<PAGE> 1
As filed with the Securities and Exchange Commission on February 16, 1999
Registration No. 333-_____
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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SUN COMMUNITIES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS GOVERNING INSTRUMENT)
<TABLE>
<S> <C>
MARYLAND 38-2730780
(State or Other Jurisdiction of Incorporation or Organization) (I.R.S. Employer Identification No.)
</TABLE>
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GARY A. SHIFFMAN
PRESIDENT
31700 MIDDLEBELT ROAD
SUITE 145
FARMINGTON HILLS, MICHIGAN 48334
(248) 932-3100
(Name, Address, Including Zip Code, and Telephone Number, Including Area Code,
of Agent for Service)
---------------
Copies of all correspondence to:
JEFFREY L. FORMAN, 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: From
time to time after the effective date of this Registration Statement as
determined by market conditions.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
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/
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 Maximum Amount of
Title of Each Class of Securities Aggregate Offering Price (1) Registration Fee
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<S> <C> <C>
Common Stock, $.01 par value $4,338,679.00 $1,207.00
====================================================================================================================================
</TABLE>
(1) Estimated solely for purposes of determining the registration fee pursuant
to Rule 457(c), based upon the average of the high and low prices reported on
the New York Stock Exchange on February 9, 1999.
----------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
<PAGE> 2
THE INFORMATION CONTAINED IN THIS PROSPECTUS IS NOT COMPLETED AND MAY CHANGE.
THE SELLING SHAREHOLDER MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION
STATEMENT WE FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE.
THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IS NOT SOLICITING
AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT
PERMITTED.
SUBJECT TO COMPLETION
PROSPECTUS DATED FEBRUARY 16, 1999
PROSPECTUS
131,975 SHARES
SUN COMMUNITIES, INC.
COMMON STOCK
This prospectus covers the sale of up to 131,975 shares of Sun
Communities, Inc. common stock by certain stockholders. We will not receive any
proceeds from the sale of the shares by the stockholders.
The common stock is listed on the New York Stock Exchange under the
symbol "SUI." The last reported sale price of the common stock as reported on
the New York Stock Exchange on February 9, 1999, was $32.875 per share.
SEE "RISK FACTORS" ON PAGE 3 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 Attorney General of the State of New York has not passed
on or endorsed the merits of this offering. Any
representation to the contrary is unlawful.
The date of this Prospectus is February 16, 1999.
<PAGE> 3
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that Sun
Communities, Inc., a Maryland corporation (hereinafter sometimes referred to as
"we", "us", or the "Company") filed with the Securities and Exchange Commission
(the "SEC") utilizing a "shelf" registration process. Under this shelf process,
the selling stockholders may, from time to time, sell the common stock described
in this prospectus. We may prepare a prospectus supplement at any time to add,
update or change information contained in this prospectus. The information in
this prospectus is accurate as of February 16, 1999. You should read both this
prospectus and any prospectus supplement together with additional information
described under the heading "WHERE YOU CAN FIND MORE INFORMATION".
We believe that we have included or incorporated by reference all
information material to investors in this prospectus, but certain details that
may be important for specific investment purposes have not been included. To see
more detail, you should read the exhibits filed with or incorporated by
reference into the registration statement.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports and other information
with the SEC. You may read and copy any document we file at the SEC's public
reference room at 450 Fifth Street, N.W., Washington, D.C. 20549. Please call
the SEC at 1-800-SEC-0330 for further information on the operation of the SEC's
public reference rooms. Our SEC filings are also available to the public over
the Internet at the SEC's web site at http://www.sec.gov. In addition, our
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 SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be part of this prospectus, and information that we file later
with the SEC will automatically update and supersede this information. We
incorporate by reference the following documents we filed with the SEC and our
future filings with the SEC under Sections 13(a), 13(c), 14, or 15(d) of the
Securities Exchange Act of 1934 until we or any underwriters sell all of the
securities:
1. Our Annual Report on Form 10-K for the year ended December
31, 1997, filed with the Commission on March 24, 1998.
2. Our Quarterly Report on Form 10-Q for the quarter ended March
31, 1998, filed with the Commission on May 12, 1998.
