<PAGE> 1
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 14a-11(c) or Rule 14a-12
SUNRISE TECHNOLOGIES INTERNATIONAL, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
N/A
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(2) Aggregate number of securities to which transaction applies:
N/A
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
N/A
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(4) Proposed maximum aggregate value of transaction:
N/A
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(5) Total fee paid:
N/A
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
N/A
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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> 2
SUNRISE TECHNOLOGIES INTERNATIONAL, INC.
3400 WEST WARREN AVENUE
FREMONT, CALIFORNIA 94538
------------------------
NOTICE OF ANNUAL MEETING
TO THE STOCKHOLDERS OF SUNRISE TECHNOLOGIES INTERNATIONAL, INC.:
You are cordially invited to attend the annual meeting (the "Annual
Meeting") of the holders of common stock, par value $0.001 per share of Sunrise
Technologies International, Inc. ("Sunrise" and, together with its subsidiaries,
the "Company"), to be held on April 30, 1999 at 10:00 a.m., local time, at the
Doubletree Hotel, located at 2050 Gateway Place, San Jose, California 95110.
At the Annual Meeting, you will be asked to consider and vote upon the
following proposals:
1. To elect two Class III directors of Sunrise, each to serve a three-year
term expiring upon the annual meeting of stockholders to be held in the
year 2002, or until his or her respective successor is elected and
qualified.
2. To ratify the appointment of PricewaterhouseCoopers LLP as independent
accountants for the Company for the year ending December 31, 1999.
3. To approve the adoption of the 1999 Long-Term Equity Compensation Plan.
4. Such other business as may properly come before the meeting or
adjournments thereof.
A Proxy Statement and proxy card accompany this Notice of Annual Meeting.
The Board of Directors has fixed the close of business on April 1, 1999 as
the record date for the determination of stockholders entitled to notice of and
to vote at the Annual Meeting and at any adjournment or postponement thereof.
All of such stockholders are cordially invited to attend the Annual Meeting in
person. However, TO ASSURE YOUR REPRESENTATION AT THE ANNUAL MEETING, YOU ARE
URGED TO MARK, SIGN, DATE AND RETURN THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE.
A pre-addressed postage-paid envelope is enclosed herewith for that purpose. Any
stockholder attending the Annual 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 Annual Meeting,
you must obtain from the record holder a proxy issued in your name.
Sincerely,
[KOENIG SIG]
Joseph D. Koenig
Chairman of the Board
Fremont, California
April 9, 1999
<PAGE> 3
SUNRISE ANNUAL MEETING
PROXY STATEMENT
THIS PROXY STATEMENT IS FURNISHED IN CONNECTION WITH THE SOLICITATION OF
PROXIES BY THE BOARD OF DIRECTORS (THE "BOARD") OF SUNRISE TECHNOLOGIES
INTERNATIONAL, INC. ("SUNRISE" AND, TOGETHER WITH ITS SUBSIDIARIES, THE
"COMPANY"), FOR USE AT THE ANNUAL MEETING OF STOCKHOLDERS (THE "ANNUAL MEETING")
SCHEDULED TO BE HELD ON APRIL 30, 1999, AT 10:00 A.M., LOCAL TIME, AT THE
DOUBLETREE HOTEL, LOCATED AT 2050 GATEWAY PLACE, SAN JOSE, CALIFORNIA 95110.
Sunrise intends to mail this Proxy Statement and the accompanying proxy card to
all stockholders entitled to vote at the Annual Meeting on or about April 9,
1999.
At the Annual Meeting, holders of common stock of Sunrise ("Sunrise Stock")
will be asked to consider and vote upon the following proposals (the
"Proposals"): (i) to elect two Class III directors of Sunrise, each to serve a
three-year term expiring upon the annual meeting of stockholders to be held in
the year 2002, or until his or her respective successor is elected and
qualified; (ii) to ratify the appointment of PricewaterhouseCoopers LLP as
independent accountants for the Company for the year ending December 31, 1999;
and (iii) to approve the adoption of the 1999 Long-Term Equity Compensation
Plan.
RECORD DATE; VOTING
The Board has fixed the close of business on April 1, 1999 as the record
date for the determination of holders of Sunrise Stock entitled to notice of and
to vote at the Annual Meeting. As of April 1, 1999, there were 42,102,296 shares
of Sunrise Stock issued and outstanding, held of record by 835 persons.
Each share of Sunrise Stock is entitled to one vote on each of the
Proposals. The presence, whether in person or by proxy, of a majority of the
outstanding shares of Sunrise Stock is necessary to constitute a quorum at the
Annual Meeting. Abstentions from voting and broker non-votes on a particular
Proposal will be counted for purposes of determining the presence of a quorum
but will not be counted as affirmative or negative votes on the Proposals.
The affirmative vote of a plurality of the votes of the shares present in
person or represented by proxy, at the Annual Meeting, is required for election
of the nominees as Class III directors of the Company. The affirmative vote of a
majority of the votes cast at the Annual Meeting is required to approve the
other Proposals. Accordingly, abstentions and broker non-votes will not have any
effect on the Proposals.
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 such proxy. A proxy also may be revoked
before it is exercised by filing with the Secretary of Sunrise a duly signed
revocation or a proxy bearing a later date.
SOLICITATION
Sunrise will bear the entire cost of the solicitation of proxies from its
stockholders, including preparation, assembly, printing and mailing of this
Proxy Statement, the proxy card 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
Sunrise 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 Sunrise. No additional compensation will be paid to such
persons for such services. Sunrise also intends to employ the services of Beacon
Hill Partners, Inc., a professional solicitation company ("Beacon Hill"), to
assist with solicitation of stockholders. Beacon Hill will be paid a fee of
$3,000 plus out-of-pocket expenses.
ChaseMellon Shareholder Services LLC, transfer agent and registrar for the
Sunrise Stock, will be paid its customary fee, estimated to be $4,000.
<PAGE> 4
SHARE OWNERSHIP BY PRINCIPAL STOCKHOLDERS AND MANAGEMENT
The following table sets forth the beneficial ownership of the Sunrise
Stock as of March 22, 1999 by: (i) each person known by the Company to be the
beneficial owner of more than 5% of the outstanding shares of Sunrise Stock;
(ii) each of the Company's directors; (iii) each of the Company's executive
officers; and (iv) all directors and executive officers of the Company as a
group.
<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP(1)
------------------------
NUMBER OF PERCENT OF
NAME AND ADDRESS(2) SHARES SHARES
------------------- ---------- -----------
<S> <C> <C>
C. Russell Trenary, III(3)............................... 401,092 *
Tina T. Herbert(4)....................................... 6,832 *
Paul M. Malin(5)......................................... 126,003 *
Jeannie G. Cecka(6)...................................... 116,257 *
Robert A. Haddad(7)...................................... 178,356 *
Richard T. VanRyne(8).................................... 156,444 *
Joseph D. Koenig(9)...................................... 165,409 *
Michael S. McFarland, M.D.(10)........................... 55,166 *
R. Dale Bowerman(11)..................................... 78,683 *
David C. Brown
4101 Evans Avenue
Ft. Myers, Florida 33901............................... 3,168,580 7.5
All executive officers and directors as a group (9
persons)(12)........................................... 1,284,242 3.0%
</TABLE>
- ---------------
* Less than one percent
(1) Based on information provided by each of the identified officers, directors
and stockholders.
(2) Unless otherwise indicated, the persons named in the table above have the
sole voting and investment power with respect to all shares beneficially
owned by them, subject to applicable community property laws. Unless
otherwise indicated, the address of each beneficial owner is: c/o Sunrise
Technologies International, Inc., 3400 West Warren Avenue, Fremont,
California 94538.
(3) Includes 313,855 shares that Mr. Trenary does not currently own, but which
he has the right to acquire within 60 days of March 22, 1999, pursuant to
outstanding options granted under the Company's stock option plan
("Options"), 22,857 shares associated with warrants granted in February
1997 and 16,666 shares pursuant to outstanding warrants granted in January
1999.
(4) Includes 6,832 shares that Ms. Herbert does not currently own, but which
she has the right to acquire within 60 days of March 22, 1999, upon
exercise of Options.
(5) Includes 120,503 shares that Mr. Malin does not currently own, but which he
has the right to acquire within 60 days of March 22, 1999, upon exercise of
Options and 2,500 shares pursuant to outstanding warrants granted in
January 1999.
(6) Includes 106,991 shares that Ms. Cecka does not currently own, but which
she has the right to acquire within 60 days of March 22, 1999, upon
exercise of Options and 4,166 shares pursuant to outstanding warrants
granted in January 1999.
(7) Includes 113,037 shares that Mr. Haddad does not currently own, but which
he has the right to acquire within 60 days of March 22, 1999, upon exercise
of Options, 39,153 shares that may be acquired within 60 days by a family
trust over which Mr. Haddad holds voting and investment power upon
conversion of a 12% convertible note issued in January 1998, 20,000 shares
that may be acquired within 60 days by such trust upon exercise of warrants
and 4,166 shares pursuant to outstanding warrants granted in January 1999.
(8) Includes 32,500 shares that Mr. VanRyne does not currently own, but which
he has the right to acquire within 60 days of March 22, 1999, upon exercise
of Options, 39,153 shares that may be acquired within 60 days upon
conversion of a 12% convertible note issued in January 1998 and 20,000
warrants
2
<PAGE> 5
associated with such convertible note held by an IRA over which Mr. VanRyne
holds voting and investment power and 62,791 shares pursuant to outstanding
warrants granted in January 1999.
(9) Includes 85,833 shares that Mr. Koenig does not currently own, but which he
has the right to acquire within 60 days of March 22, 1999, upon exercise of
Options, 19,576 shares he has the right to acquire within 60 days upon
conversion of a 12% convertible note and 60,000 shares that he may acquire
within 60 days upon exercise of warrants.
(10) Includes 49,166 shares that Dr. McFarland does not currently own, but which
he has the right to acquire within 60 days of March 22, 1999, upon exercise
of Options.
(11) Includes 28,333 shares that Mr. Bowerman does not currently own, but which
he has the right to acquire within 60 days of March 22, 1999, upon exercise
of Options.
(12) Includes 857,050 shares that such persons do not currently own, but which
they have the right to acquire within 60 days of March 22, 1999, upon
exercise of Options, 97,882 shares they may acquire within 60 days upon
conversion of 12% convertible notes, 122,857 shares they may acquire within
60 days upon exercise of warrants and 90,289 shares they may acquire
pursuant to outstanding warrants granted in January 1999.
PROPOSAL 1
ELECTION OF DIRECTORS
Sunrise's Certificate of Incorporation (the "Certificate") and Bylaws
provide that the Board 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 shall serve for the remainder of
the term of the class of directors in which the vacancy occurred and until such
director's successor is elected and qualified.
The Board presently has four members. At the Annual Meeting, stockholders
will be asked to elect two Class III directors to serve until the annual meeting
of stockholders to be held in the year 2002 or until his or her respective
successor is elected and qualified. There is a vacancy on the Board for the
position of a Class II director with a term expiring in 2001 formerly held by
Timothy A. Marcotte. Mr. Marcotte resigned his directorship on March 20, 1999.
The Board will fill that position when it has determined a suitable replacement.
The two persons who are properly nominated and who receive the highest
number of votes at the Annual Meeting will be elected as Class III directors.
Shares represented by executed proxies will be voted for the election of each of
the nominees named below (the "Nominees"), unless authority to vote for such
Nominees is specifically withheld. If either of the Nominees is unavailable for
election, such shares will be voted for the election of a substitute nominee
that management of Sunrise may propose. Each of the Nominees has agreed in
writing to serve as a director if elected.
