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 ss.240.14a-11(c) or ss.240.14a-12
SUNRISE RESOURCES, 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:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing:
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
<PAGE>
SUNRISE RESOURCES, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
to be held
October 17, 1997
TO THE SHAREHOLDERS OF SUNRISE RESOURCES, INC.:
The 1997 Annual Meeting of Shareholders of Sunrise Resources, Inc. will be
held at the Hyatt Regency Hotel, 1300 Nicollet Mall, Minneapolis, Minnesota, at
10:00 a.m. (Minneapolis-time) on Friday, October 17, 1997, for the following
purposes:
1. To set the number of members of the Board of Directors at five (5).
2. To elect members of the Board of Directors.
3. To consider and vote upon a plan of reorganization in the form of a
merger in which the Company's state of incorporation will be changed
from Minnesota to Delaware and the Company's name will be changed to
"Sunrise International Leasing Corporation."
4. To take action on any other business that may properly come before the
meeting or any adjournment thereof.
Accompanying this Notice of Annual Meeting is a Proxy Statement, form of
Proxy and the Company's 1997 Annual Report.
Only shareholders of record as shown on the books of the Company at the
close of business on September 2, 1997 will be entitled to vote at the Annual
Meeting or any adjournment thereof. Each shareholder is entitled to one vote per
share on all matters to be voted on at the Annual Meeting.
You are cordially invited to attend the Annual Meeting. Whether or not you
plan to attend the Annual Meeting, please sign, date and mail the enclosed form
of Proxy in the return envelope provided as soon as possible. Your cooperation
in promptly signing and returning your Proxy will help avoid further
solicitation expense to the Company.
BY ORDER OF THE BOARD OF DIRECTORS,
Jeffrey G. Jacobsen, Secretary
Dated: September 16, 1997
Minneapolis, MN
<PAGE>
SUNRISE RESOURCES, INC.
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
to be held
October 17, 1997
The accompanying Proxy is solicited by the Board of Directors of Sunrise
Resources, Inc. (the "Company") for use at the Annual Meeting of Shareholders of
the Company to be held on Friday, October 17, 1997, at the location and for the
purposes set forth in the Notice of Annual Meeting, and at any adjournment
thereof.
The cost of soliciting proxies, including the preparation, assembly, and
mailing of the proxies and soliciting material, as well as the cost of
forwarding such material to the beneficial owners of the Company's Common Stock,
will be borne by the Company. Directors, officers and regular employees of the
Company may, without compensation other than their regular remuneration, solicit
proxies personally or by telephone.
Any shareholder giving a Proxy may revoke it any time prior to its use at
the Annual Meeting by giving written notice of such revocation to the Secretary
or other officer of the Company or by filing a later-dated written Proxy with an
officer of the Company. Personal attendance at the Annual Meeting is not, by
itself, sufficient to revoke a Proxy unless written notice of the revocation or
a later-dated Proxy is delivered to an officer before the revoked or superseded
Proxy is used at the Annual Meeting. Proxies will be voted as specified by the
shareholders.
The presence at the Annual Meeting in person or by proxy of the holders of
a majority of the outstanding shares of the Company's Common Stock entitled to
vote shall constitute a quorum for the transaction of business. If a broker
returns a "non-vote" proxy, indicating a lack of voting instructions by the
beneficial holder and a lack of discretionary authority on the part of the
broker to vote on a particular matter, then the shares covered by such non-vote
shall be deemed present at the Annual Meeting for purposes of determining a
quorum but shall not be deemed to be represented at the Annual Meeting for
purposes of calculating the vote with respect to such matter. If a shareholder
abstains from voting as to any matter, then the shares held by such shareholder
shall be deemed present at the Annual Meeting for purposes of determining a
quorum and for purposes of calculating the vote with respect to such matter, but
shall not be deemed to have been voted in favor of such matter. An abstention as
to any proposal will, therefore, have the same effect as a vote against the
proposal. Proxies which are signed but which lack any such specification will be
voted in favor of the proposals set forth in the Notice of Meeting and in favor
of the number and slate of directors proposed by the Board of Directors and
listed herein.
The mailing address of the principal executive office of the Company is
5500 Wayzata Boulevard, Suite 725, Minneapolis, Minnesota 55416. The Company
expects that this Proxy Statement, the related Proxy and Notice of Meeting will
first be mailed to shareholders on approximately September 16, 1997.
<PAGE>
OUTSTANDING SHARES AND VOTING RIGHTS
The Board of Directors of the Company has fixed the close of business on
September 2, 1997 as the record date for determining shareholders entitled to
vote at the Annual Meeting (the "Record Date"). Persons who were not
shareholders on the Record Date will not be allowed to vote at the Annual
Meeting. At the close of business on the Record Date, 7,787,796 shares of the
Company's Common Stock, par value $.01 per share, were issued and outstanding.
The Common Stock is the only outstanding class of capital stock of the Company.
Each share of Common Stock is entitled to one vote on each matter to be voted
upon at the Annual Meeting. Holders of Common Stock are not entitled to
cumulative voting rights.
PRINCIPAL SHAREHOLDERS AND MANAGEMENT SHAREHOLDINGS
The following table provides information as of the Record Date concerning
the beneficial ownership of the Company's Common Stock by (i) each director and
nominee for director of the Company, (ii) the named executive officers in the
Summary Compensation Table, (iii) persons known to the Company to be the
beneficial owners of more than 5% of the Company's outstanding Common Stock as
of the Record Date and (iv) all directors and executive officers as a group.
