Contract

EXHIBIT 10.1 EMPLOYMENT AGREEMENT THIS EMPLOYMENT AGREEMENT (this “Agreement”) is entered into as ofFebruary 23, 2005, but effective as of January 1, 2005, by and between SUNCOMMUNITIES, INC., a Maryland corporation (the “Company”), and GARY A. SHIFFMAN(the “Executive”). W I T N E S S E T H: WHEREAS, the Company desires to continue the employment of the Executive,and the Executive desires to continue to be employed by the Company, on theterms and subject to the conditions set forth below. NOW, THEREFORE, in consideration of the mutual promises contained in thisAgreement, the parties agree as follows: 1. Employment. (a) The Company agrees to employ the Executive and the Executiveaccepts the employment, on the terms and subject to the conditions set forthbelow. During the term of employment hereunder, the Executive shall serve asChief Executive Officer and President of the Company, and shall do and performdiligently all such services, acts and things as are customarily done andperformed by such officers of companies in similar business and in size to theCompany, together with such other duties as may reasonably be requested fromtime to time by the Board of Directors of the Company (the “Board”), whichduties shall be consistent with the Executive’s positions as set forth above. (b) For service as an officer and employee of the Company, theExecutive shall be entitled to the full protection of the applicableindemnification provisions of the Articles of Incorporation and Bylaws of theCompany, as they may be amended from time to time. 2. Term of Employment. (a) Subject to the provisions for termination provided below, theterm of the Executive’s employment under this Agreement shall commence onJanuary 1, 2005 and shall continue thereafter for a period of seven (7) yearsending on December 31, 2011; provided, however, that the term of this Agreementshall be automatically extended for successive terms of one (1) year eachthereafter, unless either party notifies the other party in writing of itsdesire to terminate this Agreement at least thirty (30) days before the end ofthe term then in effect. (b) Executive acknowledges and agrees that Executive is an”at-will” employee and that Executive’s employment may be terminated, with orwithout cause, at the option of Executive or the Company. 3. Devotion to the Company’s Business. The Executive shall devote his best efforts, knowledge, skill, andhis entire productive time, ability and attention to the business of the Companyduring the term of this Agreement; provided, however, the Executive’sexpenditure of reasonable amounts of time to various charitable and othercommunity activities, or to the Executive’s own personal investments andprojects, shall not be deemed a breach of this Agreement so long as the amountof time so devoted does not materially impair, detract or adversely affect theperformance of Executive’s duties under this Agreement. 4. Compensation. (a) During the term of this Agreement, the Company shall pay orprovide, as the case may be, to the Executive the compensation and otherbenefits and rights set forth in paragraphs 4, 5 and 6 of this Agreement. (b) Base Compensation. As compensation for the services to beperformed hereunder, the Company shall pay to the Executive, during hisemployment hereunder, an annual base salary (the “Base Salary”) of Five HundredForty Five Thousand Dollars ($545,000.00) per year, payable in accordance withthe Company’s usual pay practices (including tax withholding), but in no eventless frequently than monthly. (c) COLA Adjustment. At the beginning of each calendar year ofthis Agreement, commencing with January 1, 2006, and on such date each yearthereafter (the “Adjustment Date”), the Base Salary shall be increased inaccordance with the increase, if any, in the cost of living during the precedingone year as determined by the percentage increase in the Consumers PriceIndex-All Urban Consumers (U.S. City Average/all items) published by the Bureauof Labor Statistics of the U.S. Department of Labor (the “Index”). The averageIndex for calendar years 2003 and 2004 shall be considered the “Base.” The BaseSalary for the calendar year following each Adjustment Date shall be the BaseSalary specified in Paragraph 4(b) increased by the percentage increase, if any,in the Index for the calendar year immediately preceding the Adjustment Dateover the Base. In the event the Index shall cease to be published or the formulaunderlying the Index shall change materially from the formula used for the Indexas of the date hereof, then there shall be substituted for the Index such otherindex of similar nature as is then generally recognized and accepted. In noevent shall the Base Salary during each adjusted calendar year be less than thatcharged during the preceding year of this Agreement. (d) Incentive Compensation. The Company shall pay to the Executiveincentive compensation (“Incentive Compensation”) in an amount up to 100% of theBase Salary for each calendar year that the Executive is employed under thisAgreement (“Bonus Year”), which Incentive Compensation shall be determined andcalculated with respect to each Bonus Year as follows: (i) if, in the solediscretion of the Compensation Committee