SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Amendment No. ______________)
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 Sec. 240.14a-11(c) or Sec. 240.14a-12
SUNRISE TECHNOLOGIES INTERNATIONAL INC.
------------------------------------------------
(Name of Registrant as Specified in Its Charter)
SUNRISE TECHNOLOGIES INTERNATIONAL INC.
------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2)
or Item 22(a)(2) or Schedule 14A
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transactions applies:
- ----------------------------------------------------------------------------
(2) Aggregate number of securities to which transactions applies:
- ----------------------------------------------------------------------------
(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):
- ----------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- ----------------------------------------------------------------------------
(5) Total fee paid:
- ----------------------------------------------------------------------------
/ / 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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<PAGE>
SUNRISE TECHNOLOGIES INTERNATIONAL, INC.
47257 Fremont Boulevard
Fremont, California 94538
---------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held on June 18, 1996
TO THE STOCKHOLDERS OF SUNRISE TECHNOLOGIES INTERNATIONAL, INC.
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Sunrise
Technologies International, Inc., a Delaware corporation (the "Company"), will
be held on Tuesday, June 18, 1996 at 10:00 a.m. at the Courtyard by Marriott,
47000 Lakeview Boulevard, Fremont, California 94538, for the following purposes:
1.To elect one (1) director to serve a three-year term expiring upon the
1999 Annual Meeting of Stockholders or until his successor is duly
elected and qualified.
2.To ratify the selection of Ernst & Young LLP as independent auditors for
the Company for the fiscal year ending December 31, 1996.
3.To transact such other business as may properly come before the meeting
or any adjournment thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
The Board of Directors has fixed the close of business on Tuesday, April
30, 1996, as the record date for the determination of stockholders entitled to
notice of and to vote at this Annual Meeting and at any adjournment or
postponement thereof.
By Order of the Board of Directors
/s/ Joseph W. Shaffer
Joseph W. Shaffer
Secretary
Fremont, California
May 9, 1996
ALL STOCKHOLDERS ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON. HOWEVER,
TO ASSURE YOUR REPRESENTATION AT THE MEETING, YOU ARE URGED TO MARK, SIGN, DATE
AND RETURN THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE IN THE POSTAGE PREPAID
ENVELOPE ENCLOSED FOR THAT PURPOSE. ANY STOCKHOLDER ATTENDING THE MEETING MAY
VOTE IN PERSON EVEN IF HE OR SHE RETURNED A PROXY. PLEASE NOTE, HOWEVER, THAT IF
YOUR SHARES ARE HELD OF RECORD BY A BROKER, BANK OR OTHER NOMINEE AND YOU WISH
TO VOTE AT THE MEETING, YOU MUST OBTAIN FROM THE RECORD HOLDER A PROXY ISSUED IN
YOUR NAME.
<PAGE>
SUNRISE TECHNOLOGIES INTERNATIONAL, INC.
47257 Fremont Boulevard
Fremont, California 94538
--------------------------
PROXY STATEMENT
INFORMATION CONCERNING SOLICITATION AND VOTING
GENERAL
This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Directors (the "Board") of Sunrise Technologies
International, Inc. (the "Company"), for the Annual Meeting of Stockholders (the
"Annual Meeting") to be held on Tuesday, June 18, 1996 at 10:00, at the
Courtyard by Marriott, 47000 Lakeview Boulevard, Fremont, California 94538, or
any adjournment or adjournments thereof, for the purposes set forth herein and
in the accompanying Notice of Annual Meeting. The Company intends to mail this
Proxy Statement and the accompanying proxy card on or about May 13, 1996, to all
stockholders entitled to vote at the Annual Meeting.
RECORD DATE; OUTSTANDING SHARES
Only stockholders of record at the close of business on Friday, April
30, 1996 (the "Record Date"), are entitled to receive notice of and to vote at
the meeting. On the Record Date, there were outstanding 25,356,510 shares of
Common Stock.
REVOCABILITY OF PROXIES
If a person who has executed and returned a proxy is present at the
meeting and wishes to vote in person, he or she may elect to do so and thereby
suspend the power of the proxy holders to vote his or her proxy. A proxy also
may be revoked before it is exercised by filing with the Secretary of the
Company a duly signed revocation or proxy bearing a later date.
VOTING AND SOLICITATION
Each share of Common Stock issued and outstanding on the record date
shall have one vote on the matters presented herein, except that with respect to
the election of directors, each share of Common Stock is entitled to one vote
for a nominee for each director position. Stockholders do not have the right to
cumulate votes in the election of directors.
