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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
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Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
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SUNRISE MEDICAL INC.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
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/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction
applies:
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(2) Aggregate number of securities to which transaction
applies:
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(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the
amount on which the filing fee is calculated and state how
it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or
Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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[LOGO]
2382 FARADAY AVENUE, SUITE 200
CARLSBAD, CALIFORNIA 92008
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NOTICE OF ANNUAL MEETING
TO BE HELD ON DECEMBER 15, 1999
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DEAR STOCKHOLDER:
The Annual Meeting of Stockholders of Sunrise Medical Inc. will be held at
the Hilton San Diego Hotel, 15575 Jimmy Durante Boulevard, Del Mar, California,
on Wednesday, December 15, 1999, starting at 2:00 p.m. We look forward to the
opportunity to greet personally those stockholders who are able to attend.
You will notice in reading the Proxy Statement that Richard Chandler,
founder of the company, is not standing for re-election. We want to express our
appreciation to Dick for his valuable contributions to the company as its
founder and during the 16 years he served as Chairman of the Board, President
and CEO.
At the meeting, we will:
1. Elect members of the Board of Directors;
2. Approve the adoption of an Employee Stock Purchase Plan for the company.
3. Transact such other business as may properly come before the meeting or
any adjournments thereof.
Management will then report on the activities of Sunrise and comment on its
future plans. Stockholders will then be invited to ask questions and present
their comments.
The Board of Directors fixed the close of business on October 27, 1999 as
the record date for determining stockholders entitled to notice of and to vote
at this Annual Meeting. If you plan to be present, please notify our Director of
Corporate Communications, Marcia Vaughan (at 760/930-1570), so that
identification can be prepared for you. Thank you for your interest and
consideration.
Sincerely,
[SIGNATURE]
Steven A. Jaye
SENIOR VICE PRESIDENT,
GENERAL COUNSEL AND SECRETARY
November 11, 1999
IT IS IMPORTANT THAT YOUR SHARES ARE REPRESENTED AT THE MEETING.
ACCORDINGLY, WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE SIGN, DATE
AND MAIL THE ENCLOSED PROXY IN THE ENCLOSED POSTAGE-PAID ENVELOPE. EVEN IF YOU
HAVE GIVEN YOUR PROXY, YOU MAY STILL VOTE IN PERSON IF YOU ATTEND THE MEETING.
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[LOGO]
2382 FARADAY AVENUE, SUITE 200
CARLSBAD, CALIFORNIA 92008
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PROXY STATEMENT
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ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON DECEMBER 15, 1999
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Sunrise Medical Inc., a Delaware
corporation (the "company" or "Sunrise"), for the Annual Meeting of Stockholders
(the "Annual Meeting") to be held at the Hilton San Diego Hotel, 15575 Jimmy
Durante Boulevard, Del Mar, California, on Wednesday, December 15, 1999,
commencing at 2:00 p.m., and any postponement or adjournment thereof.
VOTING RIGHTS AND SOLICITATION
VOTING
The company's Common Stock is the only type of security entitled to vote at
the Annual Meeting. On October 27, 1999, the record date for determination of
stockholders entitled to vote at the Annual Meeting, there were 22,233,933
shares of Common Stock outstanding. This Proxy Statement and the accompanying
proxy card are being sent to such stockholders on or about November 11, 1999.
Subject to the stockholders' rights to cumulative voting for the election of
Directors described below, each stockholder of record on October 27, 1999 is
entitled to one vote for each share of Common Stock held by such stockholder on
that date. A majority of the outstanding shares of Common Stock entitled to vote
must be present or represented at the Annual Meeting in order to have a quorum.
Abstentions and broker non-votes are counted as present for the purpose of
determining the presence of a quorum for the transaction of business. In the
election of Directors, the six candidates receiving the highest number of
affirmative votes will be elected. Accordingly, abstentions and broker non-votes
as to the election of Directors will have no effect. Proposal 2 requires the
affirmative vote of a majority of the Common Stock of the company present in
person or represented by proxy and entitled to vote at the Annual Meeting. In
addition, over 50 percent of the outstanding shares of Common Stock must vote on
this proposal. In determining whether this proposal has received the requisite
number of affirmative votes, an abstention will have the same effect as a vote
against the proposal, and shares represented by broker non-votes will not be
considered shares entitled to vote on the proposal.
PROXIES
Whether or not you are able to attend the Annual Meeting, you are urged to
vote your proxy, which is being solicited by the company's Board of Directors
and which will be voted as you direct on your proxy when properly completed. In
the event no directions are specified, such proxies will be voted FOR the
nominees of the Board of Directors (proposal 1), FOR the approval of an Employee
Stock Purchase Plan (proposal 2), and in the discretion of the proxy holders, as
to other matters that may properly come before the Annual Meeting. You may
revoke or change your proxy at any time before the Annual Meeting. To do this,
send a written notice of revocation or another signed proxy with a later date to
the Secretary of the company at the company's principal executive offices before
the beginning of the Annual Meeting. You may also revoke your proxy by attending
the Annual Meeting and, prior to the voting of the proxy, indicating to the
Secretary of the meeting a desire to vote your shares in person. Stockholders
whose shares are in street name should consult with their brokers concerning
procedures for revocation.
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SOLICITATION OF PROXIES
The company will bear the entire expense of this proxy solicitation. The
company may reimburse brokerage houses, fiduciaries, and custodians for their
reasonable expenses incurred in sending copies of solicitation materials to
their principals. Solicitation may be made by telephone or otherwise by
Officers, Directors or Associates (employees) of the company, who will receive
no compensation other than their regular compensation, and MacKenzie
Partners, Inc. whose services to the company will include the solicitation of
proxies. MacKenzie Partners, Inc. will receive payment of $10,000 plus
out-of-pocket expenses for such services.
PROPOSAL #1 ELECTION OF DIRECTORS
Six Directors, comprising the entire membership of the Board of Directors of
the company, are to be elected at the Annual Meeting. Stockholders are entitled
to cumulative voting rights in the election of Directors. Under cumulative
voting, each stockholder is entitled to a number of votes equal to the number of
Directors to be elected multiplied by the number of shares of Common Stock the
stockholder is entitled to vote. Such votes may be cast for one nominee or
distributed among two or more candidates. Unless otherwise instructed, the proxy
holders intend to vote the shares represented by the proxies received by them
for the six nominees shown below for a term of one year and until their
successors are duly elected and qualified. All elections shall be decided by a
plurality vote.
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MURRAY H. HUTCHISON
[PHOTO] Age 59, Director since 1983
The Board of Directors elected Mr. Hutchison to serve as
Interim Chairman of the Board of Directors, Chief Executive
Officer and President following Richard H. Chandler's
resignation from those positions on October 4, 1999. From
1976 through 1996, Mr. Hutchison was Chairman of the Board,
and from 1976 through 1994 also served as Chief Executive
Officer of International Technology Corporation, a New York
Stock Exchange (NYSE) listed environmental management
company. Mr. Hutchison serves on the Board of Directors of
Epic Solutions, Huntington Hotel Corporation, Olsen Company,
and Senior Resource Group, all privately held companies, and
Cadiz, Inc. and Jack in the Box Inc., both publicly traded
companies.
LEE A. AULT III
[PHOTO] Age 63, Director since 1988
Mr. Ault has served as Chairman of the Board of
IN-Q-T, Inc., an information technology company since
August 1999. He was Chief Executive Officer from 1968
through January 1992 of Telecredit, Inc., a payment services
company. In 1990 Telecredit, Inc. merged with Equifax, Inc.,
a NYSE listed information services company. He serves on the
Board of Directors of Equifax, Inc., Office Depot, Inc. (a
NYSE listed office supplies retailer), American Variable
Insurance Series and Pacific Crest Outward Bound School.
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MICHAEL N. HAMMES
[PHOTO] Age 56, Director since 1998
Since 1998 Mr. Hammes has been the Chairman of the Board and
Chief Executive Officer of Guide Corporation, a privately
held company which purchased the automotive lighting
business of General Motors. From October 1993 to
February 1997, Mr. Hammes was Chairman of the Board and
Chief Executive Officer of The Coleman Company, Inc., a
global manufacturer and distributor of camping and outdoor
recreational products and hardware/home products. From 1990
to 1993, he was Vice Chairman of the Black & Decker
Corporation and President of its Power Tool and Home
Products Group. From 1986 to 1990, Mr. Hammes was President
of International Operations for Chrysler Corporation and a
Vice President of the company. Mr. Hammes also served in a
number of positions for Ford Motor Company with which he was
affiliated for over 20 years, including President of Mexican
Operations and President of European Truck Operations.
Mr. Hammes is also a Board member of Navistar Corporation,
Johns Manville Corporation and the Board of Visitors of
Georgetown University's School of Business.
WILLIAM L. PIERPOINT
[PHOTO] Age 61, Director since 1985
From 1977 to 1988, Mr. Pierpoint was President and Chief
Executive Officer of Summit Health Ltd., a publicly traded,
integrated health care company. Mr. Pierpoint is a certified
public accountant, and since 1988 has been a private
investor. In 1995 he became Vice Chairman of Strategic
Partners Inc. (dba Cherokee Uniforms), a privately held
company.