3. Our Quarterly Report on Form 10-Q for the quarter ended June
30, 1998, filed with the Commission on August 10, 1998.
4. Our Quarterly Report on Form 10-Q for the quarter ended
September 30, 1998, filed with the Commission on November 10,
1998.
5. Our Current Report on Form 8-K dated December 31, 1997, filed
with the Commission on January 7, 1998, and amended by our
Current Report on Form 8-K/A filed on March 16, 1998.
6. Our Current Report on Form 8-K dated April 24, 1998, and
filed with the Commission on June 1, 1998.
7. Our Current Report on Form 8-K dated December 15, 1998, and
filed with the Commission on January 8, 1999.
8. The description of our common stock contained in the our
Registration Statement on Form 8-A dated November 23, 1993,
No. 1-12616.
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<PAGE> 4
You may request a copy of these filings at no cost, by writing or calling us at
the following address:
Sun Communities, Inc.
31700 Middlebelt Road
Suite 145
Farmington Hills, MI 48334
Attn: Corporate Secretary
(248) 932-3100
You should rely only on the information incorporated by reference or provided in
this prospectus and any supplement. We have not authorized anyone else to
provide you with different information.
THE COMPANY
As used herein, the term "Company" includes Sun Communities, Inc., a
Maryland corporation, and one or more of its subsidiaries (including the
Operating Partnership and Sun Home Services, Inc.).
We own and operate manufactured housing communities concentrated in the
midwestern and southeastern United States. We are a fully integrated real estate
company which, together with our affiliates and predecessors, has been in the
business of acquiring, operating, and expanding manufactured housing communities
since 1975. As of December 31, 1998, we owned, managed, and/or financed a
portfolio of 104 manufactured housing community properties (the "Properties")
located in fifteen states containing an aggregate of approximately 37,500
developed sites and approximately 6,100 sites suitable for development.
We are the sole general partner of, and, as of December 31, 1998, held
approximately 86% of the interests (not including preferred limited partnership
interests) in, Sun Communities Operating Limited Partnership, a Michigan limited
partnership (the "Operating Partnership"). Substantially all of our assets are
held by or through the Operating Partnership. The ownership and management of
the Properties is allocated among our subsidiaries. However, subject to the tax
and other risks discussed in the section entitled "Risk Factors", our
stockholders 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"), 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 (Jeffrey
P. Jorissen and the Principals are sometimes hereinafter collectively referred
to as the "Senior Officers"), each an officer of the Company, as the holders of
all the common stock of Home Services. As sole general partner of the Operating
Partnership, we have the exclusive power to manage and conduct the business of
the Operating Partnership, subject to certain limited exceptions.
Our executive and principal property management office is located at
31700 Middlebelt Road, Suite 145, Farmington Hills, Michigan 48334, and
telephone number is (248) 932-3100. We have regional property management offices
in Elkhart, Indiana and Tampa, Florida.
RISK FACTORS
You should consider carefully the following information, together with
the other information contained in or incorporated by reference in this
prospectus, in considering whether to purchase the common stock described in
this prospectus.
CONFLICTS OF INTEREST
Failure to Enforce Terms of Home Services Agreement. Gary A. Shiffman,
Milton M. Shiffman, and Jeffrey P. Jorissen (hereinafter collectively referred
to as the "Senior Officers"), each an officer of the Company, have an aggregate
5% interest in Home Services through their ownership of all of the common stock
of Home Services and are thus entitled to 5% of the cash flow from the operating
activities of Home Services (the Operating Partnership is entitled to the
remaining 95% of such cash flow). Home Services has entered into an agreement
with the Operating Partnership for sales, brokerage, and leasing services that
was not negotiated on an arm's length basis. Thus, the Senior Officers will have
a conflict of interest with respect to their obligations as officers and/or
directors of the Company to enforce the terms of this services agreement due to
their right to receive 5% of the cash flow from the operating activities of Home
Services. The failure to enforce the material terms of this agreement could have
an adverse effect on the Company.
