<PAGE> 1
As filed with the Securities and Exchange
Commission on September 13, 1996
Registration No. 333-
________________________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
______________________
FORM S-8
(Including registration of shares for resale by means of a Form S-3 Prospectus)
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
________________________
SUN COMMUNITIES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS GOVERNING INSTRUMENT)
MARYLAND 38-2730780
(State or Other Jurisdiction of Incorporation or (I.R.S. Employer
Organization) Identification No.)
_______________________________________
31700 MIDDLEBELT ROAD
SUITE 145
FARMINGTON HILLS, MICHIGAN 48334
(Address of Principal Executive Offices)
________________________________________________________
AMENDED AND RESTATED 1993 STOCK OPTION PLAN
AMENDED AND RESTATED 1993 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
(Full title of the plan)
________________________________________________________
GARY A. SHIFFMAN
PRESIDENT
SUN COMMUNITIES, INC.
31700 MIDDLEBELT ROAD
SUITE 145
FARMINGTON HILLS, MICHIGAN 48334
(810) 932-3100
(Name, Address, and Telephone Number, Including Area Code, of Agent for
Service)
Copies of all correspondence to:
JEFFREY M. WEISS, ESQ.
JAFFE, RAITT, HEUER & WEISS, P.C.
ONE WOODWARD AVENUE
SUITE 2400
DETROIT, MICHIGAN 48226
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As
soon as possible after the effective date of this Registration Statement and
from time to time thereafter as determined by market conditions.
If any of the securities being registered on this form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, please check the following box. __X__
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If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, please check the
following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering. ______
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. ______
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. ______.
_______________
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION> Proposed
Title of Securities Amount to be Proposed Maximum Maximum Aggregate Amount of
to be Registered Registered(1) Offering Price Per Share Offering Price Registration Fee
------------------- ------------- ------------------------ ----------------- ----------------
<S> <C> <C> <C> <C>
Common Stock, par value $.01 per share:
To be issued under 1993 Stock
Option Plan . . . . . . . . . . . . . . 1,005,766 shares (2) $25.19 $25,335,245.54 $8,737
Issued under 1993 Stock Option Plan . . 355,747 shares (3) $28.31 $10,071,197.57 $3,473
To be issued under 1993 Non-Employee
Director Stock Option Plan . . . . . 97,334 shares (4) $27.65 $2,691,285.10 $929
Issued under 1993 Non-Employee
Director Stock Option Plan . . . . . 2,666 shares (5) $28.31 $75,474.46 $27
TOTAL 1,461,513 shares $38,173,202.67 $13,166
</TABLE>
(1) Includes an indeterminate number of shares of Common Stock that may be
issued by reason of stock splits, stock dividends or other similar
transactions. For the sole purpose of calculating the registration
fee, the number of shares to be registered under this Registration
Statement has been broken down into four sub-totals.
(2) Computed in accordance with Rules 457(h) and 457(c) under the
Securities Act of 1933. Such computation is based on the weighted
average exercise price of $20.65 per share covering 409,750
outstanding options and the estimated exercise price of $28.31 per
share covering 596,016 authorized but unissued shares. The estimated
exercise price of $28.31 per share was computed in accordance with
Rule 457 by averaging the high and low prices of a share of Common
Stock as reported by the New York Stock Exchange on September 6, 1996.
(3) Computed in accordance with Rule 457(c) under the Securities Act of
1933.
(4) Computed in accordance with Rules 457(h) and 457(c) under the
Securities Act of 1933. Such computation is based on the weighted
average exercise price of $21.75 per share covering 9,834 outstanding
options and the estimated exercise price of $28.31 per share covering
87,500 authorized but unissued shares. The estimated exercise price
of $28.31 per share was computed in accordance with Rule 457 by
averaging the high and low prices of a share of Common Stock as
reported by the New York Stock Exchange on September 6, 1996.
(5) Computed in accordance with Rule 457(c) under the Securities Act of
1933.
<PAGE> 3
EXPLANATORY NOTE
This Registration Statement contains two parts. The first part
contains a Reoffer Prospectus ("Prospectus") prepared in accordance with the
requirements of Part I of Form S-3 (in accordance with Section C of the General
Instructions to Form S-8) which covers reoffers and resales by "affiliates" (as
that term is defined in Rule 405 of the General Rules and Regulations under the
Securities Act of 1933, as amended (the "Securities Act")), of shares of Common
Stock, $.01 par value per share ("Common Stock"), of Sun Communities, Inc. (the
"Company") which will be or have been issued to directors and key employees or
consultants pursuant to the exercise of options granted to employees,
consultants and/or directors pursuant to the Sun Communities, Inc. Amended and
Restated 1993 Stock Option Plan (the "Employee Option Plan") and/or the Sun
Communities, Inc. Amended and Restated 1993 Non-Employee Director Stock Option
Plan (the "Director Option Plan" and together with the Employee Option Plan,
the "Plans"). The Form S-3 Prospectus filed herewith may be utilized for
reofferings and resales of registered shares of Common Stock which may be
issued in the future upon the exercise of options granted under the Plans. The
second part of this Registration Statement contains "Information Required in
the Registration Statement" pursuant to Part II of Form S-8. Pursuant to the
Note to Part I of Form S-8, the information with respect to the Plans
specified by Part I is not filed with the Securities and Exchange Commission
(the "Commission"), but a document containing such information has been sent
or given to each person eligible to participate in each of the Plans as
specified by Rule 428(b)(1) under the Securities Act.
<PAGE> 4
Reoffer Prospectus dated September 13, 1996
PROSPECTUS
SUN COMMUNITIES, INC.
620,747 SHARES
COMMON STOCK
This Reoffer Prospectus (this "Prospectus") is being used in
connection with the offering from time to time by certain stockholders (the
"Selling Stockholders") of Sun Communities, Inc. (the "Company"), of shares of
Common Stock, par value $.01 per share ("Common Stock"), of the Company which
have been or may be acquired upon the exercise of stock options granted
pursuant to the Sun Communities, Inc. Amended and Restated 1993 Stock Option
Plan (the "Employee Option Plan") and/or the Sun Communities, Inc. Amended and
Restated 1993 Non-Employee Director Stock Option Plan (the "Director Option
Plan" and together with the Employee Option Plan, the "Plans"). Options or
shares of Common Stock may be issued under either of the Plans in amounts and
to persons not presently known by the Company; when known, such persons, their
holdings of Common Stock and certain other information may be included in a
subsequent version of this Prospectus. The Company will receive no proceeds
from the sale by the Selling Stockholders of the shares of Common Stock.
The Common Stock issued or issuable upon exercise of the options
covered by the Plans (collectively, the "Shares") may be sold from time to time
by the Selling Stockholders or by pledgees, donees, transferees or other
successors in interest. Such sales may be made on the New York Stock Exchange
(the "NYSE") at prices and at terms then prevailing or at prices related to the
then current market price, or in negotiated transactions. All discounts,
commissions or fees incurred in connection with the sale of the Shares offered
hereby will be paid by the Selling Stockholders or by the purchasers of the
Shares, except that the expenses of preparing and filing this Prospectus and
the related Registration Statement with the Securities and Exchange Commission
(the "Commission"), and of registering or qualifying the Shares, will be paid
by the Company.
The Selling Stockholders and any broker executing selling orders on
behalf of the Selling Stockholders may be deemed to be an "underwriter" within
the meaning of the Securities Act of 1933, as amended (the "Securities Act"),
in which event any commission received by such broker may be deemed to be
underwriting commissions under the Securities Act.
The Shares are listed on the NYSE under the symbol "SUI." The closing
price of the Shares as reported on the NYSE on September 6, 1996 was $28.375.
SEE "RISK FACTORS" ON PAGE 4 FOR CERTAIN FACTORS RELATING TO AN INVESTMENT IN
THE SHARES
______________________________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE
CONTRARY IS A
CRIMINAL OFFENSE.
______________________________________
The date of this Prospectus is September 13, 1996.
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No person is authorized to give any information or to make any
representation, other than as contained herein, in connection with the offering
described in this Prospectus, and any information or representation not
contained herein must not be relied upon as having been authorized by the
Company or the Selling Stockholders. This Prospectus does not constitute an
offer to sell or a solicitation of an offer to buy any securities offered
hereby in any jurisdiction in which it is unlawful or to any person to whom it
is not lawful to make any such offer or solicitation. Neither the delivery of
this Prospectus nor any sale made hereunder shall under any circumstances
create any implication that information herein is correct as of any time
subsequent to the date hereof.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and, in
accordance therewith, files, reports and other information with the Commission.
Such reports, proxy statements and other information can be inspected at the
Public Reference Section maintained by the Commission at Room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20549 and the following regional offices of the
Commission: 500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511
and Seven World Trade Center, 13th Floor, New York, New York 10048. Copies of
such material can be obtained from the Public Reference Section of the
Commission, 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed
rates. In addition, the Company's Common Stock is listed on the New York Stock
Exchange and such reports, proxy statements and other information concerning
the Company can be inspected at the offices of the New York Stock Exchange, 20
Broad Street, New York, New York 10005.
The Company has filed with the Commission a registration statement on
Form S-8 (the "Registration Statement"), of which this Prospectus is a part,
under the Securities Act with respect to the Common Stock offered hereby.
This Prospectus does not contain portions of the information set forth
in the Registration Statement, certain portions of which have been omitted as
permitted by the rules and regulations of the Commission. Statements contained
in this Prospectus as to the contents of any contract or other documents are
not necessarily complete, and in each instance, reference is made to the copy
of such contract or documents filed as an exhibit to the Registration
Statement, each such statement being qualified in all respects by such
reference and the exhibits and schedules thereto. For further information
regarding the Company and the Securities, reference is hereby made to the
Registration Statement and such exhibits and schedules which may be obtained
from the Commission at its principal office in Washington, D.C. upon payment of
the fees prescribed by the Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The documents listed below have been filed by the Company under the
Exchange Act with the Commission and are incorporated herein by reference.
1. The Company's Annual Report on Form 10-K for the year ended
December 31, 1995, filed with the Commission on March 18,
1996, as amended by Form 10-K/A, filed with the Commission on
April 18, 1996, and as amended by Form 10-K/A, filed with the
Commission on May 3, 1996.
2. The Company's current report on Form 8-K dated March 20, 1996
and filed with the Commission on March 26, 1996.
3. The Company's current report on Form 8-K dated April 2, 1996
and filed with the Commission on April 4, 1996.
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4. The Company's current report on Form 8-K dated April 24, 1996
and filed with the Commission on April 29, 1996.
5. The Company's current report on Form 8-K dated May 1, 1996 and
filed with the Commission on May 3, 1996.
6. The Company's current report on Form 8-K dated August 20, 1996
and filed with the Commission on August 22, 1996.
7. The Company's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1996, filed with the Commission on May 3,
1996.
8. The Company's Quarterly Report on Form 10-Q for the quarter
ended June 30, 1996, filed with the Commission on August 14,
1996.
9. The description of the Common Stock contained in the Company's
Registration Statement on Form 8-A dated November 23, 1993,
No. 1-12616.
All documents filed subsequent to the date of this Prospectus pursuant
to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act and prior to
termination of the offering of all Securities to which this Prospectus relates
shall be deemed to be incorporated by reference in this Prospectus and shall be
part hereof from the date of filing of such document.
Any statement contained herein or in a document incorporated or deemed
to be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained in this Prospectus (in the case of a statement in a previously filed
document incorporated or deemed to be incorporated by reference herein), in any
accompanying Prospectus Supplement relating to a specific offering of
Securities or in any other subsequently filed document that is also
incorporated or deemed to be incorporated by reference herein, modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of
this Prospectus or any accompanying Prospectus Supplement. Subject to the
foregoing, all information appearing in this Prospectus and each accompanying
Prospectus Supplement is qualified in its entirety by the information appearing
in the documents incorporated by reference.
The Company will provide without charge to each person, including any
beneficial owner, to whom a copy of this Prospectus is delivered, upon their
written or oral request, a copy of any or all of the documents incorporated
herein by reference (other than exhibits to such documents, unless such
exhibits are specifically incorporated by reference in such documents).
Written requests for such copies should be addressed to Jeffrey P. Jorissen,
the Company's Senior Vice President and Chief Financial Officer at 31700
Middlebelt Road, Suite 145, Farmington Hills, Michigan 48334, telephone number
(810) 932-3100.
As used herein, the term "Company" includes Sun Communities, Inc., a
Maryland corporation, and one or more of its subsidiaries (including Sun
Communities Operating Partnership (the "Operating Partnership"), Sun
Communities Finance Limited Partnership (the "Financing Partnership"), Sun Home
Services, Inc., and Sun Management, Inc.).
THE COMPANY
The Company owns and operates manufactured housing communities
concentrated in the midwestern and southeastern United States. The Company is
a fully integrated real estate company which, together with its affiliates and
predecessors, has been in the business of acquiring, operating, and expanding
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manufactured housing communities since 1975. As of August 1, 1996, the Company
owned and managed a portfolio of 79 manufactured housing community properties
(the "Properties") located in twelve states and Canada containing an aggregate
of approximately 28,600 developed sites and approximately 2,900 potential
expansion sites. Consistent with the Company's strategy of growth through
acquisitions, the Company has acquired 48 of the Properties since its initial
public offering in December 1993. The Company believes that it is the largest
United States owner of manufactured housing communities in the United States
(by number of communities).
The Company is the sole general partner of, and, as of August 1, 1996,
held approximately 89% of the interests in, the Operating Partnership.
Substantially all of the Company's assets are held by or through the Operating
Partnership. The ownership and management of the Properties is allocated among
the Subsidiaries; however, subject to the tax and other risks discussed in the
section entitled "Risk Factors": (i) the Company controls the management of all
the Properties either directly or through a management contract with Sun
Management, Inc., a Michigan corporation ("Sun Management") cancelable upon 30
days written notice; and (ii) stockholders in the Company achieve substantially
the same economic benefits as direct ownership, operation, and management of
the Properties, except that 5% of the cash flow from operating activities of
Sun Home Services, Inc., a Michigan corporation ("Home Services") and Sun
Management (estimated to be an aggregate of no greater than approximately
$2,000 in 1996) will be distributed to Gary A. Shiffman, Milton M. Shiffman
(Gary A. Shiffman and Milton M. Shiffman are sometimes hereinafter collectively
referred to as the "Principals"), and Jeffrey P. Jorissen, each an officer of
the Company, as the holders of all the common stock of Home Services and Sun
Management. There is no assurance that such distributions will not increase in
the future. As sole general partner of the Operating Partnership, the Company
has the exclusive power to manage and conduct the business of the Operating
Partnership, subject to certain limited exceptions.
