As filed with the Securities and Exchange Commission on March 2, 1999
Registration No. 333-___________
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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SUNRISE TECHNOLOGIES INTERNATIONAL, INC.
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(Exact Name Of Registrant As Specified In Its Charter)
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DELAWARE 77-0148208
(State Or Other Jurisdiction Of (I.R.S. Employer
Incorporation Or Organization) Identification Number)
3400 WEST WARREN AVENUE
FREMONT, CALIFORNIA 94538
(510) 623-9001
(Address, Including Zip Code, And Telephone Number, Including
Area Code, Of Registrant's Principal Executive Offices)
------------------------------
1997 STOCK OPTION PLAN
(Full Title Of The Plan)
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THE PRENTICE HALL CORPORATION
1013 CENTRE ROAD
WILMINGTON, DELAWARE 19805
(302) 998-0595
(Address, Including Zip Code, And Telephone Number, Including
Area Code, Of Agent For Service)
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COPIES TO:
JEFFREY C. EVERETT, ESQ.
55 EAST MONROE, SUITE 4100
CHICAGO, ILLINOIS 60603
(312) 807-4600
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<PAGE>
=========================================================================
CALCULATION OF REGISTRATION FEE
Proposed Proposed
Title of Maximum Maximum
Securities Amount Offering Aggregate Amount of
to be to be Price per Offering Registra-
Registered Registered Share (1) Price tion Fee
- ---------- ---------- --------- ----------- ----------
Common Stock,
$.001 par value 3,000,000 $10.46875 $31,406,250 $6,281.25
- --------------------
(1) Estimated in accordance with Rule 457(h) under the Securities Act of
1933, as amended, solely for the purpose of calculating the registration
fee. The computation is based upon the average of the high and low price as
reported on the NASDAQ National Market System on February 26, 1999.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
There are hereby incorporated by reference in this Registration
Statement the following documents and information heretofore filed with the
Securities and Exchange Commission:
(a) The Registrant's Annual Report on Form 10-K for the fiscal year
ended December 31, 1997, filed pursuant to Section 13 of the Securities
Exchange Act of 1934 (the "Exchange Act");
(b) The Registrant's Quarterly Reports on Form 10-Q for the
quarters ended March 31, 1998, June 30, 1998 and September 30, 1998;
(c) The Registrant's Current Reports on Form 8-K filed on
December 4, 1998 and January 12, 1999; and
(d) The description of the Registrant's Common Stock to be offered
hereby contained in the Registrant's Registration Statement on Form S-3
filed with the Securities and Exchange Commission on February 23, 1999
(File No. 333-72829), including any amendment or report filed for the
purpose of updating such description.
All documents filed by the Registrant pursuant to Section 13(a),
13(c), 14 and 15(d) of the Exchange Act subsequent to this registration
statement, but prior to the filing of a post-effective amendment which
indicates that all securities offered have been sold or which deregisters
all securities then remaining unsold, shall be deemed to be incorporated by
reference in this registration statement and to be part hereof from the
date of filing such documents.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 102(b)(7) of the General Corporation Law of the State of
Delaware (the "Delaware Law") grants corporations the right to limit or
eliminate the personal liability of their directors in certain
circumstances in accordance with provisions therein set forth. The
Registrant's Certificate of Incorporation contains a provision eliminating
director liability to the Company and its stockholders for monetary damages
for breach of fiduciary duty as a director. The provision does not,
however, eliminate or limit the personal liability of a director: (1) for
any breach of such director's duty of loyalty to the Company or its
stockholders; (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law; (iii) under the
Delaware statutory provision making directors personally liable, for
improper payment of dividends or improper stock purchases or redemptions;
or (iv) for any transaction from which the director derived an improper
personal benefit. This provision offers persons who serve on the Company's
Board protection against awards of monetary damages resulting from breaches
of their duty of care (except as indicated above). As a result of this
provision, the ability of the Company or a stockholder thereof to
successfully prosecute an action against a director for a breach of his
duty of care is limited. However, the provision does not affect the
availability of equitable remedies such as an injunction or rescission
based upon a director's breach of his duty of care. The Securities and
Exchange Commission has taken the position that the provision will have no
effect on claims arising under federal securities laws.
<PAGE>
Section 145 of the Delaware Law grants corporations the right to
indemnify their directors, officers, employees and agents in accordance
with the provisions therein set forth. The Company's By-laws provide that
the corporation shall, subject to limited exceptions, indemnify its
directors and executive officers to the fullest extent not prohibited by
the Delaware Law. The Company's bylaws provide further that the Company
shall have the power to indemnify its other officers, employees and their
agents as set forth in the Delaware Law. Such indemnification rights
include reimbursement for expenses incurred by such director, executive
officer, other officer, employee or agent in advance of the final
disposition of such proceeding in accordance with the applicable provisions
of the Delaware Law.
The Company has entered into agreements with certain of its directors
and officers pursuant to which the Company has agreed to indemnify such
directors and officers to the fullest extent permitted under applicable
law. In addition, the Company has purchased insurance containing customary
terms and conditions as permitted by law on behalf of its directors and
officers, which may cover liabilities under the Securities Act of 1933, as
amended (the "Securities Act").
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
Exhibit
Number Description
------- -----------
4.1 1997 Stock Option Plan
5.1 Opinion of Holleb & Coff (Counsel to the
Registrant) as to the legality of the
securities being registered herewith
23.1 Consent of PricewaterhouseCoopers, LLP,
Independent Accountants
23.2 Consent of Ernst & Young, L.L.P., Former
Independent Auditors
23.3 Consent of Holleb & Coff (included in
Exhibit 5.1)
24 Power of Attorney (included on signature
page)
ITEM 9. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement to
include any material information with respect to the plan of distribution
not previously disclosed in the registration statement or any material
change to such information in the registration statement.
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
<PAGE>
(b) The undersigned Registrant hereby undertakes that, for purposes
of determining any liability under the Securities Act of 1933, each filing
of the Registrant's annual report pursuant to Section 13(a) or Section
15(d) of the Securities Exchange Act of 1934 (and, where applicable, each
filing of an employee benefit plan's annual report pursuant to Section
15(d) of the Securities Exchange Act of 1934) that is incorporated by
reference in the registration statement shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 (the "Securities Act") may be permitted to
directors, officers and controlling persons of the Registrant pursuant to
the foregoing provisions, or otherwise, the Registrant has been advised
that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of
the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Fremont, State of California, on
March 1, 1999.
Sunrise Technologies International, Inc.
By: /s/ C. Russell Trenary, III
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C. Russell Trenary, III
President and Chief Executive Officer
POWER OF ATTORNEY
KNOWN ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints C. Russell Trenary and Timothy A.
Marcotte, jointly and severally, his attorneys-in-fact, each with the power
of substitution, for him in any and all capacities, to sign any amendments
to this Registration Statement on Form S-8, and to file the same, with
exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and confirming all
that each of said attorneys-in-fact, or his substitute or substitutes, may
do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Registration Statement has been signed by the following
persons in the capacities and on the dates indicated.
Date: March 1, 1999 /s/ C. Russell Trenary, III
-----------------------------------
C. Russell Trenary, III
President, Chief Executive Officer
and Director
(Principal Executive Officer)
Date: March 1, 1999 /s/ Timothy A. Marcotte
-----------------------------------
Timothy A. Marcotte
Chief Financial Officer
(Principal Financial Officer and
Principal Accounting Officer)
and Director
Date: March 1, 1999 /s/ Joseph D. Koenig
-----------------------------------
Joseph D. Koenig
Chairman of the Board and Director
Date: March 1, 1999 /s/ R. Dale Bowerman
-----------------------------------
R. Dale Bowerman
Director
Date: March 1, 1999 /s/ Michael S. McFarland, M.D.