JOSEPH STEMLER
[PHOTO] Age 68, Director since 1989
Mr. Stemler joined the Maret Corporation, a privately held
company, as its CEO and Chairman of its Board of Directors
in 1997. He is a Director of the Scholle Corporation, a
privately held company, and served as its CEO and Chairman
in 1996. From 1989 through 1996, Mr. Stemler served as
Chairman of the Board of La Jolla Pharmaceutical Company, a
publicly held biotechnology company and as its President and
CEO from 1989 through 1995. Mr. Stemler became President and
Chief Executive Officer of Quidel Corporation in 1985,
Chairman and Chief Executive Officer in 1988, Chairman in
1990 and Vice Chairman in 1991. Mr. Stemler was President
and Chief Executive Officer of Bentley Laboratories, Inc.
from 1978 to 1985. He also serves on the Board of Directors
of Safeskin Corporation, a publicly traded manufacturer of
disposable gloves for scientific and healthcare needs.
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JOHN R. WOODHULL
[PHOTO] Age 65, Director since 1986
Mr. Woodhull was Chairman, President and CEO, from 1969
through 1998, of Logicon, Inc., then a NYSE listed company,
which provided electronic systems and high-technology
services to industry and government. Mr. Woodhull is
currently a private investor. He serves on the Board of
Directors of Adams Business Forms, Inc., a private company,
FirstFed Financial Corp., a NYSE listed company, First
Federal Bank of California, a subsidiary of FirstFed
Financial Corp., and the YMCA of Metropolitan Los Angeles.
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If, at the time of the Annual Meeting, any of the above nominees should be
unable or unwilling to serve, the proxy holders may vote the proxies for
substitute nominee(s). Management has no reason to believe that any substitute
nominee or nominees will be required.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH NAMED NOMINEE
MEETINGS AND ATTENDANCE
The Board of Directors met seven times during the fiscal year ended July 2,
1999. The Audit Committee met three times, and the Compensation Committee met
one time in fiscal 1999. The Nominating Committee acted once by unanimous
written consent. The Executive Committee did not meet in fiscal 1999. All
Directors attended at least three-fourths of the aggregate of the total number
of Board meetings and Committee meetings on which such Directors served.
COMMITTEES
AUDIT COMMITTEE. The Audit Committee of the Board of Directors is comprised
solely of outside Directors. The Audit Committee meets periodically with the
company's independent auditors, the internal audit department and financial
management of the company to ensure that each is carrying out its
responsibilities in compliance with the Audit Committee Charter previously
approved by the Board of Directors. Both the independent auditors and the
internal audit department have free and direct access to the Audit Committee.
The company's independent auditors are recommended by the Audit Committee and
selected by the Board of Directors. Members of the Audit Committee are
Messrs. Hammes, Pierpoint and Stemler, with Mr. Hammes serving as Chair.
COMPENSATION COMMITTEE. The Compensation Committee meets with management
and makes recommendations to the Board concerning (i) Executive Officer and key
Associate compensation, (ii) payments to be made under the Management Incentive
Bonus Plan, and (iii) company contributions to be made under the 401(k) Profit
Sharing/Savings Plan. The Compensation Committee also administers the stock
option plans of the company. In addition, this Committee functions as a
Nominating Committee regarding nominations for the Board of Directors. Following
the instructions set forth below under the caption "Stockholder Proposals for
Next Annual Meeting," Stockholders wishing to recommend candidates for
consideration by the Nominating Committee may do so by writing to the Secretary
of the company and providing the candidate's name, biographical data and
qualifications. Members of the Compensation Committee are Messrs. Ault,
Hutchison and Woodhull, with Mr. Ault serving as Chair.
EXECUTIVE COMMITTEE. The Executive Committee, consisting of
Messrs. Hutchison, Ault and Hammes, meets on an as-needed basis with the
authority to make Board-level decisions between regularly scheduled Board
meetings. Mr. Hutchison is Chair of this Committee.
DIRECTOR COMPENSATION
Outside Directors are paid an annual retainer of $16,000 (paid in monthly
installments) and $1,200 for each Board meeting attended ($600 if a Board
meeting is telephonic). In addition, Committee members
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are paid $1,000 per meeting if attended in person or $500 per meeting if a
Committee meeting is telephonic. Committee Chairs receive an additional $2,000
annual retainer paid in semi-annual installments. Upon election to the Board and
every year thereafter if still a Director, each outside Director is granted an
option to purchase 2,000 shares of Common Stock under the company's Amended and
Restated 1993 Stock Option Plan. These options vest 100% on the first
anniversary of the grant. The company has no other contracts or other
arrangements pursuant to which any non-employee Director was compensated during
the year.
PROPOSAL #2 ADOPTION OF AN EMPLOYEE STOCK PURCHASE
PLAN FOR THE COMPANY
GENERAL
On August 24, 1999, the Board adopted the Sunrise Medical Inc. Employee
Stock Purchase Plan (the "Plan"), subject to stockholder approval. The Board
determined that adoption of this Plan is desirable to provide the opportunity
for Associate ownership of the capital stock of the company in order to attract,
motivate and retain qualified Associates. The Plan has the added benefit of
aligning the interests of participating Associates with the interests of the
company's stockholders.
The Plan has been designed to comply with Internal Revenue Code Section 423.
Under the Plan, purchases may be made by participating Associates on a
semi-annual basis, based on a 15% discount from the lesser of the market price
on the first day or last day of the offering period. The offering periods will
begin on March 1 and September 1 of each year. A total of 1,000,000 shares of
Common Stock of the company were authorized by the Board for purchase under the
Plan. Such shares are subject to adjustment in the event of a reorganization,
stock split, stock dividend or similar change in the corporate structure of the
company or the outstanding shares of Common Stock. Such shares may be, in whole
or in part, authorized and unissued or treasury shares.
The Plan, if approved at the Annual Meeting, will become effective March 1,
2000, and provides for the purchase through payroll deductions of Common Stock
by Associates of the company and its participating subsidiary corporations who
elect to participate. The Plan will be administered by the Compensation
Committee of the Board of Directors. The recipients, amounts and values of
future benefits are subject to the individual elections of Associates and are
therefore not determinable at this time.
The following is a summary of the terms of the Plan, which is qualified in
its entirety by reference to the Plan document, a copy of which is attached as
Appendix A to this Proxy Statement.
TERMS OF THE PLAN
ELIGIBILITY. Associates of the company and its participating subsidiary
corporations who have been employed for at least one year are eligible to
participate in the Plan, except that no person who owns (or is treated as
owning) 5% or more of the outstanding Common Stock of the company may
participate in the Plan. Also, Associates who are customarily employed for 20
hours or less per week, or for not more than five (5) months per calendar year,
are not eligible. All majority-owned corporate subsidiaries are eligible to be
participating subsidiaries, and the Compensation Committee will designate the
corporate subsidiaries that will be participating subsidiaries from time to
time. Initially, participation in the Plan will be made available only to
Associates of the company and subsidiaries in the United States due to tax and
securities laws considerations in the numerous foreign jurisdictions in which
the company's subsidiaries operate. As of October 1, 1999, approximately 2,119
Associates are expected to be initially eligible to participate in the Plan.
ELECTION TO PARTICIPATE AND PAYROLL DEDUCTIONS. A participating Associate
can elect to deduct from his or her paycheck a minimum of 1% and a maximum of
20% of his or her base compensation per offering period to purchase shares under
the Plan. Elections are made through written election forms which
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become effective for the next and all succeeding payroll periods until changed
or revoked by the participating Associate.
LIMITATION ON NUMBER OF SHARES THAT CAN BE PURCHASED. For all offering
periods ending in a given calendar year, an Associate's purchases under the Plan
shall be limited to no more then an aggregate of $25,000 worth of shares (valued
at the beginning of each such offering period). The purchase of shares under
this Plan is also limited to a maximum of 20% of the Associate's base
compensation per offering period, and a limitation of 5,000 shares per
participating Associate per offering period.
PURCHASE OF COMMON STOCK. On the last day of the offering period,
participating Associates are deemed to exercise an option to purchase shares of
Common Stock of the company, and the appropriate number of shares are allocated
to the account of each participating Associate. The number of shares allocated
to each participating Associate is the number of full shares that can be
purchased with the payroll deductions elected by such Associate for that
offering period. The purchase price for the shares purchased for an offering
period is 85% of the lesser of the fair market value of a share of the company's
Common Stock on the first day or last day of the offering period. Any payroll
contributions remaining in the participating Associate's account that are not
equal to one full share will be carried over into the next offering period
unless the Associate terminates participation in the Plan, in which case the
remaining contribution will be refunded to the Associate without interest.
TRANSFERABILITY. The right to purchase shares under the Plan may not be
transferred to or exercised by any person other than the participating
Associate. Once shares have been purchased by the participating Associate, they
may be transferred in the same manner as other shares of Common Stock of the
company.