<TABLE>
<CAPTION>
Name (and Address of Number of shares Percent
5% Holders) or Identity of Group Beneficially Owned(1) of Class(2)
-------------------------------- ------------------ --------
<S> <C> <C>
Peter J. King 519,576(3) 6.4%
Errol F. Carlstrom 50,000(4) *
Donald R. Brattain 324,300(5) 4.2%
Thomas R. King 18,000(6) *
Andrew G. Sall 29,654(7) *
Jeffrey G. Jacobsen 7,029(8) *
Barry J. Schwach 154,218(9) 2.0%
Dana C. Prescott 32,760(10) *
R. Bradley Pike 1,250(11) *
William B. King 0(12) *
Stephen D. Higgins, Individually 3,198,332(13) 41.1%
and as a Trustee
23785 Strehler Road
Loretto, MN 55101
Heartland Advisors, Inc. 400,000(14) 5.1%
790 North Milwaukee Street
Milwaukee, WI 53202
All Current Executive Officers and 1,134,787(15) 13.8%
Directors as a Group
(9 persons)
</TABLE>
- -------------
*less than 1%
<PAGE>
(1) Unless otherwise indicated, each person named or included in the group has
sole power to vote and sole power to direct the disposition of all shares
listed as beneficially owned by such person.
(2) Under the rules of the SEC, shares not actually outstanding are deemed to
be beneficially owned by an individual if such individual has the right to
acquire the shares within 60 days. Pursuant to such SEC rules, shares
deemed beneficially owned by virtue of an individual's right to acquire
them are also treated as outstanding when calculating the percent of the
class owned by such individual and when determining the percent owned by
any group in which the individual is included.
(3) Includes 270,753 shares which may be acquired by Mr. Peter King within 60
days after the Record Date upon exercise of outstanding stock options and
2,000 shares held by The King Management Corporation, of which Mr. King is
a principal shareholder, officer and director; does not include 276,235
shares held by Stephen D. Higgins, as trustee of the 1996 Grantor Retained
Annuity Trust for Mr. King's benefit, with respect to which Mr. King has no
voting or dispositive power.
(4) Includes 50,000 shares which may be acquired by Mr. Carlstrom within 60
days after the Record Date upon exercise of outstanding stock options.
(5) Includes 4,000 shares which may be acquired by Mr. Brattain within 60 days
after the Record Date upon exercise of outstanding nonqualified stock
options.
(6) Includes 12,000 shares which may be acquired by Mr. Thomas King within 60
days after the Record Date upon exercise of outstanding nonqualified stock
options.
(7) Includes 24,625 shares which may be acquired by Mr. Sall within 60 days
after the Record Date upon exercise of outstanding nonqualified stock
options.
<PAGE>
(8) Includes 2,000 which may be acquired by Mr. Jacobsen within 60 days after
the Record Date upon exercise of outstanding nonqualified stock options.
(9) Includes 32,500 which may be acquired by Mr. Schwach within 60 days after
the Record Date upon exercise of outstanding incentive stock options.
(10) Includes 22,000 shares which may be acquired by Mr. Prescott within 60 days
after the Record Date upon exercise of outstanding incentive stock options.
(11) Includes 1,250 shares which may be acquired by Mr. Pike within 60 days
after the Record Date upon exercise of outstanding incentive stock options.
(12) Does not include 1,640,285 shares held in a trust for Mr. William King's
benefit, for which he has no voting or investment power.
(13) Includes 276,235 shares held by Mr. Higgins as trustee for the 1996 Grantor
Retained Annuity Trust for the benefit of Peter J. King, the Company's
Chairman of the Board, and an aggregate of 2,917,068 shares held by Mr.
Higgins as trustee for the William B. King Stock Trust and the Russell S.
King Stock Trust, respectively, both of whom are sons of Mr. Peter King. As
trustee of the aforementioned trusts, Mr. Higgins has sole voting and
dispositive power over the shares, but he disclaims beneficial ownership of
such shares.
(14) The shares are held in investment advisory accounts of Heartland Advisors,
Inc. ("Heartland"). One of the accounts, Heartland Value Fund, a series of
Heartland Group, Inc., a registered investment company, relates to more
than 5% of the Company's Common Stock. Heartland has the sole power to vote
and dispose of the shares; however, various persons have the right to
receive or the power to direct the receipt of dividends from, or the
proceeds from the sale of, the shares. The Company has relied on
information contained in a Schedule 13G dated February 12, 1997 filed by
Heartland with the Securities and Exchange Commission.
(15) Includes 418,128 shares of Common Stock which may be acquired within 60
days after the Record Date upon the exercise of outstanding options and
2,000 shares held by a corporation. Does not include 276,235 shares held in
a trust for the benefit of a director for which the director has no voting
or investment power.
ELECTION OF DIRECTORS
(Proposals #1 and #2)
The Bylaws of the Company provide that the number of directors shall be the
number set by the shareholders, which shall not be less than one. The Board of
Directors recommends that the number of directors be set at five, which is one
less than the current number of directors, and that five directors be elected.
Unless otherwise instructed, the Proxies will be so voted. Under applicable
Minnesota law, approval of the proposals to set the number of directors at five
and to elect the nominees requires the affirmative vote of the holders of the
greater of (1) a majority of the voting power of the shares represented in
person or by proxy at the Annual Meeting with authority to vote on such matter,
or (2) a majority of the voting power of the minimum number of shares that would
constitute a quorum for the transaction of business at the Annual Meeting.
<PAGE>
In the absence of other instruction, the Proxies will be voted for each of
the following individuals. If elected, such individuals shall serve until the
next annual meeting of shareholders and until their successors shall be duly
elected and shall qualify. All of the nominees are members of the present Board
of Directors.
Mr. Andrew Sall, who was elected as a director of the Company on February
13, 1995 pursuant to the Agreement and Plan of Reorganization among the Company,
The P. J. King Companies, Inc. d/b/a International Leasing Corporation ("ILC")
and affiliates of ILC (the "ILC Merger Agreement") which provided that Mr. Peter
King and one other person chosen by the Company from a list of persons proposed
by Mr. Peter King would be elected to the Board of Directors, has declined to
stand for re-election.
