Edgar Filing: SUN COMMUNITIES INC

Company Results

Revised FFO⁽¹⁾

Revenue Producing Sites (“RPS”)

$371,032,914

Achievement Level

Not achieved

Not achieved

DEF 14A

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

SCHEDULE 14A

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

[ ] Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

[X] Definitive proxy statement

[ ] Definitive additional materials

[ ] Soliciting material under § 240.14a-12

Sun Communities, Inc.

Name of Registrant as Specified in its Charter

N/A

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:

SUN COMMUNITIES, INC.

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

To Be Held On May 23, 2016

You are cordially invited to attend the 2016 Annual Meeting of Stockholders (the “Annual Meeting”) of Sun Communities, Inc. The Annual Meeting will be held on Monday, May 23, 2016, at 11:00 a.m., local time at 27777 Franklin Road, Suite 100, Southfield, MI 48034. At the Annual Meeting, common stockholders of record at the close of business on March 11, 2016 (the “Record Date”) will be asked to:


1.	Elect seven directors to serve until our 2017 annual meeting of stockholders or until their successors shall have been duly elected and qualified;


2.	Ratify the selection of Grant Thornton LLP as our independent registered public accounting firm for 2016;


3.	Conduct a non-binding advisory vote on executive compensation; and


4.	Consider any other business properly brought before the Annual Meeting.

The attached Proxy Statement contains details of the proposals to be voted on at the Annual Meeting. We encourage you to read the Proxy Statement carefully.

Only common stockholders of record at the close of business on the Record Date are entitled to notice of, and to vote at, the Annual Meeting or any adjournments.

Your vote is important to us. Please vote as promptly as possible by using the internet, telephone or by signing, dating and returning the proxy card mailed to those who receive paper copies of this Proxy Statement.

IMPORTANT NOTICE REGARDING AVAILABILITY OF PROXY MATERIALS FOR ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON MAY 23, 2016.

This Proxy Statement and our Annual Report to stockholders are available at www.proxyvote.com.



	By Order of the Board of Directors
March 30, 2016	/s/ Karen J. Dearing
	Secretary

TABLE OF CONTENTS



INTRODUCTION	1
QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING	1
BOARD OF DIRECTORS AND CORPORATE GOVERNANCE	5
Communications with the Board	6
Board Leadership Structure and Independence of Non-Employee Directors	6
Consideration of Director Nominees	7
Incumbent Directors and Nominees	9
Director Compensation Tables	12
PROPOSAL NO. 1 - ELECTION OF DIRECTORS	13
PROPOSAL NO. 2 - RATIFICATION OF SELECTION OF GRANT THORNTON LLP	14
REPORT OF THE AUDIT COMMITTEE	15
MANAGEMENT AND EXECUTIVE COMPENSATION	16
Executive Officers	16
Compensation Discussion and Analysis	17
Risks Arising from Compensation Policies and Practices	25
Anti-Hedging Policy	25
Summary Compensation Table	26
Grants of Plan-Based Awards	27
Outstanding Equity Awards at Fiscal Year End	30
Option Exercises and Stock Vested During Last Fiscal Year	32
Change in Control and Severance Payments	32
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION	34
COMPENSATION COMMITTEE REPORT	35
PROPOSAL NO. 3 - NON-BINDING ADVISORY VOTE ON EXECUTIVE COMPENSATION	36
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE	37
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT	38
SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS	41
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE	42
SHAREHOLDER PROPOSALS FOR THE 2016 ANNUAL MEETING	44
OTHER MATTERS	45

(i)

SUN COMMUNITIES, INC.

PROXY STATEMENT

INTRODUCTION

This Proxy Statement contains information related to the 2016 Annual Meeting of Stockholders (the "Annual Meeting") of Sun Communities, Inc. (the "Company"), which will be held on Monday, May 23, 2016, at 11:00 a.m. local time at 27777 Franklin Road, Suite 100, Southfield, MI 48034. On or about March 30, 2016, we began mailing a notice containing instructions on how to access these proxy materials to all stockholders of record at the close of business on March 11, 2016 (the "Record Date").

QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING

What is the Purpose of the Annual Meeting?

At the Annual Meeting, stockholders will vote on the following proposals (the “Proposals”):



•	Proposal No. 1 — Elect seven directors to serve until our 2017 annual meeting of stockholders or until their successors shall have been duly elected and qualified;
•	Proposal No. 2 — Ratification of the selection of Grant Thornton LLP as our independent registered public accounting firm for 2016;
•	Proposal No. 3 — Non-binding advisory vote on executive compensation;

In addition, stockholders shall consider any other business properly brought before the Annual Meeting.

We have sent these proxy materials to you because our Board of Directors (the "Board of Directors" or "Board") is requesting that you allow your shares of our common stock to be represented at the Annual Meeting by the proxies named in the enclosed proxy card. This Proxy Statement contains information that we are required to provide you under the rules of the Securities and Exchange Commission ("SEC") and that is designed to assist you in voting your shares of common stock.

Who is Entitled to Vote?

You will be entitled to vote your shares of common stock on the Proposals if you held your shares of common stock at the close of business on the Record Date. As of the Record Date, a total of 58,393,647 shares of common stock were outstanding and entitled to vote held by 218 holders of record. Shares cannot be voted at the Annual Meeting unless the holder is present in person or represented by proxy. Each share of common stock entitles its holder to cast one vote for each matter to be voted upon.

What is Required to Hold the Annual Meeting?

The presence at the Annual Meeting, in person or by proxy, of the holders of a majority of the shares of common stock outstanding and entitled to vote on the Record Date will constitute a quorum permitting business to be conducted at the Annual Meeting. If you have returned valid proxy instructions or you attend the Annual Meeting and vote in person, your shares of common stock will be counted for purposes of determining whether there is a quorum, even if you abstain from voting on any or all matters introduced at the Annual Meeting. If there is not a quorum at the Annual Meeting, the stockholders entitled to vote at the Annual Meeting, whether present in person or represented by proxy, will only have the power to adjourn the Annual Meeting until such time as there is a quorum. The Annual Meeting may be reconvened without notice to the stockholders, other than an announcement at the prior adjournment of the Annual Meeting, within 120 days after the Record Date, and a quorum must be present at such reconvened Annual Meeting.

How do I Vote?

Your vote is important. Stockholders have a choice of voting over the Internet, by telephone or by using a traditional proxy card.


•	To vote by Internet, go to www.proxyvote.com and follow the instructions there. You will need the 12 digit number included on your proxy card, voter instruction form or notice.


•	To vote by telephone, stockholders should dial the phone number listed on their voter instruction form and follow the instructions. You will need the 12 digit number included on the voter instruction form or notice.


•	If you received a notice and wish to vote by traditional proxy card, you can receive a full set of materials at no charge through one of the following methods:

(i) by internet: www.proxyvote.com;

(ii) by phone: (800) 579-1639; or


(iii)	by email: sendmaterial@proxyvote.com (your email should contain the 12 digit number in the subject line included on the voter instruction form or notice).

The deadline for voting by phone or electronically is 11:59 p.m., Eastern Time, on May 22, 2016.

If you complete your proxy via the internet, telephone or properly sign and return you proxy card, your shares will be voted as you direct. You may specify whether your shares should be voted: (1) for all, some or none of the nominees for director, (2) for or against Proposal No. 2, and (3) for or against Proposal No. 3.

We encourage you to provide voting instructions to your brokerage firm by returning a completed proxy. This ensures your shares will be voted at the meeting according to your instructions. You should receive directions from your brokerage firm about how to submit your proxy to them at the time you receive notice of this Proxy Statement.

Can I Change or Revoke My Proxy?

Yes, you may change your proxy at any time before the Annual Meeting by timely delivery of a properly executed, later-dated proxy or by voting in person at the Annual Meeting. You may also revoke your proxy by filing with our Secretary, 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. However, attendance (without further action) at the Annual Meeting will not by itself constitute revocation or change of a previously granted proxy.

What are the Board’s Recommendations?

If no instructions are indicated on your valid proxy, the representatives holding your proxy will vote in accordance with the recommendations of the Board. The Board unanimously recommends a vote:



•	FOR the election of each of the nominees for director;
•	FOR the ratification of the selection of Grant Thornton LLP as our independent registered public accounting firm for 2016;
•	FOR the non-binding approval of the executive compensation as disclosed in this Proxy Statement;

With respect to any other matter that properly comes before the Annual Meeting or any adjournment or postponement thereof, the representatives holding proxies will vote in their own discretion.

How Can I Receive a Proxy Statement and Annual Report?

Our Proxy Statement and our Annual Report on Form 10-K for the year ended December 31, 2015, as filed with the SEC on February 23, 2016, is available electronically via the Internet at www.proxyvote.com. In addition, we will provide without charge to each person to whom this Proxy Statement is delivered, upon written or verbal request, a copy of this Proxy Statement and our Annual Report on Form 10-K for the year ended December 31, 2015, which contains our audited financial statements. Written

or telephone requests should be directed to us at 27777 Franklin Road, Suite 200, Southfield, Michigan 48034. Our telephone number is (248) 208-2500.

If you received a notice and wish to vote by traditional proxy card, you can receive a full set of materials at no charge through one of the following methods:

(i) by internet: www.proxyvote.com;

(ii) by phone: (800) 579-1639; or


(iii)	by email: sendmaterial@proxyvote.com (your email should contain the 12 digit number in the subject line included on the voter instruction form or notice).

What Vote is Needed to Approve Each Proposal?

Following are the votes needed in order for each Proposal to be approved at the Annual Meeting. For all Proposals a quorum must be present at the Annual Meeting.

Proposal No. 1: The affirmative vote by a majority of all the votes cast in person or by proxy at the Annual Meeting is necessary for the election of seven directors to serve until our 2017 annual meeting of stockholders, or until their successors shall have been duly elected and qualified.

Proposal No. 2: The affirmative vote by a majority of all the votes cast in person or by proxy at the Annual Meeting is required for the ratification of the selection of Grant Thornton LLP as our independent registered public accounting firm for 2016.

Proposal No. 3: The affirmative vote by a majority of all the votes cast in person or by proxy at the Annual Meeting is required for the non-binding approval of the executive compensation of our named executive officers as disclosed in this Proxy Statement.

We will treat abstentions as shares that are present and entitled to vote for purposes of determining the presence or absence of a quorum. Abstentions do not constitute a vote "for" or "against" any matter being voted on at the Annual Meeting and will not be counted as "votes cast." Therefore, abstentions will have no effect on any of the proposals. Broker "non-votes," or proxies from brokers or nominees indicating that such broker or nominee has not received instructions from the beneficial owner or other entity entitled to vote such shares on a particular matter with respect to which such broker or nominee does not have discretionary voting power, will be treated in the same manner as abstentions for purposes of the Annual Meeting. If you are a beneficial owner whose shares of common stock are held of record by a broker, your broker has discretionary voting authority under New York Stock Exchange ("NYSE") rules to vote your shares on Proposal No. 2 even if the broker does not receive voting instructions from you. However, under NYSE rules, your broker does not have discretionary authority to vote on any of the other proposals without instructions from you, in which case a broker "non-vote" will occur and your shares of common stock will not be voted on these matters.

How is My Vote Counted?

If the proxy in the form enclosed is duly executed, dated and returned, and it has not been revoked in accordance with the instructions enclosed, the shares of common stock represented by the proxy will be voted by Gary A. Shiffman and Karen J. Dearing, the Board’s proxy agents for the Annual Meeting, in the manner specified in the proxy. If no specification is made, the common stock will be voted “for” the election of the seven nominees for the Board, “for” the ratification of the selection of Grant Thornton LLP as our independent registered public accounting firm for 2015, and “for” the executive compensation as disclosed in this Proxy Statement, and at the discretion of Gary A. Shiffman and Karen J. Dearing, 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 of the Annual Meeting. It is not anticipated that any matters other than those set forth in this Proxy Statement will be presented at the Annual Meeting. If other matters are presented, proxies will be voted in accordance with the discretion of the proxy holders. In addition, no shareholder proposals or nominations were received on a timely basis, so no such matters may be brought to a vote at the Annual Meeting.

Who is Soliciting My Proxy?

This solicitation of proxies is made by and on behalf of our Board. Proxies may be solicited by personal interview, telephone, facsimile or email or by our directors, officers and employees. Arrangements may also be made with brokerage houses or other custodians, nominees and fiduciaries to forward solicitation material to the beneficial owners of common stock held of record by such persons, and we may reimburse them for reasonable out-of-pocket expenses incurred in forwarding the material. We anticipate fees and expenses for these parties will not exceed $3,000. The costs of all proxy solicitation will be borne by us.

Our principal executive offices are located at 27777 Franklin Road, Suite 200, Southfield, Michigan 48034.

BOARD OF DIRECTORS AND CORPORATE GOVERNANCE

Board of Directors and Committees

Under our charter, each of our directors serves for a one-year term or until his or her successor is duly elected and qualified. Our current directors are Stephanie W. Bergeron, Brian M. Hermelin, Ronald A. Klein, Paul D. Lapides, Clunet R. Lewis, Ronald L. Piasecki, Gary A. Shiffman and Arthur A. Weiss. Messrs. Randall K. Rowe and James R. Goldman resigned as directors on March 14, 2016, and the Board seats they had held are currently vacant. In addition, Mr. Paul D. Lapides has decided not to stand for reelection, but he will continue to serve on the Board of Directors until the date of the Annual Meeting. All of the other incumbent directors are nominees for reelection at the Annual Meeting. Pursuant to the provisions of the Company's bylaws, the Board of Directors has by resolution reduced the size of the Board to seven directors effective as of the Annual Meeting, but will continue to actively pursue qualified candidates to fill the vacancies.

The Board meets quarterly, or more often as necessary. The Board met six times during 2015 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. All of our then-serving board members attended the 2015 annual meeting of our stockholders.

Several important functions of the Board may be performed by committees that are comprised of members of the Board. Our 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, a Nominating and Corporate Governance Committee, and an Executive Committee. You may find copies of the charters of the Audit Committee, the Compensation Committee, the Nominating and Corporate Governance Committee (the "NCG Committee") and the Executive Committee under the “Investors-Officers and Directors” section of our website at www.suncommunities.com. You may also find a copy of our corporate governance guidelines and our code of business conduct and ethics under the “Investors-Officers and Directors” section of our website at www.suncommunities.com. All of the committee charters, our corporate governance guidelines and our code of business conduct and ethics are available in print to any stockholder who requests them.