AMENDMENT AND TERMINATION OF THE PLAN. The Plan may be amended or
terminated by the Board at any time, but no amendment may increase the aggregate
number of shares available for purchase under the Plan without approval of the
company's stockholders.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following discussion is intended only as a general summary of certain of
the federal income tax consequences arising from the purchase of Common Stock
pursuant to the Plan and the subsequent disposition of such Common Stock.
Federal income tax consequences will vary as a result of individual
circumstances. Moreover, the following summary relates only to U.S. federal
income tax treatment. State, local and foreign tax consequences may be
substantially different than the federal income tax consequences described
herein.
GRANT AND PURCHASE. Under applicable provisions of the Code, an Associate
generally is taxed on all compensation, including the amount of payroll
deductions used to purchase shares. However, a participating Associate will
recognize no additional compensation income upon being granted a right to
purchase shares. Furthermore, assuming that the Plan qualifies under Code
Section 423, the participating Associate will not recognize taxable income upon
purchase of shares, even though he or she will pay less than fair market value
for the shares. The company will not be entitled to a deduction for tax purposes
as a result of granting rights to purchase shares or as a result of Associates
purchasing shares.
SALE OF COMMON STOCK. Assuming the Plan qualifies under Code Section 423,
the tax treatment of a participating Associate who sells shares purchased under
the Plan depends on how long the Associate holds the shares.
If a participating Associate sells the shares within two years after the
first day of the offering period, the Associate will recognize ordinary income
to the extent that the fair market value on the purchase date exceeds the
purchase price. The remaining gain (if any) will be taxed as capital gain. If
the shares are sold for less than the fair market value on the purchase date,
the Associate may claim a capital loss for the
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decline in value. The company (or other employing subsidiary corporation) will
be entitled to a deduction equal to the amount the Associate recognizes as
ordinary income.
If the participating Associate sells the shares more than two years after
the first day of the offering period, the Associate will recognize ordinary
income equal to the lesser of (i) 15% of the fair market value of the shares on
the first day of the offering period, or (ii) the amount realized upon the sale
of the shares minus the purchase price. The remaining gain (if any) will be
taxed as capital gain. In such case, the company (or other employing subsidiary
corporation) will not be entitled to any deduction as a result of such sale.
APPROVAL REQUIRED
The Plan requires the affirmative vote of a majority of the Common Stock of
the company present in person or represented by proxy and entitled to vote at
the Annual Meeting. In addition, over 50 percent of the outstanding shares of
Common Stock must vote on this proposal. In determining whether this proposal
has received the requisite number of affirmative votes, an abstention will have
the same effect as a vote against the proposal, and shares represented by broker
non-votes will not be considered shares entitled to vote on the proposal.
Approval of the Plan by the stockholders is required within 12 months from the
adoption of the Board of Directors in order for the Plan to be qualified under
Section 423 of the Code.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSAL #2.
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COMPENSATION COMMITTEE REPORT TO STOCKHOLDERS
The Compensation Committee of the Board of Directors (the "Committee") is
responsible for establishing and overseeing the policies that govern company
compensation and benefit practices. As part of these functions, the Committee
evaluates the performance of the Chief Executive Officer, reviews with senior
management the performance of other highly compensated officers, and determines
their respective compensation levels in terms of salary, bonuses and related
benefits. The Committee has established a number of objectives, which serve as
guidelines in making all compensation decisions, including:
- The integration of compensation programs with the company's strategic
direction in order to achieve its long-term competitive objectives and
strategic intent;
- The reward of annual operating and financial performance through
individual and group bonus incentives that pay for improved quantitative
performance versus annual targets;
- The encouragement of consistent, long-term enhancement of stockholder
value by providing multi-year performance incentives through a contingent
long-term bonus plan and equity ownership through stock options; and
- The development and implementation of a competitive total compensation
program that enables the company to attract and retain high-caliber
Associates at all levels.
The company's compensation philosophy rewards individual and team
performance on the basis of both quantitative and qualitative factors.
Associates at all levels participate in one or more of the company's various
bonus plans. The six plans currently in effect are aimed broadly at different
groups including senior and middle managers, engineers, technical specialists,
sales Associates and hourly factory and office Associates.
The Committee believes that the components of executive compensation should
include base salary, annual and long-term incentive compensation, stock option
grants and other benefits described below. A brief summary of each component
follows.
BASE SALARY
Base salaries are intended to be competitive with market rates and are based
on an internal evaluation of the responsibilities of each position. The
Committee reviews hiring and turnover patterns within the company and relies
from time to time on outside industry surveys to assess salary competitiveness.
The companies included in such surveys are typically companies having revenues
and businesses similar to those of Sunrise and/or which draw from the same
geographic area. The composition of such companies is generally a peer group of
U.S. medical equipment manufacturers similar (but not identical) in composition
to the Peer Group Index shown on the stock performance chart included herein.
The Committee believes that total cash compensation for company executives
should be targeted within the 25th to 75th percentile of executives at companies
having businesses and revenues comparable to those of Sunrise. Where executives
fall within a salary range will depend on their seniority and their performance.
The Committee's objective is to link executive compensation with the company's
financial performance, while also reflecting competitive market factors.
Salary increases are based on annual supervisor reviews and are intended to
reflect individual as well as business unit performance, along with the results
of industry survey results. Annual increases for salaried Associates are all
awarded on the same day, the first Monday in September, so as to ensure fairness
across the company and to incorporate both the previous fiscal year's operating
results and individual performances.
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ANNUAL INCENTIVE COMPENSATION
The company has used throughout its history a Management Incentive Bonus
Plan (the "MIB Plan") pursuant to which members of management are eligible to
receive annual cash bonuses. Generally, each bonus will be based on both the
achievement of individual objectives agreed upon by the manager and his or her
immediate supervisor, and upon the business unit's attainment of certain
earnings targets. With regard to the company's performance, the primary measure
used for determining bonuses is the company's earnings per share growth. An
operating unit's performance is measured against goals for earnings growth
(after a capital charge on any cash drawn), and levels of return on net assets.
No bonus is paid at either the corporate or divisional level unless earnings
exceed prior year results. Earnings goals are approved annually by the Board of
Directors and are tied to the company's operating plan. Even if a bonus is
earned based on profit performance, the executive must still accomplish his or
her personal objectives for the year in order to qualify for the designated
amount. The fiscal 1999 maximum payout that could be earned under the MIB Plan
ranged from 10% to 100% of a manager's salary, depending upon his or her
position.
Under the MIB Plan, 80% of an MIB bonus earned in a given fiscal year is
paid out at the end of that year, and 20% is deferred and paid out, if earned,
in two equal installments over the following two years. The deferred amount is
paid out (i) if the manager is still employed as of the end of the fiscal year
in question; and (ii) if the division achieves at least a 5% earnings increase
over the first year level, and in the third year, at least a 5% increase over
the second year level (if the second year is a down year, earnings must at least
meet minimum specified earnings targets in the third year). The overall goal of
the MIB Plan is to encourage and reward sustained, steady profit growth over a
rolling three-year period.
STOCK OPTIONS
Certain management Associates of the company are eligible to receive
periodic grants of non-qualified or incentive stock options pursuant to the
Amended & Restated 1993 Stock Option Plan. The Committee establishes the terms
of options granted under the 1993 Plan. Options that have been granted to
Associates under the 1993 Plan become exercisable in four equal annual
increments beginning on the first anniversary date of the grant. The option
price, which is determined by the Committee, is generally equal to 100% of the
fair market value of the shares covered by the option on the date of grant.
Options are granted to certain management and senior technology Associates and
are intended to retain them and motivate them to improve the company's long-term
stock market performance, aligning their interests with those of stockholders.
In determining the number of options to be granted to an Associate, the
Committee makes a subjective determination based on a number of factors,
including the individual's level and scope of responsibility, job performance,
and the overall competitiveness of his or her compensation package compared to
the outside industry surveys referenced above. About 7% of the company's
Associates qualify for stock options each year.
401(k) PROFIT SHARING CONTRIBUTIONS
The company contributes to a 401(k) Profit Sharing/Savings Plan (the "401(k)
Plan") in which all domestic Associates (except those under certain collective
bargaining agreements) may participate after satisfying the service requirements
of the Plan. Annual awards for Associates under the profit sharing portion of
the plan typically varies from 4% to 6% of compensation (subject to the
statutory limitations on compensation referenced in the following paragraph),
contingent upon attainment of certain earnings targets by the company as a whole
in the case of corporate office Associates, or by the division, in the case of
division Associates. In addition to the basic profit sharing contribution, the
company contributes between 8% and 11% of compensation above $68,400 and below
$160,000 (the current Internal Revenue Code ("IRC") statutory maximum under the
401(k) Plan). The savings portion of the 401(k) Plan provides that Associates
may defer compensation (subject to statutory limitations) and provides
Associates with a company matching contribution, which matches their voluntary
savings on a dollar-for-dollar basis up to a maximum of $400. Associates
employed outside the United States generally participate in defined
9
<PAGE>
contribution plans which mirror the United States plan, to the extent
appropriate in view of local laws and practices.