The Company's executive and principal property management office is
located at 31700 Middlebelt Road, Suite 145, Farmington Hills, Michigan 48334,
and its telephone number is (810) 932-3100. The Company has regional property
management offices in Elkhart, Indiana and Tampa, Florida.
RISK FACTORS
Prospective investors should carefully consider, among other factors,
the matters described below.
CONFLICTS OF INTEREST
Failure to Enforce Terms of Management Contract. Through their
ownership of all of the common stock of Sun Management, the Principals and
Jeffrey P. Jorissen, an officer of the Company (the Principals and Jeffrey P.
Jorissen are sometimes hereinafter collectively referred to as the "Subsidiary
Shareholders") have a 5% interest in Sun Management. Sun Management has
entered into a management contract with the Financing Partnership with respect
to each of the Properties subject to the Mortgage Debt (as defined below),
which was not negotiated on an arm's length basis. The Subsidiary Shareholders
will have a conflict of interest with respect to their obligations as officers
and/or directors of the Company to enforce the terms of the management
contract. The failure to enforce the material terms of this agreement could
have an adverse effect on the Company. The Operating Partnership, on account
of its ownership of the preferred stock of Sun Management, and the Subsidiary
Shareholders, on account of their ownership of the common stock of Sun
Management, are entitled to 95% and 5%, respectively, of cash flow from
operating activities of Sun Management.
Failure to Enforce Terms of Home Services Agreement. Through their
ownership of all of the common stock of Home Services, the Subsidiary
Shareholders have a 5% interest in Home Services. Home Services has entered
into an agreement with the Operating Partnership for sales, brokerage, and
leasing services, which was not negotiated on an arm's length basis. The
Subsidiary Shareholders will have a conflict of interest with respect to their
obligations as officers and/or directors of the Company to enforce
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<PAGE> 8
the terms of the services agreement. The failure to enforce the material terms
of this agreement could have an adverse effect on the Company. The Operating
Partnership, on account of its ownership of the preferred stock of Home
Services, and the Subsidiary Shareholders, on account of their ownership of the
common stock of Home Services, are entitled to 95% and 5%, respectively, of the
cash flow from operating activities of Home Services.
Tax Consequences Upon Sale of Properties. Prior to the redemption of
partnership interests in the Operating Partnership ("OP Units") for Common
Stock, the Principals will have tax consequences different from those of the
Company and its public stockholders upon the sale of any of the 24 Properties
acquired from partnerships previously affiliated with the Principals (the "Sun
Partnerships") and, therefore, the Principals and the Company, as partners in
the Operating Partnership, may have different objectives regarding the
appropriate pricing and timing of any sale of those Properties. Consequently,
the Principals may influence the Company not to sell those Properties even
though such sale might otherwise be financially advantageous to the Company.
PRINCIPALS' ABILITY TO EXERCISE INFLUENCE
As of August 1, 1996, the Principals owned, in the aggregate,
approximately 5% of the Common Stock (assuming redemption of all outstanding OP
Units) and are exempt from certain limitations on ownership. See "-- Ownership
Limits and Limits on Changes in Control." Accordingly, the Principals will have
substantial influence on the Company and on the outcome of any matters
submitted to the Company's stockholders for approval, which influence might not
be consistent with the interests of other stockholders. In addition, although
there is no current agreement, understanding, or arrangement for the
Principals, as stockholders, to act together on any matter, the Principals
would be in a position to exercise significant influence over the affairs of
the Company if they were to act together in the future.
ADVERSE CONSEQUENCES OF DEBT FINANCING
The Company is subject to the risks normally associated with debt
financing, including the risk that the Company's cash flow will be insufficient
to meet required payments of principal and interest, the risk that existing
indebtedness will not be able to be refinanced, or that the terms of such
refinancing will not be as favorable as the terms of such indebtedness and the
risk that necessary capital expenditures for such purposes as renovations and
other improvements will not be able to be financed on favorable terms or at
all. If a property is mortgaged to secure payment of indebtedness and the
Company is unable to meet mortgage payments, the property could be transferred
to the mortgagee with a consequent loss of income and asset value to the
Company.
As of August 1, 1996, the Financing Partnership had outstanding $30.0
million of indebtedness that is collateralized by mortgage liens on five of the
Properties (the "Mortgage Debt"). If the Company fails to meet its obligations
under the Mortgage Debt, the lender would be entitled to foreclose on all or
some of the Properties securing such debt, which could have a material adverse
effect on the Company and its ability to make expected distributions and could
threaten the continued viability of the Company.
The Company has a one-time right to obtain the release of one Property
from the lien of the Mortgage Debt. In the event the Company desires to obtain
the release of a Property from the lien of such debt, such release may only be
obtained by satisfaction of each of the following: (i) prepayment of such debt
in an amount equal to 125% of the loan amount allocated to the Property being
released; (ii) payment of certain prepayment expenses that may be incurred by
the lender in connection with a partial prepayment of such debt; and (iii)
satisfaction of a specified debt service coverage ratio with respect to the
remaining four Properties not being released. In the event the Company is
unable to obtain the release of a Property from any such lien, it would be
unable to consummate a sale of such Property which might otherwise be in the
best interest of the Company.
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CHANGES IN INVESTMENT AND FINANCING POLICIES WITHOUT STOCKHOLDER APPROVAL
The investment and financing policies of the Company, and its policies
with respect to certain other activities, including its growth, debt,
capitalization, distributions, REIT status, and operating policies, are
determined by the Board of Directors. Although the Board of Directors has no
present intention to do so, these policies may be amended or revised from time
to time at the discretion of the Board of Directors without notice to or a vote
of the stockholders of the Company. Accordingly, stockholders may not have
control over changes in policies of the Company and changes in the Company's
policies may not fully serve the interests of all stockholders.
DEPENDENCE ON KEY PERSONNEL
The Company is dependent on the efforts of its executive officers,
particularly the Principals. While the Company believes that it could find
replacements for these key personnel, the loss of their services could have a
temporary adverse effect on the operations of the Company. The Company does
not currently maintain or contemplate obtaining any "key-man" life insurance on
the Principals.
OWNERSHIP LIMIT AND LIMITS ON CHANGES IN CONTROL
9.8% Ownership Limit; Inapplicability to Founders. In order to
qualify and maintain its qualification as a REIT, not more than 50% of the
outstanding shares of the capital stock of the Company may be owned, directly
or indirectly, by five or fewer individuals. Thus, ownership of more than 9.8%
of the outstanding shares of Common Stock by any single stockholder has been
restricted, with certain exceptions, for the purpose of maintaining the
Company's qualification as a REIT under the Internal Revenue Code of 1986, as
amended (the "Code"). Such restrictions in the Company's charter do not apply
to the Principals and Robert B. Bayer, a former director and officer of the
Company (Robert B. Bayer and the Principals are sometimes hereinafter
collectively referred to as the "Founders"), who may acquire additional shares
of Common Stock through the redemption of OP Units, through the Stock Option
Plan, from other stockholders or otherwise, but in no event will they be
entitled to acquire additional shares such that the five largest beneficial
owners of the Company's stock hold more than 50% of the total outstanding
stock. Additionally, the Company's charter allows certain transfers of such
shares without the transferees being subject to the 9.8% ownership limit,
provided such transfers do not result in an increased concentration in the
ownership of the Company. The Company's Board of Directors, upon receipt of a
ruling from the Internal Revenue Service (the "Service"), an opinion of counsel
or other evidence satisfactory to the Board of Directors and upon such other
conditions as the Board of Directors may direct, may also exempt a proposed
transferee from this restriction.
The 9.8% ownership limit, as well as the ability of the Company to
issue additional shares of Common Stock or shares of other stock (which may
have rights and preferences over the Common Stock), may discourage a change of
control of the Company and may also: (i) deter tender offers for the Common
Stock, which offers may be advantageous to stockholders; and (ii) limit the
opportunity for stockholders to receive a premium for their Common Stock that
might otherwise exist if an investor were attempting to assemble a block of
Common Stock in excess of 9.8% of the outstanding shares of the Company or
otherwise effect a change of control of the Company.
Staggered Board. The Board of Directors of the Company has been
divided into three classes of directors. The term of one class will expire
each year. Directors for each class will be chosen for a three-year term upon
the expiration of such class's term, and the directors in the other two classes
will continue in office. The staggered terms for directors may affect the
stockholders' ability to change control of the Company even if a change in
control were in the stockholders' interest.
Preferred Stock. The Company's charter authorizes the Board of
Directors to issue up to 10,000,000 shares of preferred stock and to establish
the preferences and rights (including the right to vote
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<PAGE> 10
and the right to convert into shares of Common Stock) of any shares issued.
The power to issue preferred stock could have the effect of delaying or
preventing a change in control of the Company even if a change in control were
in the stockholders' interest.
REAL ESTATE INVESTMENT CONSIDERATIONS
General. Income from real property investments, and the Company's
resulting ability to make expected distributions to stockholders, may be
adversely affected by the general economic climate, local conditions such as
oversupply of manufactured housing sites or a reduction in demand for
manufactured housing sites in an area, the attractiveness of the Properties to
tenants, zoning or other regulatory restrictions, competition from other
available manufactured housing sites and alternative forms of housing (such as
apartment buildings and site-built single-family homes), the ability of the
Company to provide adequate maintenance and insurance, and increased operating
costs (including insurance premiums and real estate taxes). The Company's
income would also be adversely affected if tenants were unable to pay rent or
sites were unable to be rented on favorable terms. If the Company were unable
to promptly relet or renew the leases for a significant number of the sites, or
if the rental rates upon such renewal or reletting were significantly lower
than expected rates, then the Company's funds from operations and ability to
make expected distributions to stockholders could be adversely affected. In
addition, certain expenditures associated with each equity investment (such as
real estate taxes and maintenance costs) generally are not reduced when
circumstances cause a reduction in income from the investment. Furthermore,
real estate investments are relatively illiquid and, therefore, will tend to
limit the ability of the Company to vary its portfolio promptly in response to
changes in economic or other conditions.
Competition. All of the Properties are located in developed areas
that include other manufactured housing community properties. The number of
competitive manufactured housing community properties in a particular area
could have a material effect on the Company's ability to lease sites and on
rents charged at the Properties or at any newly acquired properties. The
Company may be competing with others that have greater resources than the
Company and whose officers and directors have more experience than the
Company's officers and directors. In addition, other forms of multi-family
residential properties, such as private and federally funded or assisted
multi-family housing projects and single-family housing, provide housing
alternatives to potential tenants of manufactured housing communities.
Changes in Laws. Costs resulting from changes in real estate tax laws
generally may be passed through to tenants and will not affect the Company.
Increases in income, service or other taxes, however, generally are not passed
through to tenants under leases and may adversely affect the Company's funds
from operations and its ability to make distributions to stockholders.
Similarly, changes in laws increasing the potential liability for environmental
conditions existing on properties or increasing the restrictions on discharges
or other conditions may result in significant unanticipated expenditures, which
would adversely affect the Company's funds from operations and its ability to
make distributions to stockholders.
Investments in Mortgages. Although the Company currently has no plans
to invest in mortgages other than an approximately $4.0 million mortgage loan
it has made to an entity that operates two manufactured housing communities in
Alberta, Canada (the "Canadian Mortgage"), the Company may invest in additional
mortgages in the future. By virtue of its investment in the Canadian Mortgage
and if the Company were to invest in additional mortgages, it is and would be
subject to the risks of such investment, which include the risk that borrowers
may not be able to make debt service payments or pay principal when due, the
risk that the value of mortgaged property may be less than the amounts owed,
and the risk that interest rates payable on the mortgages may be lower than the
Company's costs of funds. If any of the above occurred, funds from operations
and the Company's ability to make expected distributions to stockholders could
be adversely affected.
Development of New Communities. The Company is not restricted from
engaging in the development of new communities in the future. The manufactured
housing community development
- 7 -
<PAGE> 11
business involves significant risks in addition to those involved in the
ownership and operation of established manufactured housing communities,
including the risks that financing may not be available on favorable terms for
development projects, that construction and lease-up may not be completed on
schedule resulting in increased debt service expense and construction costs,
that long-term financing may not be available upon completion of construction,
and that sites may not be leased on profitable terms. If the Company entered
the manufactured housing community development business, and if any of the
above occurred, the Company's ability to make expected distributions to
stockholders could be adversely affected.
Rent Control Legislation. State and local rent control laws in
certain jurisdictions may limit the Company's ability to increase rents and to
recover increases in operating expenses and the costs of capital improvements.
Enactment of such laws has been considered from time to time in other
jurisdictions. Certain of the Properties are located, and the Company may
purchase additional properties, in markets that are either subject to rent
control or in which rent-limiting legislation exists or may be enacted.
Environmental Matters. Under various Federal, state and local laws,
ordinances and regulations, an owner of real estate is liable for the costs of
removal or remediation of certain hazardous or toxic substances on or in such
property. Such laws often impose such liability without regard to whether the
owner knew of, or was responsible for, the presence of such hazardous or toxic
substances. The presence of such substances, or the failure to properly
remediate such substances, may adversely affect the owner's ability to sell or
rent such property or to borrow using such property as collateral. Persons who
arrange for the disposal or treatment of hazardous or toxic substances may also
be liable for the costs of removal or remediation of such substances at a
disposal or treatment facility, whether or not such facility is owned or
operated by such person. Certain environmental laws impose liability for
release of asbestos-containing materials ("ACMs") into the air and third
parties may seek recovery from owners or operators of real properties for
personal injury associated with ACMs. In connection with the ownership (direct
or indirect), operation, management, and development of real properties, the
Company or the Operating Partnership, as the case may be, may be considered an
owner or operator of such properties or as having arranged for the disposal or
treatment of hazardous or toxic substances and, therefore, potentially liable
for removal or remediation costs, as well as certain other related costs,
including governmental fines and injuries to persons and property. All of the
Properties have been subject to a Phase I or similar environmental audit (which
involves general inspections without soil sampling or ground water analysis)
completed by independent environmental consultants. These environmental audits
have not revealed any significant environmental liability that would have a
material adverse effect on the Company's business. No assurances can be given
that existing environmental studies with respect to any of the Properties
reveal all environmental liabilities, that any prior owner of a Property did
not create any material environmental condition not known to the Company, or
that a material environmental condition does not otherwise exist as to any one
or more Properties.