The Audit Committee operates pursuant to a fourth amended and restated charter that was approved by the Board in April 2013, and is reviewed annually. It is available under the “Investors-Officers and Directors” section of our website at www.suncommunities.com. The Audit Committee, among other functions, (i) has the sole authority to appoint, retain, terminate and determine the compensation of our independent accountants, (ii) reviews with our independent accountants the scope and results of the audit engagement, (iii) approves professional services provided by our independent accountants, (iv) reviews the independence of our independent accountants, and (v) directs and controls our internal audit functions. The current members of the Audit Committee are Messrs. Clunet R. Lewis (Chairman), Brian M. Hermelin and Ms. Stephanie W. Bergeron, all of whom are “independent,” as that term is defined in the rules of the SEC and applicable rules of the NYSE. James R. Goldman served on the Audit Committee from January 6, 2015, until March 14, 2016. The Audit Committee held seven formal meetings during the year ended December 31, 2015. The Board has determined that each member of the Audit Committee is an “audit committee financial expert,” as defined by SEC rules.

The Compensation Committee operates pursuant to a first amended and restated charter that was approved by the Board in March 2016. A copy of the Compensation Committee Charter is available under the “Investors-Officers and Directors” section of our website at www.suncommunities.com. The Compensation Committee, among other functions, (i) consults with executive management in developing a compensation philosophy, (ii) reviews and approves corporate goals and objectives relevant to the compensation of the Chief Executive Officer and such other executive officers as may be designated by the Chief Executive Officer, evaluates the performance of such officers in light of such goals and objectives, and determines and approves the compensation of such officers based on these evaluations, (iii) approves the compensation of our other executive officers, (iv) recommends to the Board for approval the compensation of the non-employee directors, (v) oversees our incentive-compensation plans and equity-based plans, and (vi) reviews and approves any employment agreements and severance agreements to be made with any existing or prospective executive officer. The current members of the Compensation Committee are Messrs. Brian M. Hermelin (Chairman), Clunet R. Lewis, Paul D. Lapides and Ronald L. Piasecki, all of whom are independent directors under the NYSE rules. Mr. Lapides has decided not to stand for re-election at the Annual Meeting. Effective as of April 1, 2016, the members of the Compensation Committee will be Brian M. Hermelin (Chairman), Clunet R. Lewis, and Ronald L. Piasecki. During the year ended December 31, 2015, the Compensation Committee held two formal meetings and took various actions by unanimous written consent.

The NCG Committee operates pursuant to a charter that was approved by the Board in March 2004. A copy of the NCG Committee Charter is available under the “Investors-Officers and Directors” section of our website at www.suncommunities.com. The NCG Committee, among other functions, is responsible for (i) identifying individuals qualified to become Board members, consistent

with criteria approved by the Board, (ii) recommending that the Board select the committee-recommended nominees for election at each annual meeting of stockholders, (iii) developing and recommending to the Board a set of corporate governance guidelines applicable to us, and (iv) periodically reviewing such guidelines and recommending any changes, and overseeing the evaluation of the Board. The current members of the NCG Committee are Messrs. Paul D. Lapides (Chairman), Ronald A. Klein, Clunet R. Lewis, and Ronald L. Piasecki, all of whom are independent under the NYSE rules. Mr. Lapides has decided not to stand for re-election at the Annual Meeting. Effective as of April 1, 2016, the members of the NCG Committee will be Ronald A. Klein (Chairman), Paul D. Lapides, Clunet Lewis, Ronald L. Piasecki. The NCG Committee held two formal meetings during the year ended December 31, 2015. The NCG Committee considers diversity and skills in identifying nominees for service on our Board. Regarding diversity, the NCG Committee considers the entirety of the board and a wide range of economic, social and ethnic backgrounds and does not nominate representational directors from any specific group.

The Executive Committee operates pursuant to a charter that was approved by the Board in January 2014 and amended in February 2015. The Executive Committee was established to generally manage our day-to-day business and affairs between regular Board meetings. The Executive Committee has specific authority to approve any and all acquisitions and/or financings (including refinancings of existing debt) by us or our subsidiaries up to a maximum purchase price or loan amount of $125 million per transaction. In no event may the Executive Committee, without the prior approval of the Board acting as a whole: (i) recommend to the stockholders an amendment to our charter; (ii) amend our bylaws; (iii) adopt an agreement of merger or consolidation; (iv) recommend to the stockholders the sale, lease or exchange of all or substantially all of our property and assets; (v) recommend to the stockholders our dissolution 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 distributions or authorize the issuance of our stock; (ix) approve or take any action with respect to any related party transaction involving us; or (x) take any other action which is forbidden by our bylaws or charter. 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 Arthur A. Weiss. Mr. Randall K. Rowe was a member of the Executive Committee from January 6, 2015, to March 14, 2016. Effective as of April 1, 2016, the members of the Executive Committee will be Gary A. Shiffman, Arthur Weiss and Ronald A. Klein. The Executive Committee did not hold any formal meetings during the year ended December 31, 2015.

The Board oversees and implements its risk management function several different ways. Specifically, the Audit Committee discusses our risk assessment and risk management policies with the Chief Financial Officer and other accounting staff, our internal auditor and our independent accountants in conjunction with its review of our financial statements as they deem necessary. In addition, the Board discusses the general risks facing us, the risk factors disclosed in our annual and period reports and our risk management policies with our executive management team from time to time throughout the year. In the event that a specific risk is identified, the Board or the Audit Committee directs management to assess, evaluate and provide remedial recommendations to the Board or the Audit Committee.

Communications with the Board

If you wish to communicate with any of the directors of the Board or the Board as a group, you may do so by writing to them at [Name(s) of Director(s)/Board of Directors of Sun Communities, Inc.], c/o Compliance Officer, Sun Communities, Inc., 27777 Franklin Road, Suite 200, Southfield, MI 48034.

If you wish to contact the Audit Committee to report complaints or concerns regarding accounting, internal accounting controls or auditing matters, you may do so by writing to Chairman of the Audit Committee of Sun Communities, Inc., c/o Compliance Officer, Sun Communities, Inc., 27777 Franklin Road, Suite 200, Southfield, MI 48034. You are welcome to make any such report anonymously but we prefer that you identify yourself so that we may contact you for additional information if necessary or appropriate.

If you wish to communicate with our non-management directors as a group, you may do so by writing to Non-Management Directors of Sun Communities, Inc., c/o Compliance Officer, Sun Communities, Inc., 27777 Franklin Road, Suite 200, Southfield, MI 48034.

We recommend that all correspondence be sent via certified U.S. mail, return receipt requested. All correspondence received by the Compliance Officer will be forwarded by the Compliance Officer promptly to the addressee(s).

Board Leadership Structure and Independence of Non-Employee Directors

The Board and the NCG Committee assess and revise our leadership structure from time to time. The Board does not have a fixed policy regarding the separation of the offices of Chairman and Chief Executive Officer and believes that it should maintain the flexibility to select the Chairman and its Board leadership structure, from time to time, based on the criteria that it deems to be in the best interests of the Company and its stockholders. Gary A. Shiffman currently serves as our Chairman of the Board and Chief Executive Officer. The Board believes that combining the Chairman and Chief Executive Officer positions is the right corporate governance structure for us at this time because it most effectively utilizes Mr. Shiffman's extensive experience and knowledge regarding the Company and the manufactured home industry and provides for the most efficient leadership of our Board and the Company. The Board believes that Mr. Shiffman, rather than an independent director, is in the best position, as Chairman and Chief Executive Officer, to lead Board discussions regarding our business and strategy and to help the Board respond quickly and effectively to the many business challenges affecting the Company. The Board also believes that this structure is preferable because it allows one person to speak for and lead the Company and the Board and that splitting the roles of Chairman and Chief Executive Officer may cause the Company's leadership to be less effective.

Although the Board believes that it is more effective to have one person serve as our Chairman and Chief Executive Officer at this time, it also recognizes the importance of strong independent leadership on the Board. Accordingly, in addition to maintaining a significant majority of independent directors (as described below) and independent Board committees, the Board appoints a Lead Independent Director on an annual basis to serve for a term of one year. Mr. Clunet R. Lewis is currently serving as Lead Independent Director. The Lead Independent Director calls and presides at the executive sessions of our independent directors, acts as a liaison between our management team and the Board and is responsible for identifying, analyzing and making recommendations to the Board with respect to certain strategic and extraordinary matters. The Board believes that its Lead Independent Director structure including the duties and responsibilities described above provides the same independent leadership, oversight, and benefits for the Company and the Board that would be provided by an independent Chairman.

The NYSE rules require that a majority of the Board consist of members who are independent. There are different measures of director independence-independence under NYSE rules, under Section 16 of the Exchange Act and under Section 162(m) of the Code. The Board has reviewed information about each of our non-employee directors and determined that Ms. Stephanie W. Bergeron and Messrs. Brian M. Hermelin, Ronald A. Klein, Paul D. Lapides, Clunet R. Lewis, and Ronald L. Piasecki are independent directors. The independent directors meet on a regular basis in executive sessions without management participation. In 2015, the executive sessions occurred after many of the regularly scheduled meetings of the entire Board and may occur at such other times as the independent directors deem appropriate or necessary.

Consideration of Director Nominees

Board Membership Criteria

The Board of Directors has established criteria for Board membership. These criteria include the following specific, minimum qualifications that the NCG Committee believes must be met by an NCG Committee-recommended nominee for a position on the Board:


•	The candidate must have experience at a strategic or policymaking level in a business, government, non-profit or academic organization of high standing;


•	The candidate must be highly accomplished in his or her field, with superior credentials and recognition;


•	The candidate must be well regarded in the community and must have a long-term reputation for high ethical and moral standards;


•	The candidate must have sufficient time and availability to devote to our affairs, particularly in light of the number of boards on which the nominee may serve; and


•	The candidate’s principal business or occupation must not be such as to place the candidate in competition with us or conflict with the discharge of a director’s responsibilities to us or to our stockholders.

In addition to the minimum qualifications for each nominee set forth above, the NCG Committee will recommend director candidates to the full Board for nomination, or present director candidates to the full Board for consideration, to help ensure that:


•	A majority of the Board of Directors shall be “independent” as defined by the NYSE rules;


•	Each of its Audit, Compensation and NCG Committees shall be comprised entirely of independent directors; and


•	At least one member of the Audit Committee shall have such experience, education and qualifications necessary to qualify as an “audit committee financial expert” as defined by the rules of the SEC.

Consideration of Shareholder Nominated Directors

The NCG Committee’s current policy is to review and consider any director candidates who have been recommended by stockholders in compliance with the procedures established from time to time by the NCG Committee. All stockholder recommendations for director candidates must be submitted in writing to our Secretary at Sun Communities, Inc., 27777 Franklin Road, Suite 200, Southfield, MI 48034, who will forward all recommendations to the NCG Committee. All stockholder recommendations for director candidates must include the following information:


•	The stockholder’s name, address, number of shares owned, length of period held and proof of ownership;


•	The name, age, business and residential address, educational background, current principal occupation or employment, and principal occupation or employment for the preceding five full fiscal years of the proposed director candidate;


•	A description of the qualifications and background of the proposed director candidate which addresses the minimum qualifications and other criteria for Board membership as approved by the Board from time to time;


•	A description of all arrangements or understandings between the stockholder and the proposed director candidate;


•	The consent of the proposed director candidate (1) to be named in the proxy statement relating to our annual meeting of stockholders and (2) to serve as a director if elected at such annual meeting; and


•	Any other information regarding the proposed director candidate that is required to be included in a proxy statement filed pursuant to the rules of the SEC.

Identifying and Evaluating Nominees

The NCG Committee may solicit recommendations for director nominees from any or all of the following sources: non-management directors, executive officers, third-party search firms or any other source it deems appropriate. The NCG Committee will review and evaluate the qualifications of any proposed director candidate that it is considering or has been recommended to it by a stockholder in compliance with the NCG Committee’s procedures for that purpose, and conduct inquiries it deems appropriate into the background of these proposed director candidates. When nominating a sitting director for re-election, the NCG Committee will consider the director’s performance on the Board and the director’s qualifications in respect to the criteria set forth above. Other than circumstances in which we are legally required by contract or otherwise to provide third parties with the ability to nominate directors, the NCG Committee will evaluate all proposed director candidates based on the same criteria and in substantially the same manner, with no regard to the source of the initial recommendation of the proposed director candidate.

Incumbent Directors and Nominees

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 or her election to the present time.



Name *	Age	Office
Gary A. Shiffman	61	Chairman, Chief Executive Officer and Director
Stephanie W. Bergeron	62	Director
Brian Hermelin	50	Director
Ronald A. Klein	58	Director
Paul D. Lapides ⁽¹⁾	61	Director
Clunet R. Lewis	69	Director
Ronald L. Piasecki	77	Director
Arthur A. Weiss	67	Director

* Messrs. Randall K. Rowe and James R. Goldman resigned on March 14, 2016, and therefore are not nominees for election at the Annual Meeting.

⁽¹⁾Mr. Paul D. Lapides has decided not to stand for reelection at the Annual Meeting, and therefore will not be a nominee for election at the Annual Meeting.

Gary A. Shiffman is our Chairman and Chief Executive Officer and has been a director and an executive officer since our inception in 1993. He is a member of our Executive Committee. 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 thirty years. He has overseen the acquisition, rezoning, development, expansion and marketing of numerous manufactured home communities, as well as recreational vehicle communities. Additionally, Mr. Shiffman, through his family related interests, has had significant direct holdings in various real estate asset classes, which include office, multi-family, industrial, residential and retail. Mr. Shiffman is an executive officer and a director of SHS and all of our other corporate subsidiaries. Mr. Shiffman was also a director of Origen Financial, Inc. ("Origen") until February 2016.