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<PAGE> 5
Tax Consequences Upon Sale of Properties. Gary A. Shiffman and Milton
M. Shiffman (hereinafter sometimes collectively referred to as the "Principals")
hold limited partnership interests in the Operating Partnership ("Common OP
Units") that they received in connection with the sale of 24 Properties the
Company acquired from partnerships previously affiliated with the Principals
(the "Sun Partnerships"). Prior to the redemption of Common OP Units for our
common stock (the "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 Sun Partnerships. 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.
ADVERSE CONSEQUENCES OF DEBT FINANCING
We are subject to the risks normally associated with debt financing,
including the following risks:
- our cash flow will be insufficient to meet required payments of
principal and interest;
- existing indebtedness will not be able to be refinanced;
- the terms of such refinancing will not be as favorable as the
terms of such existing indebtedness; and
- 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 December 31, 1998, we had outstanding $61.8 million of
indebtedness that is collateralized by mortgage liens on eleven of the
Properties (the "Mortgage Debt"). If we fail to meet our 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 us
and our ability to make expected distributions, and could threaten our continued
viability.
CHANGES IN INVESTMENT AND FINANCING POLICIES WITHOUT STOCKHOLDER APPROVAL
Our investment and financing policies, and our policies with respect to
certain other activities, including our growth, debt, capitalization,
distributions, real estate investment trust ("REIT") status, and operating
policies, are determined by our 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 our stockholders. Accordingly, stockholders may not have
control over changes in our policies and changes in our policies may not fully
serve the interests of all stockholders.
DEPENDENCE ON KEY PERSONNEL
We are dependent on the efforts of our executive officers, particularly
the Senior Officers. While we believe that we could find replacements for these
key personnel, the loss of their services could have a temporary adverse effect
on our operations. We do not currently maintain or contemplate obtaining any
"key-man" life insurance on the Senior Officers.
OWNERSHIP LIMIT AND LIMITS ON CHANGES IN CONTROL
9.8% Ownership Limit. In order to qualify and maintain our
qualification as a REIT, not more than 50% of the outstanding shares of our
capital stock may be owned, directly or indirectly, by five or fewer
individuals. Thus, ownership of more than 9.8% of our outstanding shares of
common stock by any single stockholder has been restricted, with certain
exceptions, for the purpose of maintaining our qualification as a REIT under the
Internal Revenue Code of 1986, as amended (the "Code"). Such restrictions in our
charter do not apply to the Principals and Robert B. Bayer, a former director
and officer of the Company.
The 9.8% ownership limit, as well as our ability to issue additional
shares of Common Stock or shares of other stock (which may have rights and
preferences over the Common Stock), may discourage
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<PAGE> 6
a change of control of the Company and may also: (1) deter tender offers for the
Common Stock, which offers may be advantageous to stockholders; and (2) 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. Our Board of Directors 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. Our 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 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.
Rights Plan. We adopted a stockholders rights plan in 1998 that
provides that our stockholders (other than a stockholder attempting to acquire a
15% or greater interest in the Company) will have the right to purchase stock in
the Company at a discount in the event any person attempts to acquire a 15% or
greater interest in the Company. Because this plan could make it more expensive
for a person to acquire a controlling interest in the Company, it 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 our 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); or
- our ability to provide adequate maintenance and insurance, and
increased operating costs (including insurance premiums and real estate
taxes).
Our income would also be adversely affected if tenants were unable to
pay rent or sites were unable to be rented on favorable terms. If we 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 our 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 our ability to vary
our 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 our ability to lease sites and on rents charged at the
Properties or at any newly acquired properties. We may be competing with others
that have greater resources than us and whose officers and directors have more
experience than our 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 us. Increases in
income, service or other taxes, however, generally are not passed through to
tenants under leases and may adversely affect our funds from operations and
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<PAGE> 7
our 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
our funds from operations and our ability to make distributions to stockholders.
Investments in Mortgages. Although our only investment in a mortgage is
an approximately $16.2 million mortgage loan we have made to two entities that
each operate a manufactured housing communities in Delaware (the "Delaware
Mortgages"), we may invest in additional mortgages in the future. By virtue of
our investment in the Delaware Mortgages, we are subject to the following risks
of such investment:
- the borrowers may not be able to make debt service payments or
pay principal when due;
- the value of mortgaged property may be less than the amounts owed;
and
- interest rates payable on the mortgages may be lower than our cost
of funds.
