1998.
As of March 13, 1998, 4,348,013 shares of Common Stock of the Company,
$.0001 par value per share ("Common Stock") were outstanding. Each share of
Common Stock entitles the holder thereof to one vote on each of the matters
to be voted upon at the annual meeting. As of the record date, executive
officers and Directors of the Company had the power to vote approximately
4.16% of the outstanding shares of Common Stock. The Company's executive
officers and Directors have advised the Company that they intend to vote
their shares of Common Stock in favor of the Proposal set forth in the Proxy
Statement.
<PAGE>
ELECTION OF DIRECTORS
NOMINEES AND DIRECTORS
The Board of Directors of the Company currently consists of six
Directors. The Directors currently are divided into three classes, consisting
of two members whose terms expire at this Annual Meeting, two members whose
terms expire at the 1999 annual meeting of stockholders and two members whose
terms expire at the 2000 annual meeting of stockholders. At the Annual
Meeting, two Directors will be elected and qualified. Edward Rosenberg and
Ellis Wachs are nominees for Directors, each to hold office for a term of
three years until the annual meeting of stockholders to be held in 2001. The
terms of Richard Agree and Michael Rotchford expire in 1999 and the terms of
Gene Silverman and Farris Kalil expire in 2000. Directors are elected by a
plurality of the votes cast at the Annual Meeting either in person or by
proxy.
NOMINEES FOR ELECTION AS DIRECTOR
THE FOLLOWING INDIVIDUALS ARE NOMINEES FOR ELECTION AS DIRECTOR AT THE
ANNUAL MEETING:
Edward Rosenberg, 78, has been a director of the Company since its
organization in 1993. Pursuant to an employment agreement with the Company,
Mr. Rosenberg served as Senior Vice President of the Company from April, 1994
through April, 1997. (the expiration of the employment term). Prior thereto,
he worked on behalf of and as a general partner of the Company's predecessor
entities for the past 23 years.
Ellis G. Wachs, 68, has been a Director of the Company since 1993. Mr.
Wachs is one of the four founders of Charming Shoppes, Inc. where, for a
forty year period ending in 1991, he held various positions, including
Executive Vice President, with various responsibilities including merchandise
acquisition, real estate leasing and site location. Since 1991 he has served
as a consultant to Charming Shoppes, Inc. and he currently is a real estate
investor. He is a graduate of the University of Illinois and a board member
of the Philadelphia Free Library. Mr. Wachs is a nominee for a three year
term expiring in 2001.
OTHER DIRECTORS WHOSE TERMS OF OFFICE CONTINUE AFTER THE ANNUAL MEETING
Richard Agree, 54, has been President and Chairman of the Board of
Directors since December 1993. Prior thereto, he worked as managing partner
of the general partnerships which held the Company's properties prior to the
formation of the Company and the initial public offering and was President of
the predecessor company since 1971. Mr. Agree has managed and overseen the
development of over 4,000,000 square feet of anchored shopping center space
during the past 24 years.
Michael Rotchford, 39, has been a Director of the Company since
December 1993. He is a Managing Director of The Saratoga Group, an investment
banking organization which specializes in tax and asset-based financing. Mr.
Rotchford has been with The Saratoga Group since 1991. Prior to 1991, Mr.
Rotchford was a Director in the investment banking division of Merrill Lynch
& Co. where he managed the commercial mortgage placement group. Mr. Rotchford
holds a bachelor's degree, with high honors, from the State University of New
York at Albany. He is also a licensed real estate broker, a registered
representative and a Securities Principal.
2
<PAGE>
Gene Silverman, 64, has been a director of the Company since April
1994, Mr. Silverman is currently a consultant to the entertainment industry.
From July 1993 until his retirement in December 1995, Mr. Silverman served as
the President and Chief Executive Officer of Polygram Video, USA, a division
of Polygram N.V., a New York Stock Exchange listed company. Prior thereto, he
was Senior Vice President of sales at Orion Home Video from 1987 through
1992. In 1979 Mr. Silverman founded the Detroit-based distribution company
named Video Trend, Inc. In addition, he owned and operated Music Trend, Inc.
and Merit Music Distribution, Inc. in Detroit.