SOLICITATION
The Company will bear the entire cost of the solicitation of proxies
including preparation, assembly, printing and mailing of this proxy statement,
the proxy and any additional information furnished to stockholders. Copies of
solicitation materials will be furnished to banks, brokerage houses, fiduciaries
and custodians holding in their names shares of Common Stock beneficially owned
by others to forward to such beneficial owners. Original solicitation of proxies
by mail may be supplemented by telephone, facsimile, telegram or personal
solicitation by directors, officers or other regular employees of the Company.
No additional compensation will be paid to directors, officers or other regular
employees for such services, but Chemical Mellon Shareholder Services will be
paid its customary fee, estimated to be about $6,500 if it renders solicitation
services.
DEADLINE FOR RECEIPT OF STOCKHOLDER PROPOSALS
Proposals of stockholders of the Company that are intended to
be presented by such stockholders at the Company's Annual Meeting of
Stockholders to be held in 1997 must be received by the Company no later than
December 30, 1996 in order that they may be included in the proxy statement and
form of proxy relating to that meeting.
<PAGE>
<TABLE>
SHARE OWNERSHIP BY PRINCIPAL STOCKHOLDERS AND MANAGEMENT
The following table sets forth the beneficial ownership of Common Stock
of the Company as of April 30, 1996 as to (a) each person known to the Company
who beneficially owns more than 5% of the outstanding shares of its Common
Stock; (b) each current director, nominee for director and named executive
officer; and (c) all executive officers and directors of the Company as a group.
<CAPTION>
Beneficial Ownership(1)
-----------------------
Number of Percent of
Shares Total(2)
------ --------
<S> <C> <C>
More than 5% Holders
- --------------------
None
Directors, Nominees and Named Executive Officers
- ------------------------------------------------
Joseph D. Koenig 6,666 *
David W. Light 256,666 1.00%
Martin D. Meeker 91,875 *
Joseph W. Shaffer 839,413 3.31%
Ronald A. Slocum 16,666 *
All Directors and Executive Officers as a group 1,211,286 4.72%
(5 persons)
</TABLE>
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") requires the Company's directors and executive officers, and
persons who own more than 10% of a registered class of the Company's equity
securities, to file with the SEC initial reports of ownership and reports of
changes in ownership of Common Stock and other equity securities of the Company.
Officers, directors and greater than 10% beneficial owners are required by SEC
regulation to furnish the Company with copies of all Section 16(a) forms they
file.
To the Company's knowledge, based solely on a review of the copies of
such reports furnished to the Company and written representations that no other
reports were required, during the fiscal year ended December 31, 1995, its
officers, directors and greater than 10% beneficial owners complied with all
applicable Section 16(a) filing requirements.
- --------------------------------
*Less than one percent.
(1) This table is based upon information supplied by officers, directors and
principal stockholders. Unless otherwise indicated in the footnotes to this
table and subject to community property laws where applicable, each of the
stockholders named in this table has sole voting and investment power with
respect to the shares indicated as beneficially owned. The table also includes
shares which certain executive officers and directors of the Company have the
right to acquire within 60 days of the date of this Proxy Statement.
(2) Applicable percentage of ownership is based on 25,356,510 shares of Common
Stock outstanding at April 30, 1996, adjusted as required by rules promulgated
by the SEC.
-2-
<PAGE>
PROPOSAL 1
ELECTION OF DIRECTORS
The Company's Certificate of Incorporation and Bylaws provide that the
Board of Directors shall be divided into three classes, each class consisting,
as nearly as possible, of one-third of the total number of directors, with each
class having a three-year term. Vacancies on the Board may be filled only by
persons elected by a majority of the remaining directors. A director elected by
the Board to fill a vacancy (including a vacancy created by an increase in the
Board of Directors) shall serve for the remainder of the full term of the class
of directors in which the vacancy occurred and until such director's successor
is elected and qualified.
The Board of Directors is presently composed of four members. There is
one director in Class III whose term of office expires in 1996. At the Annual
Meeting, one director is to be elected to Class III. If elected at the Annual
Meeting, the nominee would serve until the 1999 Annual Meeting or until his
successor is elected and has qualified, or until such director's earlier death,
resignation or removal.