3
<PAGE> 6
The following table provides information regarding the Nominees and the
continuing directors of Sunrise:
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION/
DIRECTOR POSITION HELD
NAME AGE CLASSIFICATION WITH THE COMPANY
---- --- -------------- ---------------------
<S> <C> <C> <C>
NOMINEES:
Joseph D. Koenig............. 69 Class III Chairman of the Board of
Sunrise and Consultant for
Koenig Associates, a
management consulting firm
C. Russell Trenary, III...... 41 Class III President and Chief Executive
Officer of Sunrise
CONTINUING DIRECTORS:
R. Dale Bowerman............. 59 Class I Retired, former President of
(term expires 2000) SHA, LLC, an HMO doing
business as Firstcare
Michael S. McFarland, M.D.... 48 Class II Ophthalmologist
(term expires 2001)
</TABLE>
NOMINEES
Mr. Koenig was appointed to the Board of Directors of Sunrise in December
1994. Mr. Koenig had also served as a director of Sunrise from August 1991
through January 1994. He has been a consultant for Koenig Associates, a
management consulting firm, since October 1985. Mr. Koenig is also a director of
Ancot Corporation, Hench Controls Corporation and ORISA Technologies, Inc. Mr.
Koenig has a B.S. degree in Electrical Engineering from the University of
Illinois.
Mr. Trenary was appointed the Chief Executive Officer of Sunrise in June
1997. In November 1996, Mr. Trenary was appointed President and Chief Operating
Officer of Sunrise and was also appointed to the Board of Directors of Sunrise.
Mr. Trenary was appointed President and Chief Operating Officer of Laser
Biotech, Inc., a wholly owned subsidiary of Sunrise, in April 1996. From 1995
until the time he joined Sunrise, Mr. Trenary served as Senior Vice President of
Sales and Marketing for Vidamed, Inc. Prior to 1995, Mr. Trenary served in
various positions with Allergan, Inc., most recently as Senior Vice President,
General Manager of AMO Surgical Products, an ophthalmic business. Mr. Trenary
has an M.B.A. degree from Michigan State University and a B.S. degree from Miami
University (Ohio).
CONTINUING DIRECTORS
Mr. Bowerman was appointed to the Board of Directors of Sunrise in November
1997. From 1994 until his retirement in 1997, Mr. Bowerman had been employed by
SHA, LLC d/b/a Firstcare, a Texas health maintenance organization, most recently
as President and Chief Executive Officer. From 1973 to 1994, Mr. Bowerman was
Vice President, Finance and Chief Financial Officer at High Plains Baptist
Health Systems. Mr. Bowerman is also a director of Carrington Laboratories,
Inc., a pharmaceutical research company. Mr. Bowerman has a B.B.A. degree in
Accounting from West Texas State University.
Dr. McFarland was appointed to the Board of Directors of Sunrise in October
1997. From 1980, Dr. McFarland has been a practicing ophthalmologist in
Arkansas. Dr. McFarland was the recipient of the Innovators Award of the Irish
American Ophthalmological Association in 1992 for his development of sutureless
cataract surgery. Dr. McFarland has a B.S. degree from Hendrix College and a
M.D. degree from the University of Arkansas.
None of the members of management were selected as an executive officer or
director of Sunrise pursuant to any arrangement or understanding. There are no
family relationships between any of the members of management.
4
<PAGE> 7
BOARD MEETINGS AND COMMITTEES
The Board held four meetings during the year ended December 31, 1998.
The Board has two standing committees: the Audit Committee and the
Compensation Committee (each, a "Committee"). The Board does not have a standing
nominating committee or any committee performing the function of such committee.
During 1998, each Board member attended 100% 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, comprised of Mr. Bowerman and Mr.
Koenig, met one time in 1998.
The Compensation Committee makes recommendations to the Board 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, comprised of Mr. Koenig and
Dr. McFarland, met one time during 1998.
DIRECTOR COMPENSATION
Each director of Sunrise who is not an employee of the Company (a
"non-employee director") receives a fee of $300 for each Board meeting attended.
Non-employee directors are also eligible for reimbursement for their expenses
incurred in connection with attendance at Board meetings in accordance with
Sunrise's policy.
Each non-employee director of Sunrise, when first elected or appointed as a
director of Sunrise, is automatically granted an option to acquire 20,000 shares
of Sunrise Stock (a "Directors' Option") under the Non-Employee Directors' Stock
Option Plan. Directors' Options are not intended to qualify as "incentive stock
options" within the meaning of Section 422 of the Internal Revenue Code of 1986,
as amended (the "Code"). As of March 22, 1999, non-employee Directors' Options
to purchase 20,000 shares of Sunrise Stock were outstanding and 20,000 of such
options were fully vested and exercisable.
In certain instances, non-employee directors have been granted additional
options. As of March 22, 1999, non-employee Directors had options to purchase an
additional 170,000 shares of Sunrise Stock which were outstanding and 133,332 of
such options were fully vested and exercisable.
EXECUTIVE COMPENSATION
EXECUTIVE OFFICERS
The following persons currently serve as executive officers of Sunrise:
<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- ---------------------------------------
<S> <C> <C>
C. Russell Trenary, III................ 41 President and Chief Executive Officer
and Director
Jeannie G. Cecka....................... 36 Vice President, Clinical and Regulatory
Affairs
Paul M. Malin.......................... 45 Vice President, International Sales and
Marketing and Worldwide Business
Development
Robert A. Haddad....................... 52 Vice President, Operations and Product
Development
Richard T. VanRyne..................... 52 Vice President, U.S. Sales and
Marketing
Tina T. Herbert........................ 47 Acting Vice President, Finance and
Chief Financial Officer
</TABLE>
Ms. Cecka was appointed Vice President, Clinical and Regulatory Affairs of
Sunrise in August 1996. From February 1996 to August 1996, Ms. Cecka was Quality
Systems Auditor at Tuv Product Service. From March 1995 to February 1996, Ms.
Cecka was Director of Clinical and Regulatory Affairs at MedAcoustics, Inc. From
September 1992 to March 1995, Ms. Cecka was Manager of Clinical Research for
Baxter Novacor,
5
<PAGE> 8
a developer and marketer of left ventricular assist devices. Prior to September
1992, Ms. Cecka spent seven years at Allergan, Inc. holding positions ranging
from Manager, Clinical Affairs to Director, Worldwide Clinical Research. Ms.
Cecka has an M.B.A. degree from Pepperdine University and a B.S. degree from UC
Irvine.
Mr. Malin was appointed Vice President, International Sales and Marketing
and Worldwide Business Development of Sunrise in September 1998. Prior to
joining Sunrise in May 1996, Mr. Malin was the Director of Marketing at IRIDEX
Corporation, a medical device manufacturer of ophthalmic laser products from
July 1995 to May 1996. From October 1983 to July 1995, Mr. Malin held various
senior sales and marketing positions at Allergan, Inc. Mr. Malin has an M.B.A.
degree from Pepperdine University and a B.A. degree from Washington and Lee
University.
Mr. Haddad joined Sunrise in March 1997 as Vice President, Operations and
Product Development. From March 1991 to March 1997, Mr. Haddad was Vice
President, Operations of IRIDEX Corporation, a medical device manufacturer of
ophthalmic laser products. Mr. Haddad has an M.B.A. degree from Sacramento State
University and a B.S. degree from California State Polytechnic University.
Mr. VanRyne was appointed Vice President, U.S. Sales and Marketing of
Sunrise in September 1998. From August 1997 to September 1998, Mr. VanRyne was
Sunrise's Director of Sales and Marketing for the Americas. Prior to joining
Sunrise, Mr. VanRyne was the Director of New Business Development at MedLogic
Global Corporation, a manufacturer of wound healing products, from April 1996 to
August 1997. From April 1995 to April 1996, Mr. VanRyne was a consultant for
medical device marketing and educational strategy. From 1986 to April 1995, Mr.
VanRyne was employed by Allergan, Inc. in a variety of senior sales and
marketing positions.
Ms. Herbert was appointed Acting Vice President, Finance and Chief
Financial Officer of Sunrise on March 9, 1999. From August 1998 to March 1999,
she served as Sunrise's Corporate Controller. From November 1997 until August
1998, Ms. Herbert served as Acting Controller of Matrix Pharmaceutical, Inc., a
biotechnology company. From September 1992 to October 1997, Ms. Herbert held
various management positions with Matrix. Ms. Herbert has an M.B.A. degree from
New York Institute of Technology and a B.S. degree from San Jose State
University.
For additional information regarding each of the executive officers of
Sunrise who is also a director, see "Proposal 1 -- Election of Directors" above.
6
<PAGE> 9
SUMMARY COMPENSATION
The following table sets forth certain compensation information earned
during the last three fiscal years by the Chief Executive Officer and the other
executive officers of Sunrise whose salaries and bonuses for the year ended
December 31, 1998 exceeded $100,000 (collectively, the "Named Executive
Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
AWARDS
ANNUAL COMPENSATION SECURITIES
------------------- UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS OPTIONS(1)(2)(3) COMPENSATION(4)
--------------------------- ---- -------- -------- ---------------- ---------------
<S> <C> <C> <C> <C> <C>
C. Russell Trenary, III(5)............ 1998 $233,428 $125,000 386,000 $1,500
President and 1997 $191,906 $ 20,000 776,500 $1,425
Chief Executive Officer 1996 $124,045 Nil 400,000 Nil
Timothy A. Marcotte(6)................ 1998 $163,564 $ 76,100 116,000 $1,500
Vice President, Finance 1997 $ 59,135 Nil 392,700 Nil
and Chief Financial Officer 1996 Nil Nil Nil Nil
Jeannie G. Cecka(7)................... 1998 $131,778 $ 46,200 116,000 $ 988
Vice President, Clinical 1997 $108,938 $ 15,000 317,700 $ 930
and Regulatory Affairs 1996 $ 44,962 Nil 75,000 Nil
Robert A. Haddad(8)................... 1998 $155,000 $ 52,800 116,000 $1,500
Vice President, Operations 1997 $105,538 $ 25,000 392,700 $ 814
and Product Development 1996 Nil Nil Nil Nil
Paul M. Malin(9)...................... 1998 $136,782 $ 46,200 116,000 $1,500
Vice President, International 1997 $127,917 $ 25,000 292,700 $1,425
Sales and Marketing and 1996 $ 73,398 Nil 100,000 Nil
Worldwide Business Development
</TABLE>
- ---------------
(1) Securities are shares of Sunrise Stock underlying Options granted under
Sunrise's stock option plans.
(2) Sunrise does not have any restricted stock, stock appreciation right or
long-term incentive plans.
(3) The vesting of the Options accelerates upon a change of control. See
"Summary of Amended and Restated Change of Control Agreements" below.
(4) Includes Sunrise matching contributions on amounts electively deferred by
each Named Executive Officer under Sunrise's 401(k) plan.
(5) Mr. Trenary began employment with the Company in April 1996.
(6) Mr. Marcotte began employment with the Company in August 1997. His
employment with the Company terminated on March 9, 1999.
(7) Ms. Cecka began employment with the Company in August 1996.
(8) Mr. Haddad began employment with the Company in March 1997.
(9) Mr. Malin began employment with the Company in May 1996.
EMPLOYEE STOCK OPTIONS
Sunrise grants Options to purchase Sunrise Stock to its employees,
including the executive officers, under both the 1988 Stock Option Plan, as
amended (the "1988 Plan"), and the 1997 Stock Option Plan (the "1997 Plan"). As
of March 22, 1999, Options to purchase an aggregate of 4,185,187 shares of
Sunrise Stock were outstanding under the 1988 Plan and 1997 Plan. In addition,
907,000 warrants to purchase shares of Sunrise Stock were granted to employees
in January 1999.
7
<PAGE> 10
The following tables set forth certain information regarding Options
granted to and held by the Named Executive Officers in 1998.