Stephanie W. Bergeron has been a director since May 2007. She is a member of our Audit Committee. Ms. Bergeron, a certified public accountant, also serves as the President and Chief Executive Officer of Walsh College. Additionally, Ms. Bergeron serves as President and Chief Executive Officer of Bluepoint Partners, LLC, a firm providing financial consulting services. From December 1998 to December 2003, Ms. Bergeron served as Vice President and Treasurer and then Senior Vice President-Corporate Financial Operations of The Goodyear Tire & Rubber Company (“Goodyear”). Prior to joining Goodyear, Ms. Bergeron was a Vice President and Assistant Treasurer of DaimlerChrysler Corporation. She has also served on Audit Committees of several publicly traded companies (including as chairman) and a number of not for profit organizations. During her business career, Ms. Bergeron directed staff responsible for accounting, treasury, investor relations and tax matters. Crain’s Detroit Business named Bergeron one of its “Most Influential Women” in 1997 and in 2007.

Brian M. Hermelin has been a director since January 2014. He is the chairman of our Compensation Committee and a member of our Audit Committee. Mr. Hermelin is the Co-Founder and Managing Partner since 2007 of Rockbridge Growth Equity LLC, a private equity investment firm focusing on companies in the business services, financial services, sports, media and entertainment, and consumer direct marketing industries. He is also a co-founder and General Partner of Detroit Venture Partners, LLC, a venture capital firm based in Detroit, Michigan. From December 2000 to May 2011, Mr. Hermelin served as Chairman and Chief Executive Officer of Active Aero Group/USA Jet Airlines Inc., an air charter and logistics firm that also operates an air charter service for freight and passenger air transport. In addition, he is the chair of the Audit Committee of Rock Ohio Caesars LLC.

Ronald A. Klein has been a director since January 2015. He is a member of our NCG Committee. Mr. Klein has served as a director and Chief Executive Officer of Origen Financial, Inc. and it's predecessor since February 1999. Origen Financial, Inc. is a mortgage REIT that originated, securitized and serviced manufactured housing loans until 2008, after which it managed its securitized loan portfolio. Since April 2010, he has been a director of Talmer Bancorp, Inc. (Nasdaq: TLMR) and Talmer Bank. Mr. Klein is also actively involved with several closely-held companies in the real estate industry and the technology industry. He is a graduate of the University of Michigan Law School.

Paul D. Lapides has been a director since December 1993. Mr. Lapides has decided not to stand for re-election at the Annual Meeting. He is the chairman of our NCG Committee and a member of our Compensation Committee. Mr. Lapides is Director of the Corporate Governance Center in the Michael J. Coles College of Business at Kennesaw State University, where he is a professor of management and entrepreneurship. Mr. Lapides is a director of OnBoard, Inc., and a member of the advisory boards of the Newman Real Estate Institute at Baruch College and the National Association of Corporate Directors. Mr. Lapides has extensive knowledge and experience in the areas of real estate and corporate governance. Mr. Lapides, a certified public accountant, has

been involved in real-estate related activities including the management of a $3.0 billion national portfolio of income-producing real estate. As a published author or co-author of more than 100 articles and twelve books, Mr. Lapides is considered a well-respected authority in management and corporate governance related issues.

Clunet R. Lewis has been a director since December 1993. He is the chairman of our Audit Committee, a member of our Compensation Committee and our NCG Committee, and he serves as the Lead Independent Director. Mr. Lewis has also chaired Special Committees of our Independent Directors formed to review and evaluate strategic alternatives. Mr. Lewis is a retired commercial lawyer. While in private practice, Mr. Lewis specialized in mergers and acquisitions, debt financings, issuances of equity and debt securities, and corporate governance and control issues. Mr. Lewis has also served as Board Member, General Counsel, Chief Financial Officer, President, and Managing Director of other public and private companies.

Ronald L. Piasecki has been a director since May 1996, upon completion of our acquisition of twenty-five MH communities (the “Aspen Properties”) owned by affiliates of Aspen Enterprises, Ltd. (“Aspen”). He is a member of our Compensation Committee and NCG Committee. Mr. Piasecki was a managing director of Aspen Properties, which he co-founded in 1974. From 1974 until its sale to us in 1996, Mr. Piasecki was the managing partner in charge of property financing, legal and accounting functions, resident relations, and lobbying. Prior to our acquisition, Aspen was one of the largest privately-held developers and owners of manufactured housing communities in the U.S. Mr. Piasecki has been involved in real estate development and management since 1968.

Arthur A. Weiss has been a director since October 1996. He is a member of our Executive Committee. Since 1976, Mr. Weiss has practiced law with the law firm of Jaffe, Raitt, Heuer & Weiss, Professional Corporation, which represents us in various matters. Mr. Weiss is currently Chairman of the firm and a shareholder of Jaffe, Raitt, Heuer & Weiss, Professional Corporation. Mr. Weiss practices law in the area of business planning, taxation, estate planning and real estate law. Mr. Weiss is a director of several closely-held companies in the real estate industry, steel industry and technology industry and currently serves as a director of Talmer Bancorp, Inc. (NASDAQ: TLMR) and Talmer Bank. Mr. Weiss is also a director and officer of a number of closely held public and private nonprofit corporations. Mr. Weiss received a MBA in finance and a post graduate LLM degree from New York University in taxation.

In addition to each director’s qualifications, experience and skills outlined in their biographical data above and the minimum Board qualifications set forth above, our NCG Committee looked for certain attributes in each director and based on these attributes, and the mix of attributes of the other incumbent directors, determined that each director should serve on our Board. The NCG Committee does not require that each director possess all of these attributes but rather that the Board is comprised of directors that, taken together, provide us with a variety and depth of knowledge, judgment and experience necessary to provide effective oversight and vision. These attributes include: (a) significant leadership skills as a chief executive officer and/or relevant board member experience, (b) real estate industry experience, (c) transactional experience, especially within the real estate industry, (d) relevant experience in property operations, (e) financial expertise, and (f) legal or regulatory experience.

The following table lists the attributes of each incumbent director, as determined by the NCG Committee:

Director

CEO/Board Experience

Real Estate Industry

Transactional Experience

Property Operations

Financial Expertise

Legal / Regulatory

Gary A. Shiffman

Stephanie W. Bergeron

Brian Hermelin

Ronald A. Klein

Paul D. Lapides

Clunet R. Lewis

Ronald L. Piasecki

Arthur A. Weiss

To the best of our knowledge, as of the date of this document, there are no material proceedings to which any director is currently a party, or has a material interest, adverse to the Company. Except as described below, to the best of our knowledge, during the past ten years: (i) 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 director, (ii) no director has been the subject of a or a party to any judicial or administrative proceedings relating to an alleged violation of (a) mail or wire fraud; (b) fraud in connection with any business entity; (c) violations of federal or state securities, commodities, banking or insurance laws and regulations, and (iii) no director has been the subject of a or a party to any sanction or order of any self-regulatory organization, any registered entity

(as defined in Section 1(a)(29) of the Commodity Exchange Act), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.

As announced on February 27, 2006, the SEC completed its inquiry regarding the accounting for our SunChamp investment during 2000, 2001 and 2002, and the entry of an agreed-upon Administrative Order (the “Order”). The Order required us to cease and desist from violations of certain non-intent based provisions of the federal securities laws, without admitting or denying any such violations. On February 27, 2006, the SEC filed a civil action against Mr. Shiffman, in his capacity as our Chief Executive Officer, Jeffrey P. Jorissen, our then (and now former as of February 2008) Chief Financial Officer and a former Controller in the U.S. District Court for the Eastern District of Michigan alleging various claims generally consistent with the SEC’s findings set forth in the Order. On July 21, 2008, the U.S. District Court for the Eastern District of Michigan approved a settlement whereby the SEC dismissed its civil lawsuit against Mr. Shiffman and our former Controller. The SEC concurrently reached a settlement with Mr. Jorissen.

Director Compensation Tables

Directors who are also employees receive no additional compensation for their services as directors. During 2015, we paid directors that are not our employees the following annual fees:



	Chairman		Member
Annual Retainer	$	—	$	60,000
Audit Committee	$	37,500	$	32,500
Compensation Committee	$	12,500	$	7,500
NCG Committee	$	12,500	$	7,500
Executive Committee	$	—	$	7,500
Lead Director	$	—	$	12,500

The following tables provide compensation information for each member of the Board for the year ended on December 31, 2015.



Name	Fees Earned Paid in Cash		February 2015 Restricted Stock Award⁽¹⁾		Total		Aggregate number of options and restricted stock outstanding at December 31, 2015
Stephanie W. Bergeron	$	92,500	$	144,914	$	237,414	13,500
James R. Goldman ^{(2) (3)}	$	92,500	$	144,914	$	237,414	2,200
Brian M. Hermelin	$	105,000	$	144,914	$	249,914	4,200
Ronald A. Klein ⁽²⁾	$	67,500	$	144,914	$	212,414	2,200
Paul D. Lapides	$	60,000	$	144,914	$	204,914	14,000
Clunet R. Lewis	$	125,000	$	144,914	$	269,914	6,000
Ronald L. Piasecki	$	75,000	$	144,914	$	219,914	10,500
Randall K. Rowe ^{(2) (3)}	$	67,500	$	144,914	$	212,414	2,200
Arthur A. Weiss	$	67,500	$	144,914	$	212,414	6,000

⁽¹⁾

The fair value associated with these awards was measured using the closing price of our common stock as of the grant date to calculate compensation cost, in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation - Stock Compensation (“FASB ASC Topic 718”). Each director was granted 2,200 shares of restricted stock which will vest on February 11, 2018. For additional information on the valuation assumptions with respect to these grants, refer to Note 10 in our Consolidated Financial Statements.

⁽²⁾ Messrs. Goldman, Klein and Rowe were appointed effective January 6, 2015.


⁽³⁾	Messrs. Goldman and Rowe resigned as directors on March 14, 2016.

PROPOSAL NO. 1

ELECTION OF DIRECTORS

The first matter to be considered at the Annual Meeting will be the election of seven directors. Our current directors are:


•	Stephanie W. Bergeron;


•	Brian M. Hermelin;


•	Ronald A. Klein;


•	Paul D. Lapides;


•	Clunet R. Lewis;


•	Ronald L. Piasecki;


•	Gary A. Shiffman; and


•	Arthur A. Weiss.

The term of each of our directors expires at the Annual Meeting, or until his or her successor is duly elected and qualified or until the earlier resignation or removal of such director.

Mr. Lapides has decided to not stand for reelection, but he will continue to serve on the Board of Directors until the date of the Annual Meeting. All of the other incumbent directors are nominees for reelection at the Annual Meeting. Pursuant to the provisions of the Company's bylaws, the Board of Directors has by resolution reduced the size of the Board to seven directors effective as of the Annual Meeting, but will continue to actively pursue qualified candidates to fill the vacancies.

Following the recommendation of the NCG Committee, the Board of Directors has nominated each of the following incumbent directors for election at the Annual Meeting:


•	Stephanie W. Bergeron;


•	Brian M. Hermelin;


•	Ronald A. Klein;


•	Clunet R. Lewis;


•	Ronald L. Piasecki;


•	Gary A. Shiffman; and


•	Arthur A. Weiss.

Each director elected at the Annual Meeting will serve for a term commencing on the date of the Annual Meeting and continuing until our 2017 annual meeting of stockholders or until his or her successor is duly elected and qualified or until the earlier resignation or removal of such director.

In the absence of directions to the contrary, proxies will be voted in favor of the election of the seven nominees named above.

Vote Required

A majority of the votes cast in person or by proxy at the Annual Meeting is required for the election of directors. Abstentions will not be counted in determining which nominees received a majority of votes cast since abstentions do not represent votes cast for or against a candidate. Brokers are not empowered to vote on the election of directors without instruction from the beneficial owner of the shares and thus broker non-votes likely will result. Because broker non-votes are not considered votes cast for or against a candidate, they will not be counted in determining which nominees receive a majority of votes cast. Although we know of no reason why any nominee would not be able to serve, if any nominee should become unavailable for election, the persons named as proxies will vote your shares of common stock to approve the election of any substitute nominee proposed by the Board.

Board Recommendation

The Board unanimously recommends that you vote “FOR” each of the seven nominees named above.

PROPOSAL NO. 2

RATIFICATION OF SELECTION OF GRANT THORNTON LLP

The second proposal to be considered at the Annual Meeting will be the ratification of the selection of Grant Thornton LLP as our independent registered public accounting firm. The Audit Committee has selected and appointed Grant Thornton LLP as our independent registered public accounting firm to audit its consolidated financial statements for the year ending December 31, 2016. Grant Thornton LLP has audited our consolidated financial statements since 2003. Although ratification by stockholders is not required by law or by our bylaws, the Audit Committee believes that submission of its selection to stockholders is a matter of good corporate governance. Even if the appointment is ratified, the Audit Committee, in its discretion, may select a different independent registered public accounting firm at any time if the Audit Committee believes that such a change would be in our best interests and our stockholders. If our stockholders do not ratify the appointment of Grant Thornton, the Audit Committee will take that fact into consideration, together with such other factors it deems relevant, in determining its next selection of independent auditors.

It is anticipated that a representative of Grant Thornton LLP will attend the Annual Meeting, will have an opportunity to make a statement if he or she desires to do so and will be available to respond to appropriate questions.

Auditor Fees

Aggregate fees for professional services rendered by Grant Thornton, LLP, our independent auditors, for the years ended December 31, 2015 and 2014 were as follows:



Category	December 31, 2015		December 31, 2014
Audit Fees: For professional services rendered for the audit of our financial statements, the audit of internal controls relating to Section 404 of the Sarbanes-Oxley Act, the reviews of the quarterly financial statements and consents	$	733,340	$	763,644
Audit-Related Fees: For professional services rendered for accounting assistance with new accounting standards and potential transactions and other SEC related matters	$	104,000	$	143,988
Tax Fees	$	—	$	—
All Other Fees	$	—	$	—

Auditor Fees Policy

The Audit Committee has a policy concerning the pre-approval of audit and non-audit services to be provided by our independent auditors. The policy requires that all services provided by the independent auditors to us, including audit services, audit-related services, tax services and other services, must be pre-approved by the Audit Committee. In some cases, pre-approval is provided by the full Audit Committee for up to a year, and relates to a particular category or group of services and is subject to a particular budget. In other cases, specific pre-approval is required. All of the services provided by our independent auditor in 2015 and 2014 including services related to audit, audit-related fees, tax fees and all other fees described above, were approved by the Audit Committee under its pre-approval policies.

