DEF 14A
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umh2004proxy.txt
DEF14A
UNITED MOBILE HOMES, INC.
Juniper Business Plaza, 3499 Route 9 North, Suite 3-C
Freehold, New Jersey 07728
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
June 10, 2004
Notice is hereby given that the Annual Meeting of
Shareholders (Annual Meeting) of United Mobile Homes, Inc. (the
Company) will be held Thursday, June 10, 2004, at 4:00 p.m. at
the offices of the Company at Juniper Business Plaza, 3499 Route
9 North, Suite 3-C, Freehold, New Jersey, for the following
purposes:
1. To elect two Directors, the names of whom are set forth
in the accompanying Proxy Statement, to serve for a
three-year term;
2. To approve the selection by the Board of Directors of
the appointment of KPMG LLP as Independent Auditors
for the Company for the year ending December 31, 2004;
and
3. To transact such other business as may properly come
before the Annual Meeting and any adjournment thereof.
The books containing the minutes of the last Annual Meeting
of Shareholders, and the minutes of all meetings of the Directors
since the last Annual Meeting of Shareholders, will be presented
at the Annual Meeting for the inspection of the shareholders.
Only shareholders of record at the close of business on April 22,
2004 will be entitled to vote at the Annual Meeting and at any
adjournments thereof.
IF YOU ARE UNABLE TO BE PRESENT IN PERSON, PLEASE SIGN AND
DATE THE ENCLOSED PROXY WHICH IS BEING SOLICITED BY THE BOARD OF
DIRECTORS, AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Ernest V. Bencivenga
ERNEST V. BENCIVENGA
SECRETARY
May 3, 2004
UNITED MOBILE HOMES, INC.
Juniper Business Plaza
3499 Route 9 North, Suite 3-C
Freehold, New Jersey 07728
__________
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
JUNE 10, 2004
__________
SOLICITATION AND REVOCATION OF PROXIES
This Proxy Statement is furnished in connection with the
solicitation by the Board of Directors of United Mobile Homes,
Inc. (the Company) of proxies to be voted at the Annual Meeting
of Shareholders of the Company to be held on June 10, 2004, and
at any adjournments thereof, for the purposes listed in the
preceding Notice of Annual Meeting of Shareholders. This Proxy
Statement and the accompanying Proxy card are being distributed
on or about May 3, 2004 to shareholders of record on April 22,
2004.
A copy of the Annual Report, including financial statements,
is being mailed herewith.
Any shareholder giving the accompanying proxy has the power
to revoke it at any time before it is exercised at the Annual
Meeting by filing with the Secretary of the Company an instrument
revoking it, by delivering a duly executed proxy card bearing a
later date, or by appearing at the meeting and voting in person.
Shares represented by properly executed proxies will be voted as
specified thereon by the shareholder. Unless the shareholder
specifies otherwise, such proxies will be voted FOR the proposals
set forth in the Notice of Annual Meeting.
The cost of preparing, assembling and mailing this Proxy
Statement and form of proxy, and the cost of soliciting the
proxies related to the Annual Meeting will be borne by the
Company. The Company does not intend to solicit proxies
otherwise than by use of the mail, but certain officers and
regular employees of the Company, without additional
compensation, may use their personal efforts, by telephone or
otherwise, to obtain proxies.
VOTING RIGHTS
Only holders of the Company's $.10 par value common stock
(Common Stock) of record as of the close of business on April
22, 2004, are entitled to vote at the Annual Meeting. As of the
record date, there were issued and outstanding 8,432,023 shares
of Common Stock, each share being entitled to one vote on any
matter which may properly come before the Annual Meeting. Said
voting right is non-cumulative. The holders of a majority of the
outstanding shares of Common Stock shall constitute a quorum. An
affirmative vote of a majority of the votes cast by the holders
of the Common Stock is required for approval of Proposals 1 and
2.
Page 2
PROPOSAL 1
ELECTION OF DIRECTORS
Two persons have been nominated by the Nominating Committee
to serve on the Board of Directors of the Company. Your proxy
will be voted for the election of the two nominees named in this
proxy statement, all of whom are members of the present Board of
Directors, to serve for a three-year term, unless you
specifically withhold your authority. All nominees have agreed
to serve, if elected, for the new term. If for any reason any of
the two nominees becomes unavailable for election, your proxy
will be voted for any substitute nominee who may be selected by
the Board of Directors prior to or at the meeting, or, if no
substitute is selected by the Board of Directors, for a motion to
reduce the membership of the Board of Directors to the number of
the nominees who are available to serve. In the event the
membership of the Board of Directors is reduced, it is
anticipated that it would be restored to the original number at
the next annual meeting. In the event a vacancy occurs on the
Board of Directors after the Annual Meeting, the Company's Bylaws
provide that any such vacancy will be filled for the unexpired
term only by the affirmative vote of a majority of the remaining
Directors in office. The Company has no knowledge that any of
the two nominees will become unavailable for election.
The proxies solicited cannot be voted for a greater number
of persons than the nominees named.
Robert G. Sampson, a nominee for Director is also a Director
of Monmouth Capital Corporation, a publicly-owned affiliate of
the Company. In addition, the Officers and Directors of the
Company may engage in real estate transactions for their own
account, which transactions may also be suitable for the Company.