-----------------------------------
Michael S. McFarland, M.D.
Director
<PAGE>
INDEX TO EXHIBITS
Exhibit
Number Description
- ------- -----------
4.1 1997 Stock Option Plan
5.1 Opinion of Holleb & Coff (Counsel to the
Registrant) as to legality of the securities
being registered herewith
23.1 Consent of PricewaterhouseCoopers, LLP,
Independent Accountants
23.2 Consent of Ernst & Young, L.L.P.,
Former Independent Auditors
23.3 Consent of Holleb & Coff (included in Exhibit 5.1)
24 Power of Attorney (included on signature page)
EXHIBIT 4.1
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SUNRISE TECHNOLOGIES, INC.
1997 STOCK OPTION PLAN
1. Purposes of the Plan. The purposes of this Stock Option Plan
are to attract and retain the best available personnel for positions of
substantial responsibility, to provide additional incentive to the
Employees and Consultants of the Company and to promote the success of the
Company's business. Options granted hereunder may be either Incentive
Stock Options or Nonstatutory Stock Options, at the discretion of the Board
and as reflected in the terms of the written option agreement.
2. Definitions. As used herein, the following definitions shall
apply:
"Applicable Laws" shall mean the legal requirements relating to the
administration of stock incentive plans, if any, under applicable
provisions of federal securities laws, state corporate and securities laws,
the Code, and the rules of any applicable stock exchange or national market
system.
"Board" shall mean the Committee, if one has been appointed, or the
Board of Directors of the Company, if no Committee is appointed.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Committee" shall mean the Committee appointed by the Board of
Directors in accordance with Section 4 of the Plan, if one is appointed.
"Common Stock" shall mean the Common Stock of the Company.
"Company" shall mean Sunrise Technologies International, Inc., a
Delaware corporation.
"Consultant" shall mean any person who is engaged by the Company or
any parent or Subsidiary to render consulting services and is compensated
for such consulting services, and any director of the Company whether or
not compensated for such services.
"Continuous Status as an Employee or Consultant" shall mean the
absence of any interruption or termination of service as an Employee or
Consultant. Continuous Status as an Employee or Consultant shall not be
considered interpreted in the case of sick leave, military leave, or any
other leave of absence approved by the Board; provided that such leave is
for a period of not more than 90 days or reemployment upon the expiration
of such leave is guaranteed by contract or statute.
"Covered Employee" shall mean an Employee who is, or in the opinion
of the Board may become, a "covered employee" under Section 162(m)(3) of
the Code at the time of the grant of an Option.
"Employee" shall mean any person, including officers and directors,
employed by the Company or any Parent or Subsidiary of the Company. The
payment of a director's fee by the Company shall not be sufficient to
constitute "employment" by the Company.
"Incentive Stock Option" shall mean an Option intended to qualify as
an incentive stock option within the meaning of Section 422 of the Code.
"Nonstatutory Stock Option" shall mean an Option not intended to
qualify as an Incentive Stock Option.
"Option" shall mean a stock option granted pursuant to the Plan.
<PAGE>
"Optioned Stock" shall mean the Common Stock subject to an Option.
"Optionee" shall mean an Employee or Consultant who receives an
Option.
"Parent" shall mean a "parent corporation," whether now or hereafter
existing, as defined in Section 424(e) of the Code.
"Performance-Based Compensation" shall mean compensation qualifying
as "performance-based compensation" under Section 162(m) of the Code.
"Plan" shall mean this 1997 Stock Option Plan.
"Share" shall mean a share of the Common Stock, as adjusted in
accordance with Section 11 of the Plan.
"Subsidiary" shall mean a "subsidiary corporation", whether now or
hereafter existing, as defined in Section 424(f) of the Code.
3. Stock Subject to the Plan. Subject to the provisions of
Section 11 of the Plan, the maximum aggregate number of shares which may be
issued under Options granted under the Plan is three million five hundred
thousand (3,500,000) shares of Common Stock. The Shares may be authorized,
but unissued, or reacquired Common Stock.
If an Option should expire or become unexercisable for any reason
without having been exercised in full, the unpurchased Shares which were
subject thereto shall, unless the Plan shall have been terminated, become
available for future grant under the Plan. Notwithstanding any other
provision of the Plan, shares issued under the Plan and later repurchased
by the Company shall not become available for future grant or sale under
the Plan.
4. Composition of Administrator.
(a) Multiple Administrative Bodies. If permitted by the
Applicable Laws, the Plan may (but need not) be administered by different
administrative bodies with respect to Covered Employees (in connection with
Performance-Based Compensation), directors, officers who are not directors
and Consultants and Employees who are neither directors nor officers.
(b) Administration with respect to Directors and Officers.
With respect to grants of Options to Employees or Consultants who are also
officers or directors of the Company, the Plan shall be administered by (A)
the Board, if the Board may administer the Plan in compliance with the
Applicable Laws, or B) a Committee designated by the Board to administer
the Plan, which Committee shall be constituted in such a manner as to
satisfy the Applicable Laws.
(c) Administration with respect to Other Persons. With
respect to grants of Options to Employees or Consultants who are neither
directors nor officers of the Company, the Plan shall be administered by
(A) the Board or (B) a Committee designated by the Board, which Committee
shall be constituted in such a manner as to satisfy the Applicable Laws.
(d) Administration With Respect To Covered Employees.
Notwithstanding the foregoing, grants of Options to any Covered Employee
intended to qualify as performance-Based Compensation shall be made only by
a Committee (or subcommittee of a Committee) which is composed solely of
two or more Directors eligible under the Code to serve on a committee
making grants qualifying as Performance-Based Compensation. In the case of
such grants to Covered Employees, references to the "Board" shall be deemed
to be references to such Committee or subcommittee.
<PAGE>
(e) General. Once a Committee has been appointed pursuant to
subsection (b), (c) or (d) of this Section 4, such Committee shall continue
to serve in its designated capacity until otherwise directed by the Board.
From time to time the Board may increase the size of any Committee and
appoint additional members thereof, remove members (with or without cause)
and appoint new members in substitution therefor, fill vacancies (however
caused) and remove all members of a Committee and thereafter directly
administer the Plan, all to the extent permitted by the Applicable Laws.
5. Eligibility.
(a) Nonstatutory Stock Options may be granted only to
Employees and Consultants. Incentive Stock Options may be granted only to
Employees. An Employee or Consultant who has been granted an Option may,
if he is otherwise eligible, be granted an additional Option or Options.
(b) The maximum aggregate number of Shares with respect to
which Options may be granted to any Employee in any fiscal year of the
Company shall be one million (1,000,000) Shares. The foregoing limitation
shall be adjusted proportionately in connection with any change in the
Company's capitalization pursuant to Section 11, below. This Section 5(b)
is intended to comply with the requirements for the award of Performance-
Based Compensation applicable to stock options and shall be construed in
accordance with the requirements of Section 162(m) of the Code and the
regulations thereunder.
(c) No Incentive Stock Option may be granted to an Employee
which, when aggregated with all other incentive stock options granted to
such Employee by the Company or any Parent or Subsidiary, would result in
Shares having an aggregate fair market value (determined for each Share as
of the date of grant of the Option covering such Share) in excess of
$100,000 becoming first available for purchase upon exercise of one or more
incentive stock options during any calendar year.
(d) Section 5(c) of the Plan shall apply only to an Incentive
Stock Option evidenced by an "Incentive Stock Option Agreement" which sets
forth the intention of the Company and the Optionee that such Option shall
qualify as an incentive stock option. Section 5(c) of the Plan shall not
apply to any Option evidenced by a "Nonstatutory Stock Option Agreement"
which sets forth the intention of the Company and the Optionee that such
Option shall be a Nonstatutory Stock Option.
