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: ________________________________________________________
[ AGREE LOGO ]
AGREE REALTY CORPORATION
31850 Northwestern Highway
Farmington Hills, MI 48334
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be Held on May 8, 2000
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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 8, 2000, 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 2003, 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 22, 2000 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/ Kenneth R. Howe
Kenneth R. Howe
Vice President, Finance and
Secretary
March 22, 2000
Farmington Hills, Michigan
[ AGREE LOGO ]
AGREE REALTY CORPORATION
31850 Northwestern Highway
Farmington Hills, MI 48334
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PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
May 8, 2000
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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 8, 2000 (the "Annual
Meeting"), to be held 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
22, 2000, 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 this 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.
Solicitation of proxies will be primarily by mail. However, directors
and officers of the Company also may solicit proxies by telephone or telecopy
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 24, 2000.
As of March 12, 2000, 4,398,669 shares of Common Stock of the
Company's, $.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 4.22% 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 this
Proxy Statement.
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 2001 annual meeting of stockholders and two members whose
terms expire at the 2002 annual meeting of stockholders. At the Annual
Meeting, two Directors will be elected and qualified. Gene Silverman and
Farris Kalil are nominees for Directors, each to hold office for a term of
three years until the annual meeting of stockholders to be held in 2003. The
terms of Edward Rosenberg and Ellis Wachs expire in 2001 and the terms of
Richard Agree and Michael Rotchford expire in 2002. 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:
Gene Silverman, 65, 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. Mr. Silverman is a nominee for a
three-year term expiring in 2003.
Farris G. Kalil, 61, has been a Director of the Company since December
1993. Mr. Kalil is currently a financial consultant. From November 1996 until
his retirement in May 1999 Mr. Kalil served as 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. Mr. Kalil is a nominee for a three-year
term expiring in 2003.
OTHER DIRECTORS WHOSE TERMS OF OFFICE CONTINUE AFTER THE ANNUAL MEETING
Edward Rosenberg, 80, 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 23 years. Mr. Rosenberg has been involved in commercial
development of community centers for over 30 years.
Ellis G. Wachs, 70, 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.
Richard Agree, 56, 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
2
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 30 years.
Michael Rotchford, 41, 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.
The Board of Directors met five times during fiscal year 1999. During
the year ended December 31, 1999, 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, 1999, the Company paid total
compensation of $35,000 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 1999.
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 1999.
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, including the Company's 1994 Stock Incentive Plan
(the "Stock Incentive Plan"). The Executive Compensation Committee met once
during 1999.
3
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, 51, 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, 56, has been Vice President, Leasing of the
Company since 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, 1999.
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 15, 2000 is set forth below.
Amount and
Nature of
Name and Business Address Beneficial Percent
of Beneficial Owners(1) Ownership(2) of Class
------------------------- ------------ --------
Richard Agree .............................. 459,385 9.02%
Edward Rosenberg ........................... 353,736 6.94%
Kenneth R. Howe ............................ 24,750 *
Bruce J. Schaefer .......................... 12,675 *
Gene Silverman ............................. 11,893 *
Farris G. Kalil ............................ 10,000 *
Ellis G. Wachs ............................. 1,000 *
Michael Rotchford .......................... 1,000 *
------- -----
All directors and executive
officers as a group
(8 persons) .............................. 874,439 17.16%
======= =====
- ----------------
* Less than 1%
(1) The address of each person is c/o the Company at 31850 Northwestern
Highway, Farmington Hills, MI 48334
4
(2) Includes shares of Common Stock issuable upon conversion of limited
partnership units held by Messrs. Agree and Rosenberg in Agree Limited
Partnership, the Company's operating partnership. These units entitle
Messrs. Agree and Rosenberg to acquire 347,619 and 257,794 shares of
Common Stock, respectively. These numbers also include shares of Common
Stock subject to options exercisable within 60 days granted to Messrs.
Agree and Howe of 18,375 and 4,900, respectively, and 60,000 shares of
Common Stock assigned by Mr. Agree to his children's irrevocable
investment trusts. Also includes 23,200, 19,250 and 11,650 shares of
restricted stock held by Messrs. Agree, Howe and Schaefer, respectively.