OPTIONS GRANTED DURING THE YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS(2) POTENTIAL REALIZABLE VALUE
--------------------------------------------------- AT ASSUMED ANNUAL RATES
% OF TOTAL OF STOCK PRICE
NUMBER OPTIONS APPRECIATION FOR
OF SECURITIES GRANTED TO STOCK OPTION TERM(3)
UNDERLYING EMPLOYEES EXERCISE EXPIRATION --------------------------
NAME OPTIONS(1) IN 1998 PRICE DATE 5% 10%
---- ------------- ----------- -------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
C. Russell Trenary, III..... 386,000 35.7% $7.63 4/26/08 $1,855,463 $4,682,836
Timothy A. Marcotte......... 116,000 10.7% $7.63 4/26/08 $ 557,600 $1,407,277
Jeannie G. Cecka............ 116,000 10.7% $7.63 4/26/08 $ 557,600 $1,407,277
Paul M. Malin............... 116,000 10.7% $7.63 4/26/08 $ 557,600 $1,407,277
Robert A. Haddad............ 116,000 10.7% $7.63 4/26/08 $ 557,600 $1,407,277
</TABLE>
- ---------------
(1) Options generally become exercisable, subject to a deferral of
exercisability in certain circumstances to preserve their qualification as
incentive stock options, at a rate of 1/48 of the underlying shares of
Sunrise Stock each month following the grant date.
(2) During January 1999, 907,000 warrants were issued to employees.
(3) The 5% and 10% assumed rates of appreciation applied to the fair market
value of the Sunrise Stock over the term of the Option are prescribed by the
rules of the Securities and Exchange Commission (the "Commission") and do
not represent Sunrise's estimate or projection of the future price of the
Sunrise Stock.
AGGREGATE YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS AT
OPTIONS AT YEAR-END(1) YEAR-END($)(2)(3)
NAME EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
---- -------------------------------- --------------------------
<S> <C> <C>
C. Russell Trenary, III................... 267,139/1,295,361 $1,304,436/$3,288,564
Timothy A. Marcotte....................... 140,120/368,580 $268,002/$892,398
Jeannie G. Cecka.......................... 88,271/420,429 $349,744/$788,406
Paul M. Malin............................. 99,801/408,899 $413,727/$797,173
Robert A. Haddad.......................... 88,860/419,840 $387,718/$901,682
</TABLE>
- ---------------
(1) For certain Named Executive Officers, a portion of the Options that are
listed as unexercisable are vested and will become exercisable for a given
Named Executive Officer in the first calendar year that the $100,000 per
year limitation under Section 422 of the Code is not exceeded.
(2) Options are deemed to be "in-the-money" if the fair market value of the
underlying Sunrise Stock exceeds the exercise price of the Option.
(3) Amounts equal the closing price of Sunrise Stock on December 31, 1998 ($5.94
per share) less the option exercise price, multiplied by the number of
shares exercisable or unexercisable.
SUMMARY OF STOCKHOLDER RIGHTS PLAN
The Board adopted a Stockholder Rights Plan (the "Rights Plan") in which
common stock purchase rights (each, a "Right") were distributed as a dividend at
the rate of one Right for each share of Sunrise Stock held by stockholders of
record as of the close of business on October 24, 1997. The Rights will be
exercisable only if a person or group acquires beneficial ownership of 15% or
more of Sunrise Stock, or commences a tender or exchange offer upon consummation
of which such person or group would beneficially own 15% or more of Sunrise
Stock. The Rights Plan expires on October 24, 2007.
8
<PAGE> 11
SUMMARY OF AMENDED AND RESTATED CHANGE OF CONTROL AGREEMENTS
The Board adopted separate amended and restated change of control
agreements (collectively, the "Change of Control Agreements") with certain of
the Named Executive Officers. The Change of Control Agreements were designed to
attract and retain valued executives of Sunrise and to ensure that the
performance of these executives is not undermined by the possibility, threat or
occurrence of a change of control. The Change of Control Agreements provide
these executives with separation pay and benefits following a "change of
control" in Sunrise and: (i) the executive's subsequent termination of
employment by Sunrise (unless such termination is for "cause"), or such
termination results from the executive's death, disability or retirement; or
(ii) the executive resigns for "good reason." An eligible termination must occur
within two years of the change of control or the agreement entered into with the
executive is void. Each Change of Control Agreement will continue until May 8,
2001 and renew for three year periods from that date unless the executive
receives written notice of termination of the Change of Control Agreement at
least 120 days prior to the renewal date.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Neither of the members of the Compensation Committee of the Board was,
during the last fiscal year, an officer or employee of the Company, and there
were no interlocking arrangements requiring disclosure where, for example, an
executive officer of the Company served as a member of the compensation
committee of another entity, one of whose executive officers served on the
Compensation Committee of the Company.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee aims to structure Sunrise's executive
compensation programs to enable Sunrise to attract and retain executives capable
of leading Sunrise to meet its business objectives and to motivate them to
enhance long-term stockholder value. Annual compensation for Sunrise's executive
officers consists of three elements: a cash salary, cash bonuses and stock
option grants. The Compensation Committee considers a variety of factors in
evaluating Sunrise'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 Sunrise
and the progress of Sunrise towards achieving its long-term objectives.
Compensation Policies and Procedures
Performance reviews of executive officers are conducted by the Compensation
Committee. Each executive officer is evaluated based on the executive officer's
achievement of goals set by the Compensation Committee or the Chief Executive
Officer, as applicable, and one or more interviews of the executive officer by
the Compensation Committee. Evaluations of executive officers other than the
Chief Executive Officer are also based on the Chief Executive Officer's
assessment of the executive officer's contribution to Sunrise.
In selecting new executive officers, the Compensation Committee considers
the specific needs of Sunrise and the expertise and special skills offered by a
candidate. The Compensation Committee then determines starting compensation
based on its assessment of the package needed to attract executive officers to a
development stage company that has incurred substantial losses. Compensation of
continuing executive officers is also reviewed periodically against this
assessment. As a result, the Compensation Committee may recommend compensation
packages in the upper range of cash and equity compensation paid to executive
officers by companies of comparable size in similar industries.
Based on the foregoing policies, the Compensation Committee makes its
recommendations to the Board, which ultimately determines each executive
officer's compensation package.
Compensation of Chief Executive Officer
C. Russell Trenary, III was retained by Sunrise to serve as President in
November 1996 and Chief Executive Officer in June 1997. Under the leadership of
Mr. Trenary in 1998, Sunrise achieved specific
9
<PAGE> 12
milestones including: (i) the successful completion of several private
financings; (ii) the re-listing of Sunrise Stock on the Nasdaq National Market
System; (iii) the furthering of the FDA approval process and underlying clinical
trials related to Sunrise's holmium laser corneal shaping product; (iv) the
submission of Sunrise's premarket approval application for low hyperopia to the
Food and Drug Administration on December 14, 1998; (v) the relocation of
Sunrise's offices to accommodate growth; and (vi) an increase in Sunrise's stock
price.
Mr. Trenary's 1998 compensation package consisted of a salary of $250,000,
effective as of April 28, 1998, and a bonus of $125,000 for his accomplishments
during 1997. During 1998, the Compensation Committee determined to increase Mr.
Trenary's equity position in Sunrise by granting him options to purchase 386,000
shares of Sunrise Stock. The Compensation Committee believes that Mr. Trenary's
1998 salary was in the low range compared to chief executive officers in peer
companies. Therefore, the Compensation Committee determined to increase Mr.
Trenary's salary for 1999 to $325,000 and awarded him a bonus of $150,000 for
his accomplishments during 1998. To increase Mr. Trenary's equity position in
Sunrise and further align his interests with Sunrise's stockholders, the
Compensation Committee granted Mr. Trenary warrants to purchase 200,000 shares
of Sunrise Stock. Finally, the Compensation Committee awarded Mr. Trenary an
allowance for his automobile and related expenses not to exceed $1,000 per
month, and an allowance for club dues for business purposes.
Policies with Respect to Deductibility of Compensation
Section 162(m) of the Code limits Sunrise to a deduction for federal income
tax purposes of no more than $1,000,000 of compensation paid to certain Named
Executive Officers in a taxable year. Compensation above $1,000,000 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 $1,000,000. 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 Section 162(m) of the Code in the future to the extent consistent
with the best interests of Sunrise.
Submitted by:
The Compensation Committee
Joseph D. Koenig
Michael S. McFarland, M.D.
February 17, 1999
THE BOARD UNANIMOUSLY RECOMMENDS AND NOMINATES JOSEPH D. KOENIG AND C.
RUSSELL TRENARY, III FOR ELECTION AS CLASS III DIRECTORS OF SUNRISE BY THE
STOCKHOLDERS AT THE ANNUAL MEETING TO SERVE UNTIL THE ANNUAL MEETING OF
STOCKHOLDERS TO BE HELD IN THE YEAR 2002, OR AS OTHERWISE PROVIDED IN THE
CERTIFICATE.
Vote Required. The affirmative vote of a plurality of the votes of the
shares present in person or represented by proxy, at a meeting at which a quorum
is present, is required for election of the nominees as Class III directors.
10
<PAGE> 13
PERFORMANCE GRAPH
The following graph compares the cumulative total stockholder return on the
Sunrise Stock with the cumulative return on the NASDAQ Composite (U.S.) and the
Hambrecht & Quist Technology Index for the five year period ended December 31,
1998, assuming dividend reinvestment.
<TABLE>
<CAPTION>
SUNRISE TECHNOLOGIES HAMBRECHT & QUIST TECH. NASDAQ COMPOSITE (US)
-------------------- ----------------------- ---------------------
<S> <C> <C> <C>
'12/31/93' 100.00 100.00 100.00
'12/31/94' 35.00 119.00 97.00
'12/31/95' 38.00 178.00 135.00
'12/31/96' 21.00 221.00 166.00
'12/31/97' 81.00 259.00 202.00
'12/31/98' 140.00 402.00 282.00
</TABLE>
Source: Beacon Hill Partners, Inc. www.bhpweb.com (212) 843-8500. Data from
Bloomberg Financial Markets.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Pursuant to Section 16(a) of the Securities Exchange Act of 1934, as
amended, officers, directors and beneficial owners of 10% of the Sunrise Stock
outstanding (collectively, "insiders") are required to file reports with the
Commission to report beneficial ownership of, and transactions in, securities of
Sunrise. All such reports required to be filed by insiders during 1998 were
timely filed except for R. Dale Bowerman, who made one late filing reporting a
disposition of shares.
CERTAIN TRANSACTIONS
In December 1998, Sunrise completed a private placement of $11,800,000 of
Sunrise Stock priced at $3.50 per share. Portions of the gross proceeds were
evidenced by promissory notes bearing interest at a rate of 9% per annum due on
March 15, 1999. One of the purchasers of the Sunrise Stock has not yet repaid
his promissory note which has a principal balance of $1,000,000. One Sunrise
stockholder with beneficial ownership of more than 5% of Sunrise Stock, Dr.
David C. Brown, purchased $2,000,000 of the shares through the issuance of a
promissory note, which note was repaid as of March 22, 1999.
11
<PAGE> 14
PROPOSAL 2
RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
Sunrise has selected and intends to appoint PricewaterhouseCoopers LLP
("PWC") as Sunrise's independent accountants for the fiscal year ending December
31, 1999. PWC served as the principal independent accountants for Sunrise in
1998. Services provided to Sunrise by PWC in fiscal 1998 included the
examination of Sunrise's consolidated financial statements, limited reviews of
quarterly reports and services related to filings with the Commission.
Representatives of PWC are expected to be present at the Annual Meeting, will
have an opportunity to make a statement if they so desire and are expected to be
available to respond to appropriate questions from stockholders.
The Board is seeking stockholder ratification of the appointment of PWC;
however, the Audit Committee or the Board may determine, in their discretion and
without seeking approval from the stockholders of Sunrise, to change Sunrise's
accountants if the Audit Committee or Board determines it to be in the interests
of Sunrise and the stockholders.
THE BOARD UNANIMOUSLY RECOMMENDS APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP
AS INDEPENDENT ACCOUNTANTS FOR THE COMPANY FOR THE YEAR ENDING DECEMBER 31,
1999.
Vote Required. The affirmative vote of a majority of the votes cast,
excluding abstentions, at a meeting at which a quorum is present is required to
ratify the foregoing proposal.