Directors are elected by a plurality of the votes present in person or
represented by proxy and entitled to vote at the meeting. Shares represented by
executed proxies will be voted, if authority to do so is not withheld, for the
election of the nominee named below. In the event the nominee should be
unavailable for election as a result of an unexpected occurrence, such shares
will be voted for the election of such substitute nominee as management may
propose. The person nominated for election has agreed to serve if elected, and
management has no reason to believe the nominee will be unable to serve.
<TABLE>
Certain information regarding the nominee, an incumbent members of the
Board, and the continuing directors is set forth below.
<CAPTION>
Principal Occupation/Position Held
Name Age With the Company
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Nominee for Class III Director (to
serve until the 1999 Annual
---------------------------
Meeting)
-------
Joseph D. Koenig 66 Class III Director
Class I Directors (to serve until
the 1997 Annual Meeting
---------------------------------
David W. Light 51 Chief Executive Officer, President and Class I Director
Ronald A. Slocum 56 Class I Director
Class II Director (to serve until
the 1998 Annual Meeting)
---------------------------------
Joseph W. Shaffer 50 Vice President, Secretary and Class II Director
</TABLE>
Nominee for Election for a Three-Year Term Expiring at the 1999 Annual Meeting
Joseph D. Koenig was appointed to the Board of Directors of the Company
in December 1994. Mr. Koenig was also a director of the Company from August 1991
through January 1994. He has been a consultant for Koenig Associates, a
management consultant firm, since October 1984. Mr. Koenig is also a director of
Ancot Corporation, Hench Controls Corporation and Cardiac Mariners. Mr. Koenig
received a B.S. degree in Electrical Engineering from the University of
Illinois.
-3-
<PAGE>
Directors Continuing in Office Until the 1997 Annual Meeting
David W. Light was appointed to the Board of Directors of the Company
in October 1994, at which time he was also appointed as President and Chief
Executive Officer of the Company. Prior to joining the Company, Mr. Light was in
private consulting from March to October 1994. From 1986 to March 1994, Mr.
Light was Vice President of Operations of Advanced Polymer Systems, Inc. Mr.
Light received a B.B.A. degree from Boise State University and is a licensed
Certified Public Accountant.
Ronald A. Slocum was appointed to the Board of Directors of the Company
in December 1994. Mr. Slocum has been employed by Bank of America Idaho since
1991 and is presently the President, Chief Executive Officer and Chairman of the
Board of that company. From 1990 to 1991, Mr. Slocum was Executive Vice
President and a director of Security Pacific Bank Idaho. He is also a Director
of Bank of America Oregon. Mr. Slocum received a B.S. degree in Business
Management from San Diego University.
Director Continuing in Office Until the 1998 Annual Meeting
Joseph W. Shaffer, a co-founder of the Company, has been a director of
the Company since its inception and a Vice President since January 1991. He was
President and Chief Executive Officer from April 1987 until October 1988 and was
President from October 1988 until January 1991. From July 1984 to January 1987,
Mr. Shaffer was employed by the Medical Division of Coherent, Inc., a laser
manufacturer, as Electrical Engineering Section Manager. Mr. Shaffer holds a
B.S. degree in Electrical Engineering from the University of New Mexico.
BOARD MEETINGS AND COMMITTEES
The Board of Directors held six meetings during the fiscal year ended
December 31, 1995.
The Board of Directors has two committees: an Audit Committee and a
Compensation Committee. There is no nominating committee. During the fiscal year
ended December 31, 1995, each Board member attended greater than 75% of the
aggregate number of meetings of the Board and the Committee of the Board on
which he served.
The Audit Committee meets with the Company's independent auditors at
least annually to review the results of the annual audit and discuss the
financial statements; recommends to the Board the independent auditors to be
retained; and receives and considers the accountants' comments as to controls,
adequacy of staff and management performance and procedures in connection with
audit and financial records. The Audit Committee is comprised of two
non-employee directors and one employee director, Mr. Koenig, Mr. Slocum and Mr.
Light, respectively. The Audit Committee met one time in 1995.
The Compensation Committee makes recommendations concerning salaries
and incentive compensation, awards stock options to employees and consultants
under the Company's stock option plans and otherwise determines compensation
levels and performs such other functions regarding compensation as the Board may
delegate. The Compensation Committee met two times during fiscal 1995. The
Compensation Committee is comprised of Mr. Koenig, Mr. Shaffer and Mr. Slocum.
The Board of Directors does not have a standing nominating committee or
any committee performing the function of such committee.