If any of the above occurred, funds from operations and our ability to make
expected distributions to stockholders could be adversely affected.
Development of New Communities. We are engaged in the development of
new communities. The manufactured housing community development business
involves significant risks in addition to those involved in the ownership and
operation of established manufactured housing communities, including the
following risks:
- financing may not be available on favorable terms for development
projects;
- construction and lease-up may not be completed on schedule
resulting in increased debt service expense and construction
costs;
- long-term financing may not be available upon completion of
construction; and
- sites may not be leased on profitable terms.
If any of the above occurred, our 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 our 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
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, we 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 our 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 us, or that a material
environmental condition does not otherwise exist as to any one or more
Properties.
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Uninsured Loss. We maintain 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, we could lose both our
investment in and anticipated profits and cash flow from a property.
ADVERSE CONSEQUENCES OF FAILURE TO QUALIFY AS A REIT
Taxation as a Corporation. We expect to qualify and have made an
election to be taxed as a REIT under the Code, commencing with the calendar year
beginning January 1, 1994. Although we believe that we are organized and will
operate in such a manner, no assurance can be given that we are 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 limited judicial or administrative
interpretations, and involves the determination of various factual matters and
circumstances not entirely within our control.
If we were to fail to qualify as a REIT in any taxable year, we 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, we 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 our net earnings available
for investment or distribution to stockholders because of the additional tax
liability to us for the years involved. In addition, distributions to
stockholders would no longer be required to be made.
Other Tax Liabilities. Even though we qualify as a REIT, we are subject
to certain Federal, state and local taxes on our income and property. In
addition, our sales operations, which are conducted through Home Services,
generally will be subject to Federal income tax at regular corporate rates.
ADVERSE EFFECT OF DISTRIBUTION REQUIREMENTS
We 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, we could have taxable income without sufficient cash to enable us
to meet the distribution requirements of a REIT. Accordingly, we 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
We believe that the Operating Partnership and other various Company
subsidiary partnerships have each been organized as partnerships and will
qualify for treatment as such under the Code. If the Operating Partnership and
such other partnerships fail to qualify for such treatment under the Code, we
would cease to qualify as a REIT, and the Operating Partnership and such other
partnerships 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. As of December 31, 1998, the Senior Officers held 1,159,532
shares of Common Stock. In addition, as of December 31, 1998, up to 4,127,557
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). Furthermore, 27,606 Common OP Units were issued to Water Oak, Ltd. as of
January 1, 1999 and may be converted into common stock by Water Oak, Ltd. and
sold pursuant to this prospectus. The Principals and the Former General Partners
may sell such shares pursuant to registration rights or an available exemption
from registration. Also, Water Oak, Ltd., a former owner of one of the
Properties, will be issued Common OP Units with an aggregate value of $10.2
million over the 10-year period beginning in January, 2000 and continuing on an
annual basis through 2009. In addition, as of December 31, 1998, 1,653,061
shares have been reserved for issuance (of which options for 501,279 shares have
been exercised and 165,000 shares of restricted stock have been issued as of
December 31, 1998) pursuant to our Stock Option Plan and 1993 Non-Employee
Director Stock Option Plan. The Principals' employment agreements provide for
incentive compensation payable in shares of Common Stock. We have also reserved
240,000 shares of Common Stock for issuance commencing January 31, 2002 pursuant
to our Long Term Incentive Plan which is for the benefit of all of our salaried
employees
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<PAGE> 9
other than our officers. No prediction can be made regarding the effect that
future sales of shares of Common Stock will have on the market price of shares.