Uninsured Loss. The Company maintains comprehensive liability, fire,
flood (where appropriate), extended coverage, and rental loss insurance with
respect to the Properties with policy specifications, limits, and deductibles
customarily carried for similar properties. Certain types of losses, however,
may be either uninsurable or not economically insurable, such as losses due to
earthquakes, riots, or acts of war. Should an uninsured loss occur, the
Company could lose both its investment in and anticipated profits and cash flow
from a property.
ADVERSE CONSEQUENCES OF FAILURE TO QUALIFY AS A REIT
Taxation as a Corporation. The Company expects to qualify and has
made an election to be taxed as a REIT under the Code, commencing with the
calendar year beginning January 1, 1994. Although the Company believes that it
is organized and will operate in such a manner, no assurance can be given that
the Company is organized or will be able to operate in a manner so as to
qualify or remain so qualified. Qualification as a REIT involves the
satisfaction of numerous requirements (some on an annual and quarterly basis)
established under highly technical and complex Code provisions for which there
are only
- 8 -
<PAGE> 12
limited judicial or administrative interpretations, and involves the
determination of various factual matters and circumstances not entirely within
the Company's control.
If the Company were to fail to qualify as a REIT in any taxable year,
the Company would be subject to Federal income tax (including any applicable
alternative minimum tax) on its taxable income at corporate rates. Moreover,
unless entitled to relief under certain statutory provisions, the Company also
would be disqualified from treatment as a REIT for the four taxable years
following the year during which qualification is lost. This treatment would
reduce the net earnings of the Company available for investment or distribution
to stockholders because of the additional tax liability to the Company for the
years involved. In addition, distributions to stockholders would no longer be
required to be made.
Other Tax Liabilities. Even though the Company qualifies as a REIT, it
is subject to certain Federal, state and local taxes on its income and
property. In addition, the management operations relating to the Properties
subject to the mortgages granted in connection with the Mortgage Debt and the
Company's sales operations, which are conducted through Sun Management and Home
Services, respectively, generally will be subject to Federal income tax at
regular corporate rates.
ADVERSE EFFECT OF DISTRIBUTION REQUIREMENTS
The Company may be required from time to time, under certain
circumstances, to accrue as income for tax purposes interest and rent earned
but not yet received. In such event, the Company could have taxable income
without sufficient cash to enable the Company to meet the distribution
requirements of a REIT. Accordingly, the Company could be required to borrow
funds or liquidate investments on adverse terms in order to meet such
distribution requirements.
ADVERSE CONSEQUENCES OF FAILURE TO QUALIFY AS A PARTNERSHIP
The Company believes that the Operating Partnership and the Financing
Partnership have each been organized as partnerships and will qualify for
treatment as such under the Code. If the Operating Partnership and the
Financing Partnership fail to qualify for such treatment under the Code, the
Company would cease to qualify as a REIT, and the Operating Partnership and the
Financing Partnership would be subject to Federal income tax (including any
alternative minimum tax) on their income at corporate rates.
ADVERSE EFFECT ON PRICE OF SHARES AVAILABLE FOR FUTURE SALE
Sales of a substantial number of shares of Common Stock, or the
perception that such sales could occur, could adversely affect prevailing
market prices for shares. The Principals hold 943,456 shares of Common Stock.
In addition, up to 3,208,519 shares of Common Stock may be issued in the future
to the Principals, the general partners of the Sun Partnerships other than the
Principals (the "Former General Partners"), and the sellers of certain
properties as a result of the potential redemption of their outstanding OP
Units (both Common and Preferred OP Units). Except in certain limited
circumstances or with the prior written consent of Lehman Brothers Inc. and the
Company, the Principals and the Former General Partners may not sell more than
one-third of such holder's shares prior to December 15, 1995 or two-thirds of
such holders' shares prior to December 15, 1996. After December 15, 1996, the
Principals and the Former General Partners may sell remaining unsold shares
pursuant to registration rights or an available exemption from registration.
Also, the former owner of one of the Properties will be issued OP Units with an
aggregate value of $10.85 million over the 11-year period beginning in January
1997 and continuing on an annual basis through 2007. In addition, 1,461,513
shares have been reserved for issuance pursuant to the Plans (of which 353,997
shares were issued to the Principals upon the exercise of options pursuant to
the Employee Option Plan), and the Principals' employment agreements provide
for incentive compensation payable in shares of Common Stock. These shares may
be sold without the consent of Lehman Brothers Inc. and the Company. No
prediction can be made regarding the effect that future sales of shares of
Common Stock will have on the market price of shares.
- 9 -
<PAGE> 13
ADVERSE EFFECT OF MARKET INTEREST RATES ON PRICE OF COMMON STOCK
One of the factors that may influence the price of the Company's
shares in the public market will be the annual distributions to stockholders
relative to the prevailing market price of the Common Stock. An increase in
market interest rates may tend to make the Common Stock less attractive
relative to other investments, which could adversely affect the market price of
Common Stock.
SELLING STOCKHOLDERS
The following table sets forth: (i) the name of each Selling
Stockholder, whose name is known as of the date of the filing of the
registration statement of which this Prospectus forms a part, under the Plans
who may sell Common Stock pursuant to this Prospectus; (ii) his position with
the Company and its predecessors over the last three years; (iii) the number of
shares of Common Stock owned (or subject to option) by each such Selling
Stockholder as of the date of this Prospectus; (iv) the number of shares of
Common Stock which may be offered and are being registered for the account of
each Selling Stockholder by this Prospectus; and (v) the amount of the class to
be owned by each such Selling Stockholder if such Selling Stockholder were to
sell all of the shares of Common Stock covered by this Prospectus. There can
be no assurance that any of the Selling Stockholders will offer for sale or
sell any or all of the Shares offered by them pursuant to this Prospectus.
Options or shares of Common Stock may be issued under either of the Plans in
amounts and to persons not presently known by the Company; when known, such
persons, their holdings of Common Stock and certain other information may be
included in a subsequent version of this Prospectus.
<TABLE>
<CAPTION>
NUMBER OF NUMBER OF
SHARES HELD NUMBER OF SHARES OWNED IF ALL
PRIOR TO THIS SHARES REGISTERED
POSITION WITH REGISTRATION/ TO BE HEREUNDER WERE
NAME COMPANY PERCENTAGE(1) REGISTERED SOLD/PERCENTAGE
------------ ------------- -------------- -------------- -----------------
<S> <C> <C> <C> <C>
Milton M. Shiffman Chairman of the 379,216/2.5% 73,567 305,649/2%
Board(2)
Gary A. Shiffman Chief Executive 664,240/4.4% 380,430 283,810/1.9%
Officer, President
and Director(3)
Jeffrey P. Jorissen Senior Vice 88,225/* 70,000 18,225/*
President,
Treasurer, Chief
Financial Officer
and Secretary(4)
Gilbert Opaleski None(5) 21,047/* 1,750 19,297/*
Brian W. Fannon Senior Vice 62,100/* 55,000 7,100/*
President and Chief
Operating Officer(6)
Jonathan M. Colman Senior Vice 32,500/* 27,500 5,000/*
President-
Acquisitions(7)
Paul D. Lapides Director(8) 3,500/* 2,500 1,000/*
Clunet R. Lewis Director(8) 4,500/* 2,500 2,000/*
</TABLE>
-10-
<PAGE> 14
<TABLE>
<S> <C> <C> <C> <C>
Ted J. Simon Director(8) 3,500/* 2,500 1,000/*
Carl R. Weinert Director(8) 2,500/* 2,500 0/0
Ronald L. Piasecki Director(9) 2,500/* 2,500 0/0
</TABLE>
- ----------------------------------
* Less than one percent.
(1) For purposes of this table, the number of shares owned prior to this
Registration Statement includes all shares which would be owned if all
options granted under the Plans were exercised.
(2) Mr. Shiffman has been the Chairman of the Board since the Company's
inception.
(3) Mr. Shiffman has been the President and a director of the Company
since its inception. Mr. Shiffman became the Chief Executive Officer
of the Company in October 1994.
(4) Mr. Jorissen has been Chief Financial Officer and Secretary since
August 1993 and Senior Vice President and Treasurer since December
1993.
(5) From August 1993 until February 1996, Mr. Opaleski was a Vice
President-Property Management of the Company.
(6) Mr. Fannon joined the Company in May 1994 as Senior Vice
President-Operations and became Chief Operating Officer in 1995.
(7) Mr. Colman joined the Company in 1994 as Vice President-Acquisitions
and became a Senior Vice President in 1995.
(8) Messrs. Lapides, Lewis, Simon and Weinert have been directors of the
Company since December 1993.
(9) Mr. Piasecki joined the Company's Board of Directors in May 1996.
PLAN OF DISTRIBUTION
The Selling Stockholders have not advised the Company of any specific
plans for distribution of the Shares offered hereby, but it is anticipated that
the Selling Stockholders (or their pledgees, donees, transferees or other
successors in interest) may sell all or a portion of the Shares from time to
time to purchasers directly or through underwriters, dealers or agents, who may
receive compensation in the form of underwriting discounts, concessions or
commissions from the Selling Stockholders and/or purchasers of the Shares for
whom they may act as agent. The Selling Stockholders will be responsible for
payment of any and all commissions to brokers, which will be negotiated on an
individual basis. The Selling Stockholders and any underwriters, dealers or
agents that participate in the distribution of the Shares might
<PAGE> 15
be deemed to be "underwriters" within the meaning of the Securities Act, and
any profit on the sale of such Shares by them and any discounts, commissions or
concessions received by any such underwriters, dealers or agents might be
deemed to be underwriting discounts and commissions under the Securities Act.
At the time a particular offer of any of the Shares is made, to the extent
required, a supplement to this Prospectus will be distributed which will set
forth the aggregate principal amount of Shares being offered and the terms of
the offering, including the name or names of any underwriters, dealers or
agents, any discounts, commissions or other items constituting compensation
from the Selling Stockholders and any discounts, commissions or concessions
allowed or re-allowed or paid to dealers.
The Shares may be sold on the NYSE at prices and at terms then
prevailing or at prices related to the then current market price, or in
negotiated transactions. The Shares may be sold by one or more of the
following: (a) a block trade in which the broker or dealer so engaged will
attempt to sell the shares as agent but may position and resell a portion of
the block as principal to facilitate the transaction; (b) purchases by a broker
or dealer for its account pursuant to this Prospectus; or (c) ordinary
brokerage transactions and transactions in which the broker solicits purchases.
Shares of Common Stock covered by this Prospectus also may qualify to be sold
pursuant to Rule 144 under the Securities Act, rather than pursuant tho this
Prospectus. The Selling Stockholders will be subject to applicable provisions
of the Exchange Act, including without limitation, Rules 10b-5, 10b-6 and
10b-7, which provisions may limit the timing of purchases and sales of any of
the Shares by the Selling Stockholders.
LEGAL MATTERS
The legality of the Common Stock offered hereby will be passed upon
for the Company by Jaffe, Raitt, Heuer & Weiss, Professional Corporation,
Detroit, Michigan.
EXPERTS
The consolidated financial statements and consolidated financial
statement schedules of the Company as of December 31, 1995 and 1994, and for
the years ended December 31, 1995, 1994 and 1993 included in the Company's
Annual Report on Form 10-K for the year ended December 31, 1995 have been
incorporated herein in reliance on the report of Coopers & Lybrand L.L.P.,
independent certified public accountants, and upon the authority of said firm
as experts in accounting and auditing.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company's charter authorizes the Company to obligate itself to
indemnify its present and former directors and officers and to pay or reimburse
expenses for such individuals in advance of the final disposition of a
proceeding to the maximum extent permitted from time to time by Maryland law.
The Company's bylaws obligate it to indemnify and advance expenses to present
and former directors and officers to the maximum extent permitted by Maryland
law. The Maryland General Corporation Law (the "MGCL") permits a corporation
to indemnify its present and former directors and officers, among others,
against judgments, penalties, fines, settlements, and reasonable expenses
actually incurred by them in connection with any proceeding to which they may
be made a party by reason of their service in those capacities unless it is
established that: (i) the act or omission of the director or officer was
material to the matter giving rise to the proceeding; and (a) was committed in
bad faith or, (b) was the result of active and deliberate dishonesty; (ii) the
director or officer actually received an improper personal benefit in money,
property, or services; or (iii) in the case of any criminal proceeding, the
director or officer had reasonable cause to believe that the act or omission
was unlawful.
The MGCL permits the charter of a Maryland corporation to include a
provision limiting the liability of its directors and officers to the
corporation and its stockholders for money damages, except to the extent that:
(i) it is proved that the person actually received an improper benefit or
profit in money, property or services; or (ii) a judgment or other final
adjudication is entered in a proceeding based on a
- 12 -
<PAGE> 16
finding that the person's action, or failure to act, was the result of active
and deliberate dishonesty and was material to the cause of action adjudicated
in the proceeding. The Company's charter contains a provision providing for
elimination of the liability of its directors or officers to the Company or its
stockholders for money damages to the maximum extent permitted by Maryland law
from time to time.
- 13 -
<PAGE> 17
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents filed with the Commission are incorporated
herein by reference:
(a) The Company's latest annual report filed pursuant to Section 13 or
15(d) of the Exchange Act or the latest prospectus filed pursuant to Rule
424(b) under the Securities Act that contains audited financial statements for
the Company's latest fiscal year for which such statements have been filed.
(b) All other reports filed pursuant to Section 13(a) or 15(d) of the
Exchange Act since the end of the fiscal year covered by the annual report or
the prospectus referred to in (a) above.
(c) The description of the Common Stock contained in the Company's
registration statements filed under Section 12(g) of the Exchange Act,
including any amendment or reports filed for the purpose of updating such
description.
In addition, all documents filed by the Company pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act subsequent to the date of this
Registration Statement and prior to the filing of a post-effective amendment
which indicates that all securities offered have been sold or which deregisters
all securities then remaining unsold, shall be deemed to be incorporated herein
by reference and to be a part hereof from the date of filing of such documents.