Vote Required

A majority of the votes cast in person or by proxy at the Annual Meeting is required to ratify the selection of Grant Thornton LLP. Abstentions will not be counted as votes cast for this proposal and do not represent votes cast for or against the ratification of the selection of Grant Thornton LLP. In the absence of your voting instructions, your broker or nominee may vote your shares for this proposal in its discretion.

Board Recommendation

The Board unanimously recommends that you vote “FOR” the ratification of the selection of Grant Thornton LLP as our independent registered public accounting firm for 2016.

REPORT OF THE AUDIT COMMITTEE

The Board maintains an Audit Committee comprised of three of our directors. The directors who serve on the Audit Committee are all “independent” for purposes of the NYSE listing standards. The Audit Committee held seven formal meetings during the year ended December 31, 2015.

In accordance with its written charter, the Audit Committee assists the Board with fulfilling its oversight responsibility regarding quality and integrity of our accounting, auditing and financial reporting practices. In discharging its oversight responsibilities regarding the audit process, the Audit Committee:


•	reviewed and discussed the audited financial statements with management and Grant Thornton, LLP, our independent auditors, for the fiscal year ended December 31, 2015;


•	discussed with the independent auditors the matters required to be discussed by Statement on Auditing Standards No. 61 (Codification of Statements on Auditing Standards), as amended, as adopted by the Public Company Accounting Oversight Board; and


•	received and reviewed the written disclosures and the letter from the independent auditors required by the Independence Standards Board’s Standard No. 1 (Independence Discussions with Audit Committees), and discussed with the independent auditors any relationships that may impact their objectivity and independence.

Based upon the review and discussions referred to above, the Audit Committee recommended to the Board that the audited financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2015, be filed with the SEC.

The Audit Committee has considered and determined that the level of fees of Grant Thornton LLP for provision of services other than the audit services is compatible with maintaining the auditor’s independence.

Respectfully Submitted,

Members of the Audit Committee:

Clunet R. Lewis (Chairman)

Stephanie W. Bergeron

Brian M. Hermelin

MANAGEMENT AND EXECUTIVE COMPENSATION

Executive Officers

The persons listed below are our executive officers who served during the last completed fiscal year. Each is appointed by, and serves at the pleasure of, the Board.



Name	Age	Title
Gary A. Shiffman	61	Chairman and Chief Executive Officer
John B. McLaren	45	President and Chief Operating Officer
Karen J. Dearing	51	Executive Vice President, Treasurer, Chief Financial Officer and Secretary
Jonathan M. Colman	60	Executive Vice President

Background information for Gary A. Shiffman is provided above. Background information for the other three current executive officers is set forth below.

John B. McLaren has been in the manufactured housing industry since 1995. He has served as our President since February 2014 and as our Chief Operating Officer since February 2008. From February 2008 to February 2014, he served as an Executive Vice President of the Company. From August 2005 to February 2008, he was Senior Vice President of SHS with overall responsibility for home sales and leasing. Mr. McLaren spent approximately three years as Vice President of Leasing & Service for SHS with responsibility for developing and leading our Rental Program and also has experience in the multi-family REIT segment and the chattel lending industry.

Karen J. Dearing joined us in October 1998 as the Director of Finance where she worked extensively with accounting and finance matters related to our ground up developments and expansions. Ms. Dearing became our Corporate Controller in 2002, a Senior Vice President in 2006, and Executive Vice President and Chief Financial Officer in February 2008. She is responsible for the overall management of our information technology, accounting, tax and finance departments, and all internal and external financial reporting. Prior to working for us, Ms. Dearing had eight years of experience as the Financial Controller of a privately-owned automotive supplier and five years' experience as a certified public accountant with Deloitte.

Jonathan M. Colman joined us in 1994 as Vice President-Acquisitions and became a Senior Vice President in 1995 and an Executive Vice President in March 2003. A certified public accountant, Mr. Colman has over thirty years of experience in the manufactured housing community industry. He has been involved in the acquisition, financing and management of manufactured housing communities for two of the 10 largest manufactured housing community owners, including Uniprop, Inc. during its syndication of over $90.0 million in public limited partnerships in the late 1980s. Mr. Colman is also a Vice President of all of our corporate subsidiaries.

To the best of our knowledge, as of the date of this document, there are no material proceedings to which any executive officer is currently a party, or has a material interest, adverse to us. To the best of our knowledge, except with respect to Mr. Shiffman (as described above), during the past ten years: (i) 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, (ii) no executive officer has been the subject of a or a party to any judicial or administrative proceedings relating to an alleged violation of (a) mail or wire fraud; (b) fraud in connection with any business entity; or (c) violations of federal or state securities, commodities, banking or insurance laws and regulations, and (iii) no executive officer has been the subject of a or a party to any sanction or order of any self-regulatory organization, any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.

Compensation Discussion and Analysis

Executive Summary

The goals and objectives of our executive compensation program are to attract and retain a skilled executive team to manage, lead and direct our personnel and capital to obtain the best possible economic results.

2015 Strong Performance

The Company has continued to deliver strong corporate and stock price performance in 2015, including the following accomplishments:


•	Total Stockholder Return ("TSR") of 17.8% in 2015. Ranked #17 in the KeyBanc "The Leaderboard" publication out of 166 Equity REITs.


•	Acquired 34 MH communities and 4 RV communities for over $1.1 billion; which included the final purchase on January 6, 2015 of communities from the $1.3 billion ALL transaction.


•	Disposed of 17 MH and 3 MH / RV combined communities for $224.5 million in gross proceeds, and recognized a gain on disposition of assets, net, of approximately $125.4 million.


•	Achieved 7.7% growth in FFO per fully diluted share excluding certain items.


•	Achieved Same Community NOI growth of 9.1%.


•	Gained 1,905 revenue producing sites; a new single year record.


•	Sold 2,483 homes; a new single year record, and an increase of 26% over 2014.

We have also achieved outstanding long term performance, as evidenced by our industry leading Total Shareholder Returns. The following charts illustrate our aggregate returns compared against the MSCI US REIT Index, a commonly utilized index to measure performance across the broader REIT industry and the NAREIT Residential Index of which we are a member.

Compensation Philosophy and Objectives

The executive compensation program supports our commitment to providing superior stockholder value. This program is designed to:


•	attract, retain and reward executives who have the motivation, experience and skills necessary to lead us effectively and encourage them to make career commitments to us;


•	base executive compensation levels on our overall financial and operational performance and the individual contribution of an executive officer to our success;


•	create a link between the performance of our stock and executive compensation; and


•	position executive compensation levels to be competitive with other similarly situated public companies including the real estate industry in general and manufactured housing REITs in particular.



Element	Compensation Objectives and Key Features
Base Salary	Fixed compensation component that provides a minimum level of cash to compensate the executive officer for the scope and complexity of his position.
	Amounts based on an evaluation of the executive officer's experience, position and responsibility as well as intended to be competitive in the marketplace to attract and retain executives.
Annual Incentive Award	Variable cash compensation component that provides incentive and reward to our executive officers based on the Committee's subjective assessment of both annual corporate and individual performance using certain measures of performance.
	Measures of corporate performance principally focused on funds from operations and other key operating metrics.
Long-Term Incentive	Variable equity compensation component that provides longer-term motivation which has the effect of linking stock price performance to executive compensation.
	Restricted stock is also intended to provide post-retirement financial security in lieu of other forms of more costly supplemental retirement programs.

During 2015, there were two employment agreements that were executed for Mr. McLaren and Ms. Dearing. The restricted stock awards in association with the employment agreements were both time vesting awards with no performance portion, therefore we have excluded these awards from the charts above.

Role of Executive Officers in Compensation Decisions

The Compensation Committee makes all decisions regarding the compensation of executive officers, including cash-based and equity-based incentive compensation programs. The Compensation Committee reviews the performance, and determines the annual incentive compensation, of the Chief Executive Officer. The Compensation Committee and the Chief Executive Officer annually review the performance metrics of the short and long-term performance plans and the performance of the other executive officers. The conclusions reached and recommendations based on the reviews of the other executive officers, including with respect to annual incentive and equity award amounts, are presented by the Chief Executive Officer to the Compensation Committee, which can exercise its discretion in modifying any recommended incentive or equity awards.

Role of the Compensation Consultant

In 2015, we reviewed, and engaged, FPL Associates, LP, or FPL, a nationally-known executive compensation consulting firm specializing in the public REIT industry to assist us in evaluating the elements and levels of our executive compensation, including base salaries, annual cash incentive awards and annual equity-based incentives for our named executive officers. All executive compensation services provided by FPL were conducted under the direction or authority of the Compensation Committee. FPL had previously provided compensation consulting services to our Compensation Committee.

Use of Comparative Market Data

As requested by the Compensation Committee, FPL reviewed the most recent publicly available information for peer group companies and focused on several main compensation components: base salary, target annual non-equity incentive, and long-term incentive awards (collectively “total remuneration”) both on an actual and target basis as well as per individual and in aggregate across the team. The Compensation Committee, in its discretion in setting the compensation elements and levels for the named executive officers, took into consideration this data, as well as other factors.

The information provided by FPL consisted of data from a peer group of companies with similarity to Sun Communities in terms of asset focus, geography, size, among other factors. The companies that comprised the peer group are highlighted below.



Company Name	Property Focus	Headquarters
Apartment Investment and Management Company	Multi-Family	Denver, CO
Brandywine Realty Trust	Office	Radnor, PA
Camden Property Trust	Multi-Family	Houston, TX
CubeSmart	Self-Storage	Malvern, PA
Education Realty Trust, Inc.	Student Housing	Memphis, TN
Equity LifeStyle Properties, Inc.	Manufactured Home	Chicago, IL
Home Properties, Inc.	Multi-Family	Rochester, NY
Mid-America Apartment Communities, Inc.	Multi-Family	Memphis, TN
Post Properties, Inc.	Multi-Family	Atlanta, GA
Tanger Factory Outlet Centers, Inc.	Other Retail	Greensboro, NC
Weingarten Realty Investors	Shopping Center	Houston, TX

Associated Estates Realty was removed from our peer group ranking in 2015, given their merger with Brookfield Asset Management, Inc. Our relative percentile rankings in comparison to these peers for number of employees, UPREIT market capitalization, total capitalization and total shareholder return are 47th percentile, 39th percentile, 54th percentile and 74th percentile, respectively.

Compensation Processes

The Compensation Committee considers (a) internal equity among executive officers, (b) market data for the positions held by these executives, (c) each executive’s duties, responsibilities, and experience level, (d) each executive’s performance and contribution to our success, and (e) cost to us when determining levels of compensation. In order to implement our executive compensation philosophy, the Compensation Committee exercises its independent discretion in reviewing and approving the executive compensation program as a whole, as well as specific compensation levels for each executive officer. Final aggregate compensation determinations for each fiscal year are made after the end of the fiscal year and after financial statements for the year become available. At that time, the Compensation Committee determines the annual incentive award, if any, for the past year’s performance, and makes decisions on awards of equity-based compensation.

Advisory Vote on Executive Compensation

The Compensation Committee also considered the results of the advisory vote by shareholders on executive compensation, or the "say-on-pay" proposal, presented to shareholders at our July 20, 2015 Annual Meeting. As reported in our Form 8-K, filed with the SEC on July 22, 2015, approximately 97% of the shares that voted on the say-on-pay proposal approved our 2014 executive compensation. Based on the votes from our 2015 Annual Meeting, we will continue to offer an annual non-binding advisory vote on the executive compensation. Accordingly, the Compensation Committee made no direct changes to the Company's executive compensation program as a result of the say-on-pay vote and our executive compensation program for the year ended December 31, 2015 continued to focus on the factors and objectives described above.

2015 Compensation Decisions

Base Salary

Base salary is generally based on factors such as an individual officer’s level of responsibility, prior years’ compensation, comparison to compensation of other officers, and compensation provided at competitive companies and companies of similar size. The base salaries for the named executive officers for the year ended December 31, 2015, were paid in accordance with existing employment agreements.



Executive	2015 Base Salary	2014 Base Salary	Percent Change
Gary A. Shiffman	$691,418	$680,941	1.5%
John B. McLaren ⁽¹⁾	$488,892	$425,000	15.0%
Karen J. Dearing ⁽²⁾	$405,288	$370,629	9.4%
Jonathan M. Colman	$75,000	$75,000	—%

⁽¹⁾ In May 2015, Mr. McLaren entered into a new employment agreement. Mr. McLaren's 2015 base salary is a combination of his base salary from his prior employment agreement and his new employment agreement. Mr. McLaren's new employment agreement contains no pay accelerator and no guaranteed pay increases.

⁽²⁾ In July 2015, Ms. Dearing entered into a new employment agreement. Ms. Dearing's 2015 base salary is a combination of her base salary from her prior employment agreement and her new employment agreement.

Annual Incentive Award

The annual incentive awards motivate the executive officers to maximize our annual operating and financial performance and reward participants based on annual performance. The Compensation Committee annually reviews the performance measures for determining award levels which include individual performance, our performance against budget and growth in FFO per share, revenue producing sites and CNOI, in each case as measured against targets established by the Compensation Committee. A definition of FFO and NOI is included under the heading “Supplemental Measures” in Item 7 in our Annual Report on Form 10-K, and CNOI is described further below. The Compensation Committee, in its sole discretion, may make adjustments to the NAREIT definition of FFO in determining FFO performance targets and achievement.

We view, and believe our stockholders view, these measures as key operating metrics which are primary drivers of long-term TSR. In setting these goals, the budget level of payout is intended to represent performance at the midpoint of published guidance. Exceed and excel achievement levels are set at increasing levels of performance greater than our annual budget.

The following tables provide a summary of the various target levels that we established for 2015 compared to the actual results to evaluate the achievement of certain executive goals:



	Target Ranges
Achievement Level	FFO	CNOI⁽²⁾	Revenue Producing Sites (“RPS”)
Budget	$3.57 - $3.58	$363,511,485	1,955
Exceed	$3.59 - $3.60	$365,338,176	2,005
Excel	$3.61 or greater	$367,164,867	2,055

⁽¹⁾ The reconciliation from FFO to Revised FFO as deemed by the Compensation Committee is below.

⁽²⁾ CNOI is primarily comprised of NOI/Gross Profit excluding any gross profit (loss) on fixed asset home sales.