In most respects, the activities of the Company, Monmouth Real
Estate Investment Corporation, a publicly-owned affiliate of the
Company, and Monmouth Capital Corporation are not in conflict,
but rather complement each other. However, the activities of the
Officers and Directors of the Company on behalf of the other
companies, or for their own account, may on occasion conflict
with those of the Company and deprive the Company of favorable
opportunities. It is the opinion of the Officers and Directors
of the Company that there have been no conflicting transactions
since the beginning of the last fiscal year.
The Company has two long-time Directors who have served the
Company with distinction. Under the recently adopted Sarbanes-
Oxley Act, the Board of Directors must consist of a majority of
"independent" Directors. Therefore, Ernest V. Bencivenga and
Charles P. Kaempffer will resign as Directors, effective June 10,
2004. Each will continue to provide advice to the Company as
Director Emeritus.
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The following table sets forth information regarding the
Directors standing for election, the Directors who will resign in
order to comply with the Director requirements of the Sarbanes-
Oxley Act, and Directors whose terms continue beyond the Annual
Meeting:
Present Position with the Company;
Business Experience During Past Director
Nominee Age Five Years; Other Directorships Since
_______ ___ __________________________________ _______
DIRECTORS STANDING FOR ELECTION
_______________________________
James E. 63 Director. Attorney at Law; 2001
Mitchell General Partner, Mitchell
Partners, L.P. (1979 to present);
President, Mitchell Capital
Management, Inc. (1987 to
present).
Robert G. 78 Director. Director (1963 to 1969
Sampson present) of Monmouth Capital
Corporation, an affiliate of the
Company; Director (1968 to 2001)
of Monmouth Real Estate Investment
Corporation, an affiliate of the
Company; General Partner (1983 to
present) of Sampco, Ltd., an
investment group.
DIRECTORS WHO WILL RESIGN
_________________________
Ernest V. 86 Secretary/Treasurer (1984 to 1969
Bencivenga present) and Director. Financial
consultant to the Company (1976 to
present); Treasurer and Director
(1961 to present) and Secretary
(1967 to present) of Monmouth
Capital Corporation, an affiliate
of the Company; Treasurer (1968 to
present) and Director (1968 to
2004) of Monmouth Real Estate
Investment Corporation, an
affiliate of the Company.
Charles P. 66 Director. Director (1970 to 1969
Kaempffer present) of Monmouth Capital
Corporation, an affiliate of the
Company; Director (1974 to 2004)
of Monmouth Real Estate Investment
Corporation, an affiliate of the
Company; Vice Chairman and
Director (1996 to present) of
Community Bank of New Jersey.
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Present Position with the Company;
Business Experience During Past Director
Nominee Age Five Years; Other Directorships Since
_______ ___ __________________________________ ________
DIRECTORS WHOSE TERMS EXPIRE IN 2005
____________________________________
Richard H. Molke 77 Director. General Partner of 1986
Molke Family Limited Partnership
(1994 to present).
Eugene 70 Director. Retired physician. 1977
Rothenberg Director (2001 to present) of
Monmouth Capital Corporation, an
affiliate of the Company.
DIRECTORS WHOSE TERMS EXPIRE IN 2006
____________________________________
Anna T. Chew 45 Vice President and Chief Financial 1995
Officer (1995 to present) and
Director. Certified Public
Accountant. Vice President (2001
to present) and Director (1994 to
present) of Monmouth Capital
Corporation, an affiliate of the
Company; Controller (1991 to
2003), Chief Financial Officer
(2003 to present) and Director
(1993 to 2004) of Monmouth Real
Estate Investment Corporation, an
affiliate of the Company.
Eugene W. Landy 70 Chairman of the Board (1995 to 1969
present), President (1969 to 1995)
and Director. Attorney at Law;
President and Director (1961 to
present) of Monmouth Capital
Corporation, an affiliate of the
Company; President and Director
(1968 to present) of Monmouth Real
Estate Investment Corporation, an
affiliate of the Company. Eugene
W. Landy is the father of Samuel
A. Landy.
Samuel A. Landy 42 President (1995 to present), Vice 1992
President (1991 to 1995) and
Director. Attorney at Law;
Director (1994 to present) of
Monmouth Capital Corporation, an
affiliate of the Company; Director
(1989 to present) of Monmouth Real
Estate Investment Corporation, an
affiliate of the Company. Samuel
A. Landy is the son of Eugene W.
Landy.
Page 5
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION TO
THE BOARD OF DIRECTORS OF EACH OF THE TWO PERSONS STANDING FOR
ELECTION NAMED ABOVE
Director Independence
After the annual meeting, the Company will have a Board of
Directors consisting of seven members. The Board of Directors
has determined that four members, James E. Mitchell, Richard H.
Molke, Eugene Rothenberg and Robert G. Sampson, are independent
as defined by the rules of the Securities and Exchange Commission
(SEC) and the listing standards of the American Stock Exchange
(AMEX). Three members, Anna T. Chew, Eugene W. Landy, and Samuel
A. Landy, are not considered independent directors because of
their employment as senior executives of the Company.
Committees of the Board of Directors and Meeting Attendance
The Board of Directors had four meetings during the last
fiscal year. No Director attended fewer than 75% of the
meetings.
The Company has a standing Audit Committee, Compensation
Committee and Nominating Committee of the Board of Directors.