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, 1999, 1998 and 1997.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Annual Compensation Long-Term Compensation
------------------------- --------------------------
Common Stock
Restricted Underlying
Stock Stock Option
Name and Principal Position Year Salary Bonus Awards($) Awards (#Shs)
--------------------------- ---- ------ ----- --------- -------------
<S> <C> <C> <C> <C> <C>
Richard Agree ........................... 1999 $142,308 -- $63,900(1)(2) --
Chairman of the Board 1998 $111,538 -- $37,260(1) --
and President 1997 $100,000 -- $17,100(1) --
Kenneth R. Howe ......................... 1999 $ 95,769 $15,385 $44,938(1)(2) --
Vice President, Finance 1998 $ 79,615 $13,077 $44,938(1) --
and Secretary 1997 $ 75,000 $ 5,769 $33,388(1) --
Bruce J. Schaefer ....................... 1999 $ 82,885 $29,058 $26,292(1)(2) --
Vice President, Leasing 1998 $ 73,116 $41,921 $26,292(1) --
<FN>
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(1) The dollar value of the award of restricted stock is calculated by
multiplying the closing market price of the Common Stock on the date of
the award by the number of shares awarded. Messrs. Agree, Howe and
Schaefer were awarded 7,200, 4,000 and 2,500 shares of restricted stock
on January 1, 2000; Messrs. Agree, Howe and Schaefer were awarded 7,200,
4,000 and 2,500 shares of restricted stock on January 1, 1999; Messrs.
Agree and Howe were awarded 4,800 and 2,750 shares on January 1, 1998 and
Messrs. Agree and Howe were awarded 4,000 and 2,500 shares on January 1,
1997, pursuant to the Stock Incentive Plan. These shares of restricted
stock are (i) subject to restrictions on transfer which lapse 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.
(2) At December 31, 1999, Messrs. Agree, Howe and Schaefer owned 16,000,
15,250 and 9,150 shares of restricted stock, respectively, the market
value (as computed pursuant to footnote (1) above) of which was $228,000,
$217,312 and $130,387 respectively.
</TABLE>
OPTION GRANTS
During the year ended December 31, 1999, the Company did not grant any
stock options to purchase shares of Common Stock.
5
OPTION EXERCISES IN 1999 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, 1999. None of the Named Executive Officers exercised any stock options
during the year ended December 31, 1999.
VALUE OF UNEXERCISED OPTIONS (1)
Number of
Unexercised Options
at December 31, 1999(2)
---------------------------
Name and Principal Position Exercisable Unexercisable
--------------------------- ----------- -------------
Richard Agree ............................. 18,375 --
Chairman of the Board and
President
Kenneth R. Howe ........................... 4,900 --
Vice President, Finance and
Secretary
- ----------------
(1) No options were in-the-money at December 31, 1999.
(2) All unexercised options are fully vested, have an exercise price of
$19.50 per share and expire upon employment termination.
EMPLOYMENT AGREEMENTS
The Company's current employment agreements with Mr. Agree and Mr. Howe
became effective on July 1, 1999. Mr. Schaefer does not have an employment
contract with the Company. Mr. Agree's employment agreement, pursuant to
which he serves Chairman of the Board of Directors and President of the
Company, has a five-year term. Under his employment agreement, Mr. Agree
receives an annual base salary of $150,000, subject to annual increases at
the discretion of the Compensation Committee of the Board of Directors, and
is entitled to participate in the Stock Incentive Plan and all other benefit
programs generally available to executive officers of the Company.
If the Company terminates Mr. Agree's employment without cause (as
defined below), he is entitled to receive a payment equal to his annual
salary (at the then applicable rate) and has the right to continue to
participate in all benefit plans made generally available by the Company to
its executives during the agreement's Initial Term.
If a change-in-control (as defined in the employment agreement) occurs
prior to the expiration of Mr. Agree's employment agreement and within three
years after the change-in-control of the Company Mr. Agree is terminated by
the Company, Mr. Agree is entitled to be paid the greater of three times his
then compensation, or his compensation to be paid over the remaining life of
the employment agreement.
The Company may terminate Mr. Agree's agreement for "cause" which is
defined to include (i) willful failure or refusal to perform specific
reasonable written directives of the Board of Directors; (ii) conviction of a
felony; (iii) dishonesty involving the Company which results in an unjust
gain or enrichment at the expense of the Company; (iv) moral turpitude which
adversely affects the business of the Company; or (v) a material breach of
the non-competition section of the employment agreement. In the event of Mr.
Agree's termination for cause he will forfeit his right to any and all
benefits entitled to be received pursuant to his employment agreement (other
than any previously vested benefits) through the date of termination. Mr.
Agree's agreement may also be terminated if Mr. Agree dies or becomes
disabled (as defined in the agreement). In the event of termination of the
agreement because of Mr. Agree's death or disability, Mr. Agree (or his
estate) shall receive for the longer of (i) the remainder of the calendar
year; or (ii) six months Mr. Agree's salary in effect at the date of his
death or disability.
6
The employment agreement with Mr. Howe, pursuant to which he serves as
the Company's Chief Financial Officer and Secretary, is identical to Mr.