ADVERSE EFFECT OF MARKET INTEREST RATES ON PRICE OF COMMON STOCK
One of the factors that may influence the price of the Common Stock 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
Each of the Selling Stockholders is a holder of Common OP Units and/or
shares of Common Stock. We are the sole general partner of the Operating
Partnership. Under the terms of the Operating Partnership's Second Amended and
Restated Agreement of Limited Partnership (the "Partnership Agreement"), the
Common OP Units are redeemable for shares of Common Stock. As of the date of
this prospectus, the redemption ratio is one share for each Common OP Unit
redeemed, but such redemption ratio is subject to adjustment in certain events
pursuant to anti-dilution provisions contained in the Partnership Agreement. The
Common Stock offered by this prospectus may be issued in the future to the
Selling Stockholders in redemption of Common OP Units held by the Selling
Stockholders. None of the Selling Stockholders is an affiliate of the Company.
The following table sets forth certain information regarding the
Selling Stockholders and the shares of Common Stock beneficially owned by each
of them:
<TABLE>
<CAPTION>
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Shares Beneficially
Shares of Common Owned After
Stock Beneficially Number of Shares Completion of
Owned Prior to the the Offering (2)(3)
Selling Stockholder Offering (1) Being Offered Number Percent
------------ ------------- ------ -------
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<S> <C> <C> <C> <C>
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Water Oak, Ltd. 38,596 27,606 10,990 (4)
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Keith D. Smith 117,133 50,000 67,133 (4)
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Henry S. Gornbein 6,126 6,126 0 (4)
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Irving A. Smokler, as 46,678 46,678 0 (4)
Trustee of the Irving A.
Smokler Revocable
Living Trust
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P. Scott McCleery 1,565 1,565 0 (4)
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TOTAL 209,896 131,975 77,921
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The number set forth in this column is the number of shares of Common Stock
held by each such Selling Stockholder and/or the number of shares of Common
Stock that would be received upon a conversion of Common OP Units held by
each such Selling Stockholder. Water Oak, Ltd. owns 202 shares of Common
Stock and the Irving A. Smokler Revocable Living Trust owns 46,678 shares of
Common Stock. All other holdings of the Selling Shareholders in the Company
are presently in the form of Common OP Units.
(2) Assumes that all shares of Common Stock being offered and registered
hereunder (the "Shares") are sold, although no Selling Stockholder is
obligated to sell any Shares.
(3) Based upon 17,256,244 shares of Common Stock outstanding as of December 31,
1998.
(4) Less than one percent (1%).
USE OF PROCEEDS
We will not receive any of the proceeds of any sale by the Selling
Stockholders.
-8-
<PAGE> 10
PLAN OF DISTRIBUTION
The Company is registering the Shares on behalf of the Selling
Stockholders. As used herein, "Selling Shareholders" includes pledgees, donees,
transferees or other successors in interest (collectively with the Selling
Stockholders, the "Sellers") selling shares received from a Selling Shareholder
after the date of this Prospectus. The Sellers, directly or through brokers,
dealers, underwriters, agents or market makers, may sell some or all of the
Shares. Any broker, dealer, underwriter, agent or market maker participating in
a transaction involving the Shares may receive a commission from the Sellers.
Usual and customary commissions may be paid by the Sellers. The broker, dealer,
underwriter or market maker may agree to sell a specified number of the Shares
at a stipulated price per Share and, to the extent that such person is unable to
do so acting as an agent for the Sellers, to purchase as principal any of the
Shares remaining unsold at a price per Share required to fulfill the person's
commitment to the Sellers.
A broker, dealer, underwriter or market maker who acquires the Shares
from the Sellers as a principal for its own account may thereafter resell such
Shares from time to time in transactions (which may involve block or cross
transactions and which may also involve sales to or through another broker,
dealer, underwriter, agent or market maker, including transactions of the nature
described above) on the New York Stock Exchange, in negotiated transactions or
otherwise, at market prices prevailing at the time of the sale, or at negotiated
prices. In connection with such resales, the broker, dealer, underwriter, agent
or market maker may pay commissions to or receive commissions from the
purchasers of the Shares. The Sellers also may sell some or all of the Shares
directly to purchasers without the assistance of a broker, dealer, underwriter,
agent or market maker and without the payment of any commissions.
Other than any commissions or discounts paid or allowed by the Selling
Stockholders to underwriters, dealers, brokers or agents, all expenses incurred
in connection with this offering are being borne by us.