(e) The Plan shall not confer upon any Optionee any right
with respect to continuation of employment or consulting relationship with
the Company, nor shall it interfere in any way with his right or the
Company's right to terminate his employment or consulting relationship at
any time, with or without cause.
6. Term of Plan. The Plan shall become effective upon the earlier
to occur of its adoption by the Board of Directors or its approval by the
shareholders of the Company as described in Section 17 of the Plan. It
shall continue in effect for a term of ten (10) years unless sooner
terminated under Section 13 of the Plan.
7. Term of Option. The term of each Incentive Stock Option shall
be ten (10) years from the date of grant thereof or such shorter term as
may be provided in the Incentive Stock Option Agreement. The term of each
Nonstatutory Stock Option shall be ten (10) years from the date of grant
thereof or such shorter term as may be provided in the Nonstatutory Stock
Option Agreement. However, in the case of an Option granted to an Optionee
who, at the time the Option is granted, owns stock representing more than
ten percent (10) of the voting power of all classes of stock of the Company
or any Parent or Subsidiary, (a) if the Option is an Incentive Stock
Option, the term of the Option shall be five (5) years from the date of
grant thereof or such shorter term as may be provided in the Incentive
Stock Option Agreement, or (b) if the Option is a Nonstatutory Stock
Option, the term of the Option shall be five (5) years from the date of
grant thereof or such shorter term as may be provided in the Nonstatutory
Stock Option Agreement.
<PAGE>
8. Exercise Price and Consideration.
(a) The per Share exercise price for the Shares to be issued
pursuant to exercise of an Option shall be such price as is determined by
the Board, but shall be subject to the following:
(i) In the case of an Incentive Stock Option
(A) granted to an Employee who, at the time of
the grant of such Incentive Stock Option, owns stock representing more than
ten percent (10%) of the voting power of all classes of stock of the
Company or any Parent or Subsidiary, the per Share exercise price shall be
no less than 110% of the fair market value per Share on the date of grant.
(B) granted to any Employee, the per Share
exercise price shall be no less than 100% of the fair market value per
Share on the date of grant.
(ii) In the case of a Nonstatutory Stock Option
(A) granted to a person who, at the time of the
grant of such Option, owns stock representing more than ten percent (10%)
of the voting power of all classes of stock of the Company or any Parent or
Subsidiary, the per Share exercise price shall be no less than 110% of the
fair market value per Share on the date of the grant.
(B) granted to any person, other than a Covered
Employee, the per Share exercise price shall be no less than 85% of the
fair market value per Share on the date of grant as determined by the
Board.
(C) granted to any Covered Employee, the per
Share exercise price shall be no less than the fair market value per Share
on the date of grant as determined by the Board.
(b) The fair market value shall be determined by the Board in
its discretion; provided, however, that where there is a public market for
the Common Stock, the fair market value per Share shall be the bid price
(or the closing price per share if the Common Stock is listed on the
National Association of Securities Dealers Automated Quotation ("NASDAQ")
National Market System) of the Common Stock for the date of grant, as
reported in the Wall Street Journal (or, if not so reported, as otherwise
reported by the NASDAQ System) or, in the event the Common Stock is listed
on stock exchange, the fair market value per Share shall be the closing
price on such exchange on the date of grant of the Option, as reported in
the Wall Street Journal.
(c) The consideration to be paid for the Shares to be issued
upon exercise of an Option, including the method of payment, shall be
determined by the Board and may consist entirely of cash, check, promissory
note, other Shares of Common Stock which (i) either have been owned by the
Optionee for more than six (6) months on the date of surrender or were not
acquired, directly or indirectly, from the Company, and (ii) have a fair
market value on the date of surrender equal to the aggregate exercise
price of the Shares as to which said Option shall be exercised, or any
combination of such methods of payment, or such other consideration and
method of payment for the issuance of Shares to the extent permitted under
Sections 408 and 409 of the California General Corporation Law. In making
its determination as to the type of consideration to accept, the Board
shall consider if acceptance of such consideration may be reasonably
expected to benefit the Company (Section 315(b) of the California General
Corporation Law).
<PAGE>
9. Exercise of Option.
(a) Procedure for Exercise; Rights as a Shareholder. Any
option granted hereunder shall be exercisable at such times and under such
conditions as determined by the Board, including performance criteria with
respect to the Company and/or the Optionee, and as shall be permissible
under the terms of the Plan.
An Option may not be exercised for a fraction of a Share. An Option
shall be deemed to be exercised when written notice of such exercise has
been given to the Company in accordance with the terms of the Option by the
person entitled to exercise the Option and full payment for the Shares with
respect to which the option is exercised has been received by the Company.
Full payment may, as authorized by the Board, consist of any consideration
and method of payment allowable under Section 8(c) of the Plan. Until the
issuance (as evidenced by the appropriate entry on the books of the Company
or of a duly authorized transfer agent of the Company) of the stock
certificate evidencing such Shares, no right to vote or receive dividends
or any other rights as a shareholder shall exist with respect to the
Optioned Stock, notwithstanding the exercise of the Option. The Company
shall issue (or cause to be issued) such stock certificate promptly upon
exercise of the Option. No adjustment will be made for a dividend or other
right for which the record date is prior to the date the stock certificate
is issued, except as provided in Section 11 of the Plan.
Exercise of an Option in any manner shall result in a decrease in the
number of Shares which thereafter may be available, both for purposes of
the Plan and for sale under the Option, by the number of Shares as to which
the Option is exercised.
(b) Termination of Status as an Employee or Consultant. In
the event of termination of an Optionee's Continuous Status as an Employee
or Consultant (as the case may be), such Optionee may, but only within
thirty (30) days (or such other period of time, not exceeding three (3)
months in the case of an Incentive Stock Option or six (6) months in the
case of a Nonstatutory Stock Option, as is determined by the Board, with
such determination in the case of an Incentive Stock Option being made at
the time of grant of the Option) after the date of such termination (but in
no event later than the date of expiration of the term of such Option as
set forth in the Option Agreement), exercise his Option to the extent that
he was entitled to exercise it at the date of such termination. To the
extent that he was not entitled to exercise the Option at the date of such
termination, or if he does not exercise such Option (which he was entitled
to exercise) within the time specified herein, the Option shall terminate.
(c) Disability of Optionee. Notwithstanding the provisions
of Section 9(b) above, in the event of termination of an Optionee's
Continuous Status as an Employee or Consultant as a result of his total and
permanent disability (as defined in Section 22(e)(3) of the Code), he may,
but only within six (6) months (or such other period of time not exceeding
twelve (12) months as is determined by the Board, with such determination
in the case of an Incentive Stock Option being made at the time of grant of
the Option) from the date of such termination (but in no event later than
the date of expiration of the term of such Option as set forth in the
Option Agreement), exercise his Option to the extent he was entitled to
exercise it at the date of such termination. To the extent that he was not
entitled to exercise the Option at the date of termination, or if he does
not exercise such Option (which he was entitled to exercise) within the
time specified herein, the Option shall terminate.
(d) Death of Optionee. In the event of the death of an
Optionee:
<PAGE>
(i) during the term of the Option who is at the time of
his death an Employee or Consultant of the Company and who shall have been
in Continuous Status as an Employee or Consultant since the date of grant
of the Option, the Option may be exercised, at any time within twelve (12)
months following the date of death (but in no event later than the date of
expiration of the term of such Option as set forth in the Option
Agreement), by the Optionee's estate or by a person who acquired the right
to exercise the Option by bequest or inheritance, but only to the extent of
the right to exercise that would have accrued had the Optionee continued
living and remained in Continuous Status as an Employee or Consultant
twelve (12) months after the date of death, subject to the limitation set
forth in Section 5(b); or
(ii) within thirty (30) days (or such other period of
time not exceeding three (3) months as is determined by the Board, with
such determination in the case of an Incentive Stock Option being made at
the time of grant of the Option) after the termination of Continuous Status
as an Employee or Consultant, the Option may be exercised, at any time
within six (6) months following the date of death (but in no event later
than the date of expiration of the term of such Option as set forth in the
Option Agreement), by the Optionee's estate or by a person who acquired the
right to exercise the Option by bequest or inheritance, but only to the
extent of the right to exercise that had accrued at the date of
termination.