of the Board, the Executive fulfillshis individual goals and objectives for such Bonus Year as approved by theCompensation Committee, the Executive shall receive Incentive Compensation inthe amount of 25% of the then current Base Salary; (ii) if, in the solediscretion of the Compensation Committee, the Company achieves the FFO andfinancial budget objectives approved by the Company’s Board of Directors at thebeginning of such Bonus Year, the Executive shall receive Incentive Compensationin the amount of 50% of the then current Base Salary; and (iii) the remaining25% of the Incentive Compensation may be awarded to the Executive in the solediscretion of the Compensation Committee for extraordinary performance duringsuch Bonus Year. The determination of the Incentive Compensation shall be madeby the Company no later than March 1 for the preceding Bonus Year by referenceto the Company’s audited financial statements. Unless otherwise specified by theBoard, one-twelfth of such Incentive Compensation shall be paid monthly duringthe year following such Bonus Year; provided, however, in the event that theExecutive voluntarily terminates his employment under this Agreement pursuant toparagraph 7(a)(i) hereof or the Executive’s employment under this Agreement isterminated with “cause” pursuant to paragraph 7(a)(ii) hereof, the Executiveshall not be entitled to any unpaid Incentive Compensation. (e) Disability. During any period that the Executive fails toperform his duties hereunder as a result of incapacity due to physical or mentalillness (the “Disability Period”), the Executive shall continue to receive hisfull Base Salary, Incentive Compensation and other benefits at the rate ineffect for such period until his employment is terminated by the Companypursuant to paragraph 7(a)(iii) hereof; provided, however, that payments so madeto the 2Executive during the Disability Period shall be reduced by the sum of theamounts, if any, which were paid to the Executive at or prior to the time of anysuch payment under disability benefit plans of the Company. 5. Benefits. (a) Insurance. The Company shall provide to the Executive life,medical and hospitalization insurance for himself, his spouse and eligiblefamily members as may be determined by the Board to be consistent with theCompany’s standard policies. (b) Benefit Plans. The Executive, at his election, mayparticipate, during his employment hereunder, in all retirement plans, 401(K)plans and other benefit plans of the Company generally available from time totime to other executive employees of the Company and for which the Executivequalifies under the terms of the plans (and nothing in this Agreement shall orshall be deemed to in any way affect the Executive’s right and benefits underany such plan except as expressly provided herein). The Executive shall also beentitled to participate in any equity, stock option or other employee benefitplan that is generally available to senior executives of the Company. TheExecutive’s participation in and benefits under any such plan shall be on theterms and subject to the conditions specified in the governing document of theparticular plan. Nothing contained in this Agreement shall be construed tocreate any obligation on the part of the Company to establish any such plan orto maintain the effectiveness of any such plan which may be in effect from timeto time. (c) Annual Vacation. The Executive shall be entitled to six (6)weeks vacation time each year, without loss of compensation. The Executive shallnot take more than fourteen (14) consecutive calendar days of vacation withoutthe prior approval of the Board. In the event that the Executive is unable forany reason to take the total amount of vacation time authorized herein duringany year, he may accrue such unused time and add it to the vacation time for anyfollowing year; provided, however, that no more than ten (10) business days ofaccrued vacation time may be carried over at any time (the “Carry-Over Limit”).In the event that the Executive has accrued and unused vacation time in excessof the Carry-Over Limit (the “Excess Vacation Time”), the Excess Vacation Timeshall be paid to the Executive within ten (10) days of the end of the year inwhich the Excess Vacation Time was earned based on the Base Salary then ineffect. Upon any termination of this Agreement for any reason whatsoever,accrued and unused vacation time (not to exceed thirty (30) business days) shallbe paid to the Executive within ten (10) days of such termination based on theBase Salary in effect on the date of such termination. For purposes of thisAgreement, one-twelfth (1/12) of the applicable annual vacation time shallaccrue on the last day of each calendar month that the Executive is employedunder this Agreement. 6. Reimbursement of Business Expenses. The Company shall reimburse the Executive or provide him with anexpense allowance during the term of this Agreement for travel, entertainmentand other expenses reasonably and necessarily incurred by the Executive inconnection with the Company’s business. The Executive shall furnish suchdocumentation with respect to reimbursement to be paid hereunder as the Companyshall reasonably request. 