Any statement contained in this Registration Statement or in a
document incorporated, or deemed to be incorporated, by reference herein shall
be deemed to be modified or superseded for purposes of this Registration
Statement to the extent that a statement contained herein or in any
subsequently filed document which also is, or is deemed to be, incorporated by
reference herein modifies or supersedes such statement. Except as so modified
or superseded, such statement shall not be deemed to constitute a part of this
Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company's charter authorizes the Company to obligate itself to
indemnify its present and former directors and officers and to pay or reimburse
expenses for such individuals in advance of the final disposition of a
proceeding to the maximum extent permitted from time to time by Maryland law.
The Company's bylaws obligate it to indemnify and advance expenses to present
and former directors and officers to the maximum extent permitted by Maryland
law. The Maryland General Corporation Law (the "MGCL") permits a corporation
to indemnify its present and former directors and officers, among others,
against judgments, penalties, fines, settlements, and reasonable expenses
actually incurred by them in connection with any proceeding to which they may
be made a party by reason of their service in those capacities unless it is
established that: (i) the act or omission of the director or officer was
material to the matter giving rise to the proceeding; and (a) was committed in
bad faith or, (b) was the result of active and deliberate dishonesty; (ii) the
director or officer actually received an improper personal benefit in money,
II-1
<PAGE> 18
property, or services; or (iii) in the case of any criminal proceeding, the
director or officer had reasonable cause to believe that the act or omission
was unlawful.
The MGCL permits the charter of a Maryland corporation to include a
provision limiting the liability of its directors and officers to the
corporation and its stockholders for money damages, except to the extent that:
(i) it is proved that the person actually received an improper benefit or
profit in money, property or services; or (ii) a judgment or other final
adjudication is entered in a proceeding based on a finding that the person's
action, or failure to act, was the result of active and deliberate dishonesty
and was material to the cause of action adjudicated in the proceeding. The
Company's charter contains a provision providing for elimination of the
liability of its directors or officers to the Company or its stockholders for
money damages to the maximum extent permitted by Maryland law from time to
time.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
In June 1995, Dr. Milton Shiffman exercised options to purchase 48,567
shares of Common Stock, which were granted in connection with the Employee
Option Plan. Upon the exercise of such options, the Company issued 48,567
shares of Common Stock to Dr. Shiffman in a transaction exempt from the
registration requirements of the Securities Act pursuant to Section 4(2)
thereof. Dr. Shiffman represented that he was acquiring such shares for
investment purposes and not with a view to distribution within the meaning of
the Securities Act. The stock certificate evidencing such shares bears a
restrictive legend.
In July 1995, Mr. Gary Shiffman exercised options to purchase 305,430
shares of Common Stock, which were granted in connection with the Employee
Option Plan. Upon the exercise of such options, the Company issued 305,430
shares of Common Stock to Mr. Shiffman in a transaction exempt from the
registration requirements of the Securities Act pursuant to Section 4(2)
thereof. Mr. Shiffman represented that he was acquiring such shares for
investment purposes and not with a view to distribution within the meaning of
the Securities Act. The stock certificate evidencing such shares bears a
restrictive legend.
In June 1996, Mr. Gilbert Opaleski, a former employee of the Company,
exercised options to purchase 500 shares of Common Stock and, in August 1996,
Mr. Opaleski exercised options to purchase 1,250 shares of Common Stock. Both
of these options were granted in connection with the Employee Option Plan.
Upon the exercise of such options, the Company issued an aggregate of 1,750
shares of Common Stock to Mr. Opaleski in a transaction exempt from the
registration requirements of the Securities Act pursuant to Section 4(2)
thereof. Mr. Opaleski represented that he was acquiring such shares for
investment purposes and not with a view to distribution within the meaning of
the Securities Act. The stock certificates evidencing such shares bear a
restrictive legend.
In December 1995, Mr. Carl Weinert exercised options to purchase 833
shares of Common Stock and, in August 1996, Mr. Weinert exercised options to
purchase 833 shares of Common Stock. Both of these options were granted in
connection with the Director Option Plan. Upon the exercise of such options,
the Company issued an aggregate of 1,666 shares of Common Stock to Mr. Weinert
in a transaction exempt from the registration requirements of the Securities
Act pursuant to Section 4(2) thereof. Mr. Weinert represented that he was
acquiring such shares for investment purposes and not with a view to
distribution within the meaning of the Securities Act. The stock certificates
evidencing such shares bear a restrictive legend.
In December 1995, Mr. Paul Lapides exercised options to purchase 500
shares of Common Stock, which were granted in connection with the Director
Option Plan. Upon the exercise of such options, the Company issued 500 shares
of Common Stock to Mr. Lapides in a transaction exempt from the registration
requirements of the Securities Act pursuant to Section 4(2) thereof. Mr.
Lapides represented that he was acquiring such shares for investment purposes
and not with a view to distribution within the meaning of the Securities Act.
The stock certificate evidencing such shares bears a restrictive legend.
II-2
<PAGE> 19
In June 1996, Mr. Ted Simon exercised options to purchase 500 shares
of Common Stock, which were granted in connection with the Director Option
Plan. Upon the exercise of such options, the Company issued 500 shares of
Common Stock to Mr. Simon in a transaction exempt from the registration
requirements of the Securities Act pursuant to Section 4(2) thereof. Mr. Simon
represented that he was acquiring such shares for investment purposes and not
with a view to distribution within the meaning of the Securities Act. The
stock certificate evidencing such shares bears a restrictive legend.
ITEM 8. EXHIBITS
The exhibits filed herewith are set forth on the exhibit index filed
as part of this Registration Statement.
ITEM 9. UNDERTAKINGS
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration
statement:
(i) to include any prospectus required by Section 10(a)(3) of
the Securities Act;
(ii)to reflect in the prospectus any facts or events arising
after the effective date of this registration statement (or
the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in this registration
statement;
(iii) to include any material information with respect to the
plan of distribution not previously disclosed in this
registration statement or any material change to such
information in this registration statement;
Provided, however, that paragraphs (1)(i) and (1)(ii) do not apply
if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed
by the Company pursuant to Section 13 or Section 15(d) of the Exchange
Act that are incorporated by reference in this registration statement.
(2) That, for the purpose of determining any liability under
the Securities Act, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold
at the termination of the offering.
(b) The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act, each filing of
the registrant's annual report pursuant to section 13(a) or 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to section 15(d) of the Exchange Act) that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) Insofar as indemnification for liabilities arising under
the Securities Act may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable.
II-3
<PAGE> 20
In the event that a claim for indemnification against such liabilities (other
than the payment by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful defense of
any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.
II-4
<PAGE> 21
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets
all the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Farmington Hills, State of Michigan,
on September 9, 1996.
SUN COMMUNITIES, INC., a Maryland corporation
By: /s/ Gary A. Shiffman
------------------------------------------
Gary A. Shiffman, President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below, hereby constitutes and appoints Milton M. Shiffman, Gary A. Shiffman,
and Jeffrey P. Jorissen, or either of them, his attorneys-in-fact and agents,
with full power of substitution and resubstitution for him in any and all
capacities, to sign any or all amendments or post-effective amendments to this
Registration Statement, and to file the same, with exhibits thereto and other
documents in connection therewith or in connection with the registration of the
Common Stock under the Securities Act of 1933, with the Securities and Exchange
Commission, granting unto each of such attorneys-in-fact and agents full power
and authority to do and perform each and every act and thing requisite and
necessary in connection with such matters as fully to all intents and purposes
as he might or could do in person, hereby ratifying and confirming all that
each of such attorneys-in-fact and agents or his substitute or substitutes may
do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
<TABLE>
<CAPTION>
NAME TITLE DATE
<S> <C> <C>
/s/ Milton M. Shiffman Chairman of the Board of Directors September 9, 1996
-----------------------------------------------------------
Milton M. Shiffman
/s/ Gary A. Shiffman Chief Executive Officer, President, and September 9, 1996
----------------------------------------------------------- Director
Gary A. Shiffman
/s/ Jeffrey P. Jorissen Chief Financial Officer, Senior Vice September 9, 1996
----------------------------------------------------------- President, Secretary, and Principal Accounting
Jeffrey P. Jorissen Officer
/s/ Carl R. Weinert Director September 9, 1996
-----------------------------------------------------------
Carl R. Weinert
/s/ Paul D. Lapides Director September 9, 1996
-----------------------------------------------------------
Paul D. Lapides
/s/ Ted J. Simon Director September 9, 1996
-----------------------------------------------------------
Ted J. Simon
/s/ Ronald L. Piasecki Director September 9, 1996
-----------------------------------------------------------
Ronald L. Piasecki
/s/ Clunet R. Lewis Director September 9, 1996
-----------------------------------------------------------
Clunet R. Lewis
</TABLE>
II-5
<PAGE> 22
SUN COMMUNITIES, INC.
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
------ ----------- -------------
<S> <C> <C>
4.1 Amended and Restated 1993 Stock Option Plan
4.2 Amended and Restated 1993 Non-Employee Director Stock Option Plan
4.3 Form of Stock Option Agreement between the Company and certain directors, officers and (1)
other individuals
4.4 Form of Non-Employee Director Stock Option Agreement between the Company and certain (2)
directors
5.1 Opinion of Jaffe, Raitt, Heuer & Weiss, P.C. with respect to the validity of the shares
of Common Stock underlying options registered hereby
23.1 Consent of Jaffe, Raitt, Heuer & Weiss, P.C. (included as part of Exhibit 5.1)
23.2 Consent of Coopers & Lybrand L.L.P., independent accountants
24.1 Power of Attorney (included on the signature page of this Registration Statement)
</TABLE>
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(1) Incorporated by reference to the Company's Registration Statement No.
33-69340.
(2) Incorporated by reference to the Company's Registration Statement No.
33-80972.
<PAGE> 1
EXHIBIT 4.1
SUN COMMUNITIES, INC.
AMENDED AND RESTATED
1993 STOCK OPTION PLAN
ARTICLE I.
PURPOSE AND ADOPTION OF THE PLAN
1.01 PURPOSE. The purpose of the Sun Communities, Inc. Stock
Option Plan (the "Plan") is to provide certain key employees of Sun
Communities, Inc. (the "Company") with an additional incentive to promote the
Company's financial success and to provide an incentive which the Company may
use to induce able persons to enter into or remain in the employment of the
Company or a Subsidiary.
1.02 ADOPTION AND TERM. The Plan was initially approved by the
Board and the Company's shareholders and was effective as of November 19, 1993.
The Amended and Restated Plan was approved by the Board on, and is effective as
of, May 20, 1996, subject to approval of the Company's stockholders on or
before May 20, 1997, and will remain in effect until all shares authorized
under the terms of the Plan have been issued, unless earlier terminated or
abandoned by action of the Board; provided, however, that no Incentive Stock
Option may be granted after November 19, 2003.
ARTICLE II.
DEFINITIONS
2.01 ADMINISTRATOR means the group of persons having authority
to administer the Plan pursuant to Section 3.01.
2.02 AVERAGE PRICE means, on any given date, the average of the
closing sales prices of the Company Common Stock as quoted on the New York
Stock Exchange for the ten (10) business day period immediately preceding and
including the Date of Grant.
2.03 AWARD means any one or combination of Non-Qualified Stock
Options, Performance Based Options, Incentive Stock Options, Stock Appreciation
Rights, Restricted Share Rights or any other award made under the terms of the
Plan.
2.04 AWARD AGREEMENT means a written agreement between the
Company and Participant or a written acknowledgment from the Company
specifically setting forth the terms and conditions of an Award granted under
the Plan.
2.05 AWARD PERIOD means, with respect to an Award, the period of
time set forth in the Award Agreement during which specified conditions set
forth in the Award Agreement must be satisfied.
<PAGE> 2
2.06 BENEFICIARY means (a) an individual, trust or estate who or
which, by will or by operation of the laws of descent and distribution,
succeeds to the rights and obligations of the Participant under the Plan and
Award Agreement upon the Participant's death; or (b) an individual, who by
designation of the Participant, succeeds to the rights and obligations of the
Participant under the Plan and Award Agreement upon the Participant's death.
2.07 BOARD means the Board of Directors of the Company.
2.08 CHANGE OF CONTROL EVENT means (a) an event or series of
events by which any Person or other entity or group (as such term is used in
Section 13(d) and 14(d) of the Exchange Act) of Persons or other entities
acting in concert as a partnership or other group (a "Group of Persons") (other
than Persons who are, or Groups of Persons entirely made up of, (i) management
personnel of the Company or (ii) any affiliates of any such management
personnel) shall, as a result of a tender or exchange offer or offers, an open
market purchase or purchases, a privately negotiated purchase or purchases or
otherwise, become the beneficial owner (within the meaning of Rule 13d-3 under
the Exchange Act, except that a Person shall be deemed to have "beneficial
ownership" of all securities that such Person has the right to acquire, whether
such right is exercisable immediately or only after the passage of time),
directly or indirectly, of 20% or more of the combined voting power of the then
outstanding voting stock of the Company; (b) the Company consolidates with, or
merges with or into, another Person (other than a Subsidiary in a transaction
which is not otherwise a Change of Control Event), or sells, assigns, conveys,
transfers, leases or otherwise disposes of all or substantially all of its
assets to any Person, or any Person consolidates with, or merges with or into
the Company, in any such event pursuant to a transaction in which the
outstanding voting stock of the Company is converted into or exchanged for
cash, securities or other property; (c) during any consecutive two-year period,
individuals who at the beginning of such period constituted the Board (together
with any new directors whose election by such Board or whose nomination for
election by the stockholders of the Company, was approved by a vote of 66-2/3%
of the directors then still in office who were either directors at the
beginning of such period or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority of the
Board then in office; or (d) any liquidation or dissolution of the Company
(other than a liquidation into a Subsidiary that is not otherwise a Change of
Control Event).
2.09 CODE means the Internal Revenue Code of 1986, as amended.
References to a section of the Code shall include that section and any
comparable section or sections of any future legislation that amends,
supplements or supersedes that section.
2.10 COMPANY means Sun Communities, Inc., a Maryland
corporation.
2.11 COMPANY COMMON STOCK means the Common Stock of the Company,
par value $0.01.