If, prior to the Annual Meeting, it should become known that any one of the
following individuals will be unable to serve as a director after the Annual
Meeting by reason of death, incapacity or other unexpected occurrence, the
Proxies will be voted for such substitute nominee(s) as is selected by the Board
of Directors. Alternatively, the Proxies may, at the Board's discretion, be
voted for such fewer number of nominees as results from such death, incapacity
or other unexpected occurrence. The Board of Directors has no reason to believe
that any of the following nominees will be unable to serve.
<TABLE>
<CAPTION>
Current Positions with the Company and Principal
Name and Age Occupations for the Past Five Years Director
of Nominee and Other Information Since
- -------------- ------------------------------------------------------------------------- -----
<S> <C> <C>
Peter J. King In April 1997, Mr. King was re-appointed to the Company's Board of 1997
69 Directors and was also appointed Chairman of the Board in June 1997.
Mr. King had previously served as Chairman of the Board from February
1995 to February 1996 and as a Director from February 1995 to July 1996,
resigning because of a conflict of interest from his claims arising from
the merger with ILC. The ILC Merger Agreement and the employment
agreement described below provide that Mr. King serve as Chairman of
the Board of the Company. Mr. King also had previously served as a
member of the Company's Interim CEO Committee from July 1995 until July
1996. Mr. King founded ILC in 1974 and served as its President until
ILC was merged into the Company in February 1995. Mr. King is currently
Chairman of The King Management Corporation. Mr. King is not related to
Thomas King, a Director of the Company.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Current Positions with the Company and Principal
Name and Age Occupations for the Past Five Years Director
of Nominee and Other Information Since
- -------------- ------------------------------------------------------------------------- -----
<S> <C> <C>
Donald R. Brattain Mr. Brattain has served as a Director of the Company since 1989
57 November 1989. From July 1995 to July 1996, Mr. Brattain served as a
member of the Company's Interim CEO Committee; and, from July 1991 to
February 1995, he served as the Company's Chairman of the Board.
Mr. Brattain has served as President of Brattain & Associates, LLC, an
investment company, since 1981. He is also a director of Everest
Medical Corporation, Harmony Brook, Inc. and Featherlite Mfg., Inc.
Thomas R. King Mr. King has served as a Director of the Company since December 1991. 1991
57 From July 1991 to July 1997, Mr. King served as Secretary of the Company,
and, from February 1996 to June 1997, he served as the Company's Interim
Chairman of the Board. He has been an officer and shareholder of
Fredrikson & Byron, P.A., the Company's legal counsel, for more than the
past five years. He is also a director of Datakey, Inc. Mr. King is not
related to Peter King, Chairman of the Board.
Jeffrey G. Jacobsen Mr. Jacobsen was appointed a member of the Company's Board of Directors 1997
49 in April 1997 and has served as Secretary of the Company since July
1997. Mr. Jacobsen has served as President of The King Management
Corporation since April 1997. Prior to joining The King Management
Corporation, Mr. Jacobsen served as a vice president of The Network
Systems Group of Storage Technology from March 1983 to April 1997.
Errol F. Carlstrom Mr. Carlstrom was appointed a member of the Company's Board of Directors 1997
56 in June 1997. Mr. Carlstrom has served as President since January 1996
and as Chief Executive Officer since July 1996. Mr. Carlstrom served as
Chief Operating Officer from January 1996 until July 1996. Prior to
joining the Company, Mr. Carlstrom was President and Chief Operating
Officer of CCX Worldwide, Ltd., an international computer equipment
trading company, from January 1992 to January 1996. Mr. Carlstrom was
also President and a principal of Connectivity Systems Credit
Corporation from October 1994 to December 1995, which provided lease
financing for local area and wide area networks (LAN and WAN systems).
</TABLE>
<PAGE>
Board and Committee Meetings
During the fiscal year ended March 31, 1997, the Board of Directors held
four meetings and acted three times by unanimous written action. Each director
attended at least 75% of the aggregate of the total number of meetings of the
Board of Directors plus the total number of meetings of all committees of the
Board on which he served. The Board of Directors has an Executive Committee, an
Audit Committee and a Compensation and Stock Option Committee.
The Board of Directors of the Company believes that for at least the next
two years it must continue to have a very active and direct role in the
Company's operations. Accordingly, the Executive Committee of the Board of
Directors acts on behalf of the Board of Directors between meetings of the Board
of Directors with the same rights, responsibilities and powers. During fiscal
1997, the Executive Committee was comprised of Peter King (until his resignation
in July 1996), Donald Brattain and Thomas King. On April 2, 1997, Peter King was
reappointed and Jeffrey Jacobsen was appointed to serve on the Executive
Committee, and on July 31, 1997, Errol Carlstrom was appointed to serve on the
Executive Committee. During fiscal 1997, the Executive Committee held numerous
meetings.
The Audit Committee recommends to the Board of Directors the selection of
independent accountants and reviews the activities and reports of the
independent accountants as well as the internal accounting controls of the
Company. During fiscal 1997, the Audit Committee was comprised of Thomas Strand,
Daniel Leclerc and Andrew Sall. During fiscal 1997, the Audit Committee held one
meeting. Currently, the Audit Committee is comprised of Thomas King, Jeffrey
Jacobsen and Andrew Sall.
The Compensation and Stock Option Committee determines the compensation for
executive officers of the Company and administers the Company's 1991 Stock
Option Plan and 1992 Employee Stock Purchase Plan. During fiscal 1997, the
Compensation and Stock Option Committee was comprised of Thomas King and Donald
Brattain. During fiscal 1997, the Compensation and Stock Option Committee held
two meetings. Currently, the Compensation and Stock Option Committee is
comprised of Thomas King, Donald Brattain and Jeffrey Jacobsen, who was
appointed on April 2, 1997.