Farris G. Kalil, 59, has been a Director of the Company since December
1993. Mr. Kalil is Director of Business Development for the Commercial Lending
Division of Michigan National Bank, a national banking institution. From May
1994 to November 1996, Mr. Kalil served as a Senior Vice President for
Commercial Lending at First of America Bank -- Southeast Michigan, N.A. Prior
thereto, Mr. Kalil served as a Senior Vice President of Michigan National Bank
where he headed the Commercial Real Estate Division, Corporate Special Loans,
Real Estate Asset Management/Real Estate Owned Group, and the Government
Insured Multi-Family Department. He had been with Michigan National Corporation
since 1960. Mr. Kalil received his B.S. from Wayne State University and
continued his education at the Northwestern University School of Mortgage
Banking.
The Board of Directors met five times during fiscal year 1997. During
the year ended December 31, 1997, each Director attended 75 percent or more
of the aggregate of (i) the total number of the meetings of the Board of
Directors, and (ii) the total number of meetings held by all committees of
the board on which each such Director served.
COMPENSATION OF DIRECTORS
Directors of the Company are currently paid an annual fee of $7,000.
Directors traveling from outside the Farmington Hills, Michigan area are
reimbursed for out-of-pocket expenses in connection with their attendance at
meetings. For the year ended December 31, 1997, the Company paid total
compensation of $33,250.00 to the Directors. No fees are paid to Directors
who are employees of the Company.
COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors has three standing committees: The Executive
Committee, the Audit Committee and the Executive Compensation Committee.
The Executive Committee is composed of Messrs. Agree, Rosenberg,
Rotchford and Wachs. The committee has the authority to acquire and dispose
of real property and the power to authorize, on behalf of the full Board of
Directors, the execution of certain contracts and agreements, including those
related to the borrowing of money by the Company, and generally to exercise
all other powers of the Board of Directors except for those which require
action by a majority of the independent Directors or the entire Board. The
Executive Committee met once during 1997.
The Audit Committee is composed of Messrs. Kalil and Wachs. It makes
recommendations concerning the engagement of independent public accountants,
reviews with the independent public accountants the plans and results of the
audit engagement, approves professional services provided by the independent
public accountant, reviews the independence of the independent public
accountants, considers the range of audit and non-audit fees and reviews the
adequacy of the Company's internal accounting controls. The Audit Committee
met twice during 1997.
The Executive Compensation Committee is composed of Messrs. Kalil,
Silverman and Wachs. It determines compensation for the Company's executive
officers, in addition to administering the Company's stock option and other
employee benefit plans. The Executive Compensation Committee met once during
1997.
3
<PAGE>
EXECUTIVE OFFICERS
The following sets forth certain information with respect to Mr. Howe
and Mr. Schaefer, the only executive officers who are not Directors of the
Company.
Kenneth R. Howe, 49, has been Vice President, Finance of the Company
since June 1994 and Secretary of the Company since November 1993. Prior to
being appointed as Vice President, Finance, Mr. Howe served as Chief
Financial Officer of the Company since November 1993. From 1989 to April 1994
he was Controller of Agree Development Company, a predecessor of the Company.
From 1984 to 1989, he was a partner in Straka, Jarackas and Company, a public
accounting firm with which he was employed since 1974. He is a graduate of
Western Michigan University and a certified public accountant.
Mr. Bruce J. Schaefer, 54, was named Vice President, Leasing of the
Company on January 1, 1998. Prior to being appointed to this position, Mr.
Schaefer had directed the Company's leasing activities since April 1994. From
1988 to April 1994 he coordinated all leasing activities for Agree
Development Company.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934, as amended, (the
"Exchange Act") requires the Company's executive officers and directors, and
persons who beneficially own more than 10% of the Company's common stock
("10% Stockholders"), to file reports of beneficial ownership and changes in
ownership on Forms 3, 4 and 5 with the Securities and Exchange Commission
(the "SEC") and the New York Stock Exchange. Executive officers, directors
and 10% Stockholders are required by SEC regulations to furnish the Company
with copies of all Forms 3, 4 and 5 which they file.