PROPOSAL 3
APPROVAL OF THE 1999 LONG-TERM EQUITY COMPENSATION PLAN
Sunrise's success depends, in large measure, on its ability to recruit and
retain key employees, consultants and non-employee directors with outstanding
ability and experience. The Board also believes there is a need to align
stockholder and employee interests by encouraging employee stock ownership and
to motivate employees with compensation conditioned upon achievement of
Sunrise's financial goals. In order to accomplish these objectives, the Board
has adopted, and recommends that the stockholders approve, the Sunrise
Technologies International, Inc. amended and restated 1999 Long-Term Equity
Compensation Plan (the "ECP"). The ECP is being presented to stockholders for
approval in order to assure federal income tax deductibility of certain amounts
paid under the ECP to certain executives.
The ECP is intended to replace Sunrise's 1997 Stock Option Plan, which does
not have a sufficient number of shares available to make stock option grants to
participating employees in 1999. The recommendation of the Board to increase the
number of shares of Sunrise Stock available for issuance under the 1997 Stock
Option Plan was not submitted to the stockholders at Sunrise's 1998 annual
meeting. Sunrise has continuously maintained an employee stock option plan and
made periodic grants to key employees thereunder since 1988. The Board believes
that the existence of these plans has been of substantial benefit to Sunrise by
allowing Sunrise to compensate its key employees in a manner that closely aligns
the interests of management with the interests of Sunrise's stockholders.
SUMMARY DESCRIPTION OF THE ECP
The following summary of the terms of the ECP is qualified in its entirety
by reference to the text of the plan, which is attached as Annex A to this Proxy
Statement. The ECP was adopted effective as of March 20, 1999, subject to
stockholder approval.
ADMINISTRATION
The ECP will be administered by the Compensation Committee of the Board.
12
<PAGE> 15
ELIGIBILITY
Officers, key employees, consultants and non-employee directors of Sunrise
are eligible to participate in the ECP. As the ECP provides for broad discretion
in selecting participants and in making awards, the total number of persons who
will participate and the respective benefits to be accorded to them cannot be
determined at this time.
STOCK AVAILABLE FOR ISSUANCE THROUGH THE ECP
The ECP provides for a number of forms of stock-based compensation, as
further described below. Up to 2,100,000 shares of Sunrise Stock are authorized
for issuance through the ECP. Shares issued under the ECP may be either
authorized but unissued shares (subject to a maximum of 2,100,000 shares).
Provisions in the ECP permit the reuse or reissuance by the ECP of shares of
common stock underlying canceled, expired or forfeited awards of stock-based
compensation. On March 22, 1999, the closing price for Sunrise Stock on the
Nasdaq National Market System was $9.50.
Stock-based compensation will typically be issued in consideration for the
performance of services to Sunrise. At the time of exercise, the full exercise
price for a stock option must be paid in cash or, if the Compensation Committee
so provides, in shares of common stock, by cashless exercise or by certain other
means designated by the Compensation Committee.
DESCRIPTION OF AWARDS UNDER THE PLAN
The Compensation Committee may award to eligible participants incentive and
nonqualified stock options, stock appreciation rights, restricted stock and
performance units/performance shares. As separately described under "Performance
Measures," the Compensation Committee may also grant awards subject to
satisfaction of specific performance goals. The forms of awards are described in
greater detail below.
STOCK OPTIONS
The Compensation Committee will have discretion to award incentive stock
options ("ISOs"), which are intended to comply with Section 422 of the Code, or
nonqualified stock options ("NQSOs"), which are not intended to comply with
Section 422 of the Code. Each option issued under the ECP must be exercised
within a period of ten years from the date of the grant, and the exercise price
of an option may not be less than the fair market value of the underlying shares
of common stock on the date of grant. If an award of stock options or stock
appreciation rights is intended to qualify as performance-based compensation
under Section 162(m) of the Code, the maximum number of shares which may be
subject to stock options with or without tandem stock appreciation rights, or
freestanding stock appreciation rights, granted in any calendar year to any one
participant is 1,000,000. Subject to the specific terms of the ECP, the
Compensation Committee will have discretion to set such additional limitations
on such grants as it deems appropriate.
Options granted to participants under the ECP will expire at such times as
the Compensation Committee determines at the time of the grant; provided,
however, that no option will be exercisable later than ten years from the date
of grant. Each option award agreement will set forth the extent to which the
participant will have the right to exercise the option following termination of
the participant's employment with the Company. The termination provisions will
be determined within the discretion of the Compensation Committee, may not be
uniform among all participants and may reflect distinctions based on the reasons
for termination of employment.
Upon the exercise of an option granted under the ECP, the option price is
payable in full to the Company by the participant, in a form so determined by
the Compensation Committee, either: (a) in cash or its equivalent; (b) by
tendering shares of Sunrise Stock having a fair market value at the time of
exercise equal to the total option price (provided such shares have been held
for at least six months prior to their tender); (c) by withholding Sunrise Stock
which otherwise would be acquired on exercise having a Fair Market Value at the
time of exercise equal to the total option price; (d) by promissory note; or (e)
by any combination of the foregoing methods of payment. The Compensation
Committee may also allow options granted under the
13
<PAGE> 16
ECP to be exercised by a cashless exercise, as permitted under Federal Reserve
Board Regulation T, or any other means the Compensation Committee determines to
be consistent with the ECP's purpose and applicable law.
STOCK APPRECIATION RIGHTS
The Compensation Committee may also award stock appreciation rights
("SARs") under the ECP upon such terms and conditions as it shall establish. The
exercise price of a freestanding SAR shall equal the fair market value of a
share of Sunrise Stock on the date of grant, while the exercise price of a
tandem SAR issued in connection with a stock option shall equal the option price
of the related option. If an award of SARs is intended to qualify as
performance-based compensation under Section 162(m) of the Code, the maximum
number of shares which may be subject to SARs is described above under "Stock
Options."
RESTRICTED STOCK
The Compensation Committee also may award shares of restricted Sunrise
Stock under the ECP upon such terms and conditions as it shall establish. If an
award of restricted Sunrise Stock is intended to qualify as performance-based
compensation under Section 162(m) of the Code, the maximum number of shares
which may be granted in the form of restricted Sunrise Stock in any one calendar
year to any one participant is 200,000. The award agreement will specify the
period(s) of restriction, the number of shares of restricted Sunrise Stock
granted, restrictions based upon the achievement of specific performance
objectives and/or restrictions under applicable federal or state securities
laws. Although recipients may have the right to vote these shares from the date
of grant, they will not have the right to sell or otherwise transfer the shares
during the applicable period of restriction or until earlier satisfaction of
other conditions imposed by the Compensation Committee in its sole discretion.
Participants may receive dividends on their shares of restricted Sunrise Stock
and the Compensation Committee, in its discretion, will determine how any such
dividends are to be paid.
Each award agreement for restricted Sunrise Stock will set forth the extent
to which the participant will have the right to retain unvested restricted
Sunrise Stock following termination of the participant's employment or
consulting arrangement with the Company. These provisions will be determined in
the sole discretion of the Compensation Committee, need not be uniform among all
shares of restricted Sunrise Stock issued pursuant to the ECP and may reflect
distinctions based on reasons for termination of employment. Except in the case
of terminations by reason of death, disability or retirement, the vesting of
restricted stock which qualifies for performance-based compensation under
Section 162(m) of the Code and which are held by "covered employees" under
Section 162(m) of the Code shall occur at the time it otherwise would have, but
for the employment termination.
PERFORMANCE UNITS/SHARES
The Compensation Committee has the discretion to award performance units
and performance shares under the ECP upon such terms and conditions as it shall
establish. If an award of performance units or performance shares is intended to
qualify as performance-based compensation under Section 162(m) of the Code, the
maximum aggregate payout for awards of performance units or performance shares
which may be granted in any one calendar year to any one participant shall be
the fair market value of 200,000 shares of Sunrise Stock. Performance units will
have an initial value as determined by the Compensation Committee while the
performance share will have an initial value equal to one share of Sunrise
Stock. The payout on the number and value of the performance units and
performance shares will be a function of the extent to which corresponding
performance goals are met.
PERFORMANCE MEASURES
The Compensation Committee may grant awards under the ECP to eligible
participants subject to the attainment of certain specified performance
measures. The number of performance-based awards granted to a participant in any
year is determined by the Compensation Committee in its sole discretion.
14
<PAGE> 17
The value of each performance-based award shall be determined solely upon
the achievement of certain pre-established objective performance goals during
each performance period (the "Performance Period"). The duration of a
Performance Period will be set by the Compensation Committee. A new Performance
Period may begin every year, or at more frequent or less frequent intervals, as
determined by the Compensation Committee.
The Compensation Committee shall establish, in writing, the objective
performance goals applicable to the valuation of performance-based awards
granted in each Performance Period, the performance measures which shall be used
to determine the achievement of those performance goals, and any formulas or
methods to be used to determine the value of the performance-based awards.
The value of performance-based awards may be based on absolute measures or
on a comparison of the Company's financial measures during a Performance Period
to the financial measures of a group of competitors. The performance measures
are net income either before or after taxes, market share, customer
satisfaction, profits, share price, earnings per share, total stockholder
return, return on assets, return on equity, operating income, return on capital
or investments, and economic value added.
Following the end of a Performance Period, the Compensation Committee shall
determine the value of the performance-based awards granted for the period based
on the attainment of the preestablished objective performance goals. The
Compensation Committee shall also have discretion to reduce (but not to
increase) the value of a performance-based award.
The Compensation Committee will certify, in writing, that the award is
based on the degree of attainment of the pre-established objective performance
goals. As soon as practicable thereafter, payment of the awards to participants,
if any, shall be made in the form of shares of Sunrise Stock or cash, as
applicable.
CONDITIONS TO AWARD PAYMENTS
All rights of a participant under any award under the ECP will cease on and
as of a date on which it is determined by the Compensation Committee that a
participant acted in a manner inimical to the best interests of the Company.
Participants who terminate employment with the Company for any reason other than
death while any award under the ECP remains outstanding, shall receive such
shares or benefit only if, during the entire period from his or her date of
termination to the date of such receipt, the participant shall: (i) consult and
cooperate with the Company on matters under his or her supervision during the
participant's employment; and (ii) refrain from engaging in any activity that is
directly or indirectly in competition with any activity of the Company. In the
event a participant fails to comply with such requirement, the participant's
rights under any outstanding award shall be forfeited unless otherwise provided
by the Company.
ADJUSTMENT AND AMENDMENTS
The ECP provides for appropriate adjustments in the number of shares of
Sunrise Stock subject to awards and available for future awards in the event of
changes in outstanding Sunrise Stock by reason of a merger, stock split or
certain other events.
The ECP may be modified or amended by the Board at any time and for any
purpose which the Board deems appropriate. However, no such amendment shall
adversely affect any outstanding awards without the affected holder's consent.
CHANGE IN CONTROL
In the event of a change in control, all Options and SARs granted under the
ECP shall become immediately exercisable, restriction periods and other
restrictions imposed on restricted Sunrise Stock which is not performance-based
shall lapse, and the target payout opportunities attainable under all
outstanding awards of performance-based restricted Sunrise Stock, performance
shares and performance units shall be deemed to have been fully earned for the
entire performance period as of the effective date of the change in control. The
vesting of such awards shall be accelerated.
15
<PAGE> 18
NONTRANSFERABILITY
No derivative security (including, without limitation, options) granted
pursuant to, and no right to payment under, the ECP shall be assignable or
transferable by a participant except by will or by the laws of descent and
distribution, and any option or similar right shall be exercisable during a
participant's lifetime only by the participant or by the participant's guardian
or legal representative. These limitations may be waived by the Compensation
Committee, subject to restrictions imposed under the Commission's short-swing
trading rules and federal tax requirements relating to incentive stock options.
DURATION OF THE PLAN
The ECP will remain in effect until all options and rights granted
thereunder have been satisfied or terminated pursuant to the terms of the plan,
and all performance periods for performance-based awards granted thereunder have
been completed. However, in no event will an award be granted under the ECP on
or after March 19, 2009.