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN ("SERP")
The SERP provides for company discretionary retirement contributions to a
non-qualified plan for the benefit of Associates earning a base salary of
$140,000 and above. The SERP contributions are intended to replace funds that
are not contributed to the 401(k) Plan due to the IRC statutory limitation
referenced above. Discretionary contributions may, depending on corporate or
divisional profit performance, range up to 11% of compensation over $160,000
earned in a fiscal year. In addition, these Executives may also voluntarily
defer up to 25% of their MIB bonus each year into the SERP.
The SERP is funded through a "rabbi" trust with American Express Trust Co.
as the trustee and represents a contractual obligation of the company to make
payments (subject to certain vesting restrictions) to the covered Executives
upon retirement, termination, disability or death. In the unlikely case that
Sunrise becomes insolvent, the assets of the Trust will be held for the benefit
of the company's general creditors.
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER
In determining the fiscal 1999 compensation for the company's former
Chairman, President and Chief Executive Officer, Mr. Richard H. Chandler, the
Committee followed its established philosophy and guidelines as outlined above.
The Board, at its August 1998 meeting accepted the Committee's recommendation to
increase Mr. Chandler's fiscal 1999 base salary to $510,000 (an increase of
3.5%). During fiscal 1999 the Board awarded Mr. Chandler non-qualified stock
options to purchase 75,000 shares (at a price of $10.125 per share). In
addition, in September 1999, the company contributed $10,064 to his 401(k)
account, along with a $400 company matching contribution. The company also
contributed $28,126 to his SERP account. Mr. Chandler did not receive an MIB
Bonus accrual or pay-out for fiscal 1999.
This Compensation Committee report shall not be deemed incorporated by
reference by any general statement incorporating by reference this Proxy
Statement into any filing under the Securities Act of 1933 or under the
Securities Exchange Act of 1934, except to the extent the company specifically
incorporates this report by reference, and shall not otherwise be deemed filed
under such Acts.
Lee A. Ault III Murray H. Hutchison John R.Woodhull
Chairman
10
<PAGE>
COMPENSATION OF EXECUTIVE OFFICERS
SUMMARY COMPENSATION TABLE
The following table sets forth information concerning the compensation of
the company's Chief Executive Officer and the four other most highly-compensated
Executive Officers (the "Named Officers") for the fiscal years ended July 2,
1999, July 3, 1998, and June 27, 1997.
SUMMARY COMPENSATION TABLE
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------
LONG-TERM
COMPENSATION
----------------
ANNUAL COMPENSATION AWARDS PAYOUTS
---------------------------------- -------------------
STOCK
FISCAL OTHER ANNUAL OPTION LTIP ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS(1) COMPENSATION(2) GRANTS PAYOUTS(3) COMPENSATION(4)
- ----------------------------------------------------------------------------------------------------------------------
Richard H. Chandler(5) ....... 1999 $506,634 $ -- $-- 75,000 $ -- $ 43,542
FORMER CHAIRMAN OF THE BOARD, 1998 492,500 -- -- 60,000 -- 46,967
PRESIDENT & CHIEF EXECUTIVE 1997 475,000 86,821 -- 25,000 -- 10,992
OFFICER
Thomas H. O'Donnell(6) ....... 1999 318,076 -- -- 30,000 -- 26,554
SENIOR VICE PRESIDENT, 1998 310,000 -- -- 25,000 -- 28,230(7)
OPERATIONS AND GROUP 1997 300,000 19,697 -- 10,000 1,961 8,901(7)
PRESIDENT, HOME HEALTHCARE
Ben Anderson-Ray(6) .......... 1999 311,565 -- -- 40,000 -- 23,728(8)
SENIOR VICE PRESIDENT, 1998 280,000 -- -- 7,000 -- 13,964
OPERATIONS AND GROUP 1997 250,000 1,359 -- 14,000 -- 400(8)
PRESIDENT, CONTINUING CARE
Barrie Payne(6) .............. 1999 295,169 15,770 -- 30,000 -- 43,819(9)
SENIOR VICE PRESIDENT, 1998 280,000 -- -- 25,000 -- 15,083
OPERATIONS AND GROUP 1997 266,154 18,311 -- 10,000 11,150 10,410
PRESIDENT, NORTHERN EUROPE
Ted N. Tarbet(6) ............. 1999 246,730 -- -- 30,000 -- 18,477
SENIOR VICE PRESIDENT AND 1998 233,000 -- -- 25,000 -- 19,587
CHIEF FINANCIAL OFFICER 1997 220,000 31,111 -- 10,000 -- 7,407
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The amounts reflect the bonuses earned under the Management Incentive Bonus
("MIB") Plan in the designated fiscal years, but paid in the following
fiscal year. See the Compensation Committee Report to Stockholders for a
description of this plan.
(2) Excludes perquisites and other personal benefits, securities or property, to
the extent the aggregate amount of such compensation does not exceed the
lesser of either $50,000 or 10% of the total of annual salary and bonus
reported for the named executive officer.
(3) The amounts reflect contingent bonuses accrued in prior years under the MIB
Bonus Plan that were paid out for the designated fiscal years.
(FOOTNOTES CONTINUED ON NEXT PAGE)
11
<PAGE>
4) Includes amounts shown below allocated by the company for the accounts of
the Named Officers in fiscal 1999. The company has no defined benefit or
other actuarial plan covering the Named Officers.
<TABLE>
<CAPTION>
SUPPLEMENTAL
PROFIT SHARING/ EXECUTIVE LIFE INSURANCE
NAME SAVINGS PLAN RETIREMENT PLAN PREMIUMS
- ---- --------------- --------------- --------------
<S> <C> <C> <C>
Richard H. Chandler................. $10,464 $28,126 $4,952
Thomas H. O'Donnell................. 10,464 12,901 3,189
Ben Anderson-Ray.................... 10,584 12,209 1,055
Barrie Payne........................ 9,459 0 4,360
Ted N. Tarbet....................... 10,464 7,018 995
</TABLE>
Mr. Payne also has an arrangement in the U.K. to receive a company
contribution equal to 10% of his U.K. compensation to a private pension
account similar to the U.S. SERP referenced above. In fiscal 1999 a
contribution of $15,770 was made to this account for his benefit.
(5) Mr. Chandler resigned as an Officer and Director of the company and its
subsidiaries on October 4, 1999. See "Certain Transactions."
(6) Individually, each of Messrs. O'Donnell, Anderson-Ray, Payne and Tarbet is a
party to a Change in Control Agreement ("CIC") with the company. Each CIC
Agreement provides for a severance payment of up to two times the
executive's annual salary and target MIB bonus plus a two-year continuation
of health and other benefits if (i) there is a "change in control" (as
defined in the Agreement) of the company followed within two years by
(ii) the executive's termination by the company without "cause" or
termination by the executive for "good reason" (each term as defined in the
Agreement).
Messrs. O'Donnell, Anderson-Ray, Payne and Tarbet also have severance
agreements entitling them to receive a severance payment upon termination of
employment equal to one year's base salary (plus, in certain instances,
target bonus for such year), unless such termination is for good cause (as
defined in the agreements). In addition, following his retirement from the
company, Mr. Payne has an agreement with the company that entitles him to
reimbursement of certain expenses associated with his overseas assignment,
as well as certain relocation expenses and post-employment consulting fees.
(7) At the request of the company, Mr. O'Donnell moved his residence from the
company's corporate headquarters at Carlsbad, California to the newly formed
Home Healthcare Group headquarters near Boulder, Colorado in June 1997. The
company paid for the relocation and reimbursed Mr. O'Donnell for losses
suffered thereby. The total shown above excludes such costs and losses
totaling $382,293 for fiscal 1997 and $144,581 for fiscal 1998, including
losses on the sale of his residence, costs of buying and selling the homes,
moving and travel costs, and temporary living expenses, together with a tax
gross-up covering such items. In addition, to facilitate his move, the
company provided Mr. O'Donnell with two short term bridge loans in the
amounts of $356,000 and $50,000, respectively. Each such loan was evidenced
by a promissory note secured by a deed of trust, and each such loan has
since been repaid in full.
(8) At the company's request, Mr. Anderson-Ray moved his residence from Boulder,
Colorado to Stevens Point, Wisconsin during fiscal 1999. The relocation
expense totaled $113,949. Mr. Anderson-Ray was provided with relocation
related compensation of $25,000 to further facilitate this relocation.
During fiscal 1997, at the company's request, Mr. Anderson-Ray moved his
residence to Boulder, Colorado. The relocation expense totaled $9,273.
Mr. Anderson-Ray was provided with relocation related compensation of
$50,000 to further facilitate this relocation. The total shown above for
Mr. Anderson-Ray excludes such amounts.
12
<PAGE>
(9) Includes $30,000 paid to Mr. Payne to offset certain expenses associated
with his overseas assignment. In addition, in order to assist Mr. Payne with
unusual expenses related to the overseas portion of his duties with the
company, Mr. Payne was granted a loan on May 8, 1998 in the amount of
$250,000 at a 6% annual interest rate. The principal must be repaid in full
no later than the fifth anniversary of the Secured Promissory Note. Interest
is paid quarterly, in arrears. Notwithstanding the foregoing, all principal
and interest shall be due and payable ninety (90) days after the expiration
of, or immediately upon the termination of, Mr. Payne's employment agreement
with the company. No interest or principal of this loan is reflected in the
foregoing table.