Pursuant to the registration rights granted to the Selling Stockholders
in connection with the issuance of Common OP Units to the Selling Stockholders,
we have agreed to indemnify the Selling Stockholders and any person who controls
a Selling Stockholder against certain liabilities and expenses arising out of or
based upon the information set forth or incorporated by reference in this
prospectus, and the registration statement of which this prospectus is a part,
including liabilities under the Securities Act. Any commissions paid or any
discounts or concessions allowed to any broker, dealer, underwriter, agent or
market maker and, if any such broker, dealer, underwriter, agent or market maker
purchases any of the Shares as principal, any profits received on the resale of
such Shares, may be deemed to be underwriting commissions or discounts under the
Securities Act.
LEGAL MATTERS
The legality of the Common Stock offered hereby will be passed upon by
Jaffe, Raitt, Heuer & Weiss, Professional Corporation, Detroit, Michigan.
EXPERTS
The consolidated financial statements and consolidated financial
statement schedule of the Company as of December 31, 1997 and 1996, and for the
years ended December 31, 1997, 1996 and 1995 included in the Company's Annual
Report on Form 10-K for the year ended December 31, 1997 have been incorporated
herein in reliance on the report of PricewaterhouseCoopers LLP, independent
accountants, and upon the authority of said firm as experts in accounting and
auditing.
-9-
<PAGE> 11
================================================================================
No dealer, salesperson or other individual has been authorized to give any
information or to make any representations not contained or incorporated by
reference in this prospectus in connection with any offering to be made by the
prospectus. If given or made, such information or representations must not be
relied upon as having been authorized by the Company. This prospectus does not
constitute an offer to sell, or a solicitation of an offer to buy, the
Securities, in any jurisdiction where, or to any person to whom, it is unlawful
to make such offer or solicitation. Neither the delivery of this prospectus nor
any offer or sale made hereunder shall, under any circumstance, create an
implication that there has been no change in the facts set forth in this
prospectus or in the affairs of the Company since the date hereof.
TABLE OF CONTENTS
PROSPECTUS
<TABLE>
<CAPTION>
Page
<S> <C>
About This Prospectus.........................................................2
Where You Can Find More Information...........................................2
The Company...................................................................3
Risk Factors..................................................................3
Selling Stockholders..........................................................8
Use of Proceeds...............................................................8
Plan of Distribution..........................................................9
Legal Matters.................................................................9
Experts.......................................................................9
</TABLE>
================================================================================
================================================================================
131,975 SHARES
SUN COMMUNITIES, INC.
COMMON STOCK
______________
PROSPECTUS
______________
================================================================================
FEBRUARY 16, 1999
-10-
<PAGE> 12
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the estimated expenses to be incurred in
connection with the issuance and distribution of the securities being
registered.
<TABLE>
<S> <C>
Registration Fee.................................................................$ 1,207
Legal Fees and Expenses.......................................................... 5,000
Accounting Fees and Expenses..................................................... 3,000
Miscellaneous.................................................................... 2,500
-------
Total............................................................................$11,707
=======
</TABLE>
ITEM 15. 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 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 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.
The partnership agreement of the Operating Partnership also provides
for indemnification of the Company and its officers and directors to the same
extent indemnification is provided to officers and directors of the Company in
its charter, and limits the liability of the Company and its officers and
directors to the Operating Partnership and its respective partners to the same
extent the liability of the officers and directors of the Company to the Company
and its stockholders is limited under the Company's charter.
II-1
<PAGE> 13
ITEM 16. EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
----------- -----------
<S> <C>
4.1 Form of Common Stock Certificate (Incorporated by reference
from Exhibit 2 to Amendment No. 1 to Form S-11 filed by the
Company on November 5, 1993, File No. 33-69340)
4.2 Articles VI and VII of the Company's Amended and Restated
Articles of Incorporation (Incorporated by reference from
Exhibit 3.1 to Amendment No. 1 to Form S-11 filed by the
Company on November 5, 1993, File No. 33-69340)
4.3 Rights Agreement, dated as of April 24, 1998, between the
Company and State Street Bank and Trust Company
(Incorporated by reference to Exhibit 99.1 of the Company's
Current Report on Form 8-K dated April 24, 1998)
*5.1 Opinion of Jaffe, Raitt, Heuer & Weiss, Professional
Corporation as to legality of securities
*23.1 Consent of PricewaterhouseCoopers LLP, independent
accountants
*23.2 Consent of Jaffe, Raitt, Heuer & Weiss, Professional
Corporation (included in Exhibit 5.1)
</TABLE>
*Filed herewith.