Compensation of Directors
Meeting Fees. The Company pays each director who is not an employee of the
Company (a "Non-Employee Director") an annual retainer of $2,500 plus $1,000 for
each Board of Directors meeting attended and $500 for each committee meeting
attended. Peter King agreed that he would not receive such fees during the
period of his consulting agreement as described in the section entitled
Employment and Severance Agreements or Arrangements below, and will not receive
such fees during the term of his employment agreement also described below.
Stock Option Grants. The Company's 1991 Stock Option Plan provides for the
automatic grant of stock options to each Non-Employee Director to purchase the
following number of shares of the Company's Common Stock at exercise prices
equal to 100% of the current market price on the date of grant: (i) 10,000
shares upon such Non-Employee Director's initial election to the Board, which
option becomes exercisable to the extent of 20% immediately and 20% each year
thereafter so long as such person remains a director of the Company, and (ii)
2,000 shares upon such Non-Employee Director's annual re-election to the Board
of Directors, which option is immediately exercisable in full. Peter King agreed
that he would not receive options under the formula stock option grants to
Non-Employee Directors during the period of his consulting agreement as
described in the section entitled Employment and Severance Agreements or
Arrangements below, and will not receive such options during the term of his
employment agreement also described below.
<PAGE>
Report of Compensation and Stock Option Committee
The Compensation and Stock Option Committee's executive compensation
policies are designed to enhance the financial performance of the Company, and
thus shareholder value, by significantly aligning the financial interests of the
Company's key executives with those of the Company's shareholders. Compensation
of the Company's executive officers is comprised of four parts: base salary,
annual incentive bonuses, fringe benefits and long-term incentive opportunity in
the form of stock options. The Compensation and Stock Option Committee (the
"Committee") believes, but has not conducted any formal survey, that the base
salaries of the Company's executive officers are comparable to the salaries of
executive officers of comparable publicly-held companies. These base salaries
are combined with the opportunity to earn substantial cash bonuses if certain
Company financial and other performance goals are met. Long-term incentives are
based on stock performance through stock options granted pursuant to the
Company's 1991 Stock Option Plan. The Committee believes that stock ownership by
the Company's executive officers is beneficial in aligning management's and
shareholders' interests in the enhancement of shareholder value. Overall, the
intent is to have more significant emphasis on variable compensation components
and less on fixed cost components. The Committee believes this philosophy and
structure are in the best interests of the Company's shareholders.
Bonuses. The Company's fiscal 1997 Incentive Compensation Plan provided for
incentive bonuses to four classes of employees (support staff, middle
management, senior management and the President) in amounts up to a maximum of
10%, 20%, 40% and 75% of their annual salaries, depending on the Company's
earnings performances and the attainment by the employee of certain pre-set
individual objectives. The Plan provided that no bonuses would be paid unless
the Company met a certain agreed minimum earnings goal, which was met in fiscal
1997.
No bonus plan has yet been adopted for fiscal 1998. The Compensation
Committee expects that a bonus program very similar to the program for fiscal
1997 will be created for support staff and middle management. The Compensation
Committee is in the process of reviewing the Company's compensation plans for
senior management, and expects to bring its recommendations to the Board of
Directors in the near future.
Stock Options and Other Incentives. The Company's stock option program is
the Company's long-term incentive plan for executive officers and key managers.
The objectives of the program are to align executive and shareholder long-term
interests by creating a strong and direct link between executive pay and
shareholder return, and to enable executives to develop and maintain a
significant, long-term ownership position in the Company's Common Stock.
<PAGE>
The Company's 1991 Stock Option Plan authorizes the Committee to award
stock options to executive officers and other employees. Stock options are
generally granted each year, at an option price equal to the fair market value
of the Company's Common Stock on the date of grant, and vest over a period of
five years. The amount of stock options awarded is generally a function of the
recipient's salary and position in the Company. Awards are intended to be
generally competitive with other companies of comparable size and complexity,
although the Committee has not conducted any thorough comparative analysis.
Benefits. The Company provides the same health and disability insurance
benefits to its executive officers as are available to Company employees
generally. The amount of perquisites, as determined in accordance with the rules
of the SEC relating to executive compensation, did not exceed 10% of salary for
fiscal 1997.
Chief Executive Officer Compensation. The fiscal 1997 base salary for the
Company's President, Errol Carlstrom, who became Chief Executive Officer in July
1996, was set at $150,000. The Compensation Committee believes, but has not
conducted any formal survey, that Mr. Carlstrom's fiscal 1997 base salary of
$150,000 was lower than the base salaries of chief executive officers of
comparable publicly-held companies. Mr. Carlstrom also received a bonus of
$111,860 (approximately 75% of such base salary) for fiscal 1997. From June 30,
1995 to July 24, 1996 (including the first three months of fiscal 1997), the
duties of the Chief Executive Officer were performed by a committee comprised of
Peter King and Donald Brattain, for which such individuals received no
additional compensation beyond what Peter King received pursuant to his
Consulting Agreement and what Mr. Brattain received as a Non-Employee Director
(see Employment and Severance Agreement or Arrangements below and Compensation
of Directors above). For fiscal 1998, Mr. Carlstrom's base salary is $200,000
with the opportunity to earn a bonus equal to a percentage (comparable to fiscal
1997) of base salary upon achievement of certain performance targets which have
not yet been determined.
Compensation and Stock Option Committee
Thomas R. King
Donald R. Brattain
Jeffrey G. Jacobsen
<PAGE>
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth certain information regarding compensation
paid during each of the Company's last three fiscal years to each person who
served in the capacity of the Company's Chief Executive Officer during fiscal
1997 and for each person who served as an executive officer during fiscal 1997
whose total salary and bonus earned during fiscal 1997 exceeded $100,000.