7. Termination of Employment. (a) The Executive’s employment under this Agreement may beterminated: (i) by either the Executive or the Company at any time forany reason whatsoever or for no reason upon not less than sixty (60) dayswritten 3notice; (ii) by the Company at any time for “cause” as defined below,without prior notice; (iii) by the Company upon the Executive’s “permanentdisability” (as defined below) upon not less than thirty (30) days writtennotice; and (iv) upon the Executive’s death. (b) For purposes hereof, for “cause” shall mean: (i) a materialbreach of any provision of this Agreement by Executive (if the breach iscurable, it will constitute cause only if it continues uncured for a period oftwenty (20) days after Executive’s receipt of written notice of such breach fromthe Company); (ii) Executive’s failure or refusal, in any material manner, toperform all lawful services required of him pursuant to this Agreement, whichfailure or refusal continues for more than twenty (20) days after Executive’sreceipt of written notice of such deficiency; (iii) Executive’s commission offraud, embezzlement or theft, or a crime constituting moral turpitude, in anycase, whether or not involving Company, that in the reasonable good faithjudgment of the Company, renders Executive’s continued employment harmful to theCompany; (iv) Executive’s misappropriation of Company assets or property,including, without limitation, obtaining reimbursement through fraudulentvouchers or expense reports; or (v) Executive’s conviction or the entry of aplea of guilty or no contest by Executive with respect to any felony or othercrime that, in the reasonable good faith judgment of the Company, adverselyaffects the Company or its reputation or business. (c) For purposes hereof, the Executive’s “permanent disability”shall be deemed to have occurred if Executive has become unable to perform theessential functions and responsibilities of his position with reasonableaccommodation, as required under the Americans with Disabilities Act, as thesame has and may be amended (the “ADA”), by virtue of a disability (as definedunder the ADA). 8. Compensation Upon Termination or Disability. (a) In the event that the Company terminates the Executive’semployment under this Agreement without “cause” pursuant to paragraph 7(a)(i),(i) the Executive shall be entitled to any accrued and unpaid Base Salary,Incentive Compensation and benefits through the effective date of suchtermination, prorated for the number of days actually employed in the thencurrent calendar year, which shall be paid by the Company to the Executivewithin thirty (30) days of the effective date of such termination, and (ii)subject to the Executive’s execution of a general release of claims in a formsatisfactory to the Company, the Company shall pay the Executive monthly anamount equal to one-twelfth (1/12) of the Base Salary (at the rate that wouldotherwise have been payable under this Agreement) for a period of up to eighteen(18) months if the Executive fully complies with paragraph 12 of this Agreement(the “Severance Payment”). Notwithstanding the foregoing, the Company, in itssole discretion, may elect to make the Severance Payment to the Executive in onelump sum due within thirty (30) days of the Executive’s termination ofemployment and the Severance Payment shall not be due Executive if Executive isentitled to Change in Control Benefits (as defined in paragraph 10 below). Inthe event that the Company terminates the Executive’s employment under thisAgreement without “cause” pursuant to paragraph 7(a)(i) hereof, the Executive,in his sole and absolute discretion, may decline the Severance Payment bywritten notice to the Company prior to the payment of any portion of theSeverance Payment, in which event the Company shall have no obligation to makethe Severance Payment and Executive shall be relieved of the restrictionsimposed by subparagraphs (ii) and (v) of paragraph 12(a) of this Agreement.Notwithstanding anything in this Agreement to the contrary, in the event thatthe Executive declines the Severance Payment in 4accordance with this paragraph 8(a), subparagraphs (ii) and (v) of paragraph12(a) of this Agreement shall become null and void and of no further force andeffect. (b) In the event of termination of the Executive’s employmentunder this Agreement for “cause” or if the Executive voluntarily terminates hisemployment hereunder, the Executive shall be entitled to no further compensationor other benefits under this Agreement, except only as to any accrued and unpaidBase Salary and benefits through the effective date of such termination,prorated for the number of days actually employed in the then current calendaryear. (c) In the event of termination of the Executive’s employmentunder this Agreement due to the Executive’s permanent disability or death, (i)the Executive (or his successors and assigns in the event of his death) shall beentitled to any accrued and unpaid Base Salary, Incentive Compensation andbenefits through the effective date of such termination, prorated for the numberof days actually employed in the then current calendar year, which shall be paidby the Company to the Executive or his successors and assigns, as appropriate,within thirty (30) days of the effective date of such termination, and (ii) theCompany shall pay the Executive monthly an amount equal to one-twelfth (1/12) ofthe Base Salary (at the rate that would otherwise have been payable under thisAgreement) for a period of up to twenty four (24) months if the Executive fullycomplies with paragraph 12 of this Agreement (the “Disability Payment”);provided, however, that payments so made to the Executive shall be reduced bythe sum of the amounts, if any, which: (i) were paid to the Executive at orprior to the time of any such payment under disability benefit plans of theCompany, and (ii) did not previously reduce the Base Salary, IncentiveCompensation and other benefits due the Executive under paragraph 4(e) of thisAgreement. Notwithstanding the foregoing, the Company, in its sole discretion,may elect to make the Disability Payment to the Executive in one lump sum duewithin thirty (30) days of the Executive’s termination of employment. In theevent of termination of the Executive’s employment under this Agreement due tothe Executive’s permanent disability, the Executive, in his sole and absolutediscretion, may decline the Disability Payment by written notice to the Companyprior to the payment of any portion of the Disability Payment, in which eventthe Company shall have no obligation to make the Disability Payment andExecutive shall be relieved of the restrictions imposed by subparagraphs (ii)and (v) of paragraph 12(a) of this Agreement. Notwithstanding anything in thisAgreement to the contrary, in the event that the Executive declines theDisability Payment in accordance with this paragraph 8(c), subparagraphs (ii)and (v) of paragraph 12(a) of this Agreement shall become null and void and ofno further force and effect. (d) Notwithstanding anything to the contrary in this paragraph 8,the Company’s obligation to pay, and the Executive’s right to receive, anycompensation under this paragraph 8, including, without limitation, theSeverance Payment and the Disability Payment, shall terminate upon theExecutive’s breach of any provision of paragraph 12 hereof. In addition, theExecutive shall promptly forfeit any compensation received from the Companyunder this paragraph 8, including, without limitation, the Severance Payment andthe Disability Payment, upon the Executive’s breach of any provision ofparagraph 12 hereof. 9. Resignation of Executive. Upon any termination of the Executive’semployment under this Agreement, the Executive shall be deemed to have resignedfrom any and all offices and directorships held by the Executive in the Companyand/or any of the Affiliates (as defined below). 10. Effect of Change in Control. (a) The Company or its successor shall pay the Executive the Change inControl Benefits (as defined below) if there has been a Change in Control (asdefined below) and any of the following events has occurred: (i) the Executive’semployment under this Agreement is 5terminated in accordance with paragraph 7(a)(i) at any time within twenty-four(24) months after the Change in Control, (ii) upon a Change in Control underparagraph 10(g)(ii), the Company or its successor does not expressly assume allof the terms and conditions of this Agreement, or (iii) there are less thantwenty-four (24) months remaining under the term of this Agreement (withoutregard to the last clause of paragraph 2 hereof). (b) For purposes of this Agreement, the “Change in Control Benefits”shall mean the following benefits: (i) A cash payment equal to two and 99/100 (2.99) times the Base Salary in effect on the date of such Change in Control, payable within sixty (60) days of the Change in Control or, in the event that the cessation of Executive’s employment hereunder triggers the Change in Control Benefits, payable within thirty (30) days after such cessation of employment; and (ii) Continued receipt of all compensation and benefits set forth in paragraphs 5(a) and 5(b) of this Agreement, until the earlier of (i) one year following the Change in Control (subject to the Executive’s COBRA rights) or (ii) the commencement of comparable coverage from another employer. The provision of any one benefit by another employer shall not preclude the Executive from continuing participation in Company benefit programs provided under this paragraph 10(b)(ii) that are not provided by the subsequent employer. The Executive shall promptly notify the Company upon receipt of benefits from a new employer comparable to any benefit provided under this paragraph 10(b)(ii). (c) Notwithstanding anything to the contrary herein, (i) in the eventthat the Executive’s employment under this Agreement is terminated in accordancewith paragraph 7(a)(i) within sixty (60) days prior to a Change in Control, suchtermination shall be deemed to have been made in connection with the Change inControl and the Executive shall be entitled to the Change in Control Benefits;and (ii) in the event that the Executive’s employment under this Agreement isterminated by the Company or its successor in accordance with paragraph 7(a)(i)after a Change in Control and the Executive was not already entitled to theChange in Control Benefits under paragraph 10(a)(iii), the Company or itssuccessor shall pay the