To the best of the Company's knowledge, based upon copies of Forms
furnished to it and written representations from executive officers,
directors and 10% Stockholders, all applicable Section 16(a) reporting
requirements were complied with during the year ended December 31, 1997.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The beneficial ownership of the Common Stock with respect to each
director of the Company, each executive officer of the Company, each person
known by the Company to be the beneficial owner of more than five percent of
the outstanding shares of Common Stock, and all directors and executive
officers of the Company as a group as of March 16, 1998 is set forth below.
<TABLE>
<CAPTION>
Amount and
Nature of
Name and Business Address Beneficial Percent
of Beneficial Owners(1) Ownership(2) of Class
------------------------ ------------ --------
<S> <C> <C>
Richard Agree ....................................... 427,191 8.57%
Edward Rosenberg .................................... 308,967 6.20%
Michael Rotchford ................................... 1,000 *
Farris G. Kalil ..................................... 6,000 *
Ellis G. Wachs ...................................... 1,000 *
Gene Silverman ...................................... 11,893 *
Kenneth R. Howe ..................................... 16,750 *
Bruce J. Schaefer ................................... 7,100 *
------- -------
All directors and executive officers as a group (8
persons) .......................................... 779,901 15.64%
======= =======
<FN>
- - ----------------
* Less than 1%
(1) The address of each person is c/o the Company at 31850 Northwestern
Highway, Farmington Hills, MI 48334.
(2) Includes shares of Common Stock issuable upon conversion of limited
partnership units in Agree Limited Partnership to Messrs. Agree and
Rosenberg of 329,825 and 240,000, respectively, and shares of Common
Stock subject to options exercisable within 60 days granted to Messrs.
Agree, Rosenberg and Howe of 18,375, 6,125 and 4,900, respectively. Also
includes 8,800, 11,250 and 6,650 shares of restricted stock held by
Messrs. Agree, Howe and Schaefer, respectively.
</TABLE>
4
<PAGE>
EXECUTIVE COMPENSATION
ANNUAL COMPENSATION
The Company pays compensation to its executive officers for their
services in such capacity. The following Summary Compensation Table sets
forth the annual and long-term compensation paid by the Company to each
executive officer of the Company (the "Named Executive Officers") for, or
with respect to, the fiscal periods ended December 31, 1997, 1996 and 1995.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Annual Compensation Long-Term Compensation
------------------------ ----------------------
Common Stock
Restricted Underlying
Stock Stock Option
Name and Principal Position Year Salary Bonus Award($) Awards (Shs)
--------------------------- ---- ------ ----- ---------- ------------
<S> <C> <C> <C> <C> <C>
Richard Agree ....................................... 1997 $100,000 -- $17,100 (2)(3) --
Chairman of the Board 1996 $100,000 -- -- --
and President 1995 $100,000 -- -- 18,375
Edward Rosenberg .................................... 1997 $ 25,962 -- -- --
Director and Senior(1) 1996 $ 75,000 -- -- --
Vice President 1995 $ 75,000 -- -- 6,125
Kenneth R. Howe ..................................... 1997 $ 75,000 $5,769 $33,388 (2)(3) --
Vice President, Finance 1996 $ 75,000 $4,327 $22,700 (2) --
and Secretary 1995 $ 75,000 $4,327 $19,500 (2) 4,900
<FN>
- - ----------------
(1) Amount paid during the period January 1, 1997 to April 22, 1997 based on
an annual base salary of $75,000. Mr. Rosenberg's employment agreement
with the Company expired on April 22, 1997.
(2) The dollar value (net of any consideration paid) of the award of
restricted stock, calculated by multiplying the closing market price of
the Company's Common Stock on the date of the award by the number of
shares awarded. Messrs. Agree and Howe were awarded 4,800 and 2,750
shares of restricted stock on January 1, 1998; Messrs. Agree and Howe
were awarded 4,000 and 2,500 shares on January 1, 1997 and Mr. Howe was
awarded 1,000 shares on January 1, 1996, pursuant to the Company's 1994
Stock Incentive Plan (the "Stock Incentive Plan"). Such grants (i) vest
in equal annual installments over a five-year period from the date of the
grant and (ii) are entitled to dividends from the date of the grant.
(3) At December 31, 1997, Messrs. Agree and Howe owned 4,000 and 8,500 shares
of restricted stock, respectively, the market value (as computed pursuant
to footnote (2) above) of which was $85,500 and $166,939 respectively.