Audit Committee
The Audit Committee's responsibilities include reviewing and
overseeing financial reporting, policies and procedures and
internal controls, retaining the independent auditor, approving
the audit fees, and discussing the independent auditors
independence. It also oversees the internal audit function,
legal and regulatory compliance and adherence to the Code of
Business Conduct and Ethics, establishing procedures for
complaints received regarding the Company's accounting, internal
accounting controls and auditing matters. In addition, the Audit
Committee prepares the Audit Committee Report which is included
in the Company's annual proxy statements. The Audit Committee
had four meetings during the fiscal year, including an executive
session with the independent auditors, in which management did
not attend.
The current members of the Company's Audit Committee are
James E. Mitchell, Richard H. Molke and Eugene Rothenberg. The
Board has determined that each member of the Audit Committee is
independent as defined by the rules of the SEC and the listing
standards of the AMEX, and that each of them is able to read and
understand fundamental financial statements. The Board has also
determined that James E. Mitchell is an "audit committee
financial expert" within the meaning of the rules of the SEC and
is "financially sophisticated" within the meaning of the rules of
the AMEX.
Compensation Committee
The Compensation Committee evaluates the performance of the
Chairman of the Board and the President in light of the Company's
goals and objectives, determines the executive officers'
compensation, which includes base salary and bonus, and
administers the Company's 2003 Stock Option Plan. The
Compensation Committee had one meeting during the last fiscal
year. The current members of the Compensation Committee are
Richard H. Molke and Eugene Rothenberg. The Board has determined
that each member of the Compensation Committee is independent as
defined by the rules of the SEC and the listing standards of the
AMEX.
Page 6
Nominating Committee
The Nominating Committee identifies, considers and
recommends candidates to serve as members of the Board and makes
recommendations regarding the structure and composition of the
Board of Directors and Committees. The Nominating Committee was
established in January 2004, and accordingly had no meetings
during the last fiscal year. The Nominating Committee met in
January 2004 to recommend the directors for the Annual Meeting of
Shareholders. James E. Mitchell, Richard H. Molke and Eugene
Rothenberg serve on the Nominating Committee. The Board of
Directors has determined that each member of the Nominating
Committee is an independent Director as defined by the rules of
the SEC and the listing standards of the AMEX. Our Nominating
Committee does not operate under a written charter.
The principal function of the Nominating Committee is to
review and select candidates for nomination to the Board of
Directors. The Nominating Committee will consider director
candidates recommended by the Company's shareholders.
Recommendations with regard to nominees for election to the Board
of Directors may be submitted by any stockholder entitled to vote
for the election of directors in writing, received by the
Secretary of the Corporation at least 90 days but not more than
120 days prior to the first anniversary of the date on which the
Company mailed its proxy materials for the prior year's annual
meeting of shareholders. Each notice of nomination must set
forth (i) the name, age, business address and, if known,
residence address of each nominee, (ii) the principal occupation
or employment of each such nominee, (iii) the number of shares of
common stock of the Company which are beneficially owned by each
such nominee, and (iv) such other information as required by the
SEC pursuant to Regulation 14A of the Securities Exchange Act of
1934, as amended (Exchange Act).
In connection with the formation of the Nominating
Committee, the Company's Board of Directors established certain
minimum qualifications for board members, including being at
least 21 years old and possessing (1) the ability to read and
understand corporate financial statements, (2) relevant business
experience and professional skills, (3) high moral character and
personal and professional integrity, and (4) the willingness to
commit sufficient time to attend to his or her duties and
responsibilities as a director of a public corporation. In
addition, the Nominating Committee may consider a variety of
other qualities and skills, including (i) the ability to exercise
independent decision-making, (ii) the absence of conflicts of
interest and, (iii) the ability to work effectively with other
directors in collectively serving the long-term interests of all
shareholders. Nominees must also meet any applicable requirements
of SEC regulations, state law, and the Company's articles of
incorporation and bylaws.
The Nominating Committee has established a process for
identifying and evaluating nominees for director. The Nominating
Committee will annually assess the qualifications, expertise,
performance and willingness to serve of existing directors. If at
this time or at any other time during the year the Board of
Directors determines a need to add a new director with specific
qualifications or to fill a vacancy on the Board, the Chairman of
the Nominating Committee will then initiate the search, seeking
input from other directors and senior management, considering
nominees previously submitted by shareholders, and, if deemed
necessary or appropriate, hiring a search firm. An
Page 7
initial slate of candidates satisfying the specific
qualifications, if any, and otherwise qualifying for membership
on the Board, will then be identified and presented to the
Nominating Committee by the Committee Chairman. The Nominating
Committee will then prioritize the candidates and determine if
the Nominating Committee members, other directors or senior
management have relationships with the preferred candidates and
can initiate contacts. To the extent feasible, all of the members
of the Nominating Committee and the President will interview the
prospective candidate(s). Evaluations and recommendations of the
interviewers will be submitted to the Nominating Committee for
final evaluation. The Nominating Committee will meet to consider
such recommendations and to approve the final candidate. The
Nominating Committee will evaluate all nominees for director,
including nominees recommended by a stockholder, on the same
basis.
To date, there are no third parties being compensated for
identifying and evaluating candidates.
Independent Director Meeting
The Company's independent directors, as defined under the
listing standards of the AMEX, have established a policy to meet
separately from the other directors in a regularly scheduled
executive session at least annually, and at such times as may be
deemed appropriate by the Company's independent directors. Any
independent director may call an executive session of independent
directors at any time.
Shareholder Communications
The Company has established procedures for shareholders to
communicate with the Board of Directors on a confidential basis.