Executive an amount equal to the difference between theChange in Control Benefits and the amounts actually paid to the Executive underthis Agreement after the Change in Control but prior to his termination. (d) The Change in Control Benefits are in addition to the accelerationof the vesting of, and the extension of the time for exercise of, stock optionsas a result of the Change in Control. (e) Notwithstanding anything to the contrary contained herein, in theevent it shall be determined that any compensation payment or distribution bythe Company to or for the benefit of the Executive would be subject to theexcise tax imposed by Section 4999 of the Internal Revenue Code of 1986, asamended (the “Code”), the Change in Control Benefits will be reduced to theextent necessary so that no excise tax will be imposed, but only if to do sowould result in the Executive retaining a larger amount, on an after-tax basis,taking into account the excise and income taxes imposed on all payments made tothe Executive hereunder. (f) The Company shall pay to the Executive all reasonable legal fees andexpenses incurred by the Executive in obtaining or enforcing any right orbenefit provided by this paragraph 10, except in cases involving frivolous orbad faith arbitration initiated by the Executive. 6 (g) For purposes of this Agreement, a “Change in Control” shall bedeemed to have occurred: (i) if any person or group of persons acting together (other than (a) the Company or any person (I) who as of the date hereof was a director or officer of the Company, or (II) whose shares of Common Stock of the Company are treated as “beneficially owned” by any such director or officer, or (b) any institutional investor (filing reports under Section 13(g) rather than 13(d) of the Securities Exchange Act of 1934, as amended, including any employee benefit plan or employee benefit trust sponsored by the Company)), becomes a beneficial owner, directly or indirectly, of securities of the Company representing fifty percent (50%) or more of either the then-outstanding Common Stock of the Company or the combined voting power of the Company’s then-outstanding voting securities (other than as a result of an acquisition of securities directly from the Company); (ii) if the Company sells all or substantially all of the Company’s assets to any person (other than a wholly-owned subsidiary of the Company formed for the purpose of changing the Company’s corporate domicile); (iii) if the Company merges or consolidates with another person as a result of which the shareholders of the Company immediately prior to such merger or consolidation would beneficially own (directly or indirectly), immediately after such merger or consolidation, securities of the surviving entity representing less than fifty percent (50%) of the then outstanding voting securities of the surviving entity; or (iv) if the new directors appointed to the Board during any twelve-month period constitute a majority of the members of the Board, unless (I) the directors who were in office for at least twelve (12) months prior to such twelve-month period (the “Incumbent Directors”) plus (II) the new directors who were recommended or appointed by a majority of the Incumbent Directors constitutes a majority of the members of the Board. For purposes of this paragraph 10(g), a “person” includes an individual, apartnership, a corporation, an association, an unincorporated organization, atrust or any other entity. 11. Stock Awards. In the event of termination of the Executive’semployment under this Agreement for “cause”, all stock options or other stockbased compensation awarded to the Executive shall lapse and be of no furtherforce or effect whatsoever in accordance with the Company’s equity incentiveplans. In the event that the Company terminates the Executive’s employment underthis Agreement without “cause” or upon the death or permanent disability of theExecutive, all stock options and other stock based compensation awarded to theExecutive shall become fully vested and immediately exercisable, subject to therestrictions of Section 9.02 of the Company’s 1993 Stock Option Plan. Upon aChange in Control, all stock options or other stock based compensation awardedto the Executive shall become fully vested and immediately exercisable and maybe exercised by Employee at any time within one (1) year after the Change inControl. All Stock Option Agreements between the Company and the Executive shallbe amended to conform to the provisions of this paragraph 11. In the event of aninconsistency between this paragraph 11 and such Stock Option Agreements, thisparagraph 11 shall control. 