</TABLE>
OPTION GRANTS
During the year ended December 31, 1997, the Company did not grant any
stock options to purchase shares of Common Stock.
5
<PAGE>
OPTION EXERCISES IN 1997 AND YEAR-END VALUES TABLE
The following table sets forth certain information with respect to
unexercised stock options held by the Named Executive Officers at December
31, 1997. None of the Named Executive Officers exercised any stock options
during the year ended December 31, 1997.
<TABLE>
<CAPTION>
Number of
Securities Underlying Value of Unexercised
Unexercised Options In-the-Money Options
at December 31, 1997 at December 31, 1997(1)
--------------------------- -------------------------
Name and Principal Position Exercisable Unexercisable Exercisable Unexercisable
--------------------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Richard Agree ....................................... 13,781 4,594 $ 25,409 $ 25,409
Chairman of the Board and President
Edward Rosenberg .................................... 4,594 1,531 $ 8,470 $ 8,470
Director
Kenneth R. Howe ..................................... 3,675 1,225 $ 6,776 $ 6,776
Vice President, Finance and Secretary
<FN>
- - ----------------
(1) Market value of underlying securities based on the average of the high
and low sales price of the Company's Common Stock on December 31, 1997,
minus the aggregate exercise price.
</TABLE>
EMPLOYMENT AGREEMENT
In connection with the Company's initial public offering, Messrs. Agree
and Rosenberg entered into employment agreements with the Company providing
for terms expiring on April 22, 1999 and on April 22, 1997, respectively,
pursuant to which Messrs. Agree and Rosenberg are paid annual salaries of
$100,000 and $75,000, respectively. Subject to certain terms and conditions,
Messrs. Agree and Rosenberg have agreed that, during the term of their
employment agreements, they will not compete with the Company's business,
including real estate development. Messrs. Agree and Rosenberg are required
to devote substantially all of their business time to the affairs of the
Company while they are employees of the Company. Mr. Rosenberg's employment
agreement expired on April 22, 1997.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
No person who served as a member of the Executive Compensation
Committee during 1997 (i) was an officer or employee of the Company during
such year, (ii) was formerly an officer of the Company or (iii) was a party
to any material transaction with the Company except that Mr. Kalil is
Director of Business Development for the Commercial Lending Division of
Michigan National Bank. Michigan National Bank is one of the lending banks
under the Company's $50,000,000 secured line of credit (the "Credit
Facility"), is the lender of the Company's $5,000,000 line of credit (the
"Line of Credit") and provides other on-going banking services to the Company
and receives usual and customary banking fees for such services. As of
December 31, 1997, $6,865,459 was outstanding under the Credit Facility and
$1,775,557 was outstanding under the Line of Credit.
No executive officer of the Company served as a member of the
compensation or similar committee or board of directors of any other entity
of which an executive officer served on the Executive Compensation Committee
or the Board of Directors of the Company.
6
<PAGE>
COMPENSATION COMMITTEE REPORT
The Executive Compensation Committee is comprised of Messrs. Kalil,
Silverman and Wachs. Members of the Executive Compensation Committee, all of
whom must be independent directors of the Company, are selected each year by
the full Board of Directors.
The Executive Compensation Committee determines compensation for the
Company's executive officers and administers any stock incentive or other
compensation plans adopted by the Company, including the Stock Incentive
Plan. The Executive Compensation Committee believes that the Company's
compensation package must be structured in a manner that will help the
Company attract and retain qualified executives and will align compensation
of such executives with the interests of the stockholders. The compensation
package currently consists of salary, bonus and long-term compensation in the
form of stock options and restricted stock awards issued pursuant to the
Stock Incentive Plan.
SALARY, BONUS AND OTHER ANNUAL COMPENSATION
Salary and bonus amounts are determined by the Executive Compensation
Committee using a subjective evaluation process. In making determinations of
salary and bonus amounts, the Executive Compensation Committee considers the
general performance of the Company, the officer's position, level and scope
of responsibility, the officer's anticipated performance and contributions to
the Company's achievement of its long-term goals. The base salaries for
Richard Agree and Edward Rosenberg were established pursuant to employment
agreements entered into between each of them and the Company.