ITEM 17. UNDERTAKINGS
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 of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective of the 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.
Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the
total dollar value securities offered would not
exceed that which was registered) and any deviation
from the low or high end of the estimated maximum
offering range may be reflected in the form of
prospectus filed with the commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume
and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table set forth in
this registration statement; and
(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 subparagraphs (i) and (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
registrant pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in this
registration statement.
II-2
<PAGE> 14
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the Securities offered herein, 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.
The undersigned Registrant hereby undertakes that, for the purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in this
registration statement shall be deemed to be a new registration statement
relating to the Securities offered herein, and the offering of such Securities
at that time shall be deemed to be the initial bona fide offering thereof; and
insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the provisions described under Item 15 above or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. 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 against the Registrant 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 Act and will be governed by the final adjudication of such
issue.
II-3
<PAGE> 15
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-3 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 January 29,
1999.
SUN COMMUNITIES, INC.,
a Maryland corporation
By: /s/ Jeffrey P. Jorissen
-------------------------------------------------------------
Jeffrey P. Jorissen, Chief Financial Officer,
Secretary and Principal Accounting Officer
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned officers
and directors of Sun Communities, Inc. hereby constitutes and appoints Milton M.
Shiffman, Gary A. Shiffman, and Jeffrey P. Jorissen, or any 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 shares of 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 January 29, 1999
------------------------------------------
Milton M. Shiffman
/s/ Gary A. Shiffman Chief Executive Officer, President, January 29, 1999
------------------------------------------ and Director
Gary A. Shiffman
/s/ Jeffrey P. Jorissen Senior Vice President, Treasurer, January 29, 1999
------------------------------------------ Chief Financial Officer, and
Jeffrey P. Jorissen Secretary (principal accounting and
financial officer)
/s/ Paul D. Lapides Director January 29, 1999
------------------------------------------
Paul D. Lapides
/s/ Ted J. Simon Director January 29, 1999
------------------------------------------
Ted J. Simon
/s/ Clunet R. Lewis Director January 29, 1999
------------------------------------------
Clunet R. Lewis
/s/ Ronald L. Piasecki Director January 29, 1999
------------------------------------------
Ronald L. Piasecki
</TABLE>
II-4
<PAGE> 16
<TABLE>
<CAPTION>
NAME TITLE DATE
---- ----- ----
<S> <C> <C>
/s/ Arthur A. Weiss Director January 31, 1999
------------------------------------------
Arthur A. Weiss
</TABLE>
II-5
<PAGE> 17
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
----------- -----------
<S> <C>
4.1 Form of Common Stock Certificate (Incorporated by reference
from Exhibit 2 to Amendment No. 1 to Form S-11 filed by the
Company on November 5, 1993, File No. 33-69340)
4.2 Articles VI and VII of the Company's Amended and Restated
Articles of Incorporation (Incorporated by reference from
Exhibit 3.1 to Amendment No. 1 to Form S-11 filed by the
Company on November 5, 1993, File No. 33-69340)
4.3 Rights Agreement, dated as of April 24, 1998, between the
Company and State Street Bank and Trust Company
(Incorporated by reference to Exhibit 99.1 of the Company's
Current Report on Form 8-K dated April 24, 1998)
*5.1 Opinion of Jaffe, Raitt, Heuer & Weiss, Professional
Corporation, as to legality of securities
*23.1 Consent of PricewaterhouseCoopers LLP, independent
accountants
*23.2 Consent of Jaffe, Raitt, Heuer & Weiss, Professional
Corporation (included in Exhibit 5.1)
</TABLE>
*Filed herewith.