12. Covenant Not To Compete and Confidentiality. (a) The Executive acknowledges the Company’s reliance on andexpectation of the Executive’s continued commitment to performance of his dutiesand responsibilities during the term of this Agreement. In light of suchreliance and expectation on the part of the Company, 7the Executive agrees that: (i) for a period commencing on the date of this Agreementand ending upon the termination of the Executive’s employment under thisAgreement for any reason, the Executive shall not, either directly orindirectly, engage in, or have an interest in or be associated with (whether asan officer, director, stockholder, partner, associate, employee, consultant,owner or otherwise) any corporation, firm or enterprise which is engaged in (A)the real estate business (the “Real Estate Business”), including, withoutlimitation, the development, ownership, leasing, sales, management or financingof single family or multi-family housing, condominiums, townhome communities orother form of housing, or (B) any business which is competitive with thebusiness then or at any time during the term of this Agreement conducted orproposed to be conducted by the Company, or any entity owned or controlled bythe Company or under common control with the Company (an “Affiliate”), anywherewithin the continental United States or Canada; provided, however, that theExecutive shall be permitted to make purely passive investments in the RealEstate Business; (ii) subject to paragraphs 8(a) and 8(c) of this Agreement,for a period of eighteen (18) months commencing upon the termination for anyreason of the Executive’s employment under this Agreement, the Executive shallnot, either directly or indirectly, engage in, or have an interest in or beassociated with (whether as an officer, director, stockholder, partner,associate, employee, consultant, owner or otherwise) any corporation, firm orenterprise which is engaged in any aspect of the manufactured housing communitybusiness or any other business which is competitive with the business then or atany time during the term of this Agreement conducted or proposed to be conductedby the Company or any Affiliate (the “Company Business”), anywhere within thecontinental United States or Canada; except that the Executive may invest in anypublicly held entity engaged in the Company Business, if his investment in suchentity does not exceed one percent (1%) in value of the issued and outstandingequity securities of such entity; (iii) the Executive will not at any time, for so long as anyConfidential Information (as defined below) shall remain confidential orotherwise remain wholly or partially protectable, either during the term of thisAgreement or thereafter, use or disclose, directly or indirectly, to any personoutside of the Company or any Affiliate any Confidential Information; (iv) promptly upon the termination of this Agreement for anyreason, the Executive (or in the event of the Executive’s death, his personalrepresentative) shall return to the Company any and all copies (whether preparedby or at the direction of the Company or Executive) of all records, drawings,materials, memoranda and other data constituting or pertaining to ConfidentialInformation; (v) subject to paragraphs 8(a) and 8(c) of this Agreement,for a period commencing on the date of this Agreement and ending upon theexpiration of eighteen (18) months from the termination of this Agreement forany reason, the Executive shall not, either directly or indirectly, divert, orby aid to others, do anything which would tend to divert, from the Company orany Affiliate any trade or business with any customer or supplier with whom theExecutive had any contact or association during the term of the Executive’semployment with the Company or with any party whose identity or potential as acustomer or supplier was confidential or learned by the Executive during hisemployment by the Company; and (vi) for a period commencing on the date of this Agreementand ending upon the expiration of eighteen (18) months from the termination ofthis Agreement for any reason, the Executive shall not, either directly orindirectly, call upon, compete for or solicit for employment any person withwhom the Executive was acquainted while in the Company’s employ. 8 As used in this Agreement, the term “Confidential Information” shall meanall business information of any nature and in any form which at the time ortimes concerned is not generally known to those persons engaged in businesssimilar to that conducted or contemplated by the Company or any Affiliate (otherthan by the act or acts of an employee not authorized by the Company to disclosesuch information) and which relates to any one or more of the aspects of thepresent or past business of the Company or any of the Affiliates or any of theirrespective predecessors, including, without limitation, financial information,business plans, prospects, opportunities which have been discussed or consideredby the management of the Company, and other trade secrets. (b) The Executive agrees and understands that the remedy at lawfor any breach by him of this paragraph 12 will be inadequate and that thedamages flowing from such breach are not readily susceptible to being measuredin monetary terms. Accordingly, it is acknowledged that, upon adequate proof ofthe Executive’s violation of any legally enforceable provision of this paragraph12, the Company shall be entitled to immediate injunctive relief and may obtaina temporary order restraining any threatened or further breach. Nothing in thisparagraph 12 shall be deemed to limit the Company’s remedies at law or in equityfor any breach by the Executive of any of the provisions of this paragraph 12which may be pursued or availed of by the Company. This paragraph 12 shallsurvive the termination