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As filed with the Securities and Exchange Commission on February 15, 2000.
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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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)
MARYLAND 38-2730780
(State or Other Jurisdiction of Incorporation or (I.R.S. Employer
Organization) Identification No.)
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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)
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Copies of all correspondence to:
JOEL M. ALAM, 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.
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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.
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CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
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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 (2) $ 5,571,260.00 $ 1,471
==============================================================================================
</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 11, 2000.
(2) Includes rights to purchase Junior Participating Preferred Stock of the
Company (the "Rights"). Since no separate consideration is paid for the Rights,
the registration fee therefor is included in the fee for the Common Stock.
__________________________________
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.
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The information contained in this Prospectus is not completed and may change.
The selling shareholders 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 an 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 15, 2000
PROSPECTUS
181,362 SHARES
SUN COMMUNITIES, INC.
COMMON STOCK
This prospectus covers the sale of up to 181,362 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 11, 2000, was $30.6875 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 , 2000.
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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. Except for those instances in
which a specific date is referenced, the information in this prospectus is
accurate as of February 15, 2000. 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, 1998,
filed with the Commission on March 17, 1999.
2. Our Quarterly Report on Form 10-Q for the quarter ended March 31,
1999, filed with the Commission on May 7, 1999.
3. Our Quarterly Report on Form 10-Q for the quarter ended June 30, 1999,
filed with the Commission on August 2, 1999.
4. Our Quarterly Report on Form 10-Q for the quarter ended September 30,
1999, filed with the Commission on November 5, 1999.
5. Our Current Report on Form 8-K dated September 29, 1999, filed with
the Commission on October 15, 1999.
6. Our Current Report on Form 8-K dated December 15, 1998, filed with the
Commission on January 8, 1999.
7. The description of our common stock contained in our Registration
Statement on Form 8-A dated November 23, 1993.
8. The description of rights to purchase our Junior Participating
Preferred Stock contained in our Registration Statement on Form 8-A
dated May 27, 1998.
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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 (as defined below) 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, 1999, we owned, managed, and/or financed a
portfolio of 110 manufactured housing community properties (the "Properties")
located in sixteen states containing an aggregate of approximately 38,200
developed sites and approximately 2,800 sites suitable for development. We are
also in the process of developing an additional eight communities that we
estimate will contain approximately 4,100 sites in the aggregate.
We are the sole general partner of, and, as of December 31, 1999, held
approximately 81% 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, the
estate of Milton M. Shiffman (former Chairman of the Board of the Company), and
Jeffrey P. Jorissen, 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,
President and Chief Executive Officer and a director of the Company, the estate
of Milton M. Shiffman (former Chairman of the Board of the Company), and Jeffrey
P. Jorissen, Senior Vice President, Treasurer, Chief Financial Officer and
Secretary 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, Messrs. Shiffman and Jorissen 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 a portion 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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Tax Consequences Upon Sale of Properties. Gary A. Shiffman, President and
Chief Executive Officer and a director of the Company, holds limited partnership
interests in the Operating Partnership ("Common OP Units") that were received in
connection with the sale of 24 Properties the Company acquired from partnerships
previously affiliated with him (the "Sun Partnerships"). Prior to the redemption
of Common OP Units for our common stock (the "Common Stock"), Mr. Shiffman will
have tax consequences different from those of the Company and its public
stockholders upon the sale of any of the Sun Partnerships. Therefore, Mr.
Shiffman 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, Mr. Shiffman 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, 1999, we had outstanding $71.8 million of indebtedness
that is collateralized by mortgage liens on eighteen of the Properties (the
"Mortgage Debt"). In addition, as of December 31, 1999, we had entered into four
capitalized lease obligations having an aggregate value of $36.6 million. Each
capitalized lease obligation involves a lease for a manufactured housing
community providing that we will lease the community for a certain number of
years and then have the option to purchase the community at or prior to the end
of the lease term. In each case, if we fail to exercise our purchase right, the
landlord has the right to require us to buy the property at the same price for
which we had the purchase option. 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. If we fail to satisfy our lease obligations or an
obligation to purchase the property, the landlord/seller would be entitled to
evict us from the property. In each event, this 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
Messrs. Shiffman and Jorissen (together, 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
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qualification as a REIT under the Internal Revenue Code of 1986, as amended (the
"Code"). Such restrictions in our charter do not apply to Mr. Shiffman, the
estate of Milton M. Shiffman 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 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. On September 29,
1999 the Operating Partnership issued 2,000,000 9.125% Series A Cumulative
Redeemable Perpetual Preferred Units that are exchangeable in whole at anytime
after September 29, 2009 at the option of the holders thereof for 2,000,000
shares of 9.125% Series A Cumulative Redeemable Preferred Stock of the Company.