FEDERAL INCOME TAX CONSEQUENCES
Options
With respect to options which qualify as ISOs, an ECP participant will not
recognize income for federal income tax purposes at the time options are granted
or exercised, and Sunrise will not be entitled to a deduction with respect to
the granting or exercise of such an option except in the limited circumstances
discussed below. If the participant disposes of shares acquired by exercise of
an ISO either before the expiration of two years from the date the options are
granted or within one year after the issuance of shares upon exercise of the ISO
(the "holding periods"), the participant will recognize in the year of
disposition: (a) ordinary income, to the extent that the fair market value of
the shares on the date of option exercise exceeds the option price; and (b)
capital gain, to the extent the amount realized on disposition exceeds the fair
market value of the shares on the date of option exercise. In addition, if the
holding periods are not met, Sunrise will be entitled to a deduction
corresponding to the ordinary income amount recognized by the participant. If
the shares are sold after expiration of the holding periods, the participant
generally will recognize capital gain or loss equal to the difference between
the amount realized on disposition and the option price.
With respect to NQSOs, the participant will not recognize any income and
Sunrise will not be entitled to a deduction upon grant of the option. Upon
exercise, the participant will recognize ordinary income, and Sunrise will be
entitled to a corresponding deduction, in an amount equal to the excess of the
fair market value of the shares on the date of option exercise over the amount
paid by the participant for the shares. Upon a subsequent disposition of the
shares received under the option, the participant generally will recognize
capital gain or loss to the extent of the difference between the fair market
value of the shares at the time of exercise and the amount realized on the
disposition.
SARS
The recipient of a grant of SARs will not realize taxable income and
Sunrise will not be entitled to a federal income tax deduction with respect to
such grant on the date of such grant. Upon the exercise of an SAR, the recipient
will realize ordinary income, and Sunrise will generally be entitled to a
corresponding deduction, equal to the amount of cash received.
Restricted Stock
A participant holding restricted Sunrise Stock will, at the time the shares
vest, realize ordinary income in an amount equal to the fair market value of the
shares and any cash received at the time of vesting, and Sunrise will generally
be entitled to a corresponding deduction for federal income tax purposes.
Dividends paid to the participant on the restricted Sunrise Stock during the
restriction period will generally be ordinary income to the participant and
deductible as such by the Company.
16
<PAGE> 19
Performance Units, Performance Shares
The recipient of a grant of performance units or performance shares will
not realize taxable income and Sunrise will not be entitled to a deduction with
respect to such grant on the date of such grant. Upon the payout of such award,
the recipient will realize ordinary income and Sunrise will generally be
entitled to a corresponding deduction, equal to the amount of cash or stock
received.
Section 162(m)
Under Section 162(m) of the Code, compensation paid by Sunrise in excess of
$1,000,000 for any taxable year to "covered employees" generally is deductible
by Sunrise for federal income tax purposes if it is based on the performance of
Sunrise, is paid pursuant to a plan approved by Sunrise's stockholders, and
meets certain other requirements. Generally, "covered employees" under Section
162(m) of the Code means the chief executive officer and the four other highest
paid executive officers of Sunrise as of the last day of the taxable year.
It is presently anticipated that the Compensation Committee will at all
times consist of "outside directors" as required for purposes of Section 162(m)
of the Code, and that the Compensation Committee will take the effect of Section
162(m) of the Code into consideration in structuring ECP awards.
THE BOARD UNANIMOUSLY RECOMMENDS THE APPROVAL OF THE 1999 LONG-TERM EQUITY
COMPENSATION PLAN.
Vote Required. The affirmative vote of a majority of the votes cast,
excluding abstentions, at a meeting at which a quorum is present, is required to
adopt the foregoing proposal.
OTHER MATTERS
To the best of the knowledge, information and belief of the directors of
Sunrise, there are no other matters which are to be acted upon at the Annual
Meeting. If such matters arise, the form of proxy confers discretionary
authority on the proxy holders designated therein to vote with respect to such
matters.
STOCKHOLDER PROPOSALS
To be considered for inclusion in the Proxy Statement for the next annual
meeting of stockholders, proposals must be received by Sunrise no later than
January 3, 2000. Any such proposals should be directed to the Secretary of
Sunrise.
By Order of the Board
[KOENIG SIG]
Joseph D. Koenig
Chairman of the Board
17
<PAGE> 20
ANNEX A
SUNRISE TECHNOLOGIES INTERNATIONAL, INC.
1999 LONG-TERM
EQUITY COMPENSATION PLAN
AMENDED AND RESTATED AS OF APRIL 6, 1999
<PAGE> 21
SUNRISE TECHNOLOGIES INTERNATIONAL, INC.
1999 LONG-TERM EQUITY COMPENSATION PLAN
AMENDED AND RESTATED AS OF APRIL 6, 1999
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
Article 1. Establishment, Objectives and Duration...................... A-1
Article 2. Definitions................................................. A-1
Article 3. Administration.............................................. A-3
Article 4. Shares Subject to the Plan and Maximum Awards............... A-3
Article 5. Eligibility and Participation............................... A-4
Article 6. Stock Options............................................... A-4
Article 7. Stock Appreciation Rights................................... A-6
Article 8. Restricted Stock............................................ A-7
Article 9. Performance Units and Performance Shares.................... A-8
Article 10. Performance Measures........................................ A-9
Article 11. Beneficiary Designation..................................... A-9
Article 12. Deferrals................................................... A-10
Article 13. Retention Rights............................................ A-10
Article 14. Amendment, Modification, Termination and Adjustments........ A-10
Article 15. Payment of Plan Awards and Conditions Thereon............... A-11
Article 16. Change in Control........................................... A-11
Article 17. Withholding................................................. A-12
Article 18. Indemnification............................................. A-12
Article 19. Successors.................................................. A-13
Article 20. Legal Construction.......................................... A-13
</TABLE>
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ARTICLE 1.
ESTABLISHMENT, OBJECTIVES AND DURATION
1.1. Establishment of the Plan. Sunrise Technologies International, Inc., a
Delaware corporation (hereinafter referred to as the "Company"), hereby amends
and restates its incentive compensation plan to be known as the "Sunrise
Technologies International, Inc. 1999 Long-Term Equity Compensation Plan"
(hereinafter referred to as the "Plan"), as set forth in this document. The Plan
permits the grant of Nonqualified Stock Options, Incentive Stock Options, Stock
Appreciation Rights, Restricted Stock, Performance Shares and Performance Units.
Subject to approval by the Company's stockholders, the Plan shall become
effective as of April 6, 1999 (the "Effective Date") and shall remain in effect
as provided in Section 1.3 hereof.
1.2. Objectives of the Plan. The objectives of the Plan are to optimize the
profitability and growth of the Company through incentives which are consistent
with the Company's goals and which link the personal interests of Participants
to those of the Company's stockholders; to provide Participants with an
incentive for excellence in individual performance; and to promote teamwork
among Participants.
The Plan is further intended to provide flexibility to the Company in its
ability to motivate, attract and retain the services of Participants who make
significant contributions to the Company's success and to allow Participants to
share in the success of the Company.
1.3. Duration of the Plan. The Plan shall commence on the Effective Date,
as described in Section 1.1 hereof, and shall remain in effect, subject to the
right of the Board of Directors to amend or terminate the Plan at any time
pursuant to Article 14 hereof, until all Shares subject to it shall have been
purchased or acquired according to the Plan's provisions. However, in no event
may an Award be granted under the Plan on or after March 19, 2009.
ARTICLE 2.
DEFINITIONS
Whenever used in the Plan, the following terms shall have the meanings set
forth below, and when the meaning is intended, the initial letter of the word
shall be capitalized:
2.1. "Affiliate" shall have the meaning ascribed to such term in Rule 12b-2
of the General Rules and Regulations of the Exchange Act.
2.2. "Award" means, individually or collectively, a grant under this Plan
of Nonqualified Stock Options, Incentive Stock Options, Stock Appreciation
Rights, Restricted Stock, Performance Shares or Performance Units.
2.3. "Award Agreement" means an agreement entered into by the Company and
each Participant setting forth the terms and provisions applicable to Awards
granted under this Plan.
2.4. "Beneficial Owner" or "Beneficial Ownership" shall have the meaning
ascribed to such terms in Rule 13d-3 of the General Rules and Regulations under
the Exchange Act.
2.5. "Board" or "Board of Directors" means the Board of Directors of the
Company.
2.6. "Code" means the Internal Revenue Code of 1986, as amended from time
to time.
2.7. "Committee" means any committee appointed by the Board to administer
the Plan, as specified in Article 3 herein.
2.8. "Company" means Sunrise Technologies International, Inc., a Delaware
corporation, including any and all Subsidiaries and Affiliates, and any
successor thereto as provided in Article 19 herein.
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2.9. "Consultant" means a consultant or advisor who provides bona fide
services to the Company as an independent contractor. Service as a Consultant
shall be considered employment for all purposes of the Plan, except for purposes
of an ISO grant under Article 6.
2.10. "Covered Employee" means a Participant who, as of the date of vesting
and/or payout of an Award, as applicable, is one of the group of "covered
employees," as defined in the regulations promulgated under Code Section 162(m),
or any successor statute.
2.11. "Director" means any individual who is a member of the Board of
Directors of the Company or any Subsidiary or Affiliate.
2.12. "Disability" shall have the meaning ascribed to such term in the
Participant's governing long-term disability plan, or if no such plan exists, at
the discretion of the Committee.
2.13. "Effective Date" shall have the meaning ascribed to such term in
Section 1.1 hereof.
2.14. "Employee" means any full-time, active employee of the Company or its
Subsidiaries or Affiliates. Directors or Consultants who are not employed by the
Company shall not be considered Employees under this Plan.
2.15. "Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, or any successor act thereto.
2.16. "Fair Market Value" shall be determined on the basis of the closing
sale price at which Shares have been sold regular way on the principal
securities exchange on which the Shares are traded or, if there is no such sale
on the relevant date, then on the last previous day on which there was such a
sale.
2.17. "Freestanding SAR" means an SAR that is granted independently of any
Options, as described in Article 7 herein.
2.18. "Incentive Stock Option" or "ISO" means an option to purchase Shares
granted under Article 6 herein and which is designated as an Incentive Stock
Option and which is intended to meet the requirements of Code Section 422.
2.19. "Insider" shall mean an individual who is, on the relevant date, an
officer, director or ten percent (10%) beneficial owner of any class of the
Company's equity securities that is registered pursuant to Section 12 of the
Exchange Act, all as defined under Section 16 of the Exchange Act.
2.20. "Non-Employee Director" shall mean a Director who is not also an
Employee. Service as a Non-Employee Director shall be considered employment for
all purposes of the Plan, except for purposes of an ISO grant under Article 6.
2.21. "Non-Qualified Stock Option" or "NQSO" means an option to purchase
Shares granted under Article 6 herein and which is not intended to meet the
requirements of Code Section 422.
2.22. "Option" means an Incentive Stock Option or a Nonqualified Stock
Option, as described in Article 6 herein.
2.23. "Option Price" means the price at which a Share may be purchased by a
Participant pursuant to an Option.
2.24. "Participant" means an Employee, Non-Employee Director or Consultant
who has been selected to receive an Award or who has outstanding an Award
granted under the Plan.
2.25. "Performance-Based Exception" means the performance-based exception
from the tax deductibility limitations of Code Section 162(m).
2.26. "Performance Share" means an Award granted to a Participant, as
described in Article 9 herein.
2.27. "Performance Unit" means an Award granted to a Participant, as
described in Article 9 herein.
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2.28. "Period of Restriction" means the period during which the transfer of
Shares of Restricted Stock is limited in some way (based on the passage of time,
the achievement of performance goals or upon the occurrence of other events as
determined by the Committee, at its discretion), and the Shares are subject to a
substantial risk of forfeiture, as provided in Article 8 herein.
2.29. "Person" shall have the meaning ascribed to such term in Section
3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d) thereof,
including a "group" as defined in Section 13(d) thereof.
2.30. "Restricted Stock" means an Award granted to a Participant pursuant
to Article 8 herein.