<TABLE>
<CAPTION>
Long Term Compensation
-----------------------------------
Annual Compensation Awards Payouts
-------------------------------------------- ------------------------- -------
Restricted
Name and Stock Options/ LTIP
Principal Fiscal Other Annual Awards(s) SARs Payouts All Other
Position Year Salary($) Bonus($)(1) Compensation($) ($) (#) ($) Compensation($)
- ----------- ------ ----------- ----------- ---------------- ---------- ------------ ------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Peter J. King 1997 104,000(2) --- --- --- --- --- ---
Chairman and 1996 160,000(2) --- 12,500(2) --- --- --- ---
Former Interim
CEO Committee(3)
Errol F. Carlstrom 1997 150,000 111,860 --- --- --- --- 1,913(5)
Chief Executive 1996 37,500 15,000 --- --- 250,000 --- ---
Officer & President
Donald R. Brattain 1997 --- --- 5,500(3) --- --- --- ---
Former Interim CEO 1996 --- --- 10,000(3) --- --- --- ---
Committee(3)
Barry J. Schwach 1997 126,000 10,000 --- --- 25,000 --- 1,606(5)
Executive Vice 1996 126,000 62,600 --- --- 4,000(4) --- 1,499
President of Finance 1995 23,750 7,750 --- --- 15,000 --- ---
and Administration
and CFO
Dana C. Prescott 1997 126,000 --- 160,000(6) --- --- --- 2,250(5)
Senior Vice 1996 126,000 --- 12,600 --- 4,000(4) --- 1,123
President-National 1995 182,000 --- 20,000 --- 10,000 --- 1,585
Sales Manager
R. Bradley Pike 1997 75,000 35,795 --- --- 5,000 --- 844(5)
Vice President- 1996 6,250 --- --- --- --- --- ---
Asset Management
William R. King 1997 126,000 47,198 --- --- --- --- 1,606(5)
Former Vice 1996 112,998 12,600 --- --- 4,000(4) --- 999
President-National 1995 18,750 6,249 --- --- 12,000 --- 820
Vendor Programs
</TABLE>
<PAGE>
- ------------------
(1) Reflects bonus earned during the fiscal year. In some instances all or a
portion of the bonus was paid during the next fiscal year.
(2) Mr. King served as a member of the Interim CEO Committee from July 1995
until July 1996, for which he received no compensation; all compensation
was paid to him pursuant to his Consulting and Noncompetition Agreement
described in the section entitled Employment and Severance Agreements or
Arrangements below.
(3) Mr. Brattain served as a member of the Interim CEO Committee from July 1995
to July 1996, for which he received no compensation; the compensation paid
to Mr. Brattain was pursuant to director compensation for non-employee
directors described in the section entitled Compensation of Directors
above.
(4) Option granted subsequent to March 31, 1996 fiscal year-end as part of
discretionary bonus awarded with respect to fiscal 1996
(5) Represents total Company matching contributions to the Company's 401(k)
plan.
(6) Represents payment in settlement of past commissions.
Option Grants During 1997 Fiscal Year
The following table provides information regarding stock options granted
during fiscal 1997 to the named executive officers in the Summary Compensation
Table. The Company has not granted any stock appreciation rights.
<TABLE>
<CAPTION>
Potential Realizable
Value at Assumed
Annual Rates of Stock
Percent of Total Price Appreciation
Options for Option Term (2)
Options Granted in Exercise or Base -------------------------
Name Granted Fiscal Year Price Per Share(1) Expiration Date 0% 5%(%) 10%($)
---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Peter J. King --- --- --- --- --- --- ---
Errol F. Carlstrom --- --- --- --- --- --- ---
Donald R. Brattain --- --- --- --- --- --- ---
Barry J. Schwach 25,000(3) 24.63% $2.625 04/23/06 --- $41,271 $104,589
4,000(4) 3.94% $2.625 04/23/06 --- $6,603 $16,734
Dana C. Prescott 4,000(4) 3.94% $2.625 04/23/06 --- $6,603 $16,734
R. Bradley Pike 5,000(5) 4.93% $2.625 04/23/06 --- $8,254 $20,918
William B. King 4,000(6) 3.94% $2.625 04/23/06 --- $6,603 $16,734
</TABLE>
- --------------------------
(1) Exercise price is equal to the fair market value on the date of grant.
<PAGE>
(2) The potential realizable value portion of the foregoing table illustrates
value that might be realized upon exercise of the options immediately prior
to the expiration of their term, assuming the specified compounded rates of
appreciation on the Company's Common Stock over the term of the options.
These numbers do not take into account provisions of certain options
providing for termination of the option following termination of
employment, nontransferability or vesting over periods of up to four years.
(3) Option was exercisable in full on April 23,1996.
(4) Option becomes exercisable to the extent of 1,000 shares on each of April
23, 1997, 1998, 1999 and 2000.
(5) Option becomes exercisable to the extent of 1,250 shares on each of April
23, 1997, 1998, 1999 and 2000.
(6) Option would have become exercisable to the extent of 1,000 shares on each
of April 23, 1997, 1998, 1999 and 2000; however, the option terminated
prior to vesting following Mr. William King's termination of employment.
Option Exercises During 1997 Fiscal Year and Fiscal Year-End Option Values
The following table provides information related to options and warrants
exercised by the named executive officers during fiscal 1997 and the number and
value of options held at fiscal year-end. The Company does not have any
outstanding stock appreciation rights.