<PAGE> 3
2.12 DATE OF GRANT means the date designated by the
Administrator as the date as of which it grants an Award, which shall not be
earlier than the date on which the Administrator approves the granting of such
Award.
2.13 DIRECTOR means a member of the Board of Directors of the
Company.
2.14 EXCHANGE ACT means the Securities Exchange Act of 1934, as
amended.
2.15 EXERCISE PRICE means, with respect to a Stock Appreciation
Right, the amount established by the Administrator, in accordance with Section
7.03 hereunder, and set forth in the Award Agreement, which is to be subtracted
from the Fair Market Value on the date of exercise in order to determine the
amount of the Incremental Value to be paid to the Participant.
2.16 EXPIRATION DATE means the date specified in an Award
Agreement as the expiration date of such Award.
2.17 FAIR MARKET VALUE means, with respect to Awards granted
coincident with the date of the closing of the Company's initial public
offering of Company Common Stock, the public offering price. Thereafter, Fair
Market Value means, on any given date, the average of the highest and lowest
selling price for the Company Common Stock as reported on the Composite Tape
for New York Stock Exchange Listed Companies, or, if there were no sales on
such date, the average of the highest and lowest selling price for the most
recent date upon which a sale was reported.
2.18 INCENTIVE STOCK OPTION means a stock option described in
Section 422 of the Code.
2.19 INCREMENTAL VALUE has the meaning given such term in
Section 7.01 of the Plan.
2.20 NON-QUALIFIED STOCK OPTION means a stock option which is
not an Incentive Stock Option.
2.21 OFFICER means a president, vice president, treasurer,
secretary, controller, and any other person who performs functions
corresponding to the foregoing officers for the Company, any member of the
Board of the Company or any person performing similar functions with respect to
the Company, and any other participant who is deemed to be an officer or
director of the Company for purposes of Section 16 of the Exchange Act and the
rules thereunder, as currently in effect or as amended from time to time.
2.22 OPTIONS means all Non-Qualified Stock Options, Incentive
Stock Options and Performance Based Options granted at any time under the Plan.
2.23 PARTICIPANT shall have the meaning set forth in Article V.
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<PAGE> 4
2.24 PERFORMANCE BASED OPTION means a stock option which, upon
exercise or at any other time, would not result in or give rise to "applicable
employee remuneration" within the meaning of Section 162(m) of the Code.
2.25 PLAN means the Sun Communities, Inc. Stock Option Plan, as
described herein and as it may be amended from time to time.
2.26 PURCHASE PRICE, with respect to options, shall have the
meaning set forth in Section 6.02.
2.27 RESTRICTED SHARE RIGHT means a right to receive Company
Common Stock subject to restrictions imposed under the terms of an Award
granted pursuant to Article IX.
2.28 RULE 16B-3 means Rule 16b-3 promulgated by the Securities
and Exchange Commission under Section 16 of the Exchange Act, as currently in
effect and as it may be amended from time to time, and any successor rule.
2.29 STOCK APPRECIATION RIGHT means an Award granted in
accordance with Article VII.
2.30 SUBSIDIARY shall have the meaning set forth in Section
424(f) of the Code.
2.31 TERMINATION OF EMPLOYMENT means the voluntary or
involuntary termination of a Participant's employment with the Company for any
reason, including death, disability, retirement or as the result of the
divestiture of the Participant's employer or any other similar transaction in
which the Participant's employer ceases to be the Company or a Subsidiary of
the Company. Whether an authorized leave of absence or absence on military or
government service, absence due to disability, or absence for any other reason
shall constitute Termination of Employment shall be determined in each case by
the Administrator in its sole discretion.
ARTICLE III.
ADMINISTRATION
3.01 ADMINISTRATION. The Administrator of the Plan shall be a
committee of two or more Directors with authority to act as provided in Rule
16b-3 and shall be elected or appointed by the Board. The members of the
committee shall meet the "disinterested person" requirements of Rule
16b-3(c)(2)(i) and, with respect to Awards designated as Performance Based
Options, shall also be "outside directors" within the meaning of Section 162(m)
of the Code. The Administrator shall administer the Plan in accordance with
this provision and shall have the sole discretionary authority to interpret the
Plan, to establish and modify administrative rules for the Plan, to impose such
conditions and restrictions on Awards as it determines appropriate, to cancel
Awards (including those made pursuant to other plans of the Company) and to
substitute new options (including options granted under other plans of the
Company) with the consent of the recipient, and to take such steps in
connection with the Plan and Awards granted thereunder as it may
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<PAGE> 5
deem necessary or advisable. The Administrator may, with respect to
Participants who are not Officers, delegate such of its powers and authority
under the Plan as it deems appropriate to designated officers or employees of
the Company.
3.02 INDEMNIFICATION. Members of the Administrator shall be
entitled to indemnification and reimbursement from the Company for any action
or any failure to act in connection with service as Administrator to the full
extent provided for or permitted by the Company's certificate of incorporation
or bylaws or by any insurance policy or other agreement intended for the
benefit of the Company's officers, directors or employees or by any applicable
law.
ARTICLE IV.
COMPANY COMMON STOCK ISSUABLE PURSUANT TO THE PLAN
4.01 SHARES ISSUABLE. Shares to be issued under the Plan may be
authorized and unissued shares or issued shares which have been reacquired by
the Company. Except as provided in Section 4.03, the Awards granted to any
Participant and to all Participants in the aggregate under the Plan shall be
limited so that the sum of the following shall never exceed nine percent (9%)
of the total number of shares of Company Common Stock outstanding: (i) all
shares which shall be issued upon the exercise of outstanding Options or other
Awards granted under the Plan, (ii) all shares for which payment of Incremental
Value shall be made by reason of the exercise of Stock Appreciation Rights at
any time granted under the Plan, and (iii) the number of shares otherwise
issuable under an Award which are applied by the Company to payment of the
withholding or tax liability discussed in Section 11.04.
4.02 SHARES SUBJECT TO TERMINATED AWARDS. In the event that any
Award at any time granted under the Plan shall be surrendered to the Company,
be terminated or expire before it shall have been fully exercised, or an award
of Stock Appreciation Rights is exercised for cash, then all shares formerly
subject to such Award as to which such Award shall not have been exercised
shall be available for any Award subsequently granted in accordance with the
Plan. Shares of Company Common Stock subject to Options, or portions thereof,
which have been surrendered in connection with the exercise of tandem Stock
Appreciation Rights shall not be available for subsequent Awards under the
Plan, and shares of Company Common Stock issued in payment of such Stock
Appreciation Rights shall be charged against the number of shares of Company
Common Stock available for the grant of Awards. Shares which are reacquired by
the Company or shares issuable subject to Restricted Share Rights which are
forfeited pursuant to forfeiture provisions in the Award Agreement shall be
available for subsequently granted Awards only if the forfeiting Participant
received no benefits of ownership (such as dividends actually paid to the
Participant) other than voting rights of the forfeited shares. Any shares of
Company Common Stock issued by the Company pursuant to its assumption or
substitution of outstanding grants from acquired companies shall not reduce the
number of shares available for Awards under this Plan unless issued under this
Plan.
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<PAGE> 6
4.03 ADJUSTMENTS TO REFLECT CAPITAL CHANGES.
(a) RECAPITALIZATION. The number and kind of shares
subject to outstanding Awards, the Purchase Price or Exercise Price
for such shares, and the number and kind of shares available for
Awards subsequently granted under the Plan shall be appropriately
adjusted to reflect any stock dividend, stock split, combination or
exchange of shares, merger, consolidation or other change in
capitalization with a similar substantive effect upon the Plan or the
Awards granted under the Plan. The Administrator shall have the power
to determine the amount of the adjustment to be made in each case.
(b) SALE OR REORGANIZATION. After any reorganization,
merger or consolidation in which the Company is a surviving
corporation, each Participant shall, at no additional cost, be
entitled upon exercise of an Award to receive (subject to any required
action by stockholders), in lieu of the number of shares of Company
Common Stock receivable or exercisable pursuant to such Award, a
number and class of shares of stock or other securities to which such
Participant would have been entitled pursuant to the terms of the
reorganization, merger or consolidation if, at the time of such
reorganization, merger or consolidation, such Participant had been the
holder of record of a number of shares of stock equal to the number of
shares receivable or exercisable pursuant to such Award. Comparable
rights shall accrue to each Participant in the event of successive
reorganizations, mergers or consolidations of the character described
above.
(c) OPTIONS TO PURCHASE STOCK OF ACQUIRED COMPANIES.
After any reorganization, merger or consolidation in which the Company
or a Subsidiary of the Company shall be a surviving corporation, the
Administrator may grant substituted Options under the provisions of
the Plan, pursuant to Section 424 of the Code, replacing old options
granted under a plan of another party to the reorganization, merger or
consolidation, where such party's stock may no longer be issued
following such merger or consolidation. The foregoing adjustments and
manner of application of the foregoing provisions shall be determined
by the Administrator in its sole discretion. Any adjustments may
provide for the elimination of any fractional shares which might
otherwise have become subject to any Awards.
ARTICLE V.
PARTICIPATION
5.01 ELIGIBLE EMPLOYEES. Participants in the Plan shall be the
Officers who are employees of the Company or a Subsidiary of the Company and
other employees of the Company or a Subsidiary having managerial, supervisory
or similar responsibilities or who are key administrative employees or sales
managers, and who are not covered by any collective bargaining agreement
binding on such persons' employer, as the Administrator, in its sole
discretion, may designate from time to time. The Administrator's designation
of a Participant in any year shall not require the Administrator to designate
such person to receive Awards in any other year. The Administrator shall
consider such
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<PAGE> 7
factors as it deems pertinent in selecting Participants and in determining the
type and amount of their respective Awards.
5.02 SPECIAL PROVISIONS FOR CERTAIN NON-EMPLOYEES.
Notwithstanding any provision contained in this Plan to the contrary, the
Administrator may grant Awards under the Plan to non-employees who, in the
judgment of the Administrator, render significant services to the Company or a
Subsidiary, on such terms and conditions as the Administrator deems appropriate
and consistent with the intent of the Plan.
ARTICLE VI.
OPTION AWARDS
6.01 POWER TO GRANT OPTIONS. The Administrator may grant, to
such Participants as the Administrator may select, Options entitling the
Participant to purchase Company Common Stock from the Company at the Average
Price in such quantity and on such terms and subject to such conditions, not
inconsistent with the terms of this Plan, as may be established by the
Administrator; provided, however, that the Options may be granted at exercise
prices of no less than 85% of the Average Price if such discount is expressly
granted in lieu of a reasonable amount of salary or bonus. The terms of any
Option granted under this Plan shall be set forth in an Award Agreement.
Notwithstanding the foregoing, Options granted to Officers shall not be
exercisable for a period of at least six months from the Date of Grant.
6.02 PURCHASE PRICE OF OPTIONS. The Purchase Price of each
share of Company Common Stock which may be purchased upon exercise of any
Option granted under the Plan shall be determined in accordance with Section
6.01, provided that the Purchase Price for shares of Company Common Stock
purchased pursuant to Stock Options designated by the Administrator as
Incentive Stock Options shall be equal to or greater than the Fair Market Value
on the Date of Grant as required under Section 422 of the Code and provided
further that the Purchase Price for shares of Company Common Stock purchased
pursuant to Stock Options designated by the Administrator as Performance Based
Options shall be equal to or greater than the Fair Market Value on the Date of
Grant.
6.03 DESIGNATION OF INCENTIVE STOCK OPTIONS. Except as
otherwise expressly provided in the Plan, the Administrator may designate, at
the Date of Grant of each Option, that the Option is an Incentive Stock Option
under Section 422 of the Code.
(a) INCENTIVE STOCK OPTION SHARE LIMITATION. No
Participant may be granted Incentive Stock Options under the Plan (or
any other plans of the Company) which would result in stock with an
aggregate Fair Market Value (measured on the Date of Grant) of more
than $100,000 first becoming exercisable in any one calendar year, or
which would entitle such Participant to purchase a number of shares
greater than the maximum number permitted by Section 422 of the Code
as in effect on the Date of Grant.
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<PAGE> 8
(b) OTHER INCENTIVE STOCK OPTION TERMS. Whenever
possible, each provision in the Plan and in every Option granted under
this Plan which is designated by the Administrator as an Incentive
Stock Option shall be interpreted in such a manner as to entitle the
Option to the tax treatment afforded by Section 422 of the Code. If
any provision of this Plan or any Option designated by the
Administrator as an Incentive Stock Option shall be held not to comply
with requirements necessary to entitle such Option to such tax
treatment, then (i) such provision shall be deemed to have contained
from the outset such language as shall be necessary to entitle the
Option to the tax treatment afforded under Section 422 of the Code,
and (ii) all other provisions of this Plan and the Award Agreement
shall remain in full force and effect. If any agreement covering an
Option designated by the Administrator to be an Incentive Stock Option
under this Plan shall not explicitly include any terms required to
entitle such Incentive Stock Option to the tax treatment afforded by
Section 422 of the Code, all such terms shall be deemed implicit in
the designation of such Option and the Option shall be deemed to have
been granted subject to all such terms.
6.04 DESIGNATION OF PERFORMANCE BASED OPTIONS. Except as
otherwise expressly provided in the Plan, the Administrator may designate, at
the Date of Grant of each Option, that the Option is a Performance Based
Option. A Performance Based Option shall have a Purchase Price not less than
the Fair Market Value on the Date of Grant and shall contain such other terms
and conditions as the Administrator may deem necessary so that, upon exercise
or at any other time, the Performance Based Option does not result in or give
rise to "applicable employee remuneration" within the meaning of Section 162(m)
of the Code.
6.05 RIGHTS AS A STOCKHOLDER. The Participant or any transferee
of an Option pursuant to Section 8.02 or Section 11.05 shall have no rights as
a stockholder with respect to any shares of Company Common Stock covered by an
Option until the Participant or transferee shall have become the holder of
record of any such shares, and no adjustment shall be made for dividends and
cash or other property or distributions or other rights with respect to any
such shares of Company Common Stock for which the record date is prior to the
date on which the Participant or a transferee of the Option shall have become
the holder of record of any such shares covered by the Option.
ARTICLE VII.