OPTIONS GRANTED IN LAST FISCAL YEAR
The following table sets forth information concerning options granted under
the Amended and Restated 1993 Stock Option Plan or the Amended and Restated
Sentient/Sunrise Stock Option Plan to the Named Officers during the 1999 fiscal
year.
OPTION/SAR GRANTS IN 1999 FISCAL YEAR
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------
POTENTIAL REALIZABLE VALUE
AT
ASSUMED ANNUAL RATE OF
STOCK PRICE APPRECIATION
INDIVIDUAL GRANTS FOR OPTION TERM(2)
- -----------------------------------------------------------------------------------------------------
PERCENT
OF TOTAL
OPTIONS/
SARS
GRANTED
TO EXERCISE
OPTIONS/ EMPLOYEES OR BASE
SARS IN PRICE
GRANTED FISCAL PER EXPIRATION
NAME (#)(1) YEAR SHARE DATE 5% 10%
- -----------------------------------------------------------------------------------------------------
Richard H. Chandler......... 75,000 11.4% $10.125 8/27/2008 $ 393,577 $ 1,076,508
Thomas H. O'Donnell......... 30,000 4.6 10.125 8/27/2008 157,431 430,603
Ben Anderson-Ray............ 40,000 6.1 10.125 8/27/2008 209,908 574,138
Barrie Payne................ 30,000 4.6 10.125 8/27/2008 157,431 430,603
Ted N. Tarbet............... 30,000 4.6 10.125 8/27/2008 157,431 430,603
----------- ------------
Totals.................................................................. 1,075,778 2,942,455
Increase in total stock market capitalization of the company
(under same assumptions)(3)............................................ $98 million $247 million
</TABLE>
(1) All grants were in the form of incentive stock options and non-qualified
stock options. No SARs have been granted.
(2) Potential realizable value is calculated as the aggregate difference between
the market price of the Common Stock and the option exercise price assuming
that the stock price appreciates at the annual rate shown (compounded
annually) from the date of grant until the end of the option term. These
amounts are calculated based on the requirements promulgated by the
Securities and Exchange Commission and are not an estimate of future stock
price growth.
(3) This line is presented for comparative purposes and reflects, for all
outstanding shares as of July 2, 1999, the aggregate potential realizable
increase in value that would result if the company's stock price were to
increase from the market price on July 2, 1999 ($7.00 per share) by the same
compound annual rates set forth in the table over a 10-year period ending
July 2, 2009. These amounts are not an estimate of future stock price
growth.
13
<PAGE>
AGGREGATED OPTION EXERCISES IN THE LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
The following table sets forth information with respect to the Named
Officers concerning the exercise of options during fiscal 1999 and unexercised
options held as of the end of fiscal 1999.
AGGREGATED OPTION/SAR EXERCISES IN FISCAL 1999 AND JULY 2, 1999 OPTION/SAR
VALUES
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------
NUMBER OF VALUE OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS/SARS OPTIONS/SARS
AT JULY 2, 1998 AT JULY 2, 1998(2)
- --------------------------------------------------------------------------------------------------
SHARES
ACQUIRED
ON VALUE
NAME EXERCISE REALIZED(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- --------------------------------------------------------------------------------------------------
Richard H. Chandler...... -- $-- 110,000 132,500 $ -- $--
Thomas H. O'Donnell...... -- -- 97,250 58,750 17,110 --
Ben Anderson-Ray......... -- -- 8,750 52,250 -- --
Barrie Payne............. -- -- 78,800 58,750 16,047 --
Ted N. Tarbet............ -- -- 63,250 53,750 25,915 --
</TABLE>
(1) Based on the market value of the underlying shares on the exercise date
minus the option exercise price per share.
(2) Calculated on the basis of the fair market value of the underlying shares as
of July 2, 1999 ($7.00 per share) minus the exercise price.
LONG-TERM INCENTIVE PLAN
The Named Officers received no long term incentive awards in fiscal 1998 and
1999 that could be paid in fiscal 2000 or 2001.
14
<PAGE>
STOCK PRICE PERFORMANCE GRAPH(1)
The following graph shows a five-year comparison of cumulative total returns
for the company, the S&P 500 Index ("Broad Market") and a peer group of
companies ("Peer Group") selected on a line-of-business basis. Also shown below
is the S&P Medical Products and Supplies Index ("Industry Index") which in prior
years was shown for comparison purposes. The companies included in the Peer
Group are durable medical equipment manufacturers like Sunrise, whereas the
Industry Index includes service providers as well as manufacturers of invasive
medical devices. Therefore, the company believes that the Peer Group provides a
more relevant comparison to Sunrise than the Industry Index. The graph assumes
that the value of the investment in the company's Common Stock and each index
was $100 at June 30, 1994, and that all dividends were reinvested.
FIVE-YEAR CUMULATIVE TOTAL RETURN COMPARISON(2)
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
SUNRISE BROAD PEER GROUP INDUSTRY
<S> <C> <C> <C> <C>
Medical Inc. Market Index Index
1994 $100.00 $100.00 $100.00 $100.00
1995 $142.29 $126.07 $148.20 $153.42
1996 $88.00 $158.85 $187.30 $201.56
1997 $69.14 $213.97 $210.60 $267.00
1998 $68.57 $278.51 $156.70 $357.16
1999 $32.57 $341.89 $145.00 $424.85
YEARS
</TABLE>
<TABLE>
<CAPTION>
JUNE 30,
---------------------------------------------------------------
1994 1995 1996 1997 1998 1999
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Sunrise Medical Inc......................................... $100.00 142.29 88.00 69.14 68.57 32.57
Broad Market................................................ 100.00 126.07 158.85 213.97 278.51 341.89
Peer Group(3)............................................... 100.00 148.20 187.30 210.60 156.70 145.00
Industry Index.............................................. 100.00 153.42 201.56 267.00 357.16 424.85
</TABLE>
- ------------------------------
(1) This Stock Price Performance Graph shall not be deemed incorporated by
reference by any general statement incorporating by reference this Proxy
Statement into any filing under the Securities Act of 1933 or under the
Securities Exchange Act of 1934, except to the extent the company
specifically incorporates this graph by reference, and shall not otherwise
be deemed filed under such Acts.
(2) The graph covers the period from June 30, 1994 to June 30, 1999.
(3) The companies used in the Peer Group consist of Invacare, Inc., (IVC);
Respironics, Inc. (RESP); and Graham-Field Health Products, Inc. (GRIH).
Everest & Jennings International Ltd. (EJ) was acquired by Graham-Field
Health Products, Inc. in the fourth quarter of 1996. Everest & Jennings
International Ltd. shareholders received .35 common shares of Graham-Field
Health Products, Inc. for each Everest & Jennings International Ltd. common
share owned. For purposes of the above graph, the return for Everest &
Jennings International Ltd. within the peer group for the period November
27, 1996 to June 30, 1999 was calculated with the return of Graham-Field
Health Products, Inc. at the conversation rate noted above.
15
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of October 1, 1999, the name and address,
the total number of shares of Common Stock beneficially owned (as defined in
Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the "1934
Act")), and the percentage of the outstanding shares of the Common Stock so
owned (i) by each person who is known to the company to own beneficially 5% or
more of the outstanding shares of Common Stock, (ii) by each of the Directors,
(iii) by the company's Chief Executive Officer and each of the Named Officers
and (iv) by all Directors and Executive Officers as a group. On October 1, 1999
there were a total of 22,233,933 shares of the company's Common Stock issued and
outstanding.
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
BENEFICIAL PERCENT OF
NAME AND ADDRESS OF BENEFICIAL OWNERS(1) OWNERSHIP(2) CLASS
- ---------------------------------------- ------------ ----------
<S> <C> <C>
State of Wisconsin/Wisconsin Investment Board .............. 3,169,200(3) 14.3%
121 E. Wilson St.
Madison, WI 53702
ICM Asset Management ....................................... 2,391,550(3) 10.8%
601 W. Main Avenue, Suite 917
Spokane, WA 99201
Richard H. Chandler ........................................ 2,065,466(4) 9.2%(4)
2131 Palomar Airport Road, Suite 200
Carlsbad, CA 92009
Dimensional Fund Advisor ................................... 1,441,500(3) 6.5%
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 90401
Lee A. Ault III ............................................ 31,750 *
Michael N. Hammes .......................................... 4,000 *
Murray H. Hutchison ........................................ 21,500 *
William L. Pierpoint ....................................... 31,720 *
Joseph Stemler ............................................. 52,868 *
John R. Woodhull ........................................... 26,500 *
Thomas H. O'Donnell ........................................ 115,652 *
Ben Anderson-Ray ........................................... 33,274 *
Barrie Payne ............................................... 103,814 *
Ted N. Tarbet .............................................. 101,947 *
ALL DIRECTORS & EXECUTIVE OFFICERS AS A GROUP
(13 PERSONS) ............................................. 2,645,083(5) 11.6%(5)
</TABLE>
- ------------------------
* Less than 1%
(1) Except as otherwise indicated, the address of each of the persons named
below is c/o Sunrise Medical Inc., 2382 Faraday Avenue, Suite 200, Carlsbad,
California 92008.