<PAGE>
<TABLE>
<CAPTION>
Value of Unexercised
Number of Securities In-the-Money Options at
Shares Underlying Unexercised March 31, 1997
Acquired on Value Options at March 31, 1997 Exercisable/
Name Exercise Realized Exercisable/Unexercisable Unexercisable(1)
- ---- -------- -------- ------------------------- ----------------
<S> <C> <C> <C> <C>
Peter J. King -- -- 0 exercisable $0 exercisable
0 unexercisable $0 unexercisable
Errol F. Carlstrom -- -- 50,000 exercisable $12,500 exercisable
200,000 unexercisable $466,000 unexercisable
Donald R. Brattain -- -- 4,000 exercisable $0 exercisable
0 unexercisable $0 unexercisable
Barry J. Schwach -- -- 32,500 exercisable $21,875 exercisable
11,500 unexercisable $3,500 unexercisable
Dana C. Prescott -- -- 21,000 exercisable $0 exercisable
9,000 unexercisable $3,500 unexercisable
R. Bradley Pike -- -- 0 exercisable $0 exercisable
5,000 unexercisable $4,375 unexercisable
William B. King -- -- 6,000 exercisable $0 exercisable
10,000 unexercisable $3,500 unexercisable
</TABLE>
(1) Value is calculated on the basis of the difference between the option
exercise price and the closing sale price for the Company's Common Stock at
March 31, 1997 as quoted on the Nasdaq National Market, multiplied by the
number of shares of Common Stock underlying the option.
Employment and Severance Agreements or Arrangements
In connection with the Company's February 1995 merger with ILC, the Company
assumed ILC's obligations under Employment Agreements with Barry Schwach, the
Company's Executive Vice President of Finance and Administration and Chief
Financial Officer, and William King, the Company's former Vice President -
National Vendor Programs. These agreements assured Mr. Schwach and Mr. King
minimum compensation of at least $115,000 and $95,000 per year, respectively
through February 13, 1997.
<PAGE>
Also in connection with the February 1995 merger, the Company entered into
a Consulting and Noncompetition Agreement with Peter J. King, whereby Mr. King
provides consulting services to the Company for three years at an annual fee
(payable in monthly installments) of $167,500 for the first year, $107,500 for
the second year and $60,000 for the third year ending February 13, 1998. In
addition, the agreement provided for the payment of $12,500 on each of the date
of the agreement and the first anniversary date of the agreement as
consideration for Mr. King's agreement not to compete with the Company for a
two-year period ended February 13, 1997.
On November 14, 1996, the Company entered into a severance agreement and
release (the "Agreement") with William B. King, the Company's former Vice
President - National Vendor Programs, in connection with Mr. King's resignation
as an officer and employee of the Company. Pursuant to the Agreement, Mr. King
continued to receive his base salary of $10,500 per month through March 31,
1997. Pursuant to the Agreement, Mr. King was eligible for a bonus up to an
amount equal to 40% of his salary based on certain performance criteria. In
addition, Mr. King agreed that, for a twelve-month period from April 1, 1997
through March 31, 1998, he would not (i) compete with the Company, (ii) disclose
confidential information relating to the Company, (iii) solicit any of the
Company's employees to leave the Company, (iv) contact the Company's customers
or (v) cause the discontinuance of the Company's business.
On June 16, 1997, the Company entered into an agreement (the "Agreement")
with Peter J. King and The King Management Corporation ("King Management"), a
corporation which is controlled by Mr. King, whereby Mr. King would become
Chairman of the Board and an employee of the Company and whereby Mr. King and/or
King Management would provide certain services, including but not limited to
working with management on current and prospective vendor relationships,
monitoring problem leases and loans, implementing fiscal 1998 and fiscal 1999
plans; assisting the Company on meeting financing requirements and working with
the Company's bankers. In addition, King Management will use its balance sheet
resources to enable the Company to meet its vendor leasing program financing
requirements. See the section entitled Certain Transactions below. The term of
the Agreement is from June 16, 1997 through June 15, 1999. Pursuant to the
Agreement, Mr. King receives a salary of $10,000 per month for his services as a
director and employee of the Company. In addition, Mr. King received (i) a
five-year option to purchase 270,753 shares of the Company's Common Stock at
$3.375 per share, which option is immediately exercisable, and (ii) a five-year
option to purchase 270,753 shares of the Company's Common Stock at $3.375 per
share, which option will become exercisable on June 16, 2001 if Mr. King is
still employed by the Company; provided, however, that the vesting of such
option will be accelerated prior to June 16, 1999 if certain conditions are met.
The Agreement is in addition to the above described Consulting and
Noncompetition Agreement dated February 13, 1995 between the Company and Mr.
King, pursuant to which the Company will continue to pay Mr. King $5,000 per
month through February 13, 1998.
<PAGE>
Stock Performance Chart
The following graph compares the yearly percentage change in the cumulative
total stockholder return on the Company's Common Stock during the five fiscal
years ended March 31, 1997 with the cumulative total return on the S&P 500
Composite Stock Index and the S&P 500 Financial (Diversified) Index, an index of
diverse financial companies. The comparison assumes $100 was invested March 31,
1992 in the Company's Common Stock and in each of the foregoing indices and
assumes reinvestment of dividends.
<TABLE>
<CAPTION>
03/31/92 03/31/93 03/31/94 03/31/95 03/31/96 03/31/97
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Sunrise Resources, Inc. $100.00 $112.90 $74.19 $62.90 $38.71 $50.00
S&P 500 Financial $100.00 $115.23 $116.93 $135.13 $178.51 $213.89
(Diversified) Index
S&P 500 Composite Stock $100.00 $132.78 $136.67 $163.32 $239.12 $287.51
Index
</TABLE>
<PAGE>
CERTAIN TRANSACTIONS
The Company has adopted a policy of not entering into transactions in which
any officer, director, shareholder or affiliate of the Company has a material
financial interest unless the transaction has been approved by a majority of the
disinterested directors of the Company based upon a determination that the terms
of such transactions are no less favorable to the Company than those which could
be obtained from unaffiliated third parties. The Company has entered into the
following transactions in which directors had a material financial interest:
Harmony Brook--In fiscal 1994, the Company entered into a $2,000,000
line of credit with Harmony Brook, of which Mr. Brattain is a
shareholder, Chairman and a director. As of March 31, 1997, $1,355,000
was outstanding. The line is used by Harmony Brook to fund the
expansion of its business operations and is collateralized by certain
assets of Harmony Brook.