Shareholders who wish to communicate with the Board or with a
particular director may send a letter to the Secretary of the
Company at 3499 Route 9 North, Suite 3-C, Freehold, NJ 07728.
The mailing envelope must contain a clear notation indicating
that the enclosed mailing is a "Stockholder-Board Communication"
or "Stockholder-Director Communication". All such letters must
identify the author as a stockholder and clearly state whether
the intended recipients of the letter are all of the members of
the Board or just certain specified individual directors. The
Secretary will make copies of all such letters and circulate them
to the directors addressed. If a stockholder wishes the
communication to be confidential, such shareholder must clearly
indicate on the envelope that the communication is
"Confidential". The Secretary will then forward such
communication, unopened, to the intended recipient.
Code of Conduct
The Company has adopted a Code of Business Conduct and
Ethics, which applies to all directors, officers, and employees
of the Company, including its principal executive officers and
principal financial officer. This code is posted on our website
at http:www.umh.com. During 2003, no violations of the Code of
Business Conduct and Ethics were reported nor were any waivers
granted.
Page 8
PROPOSAL 2
APPROVAL OF INDEPENDENT AUDITORS
It is proposed to approve the appointment of KPMG LLP as
Independent Auditors for the purpose of making the annual audit
of the books of account of the Company for the year ending
December 31, 2004, and shareholder approval of said appointment
is requested. KPMG LLP has served as independent auditors of the
Company since 1994. There are no affiliations between the
Company and KPMG LLP, its partners, associates or employees,
other than its employment as Independent Auditors for the
Company. KPMG LLP informed the Company that it has no direct or
indirect financial interest in the Company. The Company expects
a representative of KPMG LLP to be present at the Annual Meeting
either to make a statement or to respond to appropriate
questions.
The approval of the appointment of the Independent Auditors
must be by the affirmative vote of a majority of the votes cast
at the Annual Meeting. In the event KPMG LLP does not receive an
affirmative vote of the majority of the votes cast by the holders
of shares entitled to vote, then another firm will be appointed
as Independent Auditors and the shareholders will be asked to
ratify the appointment at the next annual meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THIS PROPOSAL
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table lists information with respect to the
beneficial ownership of the Company's Common Stock (Shares) as of
April 22, 2004 by:
- each person known by the Company to beneficially own more
than five percent of the Company's outstanding Shares;
- the Company's directors;
- the Company's executive officers; and
- all of the Company's executive officers and directors as a
group.
Unless otherwise indicated, the person or persons named
below have sole voting and investment power and that person's
address is c/o United Mobile Homes, Inc., Juniper Business Plaza,
3499 Route 9 North, Suite 3-C, Freehold, New Jersey 07728. In
determining the number and percentage of shares beneficially
owned by each person, Shares that may be acquired by that person
under options exercisable within sixty (60) days of April 22,
2004 are deemed beneficially owned by that person and are deemed
outstanding for purposes of determining the total number of
outstanding shares for that person and are not deemed outstanding
for that purpose for all other shareholders.
Page 9
Amount and Nature Percentage
Name and Address of Beneficial of Shares
of Beneficial Owner Ownership(1) Outstanding(2)
__________________ _________________ ______________
Ernest V. Bencivenga 30,588(3) *
Anna T. Chew 113,485(4) 1.34%
Charles P. Kaempffer 60,318(5) *
Eugene W. Landy 1,013,228(6) 11.95%
Samuel A. Landy 379,739(7) 4.45%
James E. Mitchell 170,347(8) 2.02%
Richard H. Molke 109,656(9) 1.30%
Eugene D. Rothenberg 81,487(10) *
Robert G. Sampson 130,589(11) 1.55%
Directors and Officers as a 2,089,437
group 24.25%
*Less than 1%.
(1) Except as indicated in the footnotes to this table and
pursuant to applicable community property laws, the Company
believes that the persons named in the table have sole voting and
investment power with respect to all Shares listed.
(2) Based on the number of Shares outstanding on April 22,
2004, which was 8,432,023 Shares.
(3) Includes (a) 9,095 Shares owned by Mr. Bencivenga's
wife; (b) 9,452 Shares held in Mr. Bencivenga's 401(k) Plan; and
(c) 5,000 Shares issuable upon the exercise of stock options.
Excludes 5,000 shares issuable upon exercise of stock option,
which stock option is not exercisable until 8/25/2004.
(4) Includes (a) 83,485 Shares owned jointly with Ms.
Chew's husband; (b) 6,108 Shares held in Ms. Chew's 401(k) Plan;
and (c) 30,000 Shares issuable upon exercise of stock options.
Excludes 10,000 Shares issuable upon exercise of stock option,
which stock option is not exercisable until 8/25/2004.
Page 10
(5) Includes (a) 2,000 Shares owned by Mr. Kaempffer's
wife; and (b) 30,425 Shares held in the Charles P. Kaempffer
Defined Benefit Pension Plan of which Mr. Kaempffer is Trustee
with Power to vote.
(6) Includes (a) 85,688 Shares owned by Mr. Landy's wife;
(b) 172,608 Shares held by Landy Investments, Ltd. for which Mr.