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
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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 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 and Installment Loans. As of December 31, 1999, we
had a $15.1 million mortgage loan investment to two entities, one of which
operates a manufactured housing community, and the other of which operates a
combination manufactured housing/recreational vehicle community, each in
Delaware. We also had investments of $18.6 million in installment loans to
owners of manufactured homes. These installment loans are collateralized by the
manufactured homes. In addition, we may invest in additional mortgages and
installment loans in the future. By virtue of our investment in the mortgages
and the loans, we are subject to the following risks of such investments:
- the borrowers may not be able to make debt service payments or pay
principal when due;
- the value of property securing the mortgages and loans may be less
than the amounts owed; and
- interest rates payable on the mortgages and loans 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
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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 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.
Uninsured Loss. We maintain comprehensive liability, fire, flood (where
appropriate), extended coverage, and rental loss insurance on 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 the affected 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, 1999, up to 4,028,615 shares of Common
Stock may be issued in the future to the limited partners of the Operating
Partnership (both Common and Preferred OP Units). The limited partners may sell
such shares pursuant to registration rights or an available exemption from
registration. Also, Water Oak, Ltd.,
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a former owner of one of the Properties, will be issued Common OP Units with a
value of approximately $1,000,000 annually through 2009. In addition, as of
December 31, 1999, 2,113,852 shares have been reserved for issuance pursuant to
our 1993 Employee Stock Option Plan and 1993 Non-Employee Director Stock Option
Plan (of which options for 539,986 shares have been exercised and pursuant to
which 189,000 shares of restricted stock have been issued as of December 31,
1999). Mr. Shiffman's employment agreement provides 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 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
The Selling Stockholders may use this prospectus for the resale of shares
of Common Stock being registered hereunder, although no Selling Stockholder is
obligated to sell any such shares. 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 has been
or will be issued to the Selling Stockholders in redemption of Common OP Units
held by the Selling Stockholders. The Selling Stockholders are not required to
convert Common OP Units to Common Stock. 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 Completion of
Owned Prior to the Shares the Offering (2)(3)
-------------------
Selling Stockholder Offering (1) Being Offered Number Percent
------------------- ------------ ------------- ------ -------
---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------
Jewish Communal Fund 5,500 5,500 0 (5)
- -------------------------------- -------------------------- --------------------- ---------------------- ------------
Water Oak Ltd. 44,090 35,000 9,090 (5)
- -------------------------------- -------------------------- --------------------- ---------------------- ------------
Robert B. Bayer 179,144(4) 133,115 46,029(4) (5)
- -------------------------------- -------------------------- --------------------- ---------------------- ------------
Margaret A. Bayer 37,747 7,747 30,000 (5)
- -------------------------------- -------------------------- --------------------- ---------------------- ------------
TOTAL 266,481 181,362 85,119
- ---------------------------------------------------------------------------------------------------------------------
</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.
(2) Assumes that all shares of Common Stock being offered and registered
hereunder are sold, although no Selling Stockholder is
obligated to sell any such shares.
(3) Based upon 17,459,188 shares of Common Stock outstanding as of December 31,
1999.
(4) Includes 3,000 shares held jointly with right of survivorship with Mr.
Bayer's adult children and 20,800 shares subject to options exercisable as
of the date of this prospectus.
(5) Less than one percent (1%).
-8-
<PAGE> 10
USE OF PROCEEDS
We will not receive any of the proceeds of any sale by the Selling
Stockholders.