2.31. "Retirement" shall have the meaning ascribed to such term in the
Company's tax-qualified retirement plan.
2.32. "Shares" means the shares of common stock of the Company.
2.33. "Stock Appreciation Right" or "SAR" means an Award, granted alone or,
in connection with a related Option, designated as an SAR, pursuant to the terms
of Article 7 herein.
2.34. "Subsidiary" means any corporation, partnership, joint venture or
other entity in which the Company has a majority voting interest (including all
divisions, affiliates and related entities).
2.35. "Tandem SAR" means an SAR that is granted in connection with a
related Option pursuant to Article 7 herein, the exercise of which shall require
forfeiture of the right to purchase a Share under the related Option (and when a
Share is purchased under the Option, the Tandem SAR shall similarly be
canceled).
ARTICLE 3.
ADMINISTRATION
3.1. The Committee. The Plan shall be administered by the Compensation
Committee of the Board consisting of not less than two (2) Directors who meet
the "outside director" requirements of Rule 16b-3 promulgated by the Securities
and Exchange Commission under the Exchange Act and the requirements of Code
Section 162(m), or by any other committee appointed by the Board, provided the
members of such committee meet such requirements.
3.2. Authority of the Committee. Except as limited by law or by the
Certificate of Incorporation or Bylaws of the Company, and subject to the
provisions herein, the Committee shall have full power to select individuals who
shall participate in the Plan; determine the sizes and types of Awards;
determine the terms and conditions of Awards in a manner consistent with the
Plan; construe and interpret the Plan and any agreement or instrument entered
into under the Plan; establish, amend or waive rules and regulations for the
Plan's administration; and (subject to the provisions of Article 14 herein)
amend the terms and conditions of any outstanding Award to the extent such terms
and conditions are within the discretion of the Committee as provided in the
Plan. Further, the Committee shall make all other determinations which may be
necessary or advisable for the administration of the Plan. As permitted by law,
the Committee may delegate its authority as identified herein.
3.3. Decisions Binding. All determinations and decisions made by the
Committee pursuant to the provisions of the Plan and all related orders and
resolutions of the Board shall be final, conclusive and binding on all persons,
including the Company, its stockholders, Employees, Participants and their
estates and beneficiaries.
ARTICLE 4.
SHARES SUBJECT TO THE PLAN AND MAXIMUM AWARDS
4.1. Number Of Shares Available For Grants. Subject to Sections 4.2 and 4.3
herein, the maximum number of Shares with respect to which Awards may be granted
to Participants under the Plan shall be two
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million one hundred thousand (2,100,000). Shares issued under the Plan may be
either authorized but unissued Shares, treasury Shares or any combination
thereof.
Unless and until the Committee determines that an Award to a Covered
Employee shall not be designed to comply with the Performance-Based Exception,
the following rules shall apply to grants of such Awards under the Plan, subject
to Sections 4.2 and 4.3.
(a) Stock Options and SARS: The maximum aggregate number of Shares
that may be subject to Stock Options, with or without Tandem SARs, or
Freestanding SARs, granted in any one fiscal year to any one Participant
shall be one million (1,000,000).
(b) Restricted Stock: The maximum aggregate grant with respect to
Awards of Restricted Stock which are intended to qualify for the
Performance-Based Exception, and which are granted in any one fiscal year
to any one Participant shall be two hundred thousand (200,000) Shares.
(c) Performance Shares/Performance Units: The maximum aggregate payout
(determined as of the end of the applicable performance period) with
respect to Awards of Performance Shares or Performance Units which are
intended to comply with the Performance-Based Exception, and which are
granted in any one fiscal year to any one Participant shall be equal to the
Fair Market Value of two hundred thousand (200,000) Shares.
4.2. Lapsed Awards. If any Award granted under this Plan is canceled,
terminates, expires or lapses for any reason (with the exception of the
termination of a Tandem SAR upon exercise of the related Option, or the
termination of a related Option upon exercise of the corresponding Tandem SAR),
any Shares subject to such Award again shall be available for the grant of an
Award under the Plan. The foregoing notwithstanding, the aggregate number of
Shares that may be issued under the Plan upon the exercise of ISOs shall not be
increased when Restricted Stock or other Shares are forfeited.
4.3. Adjustments. In the event of any change in corporate capitalization
such as a stock split, or a corporate transaction such as any merger,
consolidation, separation, including a spin-off, or other distribution of stock
or property of the Company, any reorganization (whether or not such
reorganization comes within the definition of such term in Code Section 368) or
any partial or complete liquidation of the Company, such adjustment shall be
made in the number and class of Shares which may be delivered under Section 4.1,
in the number and class of and/or price of Shares subject to outstanding Awards
granted under the Plan, and in the Award limits set forth in subsections 4.1(a),
4.l(b) and 4.l(c), as may be determined to be appropriate and equitable by the
Committee, in its sole discretion, to prevent dilution or enlargement of rights;
provided, however, that the number of Shares subject to any Award shall always
be a whole number.
ARTICLE 5.
ELIGIBILITY AND PARTICIPATION
5.1. Eligibility. Persons eligible to participate in this Plan include
Consultants, Non-Employee Directors and officers and certain key salaried
Employees of the Company with potential to contribute to the success of the
Company or its Subsidiaries, including Employees who are members of the Board.
5.2. Actual Participation. Subject to the provisions of the Plan, the
Committee may, from time to time, select from all eligible Participants those to
whom Awards shall be granted, and shall determine the nature and amount of each
Award.
ARTICLE 6.
STOCK OPTIONS
6.1. Grant of Options. Subject to the terms and provisions of the Plan,
Options may be granted to Participants in such number, and upon such terms, and
at any time and from time to time as shall be determined by the Committee.
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6.2. Award Agreement. Each Option grant shall be evidenced by an Award
Agreement that shall specify the Option Price, the duration of the Option, the
number of Shares to which the Option pertains, and such other provisions as the
Committee shall determine. The Award Agreement also shall specify whether the
Option is intended to be an ISO within the meaning of Code Section 422, or an
NQSO, whose grant is intended not to fall under the provisions of Code Section
422.
6.3. Option Price. The Option Price for each grant of an Option under this
Plan shall be at least equal to one hundred percent (100%) of the Fair Market
Value of a Share on the date the Option is granted.
6.4. Duration of Options. Each Option granted to a Participant shall expire
at such time as the Committee shall determine at the time of grant; provided,
however, that no Option shall be exercisable later than the tenth anniversary
date of its grant and provided further that no Option shall be exercisable later
than the fifth anniversary date of its grant for an ISO granted to a
Participant, who at the time of such grant, owns stock possessing more than ten
percent (10%) of the total combined voting power of all classes of stock of the
Company.
6.5. Exercise of Options. Options granted under this Article 6 shall be
exercisable at such times and be subject to such restrictions and conditions as
the Committee shall in each instance approve, which need not be the same for
each grant or for each Participant.
6.6. Payment. Options granted under this Article 6 shall be exercised by
the delivery of a written notice of exercise to the Company, setting forth the
number of Shares with respect to which the Option is to be exercised,
accompanied by full payment for the Shares.
The Option Price upon exercise of any Option shall be payable to the
Company in full in a form as determined by the Committee either: (a) in cash or
its equivalent; (b) by tendering previously acquired Shares having an aggregate
Fair Market Value at the time of exercise equal to the total Option Price
(provided that the Shares which are tendered must have been held by the
Participant for at least six (6) months prior to their tender to satisfy the
Option Price); (c) by withholding Shares which otherwise would be acquired on
exercise having an aggregate Fair Market Value at the time of exercise equal to
the total Option Price; (d) by promissory note of the Participant; or (e) by any
combination of the foregoing methods of payment.
The Committee may also allow cashless exercise as permitted under Federal
Reserve Board's Regulation T, subject to applicable securities law restrictions,
or by any other means which the Committee determines to be consistent with the
Plan's purpose and applicable law.
Subject to any governing rules or regulations, as soon as practicable after
receipt of a written notification of exercise and full payment, the Company
shall deliver to the Participant, in the Participant's name, Share certificates
in an appropriate amount based upon the number of Shares purchased under the
Option(s).
6.7. Restrictions on Share Transferability. The Committee may impose such
restrictions on any Shares acquired pursuant to the exercise of an Option
granted under this Article 6 as it may deem advisable, including, without
limitation, restrictions under applicable federal securities laws, under the
requirements of any stock exchange or market upon which such Shares are then
listed and/or traded, and under any blue sky or state securities laws applicable
to such Shares.
6.8. Termination of Employment or Consulting Arrangement. Each Option Award
Agreement shall set forth the extent to which the Participant shall have the
right to exercise the Option following termination of the Participant's
employment or consulting arrangement with the Company. Such provisions shall be
determined in the sole discretion of the Committee, shall be included in the
Award Agreement entered into with each Participant, need not be uniform among
all Options issued pursuant to this Article 6, and may reflect distinctions
based on the reasons for termination of employment.
6.9. Nontransferability of Options.
(a) Incentive Stock Options. No ISO granted under the Plan may be
sold, transferred, pledged, assigned or otherwise alienated or
hypothecated, other than by will or by the laws of descent and
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distribution. Further, all ISOs granted to a Participant under the Plan
shall be exercisable during his or her lifetime only by such Participant or
the Participant's legal representative (to the extent permitted under Code
Section 422).
(b) Nonqualified Stock Options. Except as otherwise provided in a
Participant's Award Agreement, no NQSO granted under this Article 6 may be
sold, transferred, pledged, assigned or otherwise alienated or
hypothecated, other than by will or by the laws of descent and
distribution. Further, except as otherwise provided in a Participant's
Award Agreement, all NQSOs granted to a Participant under this Article 6
shall be exercisable during his or her lifetime only by such Participant or
the Participant's legal representative.
ARTICLE 7.
STOCK APPRECIATION RIGHTS
7.1. Grant of Sars. Subject to the terms and conditions of the Plan, SARs
may be granted to Participants at any time and from time to time as shall be
determined by the Committee. The Committee may grant Freestanding SARs, Tandem
SARs or any combination of these forms of SAR.
The Committee shall have complete discretion in determining the number of
SARs granted to each Participant (subject to Article 4 herein) and, consistent
with the provisions of the Plan, in determining the terms and conditions
pertaining to such SARs.
The grant price of a Freestanding SAR shall equal the Fair Market Value of
a Share on the date of grant of the SAR. The grant price of Tandem SARs shall
equal the Option Price of the related Option.
7.2. Exercise of Tandem SARs. Tandem SARs may be exercised for all or part
of the Shares subject to the related Option upon the surrender of the right to
exercise the equivalent portion of the related Option. A Tandem SAR may be
exercised only with respect to the Shares for which its related Option is then
exercisable.
Notwithstanding any other provision of this Plan to the contrary, with
respect to a Tandem SAR granted in connection with an ISO: (i) the Tandem SAR
will expire no later than the expiration of the underlying ISO; (ii) the value
of the payout with respect to the Tandem SAR may be for no more than one hundred
percent (100%) of the difference between the Option Price of the underlying ISO
and the Fair Market Value of the Shares subject to the underlying ISO at the
time the Tandem SAR is exercised; and (iii) the Tandem SAR may be exercised only
when the Fair Market Value of the Shares subject to the ISO exceeds the Option
Price of the ISO.
7.3. Exercise of Freestanding SARs. Freestanding SARs may be exercised upon
whatever terms and conditions the Committee, in its sole discretion, imposes
upon them.
7.4. SAR Agreement. Each SAR grant shall be evidenced by an Award Agreement
that shall specify the grant price, the term of the SAR, and such other
provisions as the Committee shall determine.
7.5. Term of SARs. The term of an SAR granted under the Plan shall be
determined by the Committee, in its sole discretion; provided, however, that
such term shall not exceed ten years.
7.6. Payment of SAR Amount. Upon exercise of an SAR, a Participant shall be
entitled to receive payment from the Company in an amount determined by
multiplying:
(a) the difference between the Fair Market Value of a Share on the
date of exercise over the grant price; by
(b) the number of Shares with respect to which the SAR is exercised.