Landy has power to vote; (c) 73,212 Shares held in the Landy &
Landy Employees' Profit Sharing Plan of which Mr. Landy is a
trustee and has shared voting and dispositive power; (d) 57,561
Shares held in the Landy & Landy Employees' Pension Plan of which
Mr. Landy is a trustee and has shared voting and dispositive
power; (e) 5,000 Shares held in the Eugene W. and Gloria Landy
Family Foundation, a charitable trust, of which Mr. Landy has
shared voting and dispositive power; and (f) 50,000 Shares held
in the Eugene W. & Gloria Landy Charitable Lead Annuity Trust of
which Mr. Landy is a trustee and has shared voting and
dispositive power. Includes 50,000 Shares issuable upon the
exercise of stock options.
(7) Includes (a) 27,153 Shares owned by Mr. Landy's wife;
(b) 28,666 Shares held in custodial accounts for Mr. Landy's
minor children under the New Jersey Uniform Transfers to Minors
Act with respect to which he disclaims any beneficial interest
but he has sole dispositive and voting power; (c) 6,221 Shares in
the Samuel Landy Family Limited Partnership; (d) 10,211 Shares
held in Mr. Landy's 401(k) Plan; and (d) 100,000 Shares issuable
upon exercise of stock options. Excludes 50,000 shares issuable
upon exercise of stock options, which stock options are not
exercisable until 8/18/2004 and 1/16/2005 respectively.
(8) Includes 135,379 Shares held by Mitchell Partners in
which Mr. Mitchell has a beneficial interest.
(9) Includes 50,563 Shares owned by Mr. Molke's wife.
(10) Includes 56,888 Shares held by Rothenberg Investments,
Ltd. in which Dr. Rothenberg has a beneficial interest.
(11) Includes 48,492 Shares held by Sampco Ltd. in which Mr.
Sampson has a beneficial interest.
EXECUTIVE COMPENSATION
Summary Compensation Table
The following Summary Compensation Table shows compensation
paid by the Company to its Chairman of the Board, President and
Vice President for services rendered during the fiscal years
ended December 31, 2003, 2002 and 2001. There were no other
executive officers whose aggregate cash compensation exceeded
$100,000.
Page 11
Name and Securities
Principal Annual Compensation Underlying
Position Year Salary Bonus Other Options
________ ____ ______ _____ _____ __________
Eugene W. 2003 $150,000 $ -0- $35,776(1) -0-
Landy 2002 $150,000 $ -0- $17,276(1) -0-
Chairman of 2001 $150,000 $ -0- $15,076(1) -0-
the Board
Samuel A. 2003 $299,250 $54,862 $23,08 (2) 25,000
Landy 2002 $285,000 $14,961 $21,585(2) 25,000
President 2001 $224,616 $25,704 $21,028(2) 25,000
Anna T. Chew 2003 $177,200 $16,194 $19,631(3) 10,000
Vice President 2002 $160,488 $16,194 $19,000(3) 10,000
2001 $145,898 $15,631 $17,646(3) 10,000
(1) Represents Director's fees, legal fees and fringe benefits.
(2) Represents Director's fees, fringe benefits and
discretionary contributions by the Company to the Company's
401(k) Plan allocated to an account of the named executive
officer.
(3) Represents Director's fees and discretionary contributions
by the Company to the Company's 401(k) Plan allocated to an
account of the named executive officer.
Compensation of Directors
The Directors received a fee of $1,500 for each Board
meeting attended and an additional fixed annual fee of $10,000
payable $2,500 quarterly. Directors appointed to committees
received $150 for each meeting attended. Those specific
committees are Compensation Committee, Audit Committee and
Nominating Committee.
Stock Option Plan
On August 14, 2003, the shareholders approved and ratified
the Company's 2003 Stock Option Plan (the 2003 Plan) authorizing
the grant to officers, directors and key employees options to
purchase up to 1,500,000 shares of common stock. All options are
exercisable one year from the date of grant. The option price
shall not be below the fair market value at date of grant. If
options granted under the 2003 Plan expire or terminate for any
reason without having been exercised in full, the Shares subject
to, but not delivered under, such options shall become available
for additional option grants under the 2003 Plan. This Plan
replaced the Company's 1994 Stock Option Plan which, pursuant to
its terms, terminated December 31, 2003.
Page 12
The following table sets forth, for the executive officers
named in the Summary Compensation Table, information regarding
individual grants of stock options made during the year ended
December 31, 2003:
Percent of Potential Realized
Total Value at Assumed
Options Price Annual Rates for
Options Granted to Per Expiration Option Terms
Name Granted Employees Share Date 5% 10%
____ _______ _________ _____ _________ ________ _______
Samuel A.
Landy 25,000 39% $16.92 08/18/11 $145,082 $401,210
Anna T. Chew 10,000 16% $15.00 08/25/11 $ 71,618 $171,538
The following table sets forth, for the executive officers
named in the Summary Compensation Table, information regarding
stock options outstanding at December 31, 2003:
Number of
Unexercised Value of
Shares Options Unexercised
Acquired at Year-End Options at Year-
Upon Value Exercisable/ End Exercisable/
Name Exercise Realized Unexercisable Unexercisable
___ ________ _________ ____________ _______________
Eugene W. Landy 25,000 $ 85,500 50,000/ -0- $438,000/ $ -0-
Samuel A. Landy 25,000 $137,945 100,000/25,000 $686,624/ $ 2,250
Anna T. Chew 20,000 $130,275 30,000/ 10,000 $193,300/ $20,100
Employment Agreements
On December 14, 1993, the Company and Eugene W. Landy
entered into an Employment Agreement under which Mr. Landy
receives an annual base compensation of $150,000 (as amended)
plus bonuses and customary fringe benefits, including health
insurance, participation in the Company's 401(k) Plan, stock
options, five weeks' vacation and use of an automobile.