of this Agreement. (c) Executive acknowledges and agrees that the covenants set forthabove are reasonable and valid in geographical and temporal scope and in allother respects. If any court determines that any of the covenants, or any partof any covenant, is invalid or unenforceable, the remainder of the covenantsshall not be affected and shall be given full effect, without regard to theinvalid portion. If any court determines that any of the covenants, or any partof any covenant, is unenforceable because of its duration or geographic scope,such court shall have the power to reduce the duration or scope, as the case maybe, and, enforce such provision in such reduced form. Executive and the Companyintend to and hereby confer jurisdiction to enforce the covenants upon thecourts of any jurisdiction within the geographical scope of such covenants. Ifthe courts of any one or more of such jurisdictions hold the covenants, or anypart of any covenant, unenforceable by reason of the breadth of such scope orotherwise, it is the intention of Executive and the Company that suchdetermination not bar or in any way affect the right of the Company to therelief provided above in the courts of any other jurisdiction within thegeographical scope of such covenants as to breaches of such covenants in suchother respective jurisdictions. For this purpose, such covenants as they relateto each jurisdiction shall be severable into diverse and independent covenants. 13. Arbitration. The parties agree that any and all disputes,controversies or claims of any nature whatsoever relating to, or arising out of,this Agreement or Executive’s employment, whether in contract, tort, orotherwise (including, without limitation, claims of wrongful termination ofemployment, claims under Title VII of the Civil Rights Act, the Fair LaborStandards Act, the Americans with Disabilities Act, the Age Discrimination inEmployment Act, or comparable state or federal laws, and any other laws dealingwith employees’ rights and remedies), shall be settled by mandatory arbitrationadministered by the American Arbitration Association under its National Rulesfor the Resolution of Employment Disputes (the “Rules”) and the followingprovisions: (A) a single arbitrator (the “Arbitrator”), mutually agreeable tothe Company and Executive, shall preside over the arbitration and shall make alldecisions with respect to the resolution of the dispute, controversy or claimbetween the parties; (B) in the event that the Company and Executive are unableto agree on an Arbitrator within fifteen (15) days after either party has filedfor arbitration in accordance with the Rules, they shall select a truly neutralarbitrator in accordance with the rules for the selection of neutralarbitrators, who shall be the “Arbitrator” for the purposes of this paragraph13; (C) the place of arbitration shall be Southfield, Michigan unless mutuallyagreed otherwise; (D) judgment may be entered on any 9award rendered by the Arbitrator in any federal or state court havingjurisdiction over the parties; (E) all fees and expenses of the Arbitrator shallbe shared equally between Company and Executive; (F) the decision of theArbitrator shall govern and shall be conclusive and binding upon the parties;(G) the parties shall be entitled to reasonable levels of discovery inaccordance with the Federal Rules of Civil Procedure or as permitted by theArbitrator, provided, however, that the time permitted for discovery shall notexceed eight (8) weeks and each party shall be limited to two (2) depositions;and (H) this provision shall be enforceable by specific performance and/orinjunctive relief, and shall constitute a basis for dismissal of any legalaction brought in violation of the duty to arbitrate. The parties herebyacknowledge that it is their intent to expedite the resolution of any dispute,controversy or claim hereunder and that the Arbitrator shall schedule the timingof discovery and of the hearing consistent with that intent. Notwithstandinganything to the contrary herein, nothing contained in this paragraph shall beconstrued to preclude Company from obtaining injunctive or other equitablerelief to secure specific performance or to otherwise prevent Executive’s breachof paragraph 12 of this Agreement. 14. Notice. Any notice, request, consent or other communication given ormade hereunder shall be given or made only in writing and (a) deliveredpersonally to the party to whom it is directed; (b) sent by first class mail orovernight express mail, postage and charges prepaid, addressed to the party towhom it is directed; or (c) telecopied to the party to whom it is directed, atthe following addresses or at such other addresses as the parties may hereafterindicate by written notice as provided herein: If to the Company: Sun Communities. Inc. 27777 Franklin Road, Suite 200 Southfield, Michigan 48034 Fax: (248) 208-2641 Attn: Chief Financial Officer If to the Executive: Gary A. Shiffman 6212 Bromley Court West Bloomfield, Michigan 48322 In all events, with a copy to: Jaffe, Raitt, Heuer & Weiss, Professional Corporation 27777 Franklin Road Suite 2500 Southfield, Michigan 48034 Attn: Arthur A. Weiss Any such notice, request, consent or other communication given or made:(i) in the manner indicated in clause (a) of this paragraph shall be deemed tobe given or made on the date on which it was delivered; (ii) in the mannerindicated in clause (b) of this paragraph shall be deemed to be given or made onthe third business day after the day in which it was deposited in a regularlymaintained receptacle for the deposit of the United States mail, or in the caseof overnight express mail, on the business day immediately following the day onwhich it was deposited in the regularly maintained receptacle for the deposit ofovernight express mail; and 10(iii) in the manner indicated in clause (c) of this paragraph shall be deemed tobe given or made when received by the telecopier owned or operated by therecipient thereof. 