STOCK INCENTIVE PLAN
The Executive Compensation Committee is responsible for administering
the Stock Incentive Plan, which includes determining the individuals to be
granted stock options awards or restricted stock grants and defining the
terms of such awards, including the number of shares, exercise price, vesting
schedule and expiration date.
The purpose of the Stock Incentive Plan is to provide compensation to
persons whose services are considered essential to the Company. By linking
this compensation to the market performance of the Company's Common Stock,
the Company intends to provide additional incentive for officers and key
employees to enhance the value and success of the Company and align the
long-term interests of the officers and key employees with the interest of
the Company.
The Executive Compensation Committee uses a subjective evaluation
process to determine whether an officer of key employee should receive a
stock option grant or receive a restricted stock award and the number of
shares to be granted or awarded to such officer or key employee. It has not
set specific objective goals or standards that an officer or key employee
must meet to receive a stock option or restricted stock award. The factors
considered by the Executive Compensation Committee include the general
performance of the Company, the position, level and scope of responsibility
of the respective officer or key employee and the officer's or key employee's
anticipated performance and contributions to the Company's achievement of its
long-term goals.
In January of 1996, the Executive Compensation Committee awarded Mr.
Howe a 1,000 share restricted stock award, in January of 1997, the Committee
awarded Messrs. Agree and Howe restricted stock awards of 4,000 shares and
2,500 shares, respectively, and in January 1998, the Committee awarded
Messrs. Agree and Howe restricted stock awards of 4,800 shares and 2,750
shares, respectively. The Executive Compensation Committee did not grant any
options to purchase shares of the Company's Common Stock in 1997.
The foregoing report is given by the following members of the Executive
Compensation Committee:
Farris G. Kalil
Gene Silverman
Ellis G. Wachs
7
<PAGE>
PERFORMANCE GRAPH
Rules promulgated under the Exchange Act require the Company to present
a graph comparing the cumulative total stockholder return on its Common Stock
with the cumulative total stockholder return of (i) a broad equity market
index, and (ii) a published industry index or peer group. Although the graph
would normally be for a five-year period, the Common Stock has been publicly
traded only since April 15, 1994, and as a result, the following graph
commences as of April 14, 1994. The graph compares the cumulative total
stockholder return of the Company's Common Stock, based on the market price
of the Common Stock and assuming reinvestment of dividends, with the SNL
Shopping Center REIT Index ("SNL") and the S&P 500 Total Return ("S&P 500").
The graph assumes the investment of $100 on April 15, 1994.
Total Return Performance
[ PERFORMANCE GRAPH ]
<TABLE>
<CAPTION>
PERIOD ENDING
-------------------------------------------------------------------------------------
04/14/94 12/31/94 06/30/95 12/31/95 06/30/96 12/31/96 06/30/97 12/31/97
-------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Agree Realty Corp. 100.00 85.70 95.66 90.39 116.98 145.28 145.59 161.20
S&P 500 Total Return 100.00 105.09 126.33 144.58 159.16 177.63 214.23 236.91
SNL Shopping Center REITs 100.00 100.21 105.54 107.94 116.08 143.43 152.40 173.29
</TABLE>
CERTAIN RELATIONSHIPS AND TRANSACTIONS
The Company rents its executive offices, located at 31850 Northwestern
Highway, Farmington Hills, Michigan from A & M Investment, a Michigan general
partnership, the general partners of which are the daughters of Mr. Rosenberg
and, in the case of one of the partners, the spouse of Mr. Agree, for annual
rental payments of $60,000 ($10.00 per square foot) and a lease term ending
April 30, 1999. Management believes that the lease terms are consistent with
leases for similar properties in the area.
The Company and Messrs. Agree and Rosenberg have entered into a
management agreement (the "Management Agreement"), expiring on April 22,
1999, whereby the Company manages three properties for Messrs. Agree and
Rosenberg that are not part of the Company's portfolio for a fee equal to
3.5% of the gross rental income of the three properties. During the year
ended December 31, 1997, the Company received approximately $76,000 pursuant
to the Management Agreement. In addition, pursuant to the management
agreement, the Company has been granted a right of first refusal to
8
<PAGE>
purchase all or any one of the three properties on the same terms and
conditions as any arm's-length, bona fide, written offer received from an
unaffiliated third party. In the event that the Company decides to acquire
the three properties, such acquisition will be contingent upon the receipt of
a fairness opinion from Raymond James & Associates, Inc. and approved by a
majority of the independent directors.