Additionally, there may be bonuses voted by the Board of
Directors. The Employment Agreement is terminable by either
party at any time subject to certain notice requirements. On
severance of employment by the Company, Mr. Landy will receive
severance of $450,000, payable $150,000 on severance and $150,000
on the first and second anniversaries of severance. In the event
of disability, Mr. Landy's compensation will continue for a
period of three years, payable monthly. On retirement, Mr. Landy
will receive a pension of $50,000 a year for ten years, payable
in monthly installments. In the event of death, Mr. Landy's
designated beneficiary will receive $450,000, $100,000 thirty
days after death and the balance one year after death. The
Employment Agreement automatically renews each year for
successive one-year periods. Effective January 1, 2004, this
Employment Agreement was amended to increase Mr. Landy's annual
base compensation to $175,000. Additionally, Mr. Landy's pension
has been extended for an additional three years.
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Effective January 1, 2002, the Company and Samuel A. Landy
entered into a three-year Employment Agreement under which Mr.
Samuel Landy receives an annual base salary of $285,000 for 2002,
$299,250 for 2003 and $314,212 for 2004 plus bonuses and
customary fringe benefits. Bonuses are at the discretion of the
Board of Directors and are based on certain guidelines. Mr.
Samuel Landy will also receive four weeks vacation, use of an
automobile, and stock options for 25,000 shares in each year of
the contract. On severance by the Company or disability, Mr.
Samuel Landy is entitled to one year's salary.
Effective January 1, 2003, the Company and Anna T. Chew
entered into a three-year Employment Agreement. Ms. Chew will
receive an annual base salary of $177,200 for 2003, plus bonuses
and customary fringe benefits. Each year Ms. Chew will receive a
10% increase in her base salary. On severance by the Company,
Ms. Chew is entitled to an additional one year's salary.
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
Overview and Philosophy
The Company has a Compensation Committee consisting of two
independent, outside Directors. This Committee is responsible
for making recommendations to the Board of Directors concerning
compensation. The Compensation Committee takes into
consideration three major factors in setting compensation.
The first consideration is the overall performance of the
Company. The Committee believes that the financial interests of
the executive officers should be aligned with the success of the
Company and the financial interests of its shareholders.
The second consideration is the individual achievements made
by each officer. The Company is a small REIT. The Board of
Directors is aware of the contributions made by each officer and
makes an evaluation of individual performance based on their own
familiarity with the officer.
The final criteria in setting compensation is comparable
wages in the industry. In this regard, the REIT industry
maintains excellent statistics.
Evaluation
Mr. Eugene Landy is under an employment agreement with the
Company. His base compensation under this contract is $150,000
per year. (The Summary Compensation Table for Mr. Eugene Landy
shows a salary of $150,000 and $35,776 in director's fees, fringe
benefits and legal fees). This contract expired in 1998 and had
been renewed for one-year periods. Effective January 1, 2004,
the Committee approved an increase to Mr. Landy's base
compensation to $175,000 per year.
Page 14
The Committee also reviewed the progress made by Mr. Samuel
A. Landy, President, including funds from operations which
increased by approximately 18%. Mr. Samuel Landy is under an
employment agreement with the Company. His base compensation
under this contract
is $299,250 for 2003. Mr. Samuel Landy also received bonuses
totaling $54,862. These bonuses were primarily based upon his
meeting certain performance goals as outlined in his employment
agreement.
Compensation Committee:
Richard H. Molke
Eugene Rothenberg
REPORT OF THE AUDIT COMMITTEE
The Board of Directors adopted a written charter for the
Audit Committee.
The Company has an Audit Committee consisting of three
"independent" Directors, as defined by the listing standards of
the AMEX. The Audit Committee's role is to act on behalf of the
Board of Directors in the oversight of all material aspects of
the Company's reporting, internal control and audit functions.
We have reviewed and discussed with management the Company's
audited financial statements as of and for the year ended
December 31, 2003.
We have discussed with the independent auditors the matters
required to be discussed by Statement on Auditing Standards No.
61, Communication with Audit Committees.
We have received and reviewed the written disclosures and
the letter from the independent auditors required by Independence
Standard No. 1, "Independence Discussions with Audit Committees",
and have discussed with the auditors the auditors' independence.
Based on the reviews and discussions referred to above, we
recommend to the Board of Directors that the financial statements
referred to above be included in the Company's Annual Report on
Form 10-K for the year ended December 31, 2003.
Fees Billed by Independent Auditors
KPMG LLP served as the Company's independent auditors for
the years ended December 31, 2003 and 2002. The following are
the fees billed by KPMG in connection with services rendered:
2003 2002
____ ____
Audit Fees $46,000 $39,500
Audit Related Fees -0- -0-
Tax Fees 47,250 47,250
All Other Fees -0- -0-
______ ______
Total Fees $93,250 $86,750
====== ======
Page 15
Audit fees include professional services rendered by KPMG
LLP for the audit of the Company's annual financial statements
and reviews of financial statements included in the Company's
quarterly reports on Form 10-Q.
Tax fees include professional services rendered by KPMG LLP
for the preparation of the Company's federal and state corporate
tax returns and supporting schedules as may be required by the
Internal Revenue Service and applicable state taxing authorities.
Tax fees also include other work directly affecting or supporting
the payment of taxes, including planning and research of various
tax issues.