DIRECTOR COMPENSATION
Each non-employee director of the Company receives a fee of $300 for
each meeting of the Board of Directors attended. In the fiscal year ended
December 31, 1995, the total compensation paid to non-employee directors was
$3,900. The members of the Board of Directors are also eligible for
reimbursement for their expenses incurred in connection with attendance at Board
meetings in accordance with Company policy.
Each non-employee director of the Company also receives stock option
grants under the 1994 Non-Employee Directors' Stock Option Plan (the "Directors'
Plan"). Only non-employee directors of the Company or an affiliate of such
directors (as defined in the Internal Revenue Code of 1986 (the "Code")) are
eligible to receive options under the Directors' Plan. Options granted under the
Directors' Plan are not intended by the Company to qualify as incentive stock
options under the Code.
-4-
<PAGE>
Options granted under the Directors' Plan are non-discretionary. Each
person of the Company's Board of Directors who is not an employee of or
consultant to the Company or of any Affiliate of the Company or the Company's
parent or subsidiary (as such terms are defined in Sections 424(e) and (f) of
the Code) ("Outside Director") (1) at the time of Board approval of the
Directors' Plan, or (2) subsequently elected for the first time to be an Outside
Director, is automatically granted an option to acquire 20,000 shares of Common
Stock of the Company.
In 1994, the Company granted options covering 20,000 shares to each
Outside Director at an exercise price per share of $2.00. This exercise price
was determined by averaging the high and low trading price of the Company's
Common Stock at the close of business on the date of grant as reported by the
Nasdaq National Market. During 1995 these options were canceled and reissued at
$1.00 per share under an option exchange program. As of April 30, 1996, no
options had been exercised under the Directors' Plan.
REQUIRED VOTE
The nominee receiving the highest number of affirmative votes of the
shares of the Company's Common Stock present and entitled to vote at the Annual
Meeting on this matter shall be elected as the Class III director. Votes
withheld from the nominee will be counted for purposes of determining the
presence or absence of a quorum but will not be counted as affirmative votes. A
broker non-vote will be counted for purposes of determining the presence or
absence of a quorum but will not be treated as entitled to vote on this matter
at the Annual Meeting.
The Board of Directors of the Company recommends a vote FOR the
election of the Class III nominee named above. Proxies solicited by the
Board of Directors will be voted FOR the named nominee unless
instructions are given to the contrary.
-5-
<PAGE>
MANAGEMENT
DIRECTORS AND EXECUTIVE OFFICERS
<TABLE>
The directors and executive officers of the Company and their ages are
as follows:
<CAPTION>
Principal Occupation/Position Held
Name Age With the Company
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
David W. Light 51 Chief Executive Officer, President and Director
Martin D. Meeker 54 Vice President of Finance and Chief Financial Officer
Joseph W. Shaffer 50 Vice President, Secretary and Director
Joseph D. Koenig 66 Director
Ronald A. Slocum 56 Director
Theresa M. Nazaroff 46 Vice President, Regulatory and Clinical Affairs
Catherine M. Caserza 35 Vice President and General Manager, Dental Division
</TABLE>
Martin D. Meeker was appointed Vice President-Finance and Chief
Financial Officer of the Company in January 1995. From May 1992 through December
1994, Mr. Meeker was Vice President of Finance and Operations at Metaphor, Inc.,
a developer and marketer of decision support software for use in the
client/server marketplace. Prior to 1992, Mr. Meeker owned and managed a
corporate financial consultancy practice. Mr. Meeker holds an M.B.A. degree from
the University of California at Los Angeles and a B.B.A. degree from the
University of Notre Dame. Mr. Meeker is a licensed Certified Public Accountant
in the State of California.
Theresa M. Nazaroff was appointed Vice President, Regulatory and
Clinical Affairs of the Company in January 1996. From July 1994 through December
1995, Ms. Nazaroff was Vice President of Business Development for General
Surgical Innovations, a developer and marketer of surgical products. From
January 1990 through January 1994, Ms. Nazaroff was Vice President of
Regulatory, Clinical Affairs and Quality Assurance for Target Therapeutics,
Inc., a developer and marketer of products treating the cerebral and peripheral
vascular diseases. Ms. Nazaroff holds Master of Arts and Bachelor or Arts
degrees from California State University, San Francisco,
Catherine M. Caserza was appointed Vice President and General Manager
of the Company's Dental Division in December 1995. Ms. Caserza joined the
Company in July 1995 as U.S. Sales Manager. From March 1994 through June 1995
Ms. Caserza was an independent consultant to companies in the medical device
field. From 1987 through March 1994 Ms. Caserza worked for Fuji Optical Systems,
Inc., holding positions ranging from Product Manager to Director of Sales and
Marketing. Ms. Caserza holds a Master of Science degree from the University of
San Francisco and a Bachelor of Arts degree from California State University,
San Jose.