Mr. Kalil, a director of the Company, is Director of Business
Development for the Commercial Lending Division of Michigan National Bank.
Michigan National Bank is one of the lending banks under the Company's
$50,000,000 secured line of credit (the "Credit Facility"), is the lender of
the Company's $5,000,000 line of credit (the "Line of Credit") and provides
other on-going banking services to the Company and receives usual and
customary banking fees for such services. As of December 31, 1997, $6,865,459
was outstanding under the Credit Facility and $1,775,557 was outstanding
under the Line of Credit.
INDEPENDENT AUDITORS
Upon recommendation of and approval by the Audit Committee, BDO
Seidman, LLP has been selected to act as independent certified public
accountants for the Company during the current year.
A representative of BDO Seidman will be present at the Annual Meeting
and will be provided with the opportunity to make a statement if such
representative desires to do so. Such representative is also expected to be
available to respond to appropriate questions.
OTHER MATTERS
The Board of Directors does not know of any matters to be presented at
the Annual Meeting other than those stated above. If any other business
should come before the Annual Meeting, the persons named in the enclosed
proxy will vote thereon as they determine to be in the best interests of the
Company.
PROPOSALS FOR NEXT ANNUAL MEETING
It is presently contemplated that the 1999 annual meeting of
stockholders will be held in mid-May 1999. Any stockholder proposal to be
considered for inclusion in the Company's proxy statement and form of proxy
for the annual meeting of stockholders to be held in 1999 must be received at
the Company's office at 31850 Northwestern Highway, Farmington Hills, MI
48334, no later than November 27, 1998.
ANNUAL REPORT
A copy of the Company's Annual Report to Stockholders for the year
ended December 31, 1997 accompanies this Proxy Statement.
9
<PAGE>
OTHER BUSINESS
The Annual Meeting is being held for the purposes set forth in the
Notice of Annual Meeting of Stockholders which accompanies this Proxy
Statement. The Board is not presently aware of business to be transacted at
the Annual Meeting other than as set forth in the Notice.
By Order of the Board of Directors
/s/ Kenneth R. Howe
Kenneth R. Howe
Vice President, Finance and
Secretary
March 23, 1998
Farmington Hills, Michigan
1304-PS-98
<PAGE>
DETACH HERE
PROXY
AGREE REALTY CORPORATION
Proxy for Annual Meeting of Stockholders May 11, 1998
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Richard Agree and Kenneth R. Howe as
Proxies, each with the power to appoint his substitute, and hereby authorizes
them to represent and to vote, as designated below, all the Common Stock of
Agree Realty Corporation held on record by the undersigned on March 23, 1998
at the Annual Meeting of Stockholders to be held on May 11, 1998, or any
adjournment thereof.
The Board of Directors recommends a vote FOR all of the nominees for director.
CONTINUED AND TO BE SIGNED ON THE REVERSE SIDE
SEE REVERSE SIDE SEE REVERSE SIDE
DETACH HERE
Please mark
votes as in
this example. /X/
This Proxy when executed will be voted in the manner directed herein. If
no direction is made this Proxy will be voted FOR each of the matters
hereon.
1. Electing two Directors:
Nominees: Edward Rosenberg and Ellis Wachs
FOR WITHHELD
/ / / /
/ / ________________________________
For both nominees except as noted above
2. In their judgement, upon such other matters as may properly come
before the meeting.
MARK HERE MARK HERE
FOR ADDRESS CHANGE IF YOU PLAN TO
AND NOTE AT LEFT ATTEND THE MEETING
/ / / /
NOTE - PLEASE COMPLETE THIS PROXY AND MAIL TO US PROMPTLY.
Signature________________ Date____________Signature_____________Date __________
(Please sign exactly as your name or names appears hereon. Where shares are
held jointly both holders should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give your full title as such.)
FOLD AND DETACH HERE