Audit Committee Pre-Approval Policy
The Audit Committee has adopted a policy for the pre-
approval of audit and permitted non-audit services provided by
the Company's principal independent accountants. The policy
requires that all services provided by KPMG LLP to the Company,
including audit services, audit-related services, tax services
and other services, must be pre-approved by the Committee. The
pre-approval requirements do not prohibit day-to-day normal tax
consulting services, where each individual matter will not exceed
$5,000 and in the aggregate will not exceed $25,000 for 2003 and
2004.
The Audit Committee has determined that the provision of the
non-audit services described above is compatible with maintaining
KPMG LLP's independence.
Audit Committee:
James E. Mitchell
Richard H. Molke
Eugene Rothenberg
Page 16
COMPARATIVE STOCK PERFORMANCE
The following line graph compares the total return of the
Company's common stock for the last five years to the NAREIT ALL
REIT Total Return Index published by the National Association of
Real Estate Investment Trust (NAREIT) and to the S&P 500 Index
for the same period. The total return reflects stock price
appreciation and dividend reinvestment for all three comparative
indices. The information herein has been obtained from sources
believed to be reliable, but neither its accuracy nor its
completeness is guaranteed.
1998 1999 2000 2001 2002 2003
_____ _____ _____ _____ _____ _____
United Mobile 100 84 106 146 174 231
Homes, Inc.
NAREIT All REIT 100 94 118 136 143 198
S & P 500 100 121 110 97 76 97
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company operates as part of a group of three public
companies (all REITs) which includes the Company, Monmouth Real
Estate Investment Corporation (MREIC) and Monmouth Capital
Corporation (MCC), (collectively, the affiliated companies).
Some general and administrative expenses are allocated among the
affiliated companies based on use or services provided.
Allocations of salaries and benefits are made based on the amount
of the employees' time dedicated to each affiliated company.
There were five Directors of the Company who were also
Directors and shareholders of MREIC, and there were seven
Directors of the Company who were also Directors and shareholders
of MCC.
Transactions with Monmouth Real Estate Investment Corporation
During 2003, 2002 and 2001, the Company purchased shares of
MREIC common stock primarily through its Dividend Reinvestment
and Stock Purchase Plan. During 2003, the Company sold 50,000
shares of MREIC and recorded a gain on sale of $131,727.
Transactions with Monmouth Capital Corporation and Subsidiary
During 2003, 2002 and 2001, the Company purchased shares of
MCC common stock primarily through its Dividend Reinvestment and
Stock Purchase Plan.
Page 17
Prior to April 1, 2001, MCC, through its wholly-owned
subsidiary sold and financed the sales of manufactured homes.
MCC paid the Company market rent on sites where MCC had a home
for sale. Total site rental income from MCC amounted to $33,370
for the year ended December 31, 2001.
Effective April 1, 1996 through April 1, 2001, MCC leased
space from the Company to be used as sales lots, at market rates,
at most of the Company's communities. Total rental income
relating to these leases amounted to $38,370 for the year ended
December 31, 2001.
During 2001, the Company had approximately $49,000 of rental
homes that were sold to MCC at book value.
During 2003, 2002 and 2001, the Company purchased from MCC
at its cost, 4, 2 and 3 homes, respectively totaling $78,195,
$43,181 and $47,953, respectively to be used as rental homes. On
March 30, 2001, the Company also purchased at carrying value all
of the remaining inventory of MCC. This amounted to $2,261,624.
The Company also assumed the inventory financing of $1,833,871.
During 2003, the Company financed/refinanced certain loans
on sales made by MCC to third parties. The total amount financed
amounted to $307,746 during 2003.
On October 23, 2003, the Company invested $1,000,000 in the
Convertible Debenture Private Placement Offering of MCC (the MCC
Debenture). The MCC Debenture pays interest at 8% and is
convertible into 166,667 shares of Common Stock of MCC at any
time prior to redemption or maturity. The MCC debenture is due
in 2013.
Other Matters
Prior to the adoption of Sarbanes Oxley Act of 2002, Section
202, prohibiting loans to directors and executive officers, the
Board of Directors of the Company granted Samuel A. Landy,
President, loans in accordance with his Employment Agreement.
The total balance of these loans outstanding at March 31, 2004
amounted to $667,525 at interest rates ranging from 6.36% to 7.5%
and maturity dates ranging from 2005 to 2006.
There is no family relationship between any of the Directors
or executive officers of the Company, except that Samuel A.
Landy, President and Director of the Company, is the son of
Eugene W. Landy, the Chairman of the Board of the Company.
Eugene W. Landy and Samuel A. Landy are partners in the law
firm of Landy & Landy, which firm, or its predecessor firms, have
been retained by the Company as legal counsel since the formation
of the Company, and which firm the Company proposes to retain as
legal counsel for the current fiscal year. The Company now uses
outside counsel for most of the legal services required. The New
Jersey Supreme Court has ruled that the relationship of directors
also serving as outside counsel is not per se improper, but the
attorney should fully discuss the issue of conflict with the
other directors and disclose it as part of the proxy statement so
that shareholders can consider the conflict issue when voting for
or against the attorney/director nominee.
The Company has employment agreements with certain executive
officers, which in addition to base compensation, bonuses and
fringe benefits, provides for specified retirement benefits. The
Company has accrued these benefits over the terms of the
agreements. Amounts accrued under these agreements were
$780,058 and $817,058 at December 31, 2003 and 2002,
respectively.