(2) Includes equivalent shares held for the benefit of the named person as of
October 1, 1999 under the Sunrise 401(k) plan, as well as shares deemed to
be outstanding pursuant to stock options presently exercisable or
exercisable within 60 days after October 1, 1999.
16
<PAGE>
(3) Based upon holdings reported by the named institutions in filings with the
Securities and Exchange Commission on Forms 13G and/or 13F, together with
telephonic confirmation of holdings (where possible) as of October 1, 1999.
(4) Includes Mr. Chandler's options to purchase 141,250 shares of Common Stock.
Also includes 22,708 equivalent shares of Common Stock held for the benefit
of Mr. Chandler under the company's 401(k) Plan as of October 1, 1999. Also
includes 85,350 shares held in a non-profit foundation of which
Mr. Chandler and family members are directors, and as to which Mr. Chandler
disclaims beneficial ownership. The total number of shares used to determine
the percent of class is 22,375,183.
(5) Includes options to purchase 523,275 shares of Common Stock held by all
Directors and Executive Officers as a group. Also includes 69,677 equivalent
shares of Common Stock held for the benefit of Executive Officers under the
company's 401(k) Plan as of October 1, 1999. The number of outstanding
shares of Common Stock for this purpose is 22,757,208.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the 1934 Act requires the company's Directors, Executive
Officers and any persons who are beneficial owners of more than 10 percent of
the Common Stock ("Reporting Persons") to report their initial ownership of
Common Stock and any subsequent changes in that ownership to the Securities and
Exchange Commission (the "SEC"). The 1934 Act specifies deadlines for filing of
these reports with the SEC and also requires the disclosure in this Proxy
Statement of any failure to meet the filing deadlines. During fiscal 1999, the
company believes that all reports for the company's Directors and Executive
Officers were timely filed with the SEC.
CERTAIN TRANSACTIONS
On October 4, 1999, Richard H. Chandler resigned from his positions as
Chairman, President and CEO and as a Director of Sunrise Medical Inc. The
company then entered into a consulting, resignation and general release
agreement with Mr. Chandler which provides that Mr. Chandler be hired as a
consultant to the company from October 5, 1999 through September 30, 2002,
during which time Mr. Chandler (i) will consult with and advise the Board of
Directors, (ii) will hold all company information confidential and (iii) will
not compete with the company nor solicit or hire any company Associate. As
compensation, Mr. Chandler will receive a total of $1,830,000, paid in future
installments.
INDEPENDENT AUDITORS
KPMG LLP has been selected to serve as the company's independent auditors
for fiscal year 2000. This firm has audited the company's financial statements
since 1983. One or more representatives of KPMG LLP will be present at the
Annual Meeting to respond to appropriate questions and will be given an
opportunity to make a statement if they so desire.
STOCKHOLDER PROPOSALS FOR NEXT ANNUAL MEETING
Proposals of stockholders intended to be included in the company's Proxy
Statement for the 2000 Annual Meeting of Stockholders must be received at the
company's principal executive offices on or before July 11, 2000 pursuant to
proxy rules 14a-5(e) and 14a-8(e) (Question 5).
Under Section 2.10 of the company's Bylaws, stockholders who intend to
nominate persons for election to the Board of Directors of the company or
stockholders who intend to present a proposal at Sunrise's 2000 Annual Meeting
of Stockholders, but who do not intend to have it included in our 2000 Proxy
Statement, must submit their nomination(s) or proposal(s) of business to the
company in writing to be received by the Secretary of the company no later than
September 16, 2000 nor earlier than August 17, 2000; provided, however, that if
the date of the 2000 Annual Meeting is more than 30 days before or more
17
<PAGE>
than 70 days after the anniversary of this Annual Meeting, then nominations or
proposals must be submitted not earlier than the close of business on the
120th day prior to the 2000 Annual Meeting of Stockholders and not later than
the close of business on the later of the 90th day prior to such meeting or the
10th business day following the day on which public announcement of the date of
the 2000 Annual Meeting of Stockholders is first made by the company. The
company reserves the right to reject, rule out of order or take other
appropriate action with respect to any nomination or proposal that does not
comply with these and other applicable requirements.
OTHER MATTERS
At the time of the preparation of this Proxy Statement, the Board of
Directors knows of no other matter which will be acted upon at the Annual
Meeting. If any other matters are presented properly for action at the Annual
Meeting or at any adjournment thereof, it is intended that the proxies will be
voted with respect thereto in accordance with the best judgment and in the
discretion of the proxy holders, insofar as such proxies are not limited to the
contrary.
By order of the Board of Directors,
[SIGNATURE]
Steven A. Jaye
SENIOR VICE PRESIDENT,
GENERAL COUNSEL AND SECRETARY
Dated November 11, 1999
18
<PAGE>
APPENDIX A
SUNRISE MEDICAL INC.
EMPLOYEE STOCK PURCHASE PLAN
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
--------
<S> <C> <C>
1. PURPOSE OF PLAN............................................. A-1
2. DEFINITIONS................................................. A-1
3. SHARES RESERVED FOR THE PLAN................................ A-2
4. ADMINISTRATION.............................................. A-2
5. ELIGIBILITY................................................. A-3
6. ELECTION TO PARTICIPATE AND PAYROLL DEDUCTIONS.............. A-3
7. GRANT OF OPTIONS............................................ A-4
8. LIMITATION OF NUMBER OF SHARES THAT AN ASSOCIATE MAY
PURCHASE................................................... A-4
9. PURCHASE PRICE.............................................. A-4
10. METHOD OF PURCHASE AND INVESTMENT ACCOUNTS.................. A-4
11. ISSUANCE OF SHARE CERTIFICATES.............................. A-5
12. VOTING RIGHTS............................................... A-5
13. RIGHTS NOT TRANSFERABLE..................................... A-5
14. EXPENSES.................................................... A-5
15. ADJUSTMENT FOR CHANGES IN COMMON STOCK...................... A-5
16. DEATH, RETIREMENT AND TERMINATION........................... A-5
17. RECORDS AND REPORTS TO PARTICIPANTS......................... A-5
18. AMENDMENT OF THE PLAN....................................... A-6
19. TERMINATION OF THE PLAN..................................... A-6
20. EFFECTIVE DATE, PLAN YEAR AND APPROVAL OF STOCKHOLDERS...... A-6
21. INDEMNIFICATION............................................. A-6
22. COMPLIANCE WITH LAWS AND OTHER REGULATIONS.................. A-6
</TABLE>
<PAGE>
EMPLOYEE STOCK PURCHASE PLAN
1. PURPOSE OF PLAN.
The purpose of the Sunrise Medical Inc. Employee Stock Purchase Plan is to
benefit Sunrise Medical Inc., a Delaware corporation, and its eligible
Associates by increasing Associate opportunity and motivation to purchase the
capital stock of the Company. This Plan is intended to comply with the
provisions of Section 423 of the Internal Revenue Code of 1986, as amended, and
this Plan shall be administered, interpreted and construed in accordance with
such provisions. This Plan shall be effective as of March 1, 2000, subject to
the approval of the Company's stockholders in accordance with Section 20 of this
Plan.
2. DEFINITIONS
a) "ASSOCIATE" shall mean any person, including an Officer, who is
customarily employed for more than twenty (20) hours per week and more
than five (5) months in a calendar year by the Company or one of its
Designated Subsidiaries.
b) "BASE COMPENSATION" shall mean all regular straight time gross earnings,
and shall not include payments for overtime, shift premium, incentive
compensation, incentive payments, bonuses, commissions and other
compensation.
c) "BOARD" shall mean the Board of Directors of Sunrise Medical Inc.
d) "CODE" shall mean the Internal Revenue Code of 1986, as amended.
e) "COMMITTEE" shall mean the Compensation Committee appointed by the Board
of Directors of the Company.
f) "COMMON STOCK" shall mean the Common Stock of Sunrise Medical Inc.,
$1.00 par value.
g) "COMPANY" shall mean Sunrise Medical Inc., a Delaware corporation.
h) "DESIGNATED SUBSIDIARIES" shall mean the Subsidiary Corporations which
have been designated by the Committee from time to time in its sole
discretion as eligible to participate in the Plan in accordance with
Section 4.
i) "ELIGIBLE ASSOCIATE" shall mean any Associate that qualifies under
Section 5 of the Plan.
j) "ENROLLMENT FORM" shall mean the actual written form the Eligible
Associate completes, signs and submits to the Company's or Designated
Subsidiary's Human Resources Department during the Enrollment Period.
k) "ENROLLMENT PERIOD" shall mean the period of time 15 to 30 days prior to
the beginning of the Offering Period.
l) "EXERCISE DATE" shall mean the last day of each Offering Period.
m) "GRANT DATE" shall mean the first day of each Offering Period.
n) "OFFERING DATE" shall mean the first day of each Offering Period.
o) "OFFERING PERIOD" shall mean a period of six (6) months commencing on
March 1 and September 1 of each year, as determined in accordance with
Section 7.
p) "OFFICER" shall mean a person who is an officer of the Company within
the meaning of Section 16 of the Exchange Act and the rules and
regulations promulgated thereunder.
q) "OPTION" shall mean an option to purchase shares of Common Stock granted
under the Plan to an Eligible Associate.