PROPOSAL 2
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has selected Ernst & Young LLP, as the Company's
independent auditors for the fiscal year ending December 31, 1996 and has
further directed that management submit the selection of independent auditors
for ratification by the stockholders at the Annual Meeting. Ernst & Young has
audited the Company's financial statements since its inception in 1987.
Representatives of Ernst & Young are expected to be present at the Annual
Meeting, will have an opportunity to make a statement if they so desire and will
be available to respond to appropriate questions.
Stockholder ratification of the selection of Ernst & Young as the
Company's independent auditors is not required by the Company's Bylaws or
otherwise. However, the Board is submitting the selection of Ernst & Young to
-6-
<PAGE>
the stockholders for ratification as a matter of good corporate practice. If the
stockholders fail to ratify the selection, the Audit Committee and the Board
will reconsider whether to retain such firm. Even if the selection is ratified,
the Audit Committee and the Board in their discretion may direct the appointment
of different independent auditors at any time during the year if they determine
that such a change would be in the best interests of the Company and its
stockholders.
The Board of Directors of the Company recommends a vote FOR the
appointment of Ernst & Young LLP as the Company's independent
accountants for the fiscal year ending December 31, 1996.
-7-
<PAGE>
EXECUTIVE COMPENSATION
Summary Compensation
<TABLE>
The following table provides certain summary information concerning
compensation paid to or accrued for the Company's Chief Executive Officer and
its other most highly compensated executive officers (determined as of December
31, 1995) (hereafter referred to as the "Named Executive Officers")1/ for fiscal
years ended December 31, 1993, 1994, and 1995:
<CAPTION>
Long-term Compensation
Annual Compensation Awards
Salary Bonus (Securities Underlying
Year ($) ($) Options)
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
David W. Light 1995 $ 220,000 2/ $ 0 500,000 3/
President and Chief Executive Officer
1994 $ 47,680 0 500,000
1993 0 0 0
Martin D. Meeker 1995 $ 136,859 $ 25,000 150,000 4/
Vice President, Finance
and Chief Financial Officer 1994 0 0 0
1993 0 0 0
<FN>
- -------------
1/ In accordance with SEC rules, the Chief Executive Officer (at fiscal
year end) must be listed as a Named Executive Officer irrespective of
the amount of consideration he received. The next four most highly
compensated executive officers at fiscal year end (based on salary and
bonus for the last year) would then be listed, as Named Executive
Officers, provided, however, that the minimum threshold for required
listing is $100,000 (salary and bonus). Also, any person who served as
Chief Executive Officer, and the amount of consideration he received,
must be listed.
2/ Includes a deferred compensation payment of $60,000 made at the completio
of one year of employment.
3/ In 1994 Mr. Light was granted an option to purchase 500,000 shares of
Common Stock. On June 20, 1995, Mr. Light exchanged such option pursuant
to an option exchange program. See "Board Compensation Committee Report
on Executive Compensation--Report on Repricing of Options."
4/ On January 8, 1996 Mr. Meeker was granted an option to purchase 150,000
shares of Common Stock. On June 20, 1995, Mr. Meeker exchanged such
options pursuant to an option exchange program. See "Board Compensatio
Committee Report on Executive Compensation--Report on Repricing of
Options."
</FN>
</TABLE>
-8-
<PAGE>
STOCK OPTION GRANTS AND EXERCISES
The Company grants options to its executive officers under the Option
Plan. As of April 30, 1996, options to purchase a total of 1,304,164 shares were
outstanding under the Option Plan and options to purchase 1,683,525 shares
remained available for grant thereunder.
<TABLE>
Stock Option Grants in Fiscal Year 1995
<CAPTION>
Individual Grants
-------------------------------
Potential Realisable
Number of $ Value at Assumed Annual
Securities of Total Rate of Stock Price
Underlying Options/SARs Appreciation for
Options/SARs Granted to Exercise or Option Term(2)
Granted (#) (1) Employees in Base Price Expiration -----------------------------
Name Fiscal Year ($/Sh) Date 5%($) 10%($)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
David W. Light(3) 500,000 31% 1.00 10/13/04 $288,000 $717,000
Martin D. Meeker(4) 150,000 9% 1.50 N/A N/A N/A
150,000 9% 1.00 1/8/05 $89,000 $222,000
<FN>
(1) Options granted generally become exercisable for 25% of the shares one
year after the grant date and 1/36th of the remaining share subject to
the option become exercisable each month thereafter.