10. Transferability of Options.
(a) Incentive Stock Options. Incentive Stock Options may not
be sold, pledged, assigned, hypothecated, transferred or disposed of in any
manner other than by will or by the laws of descent and distribution or
pursuant to a qualified domestic relations order as defined by the Code or
Title I of the Employee Retirement Income Security Act, or the rules
thereunder. The designation of a beneficiary by an Optionee does not
constitute a transfer. An Incentive Stock Option may be exercised, during
the lifetime of the Optionee, only by the Optionee or a transferee
permitted by this Section 10(a).
(b) Nonstatutory Stock Options. Nonstatutory Stock Options
may permit transfer of all or a portion of the Option by such Optionee to
(i) the spouse, children or grandchildren of the Optionee ("Immediate
Family Members"), (ii) a trust or trusts for the exclusive benefit of such
Immediate Family Members, or (iii) a partnership in which such Immediate
Family Members are the only partners, provided that (x) there may be no
consideration for any such transfer, (y) the stock option agreement
pursuant to which such Nonstatutory Stock Options are granted must be
approved by the Committee, and must expressly provide for transferability
in a manner consistent with this Section, and (z) subsequent transfers of
transferred options shall be prohibited except those in accordance with
Section 10(a). Following transfer, any such Options shall continue to be
subject to the same terms and conditions as were applicable immediately
prior to transfer, provided that for purposes of Section 8(c) hereof the
term "Optionee" shall be deemed to refer to the transferee. The events of
termination of employment of Section 9 hereof shall continue to be applied
with respect to the original Optionee, following which the options shall be
exercisable by the transferee only to the extent, and for the periods
specified at Sections 9(b), (c) and (d).
<PAGE>
11. Adjustments Upon Changes in Capitalization or Merger.
(a) Changes in Capitalization. Subject to any required
action by the shareholders of the Company, the number of shares of Common
Stock covered by each outstanding Option, and the number of shares of
Common Stock which have been authorized for issuance under the Plan but as
to which no Options have yet been granted or which have been returned to
the Plan upon cancellation or expiration of an Option, as well as the price
per share of Common Stock covered by each such outstanding Option, shall be
proportionately adjusted for any increase or decrease in the number of
issued shares of Common Stock resulting from a stock split, reverse stock
split, stock dividend, combination or reclassification of the Common Stock,
or any other increase or decrease in the number of issued shares of Common
Stock effected without receipt of consideration by the Company; provided,
however, that conversion of any convertible securities of the Company shall
not be deemed to have been effected without receipt of consideration." Such
adjustment shall be made by the Board, whose determination in that respect
shall be final, binding and conclusive. Except as expressly provided
herein, no issuance by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, shall affect, and
no adjustment by reason thereof shall be made with respect to, the number
or price of shares of Common Stock subject to an Option.
(b) Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of the Company, the Option will terminate
immediately prior to the consummation of such proposed action, unless
otherwise provided by the Board. The Board may, in the exercise of its
sole discretion in such instances, declare that any Option shall terminate
as of a date fixed by the Board and give each Optionee the right to
exercise his Option as to all or any part of the Optioned Stock, including
Shares as to which the Option would not otherwise be exercisable.
(c) Merger or Asset Sale. In the event of the proposed sale
of substantially all of the assets of the Company or a merger of the
Company, in which the Company is not the surviving entity:
(i) Options. Each Option shall be assumed or an
equivalent option shall be substituted by such successor corporation
(including as a "Successor" any purchaser of substantially all of the
assets of the Company) or a parent or subsidiary of such successor
corporation. In the event that the successor corporation or a parent or
subsidiary of such successor corporation does not agree to assume the
Option or to substitute an equivalent option, the Board shall, as soon as
practicable prior to the effective date of such transaction, provide for
the Optionee to have the right to exercise the Option as to all of the
Optioned Stock, including Shares that would not otherwise be exercisable.
In such event the Board shall notify the Optionee as soon as practicable
prior to the effective date of such transaction that the Option shall be
fully exercisable for a period of ten (10) days from the date of such
notice, and the Option shall terminate upon the expiration of such period.
For the purposes of this paragraph, the Option shall be considered assumed
if following the merger, the option confers the right to purchase, for each
Share of Optioned Stock subject to the Option immediately prior to the
merger, the consideration (whether stock, cash or other securities or
property) received in the merger by holders of Common Stock for each Share
held on the effective date of the transaction (and if holders were offered
a choice of consideration, the type of consideration chosen by the holders
of a majority of the outstanding Shares); provided, however, that if such
consideration received in the merger was not solely common stock of the
successor corporation or Parent, the Board may, with the consent of the
successor corporation, provide for the consideration received upon the
exercise of the Option, for each Share of Optioned Stock subject to the
Option, to be solely common stock of the successor corporation or its
Parent equal in fair market value to the per share consideration received
by holders of Common Stock in the merger.
<PAGE>
(ii) Shares Subject to Repurchase Option. Any Shares
subject to a repurchase option of the Company shall be exchanged for the
consideration (whether stock, cash or other securities or property)
received in the merger or asset sale by the holders of Common Stock for
each Share held on the effective date of the transaction, as described in
the preceding paragraph. If the Optionee receives shares of stock of the
successor corporation or a parent or subsidiary of such successor
corporation in exchange for Shares subject to a repurchase option, such
exchanged shares shall continue to be subject to the repurchase option as
provided in the restricted stock purchase agreement.
12. Time of Granting Options. The date of grant of an Option
shall, for all purposes, be the date on which the Board makes the
determination granting such Option. Notice of the determination shall be
given to each Employee or Consultant to whom an Option is so granted within
a reasonable time after the date of such grant.
13. Amendment and Termination of the Plan.
(a) Amendment and Termination. The Board may at any time
amend, suspend or terminate the Plan. To the extent necessary and
desirable to comply with Applicable Laws, the Company shall obtain
shareholder approval of any Plan amendment in such a manner and to such a
degree as required.
(b) Effect of Amendment or Termination. Any such amendment
or termination of the Plan shall not affect Options already granted and
such Options shall remain in full force and effect as if this Plan had not
been amended or terminated, unless mutually agreed otherwise between the
Optionee and the Board, which agreement must be in writing and signed by
the Optionee and the Company.
14. Conditions Upon Issuance of Shares. Shares shall not be issued
pursuant to the exercise of an Option unless the exercise of such Option
and the issuance and delivery of such Shares pursuant thereto shall comply
with all relevant provisions of law, including, without limitation, the
Securities Act of 1933, as amended, the Exchange Act, the rules and
regulations promulgated thereunder, and the requirements of any stock
exchange upon which the Shares may then be listed, and shall be further
subject to the approval of counsel for the Company with respect to such
compliance.
As a condition to the exercise of an Option, the Company may require
the person exercising such Option to represent and warrant at the time of
any such exercise that the Shares are being purchased only for investment
and without any present intention to sell or distribute such Shares if, in
the opinion of counsel for the Company, such a representation is required
by any of the aforementioned relevant provisions of law.
15. Reservation of Shares. The Company, during the term of this
Plan, will at all times reserve and keep available such number of Shares as
shall be sufficient to satisfy the requirements of the Plan.