II-6
<PAGE> 1
EXHIBIT 5.1
[JAFFE, RAITT, HEUER & WEISS LETTERHEAD]
February 11, 1999
Sun Communities, Inc.
31700 Middlebelt Road, Suite 145
Farmington Hills, Michigan 48334
Gentlemen:
We have acted as counsel to Sun Communities, Inc. (the "Company"), a
Maryland corporation, in connection with the registration by the Company of
131,975 shares (the "Shares") of Common Stock, $.01 par value per share ("Common
Stock") pursuant to a Registration Statement on Form S-3 filed with the
Securities and Exchange Commission on or about February 12, 1999 (the
"Registration Statement"). This opinion letter is furnished to you at your
request to enable you to fulfill the requirements of Item 601(b)(5) of
Regulation S-K, 17 C.F.R. 229.601(b)(5), in connection with 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 the 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.
For purposes of this opinion letter, we have examined copies of the
following documents:
A. An executed copy of the Registration Statement;
B. The Company's Articles of Amendment and Restatement (the
"Charter");
C. Second Amended and Restated Limited Partnership Agreement of
Sun Communities Operating Limited Partnership;
D. The first through eighty-second amendments, inclusive, to the
Second Amended and Restated Limited Partnership Agreement of
Sun Communities Operating Limited Partnership;
E. The Bylaws of the Company;
F. The Company's corporate minute book; and
G. An Officer's Certificate (the "Certificate"), a copy of which
is attached to this letter as Exhibit A.
<PAGE> 2
[JAFFE, RAITT, HEUER & WEISS LETTERHEAD]
Sun Communities, Inc.
February 11, 1999
Page 2
The documents listed in items A-G above are collectively referred to as
the "Documents".
In rendering our opinion, we have assumed, without independent
verification, that: (i) all signatures are genuine; (ii) all Documents submitted
to us as originals are authentic; and (iii) all Documents submitted to us as
copies conform to the originals of such Documents. Our review has been limited
to examining the Documents and applicable law.
To the extent that any opinion in this letter relates to or is
dependent upon factual information, we have relied exclusively upon the factual
representations and warranties set forth in the Certificate, and we have not
undertaken to independently verify any such facts or information.
Based upon, subject to and limited by the foregoing, we are of the
opinion that, as of the date hereof:
1. The Shares that have been issued are validly issued, fully
paid, and non-assessable.
2. The Shares that may be issued in the future in exchange for
Common OP Units (as such term is defined in the Registration
Statement) have been duly authorized.
3. Upon issuance in the manner described in the Registration
Statement of the Shares that are to be issued in exchange for
the Common OP Units, such Shares will be validly issued, fully
paid, and non-assessable.
We hereby consent to the filing of this opinion letter as Exhibit 5.1
to the Registration Statement, and to the use of the name of our firm in the
Prospectus under the caption "LEGAL MATTERS".
Very truly yours,
JAFFE, RAITT, HEUER & WEISS
Professional Corporation
/s/ Jeffrey L. Forman
Jeffrey L. Forman
<PAGE> 3
EXHIBIT "A"
OFFICER'S CERTIFICATE
The undersigned, the duly elected and acting President and Chief
Executive Officer of SUN COMMUNITIES, INC., a Maryland corporation (the
"Corporation"), hereby represents and warrants the following to Jaffe, Raitt,
Heuer & Weiss, professional corporation ("JRH&W"):
1. Sun Communities, Inc. ("Sun") is a corporation formed under
the laws of the State of Maryland.
2. The Articles of Amendment and Restatement of the Company have
not been amended since November 8, 1993.
3. The Second Amended and Restated Limited Partnership Agreement
of Sun Communities Operating Limited Partnership, a Michigan
limited partnership, has not been amended other than pursuant
to amendments prepared by JRH&W.
February 10, 1999
-------------------------------------
Gary A. Shiffman, President and Chief
Executive Officer
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the inclusion in this registration statement on Form S-3 of our
report dated February 23, 1998, on our audits of the consolidated financial
statements and financial statement schedule of Sun Communities, Inc. We also
consent to the references to our firm under the captions "Experts."
PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Detroit, Michigan
February 12, 1999