Gift Certificate Centers--As of March 31, 1997, the Company had a
direct-financing lease outstanding with Gift Certificate Centers, of
which Mr. Brattain is a principal shareholder. The net asset value at
year-end was $113,795.
The King Management Corporation--The Company had a note in the original
principal amount of $11,733,000 payable to The King Management
Corporation ("King Management"), a majority of the common stock of
which is owned by Peter J. King. This note was collateralized by
certain rental equipment which is presently on lease to various
customers. The note was due in semi-monthly installments, payable in
full February 16, 1996, and bears interest at prime (9.0% at March 31,
1995 and 8.25% at March 31, 1996). This note was paid in full in
November 1996.
--Pursuant to the Agreement dated June 16, 1997 between the
Company, Peter J. King, and King Management, King Management will
provide subordinated debt financing, direct financing and/or other
financial assistance to the Company for a period of two years in
consideration of King Management's right to participate as lessor to
the extent of 25% of certain higher-risk vendor leasing programs and
risk pools and to the extent of 15% of all other vendor leasing
programs of the Company. See the section entitled Employment and
Severance Agreements or Arrangements above.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors, and persons who own more than ten percent of a
registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the Securities and Exchange Commission
(the "SEC"). Officers, directors and greater than ten-percent shareholders are
required by SEC regulation to furnish the Company with copies of all Section
16(a) forms they file.
Based solely on its review of the copies of such forms received by it, or
written representations from certain reporting persons that no Forms 5 were
required for those persons, the Company believes that, during the period from
April 1, 1996 through March 31, 1997, all filing requirements applicable to its
officers, directors and greater than ten-percent beneficial owners were complied
with, except that option grants were reported by each of Messrs. Schwach, Pike
and Prescott, officers of the Company, on Forms 5 that were not timely filed.
<PAGE>
REINCORPORATION OF THE COMPANY IN DELAWARE
(Proposal #3)
Introduction
The Board of Directors has approved a plan of reorganization (the
"Reincorporation") in the form of a merger (the "Merger") in which the Company's
state of incorporation will be changed from Minnesota to Delaware and the
Company's name will be changed to "Sunrise International Leasing Corporation."
In preparation for the submission of this proposal to the shareholders,
Sunrise Resources, Inc., a Minnesota corporation ("Sunrise Minnesota"), has
formed a wholly-owned Delaware subsidiary named Sunrise International Leasing
Corporation ("Sunrise Delaware"). If the shareholders of Sunrise Minnesota
approve the Reincorporation, Sunrise Minnesota will be merged into Sunrise
Delaware. In the merger each issued and outstanding share of Sunrise Delaware
Common Stock shall be retired and cancelled and each issued and outstanding
share of Sunrise Minnesota Common Stock will be automatically converted into and
become one share of Sunrise Delaware Common Stock. As a result, the existing
shareholders of Sunrise Minnesota will become shareholders of Sunrise Delaware
and Sunrise Minnesota will cease to exist. As used in this section, the term
"the Company" refers to Sunrise Minnesota or Sunrise Delaware or both, as the
context requires. A copy of the Agreement and Plan of Merger (the "Merger
Agreement") is attached to this Proxy Statement as Exhibit A.
Governing Law
The Company is presently governed by the Minnesota Business Corporation Act
("MBCA") and its current Articles of Incorporation and Bylaws. If the
Reincorporation is approved, the Company will be governed by the Delaware
General Corporation Law ("DGCL") and by a new Certificate of Incorporation and
Bylaws, which will result in changes in the rights of shareholders as discussed
below. Copies of the Certificate of Incorporation and Bylaws of Sunrise Delaware
are attached to this Proxy Statement as Exhibits B and C.
Business After the Reincorporation
Sunrise Delaware was incorporated on August 28, 1997 for the sole purpose
of effecting the Merger, and has not engaged in any business to date and has no
assets. Approval of the Reincorporation and the merger of Sunrise Minnesota into
Sunrise Delaware will not result in any change in the business, management,
location of the principal executive offices or other facilities, capitalization,
assets or liabilities of the Company. The Company's employee benefit
arrangements will be continued by Sunrise Delaware upon the same terms and
subject to the same conditions. In management's judgment, except for additional
annual Delaware franchise fees estimated at approximately $60,000, no presently
contemplated activities of the Company will be either favorably or unfavorably
affected in any material respect by adoption of the Reincorporation proposal.
Shareholders should consider, however, that the DGCL and the MBCA differ in a
number of significant respects, including differences pertaining to the rights
of shareholders, and should carefully review the discussion of certain of these
differences under Certain Significant Differences Between the Corporation Laws
of Minnesota and Delaware set forth below.
<PAGE>
The following summary of the Reincorporation does not purport to be a
complete description of the Reincorporation proposal and is qualified in its
entirety by reference to the Merger Agreement, the Certificate of Incorporation
of Sunrise Delaware and the Bylaws of Sunrise Delaware attached hereto as
Exhibits A, B and C, respectively.
Board of Directors and Officers
The Board of Directors of Sunrise Delaware will consist of the persons
elected as directors of Sunrise Minnesota at the Annual Meeting. They will hold
office after the Reincorporation until their successors are elected at the next
Annual Meeting. See "Election of Directors" (Proposals #1 and #2). The officers
of Sunrise Delaware immediately following the Reincorporation will consist of
the officers of Sunrise Minnesota immediately prior to the Reincorporation.