The inability of the Company to obtain authority from any regulatory
body having jurisdiction, which authority is deemed by the Company's
counsel to be necessary to the lawful issuance and sale of any Shares
hereunder, shall relieve the Company of any liability in respect of the
failure to issue or sell such Shares as to which such requisite authority
shall not have been obtained.
16. Option Agreement. Options shall be evidenced by written option
agreements in such form as the Board shall approve.
<PAGE>
17. Shareholder Approval. Continuance of the Plan with respect to
the grant of Incentive Stock Options and grants to Covered Employees shall
be subject to approval by the stockholders of the Company within twelve
(12) months before or after the date the Plan is adopted, and such
stockholder approval shall be a condition to the right of a Covered
Employee to receive Performance-Based Compensation hereunder. Such
stockholder approval shall be obtained in the degree and manner required
under Applicable Laws.
18. Information to Optionees. The Company shall provide to each
Optionee, during the period for which such Optionee has one or more Options
outstanding, copies of all annual reports and other information which are
provided to all shareholders of the Company. The Company shall not be
required to provide such information if the issuance of Options under the
Plan is limited to key employees whose duties in connection with the
Company assure their access to equivalent information.
19. Miscellaneous.
(a) Code Section 162(m). In the sole discretion of the
Committee, Agreements may provide that, in the event Code Section 162(m),
or any successor provision relating to excessive employee remuneration,
would operate to disallow a deduction by Company for all or part of any
compensation attributable to an Option under the Plan, an Employee's
exercise of an Option, to the extent that the exercise would result in
compensation that would not be deductible by Company, shall be deferred
until the next succeeding year or years in which the Employee's
remuneration either does not exceed the limit set forth in Code Section
162(m) or is not subject to Code Section 162(m).
(b) Withholding. To the extent required by applicable
federal, state, local or foreign law, a Participant or his or her successor
shall make arrangements satisfactory to the Company for the satisfaction of
any withholding tax obligations that arise in connection with the Plan.
The Company shall not be required to issue any Shares or make any cash
payment under the Plan until such obligations are satisfied. The Committee
may permit a Participant to satisfy all or part of his or her withholding
or income tax obligations by having the Company withhold all or a portion
of any Shares that otherwise would be issued to him or her or by
surrendering all or a portion of any Shares that he or she previously
acquired. Such Shares shall be valued at their Fair Market Value on the
date when taxes otherwise would be withheld in cash. Any payment of taxes
by assigning Shares to the Company may be subject to restrictions,
including any restrictions required by rules of the Securities and Exchange
Commission.
(c) Pooling. If any Option, or any provision of any Option,
granted under the Plan would prevent transaction from being account for as
a pooling of interests (in the opinion of the Company's accountants), the
Option, or the provision shall be void. No consent shall be required to
void the Option or the provision.
<PAGE>
SUNRISE TECHNOLOGIES INTERNATIONAL, INC.
INCENTIVE STOCK OPTION AGREEMENT
Sunrise Technologies International, Inc., a Delaware corporation (the
"Company"), has granted to [EMPLOYEE.NAME] (the "Optionee"), an option (the
"Option") to purchase a total of [NO.SHARES] shares of Common Stock (the
"Shares"), at the price determined as provided herein, and in all respects
subject to the terms, definitions and provisions of the Sunrise
Technologies, Inc. 1997 Stock Option Plan (the "Plan") adopted by the
Company, which is incorporated herein by reference. Unless otherwise
defined herein, the terms defined in the Plan shall have the same defined
meanings herein.
1. Nature of the Option. This Option is intended to qualify as an
Incentive Stock Option as defined in Section 422 of the Internal Revenue
Code of 1986, as amended ("Code").
2. Exercise Price. The exercise price is [EXERCISE.PRICE] for
each share of Common Stock, which price in not less than the fair market
value per share of the Common Stock on the date of grant. [EXERCISE PRICE
MUST BE NO LESS THAN 110% OF FMV IF GRANTED TO EMPLOYEE OWNING MORE THAN
10% OF VOTING POWER OF ALL CLASSES OF STOCK.]
3. Exercise of Option. This Option shall be exercisable during
its term in accordance with the provisions of Section 9 of the Plan as
follows:
(i) Right to Exercise.
(a) Subject to subsections 3(i), (b), (c), (d) and (e)
below, this Option shall be exercisable cumulatively, to the extent of 1/4
of the Shares subject to the Option at the end of the first 12-month period
following the vesting start date and 1/36 of the Shares subject to the
Option for each full calendar month thereafter. [THIS PARAGRAPH MUST BE
TAILORED]
(b) This Option may not be exercised for a fraction of
a share.
(c) In the event of Optionee's death, disability (as
defined in Section 8 below) or other termination of employment, the
exercisability of the Option is governed by Sections 7, 8 and 9 below,
subject to the limitations contained in subsections 3(i) (d) and (e).
(d) In no event may this Option be exercised after the
date of expiration of the term of this Option as set forth in Section 11
below.
(e) In no event may this Option be exercisable at a
time or times which, when this Option is aggregated with all other
incentive options granted to Optionee by the Company or any Parent or
Subsidiary, would result in Shares having an aggregate fair market value
(determined for each Share as of the date of grant of the option covering
such share) in excess of $100,000 becoming first available for purchase
upon exercise of one or more incentive stock options during any calendar
year. To the extent this Option would otherwise have become exercisable in
a year but for this subsection 3(i)(e) (the "Excess Shares"), it shall
become exercisable for the Excess Shares in the first succeeding year that
the provisions of subsection 3(i)(e) would not thereby be violated.
<PAGE>
(ii) Method of Exercise. This Option shall be exercisable by
written notice which shall state the election to exercise the Option, the
number of Shares in respect of which the Option is being exercised, and
such other representations and agreements as to the holder's investment
intent with respect to such shares of Common Stock as may be required by
the Company pursuant to the provisions of the Plan. Such written notice
shall be signed by the Optionee and shall be delivered in person or by
certified mail to the Secretary of the Company.
The written notice shall be accompanied by payment of the exercise
price. This Option shall be deemed to be exercised upon receipt by the
Company of such written notice accompanied by the exercise price.
No Shares will be issued pursuant to the exercise of an Option unless
such issuance and such exercise shall comply with all relevant provisions
of law and the requirements of any stock exchange upon which the Shares may
then be listed. Assuming such compliance, for income tax purposes the
Shares shall be considered transferred to the Optionee on the date on which
the Option is exercised with respect to such Shares.
4. Optionee's Representations. In the event the Shares
purchasable pursuant to the exercise of this Option have not been
registered under the Securities Act of 1933, as amended, at the time this
Option is exercised, Optionee shall, concurrently with the exercise of all
or any portion of this Option, deliver to the Company his Investment
Representation Statement in a form acceptable to the Company, and shall
read the applicable rules of the Commissioner of Corporations attached to
such Investment Representation Statement.
5. Method of Payment. Payment of the exercise price shall be by
any of the following, or a combination thereof, at the election of the
Board:
(i) cash;
(ii) check;
(iii) delivery of a promissory note (the "Note") of Optionee in
the amount of the exercise price together with the execution and delivery
by the Optionee of the Security Agreement, attached hereto as Exhibit A;
the Note shall be in the form attached hereto as Exhibit B, shall contain
the terms and be payable as set forth therein, shall bear interest at a
rate (compounded semiannually) not less than the rate required to ensure
that there will be no "unstated interest" with respect to the purchase of
shares under this Option, pursuant to the applicable provisions of the Code
and the regulations in effect thereunder at the time of such purchase, and
shall be secured by a pledge of the Shares purchased by the Note pursuant
to the Security Agreement; or
(iv) surrender of other shares of Common Stock of the Company
which: (A) either have been owned by the Optionee for more than six (6)
months on the date of surrender or were not acquired, directly or
indirectly, from the Company; and (B) have a fair market value on the date
of surrender equal to the exercise price of the Shares as to which the
Option is being exercised.