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r) "PARENT CORPORATION" shall mean any corporation, other than the Company,
in an unbroken chain of corporations ending with the Company if, at the
time of the granting of the Option, each of the corporations other than
the Company owns stock possessing 50% or more of the total combined
voting power of all classes of stock in one of the other corporations in
such chain.
s) "PAYROLL DEDUCTIONS" shall mean all contribution amounts credited to the
account of an Eligible Associate pursuant to the Plan.
t) "PLAN" shall mean this Employee Stock Purchase Plan.
u) "PURCHASE DATE" shall mean the last day of each Offering Period.
v) "SHARES" shall mean an aggregate of 1,000,000 shares of Sunrise Medical
Inc. Common Stock reserved for this Plan.
w) "SUBSIDIARY CORPORATION" shall mean any corporation, other than the
Company, in an unbroken chain of corporations beginning with the Company
if, at the time of the granting of the Option, each of the corporations
other than the last corporation in an unbroken chain owns stock
possessing 50% or more of the total combined voting power of all classes
of stock in one of the other corporations in such chain.
3. SHARES RESERVED FOR THE PLAN.
There shall be reserved for issuance and purchase by Associates under this
Plan an aggregate of 1,000,000 shares of Common Stock, subject to adjustment as
provided in Section 15 hereof. Shares subject to this Plan may be shares now or
hereafter authorized and unissued or shares already authorized, issued and held
by the Company as treasury Shares. The right to purchase Shares pursuant to this
Plan shall be made available by a series of semi-annual Offering Periods to
Associates eligible to participate in this Plan pursuant to Section 5 hereof. If
and to the extent that any right to purchase reserved Shares shall not be
exercised by any Associate for any reason or if such right to purchase shall
terminate as provided herein, Shares that have not been so purchased under this
Plan shall again become available for the purposes of this Plan unless this Plan
shall have terminated.
4. ADMINISTRATION.
This Plan shall be administered by the Compensation Committee of the Board
of Directors. The Committee shall consist of three or more directors designated
by the Board of Directors. The Committee shall have full power to:
(a) prescribe, amend and rescind rules and procedures governing the
administration of the Plan;
(b) interpret the provisions of the Plan and establish and interpret
rules and procedures with respect to the Plan;
(c) determine the requirements imposed by or rights of any person under the
Plan and the rules and procedures established by the Committee relating
to such rights;
(d) determine the eligibility of Associates to participate in the Plan in
accordance with the standards set forth in Section 5 hereof; and
(e) delegate certain of the duties of the Committee to Officers or other
committees of the Company or to one or more outside agents to facilitate
the purchase and transfer of Shares and to otherwise assist in the
administration of the Plan.
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All Subsidiary Corporations are potentially eligible to participate in the
Plan. The Committee shall designate from among the Subsidiary Corporations, as
determined from time to time, the Subsidiary Corporation or Subsidiary
Corporations whose Associates shall be eligible to participate in the Plan. The
Committee may designate a Subsidiary Corporation, or terminate the designation
of a Subsidiary Corporation, without the approval of the stockholders of the
Company.
Each action of the Committee which is within the scope of the authority
delegated to the Committee by the Plan or by the Board shall be binding on all
persons. The Board shall have the right to exercise all of the rights or duties
of the Committee under the Plan.
5. ELIGIBILITY.
Each Associate shall be eligible to participate in the Plan, provided that
such Associate: (a) has been employed by the Company or a Designated Subsidiary
for at least one (1) year and (b) does not own, immediately after the right is
granted, five percent (5%) or more of the total combined voting power or value
of all classes of capital stock of the Company, or any Parent Corporation or any
Subsidiary Corporation. In determining stock ownership under this Section 5, the
rules of Section 424(d) of the Code shall apply and stock that an Associate may
purchase under outstanding rights shall be treated as stock owned by the
Associate. The Committee shall determine which Associates are eligible to
participate in the Plan in accordance with the standards set forth in this
Section 5. Associates eligible to participate in this Plan pursuant to this
Section 5 are hereinafter referred to as "Eligible Associates."
6. ELECTION TO PARTICIPATE AND PAYROLL DEDUCTIONS.
An Eligible Associate may elect to participate in the Plan at any time by
properly completing and returning to the Company's or Designated Subsidiary's
Human Resources Department prior to the applicable Offering Date, an enrollment
form authorizing a specified Payroll Deduction to be made from each subsequent
paycheck for the purchase of Common Stock under this Plan. The enrollment form
shall set forth the whole number percentage of the Eligible Associate's Base
Compensation (which shall be not less than 1% and not more than 20%) to be
withheld as Payroll Deductions pursuant to the Plan. All Payroll Deductions
shall be credited on the records of the Company in the name of the Eligible
Associate. Such credit shall constitute only a convenient bookkeeping entry by
the Company and no interest will be paid or due on any Payroll Deductions or
credited to such Eligible Associate. Associates who elect to participate in the
Plan are referred to herein as "Participating Associates."
Payroll Deductions shall commence on the first paycheck paid during the
Offering Period and shall end with the last paycheck paid during the Offering
Period to which the Enrollment Form is applicable.
A Participating Associate will be deemed to have elected to participate and
to have authorized the same Payroll Deduction for each subsequent Offering
Period provided that he or she is an Eligible Associate during each such
subsequent Offering Period. A Participating Associate may terminate his or her
Payroll Deduction and thereby cease to be a Participating Associate by notifying
the Human Resources Department of the Company or Designated Subsidiary in
writing at any time other than the last thirty (30) days of the Offering Period,
subject to such notice and timing requirements as may be reasonably required to
effect such termination.
Upon termination from the Plan, the Associate's cumulative Payroll
Deductions will be refunded without interest. An Associate who terminates his or
her Payroll Deductions and is eligible for a subsequent Offering Period may
participate in such Offering Period by delivering a new Enrollment Form and
Payroll Deduction authorization to the Company or Designated Subsidiary not
later than the fifteenth day of the month before the commencement of such
subsequent Offering Period.
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7. GRANT OF OPTION.
Commencing with March 1, 2000, the Company will offer Options under the Plan
to all Eligible Associates in successive six-month Offering Periods. The
Offering Periods will be: (i) March 1 through and including the following
August 31, and (ii) September 1 through and including the following February 28
or 29 (as applicable), of each year. The Company will offer Options under the
Plan until the number of Shares available under the Plan have been sold, or the
Plan terminates on February 28, 2010.
On the Offering Date of each Offering Period each Eligible Associate shall
be granted an Option to purchase on the Exercise Date a number of Shares
determined by dividing such Associate's Payroll Deductions accumulated prior to
such Purchase Date and retained in the Associate's account as of the Purchase
Date by the lesser of (i) eighty-five percent (85%) of the fair market value of
a share of Common Stock on the Offering Date, or (ii) eighty-five percent (85%)
of the fair market value of a share of Common Stock on the Purchase Date;
provided however, that the maximum number of Shares an Associate may purchase
during each Offering Period shall be 5,000 Shares, and provided, further that
such purchase shall be subject to the limitations set forth in Section 8. The
fair market value of a share of Common Stock shall be determined as provided in
Section 9.
8. LIMITATION OF NUMBER OF SHARES THAT AN ASSOCIATE MAY PURCHASE.
No Option shall permit an Associate's right to purchase stock under the Plan
and all other employee stock purchase plans (as defined in Section 423 of the
Code) of the Company, any Subsidiary Corporation or any Parent Corporation (if
any), to accrue at a rate which in aggregate exceeds $25,000 of the fair market
value of such stock (determined at the time such Option or other right or rights
are granted) for each calendar year in which the Option or right is exercised.
In addition, the purchase of Shares under this Plan by an Associate for an
Offering Period is also limited to a maximum of 20% of the Associate's Base
Compensation for the Offering Period and to 5,000 shares.
9. PURCHASE PRICE.
The purchase price for each Share for each Offering Period shall be
eighty-five percent (85%) of the lesser of the fair market value for a share of
Common Stock on the first or last day of the Offering Period. "Fair market
value" for a share of Common Stock on any day shall be the per share closing
price of the Common Stock reported on the NYSE (or any successor or replacement
exchange or quotation system) on such day. If there is no trading on the
relevant day, the closing price on the preceding trading day will be used.