(2) The 5% and 10% assumed rates of appreciation applied to the fair market
value of the Common Stock over the term of the option are prescribed by
the rules of the SEC and do not represent the Company's estimate or
projection of the future price of its Common Stock.
(3) Reflects the exchange of an option pursuant to an option exchange
program conducted in 1995. See "Board Compensation Committee Report on
Executive Compensation--Report on Repricing of Options." The
computation of potential realizable value is based on the appreciation
of the Common Stock at the specified percentages over the exercise
price of $1.00 per share for the term of the option.
(4) Reflects the grant and exchange of an option pursuant to an option
exchange program. Both the grant and exchange of the option were made
in 1995. See "Board Compensation Committee Report on Executive
Compensation--Report on Repricing of Options." The computation of
potential realizable value is based on the appreciation of the Common
Stock at the specified percentages over the exercise price of $1.00 per
share for the term of the option.
</FN>
</TABLE>
<TABLE>
Option Exercises in 1995 and Year-End Holding
The following table provides information with respect to the Named
Executive Officers concerning the exercise of options during the last fiscal
year and the number and value of unexercised options held as of the end of the
last fiscal year
<CAPTION>
Number of Securities
Shares Underlying Unexercised Value of Unexercised
Acquired on Value Options at FY-End (#) In-the-Money- Options at
Exercise Realized Exercisable/ FY-End ($)
Name (#) ($) Unexercisable Exercisable/Unexercisable
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
David W. Light -0- -0- 166,666/333,334 -0-/-0-
Martin D. Meeker -0- -0- 25,000/125,000 -0-/-0-
</TABLE>
-9-
<PAGE>
<TABLE>
Ten-Year Option Repricing
The following table sets forth information with respect to options held
by executive officers of the Company that were repriced pursuant to an option
exchange program. See "Board Compensation Committee Report on Executive
Compensation--Report on Repricing of Options," Except as set forth in this
table, no options held by executive officers of the Company have been repriced
in the last ten years.
<CAPTION>
Number of Market Exercise Original
Securities Price of Price of Term
Underlying Stock at Stock at New Remaining
Date of Options Time of Time of Exercise at Date of
Name/Position Repricing Repricing Repricing Repricing Price Repricing
------------- --------- --------- --------- --------- ----- ---------
<S> <C> <C> <C> <C> <C> <C>
David W. Light
President & CEO June 20, 1995 500,000 $1.00 $2.00 $1.00 Nine Years
Martin D. Meeker
V.P. Finance & CFO June 20, 1995 150,000 $1.00 $1.50 $1.00 Nine Years
</TABLE>
Board Compensation Committee Report on Executive Compensation
The Compensation Committee of the Board consists of two outside
directors and theVice President/Secretary. The Compensation Committee believes
that the Company's executive compensation programs should enable the Company to
attract and retain executives capable of leading the Company to meet its
business objectives and to motivate them to enhance long-term shareholder value.
Annual compensation for the Company's executive officers consists of four
elements: a cash salary, profit sharing, cash bonuses and stock option grants.
With respect to cash salary, cash bonuses and stock option grants, the Committee
considers a variety of factors in evaluating the Company's executive officers
and making compensation decisions. These include the compensation paid by
comparable companies to individuals in comparable positions, the individual
contributions of each officer to the Company, and most importantly, the progress
of the Company towards achieving its long-term objectives. As the Company has
progressed, the measures of this progress have changed, and the Committee
expects them to continue to change.
Compensation Policies and Procedures
Annual performance reviews for executive officers are conducted in the
first quarter of each year. The performance reviews are conducted by the
Committee, comparing actual Company progress against detailed annual plans.
Elements of the Plan such as progress on product development, expense control
and organizational development are considered. The Committee then develops
recommendations that are presented to the full Board for review and approval.
The method used by the Compensation Committee to determine executive
compensation is designed to provide for a base salary that, while competitive
with comparable companies, is nevertheless calculated to result in a base salary
that is in the middle of the competitive range for those companies.