6. Restrictions on Exercise. This Option may not be exercised
until such time as the Plan has been approved by the shareholders of the
Company, or if the issuance of such Shares upon such exercise or the method
of payment of consideration for such shares would constitute a violation of
any applicable federal or state securities or other law or regulation,
including any rule under Part 207 of Title 12 of the Code of Federal
Regulations ("Regulation G") as promulgated by the Federal Reserve Board.
As a condition to the exercise of this Option, the Company may
require Optionee to make any representation and warranty to the Company as
may be required by any applicable law or regulation.
<PAGE>
7. Termination of Status as an Employee. In the event of
termination of Optionee's Continuous Status as an Employee, as defined by
the Plan, he may, but only within thirty (30) days after the date of such
termination (but in no event later than the date of expiration of the term
of this Option as set forth in Section 11 below), exercise this Option to
the extent that he was entitled to exercise it at the date of such
termination. To the extent that he was not entitled to exercise this
Option at the date of such termination, or if he does not exercise this
Option within the time specified herein, the Option shall terminate. [PLAN
ALLOWS EXTENSION OF EXERCISE PERIOD TO MAXIMUM OF THREE MONTHS IF SO
DETERMINED BY THE BOARD AT TIME OF GRANT. THIS SECTION MAY NEED TO BE
MODIFIED.]
8. Disability of Optionee. Notwithstanding the provisions of
Section 7 above, in the event of termination of Optionee's Continuous
Status as an Employee as a result of his total and permanent disability (as
defined in Section 22 (e) (3) of the Code), he may, but only within six (6)
months from the date of termination of employment (but in no event later
than the date of expiration of the term of this Option as set forth in
Section 11 below), exercise his Option to the extent he was entitled to
exercise it at the date of such termination. To the extent that he was not
entitled to exercise the Option at the date of termination, or if he does
not exercise such Option (which he was entitled to exercise) within the
time specified herein, the Option shall terminate. [PLAN ALLOWS EXTENSION
OF THE PERIOD TO MAXIMUM OF TWELVE MONTHS IF SO DETERMINED BY THE BOARD AT
TIME OF GRANT. THIS SECTION MAY NEED TO BE MODIFIED.]
9. Death of Optionee. In the event of the death of Optionee:
(i) During the term of this Option and while an Employee of
the Company and having been in Continuous Status as an Employee since the
date of grant of the Option, the Option may be exercised, at any time
within twelve (12) months following the date of death (but in no event
later than the date of expiration of the term of this Option as set forth
in Section 11 below), by Optionee's estate or by a person who acquired the
right to exercise the Option by bequest or inheritance, but only to the
extent of the right to exercise that would have accrued had Optionee
continued living and remained in Continuous Status as an Employee twelve
(12) months after the date of death, subject to the limitations contained
in Section 3 (i) (e) above; or
(ii) Within thirty (30) days after the termination of
Optionee's Continuous Status as an Employee, the Option may be exercised,
at any time within six (6) months following the date of death (but in no
event later than the date of expiration of the term of this Option as set
forth in Section 11 below), by Optionee's estate or by a person who
acquired the right to exercise the Option by bequest or inheritance, but
only to the extent of the right to exercise that had accrued at the date of
termination.
10. Non-Transferability of Option. This Option may not be
transferred in any manner otherwise than by will or by the laws of descent
or distribution and may be exercised during the lifetime of Optionee only
by him. The terms of this Option shall be binding upon the executors,
administrators, heirs, successors and assigns of the Optionee.
11. Term of Option. This Option may not be exercised more than ten
(10) years (five (5) years if Optionee owns, immediately before the Option
is granted, stock representing more than 10 percent (10%) of the total
combined voting power of all classes of stock of the Company or of any
parent or subsidiary) from the date of grant of this Option, and may be
exercised during such term only in accordance with the Plan and the terms
of this Option. [PLAN ALLOWS AGREEMENT TO PROVIDE FOR SHORTER TERM. THIS
SECTION MAY NEED TO BE MODIFIED]
<PAGE>
12. Early Disposition of Stock. Optionee understands that if he
disposes of any shares received under this Option within two (2) years
after the date of this Agreement or within one (1) year after such Shares
were transferred to him, he will be treated for federal income tax purposes
as having received ordinary income at the time of such disposition in an
amount generally measured by the difference between the option's exercise
price and the fair market value at the time of the option exercise. The
amount of such ordinary income may be measured differently if Optionee is
an officer, director or 10% stockholder of the Company, or if the Shares
were subject to a substantial risk of forfeiture at the time they were
transferred to Optionee. Optionee hereby agrees to notify the Company in
writing within thirty (30) days after the date of any such disposition.
Optionee understands that if he disposes of such Shares at any time after
the expiration of such two-year and one-year holding periods, he will
recognize as capital gains income the difference between the amount
received in such disposition over the basis in the option stock.
DATE OF GRANT: [GRANT.DATE]
VESTING START DATE: [VEST.DATE]
Sunrise Technologies International, Inc.,
A Delaware corporation
By: _________________________
Title: _________________________
OPTIONEE ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES
PURSUANT TO SECTION 3 HEREOF IS EARNED ONLY BY CONTINUING SERVICE AS AN
EMPLOYEE AT THE WILL OF THE COMPANY NOT THROUGH THE ACT OF BEING HIRED,
BEING GRANTED THIS OPTION OR ACQUIRING SHARES HEREUNDER. OPTIONEE FURTHER
ACKNOWLEDGES AND AGREES THAT NOTHING IN THIS AGREEMENT, NOR IN THE
COMPANY'S 1997 STOCK OPTION PLAN WHICH IS INCORPORATED HEREIN BY REFERENCE,
SHALL CONFER UPON OPTIONEE ANY RIGHT WITH RESPECT TO CONTINUATION OF
EMPLOYMENT BY THE COMPANY, NOR SHALL IT INTERFERE IN ANY WAY WITH HIS RIGHT
OR THE COMPANY'S RIGHT TO TERMINATE HIS EMPLOYMENT AT ANY TIME, WITH OR
WITHOUT CAUSE.
Optionee acknowledges receipt of a copy of the Plan and certain
information related thereto and represents that he is familiar with the
terms and provisions thereof, and hereby accepts this Option subject to all
of the terms and provisions thereof. Optionee has reviewed the Plan and
this Option in their entirety, has had an opportunity to obtain the advice
of counsel prior to executing this Option and fully understands all
provisions of the Option. Optionee hereby agrees to accept as binding,
conclusive and final all decisions or interpretations of the Compensation
Committee upon any questions arising under the Plan. Optionee further
agrees to notify the Company upon any change in the residence address
indicated below.
Dated: __________, ____. _________________________________________
[EMPLOYEE.NAME]
Residence Address:
_________________________________________
_________________________________________
<PAGE>
EXHIBIT A
SECURITY AGREEMENT
This Security Agreement is made as of __________, _____ between
Sunrise Technologies International, Inc., a Delaware corporation
("Pledgee"), and __________("Pledgor").
Recitals
Pursuant to Pledgor's election to purchase Shares, as hereinafter
defined, under the Stock Option Agreement dated __________, _____ (the
"Option Agreement"), between Pledgor and Pledgee under Pledgee's 1997 Stock
Option Plan, and Pledgor's election under the terms of the Option Agreement
to pay for such shares with his promissory note (the "Note"), Pledgor has
purchased __________ shares of Pledgee's Common Stock (the "Shares") at a
price of $__________ per share, for a total purchase price of $__________
per share, for a total purchase price of $__________. The Note and the
obligations hereunder are as set forth in Exhibit B to the Option
Agreement.