10. METHOD OF PURCHASE AND INVESTMENT ACCOUNTS.
Each Eligible Associate shall be deemed to exercise the right to purchase on
each Exercise Date the number of whole shares of Common Stock determined by
dividing the amount of his or her aggregate Payroll Deductions by the purchase
price determined in accordance with Section 9 hereof. Each Participating
Associate having aggregate Payroll Deductions on an Exercise Date shall be
deemed, without any further action, to have elected to purchase with such
Payroll Deductions the number of whole shares that he or she has the right to
purchase at the purchase price on that Exercise Date. A Participating Associate
who has purchased the maximum number of shares to which he or she is entitled
pursuant to Section 7, Section 8 or Section 19 hereof shall be refunded any
excess Payroll Deductions without interest. All whole shares purchased shall be
allocated to separate investment accounts ("Investment Accounts") maintained by
such brokerage house, investment banking firm, commercial bank or other such
similar institution as may be selected by the Committee for the Participating
Associates. Any Payroll Deductions remaining in the Participating Associate's
account that is not equal to one full share of Common Stock will be carried over
into the next Offering Period unless the Associate terminates participation in
the Plan, in which case the remaining Payroll Deductions will be refunded to the
Associate without interest.
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11. ISSUANCE OF SHARE CERTIFICATES.
Stock certificates for any of the whole shares in a Participating
Associate's Investment Account will be issued to such Participating Associate
only upon receipt by the Committee (or its designee) of such Participating
Associate's written request, which request shall indicate the number of shares
(up to a maximum of the number of full shares in such Participating Associate's
Investment Account) for which the Participating Associate wishes to receive
stock certificates. Such request shall be made on a form at the time prescribed
by the Committee (or its designee) and shall be accompanied by payment of any
fee that may be charged by the Committee's designee for such issuance. The
Participating Associate shall assume full payment responsibility for the cost to
issue actual share certificates.
12. VOTING RIGHTS.
No voting rights are granted until the actual purchase of shares is made on
the Purchase Date. Holders of shares under the Plan shall have the same rights
to vote on matters affecting the Company as do other stockholders of the
Company.
13. RIGHTS NOT TRANSFERABLE.
Until shares are issued, no person shall have any right to sell, assign,
mortgage, pledge, hypothecate or otherwise encumber any of such shares. Rights
granted under the Plan may not be transferred by an Eligible or Participating
Associate. Such Rights may be exercised only by the person to whom they have
been granted during his or her lifetime.
14. EXPENSES.
The Company or the Designated Subsidiary, as applicable, shall bear all
costs associated with the administration of the Plan and the purchase of shares
(other than costs for issuance of share certificates covered by Section 11
above). No expenses attributable to a Participating Associate's sale of shares,
however, shall be borne by the Company or the Designated Subsidiary.
15. ADJUSTMENT FOR CHANGES IN COMMON STOCK.
In order to prevent the dilution or enlargement of rights granted under this
Plan, in the event of a reorganization, recapitalization, stock split, stock
dividend, combination of shares, merger, consolidation or other change in the
Common Stock, the Committee shall make appropriate changes in the number and
type of Shares authorized by this Plan, the number and type of Shares covered
by, or with respect to which payments are measured under, outstanding rights and
the prices specified therein, subject to the limitations of Section 424 of the
Code.
16. DEATH, RETIREMENT, AND TERMINATION.
In the event of a Participating Associate's death, retirement or other
termination of employment, such Associate's participation in the Plan shall
cease and the amount of his or her aggregate Payroll Deductions not theretofore
invested shall be returned.
17. RECORDS AND REPORTS TO PARTICIPANTS.
The Committee or its designee shall cause to be maintained true and accurate
books of account and records of all transactions under the Plan. A statement of
account shall be provided (or made electronically available on the internet or
otherwise) to each Participating Associate promptly following the Exercise Date,
which statement will set forth the amounts of Payroll Deductions, the per share
purchase price, the number of shares purchased and the remaining cash balance,
if any.
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18. AMENDMENT OF THE PLAN.
The Committee or the Board may at any time or from time to time amend this
Plan in any respect, provided, that this Plan may not be amended in any way that
will cause rights issued under it to fail to meet the requirements for employee
stock purchase plans as defined in Section 423 of the Code, including any
amendment that will increase the persons authorized to participate in the Plan
or increase the aggregate number of Shares of Common Stock available for
purchase under the Plan, without approval of the Company's stockholders.
19. TERMINATION OF THE PLAN.
This Plan and all rights of Associates hereunder may be suspended or
terminated at any time at the discretion of the Board of Directors and shall
terminate on the Exercise Date that Participating Associates become entitled to
purchase a number of shares greater than the number of reserved Shares available
for purchase pursuant to Section 3 hereof. In the event that the Plan terminates
because there are an insufficient number of Shares available for purchase,
reserved Shares remaining as of the termination date shall be issued to
Participating Associates on a pro rata basis. The Company will offer options
under the Plan until the number of Shares of Common Stock available under the
Plan have been sold, or the Plan terminates on February 28, 2010.
20. EFFECTIVE DATE, PLAN YEAR AND APPROVAL OF STOCKHOLDERS.
This Plan shall be effective as of March 1, 2000. This Plan is subject to
the approval of the Company's stockholders at the next annual meeting of
stockholders or at any special meeting of stockholders for which one of the
purposes shall be to act upon this Plan. Options granted under the Plan shall be
subject to the approval of the Plan by the Company's stockholders within 12
months of adoption of the Plan by the Board.
21. INDEMNIFICATION.
No member of the Committee shall be liable, in the absence of bad faith, for
any act or omission with respect to his or her service on the Committee under
the Plan. Service on the Committee constitutes service as a Director of the
Company and members of the Committee are entitled to indemnification and
reimbursement as Directors of the Company for any action or any failure to act
in connection with service on the Committee to the fullest extent provided for
at any time in the Company's Certificate of Incorporation and Bylaws, or in any
insurance policy or other agreement intended for the benefit of the Company's
Directors.
22. COMPLIANCE WITH LAWS AND OTHER REGULATIONS.
Each right under this Plan shall be subject to the requirement that if at
any time the Committee determines that the listing, registration or
qualification of the Shares of Common Stock subject to this Plan upon any
securities exchange or under any federal or state securities or other law or
regulation, or that the consent or approval of any governmental regulatory body,
is necessary or desirable as a condition to, or in connection with, the granting
of such right or the issuance or purchase of Shares thereunder, no such right
may be exercised in whole or in part unless such listing, registration,
qualification, consent or approval shall have been effected or obtained free of
any conditions not acceptable to the Committee and, the holder of the right will
supply the Company with such certificates, representations and information as
the Company shall request and shall otherwise cooperate with the Company in
obtaining such listing, registration, qualification, consent or approval.
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PROXY
SUNRISE MEDICAL INC.
The undersigned holder of Common Stock acknowledges receipt of a copy of
the Annual Report and the Proxy Statement and, revoking any proxy previously
given, hereby appoints Mr. Murray H. Hutchison and Mr. Steven A. Jaye, and
each of them, as proxies, each with full power of substitution, and hereby
authorizes each of them to represent and to vote, cumulatively or otherwise,
in the manner indicated on the reverse side of this proxy card, all of the
shares of Common Stock of Sunrise Medical Inc. held of record by the
undersigned on October 27, 1999, at the Annual Meeting of Stockholders to be
held on December 15, 1999, at 2:00 P.M. PST at the Hilton San Diego Hotel and
at any adjournment thereof.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. THIS PROXY,
WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED HEREIN BY THE UNDERSIGNED
STOCKHOLDER. IF NO DIRECTION IS INDICATED, IT WILL BE VOTED FOR THE NOMINEES
FOR DIRECTORS LISTED ON THIS PROXY CARD AND FOR ITEM 2. THIS PROXY WILL ALSO
BE VOTED IN THE DISCRETION OF THE PROXY HOLDERS, WITH RESPECT TO ANY OTHER
MATTERS THAT MAY PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENT THEREOF.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF THE NOMINEES FOR
DIRECTORS LISTED ON THIS PROXY CARD AND FOR THE APPROVAL OF ITEM 2.
PLEASE DATE, SIGN ON REVERSE SIDE AND RETURN IN THE ACCOMPANYING ENVELOPE.
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<TABLE>
<S><C>
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THE SUNRISE MEDICAL BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEMS 1 AND 2: Please mark your vote /X/
as indicated in the example
ITEM 1-ELECTION OF DIRECTORS FOR ALL NOMINEES WITHHOLD ITEM 2-ADOPTION OF AN EMPLOYEE
LISTED (EXCEPT AS AUTHORITY STOCK PURCHASE PLAN
Lee A. Ault III William L. Pierpoint MARKED TO THE CONTRARY TO VOTE FOR ALL
Michael N. Hammes Joseph Stemler ON THE LINE BELOW) NOMINEES LISTED
Murray H. Hutchison John R. Woodhull FOR AGAINST ABSTAIN
/ / / / / / / / / /
(INSTRUCTION: To withhold authority to vote for any nominee, put an "X" in the "FOR" box above and
write that nominee's name on the space provided below.)
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Signature Signature Date
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NOTE: Please sign exactly as your name appears above. Joint owners should each sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such.
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- FOLD AND DETACH HERE -
</TABLE>