At the discretion of the Committee, the payment upon SAR exercise may be in
cash, in Shares of equivalent value or in some combination thereof. The
Committee's determination regarding the form of SAR payout shall be set forth in
the Award Agreement pertaining to the grant of the SAR.
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7.7. Termination of Employment or Consulting Arrangement. Each SAR Award
Agreement shall set forth the extent to which the Participant shall have the
right to exercise the SAR following termination of the Participant's employment
or consulting arrangement with the Company and/or its Subsidiaries. Such
provisions shall be determined in the sole discretion of the Committee, shall be
included in the Award Agreement entered into with Participants, need not be
uniform among all SARs issued pursuant to the Plan and may reflect distinctions
based on the reasons for termination of employment.
7.8. Nontransferability of SARs. Except as otherwise provided in a
Participant's Award Agreement, no SAR granted under the Plan may be sold,
transferred, pledged, assigned or otherwise alienated or hypothecated, other
than by will or by the laws of descent and distribution. Further, except as
otherwise provided in a Participant's Award Agreement, all SARs granted to a
Participant under the Plan shall be exercisable during his or her lifetime only
by such Participant or the Participant's legal representative.
ARTICLE 8.
RESTRICTED STOCK
8.1. Grant of Restricted Stock. Subject to the terms and provisions of the
Plan, the Committee, at any time and from time to time, may grant Shares of
Restricted Stock to Participants in such amounts as the Committee shall
determine.
8.2. Restricted Stock Agreement. Each Restricted Stock grant shall be
evidenced by a Restricted Stock Award Agreement that shall specify the Period(s)
of Restriction, the number of Shares of Restricted Stock granted and such other
provisions as the Committee shall determine.
8.3. Transferability. Except as provided in this Article 8, the Shares of
Restricted Stock granted under the Plan may not be sold, transferred, pledged,
assigned or otherwise alienated or hypothecated until the end of the applicable
Period of Restriction established by the Committee and specified in the
Restricted Stock Award Agreement, or upon earlier satisfaction of any other
conditions, as specified by the Committee in its sole discretion and set forth
in the Restricted Stock Award Agreement. All rights with respect to the
Restricted Stock granted to a Participant under the Plan shall be available
during his or her lifetime only to such Participant or the Participant's legal
representative.
8.4. Other Restrictions. Subject to Article 10 herein, the Committee shall
impose such other conditions and/or restrictions on any Shares of Restricted
Stock granted pursuant to the Plan as it may deem advisable including, without
limitation, a requirement that Participants pay a stipulated purchase price for
each Share of Restricted Stock, restrictions based upon the achievement of
specific performance goals (Company-wide, divisional and/or individual),
time-based restrictions on vesting following the attainment of the performance
goals and/or restrictions under applicable federal or state securities laws.
The Company may retain the certificates representing Shares of Restricted
Stock in the Company's possession until such time as all conditions and/or
restrictions applicable to such Shares have been satisfied.
Except as otherwise provided in this Article 8, Shares of Restricted Stock
covered by each Restricted Stock grant made under the Plan shall become freely
transferable by the Participant after the last day of the applicable Period of
Restriction.
8.5. Voting Rights. Participants holding Shares of Restricted Stock granted
hereunder may be granted the right to exercise full voting rights with respect
to those Shares during the Period of Restriction.
8.6. Dividends and Other Distributions. During the Period of Restriction,
Participants holding Shares of Restricted Stock granted hereunder may be
credited with regular cash dividends paid with respect to the underlying Shares
while they are so held. The Committee may apply any restrictions to the
dividends that the Committee deems appropriate. Without limiting the generality
of the preceding sentence, if the grant or vesting of Restricted Shares granted
to a Covered Employee is designed to comply with the requirements of the
Performance-Based Exception, the Committee may apply any restrictions it deems
appropriate to the
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payment of dividends declared with respect to such Restricted Shares, such that
the dividends and/or the Restricted Shares maintain eligibility for the
Performance-Based Exception.
8.7. Termination of Employment or Consulting Arrangement. Each Restricted
Stock Award Agreement shall set forth the extent to which the Participant shall
have the right to receive unvested Restricted Shares following termination of
the Participant's employment or consulting arrangement with the Company. Such
provisions shall be determined in the sole discretion of the Committee, shall be
included in the Award Agreement entered into with each Participant, need not be
uniform among all Shares of Restricted Stock issued pursuant to the Plan and may
reflect distinctions based on the reasons for termination of employment;
provided, however, that except in the cases of terminations by reason of death
or Disability, the vesting of Shares of Restricted Stock which qualify for the
Performance-Based Exception and which are held by Covered Employees shall occur
at the time they otherwise would have, but for the employment termination.
ARTICLE 9.
PERFORMANCE UNITS AND PERFORMANCE SHARES
9.1. Grant of Performance Units/Shares. Subject to the terms of the Plan,
Performance Units and/or Performance Shares may be granted to Participants in
such amounts and upon such terms, and at any time and from time to time, as
shall be determined by the Committee.
9.2. Value of Performance Units/Shares. Each Performance Unit shall have an
initial value that is established by the Committee at the time of grant. Each
Performance Share shall have an initial value equal to the Fair Market Value of
a Share on the date of grant. The Committee shall set performance goals in its
discretion which, depending on the extent to which they are met, will determine
the number and/or value of Performance Units/Shares that will be paid out to the
Participant. For purposes of this Article 9, the time period during which the
performance goals must be met shall be called a "Performance Period."
9.3. Earning of Performance Units/Shares. Subject to the terms of this
Plan, after the applicable Performance Period has ended, the holder of
Performance Units/Shares shall be entitled to receive payout on the number and
value of Performance Units/Shares earned by the Participant over the Performance
Period, to be determined as a function of the extent to which the corresponding
performance goals have been achieved.
9.4. Form and Timing of Payment of Performance Units/Shares. Payment of
earned Performance Units/Shares shall be made in a single lump sum following the
close of the applicable Performance Period. Subject to the terms of this Plan,
the Committee, in its sole discretion, may pay earned Performance Units/ Shares
in the form of cash or in Shares (or in a combination thereof) which have an
aggregate Fair Market Value equal to the value of the earned Performance
Units/Shares at the close of the applicable Performance Period. Such Shares may
be granted subject to any restrictions deemed appropriate by the Committee. The
determination of the Committee with respect to the form of payout of such Awards
shall be set forth in the Award Agreement pertaining to the grant of the Award.
At the discretion of the Committee, Participants may be entitled to receive
any dividends declared with respect to Shares which have been earned in
connection with grants of Performance Units and/or Performance Shares, but not
yet distributed to Participants (such dividends shall be subject to the same
accrual, forfeiture and payout restrictions as apply to dividends earned with
respect to Shares of Restricted Stock, as set forth in Section 8.6 herein). In
addition, Participants may, at the discretion of the Committee, be entitled to
exercise their voting rights with respect to such Shares.
9.5. Termination of Employment or Consulting Arrangement Due to Death,
Disability or Retirement. Unless determined otherwise by the Committee and set
forth in the Participant's Award Agreement, in the event the employment or
consulting arrangement of the Participant is terminated by reason of death,
Disability or Retirement during a Performance Period, the Participant shall
receive a payout of the Performance Units/Shares which is prorated, as specified
by the Committee in its discretion.
Payment of earned Performance Units/Shares shall be made at a time
specified by the Committee in its sole discretion and set forth in the
Participant's Award Agreement. Notwithstanding the foregoing, with
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respect to Covered Employees who retire during a Performance Period, payments
shall be made at the same time as payments are made to Participants who did not
terminate employment during the applicable Performance Period.
9.6. Termination of Employment or Consulting Arrangement for Other
Reasons. In the event the Participant's employment or consulting arrangement
terminates for any reason other than those reasons set forth in Section 9.5
herein, all Performance Units/Shares shall be forfeited by the Participant to
the Company unless determined otherwise by the Committee, as set forth in the
Participant's Award Agreement.
9.7. Nontransferability. Except as otherwise provided in a Participant's
Award Agreement, Performance Units/Shares may not be sold, transferred, pledged,
assigned or otherwise alienated or hypothecated, other than by will or by the
laws of descent and distribution. Further, except as otherwise provided in a
Participant's Award Agreement, a Participant's rights under the Plan shall be
exercisable during the Participant's lifetime only by the Participant or the
Participant's legal representative.
ARTICLE 10.
PERFORMANCE MEASURES
Unless and until the Committee proposes for stockholder vote and
stockholders approve a change in the general performance measures set forth in
this Article 10, the attainment of which may determine the degree of payout
and/or vesting with respect to Awards to Covered Employees which are designed to
qualify for the Performance-Based Exception, the performance measure(s) to be
used for purposes of such grants shall be chosen from among net income either
before or after taxes, market share, customer satisfaction, profits, share
price, earnings per share, total stockholder return, return on assets, return on
equity, operating income, return on capital or investments, or economic value
added (including, but not limited to, any or all of such measures in comparison
to the Company's competitors, the industry or some other comparator group).
The Committee shall have the discretion to adjust the determinations of the
degree of attainment of the preestablished performance goals; provided, however,
that Awards which are designed to qualify for the Performance-Based Exception,
and which are held by Covered Employees, may not be adjusted upward (the
Committee shall retain the discretion to adjust such Awards downward).
In the event that applicable tax and/or securities laws change to permit
Committee discretion to alter the governing performance measures without
obtaining stockholder approval of such changes, the Committee shall have sole
discretion to make such changes without obtaining stockholder approval. In
addition, in the event that the Committee determines that it is advisable to
grant Awards which shall not qualify for the Performance-Based Exception, the
Committee may make such grants without satisfying the requirements of Code
Section 162(m).
ARTICLE 11.
BENEFICIARY DESIGNATION
Each Participant under the Plan may, from time to time, name any
beneficiary or beneficiaries (who may be named contingently or successively) to
whom any benefit under the Plan is to be paid in case of his or her death before
he or she receives any or all of such benefit. Each such designation shall
revoke all prior designations by the same Participant, shall be in a form
prescribed by the Company, and will be effective only when filed by the
Participant in writing with the Company during the Participant's lifetime. In
the absence of any such designation, the Participant's beneficiary shall be paid
to the Participant's estate.
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ARTICLE 12.
DEFERRALS
The Committee may permit or require a Participant to defer such
Participant's receipt of the payment of cash or the delivery of Shares that
would otherwise be due to such Participant by virtue of the exercise of an
Option or SAR, the lapse or waiver of restrictions with respect to Restricted
Stock, or the satisfaction of any requirements or goals with respect to
Performance Units/Shares. If any such deferral election is required or
permitted, the Committee shall, in its sole discretion, establish rules and
procedures for such payment deferrals.
ARTICLE 13.
RETENTION RIGHTS
13.1. Employment. Nothing in the Plan shall interfere with or limit in any
way the right of the Company to terminate the services of any Participant at any
time, nor confer upon any Participant any right to continue as an Employee,
Non-Employee Director or Consultant.
13.2. Participation. No Participant shall have the right to be selected to
receive an Award under this Plan or, having been so selected, to be selected to
receive a future Award.
ARTICLE 14.
AMENDMENT, MODIFICATION, TERMINATION AND ADJUSTMENTS
14.1. Amendment, Modification, and Termination. Subject to the terms of the
Plan, the Board, upon recommendation of the Committee, may at any time and from
time to time, alter, amend, suspend or terminate the Plan in whole or in part.
14.2. Adjustment of Awards Upon the Occurrence of Certain Unusual or
Nonrecurring Events. The Committee may make adjustments in the terms and
conditions of, and the criteria included in, Awards in recognition of unusual or
nonrecurring events (including, without limitation, the events described in
Section 4.3 hereof) affecting the Company or the financial statements of the
Company or of changes in applicable laws, regulations or accounting principles,
whenever the Committee determines that such adjustments are appropriate in order
to prevent dilution or enlargement of the benefits or potential benefits
intended to be made available under the Plan; provided that unless the Committee
determines otherwise, no such adjustment shall be authorized to the extent that
such authority would be inconsistent with the Plan or Awards meeting the
requirements of Code Section 162(m), as from time to time amended.