NOW, THEREFORE, it is agreed as follows:
1. Creation and Description of Security Interest. In
consideration of the transfer of the Shares to Pledgor under the Option
Agreement, Pledgor, pursuant to the Commercial Code of the State of
California, hereby pledges all of such Shares (herein sometimes referred to
as the "Collateral") represented by certificate number __________, duly
endorsed in blank or with executed stock powers, and herewith delivers said
certificate to the Secretary of Pledgee ("Pledgeholder"), who shall hold
said certificate subject to the terms and conditions of this Security
Agreement.
The pledged stock (together with an executed blank stock assignment
for use in transferring all or a portion of the Shares to Pledgee if, as
and when required pursuant to this Security Agreement) shall be held by the
Pledgeholder as security for the repayment of the Note, and any extensions
or renewals thereof, to be executed by Pledgor pursuant to the terms of the
Option Agreement, and the Pledgeholder shall not encumber or dispose of
such Shares except in accordance with the provisions of this Security
Agreement.
2. Pledgor's Representations and Covenants. To induce Pledgee to
enter into this Security Agreement, Pledgor represents and covenants to
Pledgee, its successors and assigns, as follows:
(a) Payment of Indebtedness. Pledgor will pay the principal
sum of the Note secured hereby, together with interest thereon, at the time
and in the manner provided in the Note.
(b) Encumbrances. The Shares are free of all other
encumbrances, defenses and liens, and Pledgor will not further encumber the
Shares without the prior written consent of Pledgee.
(c) Margin Regulations. In the event that Pledgee's Common
Stock becomes margin-listed by the Federal Reserve Board subsequent to the
execution of this Security Agreement, and Pledgee is classified as a
"lender" within the meaning of the regulations under Part 207 of Title 12
of the Code of Federal Regulations ("Regulation G"), Pledgor agrees to
cooperate with Pledgee in making any amendments to the Note or providing
any additional collateral as may be necessary to comply with such
regulations.
<PAGE>
3. Voting Rights. During the term of this pledge and so long as
all payments of principal and interest are made as they become due under
the terms of the Note, Pledgor shall have the right to vote all of the
Shares pledged hereunder.
4. Stock Adjustments. In the event that during the term of the
pledge any stock dividend, reclassification, readjustment or other changes
declared or made in the capital structure of Pledgee, all new, substituted
and additional shares or other securities issued by reason of any such
change shall be delivered to and held by the Pledgee under the terms of
this Security Agreement in the same manner as the Shares originally pledged
hereunder. In the event of substitution of such securities, Pledgor,
Pledgee and Pledgeholder shall cooperate and execute such documents as are
reasonable so as to provide for the substitution of such Collateral and,
upon such substitution, references to "Shares" in this Security Agreement
shall include the substituted shares of capital stock of Pledgor as a
result thereof.
5. Warrants and Rights. In the event that, during the term of
this pledge, subscription warrants or other rights or options shall be
issued in connection with the pledged Shares, such rights, warrants and
options shall be the property of Pledgor and, if exercised by Pledgor, all
new stock or other securities so acquired by Pledgor as it relates to the
pledged Shares then held by Pledgeholder shall be immediately delivered to
Pledgeholder, to be held under the terms of this Security Agreement in the
same manner as the Shares pledged.
6. Default. Pledgor shall be deemed to be in default of the Note
and of this Security Agreement in the event:
(a) Payment of principal or interest on the Note shall be
delinquent for a period of 10 days or more; or
(b) Pledgor fails to perform any of the covenants set forth
in the Option Agreement or contained in this Security Agreement for a
period of 10 days after written notice thereof from Pledgee.
In the case of an event of Default, as set forth above, Pledgee shall
have the right to accelerate payment of the Note upon notice to Pledgor,
and Pledgee shall thereafter be entitled to pursue his remedies under the
Commercial Code of the State of California.
7. Release of Collateral. Subject to any applicable contrary
rules under Regulation G, there shall be released from this pledge a
portion of the pledged Shares held by Pledgeholder hereunder upon payments
of the principal of the Note. The number of the pledged Shares which shall
be released shall be that number of full Shares which bears the same
proportion to the initial number of Shares pledged hereunder as the payment
of principal bears to the initial full principal amount of the Note.
8. Withdrawal or Substitution of Collateral. Pledgor shall not
sell, withdraw, pledge, substitute or otherwise dispose of all or any part
of the Collateral without the prior written consent of Pledgee.
9. Term. The within pledge of Shares shall continue until the
payment of all indebtedness secured hereby, at which time the remaining
pledged stock shall be promptly delivered to Pledgor, subject to the
provisions for prior release of a portion of the Collateral as provided in
paragraph 7 above.
10. Insolvency. Pledgor agrees that if a bankruptcy or insolvency
proceeding is instituted by or against it, or if a receiver is appointed
for the property of Pledgor, or if Pledgor makes an assignment for the
benefit of creditors, the entire amount unpaid on the Note shall become
immediately due and payable, and Pledgee may proceed as provided in the
case of default.
<PAGE>
11. Pledgeholder Liability. In the absence of willful or gross
negligence, Pledgeholder shall not be liable to any party for any of his
acts, or omissions to act, as Pledgeholder.
12. Invalidity of Particular Provisions. Pledgor and Pledgee agree
that the enforceability or invalidity of any provision or provisions of
this Security Agreement shall not render any other provision or provisions
herein contained unenforceable or invalid.
13. Successors or Assigns. Pledgor and Pledgee agree that all of
the terms of this Security Agreement shall be binding on their respective
successors and assigns, and that the term "Pledgor" and the term "Pledgee"
as used herein shall be deemed to include, for all purposes, the respective
designees, successors, assigns, heirs, executors and administrators.
14. Governing Law. This Security Agreement shall be interpreted
and governed under the laws of the State of California.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the day and year first above written.
"PLEDGOR" ______________________________
Address: ____________________
"PLEDGEE" SUNRISE TECHNOLOGIES
INTERNATIONAL, INC.,
a Delaware corporation
By: ____________________
Title: ____________________
"PLEDGEHOLDER" ______________________________
Secretary of Sunrise Technologies
International, Inc.
<PAGE>
EXHIBIT B
INSTALLMENT NOTE
FOR VALUE RECEIVED,______________________ promises to pay to Sunrise
Technologies International, Inc., a Delaware corporation (the "Company"),
or order, the principal sum of __________ Dollars ($__________), together
with interest on the unpaid principal hereof from the date hereof at the
prime rate of __________ percent (_____%) per annum, compounded
semiannually.
Principal and interest shall be due and payable within 30 days.
Should the undersigned fail to make full payment of any installment of
principal or interest for a period of 10 days or more after the due date
thereof, or should the undersigned's employment or consulting relationship
with the Company be terminated for any reason (or for no reason), the whole
unpaid balance on this Note of principal and interest shall become
immediately due at the option of the holder of this Note. Payments of
principal and interest shall be made in lawful money of the United States
of America.
The undersigned may at any time prepay all or any portion of the
principal or interest owing hereunder.
This Note is subject to the terms of a Stock Option Agreement, dated
as of __________, _____. This Note is secured by a pledge of the Company's
Common Stock under the terms of a Security Agreement of even date herewith
and is subject to all the provisions thereof. Should any action be
instituted for the collection of this Note, the reasonable costs and
attorneys' fees therein of the holder shall be paid by the undersigned.
The holder of this Note shall have full recourse against the maker,
and shall not be required to proceed against the collateral securing this
Note in the event of default.
The undersigned understands that the one-year holding period under
Rule 144 of the Securities Act of 1933, as amended, generally will not
begin to run until this Note has been paid in full.
________________________________________
<PAGE>
EXHIBIT C
INVESTMENT REPRESENTATION STATEMENT
PURCHASER: ________________________________________
COMPANY: SUNRISE TECHNOLOGIES INTERNATIONAL, INC.