STOCK APPRECIATION RIGHTS
7.01 POWER TO GRANT STOCK APPRECIATION RIGHTS. The
Administrator is authorized to grant to any Participant, on such terms
established by the Administrator on or prior to the Date of Grant and subject
to and not inconsistent with the provisions of this Plan, the right to receive
the payment from the Company, payable as provided in Section 7.04, of an amount
equal to the Incremental Value of the Stock Appreciation Rights, which shall be
an amount equal to the remainder derived from subtracting (i) the Exercise
Price for the right established in the Award Agreement from (ii) the Fair
Market Value of a share of Company Common Stock on the date of exercise. The
terms of any
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<PAGE> 9
Stock Appreciation Right granted under the Plan shall be set forth in an Award
Agreement.
7.02 TANDEM STOCK APPRECIATION RIGHTS. The Administrator may
grant to any Participant a Stock Appreciation Right consistent with the
provisions of this Plan covering any share of Company Common Stock which is, at
the Date of Grant of the Stock Appreciation Right, also covered by an Option
granted to the same Participant, either prior to or simultaneously with the
grant to such Participant of the Stock Appreciation Right, provided: (i) any
Option covering any share of Company Common Stock shall expire and not be
exercisable upon the exercise of any Stock Appreciation Right with respect to
the same share; (ii) any Stock Appreciation Right covering any share of Company
Common Stock shall not be exercisable upon the exercise of any related Option
with respect to the same share; and (iii) an Option and Stock Appreciation
Right covering the same share of Company Common Stock may not be exercised
simultaneously.
7.03 EXERCISE PRICE. The Exercise Price established under any
Stock Appreciation Right granted under this Plan shall be determined by the
Administrator and, in the case of a tandem Stock Appreciation Right, shall not
be less than the Purchase Price of the related Option. Upon exercise of the
Stock Appreciation Rights, the number of shares subject to exercise under a
related Option shall automatically be reduced by the number of shares of
Company Common Stock represented by the Option or portion thereof which is
surrendered as a result of the exercise of such Stock Appreciation Rights.
7.04 PAYMENT OF INCREMENTAL VALUE. Any payment which may become
due from the Company by reason of Participant's exercise of a Stock
Appreciation Right may be paid to the Participant as determined by the
Administrator (i) all in cash, (ii) all in Company Common Stock, or (iii) in
any combination of cash and Company Common Stock. In the event that all or a
portion of the payment is made in Company Common Stock, the number of shares of
the Company Common Stock delivered in satisfaction of such payment shall be
determined by dividing the amount of the payment by the Fair Market Value on
the date of exercise. The Administrator may determine whether payment upon
exercise of a Stock Appreciation Right will be made in cash or in stock, or a
combination thereof, upon or at any time prior to the exercise of such Stock
Appreciation Right. No fractional share of Company Common Stock shall be
issued to make any payment; if any fractional shares would be issuable, the mix
of cash and Company Common Stock payable to the Participant shall be adjusted
as directed by the Administrator to avoid the issuance of any fractional share.
Payment may be made in cash to Officers only if the Stock Appreciation Right is
exercised during the "window period" required under Rule 16b-3(e)(3) and
otherwise in accordance with Rule 16b-3.
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ARTICLE VIII.
TERMS OF OPTIONS AND STOCK APPRECIATION RIGHTS
8.01 DURATION OF OPTIONS AND STOCK APPRECIATION RIGHTS. Options
and Stock Appreciation Rights shall terminate after the first to occur of the
following events:
(a) Expiration Date of the Award as provided in the
Award Agreement; or
(b) Termination of the Award as provided in Section
8.02; or
(c) In the case of an Incentive Stock Option, ten years
from the Date of Grant; or
(d) Solely in the case of tandem Stock Appreciation
Rights, upon the Expiration Date of the related Option.
8.02 EXERCISE ON DEATH OR TERMINATION OF EMPLOYMENT.
(a) Unless otherwise provided in the Award Agreement,
in the event of the death of a Participant while an employee of the
Company or a Subsidiary of the Company, the right to exercise all
unexpired Awards shall be accelerated and shall accrue as of the date
of death, and the Participant's Awards may be exercised by his
Beneficiary at any time within one year after the date of the
Participant's death.
(b) Unless otherwise provided in the Award Agreement,
in the event of Participant's Termination of Employment at any time
for any reason (including disability or retirement) other than death
or for "cause", as defined in paragraph (d) below, an Award may be
exercised, but only to the extent it was otherwise exercisable, on the
date of Termination of Employment, within ninety days after the date
of Termination of Employment. In the event of the death of the
Participant within the ninety-day period following Termination of
Employment, his Award may be exercised by his Beneficiary within the
one year period provided in subparagraph (a) above.
(c) With respect to an Award which is intended to
constitute an Incentive Stock Option, upon Termination of Employment,
such Award shall be exercisable as provided in Section 422 of the
Code.
(d) In the event that a Participant's Termination of
Employment is for "cause", all Awards shall terminate immediately upon
Termination of Employment. A Participant's employment shall be deemed
to have been terminated for "cause" if such termination is determined,
in the sole discretion of the Administrator, to have resulted from an
act or omission by the Participant constituting active and deliberate
dishonesty, as established by a final judgment or actual receipt of an
improper benefit or profit in money, property or services, or from the
Participant's
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continuous failure to perform his or her duties under any employment
agreement in effect between the Participant and the Company in any
material manner (or, in the absence of such an agreement, the
consistent failure or refusal of the Participant to perform according
to reasonable expectations and standards set by the Board and/or
management consistent with Participant's title and position) after
receipt of notice of such failure from the Company specifying how the
Participant has so failed to perform.
8.03 ACCELERATION OF EXERCISE TIME. The Administrator, in its
sole discretion, shall have the right (but shall not in any case be obligated)
to permit purchase of shares under any Award prior to the time such Award would
otherwise become exercisable under the terms of the Award Agreement.
8.04 EXTENSION OF EXERCISE TIME. The Administrator, in its sole
discretion, shall have the right (but shall not in any case be obligated) to
permit any Award granted under this Plan to be exercised after its Expiration
Date or after the ninety day period following Termination of Employment,
subject, however, to the limitations described in Section 8.01 (c) and (d).
8.05 CONDITIONS FOR EXERCISE. An Award Agreement may contain
such waiting periods, exercise dates and restrictions on exercise (including,
but not limited to, periodic installments which may be cumulative) as may be
determined by the Administrator at the Date of Grant. No Stock Appreciation
Right may be exercised prior to six months from the Date of Grant.
8.06 CHANGE OF CONTROL EVENT. Unless otherwise provided in the
Award Agreement, and subject to such other terms and conditions as the
Administrator may establish in the Award Agreement, upon the occurrence of a
Change of Control Event, irrespective of whether or not an Award is then
exercisable, the Participant shall have the right to exercise in full any
unexpired Award to the extent not theretofore exercised or terminated;
provided, however, that any Stock Appreciation Right so exercised must have a
Date of Grant at least six months prior to the date of exercise.
8.07 EXERCISE PROCEDURES. Each Option and Stock Appreciation
Right granted under the Plan shall be exercised by written notice to the
Company which must be received by the officer of the Company designated in the
Award Agreement on or before the Expiration Date of the Award. The Purchase
Price of shares purchased upon exercise of an Option granted under the Plan
shall be paid in full in cash by the Participant pursuant to the Award
Agreement; provided, however, that the Administrator may (but need not) permit
payment to be made by delivery to the Company of either (a) shares of Company
Common Stock (including shares issuable to the Participant pursuant to the
exercise of the Option), or (b) any combination of cash and shares of Company
Common Stock, or (c) such other consideration as the Administrator deems
appropriate and in compliance with applicable law (including payment in
accordance with a cashless exercise program under which, if so instructed by
the Participant, shares of Company Common Stock may be issued directly to the
Participant's broker or dealer upon receipt of the Purchase Price in cash from
the broker or dealer.) In the event that
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any Company Common Stock shall be transferred to the Company to satisfy all or
any part of the Purchase Price, the part of the Purchase Price deemed to have
been satisfied by such transfer of Company Common Stock shall be equal to the
product derived by multiplying the Fair Market Value as of the date of exercise
times the number of shares transferred. The Participant may not transfer to
the Company in satisfaction of the Purchase Price (y) a number of shares which
when multiplied times the Fair Market Value as of the date of exercise would
result in a product greater than the Purchase Price or (z) any fractional share
of Company Common Stock. Any part of the Purchase Price paid in cash upon the
exercise of any Option shall be added to the general funds of the Company and
used for any proper corporate purpose. Unless the Administrator shall
otherwise determine, any Company Common Stock transferred to the Company as
payment of all or part of the Purchase Price upon the exercise of any Option
shall be held as treasury shares.
ARTICLE IX.
RESTRICTED STOCK AWARDS
9.01 RESTRICTED SHARE AWARDS. The Administrator may grant to
any Participant an Award of Restricted Share Rights entitling such person to
receive shares of Company Common Stock in such quantity, and on such terms,
conditions and restrictions (whether based on performance standards, periods of
service or otherwise) as the Administrator shall determine on or prior to the
Date of Grant. The terms of any Award of Restricted Share Rights granted under
the Plan shall be set forth in an Award Agreement.
9.02 DURATION OF RESTRICTED SHARE RIGHTS. In no event shall any
Restricted Share Rights granted entitle the holder to receive shares of Company
Common Stock free of all restrictions on transfer at any time prior to the
expiration of three years from the Date of Grant, and each Award Agreement
shall provide that the Participant shall remain employed by the Company or a
Subsidiary for that three year period (subject to the Company's or Subsidiary's
right to terminate such employment).
9.03 FORFEITURE OF RESTRICTED SHARE RIGHTS. Subject to Section
9.05, all Restricted Share Rights shall be forfeited and all Restricted Share
Awards shall terminate unless the Participant continues in the service of the
Company or a Subsidiary until the expiration of the forfeiture and satisfies
any other conditions set forth in the Award Agreement. If the Award Agreement
shall so provide, in the case of death, disability or retirement (as defined in
the Award Agreement) of the Participant, all of the shares covered by the
Restricted Share Rights shall immediately vest and any restrictions shall lapse
as of the date of such death, disability or retirement.
9.04 DELIVERY OF SHARES UPON VESTING. Upon the lapse of the
restrictions established in the Award Agreement, the Participant shall be
entitled to receive, without payment of any cash or other consideration,
certificates for the number of shares covered by the Award.
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<PAGE> 13
9.05 WAIVER OR MODIFICATION OF FORFEITURE PROVISIONS. The
Administrator has full power and authority to modify or waive any or all terms,
conditions or restrictions (other than the minimum restriction period set forth
in Section 9.02) applicable to any Restricted Share Rights granted to a
Participant under the Plan; provided that no modification shall, without
consent of the Participant, adversely affect the Participant's rights
thereunder and no modification shall reduce the employment requirement to less
than three years, except in the case of death, disability or retirement.
9.06 RIGHTS AS A STOCKHOLDER. No person shall have any rights
as a stockholder with respect to any shares subject to Restricted Share Rights
until such time as the person shall have been issued a certificate for such
shares.
ARTICLE X.
OTHER STOCK BASED AWARDS
10.01 GRANT OF OTHER AWARDS. Other Awards of Company Common
Stock or other securities of the Company and other Awards that are valued in
whole or in part by reference to, or are otherwise based on, Company Common
Stock ("Other Awards") may be granted either alone or in addition to or in
conjunction with Options or Stock Appreciation Rights under the Plan. Subject
to the provisions of the Plan, the Administrator shall have the sole and
complete authority to determine the persons to whom and the time or times at
which Other Awards shall be made, the number of shares of Company Common Stock
or other securities, if any, to be granted pursuant to such Other Awards, and
all other conditions of such Other Awards. Any Other Award shall be confirmed
by an Award Agreement executed by the Administrator and the Participant, which
agreement shall contain such provisions as the Administrator determines to be
necessary or appropriate to carry out the intent of this Plan with respect to
the Other Award.
10.02 TERMS OF OTHER AWARDS. In addition to the terms and
conditions specified in the Award Agreement, Other Awards made pursuant to this
Article X shall be subject to the following:
(a) Any shares of Company Common Stock subject to such
Other Awards may not be sold, assigned, transferred or otherwise
encumbered prior to the date on which the shares are issued, or, if
later, the date on which any applicable restriction, performance or
deferral period lapses; and
(b) If specified by the Administrator and the Award
Agreement, the recipient of an Other Award shall be entitled to
receive, currently or on a deferred basis, interest or dividends or
dividend equivalents with respect to the Company Common Stock or other
securities covered by the Other Award; and
(c) The Award Agreement with respect to any Other Award
shall contain provisions providing for the disposition of such Other
Award in the event of Termination of Employment prior to the exercise,
realization or payment of such
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<PAGE> 14
Other Award, with such provisions to take account of the specific
nature and purpose of the Other Award.
ARTICLE XI.
TERMS APPLICABLE TO ALL AWARDS
11.01 AWARD AGREEMENT. The grant and the terms and conditions of
the Award shall be set forth in an Award Agreement between the Company and the
Participant. No person shall have any rights under any Award granted under the
Plan unless and until the Administrator and the Participant to whom the Award
is granted shall have executed and delivered an Award Agreement expressly
granting the Award to such person and setting forth the terms of the Award.
11.02 PLAN PROVISIONS CONTROL AWARD TERMS. The terms of the Plan
shall govern all Awards granted under the Plan, and in no event shall the
Administrator have the power to grant any Award under the Plan which is
contrary to any of the provisions of the Plan. In the event any provision of
any Award granted under the Plan shall conflict with any term in the Plan as
constituted on the Date of Grant of such Award, the term in the Plan as
constituted on the Date of Grant of such Award shall control. Except as
provided in Section 4.03, (i) the terms of any Award granted under the Plan may
not be changed after the granting of such Award without the express approval of
the Participant and (ii) no modification may be made to an Award granted to an
Officer except in compliance with Rule 16b-3.
11.03 MODIFICATION OF AWARD AFTER GRANT. Each Award granted
under the Plan to a Participant other than an Officer may be modified after the
date of its grant by express written agreement between the Company and the
Participant, provided that such change (i) shall not be inconsistent with the
terms of the Plan and (ii) shall be approved by the Administrator. No
modifications may be made to any Awards granted to an Officer except in
compliance with Rule 16b-3.