14.3. Awards Previously Granted. Notwithstanding any other provision of the
Plan to the contrary (but subject to Section 14.2 hereof), no termination,
amendment or modification of the Plan shall adversely affect in any material way
any Award previously granted under the Plan without the written consent of the
Participant holding such Award.
14.4. Compliance With Code Section 162(m). At all times when Code
Section 162(m) is applicable, all Awards granted under this Plan shall comply
with the requirements of Code Section 162(m); provided, however, that in the
event the Committee determines that such compliance is not desired with respect
to any Award or Awards available for grant under the Plan, then compliance with
Code Section 162(m) will not be required. In addition, in the event that changes
are made to Code Section 162(m) to permit greater flexibility with respect to
any Award or Awards available under the Plan, the Committee may, subject to this
Article 14, make any adjustments it deems appropriate.
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ARTICLE 15.
PAYMENT OF PLAN AWARDS AND CONDITIONS THEREON
15.1. Effect of Competitive Activity. Anything contained in the Plan to the
contrary notwithstanding, if the employment of any Participant who is an
Employee shall terminate, for any reason other than death, while any Award to
such Participant is outstanding hereunder, and such Participant has not yet
received the Shares covered by such Award or otherwise received the full benefit
of such Award, such Participant, if otherwise entitled thereto, shall receive
such Shares or benefit only if, during the entire period from the date of such
Participant's termination to the date of such receipt, such Participant shall
have earned out such Award by: (i) making himself or herself available, upon
request, at reasonable times and upon a reasonable basis, to consult with,
supply information to, and otherwise cooperate with the Company or any
Subsidiary or Affiliate thereof with respect to any matter that shall have been
handled by him or her or under his or her supervision while he or she was in the
employ of the Company or of any Subsidiary or Affiliate thereof; and (ii)
refraining from engaging in any activity that is directly or indirectly in
competition with any activity of the Company or any Subsidiary or Affiliate
thereof.
15.2. Nonfulfillment of Competitive Activity Conditions; Waivers Under the
Plan. In the event of a Participant's nonfulfillment of any condition set forth
in Section 15.1 hereof, such Participant's rights under any Award shall be
forfeited and canceled forthwith; provided, however, that the nonfulfillment of
such condition may at any time (whether before, at the time of, or subsequent to
termination of employment) be waived by the Committee upon its determination
that in its sole judgment there shall not have been and will not be any
substantial adverse effect upon the Company or any Subsidiary or Affiliate
thereof by reason of the nonfulfillment of such condition.
15.3. Effect of Inimical Conduct. Anything contained in the Plan to the
contrary notwithstanding, all rights of a Participant under any Award shall
cease on and as of the date on which it has been determined by the Committee
that such Participant at any time (whether before or subsequent to termination
of such Participant's employment in the case of a Participant who is an
Employee) acted in manner inimical to the best interests of the Company or any
Subsidiary or Affiliate thereof.
ARTICLE 16.
CHANGE IN CONTROL
16.1. Definition. For purposes of this Plan, a "Change in Control" of the
Company is deemed to have occurred as of the first day that any one or more of
the following conditions shall have been satisfied:
(a) the "Beneficial Ownership" of securities representing more than
thirty-three percent (33%) of the combined voting power of the Company is
acquired by any "person" as defined in Section 13(d) and 14(d) of the
Exchange Act (other than the Company, any trustee or other fiduciary
holding securities under an employee benefit plan of the Company, or any
corporation owned, directly or indirectly, by the stockholders of the
Company in substantially the same proportions as their ownership of stock
of the Company); or
(b) the stockholders of the Company approve a definitive agreement to
merge or consolidate the Company with or into another corporation or to
sell or otherwise dispose of all or substantially all of its assets, or
adopt a plan of liquidation; or
(c) during any period of three (3) consecutive years, individuals who
at the beginning of such period were members of the Board cease for any
reason to constitute at least a majority thereof (unless the election, or
the nomination for election by the Company's stockholders, of each new
director was approved by a vote of at least a majority of the directors
then still in office who were directors at the beginning of such period or
whose election or nomination was previously so approved).
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<PAGE> 33
16.2. Treatment of Outstanding Awards. Subject to Section 16.3 herein, upon
the occurrence of a Change in Control:
(a) any and all Options and SARs granted hereunder shall become
immediately exercisable and shall remain exercisable throughout their
entire term;
(b) any restriction periods and restrictions imposed on Restricted
Stock which are not performance-based shall lapse; and
(c) the target payout opportunities attainable under all outstanding
Awards of performance-based Restricted Stock, Performance Units and
Performance Shares shall be deemed to have been fully earned for the entire
Performance Period(s) as of the effective date of the Change in Control.
The vesting of all Awards denominated in Shares shall be accelerated as of
the effective date of the Change in Control, and there shall be paid out to
Participants within thirty (30) days following the effective date of the
Change in Control a pro rata number of Shares (or their cash equivalents)
based upon an assumed achievement of all relevant targeted performance
goals and upon the length of time within the Performance Period which has
elapsed prior to the Change in Control. Awards denominated in cash shall be
paid pro rata to Participants in cash within thirty (30) days following the
effective date of the Change in Control, with the proration determined as a
function of the length of time within the Performance Period which has
elapsed prior to the Change in Control, and based on an assumed achievement
of all relevant targeted performance goals.
16.3. Termination, Amendment and Modifications of Change-in-Control
Provisions. Notwithstanding any other provision of the Plan or any Award
Agreement provision, the provisions of this Article 16 may not be terminated,
amended or modified on or after the date of an event which is likely to give
rise to a Change in Control to affect adversely any Award theretofore granted
under the Plan without the prior written consent of the Participant with respect
to said Participant's outstanding Awards.
16.4. Pooling of Interest Accounting. Notwithstanding anything contained in
the Plan to the contrary, in the event that the consummation of a Change in
Control is contingent on using pooling of interests accounting methodology, the
Board may, in its discretion, take any action necessary to preserve the use of
pooling of interests accounting.
ARTICLE 17.
WITHHOLDING
17.1. Tax Withholding. The Company shall have the power and the right to
deduct or withhold, or require a Participant to remit to the Company, an amount
sufficient to satisfy federal, state and local taxes, domestic or foreign,
required by law or regulation to be withheld with respect to any taxable event
arising as a result of this Plan.
17.2. Share Withholding. With respect to withholding required upon the
exercise of Options or SARs, upon the lapse of restrictions on Restricted Stock,
or upon any other taxable event arising as a result of Awards granted hereunder,
Participants may elect, subject to the approval of the Committee, to satisfy the
withholding requirement, in whole or in part, by having the Company withhold
Shares having a Fair Market Value on the date the tax is to be determined equal
to the minimum statutory total tax which could be imposed on the transaction.
All such elections shall be irrevocable, made in writing, and signed by the
Participant, and shall be subject to any restrictions or limitations that the
Committee, in its sole discretion, deems appropriate.
ARTICLE 18.
INDEMNIFICATION
Each person who is or shall have been a member of the Committee, or of the
Board, shall be indemnified and held harmless by the Company against and from
any loss, cost, liability or expense that may be imposed upon or reasonably
incurred by him or her in connection with or resulting from any claim, action,
suit or
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<PAGE> 34
proceeding to which he or she may be a party or in which he or she may be
involved by reason of any action taken or failure to act under the Plan and
against and from any and all amounts paid by him or her in settlement thereof,
with the Company's approval, or paid by him or her in satisfaction of any
judgment in any such action, suit or proceeding against him or her, provided he
or she shall give the Company an opportunity, at its own expense, to handle and
defend the same before he or she undertakes to handle and defend it on his or
her own behalf. The foregoing right of indemnification shall not be exclusive of
any other rights of indemnification to which such persons may be entitled under
the Company's Certificate of Incorporation or Bylaws, as a matter of law or
otherwise, or any power that the Company may have to indemnify them or hold them
harmless.
ARTICLE 19.
SUCCESSORS
All obligations of the Company under the Plan with respect to Awards
granted hereunder shall be binding on any successor to the Company, whether the
existence of such successor is the result of a direct or indirect purchase,
merger, consolidation or otherwise, of all or substantially all of the business
or assets of the Company.
ARTICLE 20.
LEGAL CONSTRUCTION
20.1. Gender and Number. Except where otherwise indicated by the context,
any masculine term used herein also shall include the feminine, the plural shall
include the singular, and the singular shall include the plural.
20.2. Severability. In the event any provision of the Plan shall be held
illegal or invalid for any reason, the illegality or invalidity shall not affect
the remaining parts of the Plan, and the Plan shall be construed and enforced as
if the illegal or invalid provision had not been included.
20.3. Requirements of Law. The granting of Awards and the issuance of
Shares under the Plan shall be subject to all applicable laws, rules and
regulations, and to such approvals by any governmental agencies or national
securities exchanges as may be required.
20.4. Securities Law Compliance. With respect to Insiders, transactions
under this Plan are intended to comply with all applicable conditions of Rule
16b-3 or its successors under the Exchange Act. To the extent any provision of
the Plan or action by the Committee fails to so comply, it shall be deemed null
and void, to the extent permitted by law and deemed advisable by the Committee.
20.5. Governing Law. To the extent not preempted by federal law, the Plan,
and all agreements hereunder, shall be construed in accordance with and governed
by the laws of the State of California.
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<PAGE> 35
PROXY
SUNRISE TECHNOLOGIES INTERNATIONAL, INC.
3400 WEST WARREN AVENUE
FREMONT, CA 94538
510-623-9001
This Proxy is solicited on behalf of the Board of Directors
for the Annual Meeting of Stockholders to be held
April 30, 1999
The undersigned hereby appoints C. Russell Trenary, III and Eric M.
Fogel 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. (the "Company") which the undersigned may be
entitled to vote at the Annual Meeting of Stockholders of the Company to be held
at the Newark-Fremont Hilton Hotel, 39900 Balentine Drive, Newark, California
94560 on April 30, 1999, 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 present, 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> 36
UNLESS A CONTRARY DIRECTION IS INDICATED, THIS PROXY WILL BE VOTED FOR THE
NOMINEES LISTED IN PROPOSAL 1, AND FOR PROPOSALS 2 AND 3, AS MORE SPECIFICALLY
DESCRIBED IN THE PROXY STATEMENT. IF SPECIFIC INSTRUCTIONS ARE INDICATED, THIS
PROXY WILL BE VOTED IN ACCORDANCE THEREWITH.
MANAGEMENT RECOMMENDS A VOTE FOR THE NOMINEES FOR DIRECTORS LISTED BELOW AND A
VOTE FOR PROPOSALS 2 AND 3.
1. PROPOSAL 1: To elect two Class III directors to hold office until the
Annual Meeting of Stockholders to be held in the year 2002.
FOR WITHHOLD
FOR ALL
[ ] [ ]
NOMINEES: Joseph D. Koenig, C. Russell Trenary, III
(INSTRUCTION: To withhold authority to vote for any nominee, write the nominee's
name in the space provided below.)
2. PROPOSAL 2: To ratify the appointment of PricewaterhouseCoopers LLP
as independent accountants of the Company for its fiscal year
ending December 31, 1999.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
3. PROPOSAL 3: To approve the adoption of the 1999 Long-Term Equity
Compensation Plan.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
I PLAN TO ATTEND THE MEETING
Please sign exactly as your name appears
YES NO hereon. If the stock is registered in
the names of two or more persons, NO
each should sign. Executors,
administrators, trustees, guardians or
Date:___________________________ attorneys-in-fact should add their
titles. If signer is a corporation,
please give full corporate name and have
________________________________ a duly authorized officer sign, stating
Signature title. If signer is a partnership,
please sign in partnership name by
authorized person.
________________________________
Signature (if held jointly)
Please vote, date and promptly return this proxy in the enclosed envelope which
is postage prepaid if mailed in the United States.