For fiscal year 1995, the Committee reviewed the results of "The
Executive Compensation in the Electronics Industry" compiled by the American
Electronics Industry, the "Radford Benchmark Salary Structure" compiled by
Radford Associates, and "Executive Compensation" compiled by Ernst & Young which
provides information on the compensation of management at companies nationwide
with fewer than 100 employees and companies in the San Francisco Bay Area. Based
in part on this survey information, the Committee generally sets salaries in the
middle of the range comparable to competitive companies of comparable size in
similar industries, although the Committee will also consider the individual
performance of the executive officer.
In accordance with the foregoing, for fiscal 1995, the measures the
Committee looked to in evaluating the Company's progress and individual
performance when determining compensation for the executive officers were, in
order of importance, first, the progress in development and regulatory approvals
for the Company's dental and ophthalmic laser systems (in particular, the
Company's success in meeting goals it had established in this area); second, the
Company's success in establishing distribution channels for the Company's
products; and third, the effectiveness of the executive officers in settling the
dispute with American Dental Technologies, Inc. The Committee, however, was also
faced with the significant challenges that faced the Company in 1995 and
continue to face the Company in finding its working capital needs.
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<PAGE>
Compensation of Chief Executive Officer
During 1994, the Company retained David Light to serve as President and
Chief Executive Officer. Mr. Light's basic annual compensation was set at
$160,000 plus a deferred payment of $60,000 to be made at the completion of one
year of employment. Mr. Light was also granted options to acquire 500,000 shares
of Common Stock at a price of $2.00 per share. The Compensation Committee
determined Mr. Light's initial compensation based on its assessment of the
package needed to attract a chief executive officer to a distressed company that
had incurred substantial losses.
Because Mr. Light's employment with the Company commenced in October
1994, Mr. Light's annual salary was not changed for 1995. In October 1995, at
the completion of Mr. Light's first year of employment, Mr. Light received the
$60,000 deferred payment. Also in 1995, Mr. Light exchanged his option to
acquire 500,000 shares of Common Stock at a price of $2.00 per share for an
option to acquire 500,000 shares of Common stock at a price of $1.00 per share,
pursuant to an option exchange program.
Report on Repricing of Options
In December 1994, the Board established an option exchange program (the
"Exchange Program") based on its determination that (a) the purpose of the
Option Plan of providing an equity incentive would not be achieved for employees
holding options exercisable above the market price and (b) it was critical to
the best interests of the Company and the stockholders that the Company retain
the services of its employees. Pursuant to the Exchange Program, at such times
as the Board or Compensation Committee determines to conduct an exchange of
options thereunder (an "Exchange Offer"), employees holding options with
exercise prices higher than the then fair market value of the Common Stock shall
be offered the opportunity to exchange such options ("Old Options") for new
options ("Repriced Options"). Repriced Options have substantially the same terms
as the respective Old Options, except that the exercise price is the fair market
value of the Common Stock at the time the Board or Compensation Committee
determines to conduct an Exchange Offer. In addition, Repriced Options vest on
the same schedule as the respective Old Options would have vested, except that
Repriced Options cannot be exercised, except under certain circumstances, for
six months from the date of exchange, even if the Old Options exchanged therfor
were vested.
On June 20, 1995, the Compensation Committee determined to conduct an
Exchange Offer. At that time the fair market value of the Common Stock was, and
therefore the exercise price of the Repriced Options was established at, $1.00
per share.
Policies With Respect to Deductibility of Compensation
Section 162(m) of the Code limits the Company to a deduction for
federal income tax purposes of no more than $1 million of compensation paid to
certain Named Executive Officers in a taxable year. Compensation above $1
million may be deducted if it is "performance-based compensation" within the
meaning of the Code. The Compensation Committee believes that at the present
time it is unlikely that the compensation paid to any Named Executive Officer in
a taxable year will exceed $1 million. Therefore, the Compensation Committee has
not yet established a policy for determining which forms of incentive
compensation awarded to its Named Executive Officers shall be designed to
qualify as "performance-based compensation." The Compensation Committee intends
to continue to evaluate the effects of the statute and the final Treasury
regulations and to comply with Code Section 162(m) in the future to the extent
consistent with the best interests of the Company.
Submitted by:
The Compensation Committee
Joseph D. Koenig
Joseph W. Shaffer
Ronald A. Slocum
May 9, 1996
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<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
As noted above, the Company's Compensation Committee is composed of
Joseph Koenig, Joseph Shaffer and Ronald Slocum. Mr. Shaffer also serves as the
Company's Vice President, Product Development.