The following table provides information regarding the Compensation Committee’s calculation of Revised FFO (shown as per diluted share):



	Year Ended December 31, 2015
Funds from operations (FFO)	$	3.31
Transaction costs	0.31
Distribution from affiliate	(0.13		)
Preferred stock redemption costs	0.07
Extinguishment of debt	0.05
Income tax expense - reduction of deferred tax asset	0.02
Adjustments to reflect certain items including unbudgeted transactions and capital events	(0.07		)
Revised FFO as deemed by the Compensation Committee	$	3.56

Targets for FFO achievement were developed from the Company's budget including community acquisitions, dispositions and common stock offerings completed through April 23, 2015. Adjustments were made to remove the operating results of properties acquired or disposed after April 23, 2015, the effect of securities issued in our November 2015 equity offering, and the effect of securities issued through our at-the-market sales program.

We achieved Revised FFO/share of $3.56 as adjusted by the Compensation Committee and as such Messrs. Shiffman and McLaren and Ms. Dearing did not receive an incentive payout with respect to this target.



		Incentive Opportunity (as a % of Salary)
Executive	2015 Base Salary	Budget	Exceed	Excel
Gary A. Shiffman	$691,418	30%	60%	100%
John B. McLaren	$488,892	30%	60%	100%
Karen J. Dearing	$405,288	30%	60%	100%

The percentage of the aggregate annual incentive payment each of Messrs. Shiffman and McLaren and Ms. Dearing is eligible to receive with respect to certain performance metrics applicable to him or her is as set forth in the following table.



	Performance Metrics
Executive	Achievement of individual goals	Company achievement of FFO	CNOI	Achievement of Revenue Producing Sites (“RPS”)	Compensation Committee Discretion
Gary A. Shiffman	25%	50%	—	—	25%
John B. McLaren	—	20%	25%	5%	50%
Karen J. Dearing	25%	50%	—	—	25%

The individual goals for Mr. Shiffman were focused on strategic leadership of the organization and communication of our mission and values, implementation of systems and processes that assure physical, financial and human resources of our organization, providing strategic planning and guidance for growth through acquisitions and expansions and opportunistically accessing capital markets to fund growth and strengthen the balance sheet.

The individual goals for Ms. Dearing were focused on evaluation and implementation of strategies associated with our capital requirements and structure including debt and equity transactions, effectively leading our accounting, tax and information technology departments, and creating and communicating along with the other executive officers, our strategic vision. The Compensation Committee determined that for fiscal year 2015 both Mr. Shiffman and Ms. Dearing “excelled” in the achievement of their individual goals and as such, achieved annual incentive awards of $172,959 and $101,322 respectively, for the achievement of this target.

Based on the results achieved in 2015, including significant community acquisitions, community dispositions, financing transactions, equity transactions and diligent management of the Company's balance sheet, the Compensation Committee, elected to exercise its sole discretion to award Mr. Shiffman and Ms. Dearing additional discretionary amounts of $100,000 each, bringing their total annual non-equity incentives to $272,959 and $201,322, respectively.

Combined net operating income (CNOI) for purposes of determining Mr. McLaren's annual incentive may not be the same as net operating income as disclosed in our Consolidated Financial Statements as certain items that are not under Mr. McLaren’s control or that are recorded solely for GAAP financial purposes are excluded from the computation of CNOI. CNOI also excludes any gain or loss from the sale of homes which were depreciated assets utilized in our home rental program. Mr. McLaren achieved the excel level award for CNOI and did not achieve an annual incentive award for the achievement of FFO or revenue producing sites. The Compensation Committee, in its sole discretion, elected to award Mr. McLaren a discretionary bonus of $100,000 due to his significant efforts with respect to our core portfolio, acquired communities and leadership of the operations, sales and human resource departments.

In summary, the three executives earned total annual cash incentives as shown in the table below.



Executive	Actual Amount Earned
Gary A. Shiffman	$272,959
John B. McLaren	$222,223
Karen J. Dearing	$201,322

For Jonathan M. Colman:

The CEO reviews Mr. Colman's overall responsibilities, his individual performance during the year, the annual incentives of the other executive officers and his overall compensation and makes recommendation of incentive compensation to the Compensation Committee. The Compensation Committee exercises its sole discretion in awards of incentive compensation to Mr. Colman. For the fiscal year 2015, the CEO recommended and the Compensation Committee approved an annual incentive award of $350,000 related to his significant work on the acquisition and disposition of communities in 2015.

Long-term Incentive Award

Long-term equity incentive awards are provided to the executive officers in order to increase their personal stake in our success and motivate them to enhance our long-term value while better aligning their interests with those of other stockholders. Equity awards are generally awarded in the form of restricted stock although stock options are utilized from time to time. The value of the restricted shares awarded is the price of a share of our stock as of the close of business on the grant date. On an annual basis the Compensation Committee reviews and approves the equity incentives to be issued to each of the executive officers for the prior year’s performance. There is no established target for long-term equity incentive awards for any of the executive officers either as a dollar value or percentage of their total compensation. Rather, the Compensation Committee reviews this component of each executive officer’s total compensation on an annual basis. Our executive officers (as well as our employees that receive restricted stock awards) receive distributions on the restricted stock awards that have been granted to date, including restricted stock awards that have not vested.

As described below under the 'Grants of Plan Based Awards', the long-term incentive awards that were granted in 2015 had both market and financial performance and service components.

Employment Agreements

Gary A. Shiffman

In June 2013, we entered into an employment agreement with Gary A. Shiffman, under which he serves as our Chief Executive Officer. The employment agreement was amended in July 2014. He also served as our President until February 2014. Mr. Shiffman's employment agreement has an initial term ending June 20, 2018, and will be automatically renewed for successive one year terms thereafter unless either party timely terminates the agreement. Pursuant to this employment agreement, Mr. Shiffman's initial annual base salary was $671,000, which amount is increased by an annual cost of living adjustment on January 1 of each year of the term. Mr. Shiffman's base salary for 2015 was $691,418. In addition to his base salary, we may pay Mr. Shiffman annual incentive compensation in an amount up to 100% of his then current base salary, as follows: (i) if, in the sole discretion of the Compensation Committee of our Board, Mr. Shiffman fulfills his annual individual goals and objectives as approved by the Compensation Committee, he will receive incentive compensation in the amount of 25% of his then current base salary; (ii) if, in the sole discretion of the Compensation Committee, the Company achieves the FFO and financial budget objectives approved by our Board at the beginning of the applicable year, Mr. Shiffman will receive incentive compensation in the amount of 50% of his then current base salary; and (iii) the remaining 25% of the incentive compensation may be awarded to Mr. Shiffman in the sole discretion of the Compensation Committee for extraordinary performance during the applicable year. Incentive compensation paid or payable to Mr. Shiffman under the employment agreement shall not be deemed to be fully earned and vested, and must be repaid to the extent such incentive compensation becomes subject to clawback pursuant to the provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act, any rules promulgated thereunder or the rules and regulations of the New York Stock Exchange. Mr. Shiffman's incentive-based

compensation, including equity-based incentive compensation, is also subject to our Executive Compensation "Clawback" Policy (the "Clawback Policy"), under which the Compensation Committee may seek recoupment of incentive compensation if any of our officers engages in fraud, willful misconduct or gross negligence that directly caused or otherwise directly contributed to the need for a material restatement of our financial results in order to comply with federal securities laws. 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 other business competitive with our business during the period he is employed by us; and (b) in the manufactured housing community business or any other business competitive with our business for a period of 18 months following the period he is employed by us. However, Mr. Shiffman’s employment agreement does allow him to make passive investments relating to real estate in general. See "Change in Control and Severance Payments" for a description of the terms of Mr. Shiffman's employment agreement relating to change in control and severance payments.

A copy of Mr. Shiffman’s employment agreement is attached as an exhibit to our periodic filings under the Exchange Act.

John B. McLaren

On May 19, 2015, we entered into an employment agreement with John B. McLaren pursuant to which Mr. McLaren serves as our President, and Chief Operating Officer. The new employment agreement supersedes Mr. McLaren's previous employment agreement entered into on March 7, 2011. Mr. McLaren's employment agreement is for an initial term ending on May 1, 2020. The employment agreement is automatically renewable for successive one year terms thereafter unless either party timely terminates the employment agreement. Pursuant to the employment agreement, Mr. McLaren is paid an annual base salary of $525,000 during the term of the employment agreement. Mr. McLaren is eligible for annual incentive compensation of up to 50% of his base salary if certain annual individual and/or Company performance criteria, as established by the Compensation Committee in its sole discretion, are met and up to 50% of his base salary at the sole discretion of the Compensation Committee, based on any other criteria. Incentive compensation paid or payable to Mr. McLaren under the employment agreement shall not be deemed to be fully earned and vested, and must be repaid to the extent such incentive compensation becomes subject to clawback pursuant to the provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act, any rules promulgated thereunder or the rules and regulations of the NYSE. Mr. McLaren's incentive-based compensation, including equity-based incentive compensation, is also subject to our Clawback Policy, under which the Compensation Committee may seek recoupment of incentive compensation if any of our officers engages in fraud, willful misconduct or gross negligence that directly caused or otherwise directly contributed to the need for a material restatement of our financial results in order to comply with federal securities laws. The non-competition clauses of Mr. McLaren’s employment agreement preclude him from engaging, directly or indirectly, in the development, ownership, leasing, management, financing, or sales of manufactured housing communities, recreational vehicle communities or manufactured homes anywhere in the continental U.S. or Canada during the period he is employed by us and for a period of up to twenty four months following the period he is employed by us; provided, however, that if Mr. McLaren is terminated without “cause” the period of non-competition shall be reduced to twelve months following the period he is employed by us. Notwithstanding, Mr. McLaren’s employment agreement does allow him to make passive investments in publicly-traded entities engaged in our business during the period he is employed by us. See “Change in Control and Severance Payments” for a description of the terms of Mr. McLaren's employment agreement relating to change of control and severance payments.

A copy of Mr. McLaren’s employment agreement is attached as an exhibit to our periodic filings under the Exchange Act.

Karen J. Dearing

On July 16, 2015, the effective date, we entered into an employment agreement with Karen J. Dearing pursuant to which Ms. Dearing serves as our Executive Vice President, Chief Financial Officer, Secretary, and Treasurer. The new employment agreement supersedes Ms. Dearing’s previous employment agreement entered into on March 7, 2011. Ms. Dearing's employment agreement is for an initial term ending on June 30, 2020. The employment agreement is automatically renewable for successive one year terms thereafter unless either party timely terminates the agreement. Pursuant to the employment agreement, Ms. Dearing is paid an annual base salary of $425,000 during the term on the agreement. In addition to her base salary and in accordance with the terms of her employment agreement and in sole discretion of the Compensation Committee, Ms. Dearing is eligible for annual incentive compensation to be determined by the Compensation Committee of our Board of Directors in an amount of up to 100% of her base salary. The bonus for each year will be determined and calculated as follows: (i) if and to the extent, in the sole discretion of the Compensation Committee and based on criteria approved by the Compensation Committee, the Company meets certain criteria and Ms. Dearing fulfills her individual goals and objectives for the applicable year, we will pay Ms. Dearing a bonus in an amount of up to 50% of her then current base salary; and (ii) we may pay up to an additional 50% of her then current base salary to Ms. Dearing in the sole discretion of the Compensation Committee based on criteria determined by the Compensation Committee at the time of the determination of the bonus, which may be based on any number of individual, company and/or industry factors. Incentive compensation paid or payable to Ms. Dearing under the employment agreement shall not be deemed to be fully earned and vested, and must be repaid to the extent such incentive compensation becomes subject to clawback pursuant to the provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act, any rules promulgated thereunder or the rules and regulations of the NYSE. Ms. Dearing's incentive-

based compensation, including equity-based incentive compensation, is also subject to our Clawback Policy, under which the Compensation Committee may seek recoupment of incentive compensation if any of our officers engages in fraud, willful misconduct or gross negligence that directly caused or otherwise directly contributed to the need for a material restatement of our financial results in order to comply with federal securities laws. The non-competition clauses of Ms. Dearing’s employment agreement preclude her from engaging, directly or indirectly, in the development, ownership, leasing, management, financing, or sales of manufactured housing communities, recreational vehicle communities or manufactured homes anywhere in the continental U.S. or Canada during the period she is employed by us and for a period of up to twenty four months following the period she is employed by us; provided, however, that if Ms. Dearing is terminated without “cause” the period of non-competition shall be reduced to twelve months following the period she is employed by us. Notwithstanding, Ms. Dearing’s employment agreement does allow her to make passive investments in publicly-traded entities engaged in our business during the period she is employed by us. See “Change in Control and Severance Payments” for a description of the terms of Ms. Dearing's employment agreement relating to change of control and severance payments.

A copy of Ms. Dearing’s employment agreement is attached as an exhibit to our periodic filings under the Exchange Act.

Tax and Accounting Implications

Deductibility of Executive Compensation

Section 162(m) of the Code limits the deductibility on our tax return of compensation over $1.0 million to any of our named executive officers. We believe that, because we qualify as a REIT under the Code and therefore are not subject to federal income taxes on our income to the extent distributed, the payment of compensation that does not satisfy the requirements of section 162(m) has not and will not generally affect our net income. However, to the extent that compensation does not qualify for deduction of section 162(m), a larger portion of stockholder distributions may be subject to federal income taxation as dividend income rather than return of capital. We do not believe that section 162(m) has materially affected or will materially affect the taxability of stockholder distributions, although no assurance can be given in this regard due to the variety of factors that affect the tax position of each stockholder. For these reasons, section 162(m) is not a significant factor in the Compensation Committee’s compensation policy and practices. In 2015, we paid $374,640 to Mr. Shiffman, $713,623 to Mr. McLaren, $589,818 to Ms. Dearing, and $240,907 to Mr. Colman that was subject to section 162(m).

409A Considerations

We have also taken into consideration Code Section 409A in the design and implementation of our compensation programs. If an executive is entitled to nonqualified deferred compensation benefits that are subject to Section 409A, and such benefits do not comply with Section 409A, then the benefits are taxable in the first year they are not subject to a substantial risk of forfeiture. In such case, the executive is subject to regular federal income tax, interest and an additional federal income tax of 20% of the benefit includible in income.