11.04 TAXES. The Company shall be entitled, if the Administrator
deems it necessary or desirable, to withhold (or secure payment from the
Participant in lieu of withholding) the amount of any withholding or other tax
required by law to be withheld or paid by the Company with respect to any
amount payable and/or shares issuable under such Participant's Award, or with
respect to any income recognized upon a disqualifying disposition of shares
received pursuant to the exercise of an Incentive Stock Option, and the Company
may defer payment or issuance of the cash or stock upon exercise or vesting of
an Award unless indemnified to its satisfaction against any liability for such
tax. The amount of such withholding or tax payment shall be determined by the
Administrator and, unless otherwise provided by the Administrator, shall be
payable by the Participant at the time of issuance or payment in accordance
with the following rules:
(a) A Participant, other than an Officer, shall have
the right to elect to meet his or her withholding requirement by: (1)
having the Company withhold from such Award the appropriate number of
shares of Company Common Stock, rounded out to the next whole number,
the Fair Market Value of which is equal to
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<PAGE> 15
such amount, or, in the case of the cash payment, the amount of cash,
as is determined by the Company to be sufficient to satisfy applicable
tax withholding requirements; or (2) direct payment to the Company in
cash of the amount of any taxes required to be withheld with respect
to such Award.
(b) Unless otherwise provided by the Administrator,
with respect to Officers, the Company shall withhold from such Award
the appropriate number of shares of Company Common Stock, rounded up
to the next whole number, the Fair Market Value of which is equal to
the amount, as determined by the Administrator, (or, in the case of a
cash payment, the amount of cash) required to satisfy applicable tax
withholding requirements.
(c) In the event that an Award or property received
upon exercise of an Award has already been transferred to the
Participant on the date upon which withholding requirements apply, the
Participant shall pay directly to the Company the cash amount
determined by the Company to be sufficient to satisfy applicable
federal, state or local withholding requirements. The Participant
shall provide to the Company such information as the Company shall
require to determine the amounts to be withheld and the time such
withholding requirements become applicable.
(d) If permitted under applicable federal income tax
laws, a Participant may elect to be taxed in the year in which an
Award is exercised or received, even if it would not otherwise have
become taxable to the Participant. If the Participant makes such an
election, the Participant shall promptly notify the Company in writing
and shall provide the Company with a copy of the executed election
form as filed with the Internal Revenue Service no later than thirty
days from the date of exercise or receipt. Promptly following such
notification, the Participant shall pay directly to the Company the
cash amount determined by the Company to be sufficient to satisfy
applicable federal, state or local withholding tax requirements.
11.05 LIMITATIONS ON TRANSFER. A Participant's rights and
interest under the Plan may not be assigned or transferred other than by will
or the laws of descent and distribution, or pursuant to the terms of a domestic
relations order, as defined in Section 414(p)(1)(B) of the Code, which
satisfies the requirements of Section 414(p)(1)(A) of the Code (a "Qualified
Domestic Relations Order"). During the lifetime of a Participant, only the
Participant personally (or the Participant's personal representative or
attorney-in-fact) or the alternate payee named in a Qualified Domestic
Relations Order may exercise the Participant's rights under the Plan. The
Participant's Beneficiary may exercise a Participant's rights to the extent
they are exercisable under the Plan following the death of the Participant.
11.06 SURRENDER OF AWARDS. Any Award granted under the Plan may
be surrendered to the Company for cancellation on such terms as the
Administrator and Participant approve, including, but not limited to, terms
which provide that upon such surrender the Company will pay to the Participant
cash or Company Common Stock, or a combination of cash and Company Common
Stock.
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<PAGE> 16
ARTICLE XII.
GENERAL PROVISIONS
12.01 AMENDMENT AND TERMINATION OF PLAN.
(a) AMENDMENT. The Board shall have complete power and
authority to amend the Plan at any time and to add any other stock
based Award or other incentive compensation programs to the Plan as it
deems necessary or appropriate and no approval by the stockholders of
the Company or by any other person, committee or entity of any kind
shall be required to make any amendment; provided, however, that the
Board shall not, without the requisite affirmative approval of
stockholders of the Company, (i) make any amendment which requires
stockholder approval under any applicable law, including Rule 16b-3 or
the Code; or (ii) which, unless approved by the requisite affirmative
approval of stockholders of the Company, would cause, result in or
give rise to "applicable employee remuneration" within the meaning of
Section 162(m) of the Code with respect to any Performance Based
Option. No termination or amendment of the Plan may, without the
consent of the Participant to whom any Award shall theretofore have
been granted under the Plan, adversely affect the right of such
individual under such Award. For the purposes of this section, an
amendment to the Plan shall be deemed to have the affirmative approval
of the stockholders of the Company if such amendment shall have been
submitted for a vote by the stockholders at a duly called meeting of
such stockholders at which a quorum was present and the majority of
votes cast with respect to such amendment at such meeting shall have
been cast in favor of such amendment, or if the holders of outstanding
stock having not less than a majority of the outstanding shares
consent to such amendment in writing in the manner provided under the
Company's bylaws.
(b) TERMINATION. The Board shall have the right and
the power to terminate the Plan at any time. If the Plan is not
earlier terminated, the Plan shall terminate when all shares
authorized under the Plan have been issued. No Award shall be granted
under the Plan after the termination of the Plan, but the termination
of the Plan shall not have any other effect and any Award outstanding
at the time of the termination of the Plan may be exercised after
termination of the Plan at any time prior to the expiration date of
such Award to the same extent such award would have been exercisable
if the Plan had not been terminated.
12.02 NO RIGHT TO EMPLOYMENT. No employee or other person shall
have any claim or right to be granted an Award under this Plan. Neither the
Plan nor any action taken hereunder shall be construed as giving any employee
any right to be retained in the employ of the Company or a Subsidiary of the
Company.
12.03 COMPLIANCE WITH RULE 16B-3. It is intended that the Plan
be applied and administered in compliance with Rule 16b-3. If any provision of
the Plan would be in violation of Rule 16b-3 if applied as written, such
provision shall not have effect as written and shall be given effect so as to
comply with Rule 16b-3, as determined by the Administrator. The Board is
authorized to amend the Plan and to make any such
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<PAGE> 17
modifications to Award Agreements to comply with Rule 16b-3, as it may be
amended from time to time, and to make any other such amendments or
modifications as it deems necessary or appropriate to better accomplish the
purposes of the Plan in light of any amendments made to Rule 16b-3.
12.04 SECURITIES LAW RESTRICTIONS. The shares of Company Common
Stock issuable pursuant to the terms of any Awards granted under the Plan may
not be issued by the Company without registration or qualification of such
shares under the Securities Act of 1933, as amended, or under various state
securities laws or without an exemption from such registration requirements.
Unless the shares to be issued under the Plan have been registered and/or
qualified as appropriate, the Company shall be under no obligation to issue
shares of Company Common Stock upon exercise of an Award unless and until such
time as there is an appropriate exemption available from the registration or
qualification requirements of federal or state law as determined by the
Administrator in its sole discretion. The Administrator may require any person
who is granted an award hereunder to agree with the Company to represent and
agree in writing that if such shares are issuable under an exemption from
registration requirements, the shares will be "restricted" securities which may
be resold only in compliance with applicable securities laws, and that such
person is acquiring the shares issued upon exercise of the Award for
investment, and not with the view toward distribution.
12.05 CAPTIONS. The captions (i.e., all section headings) used
in the Plan are for convenience only, do not constitute a part of the Plan, and
shall not be deemed to limit, characterize or affect in any way any provisions
of the Plan, and all provisions of the Plan shall be construed as if no
captions have been used in the Plan.
12.06 SEVERABILITY. Whenever possible, each provision in the
Plan and every Award at any time granted under the Plan shall be interpreted in
such a manner as to be effective and valid under applicable law, but if any
provision of the Plan or any Award at any time granted under the Plan shall be
held to be prohibited or invalid under applicable law, then (a) such provision
shall be deemed amended to accomplish the objectives of the provision as
originally written to the fullest extent permitted by law and (b) all other
provisions of the Plan and every other Award at any time granted under the Plan
shall remain in full force and effect.
12.07 NO STRICT CONSTRUCTION. No rule of strict construction
shall be implied against the Company, the Administrator, or any other person in
the interpretation of any of the terms of the Plan, any Award granted under the
Plan or any rule or procedure established by the Administrator.
12.08 CHOICE OF LAW. All determinations made and actions taken
pursuant to the Plan shall be governed by the laws of Michigan and construed in
accordance therewith.
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<PAGE> 1
EXHIBIT 4.2
SUN COMMUNITIES, INC.
AMENDED AND RESTATED
1993 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
ARTICLE I.
PURPOSE AND ADOPTION OF THE PLAN
1.01 PURPOSE. The purpose of the Sun Communities, Inc.
Non-Employee Director Stock Option Plan is to attract and retain the services
of experienced and knowledgeable independent directors of Sun Communities, Inc.
(the "Company") and to provide an additional incentive for such directors to
continue to work for the best interests of the Company and its stockholders.
1.02 ADOPTION AND TERM. The Plan was initially approved by the
Board as of December 21, 1993 and ratified and approved by the Company's
stockholders on May 26, 1994. The Amended and Restated Plan was approved by
the Board on May 20, 1996, subject to approval of the Company's stockholders on
or before May 20, 1997, and will remain in effect until all shares authorized
under the terms of the Plan have been issued, unless earlier terminated or
abandoned by action of the Board.
ARTICLE II.
DEFINITIONS
2.01 AVERAGE PRICE means the average of the closing sales prices
of the Company Common Stock as quoted on the New York Stock Exchange for the
ten (10) business day period immediately preceding and including June 30th of
the year for which the Performance Option was earned.
2.01 BENEFICIARY means (a) an individual, trust or estate who or
which, by will or by operation of the laws of descent and distribution,
succeeds to the rights and obligations of the Non-Employee Director under the
Plan and Option Agreement upon the Non-Employee Director's death; or (b) an
individual, who by designation of the Non-Employee Director, succeeds to the
rights and obligations of the Non- Employee Director under the Plan and Option
Agreement upon the Non-Employee Director's death.
2.02 BOARD means the Board of Directors of the Company.
2.03 CODE means the Internal Revenue Code of 1986, as amended.
References to a section of the Code shall include that section and any
comparable section or sections of any future legislation that amends,
supplements or supersedes that section.
2.04 COMPANY means Sun Communities, Inc., a Maryland
corporation.
2.05 COMPANY COMMON STOCK means the Common Stock of the Company,
par value $0.01.
<PAGE> 2
2.06 DATE OF GRANT means: (a) with respect to Initial Options,
the date the Plan is adopted by the Board, or if later, the date an individual
first becomes a Director; and (b) with respect to Performance Options, December
31st of the year for which the Performance Option is earned.
2.07 DIRECTOR means a member of the Board of Directors of the
Company.
2.08 EXCHANGE ACT means the Securities Exchange Act of 1934, as
amended.
2.09 EXPIRATION DATE means the date specified in an Option
Agreement as the expiration date of such Award.
2.10 FAIR MARKET VALUE means, on any given date, the average of
the highest and lowest selling price for the Company Common Stock as reported
on the Composite Tape for New York Stock Exchange Listed Companies, or, if
there were no sales on such date, the average of the highest and lowest selling
price for the most recent date upon which a sale was reported.
2.11 INITIAL OPTION has the meaning set forth in Section 5.01.
2.12 NON-EMPLOYEE DIRECTOR means a Director who is not an
employee of the Company or a Subsidiary.
2.13 NON-QUALIFIED STOCK OPTION means a stock option which is
not an Incentive Stock Option as described in Section 422 of the Code.
2.14 OPTION means a Non-Qualified Stock Option granted at any
time under the Plan.
2.15 OPTION AGREEMENT means a written agreement between the
Company and the optionholder evidencing the grant of an Option and setting
forth the terms and conditions of the Option.
2.16 PERFORMANCE OPTION has the meaning set forth in Section
5.01.
2.17 PER SHARE FFO means, with respect to any fiscal year, the
Company's funds from operations (as defined by the National Association of Real
Estate Investment Trusts) per weighted average number of outstanding shares of
Company Common Stock for such fiscal year, as determined by reference to the
Company's audited financial statements.
2.18 PLAN means the Amended and Restated Sun Communities, Inc.
1993 Non-Employee Director Stock Option Plan, as described herein and as it may
be amended from time to time.
2.19 PURCHASE PRICE, with respect to Options, has the meaning
set forth in Section 5.02.
<PAGE> 3
2.20 RULE 16b-3 means Rule 16b-3 promulgated by the Securities
and Exchange Commission under Section 16 of the Exchange Act, as currently in
effect and as it may be amended from time to time, and any successor rule.
2.21 SUBSIDIARY shall have the meaning set forth in Section
424(f) of the Code.
ARTICLE III.
COMPANY COMMON STOCK ISSUABLE PURSUANT TO THE PLAN
3.01 SHARES ISSUABLE. Shares to be issued under the Plan may be
authorized and unissued shares or issued shares which have been reacquired by
the Company. Except as provided in Section 3.03, the Options granted under the
Plan shall be limited so that all shares which shall be issued upon the
exercise of outstanding Options granted under the Plan shall never exceed
100,000 shares of Company Common Stock.
3.02 SHARES SUBJECT TO TERMINATED OPTIONS. In the event that
any Option at any time granted under the Plan shall be surrendered to the
Company, be terminated or expire before it shall have been fully exercised,
then all shares formerly subject to such Option as to which such Option shall
not have been exercised shall be available for any Option subsequently granted
in accordance with the Plan.
3.03 ADJUSTMENTS TO REFLECT CAPITAL CHANGES.
(a) RECAPITALIZATION. The number and kind of shares
subject to outstanding Options, the Purchase Price for such shares,
and the number and kind of shares available for Options subsequently
granted under the Plan shall be appropriately adjusted to reflect any
stock dividend, stock split, combination or exchange of shares,
merger, consolidation or other change in capitalization with a similar
substantive effect upon the Plan or the Options granted under the
Plan. The Board shall have the power to determine the amount of the
adjustment to be made in each case.