PERFORMANCE MEASUREMENT COMPARISON
The following chart shows the value of an investment of $100 on
December 31, 1990 in cash of (i) the Company's Common Stock, (ii) the Russell
3000 and (iii) the Hambrecht & Quist Technology Index. All values assume
reinvestment of the full amount of all dividends and are calculated as of
December 31 of each year.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
AMONG SUNRISE TECHNOLOGIES INTERNATIONAL, INC. THE RUSSELL 3000 INDEX
AND THE HAMBRECHT & QUIST TECHNOLOGY INDEX
[The following descriptive data is supplied in accordance with Rule 304(d) of
Regulation S-T]
DOLLARS
----------------------------------------
12/90 12/91 12/92 12/93 12/94 12/95
Sunrise Technologies Int'l, Inc. 100 278 136 68 24 22
Russell 3000 100 134 146 162 163 223
Hambrecht & Quist Technology 100 148 170 186 215 323
* $100 INVESTED ON 12/31/90 IN STOCK OR INDEX -
INCLUDING REINVESTMENT OF DIVIDENDS.
FISCAL YEAR ENDING DECEMBER 31.
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<PAGE>
OTHER MATTERS
The Board of Directors knows of no other matters that will be presented
for consideration at the Annual Meeting. If any other matters are properly
brought before the meeting, it is the intention of the persons named in the
accompanying proxy to vote on such matters in accordance with their best
judgment.
By Order of the Board of Directors
/s/ Joseph W. Shaffer
Joseph W. Shaffer
Secretary
May 9, 1996
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<PAGE>
APPENDIX A
PROXY SUNRISE TECHNOLOGIES INTERNATIONAL, INC. PROXY
PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 18, 1996
The undersigned hereby appointS David W. Light and Joseph W. Shaffer and
each of them, as attorneys and proxies of the undersigned, with full power of
substitution, to vote all of the shares of stock of Sunrise Technologies
International, Inc. which the undersigned may be entitled to vote at the Annual
Meeting of Stockholders of Sunrise Technologies International, Inc. to be held
at the Courtyard by Marriott, 47000 Lakeview Boulevard, Fremont, California
94538 on June 18, 1996, at 10:00 a.m., local time, and at any and all
continuations and adjournments thereof, with all powers that the undersigned
would possess if personally sent, upon and in respect of the following matters
and in accordance with the following instructions, with discretionary authority
as to any and all other matters that may properly come before the meeting.
(Continued, and to be signed on the other side)
<PAGE>
Please make your votes as this [X]
UNLESS A CONTRARY DIRECTION IS INDICATED, THIS PROXY WILL BE VOTED FOR THE
NOMINEE LISTED IN PROPOSAL 1 AND FOR PROPOSAL 2 AS MORE SPECIFICALLY DESCRIBED
IN THE PROXY STATEMENT. IF SPECIFIC INSTRUCTIONS ARE INDICATED, THIS PROXY WILL
BE VOTED IN ACCORDANCE THEREWITH.
MANAGEMENT RECOMMEND OTE FOR THE NOMINEE FOR DIRECTOR LISTED BELOW AND A VOTE
FOR PROPOSALS 1 AND 2
WITHHOD
FOR FOR
PROPOSAL 1: To elect one director [ ] [ ]
to hold office until the 1999 Annual
Meeting of Stockholders
NOMINEE: Joseph D. Koenig
(INSTRUCTION: To withhold authority to vote for any nominee, write
the nominee's name in the space provided below.
- ------------------------------------------------------------------
I PLAN TO ATTEND THE MEETING [ ]
FOR AGAINST ABSTAIN
PROPOSAL 2: To ratify selection of Ernst [X] [ ] [ ]
Young LLP as independent public accountants
of the Company for its fiscal year ending
December 31, 1996
Please sign exactly ur name appears hereon. If the stock is registered in the
names of two or more persons, each should sign. Executors, administrators,
trustees, guardians and attorneys-in-fact should add their titles. If signer is
a corporation, please give full corporate name and have a duly authorized
officer , stating title. If signer is a partnership, please sign in partnership
name by authorized person.
Signature _______________________________________________________ Date _________
PLEASE VOTE, DATE AND PROMPTLY RETURN THIS PROXY IN THE ENCLOSED RETURN ENVELOPE
WHICH IS POSTAGE PREPAID IF MAILED IN THE UNITED STATES.