Agree's employment agreement, except that Mr. Howe's agreement provides for
an annual base salary of $100,000.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
No person who served as a member of the Executive Compensation
Committee during 1999 (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 was
Director of Business Development for the Commercial Lending Division of
Michigan National Bank until May 31, 1999, the date of his retirement.
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, 1999,
$27,158,232 was outstanding under the Credit Facility and there were no
outstanding borrowings 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.
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 Kenneth R. Howe were established pursuant to their
employment agreements.
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 Common Stock and the
growth in funds from operations 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.
7
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 and 2,500
shares respectively, in January of 1998, the Committee awarded Messrs. Agree
and Howe restricted stock awards of 4,800 and 2,750 shares, respectively, in
January 1999, the Committee awarded Messrs. Agree, Howe and Schaefer
restricted stock awards of 7,200, 4,000 and 2,500 shares, and in January
2000, the Committee awarded Messrs. Agree, Howe and Schaefer restricted stock
awards of 7,200, 4,000 and 2,500 shares respectively.
The Executive Compensation Committee did not grant any options to
purchase shares of the Company's Common Stock in 1999.
The foregoing report is given by the following members of the Executive
Compensation Committee:
Farris G. Kalil
Gene Silverman
Ellis G. Wachs
8
PERFORMANCE GRAPH
Rules promulgated under the Securities Exchange Act of 1934 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.
The graph compares the cumulative total stockholder return of the Common
Stock (NYSE: ADC), 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 January 1, 1995.
[ PERFORMANCE GRAPH ]
<TABLE>
<CAPTION>
PERIOD ENDING
---------------------------------------------------------------------------
Index 12/31/1994 12/31/1995 12/31/1996 12/31/1997 12/31/1998 12/31/1999
----- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Agree Realty Corporation 100.00 105.47 169.52 188.10 175.37 150.89
S&P 500 100.00 137.58 169.03 225.44 289.79 350.78
SNL Shopping Center REITs 100.00 107.71 143.13 172.93 164.85 145.67
</TABLE>
CERTAIN RELATIONSHIPS AND TRANSACTIONS
The Company leases its executive offices, located at 31850 Northwestern
Highway, Farmington Hills, Michigan from Mrs. Arlene Agree, the wife of Mr.
Agree. Under the terms of the lease, which expires December 31, 2003 the
Company is required to pay an annual rental of $60,000 ($10.00 per square
foot) and is responsible for the payment of real estate taxes, insurance and
maintenance expenses relating to the building. Management believes that the
lease terms are consistent with leases for similar properties in the area.
9
The Company and Messrs. Agree and Rosenberg have entered into a
management agreement (the "Management Agreement"), expiring on April 22,
2000, whereby the Company manages two 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 two properties. During the year ended
December 31, 1999, the Company received approximately $38,000 pursuant to the
Management Agreement. In addition, pursuant to the management agreement, the
Company has been granted a right of first refusal to purchase both or any one
of the two 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 either or both of the 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, was Director of Business
Development for the Commercial Lending Division of Michigan National Bank
until his retirement on May 31, 1999. Michigan National Bank is one of the
lending banks under the Credit Facility, is the lender of 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, 1999,
$27,158,232 was outstanding under the Credit Facility and there were no
outstanding borrowings under the Line of Credit.
Mr. Rotchford, a director of the Company, is Managing Director of the
Saratoga Group. The Saratoga Group assisted the Company in obtaining a
$12,390,135 mortgage with Teachers Insurance and Annuity Association of
America. The mortgage is secured by four (4) of the Company's properties. The
Company paid the Saratoga Group a fee of $92,626 in connection with this
transaction.
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 2001 annual meeting of
stockholders will be held in mid-May 2001. 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 2001 must be received at
the Company's office at 31850 Northwestern Highway, Farmington Hills, MI
48334, no later than November 27, 2000.
ANNUAL REPORT
A copy of the Company's Annual Report to Stockholders for the year
ended December 31, 1999 accompanies this Proxy Statement.
10
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 22, 2000
Farmington Hills, Michigan
11
DETACH HERE
PROXY
AGREE REALTY CORPORATION
Proxy for Annual Meeting of Stockholders May 8, 2000
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 22, 2000
at the Annual Meeting of Stockholders to be held on May 8, 2000, 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
/X/ this example.
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: Gene Silverman and Farris G. Kalil
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
IF YOU PLAN TO FOR ADDRESS CHANGE
ATTEND THE MEETING AND NOTE AT LEFT
/ / / /
NOTE - PLEASE COMPLETE THIS PROXY AND MAIL TO US PROMPTLY.
(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.)
Signature_______________ Date___________Signature_____________Date __________
FOLD AND DETACH HERE