Risks Arising from Compensation Policies and Practices

Our senior management has assessed the enterprise-wide risks facing us and processes and procedures to mitigate such risks. In connection with such enterprise risk management process, our compensation programs were assessed, including program features that could potentially encourage excessive or imprudent risk taking and the specific aspects of our compensation policies and procedures which mitigate some of the material risks that might otherwise arise from such policies and procedures. Following this review, our management, Compensation Committee and full Board of Directors affirmatively determined that there were no risks arising from the compensation policies and practices that are reasonably likely to have a material adverse effect on us.

Anti-Hedging Policy

The Company has adopted an anti-hedging policy under which its directors and executive officers who are subject to reporting requirements under Section 16 of the Exchange Act are prohibited from trading in any interest relating to the future price of the Company’s securities, such as a put, call or short sale.

Summary Compensation Table

The following table includes information concerning compensation for our named executive officers for the fiscal year ended December 31, 2015:



Name and Principal Position	Year	Salary		Non-equity Incentive ⁽¹⁾			Stock Awards ⁽²⁾			All Other Compensation ⁽³⁾		Total
Gary A. Shiffman, Chairman,	2015	$	691,418	$	272,959		$	6,381,000	⁽⁵⁾	$	42,516	$	7,387,888
and Chief Executive Officer ⁽⁴⁾	2014	$	680,941	$	680,941		$	249,200		$	47,463	$	1,658,545
	2013	$	671,111	$	335,556		$	13,717,600		$	49,858	$	14,774,125

John B. McLaren, President and	2015	$	488,892	$	222,223		$	3,168,750	⁽⁶⁾	$	989	$	3,880,848
Chief Operating Officer ⁽⁴⁾	2014	$	425,000	$	329,375		$	996,800		$	3,845	$	1,755,020
	2013	$	400,000	$	200,000		$	685,350		$	4,299	$	1,289,649

Karen J. Dearing, Executive	2015	$	405,288	$	201,322		$	2,627,600	⁽⁷⁾	$	2,213	$	3,236,416
Vice President, Treasurer, Chief	2014	$	370,629	$	370,629		$	1,246,000		$	7,475	$	1,994,733
Financial Officer and Secretary	2013	$	352,980	$	176,490		$	685,350		$	4,361	$	1,219,181

Jonathan M. Colman, Executive	2015	$	75,000	$	350,000		$	—		$	2,478	$	427,478
Vice President	2014	$	75,000	$	1,134,000	⁽⁸⁾	$	384,080		$	2,439	$	1,595,511
	2013	$	75,000	$	265,000	⁽⁹⁾	$	137,070		$	3,367	$	480,428

⁽¹⁾

See “2015 Compensation Decisions” above for additional information regarding annual incentive payments awarded in 2015. Although the annual incentive payments were earned for 2015, 2014 and 2013 such payments were made in 2016, 2015 and 2014, respectively. The amount included in 2015 for Mr. Colman is acquisition related incentive compensation of which $350,000 was earned for 2015, but paid in 2016.


⁽²⁾	This column represents the aggregate grant date fair value computed in accordance with FASB ASC Topic 718. For additional information on the valuation assumptions with respect to these grants, refer to Note 10 in our Consolidated Financial Statements

⁽³⁾

Includes matching contributions to our 401(k) plan of $665, $0, $1,489 and $749 for each of Messrs. Shiffman, McLaren, Colman and Ms. Dearing, respectively; for the year ended December 31, 2015. Includes matching contributions to our 401(k) plan of $524, $2,958, $1,552 and $1,460 for each of Messrs. Shiffman, McLaren, Colman and Ms. Dearing, respectively, for the year ended December 31, 2014. Includes matching contributions to our 401(k) plan of $3,253, $3,412, $2,480 and $3,251 for each of Messrs. Shiffman, McLaren, Colman and Ms. Dearing, respectively, for the year ended December 31, 2013. Also includes premiums for life insurance and accidental death and disability insurance in the amount of $989 for each of Messrs. Shiffman, McLaren, Colman and Ms. Dearing for the year ended December 31, 2015. Includes premiums for life insurance and accidental death and disability insurance in the amount of $887 for each of Messrs. Shiffman, McLaren, Colman and Ms. Dearing for the years ended December 31, 2014, and 2013. Includes perquisites for sporting events and/or entertainment valued in the amounts of $1,862 and $475 for Mr. Shiffman and Ms. Dearing, for the year ended December 31, 2015. Includes perquisites for sporting and/or entertainment events valued in the amounts of $1,552 and $5,128 for Mr. Shiffman and Ms. Dearing, respectively, for the year ended December 31, 2014. Includes perquisites for sporting events and/or entertainment valued in the amounts of $2,718 and $223 for Mr. Shiffman and Ms. Dearing, respectively, for the year ended December 31, 2013. Includes $39,000, $44,500 and $43,000 paid to Mr. Shiffman by Origen Financial, Inc. for service on its Board of Directors for the years ended December 31, 2015, 2014 and 2013, respectively.


⁽⁴⁾	Mr. McLaren was appointed to replace Mr. Shiffman as President of the Company in February 2014.


⁽⁵⁾	Does not include 75,000 restricted stock awards equal to $5,193,750 in fair value, which were granted in March 2016, but which relate to Mr. Shiffman's performance in 2015.


⁽⁶⁾	Does not include 35,000 restricted stock awards equal to $2,423,750 in fair value, which were granted in March 2016, but which relate to Mr. McLaren's performance in 2015.


⁽⁷⁾	Does not include 20,000 restricted stock awards equal to $1,385,000 in fair value, which were granted in March 2016, but which relate to Ms. Dearing's performance in 2015.


⁽⁸⁾	Includes community acquisition and disposition related incentive compensation of which $1,000,000 was earned in 2014, but paid in 2015.


⁽⁹⁾	Includes community acquisition related incentive compensation of which $135,000 was earned in 2013, but paid in 2014.

Grants of Plan Based Awards

We made the following grants of restricted shares of our common stock to certain named executive officers in 2015.



Name	Grant Date	All Other Stock Awards: Number of Shares of Stocks or Units (#)		Grant Date Fair Value of Stock Option Awards ⁽¹⁾
Gary A. Shiffman	4/14/2015	50,000		$	3,190,500
	4/14/2015	25,000	⁽²⁾	$	1,595,250
	4/14/2015	25,000	⁽³⁾	$	1,595,250


John B. McLaren	4/14/2015	12,500		$	797,625
	4/14/2015	6,250	⁽²⁾	$	398,813
	4/14/2015	6,250	⁽³⁾	$	398,813
	5/19/2015	25,000		$	1,573,500

Karen J. Dearing	4/14/2015	10,000		$	638,100
	4/14/2015	5,000	⁽²⁾	$	319,050
	4/14/2015	5,000	⁽³⁾	$	319,050
	7/16/2015	20,000		$	1,351,400

⁽¹⁾Pursuant to SEC rules, this column represents the total fair market value of restricted stock awards, in accordance with FASB ASC Topic 718.

⁽²⁾Award is subject to market performance criteria.

⁽³⁾Award is subject to financial performance criteria.

On April 14, 2015 Messrs. Shiffman and McLaren and Ms. Dearing were award 100,000, 25,000, and 20,000 shares, respectively, 50% of each award, 50,000, 12,500, and 10,000, respectively, has a vesting schedule as follows: 20% on April 14, 2018, 30% on April 14, 2019, 35% on April 14, 2020, 10% on April 14, 2021 and five percent on April 14, 2022. The other 50% of shares awarded are subject to performance vesting as described below.

The shares granted on May 19, 2015 to Mr. McLaren, in connection with the execution of his new employment agreement, vest 35% on May 19, 2018, 35% on May 19, 2019, 20% on May 19, 2020, 5% on May 19, 2021 and five percent on May 19, 2022. The shares granted on July 16, 2015 to Ms. Dearing, in connection with the execution of her new employment agreement, vest 35% on July 16, 2018, 35% on July 16, 2019, 20% on July 16, 2020, 5% on July 16, 2021 and five percent on July 16, 2022.

On March 20, 2016, Messrs. Shiffman and McLaren and Ms. Dearing were awarded 75,000, 35,000 and 20,000 restricted shares, respectively, which related to their performance in 2015, which shares are not included in the chart above. Fifty percent of each such award, 33,750, 17,500, and 10,000, respectively, has a vesting schedule as follows: 20% on March 20, 2019, 30% on March 20, 2020, 35% on March 20, 2021, 10% on March 20, 2022, and the balance of such time-vested shares on March 20, 2023. The other 50% of shares awarded are subject to performance vesting as described above.

If certain market performance criteria established by the Compensation Committee relative to the Company’s common stock for the applicable three-year measurement period are satisfied, up to 25,000 of the shares for Mr. Shiffman, up to 6,250 of the shares for Mr. McLaren, and up to 5,000 of the shares for Ms. Dearing, are subject to performance vesting will vest as follows, provided that such executive officer is employed by the Company or any of its affiliates on the applicable vesting dates:



Measurement Period	Vesting Date	Shares Vested
Gary A. Shiffman
January 1, 2015 through December 31, 2017	April 14, 2018	Up to 8,333
January 1, 2016 through December 31, 2018	April 14, 2019	Up to 8,333
January 1, 2017 through December 31, 2019	April 14, 2020	Up to 8,334

John B. McLaren
January 1, 2015 through December 31, 2017	April 14, 2018	Up to 2,083
January 1, 2016 through December 31, 2018	April 14, 2019	Up to 2,083
January 1, 2017 through December 31, 2019	April 14, 2020	Up to 2,084

Karen J. Dearing
January 1, 2015 through December 31, 2017	April 14, 2018	Up to 1,667
January 1, 2016 through December 31, 2018	April 14, 2019	Up to 1,667
January 1, 2017 through December 31, 2019	April 14, 2020	Up to 1,666

The market performance criteria is based (i) 50% on the absolute TSR on the Company’s common stock during the applicable three-year measurement period above, and (ii) 50% on the TSR on the Company’s common stock during the applicable three-year measurement period relative to the TSR during such period of the MSCI US REIT Index.

TSR is calculated using the average closing sales price of our common stock (as reported on the NYSE) for the 20 trading days immediately preceding and including the first day and the last day of the applicable three-year measurement period. The following tables detail the market performance criteria applicable to each three-year measurement period. If the minimum performance level for each metric is met, the award is pro-rated between vesting levels.



Metric	Performance Level	Earned %
Absolute Cumulative TSR (Weight 50%)	less than 21%	0%
	21.0%	50%
	27.0%	75%
	33.0%	90%
	36.0%	100%

Relative TSR vs. MSCI US REIT Index (Weight 50%)	Below index	0%
	Index	50%
	Index + 1%	75%
	Index + 2%	85%
	Index +3%	100%

If certain Company financial performance criteria established by the Compensation Committee for the applicable calendar year are satisfied, up to 25,000 of the shares for Mr. Shiffman, up to 6,250 of the shares for Mr. McLaren, and up to 5,000 of the shares for Ms. Dearing, are subject to performance vesting will vest as follows, provided that such executive officer is employed by the Company or any of its affiliates on the applicable vesting dates:



Measurement Period	Vesting Date	Shares Vested
Gary A. Shiffman
January 1, 2015 through December 31, 2015	April 14, 2016	Up to 6,250
January 1, 2016 through December 31, 2016	April 14, 2017	Up to 6,250
January 1, 2017 through December 31, 2017	April 14, 2018	Up to 6,250
January 1, 2018 through December 31, 2018	April 14, 2019	Up to 6,250

John B. McLaren
January 1, 2015 through December 31, 2015	April 14, 2016	Up to 1,562
January 1, 2016 through December 31, 2016	April 14, 2017	Up to 1,562
January 1, 2017 through December 31, 2017	April 14, 2018	Up to 1,563
January 1, 2018 through December 31, 2018	April 14, 2019	Up to 1,563

Karen J. Dearing
January 1, 2015 through December 31, 2015	April 14, 2016	Up to 1,250
January 1, 2016 through December 31, 2016	April 14, 2017	Up to 1,250
January 1, 2017 through December 31, 2017	April 14, 2018	Up to 1,250
January 1, 2018 through December 31, 2018	April 14, 2019	Up to 1,250

The financial performance criteria is based (i) 50% on certain Company FFO growth targets for the applicable calendar year, and (ii) 50% on certain Company same-site NOI growth targets for the applicable calendar year. The specific metrics for these performance criteria are described above under the 'Grants of Plan Based Awards'.

In addition to our financial results reported in accordance with GAAP, we view information regarding FFO as an appropriate supplemental measure of the financial and operational performance of an equity REIT. Under the National Association of Real Estate Investment Trusts (“NAREIT”) definition, FFO represents net income (loss) (computed in accordance with GAAP), excluding extraordinary items (as defined under GAAP), and gain (loss) on sales of depreciable operating property, plus real estate related depreciation and amortization (excluding amortization of financing costs), and after adjustments for unconsolidated partnerships and joint ventures. Management also uses FFO excluding certain items, a non-GAAP financial measure, which excludes certain gain and loss items that management considers unrelated to the operational and financial performance of our core business. We believe that this provides investors with another financial measure of our operating performance that is more comparable when evaluating period over period results.

NOI serves as the primary basis to evaluate the performance of our operations. NOI is derived from revenues minus property operating and maintenance expenses and real estate taxes. We believe that NOI is helpful to investors and analysts as a measure of operating performance because it is an indicator of the return on property investment and provides a method of comparing property performance over time. We use NOI as a key management tool when evaluating performance and growth of particular properties and/or groups of properties. The principal limitation of NOI is that it excludes depreciation, amortization, interest expense, and non-property specific expenses such as general and administrative expenses, all of which are significant costs, and therefore, NOI is a measure of the operating performance of our properties rather than of the Company overall. We believe that these costs included in net income often have no effect on the market value of our property and therefore limit its use as a performance measure. In addition, such expenses are often incurred at a parent company level and therefore are not necessarily linked to the performance of a real estate asset.

Outstanding Equity Awards at Fiscal Year-End

The following table provides certain information with respect to the value of all restricted share awards previously granted our named executive officers. None of the named executive officers hold any unexercised options.