SECURITY: COMMON STOCK
AMOUNT: ___________ SHARES
In connection with the purchase of the above-listed Securities, I,
the Purchaser, represent to the Company the following:
(a) I am aware of the Company's business affairs and financial
condition, and have acquired sufficient information about the Company to
reach an informed and knowledgeable decision to acquire the Securities. I
am purchasing these Securities for my own account for investment purposes
only and not with a view to, or for the resale in connection with, any
"distribution" thereof for purposes of the Securities Act of 1933, as
amended (the "Securities Act")
(b) I understand that the Securities have not been registered under
the Securities Act in reliance upon a specific exemption therefrom, which
exemption depends upon, among other things, the bona fide nature of my
investment intent as expressed herein. In this connection, I understand
that, in the view of the Securities and Exchange Commission (the "SEC"),
the statutory basis for such exemption may be unavailable if my
representation was predicated solely upon a present intention to hold these
Securities for any fixed period in the future, including but not limited
to, the minimum capital gains period specified under tax statutes, for a
deferred sale, or until an increase or decrease in the market price of the
Securities, or for a period of one year, or any other fixed period in the
future.
(c) I further understand that the Securities must be held
indefinitely unless subsequently registered under the Securities Act or
unless an exemption from registration is otherwise available. Moreover, I
understand that the Company is under no obligation to register the
Securities. In addition, I understand that the certificate evidencing the
Securities will be imprinted with a legend which prohibits the transfer of
the Securities unless they are registered or such registration is not
required in the opinion of counsel for the Company.
(d) I am familiar with the provisions of Rule 144, promulgated
under the Securities Act, which, in substance, permits limited public
resale of "restricted securities" acquired, directly or indirectly, from
the issuer thereof, in a non-public offering subject to the satisfaction of
certain conditions. The Securities may be resold in certain limited
circumstances subject to the provisions of Rule 144, which requires among
other things: (1) the availability of certain public information about the
Company; (2) the resale occurring not less than one year after the party
has purchased, and made full payment for, within the meaning of Rule 144,
the securities to be sold; and, in the case of an affiliate, or a non-
affiliate who has held the securities less than two years; and (3) the sale
being made through a broker in an unsolicited "broker's transaction" or in
transactions directly with a market maker (as said term is defined under
the Securities Exchange Act of 1934) and the amount of securities being
sold during any three month period not exceeding the specified limitations
stated therein, if applicable.
<PAGE>
(e) I agree, in connection with a public offering of the Company's
securities, (1) not to sell, make short sale of, loan, grant any options
for the purchase of, or otherwise dispose of any shares of Common Stock of
the Company held by me (other than those shares included in the
registration) without the prior written consent of the Company or the
underwriters managing such underwritten public offering of the Company's
securities for one hundred eighty (180) days from the effective date of
such registration, and (2) I further agree to execute any agreement
reflecting (1) above as may be requested by the underwriters at the time of
the public offering; provided however that the officers and directors of
the Company who own the stock of the Company also agree to such
restrictions.
(f) I further understand that in the event all of the applicable
requirements of Rule 144 are not satisfied, registration under the
Securities Act, compliance with Regulation A, or some other registration
exemption will be required; the Staff of the SEC has expressed its opinion
that persons proposing to sell private placement securities other than in a
registered offering and otherwise than pursuant to Rule 144 will have a
substantial burden of proof in establishing that an exemption from
registration is available for such offers or sales, and that such persons
and their respective brokers who participate in such transactions do so at
their own risk.
___________________________________
(Signature of Purchaser)
Date: __________, _____.
EXHIBIT 5.1
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(HOLLEB & COFF LETTERHEAD)
OPINION OF HOLLEB & COFF
March 1, 1999
Sunrise Technologies International, Inc.
3400 West Warren Avenue
Fremont, California 94538
Ladies and Gentlemen:
We have acted as special counsel for Sunrise Technologies
International, Inc., a Delaware Corporation (the "Company"), in connection
with the Company's Registration Statement on Form S-8, as amended (the
"Registration Statement"), being filed by the Company under the Securities
act of 1933, as amended, with respect to 3,000,000 shares (the "Shares") of
the Company's common stock, par value $.001 per share (the "Common Stock"),
which may be disposed of from time to time by the selling securityholders
(the "Selling Securityholders") named therein.
In connection with the preparation of the Registration Statement and
this letter, we have examined, considered and relied solely upon the
following documents (collectively, the "Documents"): the Registration
Statement; the Company's Amended and Restated Certificate of Incorporation
as filed with the Secretary of State of the State of Delaware; the
Company's Bylaws; a Certificate of Good Standing of the Company issued on
February 22, 1999 by the Secretary of State of the State of Delaware;
certain minutes of the meetings of the Company's Board of Directors; a
certificate of the Company's president; and such matters of law as we have
considered necessary or appropriate for the expression of the opinions
contained herein.
In rendering the opinions set forth below, we have assumed without
investigation the genuineness of all signatures and the authenticity of all
documents submitted to us as originals, the conformity to authentic
original documents of all documents submitted to us as copies, and the
veracity of the Documents. In addition, for the purposes of this opinion,
we have assumed that the consideration received by the Company in
connection with each issuance of Shares will include an amount in the form
of cash, services rendered or property with a value that exceeds the
greater of (i) the aggregate par value of such Shares and (ii) the portion
of such consideration determined by the Company's Board of Directors to be
"capital" for purpose of the Delaware General Corporation Law. As to
questions of fact material to the opinions hereinafter expressed, we have
relied upon the representations and warranties of the Company made in the
Documents. We would call your attention to the fact that Eric M. Fogel, a
partner of this law firm, also acts as the Secretary of the Company and
certain of our firm's partners own shares of the Company's Common Stock.
Based solely upon and subject to the Documents, and subject to the
qualification set forth below, we are of the opinion that the Shares have
been duly authorized and when the Shares have been duly delivered against
payment therefor, the Shares will be validly issued, fully paid and
nonassessable
<PAGE>
Although we have acted as counsel to the company in connection with
certain other matters, our engagement is limited only to matters which have
been specifically referred to us. Consequently, there may exist matters of
a legal nature involving the Company in connection with which we have not
been consulted and have not represented the Company. This opinion letter
is limited to the matters stated herein and no opinions may be implied or
inferred beyond the matters expressly stated herein. The opinions
expressed herein are as of the date hereof, and we assume no obligation to
update or supplement such opinions to reflect any facts or circumstances
that may hereafter come to our attention or any changes in law that may
hereafter occur.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. This opinion may be incorporated by reference in
any abbreviated registration statement filed pursuant to General
Instruction E of Form S-8 under the Securities Act with respect to the
Registration Statement.
Very truly yours,
/s/ HOLLEB & COFF
HOLLEB & COFF
EXHIBIT 23.1
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CONSENT OF INDEPENDENT ACCOUNTANTS
----------------------------------
We consent to the incorporation by reference in this registration
statement on Form S-8 of Sunrise Technologies International, Inc. of our
report dated March 6, 1998, on our audits of the financial statements and
financial statement schedule of Sunrise Technologies International, Inc. as
of December 31, 1998 and for the year then ended which report is
incorporated by reference in the annual report on From 10-K.
PricewaterhouseCoopers LLP
San Jose, CA
March 1, 1999
EXHIBIT 23.2
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CONSENT OF ERNST & YOUNG LLP, FORMER INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts"
and to the use of our reports dated March 10, 1997, in the Registration
Statement (Form S-8, No. 333-_________) and related Prospectus of Sunrise
Technologies International, Inc. for the registration of 3,000,000 shares
of its common stock.
/s/ Ernst & Young LLP
Palo Alto, CA
March 1, 1999