15. Cooperation in Future Matters. Executive hereby agrees that, for aperiod of 18 months following his termination of employment for any reasonwhatsoever, he shall cooperate with the Company’s reasonable requests relatingto matters that pertain to Executive’s employment by the Company, including,without limitation, providing information or limited consultation as to suchmatters, participating in legal proceedings, investigations or audits on behalfof the Company, or otherwise making himself reasonably available to the Companyfor other related purposes. Any such cooperation shall be performed at scheduledtimes taking into consideration Executive’s other commitments, and Executiveshall be compensated at a reasonable hourly or per diem rate to be agreed uponby the parties to the extent such cooperation is required on more than anoccasional and limited basis. Executive shall not be required to perform suchcooperation to the extent it conflicts with any requirements of exclusivity ofservices for another employer or otherwise, nor in any manner that in the goodfaith belief of Executive would conflict with his rights under or ability toenforce this Agreement. 16. Miscellaneous. (a) The provisions of this Agreement are severable and if any oneor more provisions may be determined to be illegal or otherwise unenforceable,in whole or in part, the remaining provisions and any partially unenforceableprovision to the extent enforceable in any jurisdiction nevertheless shall bebinding and enforceable. (b) Neither the Company nor the Executive may make any assignmentof this Agreement or any interest herein, by operation of law or otherwise,without the prior written consent of the other party; provided that the Companymay assign its rights under this Agreement without the consent of the Executivein the event that the Company shall effect a reorganization, consolidate with ormerge into another corporation, partnership, organization or other entity, ortransfer all or substantially all of its properties or assets to any othercorporation, partnership, organization or other entity. This Agreement shallinure to the benefit of and be binding upon the Company and the Executive, theirrespective successors, executors, administrators, heirs and permitted assigns. (c) The failure of either party to enforce any provision orprotections of this Agreement shall not in any way be construed as a waiver ofany such provision or provisions as to any future violations thereof, norprevent that party thereafter from enforcing each and every other provision ofthis Agreement. The rights granted the parties herein are cumulative and thewaiver of any single remedy shall not constitute a waiver of such party’s rightto assert all other legal remedies available to it under the circumstances. (d) This Agreement supersedes all agreements, understandings,representations, warranties, negotiations and discussions between the partieswith respect to the subject matter hereof, including, without limitation, thatcertain Employment Agreement, dated as of October 28, 1996, as amended. Nomodification, termination or waiver shall be valid unless in writing and signedby the party against whom the same is sought to be enforced. (e) This Agreement shall be governed by and construed according tothe laws of the State of Michigan. (f) Captions and paragraph headings used herein are forconvenience and are not a part of this Agreement and shall not be used inconstruing it. (g) This Agreement may be executed in two or more counterparts,each of 11which shall be deemed an original, but all of which together shall constituteone and the same instrument. (h) Except as otherwise provided in paragraph 10(f) above, eachparty shall pay his or its own fees and expenses, including, without limitation,legal fees, incurred in connection with the transactions contemplated by thisAgreement, including, without limitation, any fees incurred in connection withany arbitration arising out of the transactions contemplated by this Agreement. [Remainder of page intentionally left blank] 12 IN WITNESS WHEREOF, the parties have executed this Employment Agreement onthe date first written above. COMPANY: SUN COMMUNITIES, INC., a Maryland corporation By: /s/ Jeffrey P. Jorissen ________________________________________________ Jeffrey P. Jorissen, Chief Financial Officer and Executive Vice President EXECUTIVE: /s/ Gary A. Shiffman ____________________________________________________ GARY A. SHIFFMAN 13