Outstanding Equity Awards at Fiscal Year-End as of December 31, 2015



	Share Awards ⁽¹⁾
Name	Number of Shares or Units of Stock that Have Not Vested	Market Value of Shares or Units of Stock that Have Not Vested ⁽²⁾
Gary A. Shiffman	33,334	$	2,284,379	⁽³⁾
	20,000	$	1,370,600	⁽⁴⁾
	40,000	$	2,741,200	⁽⁵⁾
	150,000	$	10,279,500	⁽⁶⁾
	5,000	$	342,650	⁽⁷⁾
	50,000	$	3,426,500	⁽⁸⁾
	37,500	$	2,569,875	⁽⁹⁾
	50,000	$	3,426,500	⁽¹¹⁾
	25,000	$	1,713,250	⁽¹²⁾
	25,000	$	1,713,250	⁽¹³⁾

John B. McLaren	500	$	34,265	⁽¹⁰⁾
	8,334	$	571,129	⁽¹⁴⁾
	5,000	$	342,650	⁽³⁾
	10,000	$	685,300	⁽¹⁵⁾
	15,000	$	1,027,950	⁽⁵⁾
	20,000	$	1,370,600	⁽⁷⁾
	12,500	$	856,625	⁽¹¹⁾
	6,250	$	428,313	⁽¹²⁾
	6,250	$	428,313	⁽¹³⁾
	25,000	$	1,713,250	⁽¹⁶⁾

Karen J. Dearing	500	$	34,265	⁽¹⁰⁾
	5,000	$	342,650	⁽¹⁴⁾
	6,667	$	456,890	⁽³⁾
	5,000	$	342,650	⁽¹⁵⁾
	15,000	$	1,027,950	⁽⁵⁾
	25,000	$	1,713,250	⁽⁷⁾
	10,000	$	685,300	⁽¹¹⁾
	5,000	$	342,650	⁽¹²⁾
	5,000	$	342,650	⁽¹³⁾
	20,000	$	1,370,600	⁽¹⁷⁾

Jonathan M. Colman	3,000	$	205,590	⁽⁵⁾
	8,000	$	548,240	⁽¹⁸⁾

⁽¹⁾All share awards begin to vest after either the third or fourth anniversary of the date of grant.


⁽²⁾	Value based on $68.53, the closing price of our common stock on NYSE on December 31, 2015.


⁽³⁾	One-half of the remaining shares will vest on each of May 6, 2016 and May 6, 2017.


⁽⁴⁾	One-third of the remaining shares vest on each of December 14, 2016, December 14, 2017 and December 14, 2018.


⁽⁵⁾	One-third of the remaining shares will vest on each of February 15, 2017, February 15, 2018 and February 15, 2019.


⁽⁶⁾	Thirty-five percent of the shares will vest on June 20, 2016, 35% of the shares will vest on June 20, 2017, 20% of the shares will vest on June 20, 2018 and 5% of the shares will vest on each of June 20, 2019 and June 20, 2020.


⁽⁷⁾	Twenty percent of the shares will vest on June 30, 2018, 30% of the shares will vest on June 30, 2019, 35% of the shares will vest on June 30, 2020, 10% of the shares will vest on June 30, 2021 and 5% of the shares will vest on June 30, 2022.


⁽⁸⁾	One-third of the remaining shares will vest on each of March 1, 2016, March 1, 2017 and March 1, 2018 based on certain performance conditions.


⁽⁹⁾	One-third of the shares will vest on each of March 1, 2016, March 1, 2017 and March 1, 2018 based on certain market conditions.


⁽¹⁰⁾	These shares will vest on February 5, 2018.


⁽¹¹⁾	Twenty percent of the shares will vest on April 14, 2018, 30% of the shares will vest on April 14, 2019, 35% of the shares will vest on April 14, 2020, 10% of the shares will vest on April 14, 2021 and 5% of the shares will vest on April 14, 2022.


⁽¹²⁾	One-fourth of the shares will vest on each of April 14, 2016, April 14, 2017, April 14, 2018 and April 14, 2019 based on certain performance conditions.


⁽¹³⁾	One-third of the shares will vest on each of April 14, 2018, April 14, 2019 and April 14, 2020 based on certain market conditions.


⁽¹⁴⁾	One-half of the remaining shares vest on each of January 1, 2016 and January 1, 2017.

⁽¹⁵⁾ Twenty percent of the shares vest on February 20, 2016, 30% of the shares vest on February 20, 2017, 35% of the shares vest on February 20, 2018, 10% of the shares vest on February 20, 2019 and 5% of the shares vest on February 20, 2020.

⁽¹⁶⁾ Thirty-five percent of the shares vest on May 19, 2018, 35% of the shares vest on May 19, 2019, 20% of the shares vest on May 19, 2020, 5% of the shares vest on May 19, 2021 and 5% of the shares vest on May 19, 2022.

⁽¹⁷⁾ Thirty-five percent of the shares vest on July 16, 2018, 35% of the shares vest on July 16, 2019, 20% of the shares vest on July 16, 2020, 5% of the shares vest on July 16, 2021 and 5% of the shares vest on July 16, 2022.

⁽¹⁸⁾ Twenty percent of the shares will vest on February 12, 2018, 30% of the shares will vest on February 12, 2019, 35% of the shares will vest on February 12, 2020, 10% of the shares will vest on February 12, 2021 and 5% of the shares will vest on February 12, 2022.

Option Exercises and Stock Vested During Last Fiscal Year

The following table sets forth certain information concerning shares held by our named executive officers that vested during the fiscal year ended December 31, 2015:



	Stock Awards
Name	Number of Shares Acquired on Vesting	Value Realized on Vesting
Gary A. Shiffman	12,500	$	843,625
	16,666	$	1,014,793
	20,000	$	1,345,800

John B. McLaren	4,166	$	256,251
	500	$	34,840
	2,500	$	152,225
	3,334	$	224,345

Karen J. Dearing	2,500	$	153,775
	500	$	34,840
	3,333	$	202,946
	3,334	$	224,345

Change in Control and Severance Payments

Under their employment agreements, we are obligated to make severance and change in control payments to Mr. Shiffman, Mr. McLaren and Ms. Dearing under certain circumstances. If any such executive is terminated without “cause” or for "good reason" as defined in his or her employment agreement, he or she is entitled to any accrued but unpaid salary, incentive compensation and benefits through the effective date of termination. In addition, subject to the execution of a general release and continued compliance with his or her non-competition and confidentiality covenants, Mr. Shiffman is entitled to a continuation of salary for up to 18 months after termination, and each of Ms. Dearing and Mr. McLaren is entitled to a continuation of salary for up to 12 months after termination. If Mr. Shiffman’s, Mr. McLaren’s or Ms. Dearing’s employment is terminated due to death or disability, he or she or his or her successors and assigns, is entitled to any accrued but unpaid salary, incentive compensation and benefits through the effective date of termination. In addition, Mr. Shiffman, Mr. McLaren and Ms. Dearing are entitled to a continuation of salary for up to 24 months after death or disability.

If there is a change of control of the Company and any of the following events has occurred: (i) we terminate the employment of Mr. Shiffman, Mr. McLaren or Ms. Dearing without "cause" (as defined in his or her employment agreement) within two years after the date of such change of control, (ii) any of Mr. Shiffman, Mr. McLaren or Ms. Dearing terminate his or her employment for "good reason" (as defined in his or her employment agreement) within two years after the date of such change or control, or (iii) the form of such change of control transaction is a sale by the Company of all or substantially all of its assets and the Company or its successor does not expressly assume the employment agreement of Mr. Shiffman, Mr. McLaren or Ms. Dearing, then we are obligated to pay Mr. Shiffman, Mr. McLaren or Ms. Dearing, as applicable, an amount equal to 2.99 times his or her then current base salary, and to continue to provide him or her health and insurance benefits for up to one year. In addition, in the case of any such triggering event, all stock options or other stock based compensation awarded to Mr. Shiffman, Mr. McLaren, or Ms. Dearing will become fully vested and immediately exercisable and may be exercised by him or her at any time within one year after the triggering event.

Under any of the foregoing events of termination or change of control, all stock options and other stock based compensation awarded to the applicable executive shall become fully vested and immediately exercisable.

The following tables describe the potential payments upon termination without cause, a termination due to death or disability or after a change of control (and associated termination of the executives) for the following named executive officers:

Termination Without Cause



Name	Cash Payment ⁽¹⁾		Acceleration of Vesting of Stock Awards ⁽²⁾		Benefits ⁽³⁾		Total
Gary A. Shiffman	$	1,037,127	$	29,867,704	$	—	$	30,904,831
John B. McLaren	$	525,000	$	7,458,394	$	—	$	7,983,394
Karen J. Dearing	$	425,000	$	6,658,855	$	—	$	7,083,855
Jonathan M. Colman	$	—	$	—	$	—	$	—

Termination Due to Death or Disability



Name	Cash Payment ⁽¹⁾		Acceleration of Vesting of Stock Awards ⁽²⁾		Benefits ⁽³⁾		Total
Gary A. Shiffman	$	1,382,836	$	29,867,704	$	—	$	31,250,540
John B. McLaren	$	1,050,000	$	7,458,394	$	—	$	8,508,394
Karen J. Dearing	$	850,000	$	6,658,855	$	—	$	7,508,855
Jonathan M. Colman	$	—	$	753,830	$	—	$	753,830

Change of Control



Name	Cash Payment ⁽¹⁾		Acceleration of Vesting of Stock Awards ⁽²⁾		Benefits ⁽³⁾		Total
Gary A. Shiffman	$	2,067,340	$	29,867,704	$	11,898	$	31,946,942
John B. McLaren	$	1,569,750	$	7,458,394	$	11,898	$	9,040,042
Karen J. Dearing	$	1,270,750	$	6,658,855	$	11,898	$	7,941,503
Jonathan M. Colman	$	—	$	753,830	$	—	$	753,830

⁽¹⁾Assumes a termination on December 31, 2015 and payments based on base salary without taking into account any accrued incentive based compensation as of December 31, 2015 for each executive for the periods specified above.


⁽²⁾	Calculated based on a termination as of December 31, 2015 and the fair market value of our common stock on NYSE as of December 31, 2015.


⁽³⁾	Reflects continuation of health benefits, life insurance and accidental death and disability insurance for the periods specified above.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

Messrs. Brian M. Hermelin, Paul D. Lapides, Clunet R. Lewis and Ronald L. Piasecki served as members of the Compensation Committee of our Board during 2015. None of the members of the Compensation Committee has been or will be one of our officers or employees. We do not have any interlocking relationships between our executive officers and the Compensation Committee and the executive officers and compensation committees of any other entities, nor has any such interlocking relationship existed in the past.

COMPENSATION COMMITTEE REPORT

The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with management and, based on such review and discussions, the Committee recommended to the Board that the Compensation Discussion and Analysis be included in this document.

Respectfully submitted,

Members of the Compensation Committee:

Brian M. Hermelin (Chairman)

Paul D. Lapides

Clunet R. Lewis

Ronald L. Piasecki

PROPOSAL NO. 3

NON-BINDING ADVISORY VOTE ON EXECUTIVE COMPENSATION

The third proposal to be considered at the Annual Meeting will be a non-binding advisory vote on executive compensation. Section 14A of the Exchange Act requires us to allow stockholders an opportunity to cast a non-binding advisory vote on executive compensation as disclosed in this Proxy Statement. The following proposal, commonly known as a “say on pay” proposal, gives stockholders the opportunity to approve, reject or abstain from voting with respect to our fiscal 2015 executive compensation programs and policies and the compensation paid to our “named executive officers” listed in the Summary Compensation Table above.

“RESOLVED, that the compensation paid to our named executive officers, as disclosed pursuant to the SEC’s rules and regulations, including the Compensation Discussion and Analysis, the compensation tables and narrative discussion is, hereby approved on an advisory basis.”

As discussed in the “Compensation Discussion and Analysis” section of this Proxy Statement, the primary objectives of our executive compensation program are to attract and retain a skilled executive team to manage, lead and direct our personnel and capital to obtain the best possible economic results. The compensation of our executive officers reflects the success of our management team in attaining certain operational goals which leads to the success of the company and serves the best interests of our stockholders.

This proposal allows our stockholders to express their opinions regarding the decisions of the Compensation Committee on the prior year’s annual compensation to the named executive officers. Your non-binding advisory vote will serve as an additional tool to guide the Board and the Compensation Committee in continuing to improve the alignment of our executive compensation programs with our interests and the interests of our stockholders, and is consistent with our commitment to high standards of corporate governance.

Vote Required

Advisory approval of this say on pay proposal requires the affirmative vote of holders of a majority of all the votes cast in person or by proxy at the Annual Meeting. Abstentions will not be counted as votes cast for the say on pay proposal and do not represent votes cast for or against the advisory approval of the proposal. Brokers are not empowered to vote on the say on pay proposal without instruction from the beneficial owner of the shares and thus broker non-votes likely will result. Since broker non-votes are not considered votes cast on the say on pay proposal, they will not be counted in determining whether the say on pay proposal is approved. Because the vote on this proposal is non-binding and advisory in nature, it will not affect any compensation already paid or awarded to any named executive officer and will not be binding on or overrule any decisions by the Board; it will not create or imply any additional fiduciary duty on the part of the Board; and it will not restrict or limit the ability of stockholders to make proposals for inclusion in proxy materials related to executive compensation. To the extent there is any significant vote against our named executive officer compensation as disclosed in this Proxy Statement, the Compensation Committee will evaluate whether any actions are necessary to address the concerns of stockholders. The vote on this resolution is not intended to address any specific element of compensation; rather, the vote relates to the compensation of our named executive officers, as described in this Proxy Statement in accordance with the compensation disclosure rules of the SEC.