Page 18
In August, 1999, the Company entered into a lease for its
corporate offices. The lease is for a five-year term at market
rates with monthly lease payments of $12,000, plus its
proportionate share of real estate taxes and common area
maintenance. The lessor of the property is owned by certain
officers and directors of the Company. The lease payments and
the resultant lease term commenced on May 1, 2000. Approximately
50% of the monthly lease payment of $12,000, plus its
proportionate share of real estate taxes and common area
maintenance is reimbursed by other related entities utilizing the
leased space (MREIC and MCC).
COMPLIANCE WITH EXCHANGE ACT FILING REQUIREMENTS
Section 16(a) of the Securities Exchange Act of 1934, as
amended, requires the Company's Officers and Directors, and
persons who own more than 10% of the Company's Common Stock, to
file reports of ownership and changes in ownership with the
Securities and Exchange Commission. Officers, Directors and
greater than 10% shareholders are required by Securities and
Exchange Commission regulations to furnish the Company with
copies of all Section 16(a) forms they file. Based solely on
review of the copies of such forms furnished to the Company, the
Company believes that, during the fiscal year, all Section 16(a)
filing requirements applicable to its Officers, Directors and
greater than 10% beneficial owners were met.
OTHER MATTERS
The Board of Directors knows of no other matters other than
those stated in this Proxy Statement which are to be presented
for action at the Annual Meeting. If any other matters should
properly come before the Annual Meeting, it is intended that
proxies in the accompanying form will be voted on any such matter
in accordance with the judgment of the persons voting such
proxies. Discretionary authority to vote on such matters is
conferred by such proxies upon the persons voting them.
Page 19
The Company will provide, without charge, to each person
being solicited by this Proxy Statement, on the written request
of any such person, a copy of the Annual Report of the Company on
Form 10-K for the year ended December 31, 2003 (as filed with the
Securities and Exchange Commission), including the financial
statements and schedules thereto. All such requests should be
directed to United Mobile Homes, Inc., Attention: Shareholder
Relations, Juniper Business Plaza, 3499 Route 9 North, Suite 3-C,
Freehold, NJ 07728.
SHAREHOLDER PROPOSALS
In order for Shareholder Proposals for the 2005 Annual
Meeting of Shareholders to be eligible for inclusion in the
Company's 2005 Proxy Statement, they must be received by the
Company at its office at Juniper Business Plaza, 3499 Route 9
North, Suite 3-C, Freehold, New Jersey 07728 not later than
February 2, 2005.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Ernest V. Bencivenga
Ernest V. Bencivenga
Secretary
Dated: May 3, 2004
Important: Shareholders can help the Directors avoid the
necessity and expense of sending follow-up letters to insure a
quorum by promptly returning the enclosed proxy. The proxy is
revocable and will not affect your right to vote in person in the
event you attend the meeting. You are earnestly requested to
sign and return the enclosed proxy in order that the necessary
quorum may be represented at the meeting. The enclosed addressed
envelope requires no postage and is for your convenience.
Page 20
PROXY PROXY
UNITED MOBILE HOMES, INC.
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned hereby constitutes and appoints Eugene W.
Landy, Anna T. Chew, and Samuel A. Landy, and each or any of
them, proxies of the undersigned, with full power of
substitution, to vote in their discretion (subject to any
direction indicated hereon) at the Annual Meeting of Shareholders
to be held at the Company Office at Juniper Business Plaza, 3499
Route 9 North, Suite 3-C, Freehold, New Jersey, on Thursday, June
10, 2004, at 4:00 o'clock p.m., and at any adjournment thereof,
with all the powers which the undersigned would possess if
personally present, and to vote all shares of stock which the
undersigned may be entitled to vote at said meeting.
(Continued and to be signed on the reverse side)
Page 21
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE /X/
1. Election of Directors:
NOMINEES:
- FOR ALL NOMINEES James E. Mitchell
Robert G. Sampson
- WITHHOLD AUTHORITY
FOR ALL NOMINEES
- FOR ALL EXCEPT
(See instructions below)
INSTRUCTION: To withhold authority to vote for any individual
nominee(s), mark "FOR ALL EXCEPT" and fill in the circle next to
each nominee you wish to withhold, as shown here: ?
(2) Approval of the appointment of KPMG LLP as Independent
Auditors for the Company for the fiscal year ending December
31, 2004.
FOR AGAINST ABSTAIN
(3) Such other business as may be brought before the meeting or
any adjournment thereof. The Board of Directors at present
knows of no other business to be presented by or on behalf
of the Company or its Board of Directors at the meeting.
The Board of Directors recommends a vote FOR items (1) and (2),
and all shares represented by this Proxy will be so voted unless
otherwise indicated, in which case they will be voted as marked.
Receipt of Notice of Meeting and Proxy Statement is hereby
acknowledged.
To change the address on your account, please check the box at
right and indicate __ your new address in the address space
above. Please note that changes to the registered name(s) on the
account may not be submitted via this method.
Signature of Shareholder _____________________ Date___________
Signature of Shareholder ______________________ Date___________
Note: Please sign exactly as your name(s) appear on this Proxy.
When shares are held jointly, each holder should sign. When
signing as executor, administrator, attorney, trustee or
guardian, please give full title as such. If the signer is a
corporation, please sign full corporate name by duly authorized
officer, giving full title as such. If signer is a partnership,
please sign in partnership name by authorized person.
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