PLAN OF DISTRIBUTION
The Company is registering the Shares on behalf of the Selling
Stockholders. As used herein, "Selling Stockholders" includes pledgees, donees,
transferees or other successors in interest (collectively with the Selling
Stockholders, the "Sellers") selling shares received from a Selling Stockholder
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. Arthur
A. Weiss, who is a director of the Registrant, is a shareholder of Jaffe, Raitt,
Heuer & Weiss, P.C. In addition, as of February 4, 2000 certain shareholders of
Jaffe, Raitt, Heuer & Weiss, P.C. beneficially owned approximately 48,925 shares
of our Common Stock.
EXPERTS
The financial statements incorporated in this Registration Statement by
reference to our Annual Report on Form 10-K for the year ended December 31, 1998
have been so incorporated in reliance on the report of PricewaterhouseCoopers
LLP, independent accountants, given on the authority of said firm as experts in
auditing and accounting.
-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
Page
ABOUT THIS
PROSPECTUS.......................................2
WHERE YOU CAN FIND
MORE INFORMATION.................................2
THE COMPANY......................................3
RISK FACTORS.....................................3
SELLING STOCKHOLDERS.............................8
USE OF PROCEEDS..................................9
PLAN OF DISTRIBUTION.............................9
LEGAL MATTERS....................................9
EXPERTS..........................................9
===========================================================
===========================================================
181,362 SHARES
SUN COMMUNITIES, INC.
COMMON STOCK
----------
PROSPECTUS
----------
========================================================
FEBRUARY , 2000
<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................................................................$ 1,471
Legal Fees and Expenses.......................................................... 7,000
Accounting Fees and Expenses..................................................... 3,000
Miscellaneous.................................................................... 2,529
-------
Total............................................................................$14,000
=======
</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
EXHIBIT NO. DESCRIPTION
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)
4.4 Articles Supplementary to the Company's Amended and
Restates Articles of Incorporation (Incorporated by
reference from Exhibit 4.1 of the Company's Current
Report on Form 8-K dated September 29, 1999)
*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)
*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 date 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 February
14, 2000.
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 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 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/ Gary A. Shiffman
- ------------------------------------------ Chief Executive Officer, February 10, 2000
Gary A. Shiffman President, and Director
/s/ Jeffrey P. Jorissen February 14, 2000
- ------------------------------------------ Senior Vice President, Treasurer,
Jeffrey P. Jorissen Chief Financial Officer, and
Secretary (principal accounting
and financial officer)
/s/ Paul D. Lapides
- ------------------------------------------ Director February 14, 2000
Paul D. Lapides
/s/ Ted J. Simon
- ------------------------------------------ Director February 14, 2000
Ted J. Simon
/s/ Clunet R. Lewis
- ------------------------------------------ Director February 14, 2000
Clunet R. Lewis
/s/ Ronald L. Piasecki
- ------------------------------------------ Director February 14, 2000
Ronald L. Piasecki
/s/ Arthur A. Weiss
- ------------------------------------------ Director February 14, 2000
Arthur A. Weiss
</TABLE>
II-4
<PAGE> 16
INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION
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)
4.4 Articles Supplementary to the Company's Amended and
Restates Articles of Incorporation (Incorporated by
reference from Exhibit 4.1 of the Company's Current Report
on Form 8-K dated September 29, 1999)
*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)
*Filed herewith.
II-5
<PAGE> 1
EXHIBIT 5.1
[Letterhead of Jaffe, Raitt, Heuer & Weiss, P.C.]
February 8, 2000
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
181,362 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 , 2000 (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, as
amended (the "Charter");
C. Second Amended and Restated Limited Partnership Agreement of
Sun Communities Operating Limited Partnership;
D. The first through one hundred seventh 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
<PAGE> 2
Sun Communities, Inc.
February 8, 2000
Page 2
G. An Officer's Certificate (the "Certificate"), a copy of which
is attached to this letter as Exhibit A.
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 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.
2. 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/ Joel M. Alam
------------------------
Joel M. Alam
<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 September 30, 1999.
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 , 2000 Gary A. Shiffman, President and Chief
Executive Officer
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-3 of our report dated February 12, 1999 relating to the
financial statements and financial statement schedule, which appears in Sun
Communities, Inc.'s Annual Report on Form 10-K for the year ended December 31,
1998. We also consent to the references to us under the headings "Experts" in
such Registration Statement.
PricewaterhouseCoopers LLP
Detroit, Michigan
February 15, 2000