Board Recommendation

The Board unanimously recommends that you vote “FOR” the executive compensation of our named executive officers as disclosed in this Proxy Statement.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Exchange Act, requires our directors, executive officers and beneficial owners of more than 10% of our capital stock to file reports of ownership and changes of ownership with the SEC and the NYSE. Based solely on our review of the copies of such reports received by us, and written representations from certain reporting persons, we believe, that, during the year ended December 31, 2015, our directors, executive officers and beneficial owners of more than 10% of our common stock have complied with all filing requirements applicable to them, except that Mr. Gary A. Shiffman failed to timely file one report disclosing the sale of 1,562 shares of common stock, Mr. Randall K. Rowe failed to timely file one report disclosing the sale of 100 shares of common stock, and Mr. Arthur A. Weiss failed to timely file one report disclosing the acquisition of 13,125 common OP units by a trust of which he is a trustee.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Security Ownership of Certain Beneficial Owners and Management

The following table sets forth, based upon information available to us, as of March 23, 2016, the shareholdings of: (a) each person known to us to be the beneficial owner of more than five percent (5%) of our common stock; (b) each of our directors; (c) each named executive officer listed in the Summary Compensation Table; and (d) all of our named executive officers and directors as a group:



Name and Address of Beneficial Owner	Amount and Nature of Beneficial Ownership		Percent of Outstanding Shares⁽¹⁾
Gary A. Shiffman 27777 Franklin Road Suite 200 Southfield, Michigan 48034	2,338,336	(2)	3.96	%
John B. McLaren 27777 Franklin Road Suite 200 Southfield, Michigan 48034	145,616		*
Karen J. Dearing 27777 Franklin Road Suite 200 Southfield, Michigan 48034	126,989		*
Jonathan M. Colman 27777 Franklin Road Suite 200 Southfield, Michigan 48034	40,206		*
Stephanie W. Bergeron 27777 Franklin Road Suite 200 Southfield, Michigan 48034	23,500	(3)	*
Brian M. Hermelin 27777 Franklin Road Suite 200 Southfield, Michigan 48034	6,600		*
Ronald A. Klein 27777 Franklin Road Suite 2500 Southfield, Michigan 48034	6,600		*
Paul D. Lapides 27777 Franklin Road Suite 200 Southfield, Michigan 48034	21,678	(4)	*
Clunet R. Lewis 27777 Franklin Road Suite 200 Southfield, Michigan 48034	63,776		*
Ronald L. Piasecki 27777 Franklin Road Suite 200 Southfield, Michigan 48034	55,375	(5)	*
Arthur A. Weiss 27777 Franklin Road Suite 200 Southfield, Michigan 48034	773,743	(6)	1.32	%
FMR LLC, Abigail P. Johnson⁽⁷⁾ 245 Summer Street Boston, MA 02210	8,743,064		14.94	%
Cohen & Steers, Inc., Cohen & Steers Capital Management, Inc. and Cohen & Steers UK Limited ⁽⁸⁾ 280 Park Ave., 10th Floor New York, NY 10017	7,604,048		12.99	%
The Vanguard Group, Inc. ⁽⁹⁾ 100 Vanguard Blvd. Malvern, PA 19355	7,418,742		12.67	%
BlackRock, Inc. ⁽¹⁰⁾ 55 East 52nd Street New York, NY 10022	4,291,263		7.33	%
Vanguard Specialized Funds - Vanguard REIT Index Fund ⁽¹¹⁾ 100 Vanguard Blvd. Malvern, PA 19355	3,744,387		6.39	%
All executive officers and directors as a group (11 persons)⁽¹²⁾	3,068,721		5.14	%

* Less than one percent (1%) of the outstanding shares.

(1)

In accordance with SEC regulations, the percentage calculations are based on 58,538,863 shares of common stock issued and outstanding as of March 23, 2016, plus shares of common stock which may be issued within 60 days of March 23, 2016, to each individual or group listed upon the exercise, conversion or exchange of options, common OP units issued by Sun Communities Operating Limited Partnership (“SCOLP”), and Aspen preferred OP units issued by SCOLP. As of March 23, 2016, (a) each common OP unit was convertible into one share of common stock and (b) each Aspen preferred OP unit was convertible into 0.39628 shares of common stock.


(2)	Includes: (a) 394,141 Common OP units convertible into 394,141 shares of common stock; (b) 453,841 shares of common stock owned by certain limited liability companies of which Mr. Shiffman is a member and a manager, and (c) 141,794 Common OP units convertible into 141,794 shares of common stock owned by certain limited liability companies of which Mr. Shiffman is a member and a manager.


(3)	Includes 7,500 shares of common stock which may be acquired pursuant to options that are exercisable within 60 days of March 23, 2016.


(4)	Includes 8,000 shares of common stock which may be acquired pursuant to options that are exercisable within 60 days of March 23, 2016.


(5)	Includes: (a) 17,437 common OP units convertible into 17,437 shares of common stock, and (b) 139,735 Aspen preferred OP units convertible into 0.39628 shares of common stock as of March 23, 2016.

(6)

Includes: (a) 10,748 shares of common stock owned by a limited liability company of which Mr. Weiss is a member and a manager, (b) 16,938 common OP units convertible into 16,938 shares of common stock, (c) 453,841 shares of common stock owned by certain limited liability companies of which Mr. Weiss is a manager (the “Managed LLCs”), (d) 141,794 Common OP units convertible into 141,794 shares of common stock owned by a Managed LLC, (e) 86,810 shares of common stock and 40,287 common OP Units convertible into 40,287 shares of common stock held by the Gary A. Shiffman 2012 Irrevocable Family Trust, of which Mr. Weiss is the trustee, and (e) 13,125 common OP units convertible into 13,125 shares of common stock held by the Lois T. Shiffman 2015 Charitable Remainder Annuity Trust, of which Mr. Weiss is the trustee. Mr. Weiss does not have a pecuniary interest in the Gary A. Shiffman 2012 Irrevocable Family Trust, the Lois T. Shiffman 2015 Charitable Remainder Annuity Trust, or any of the Managed LLCs above and, accordingly, Mr. Weiss disclaims beneficial ownership of the 540,651 shares of common stock and the 195,206 common OP units held by such entities.


(7)	According to the Schedule 13G/A for the year ended December 31, 2015, and filed with the SEC on February 12, 2016, each of FMR LLC, in its capacity as a parent holding company or control person and Abigail P. Johnson, a Director, the Vice Chairman, the Chief Executive Officer and the President of FMR LLC, beneficially own 8,743,064 shares of our common stock.


(8)	According to the Schedule 13G/A for the year ended December 31, 2015, and filed with the SEC on February 16, 2016, Cohen & Steers, Inc., Cohen & Steers Capital Management, Inc., and Cohen & Steers UK Limited, in their capacity as investment advisor and parent holding company or control person, beneficially own 7,604,048 shares of our common stock in the aggregate.


(9)	According to the Schedule 13G/A for the year ended December 31, 2015, and filed with the SEC on February 10, 2016, The Vanguard Group, Inc., in its capacity as an investment advisor, beneficially owns 7,418,742 shares of our common stock.


(10)	According to the Schedule 13G/A for the year ended December 31, 2015, and filed with the SEC on January 27, 2016, BlackRock, Inc., in its capacity as a parent holding company or control person, beneficially owns 4,291,263 shares of our common stock.


(11)	According to the Schedule 13G/A for the year ended December 31, 2015, and filed with the SEC on February 9, 2015, Vanguard Specialized Funds- Vanguard REIT Index Fund, in its capacity as an investment company, beneficially owns 3,744,387 shares of our common stock.


(12)	Includes (a) 671,320 common OP units convertible into 671,320 shares of common stock, (b) 139,735 Aspen preferred OP units convertible into 0.39628 shares of common stock, and (e) 18,500 shares of common stock which may be acquired pursuant to options exercisable within 60 days of March 23, 2015.

SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS

The following table reflects information about the securities authorized for issuance under our equity compensation plans as of December 31, 2015.



	Number of securities to be issued upon exercise of outstanding options, warrants and rights	Weighted-average exercise price of outstanding options, warrants and rights		Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column a)
Plan Category	(a)	(b)		(c)
Equity compensation plans approved by stockholders	24,500	$	29.11	1,799,874
Equity compensation plans not approved by stockholders	—	—		—
Total	24,500	$	29.11	1,799,874

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE

Relationship with Equity Affiliates

We have entered into the following transactions with Origen:

•

Investment in Origen. We own approximately 19.3% of the outstanding shares of Origen common stock and Shiffman Origen LLC (which is owned by Gary A. Shiffman (our Chairman and Chief Executive Officer), and members of Mr. Shiffman’s family and related trusts) owns approximately 3.9% of the outstanding shares of Origen common stock. Gary A. Shiffman was a member of the Board of Directors of Origen until February 2016, and one of our directors, Arthur A. Weiss, was the trustee of a Shiffman family trust that beneficially owned Origen common stock. Ronald A. Klein, one of our directors, is the Chief Executive Officer and a director of Origen. Mr. Klein owns approximately 1.8% of the outstanding shares of Origen common stock. Mr. Shiffman, Mr. Weiss and Brian M. Hermelin, another of our directors, each beneficially owns less than 1% of the outstanding shares of Origen common stock. We accounted for our investment in Origen using the equity method of accounting which we have since suspended. As of December 31, 2015 the carrying value of our investment in Origen was zero.


•	Board Membership and Officer. Gary A. Shiffman, our Chairman and Chief Executive Officer was a board member of Origen until February 2016. Ronald A. Klein, one of our directors, is a director and the Chief Executive Officer of Origen.

Lease of Principal Executive Offices

Gary A. Shiffman, together with certain of his family members, indirectly owns a 16% equity interest in American Center LLC, the entity from which we lease office space for our principal executive offices. Each of Arthur A. Weiss and Ronald A. Klein owns a less than one percent indirect interest in American Center LLC. Under this lease agreement, we lease approximately 62,900 rentable square feet. The term of the lease is until October 31, 2026, and the base rent is $16.95 per square foot (gross) until October 31, 2016, with graduated rental increases thereafter. Each of Mr. Shiffman, Mr. Weiss and Mr. Klein may have a conflict of interest with respect to his obligations as our officer and/or director and his ownership interest in American Center LLC.

Legal Counsel

During 2015, Jaffe, Raitt, Heuer, & Weiss, Professional Corporation acted as our general counsel and represented us in various matters. Arthur A. Weiss is the Chairman of the Board of Directors and a shareholder of such firm. We incurred legal fees and expenses owed to Jaffe, Raitt, Heuer, & Weiss of approximately $4.8 million in the year ended December 31, 2015.

Tax Consequences Upon Sale of Properties

Gary A. Shiffman holds limited partnership interests in the Operating Partnership which were received in connection with the contribution of properties from partnerships previously affiliated with him. Prior to any redemption of these limited partnership interests for our common stock, Mr. Shiffman will have tax consequences different from those on us and our public stockholders upon the sale of any of these partnerships. Therefore, we and Mr. Shiffman may have different objectives regarding the appropriate pricing and timing of any sale of those properties.

ALL Acquisition

In the fourth quarter of 2014 and the first quarter of 2015, we purchased a portfolio of 59 MH communities from the Green Courte parties for aggregate consideration of $1.3 billion. In January 2015, we sold 150,000 shares of our common stock and 200,000 Series A-4 preferred OP units for an aggregate purchase price of $12.5 million to one of the Green Courte parties. Randall K. Rowe and James R. Goldman are beneficial owners and directors and officers of certain of the Green Courte parties. In January 2015, Messrs. Rowe and Goldman were appointed to serve on our Board of Directors. In June 2015, we issued 25,664 shares of common stock and 34,219 shares of Series A-4 Preferred Stock to one of the Green Courte parties in connection with the ALL acquisition. In August 2015, we repurchased from certain of the Green Courte entities and their affiliates an aggregate of 4,066,586 shares of Series A-4 Preferred Stock at a purchase price of $31.08 per share. We repurchased 156,625 shares of Series A-4 Preferred Stock from Mr. Rowe and his affiliates and 22,577 shares of Series A-4 Preferred Stock from Mr. Goldman. On March 14, 2016, Messrs. Rowe and Goldman resigned as members of the Board of Directors.

Policies and Procedures for Approval of Related Party Transactions

None of our executive officers or directors (or any family member or affiliate of such executive officer or director) may enter into any transaction or arrangement with us that reasonably could be expected to give rise to a conflict of interest without the prior approval of the NCG Committee. Any such transaction or arrangement must be promptly reported to the NCG Committee or the full Board. Any such disclosure provided by an executive officer or director is reviewed by the NCG Committee and approved or disapproved. In determining whether to approve such a transaction or arrangement, the NCG Committee takes into account, among other factors, whether the transaction was on terms no less favorable to us than terms generally available to third parties and the extent of the executive officer’s or director’s involvement in such transaction or arrangement.

The current policy was adopted and approved in 2004. All related party transactions disclosed above were approved by either the NCG Committee or the full Board.

SHAREHOLDER PROPOSALS FOR THE 2016 ANNUAL MEETING

In order to be considered for inclusion in our proxy statement and on the proxy card that will be solicited by the Board in connection with the 2017 annual meeting of stockholders, shareholder proposals intended to be presented at the 2017 annual meeting of stockholders must be received by our Secretary no later than December 1, 2016.

In addition, if a shareholder desires to bring business before an annual meeting of stockholders, which is not the subject of a proposal for inclusion in our proxy materials, the shareholder must follow the advance notice procedures outlined in our bylaws. These advance notice procedures are the same as the advance notice procedures for shareholder nominated directors, which are described under "Board of Directors and Corporate Governance - Consideration of Director Nominees - Consideration of Shareholder Nominated Directors" above. Our bylaws provide that: (i) with respect to an annual meeting of stockholders, nominations of individuals for election to the Board of Directors and the proposal of other business to be considered by the stockholders may be made only (a) pursuant to our notice of the meeting, (b) by or at the direction of the Board of Directors, or (c) by any shareholder who was a shareholder of record at the time of giving of notice provided for in the bylaws and at the time of the annual meeting, is entitled to vote at the meeting and has complied with the advance notice procedures set forth in the bylaws; and (ii) with respect to special meetings of stockholders, only the business specified in our notice of meeting may be brought before the meeting of stockholders, and nominations of persons for election to the Board of Directors may be made (a) pursuant to our notice of meeting, (b) by or at the direction of the Board of Directors, or (c) provided that the Board of Directors has determined that directors shall be elected at such special meeting, by any shareholder who is a shareholder of record both at the time of giving of notice provided for in the bylaws and at the time of the special meeting, is entitled to vote at the meeting and has complied with the advance notice provisions set forth in the bylaws.

OTHER MATTERS

The Board knows of no other matters to be presented for shareholder action at the Annual Meeting. If any other matters are properly presented at the Annual Meeting for action, it is intended that the persons named in the accompanying proxy and acting thereunder will vote in accordance with their best judgment on such matters.



	By Order of the Board of Directors
Dated: March 30, 2016	/s/ Karen J. Dearing
	Secretary