(b) SALE OR REORGANIZATION. After any reorganization,
merger or consolidation in which the Company is a surviving
corporation, each Non-Employee Director shall, at no additional cost,
be entitled upon exercise of an Option to receive (subject to any
required action by stockholders), in lieu of the number of shares of
Company Common Stock receivable or exercisable pursuant to such
Option, a number and class of shares of stock or other securities to
which such Non-Employee Director would have been entitled pursuant to
the terms of the reorganization, merger or consolidation if, at the
time of such reorganization, merger or consolidation, such Non-
Employee Director had been the holder of record of a number of shares
of stock equal to the number of shares receivable or exercisable
pursuant to such Option. Comparable rights shall accrue to each
Non-Employee Director in the event of successive reorganizations,
mergers or consolidations of the character described above.
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<PAGE> 4
ARTICLE IV.
PARTICIPATION
ELIGIBLE INDIVIDUALS. All Non-Employee Directors of the Company shall
be eligible to receive Options under the Plan.
ARTICLE V.
OPTION AWARDS
5.01 GRANT OF OPTIONS.
(a) INITIAL OPTIONS. Each of the Company's
Non-Employee Directors, on the date the Plan is adopted by the Board,
shall automatically receive a Non-Qualified Stock Option (the "Initial
Option") to purchase 2,500 shares, subject to adjustment in accordance
with Section 3.03, of Company Common Stock on the date of adoption.
Thereafter, each of the Company's Non-Employee Directors shall
automatically receive the Initial Option, subject to adjustment in
accordance with Section 3.03, on the day he or she first becomes a
Director. Each Initial Option shall be evidenced by an Option
Agreement.
(b) PERFORMANCE OPTIONS. As of December 31st of each
fiscal year of the Company, each of the Company's Non-Employee
Directors that has continuously served the Company for the entire
fiscal year shall automatically receive a Non-Qualified Stock Option
(the "Performance Option") to purchase the following number of shares
of Company Common Stock, subject to adjustment in accordance with
Section 3.03:
(i) if Per Share FFO for such fiscal year increased by less
than 5% as compared to Per Share FFO for the previous fiscal year, 0
shares of Company Common Stock;
(ii) if Per Share FFO for such fiscal year increased by 5%
or more but less than 6% as compared to Per Share FFO for the previous
fiscal year, 1,000 shares of Company Common Stock;
(iii) if Per Share FFO for such fiscal year increased by 6%
or more but less than 7% as compared to Per Share FFO for the previous
fiscal year, 1,500 shares of Company Common Stock;
(iv) if Per Share FFO for such fiscal year increased by 7%
or more but less than 8% as compared to Per Share FFO for the previous
fiscal year, 2,000 shares of Company Common Stock;
(v) if Per Share FFO for such fiscal year increased by 8%
or more but less than 9% as compared to Per Share FFO for the previous
fiscal year, 2,500 shares of Company Common Stock;
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<PAGE> 5
(vi) if Per Share FFO for such fiscal year increased by 9%
or more but less than 10% as compared to Per Share FFO for the
previous fiscal year, 3,000 shares of Company Common Stock; or
(vii) if Per Share FFO for such fiscal year increased by
10% or more as compared to Per Share FFO for the previous fiscal year,
3,500 shares of Company Common Stock.
The Performance Options, if any, shall be granted as soon as possible after
issuance of the Company's audited financial statements but shall be effective
as of December 31st of the year for which the Performance Option was earned.
Each Performance Option shall be evidenced by an Option Agreement.
5.02 PURCHASE PRICE OF OPTIONS. The Purchase Price of each
share of Company Common Stock which may be purchased upon exercise of any
Initial Option granted under the Plan shall be the Fair Market Value on the
Date of Grant. The Purchase Price of each share of Company Common Stock which
may be purchased upon exercise of any Performance Option granted under the Plan
shall be the Average Price.
5.03 VESTING OF OPTIONS. No Option may be exercised prior to
one year from the Date of Grant. An Option shall become exercisable with
respect to one-third (1/3) of the shares one year from the Date of Grant, with
respect to an additional one-third (1/3) of the shares two years from the Date
of Grant and with respect to the final one-third (1/3) of the shares three
years from the Date of Grant.
5.04 DURATION OF OPTIONS. Options granted under the Plan shall
terminate after the first to occur of the following events:
(a) Ten years from the Date of Grant.
(b) Three months after the Optionee ceases to be a
Director, except in the case of death, as described in (c) below.
(c) In the event of the death of a Non-Employee
Director while a Director, the right to exercise all unexpired Options
shall be accelerated and shall accrue as of the date of death, and the
Non-Employee Director's Options may be exercised by his Beneficiary at
any time within one year after the date of the Non-Employee Director's
death. In the event of the death of a Non- Employee Director within
the ninety day period after he or she ceases to be a Director, the
Non-Employee Director's Beneficiary may exercise his or her Options,
to the extent exercisable on the date of death, within one year after
the date of the Non-Employee Director's death.
5.05 EXERCISE PROCEDURES. Each Option granted under the Plan
may be exercised by written notice to the Company which must be received by the
Secretary of the Company on or before the Expiration Date of the Option. The
Purchase Price of
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<PAGE> 6
shares purchased upon exercise of an Option granted under the Plan shall be
paid in full in cash by the Non-Employee Director on the date of exercise.
5.06 RIGHTS AS A STOCKHOLDER. The Non-Employee Director or any
transferee of an Option pursuant to Section 5.04(c) or Section 5.09 shall have
no rights as a stockholder with respect to any shares of Company Common Stock
covered by an Option until the Non-Employee Director or transferee shall have
become the holder of record of any such shares, and no adjustment shall be made
for dividends and cash or other property or distributions or other rights with
respect to any such shares of Company Common Stock for which the record date is
prior to the date on which the Non-Employee Director or a transferee of the
Option shall have become the holder of record of any such shares covered by the
Option.
5.07 PLAN PROVISIONS CONTROL OPTION TERMS. The terms of the
Plan shall govern all Options granted under the Plan. In the event any
provision of any Option granted under the Plan shall conflict with any term in
the Plan as constituted on the Date of Grant of such Option, the term in the
Plan as constituted on the Date of Grant of such Option shall control. Except
as provided in Section 3.03, (i) the terms of any Option granted under the Plan
may not be changed after the granting of such Option without the express
approval of the Non-Employee Director and (ii) no modification may be made to
an Option granted under the Plan except in compliance with Rule 16b-3.
5.08 TAXES. The Company shall be entitled, if the Company deems
it necessary or desirable, to withhold (or secure payment from the Non-Employee
Director in lieu of withholding) the amount of any withholding or other tax
required by law to be withheld or paid by the Company with respect to any
shares issuable upon exercise of an Option, and the Company may defer issuance
of the stock upon exercise unless indemnified to its satisfaction against any
liability for such tax.
5.09 LIMITATIONS ON TRANSFER. A Non-Employee Director's rights
and interest under the Plan may not be assigned or transferred other than by
will or the laws of descent and distribution, or pursuant to the terms of a
domestic relations order, as defined in Section 414(p)(1)(B) of the Code, which
satisfies the requirements of Section 414(p)(1)(A) of the Code (a "Qualified
Domestic Relations Order"). During the lifetime of a Non-Employee Director,
only the Non-Employee Director personally (or the Non-Employee Director's
personal representative or attorney-in-fact) or the alternate payee named in a
Qualified Domestic Relations Order may exercise the Non-Employee Director's
rights under the Plan. The Non-Employee Director's Beneficiary may exercise a
Non-Employee Director's rights to the extent they are exercisable under the
Plan following the death of the Non-Employee Director.
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<PAGE> 7
ARTICLE VI.
GENERAL PROVISIONS
6.01 AMENDMENT AND TERMINATION OF PLAN.
(a) AMENDMENT. The Board shall have complete power and
authority to amend the Plan at any time as it deems necessary or
appropriate and no approval by the stockholders of the Company or by
any other person, committee or entity of any kind shall be required to
make any amendment; provided, however, that the Board shall not,
without the requisite affirmative approval of stockholders of the
Company, make any amendment which requires stockholder approval under
any applicable law, including Rule 16b-3 or the Code, unless such
compliance, if discretionary, is no longer desired. No termination or
amendment of the Plan may, without the consent of the Non-Employee
Director to whom any Option shall theretofore have been granted under
the Plan, adversely affect the right of such individual under such
Option. For the purposes of this section, an amendment to the Plan
shall be deemed to have the affirmative approval of the stockholders
of the Company if such amendment shall have been submitted for a vote
by the stockholders at a duly called meeting of such stockholders at
which a quorum was present and the majority of votes cast with respect
to such amendment at such meeting shall have been cast in favor of
such amendment, or if the holders of outstanding stock having not less
than a majority of the outstanding shares consent to such amendment in
writing in the manner provided under the Company's bylaws.
(b) TERMINATION. The Board shall have the right and
the power to terminate the Plan at any time. If the Plan is not
earlier terminated, the Plan shall terminate when all shares
authorized under the Plan have been issued. No Option shall be
granted under the Plan after the termination of the Plan, but the
termination of the Plan shall not have any other effect and any Option
outstanding at the time of the termination of the Plan may be
exercised after termination of the Plan at any time prior to the
expiration date of such Option to the same extent such award would
have been exercisable if the Plan had not been terminated.
6.02 NO RIGHT TO CONTINUE AS DIRECTOR. Neither the Plan nor any
action taken hereunder shall be construed as giving any Non- Employee Director
any right to be retained as a Director, or to limit in any way the right of the
stockholders of the Company to remove such person as a Director.
6.03 COMPLIANCE WITH RULE 16B-3. It is intended that the Plan
be established and operated so as to qualify for the exemption from Section 16
of the Exchange Act available under Rule 16b-3, and so that the Non-Employee
Director receiving Options hereunder will qualify as "disinterested" under Rule
16b-3 for purposes of administering other stock option plans of the Company.
If any provision of the Plan would not comply with Rule 16b-3 if applied as
written, such provision shall not have effect as written and shall be given
effect so as to comply with Rule 16b-3, as determined by the Board. The Board
is authorized to amend the Plan and to make any such modifications to Option
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<PAGE> 8
Agreements to comply with Rule 16b-3, as it may be amended from time to time,
and to make any other such amendments or modifications as it deems necessary or
appropriate to better accomplish the purposes of the Plan in light of any
amendments made to Rule 16b-3.
6.04 SECURITIES LAW RESTRICTIONS. The shares of Company Common
Stock issuable pursuant to the terms of any Options granted under the Plan may
not be issued by the Company without registration or qualification of such
shares under the Securities Act of 1933, as amended, or under various state
securities laws or without an exemption from such registration requirements.
Unless the shares to be issued under the Plan have been registered and/or
qualified as appropriate, the Company shall be under no obligation to issue
shares of Company Common Stock upon exercise of an Option unless and until such
time as there is an appropriate exemption available from the registration or
qualification requirements of federal or state law as determined by the Company
in its sole discretion. The Company may require any person who is granted an
award hereunder to agree with the Company to represent and agree in writing
that if such shares are issuable under an exemption from registration
requirements, the shares will be "restricted" securities which may be resold
only in compliance with applicable securities laws, and that such person is
acquiring the shares issued upon exercise of the Option for investment, and not
with the view toward distribution.
6.05 CAPTIONS. The captions (i.e., all section headings) used
in the Plan are for convenience only, do not constitute a part of the Plan, and
shall not be deemed to limit, characterize or affect in any way any provisions
of the Plan, and all provisions of the Plan shall be construed as if no
captions have been used in the Plan.
6.06 SEVERABILITY. Whenever possible, each provision in the
Plan and every Option at any time granted under the Plan shall be interpreted
in such a manner as to be effective and valid under applicable law, but if any
provision of the Plan or any Option at any time granted under the Plan shall be
held to be prohibited or invalid under applicable law, then (a) such provision
shall be deemed amended to accomplish the objectives of the provision as
originally written to the fullest extent permitted by law and (b) all other
provisions of the Plan and every other Option at any time granted under the
Plan shall remain in full force and effect.
6.07 CHOICE OF LAW. All determinations made and actions taken
pursuant to the Plan shall be governed by the laws of Michigan and construed in
accordance therewith.
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<PAGE> 1
EXHIBIT 5.1
[JAFFE, RAITT, HEUER & WEISS LETTERHEAD]
September 12, 1996
Sun Communities, Inc.
31700 Middlebelt Road, Suite 145
Farmington Hills, Michigan 48334
Re: Sun Communities, Inc.
Gentlemen:
We have acted as counsel to Sun Communities, Inc. (the "Company"), a
Maryland corporation, in connection with the registration by the Company of up
to 1,461,513 shares of Common Stock, $.01 par value per share ("Common Stock"),
issued or issuable by the Company upon the exercise of options granted under
the Sun Communities, Inc. Amended and Restated 1993 Stock Option Plan or the
Sun Communities, Inc. Amended and Restated 1993 Non-Employee Director Stock
Option Plan, as described in the Registration Statement on Form S-8 filed with
the Securities and Exchange Commission on September 13, 1996 (together with
all amendments thereto, the "Registration Statement").
We do not purport to be experts on or to express any opinion in this
letter concerning any law other than the laws of the State of Michigan and the
General Corporation Law of Maryland, and this opinion is qualified accordingly.
This opinion is limited to matters expressly set forth in this letter, and no
opinion is to be inferred or may be implied beyond the matters expressly so
stated. In rendering the opinion contained in this letter, we have assumed
without investigation that the information supplied to us by the Company is
accurate and complete.
Based upon and subject to the foregoing, it is our opinion that the
shares of Common Stock to be offered under the Registration Statement have been
duly authorized, and upon the issuance and sale thereof in the manner referred
to in the Registration Statement, will be validly issued, fully paid and
non-assessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
JAFFE, RAITT, HEUER & WEISS
Professional Corporation
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration statement on
Form S-8 of our report dated February 23, 1996, on our audits of the
consolidated financial statements and financial statement schedule of Sun
Communities, Inc. which report is incorporated by reference from the Annual
Report on Form 10-K for the year ended December 31, 1995.
We also consent to the incorporation by reference in this registration
statement on Form S-8 of our report dated February 14, 1996, on our audits of
the historical summaries of combined gross income and direct operating expenses
of the Aspen Properties for the years ended December 31, 1995, 1994 and 1993
which report is incorporated by reference from the March 20, 1996 Form 8-K of
Sun Communities, Inc.
We also consent to the reference to our firm under the caption "Experts."
Coopers & Lybrand L.L.P.
Coopers & Lybrand L.L.P.
Detroit, Michigan
September 12, 1996