Capitalization of Sunrise Delaware; Stock Certificates
Sunrise Minnesota stock certificates will be deemed to represent the same
number of Sunrise Delaware shares as were represented by such Sunrise Minnesota
certificates prior to the Reincorporation. IT WILL NOT BE NECESSARY FOR
SHAREHOLDERS TO EXCHANGE THEIR SUNRISE MINNESOTA STOCK CERTIFICATES FOR SUNRISE
DELAWARE STOCK CERTIFICATES, ALTHOUGH SHAREHOLDERS MAY EXCHANGE THEIR
CERTIFICATES IF THEY WISH. Following the Reincorporation, delivery of previously
outstanding Sunrise Minnesota stock certificates will constitute "good delivery"
in connection with sales through a broker, or otherwise, of shares of Sunrise
Delaware. Shares of Sunrise Delaware's Common Stock will be listed on the Nasdaq
National Market(TM) under the symbol "SUNL", as Sunrise Minnesota shares are
presently listed. Upon completion of the Reincorporation, the authorized number
of shares of stock of Sunrise Delaware will consist of 17,500,000 shares of
Common Stock, $.01 par value, and 2,500,000 shares of Preferred Stock, $.01 par
value.
<PAGE>
Outstanding Stock Options and Warrants
As part of the Reincorporation, Sunrise Delaware will assume and continue
all of the obligations of Sunrise Minnesota under all of its outstanding stock
options, warrants and employee stock purchase plan. If the Reincorporation is
approved, options and warrants outstanding under Sunrise Minnesota's stock
option and stock purchase plans, as well as outstanding options and warrants
issued outside of any plan, will be exercisable for shares of Sunrise Delaware.
All other employee benefit plans and arrangements are expected to be continued
without change, subject to the Compensation Committee's comprehensive review
thereof. See Report of Compensation and Stock Option Committee above.
Effective Time
Subject to the terms and conditions of the Reincorporation, the Company
intends to file, as soon as practicable after the adoption and approval of the
Merger Agreement by the shareholders of the Company, appropriate articles of
merger with the Secretary of State of Minnesota and the Secretary of State of
Delaware. The Reincorporation shall become effective at the time the last of
such filings is completed (the "Effective Time"). It is presently contemplated
that such filings will be made on October 17, 1997. However, the Merger
Agreement provides that the merger may be abandoned by the Board of Directors of
the Company prior to the Effective Time either before or after shareholder
approval. In addition, the Merger Agreement may be amended prior to the
Effective Time, either before or after shareholder approval; however, the Merger
Agreement may not be amended after shareholder approval if such amendment would,
in the judgment of the Board of Directors of the Company, have a material
adverse effect on the rights of such shareholders or in any manner violate
applicable law.
Reasons for the Reincorporation
For many years, Delaware has followed a policy of encouraging incorporation
in that state and, in furtherance of that policy, has adopted comprehensive,
modern and flexible corporate laws which are periodically updated and revised to
meet changing business needs. The Delaware courts have developed considerable
expertise in dealing with corporate issues and a substantial body of case law
has developed construing Delaware law and establishing public policies with
respect to Delaware corporations. This is especially the case in the area of
contests for corporate control and the related issues of the scope of a board's
fiduciary duties in the context of a potential change in corporate control. In
recent years, the Delaware courts have issued a number of significant decisions
dealing with many of the major issues in this area, and it can reasonably be
anticipated that Delaware corporate law will continue to be interpreted and
explained in future court decisions of similar significance which may prove
greater predictability with respect to the Company's corporate legal affairs. In
addition, it is expected that the Delaware legislature and legal community will
continue to review Delaware corporate law and seek to implement appropriate
changes which are responsive to developments in the legal, financial and
business communities. As a result, many major corporations have initially chosen
Delaware for their domicile or have subsequently reincorporated in Delaware in a
manner similar to that proposed by the Company. The proposed Reincorporation is
primarily designed to obtain the benefits of the Delaware corporate law.
<PAGE>
Certain Significant Differences Between the Corporation Laws of Minnesota and
Delaware
The rights and preferences of the holders of the Company's capital stock
are presently governed by the MBCA. Upon the Reincorporation, these rights and
preferences will be governed by the DGCL. Although Delaware and Minnesota
corporation laws currently in effect are similar in many respects, certain
differences will affect the rights of the Company's shareholders if the
Reincorporation is consummated. The following discussion summarizes certain
differences considered by management to be significant and is qualified in its
entirety by reference to the full text of the MBCA and the GGCL.
Treasury Shares. The MBCA does not allow treasury shares. Under the DGCL, a
corporation may hold treasury shares. Treasury shares under Delaware law may be
held, sold, lent, pledged or exchanged by the corporation. Such shares, however,
are not outstanding shares and therefore do not receive any dividends and do not
have voting rights.
Anti-Takeover Legislation. Both the MBCA and the DGCL contain provisions
intended to protect shareholders from individuals or companies attempting a
takeover of a corporation in certain circumstances. The anti-takeover provisions
of the MBCA and the DGCL differ in a number of respects, and it is not practical
to summarize all such differences here. However, the following is a summary of
certain significant differences.
Control Share Acquisition. The Minnesota control share acquisition statute,
MBCA Section 302A.671 ("Section 671"), establishes various disclosure and
shareholder approval requirements to be met by individuals or companies
attempting a takeover of an "issuing public corporation" such as Sunrise.
Delaware has no comparable provision. Section 671 provides that any person (an
"acquiring person") proposing to make a "control share acquisition" must
disclose certain information to the target corporation and the target
corporation's shareholders must thereafter approve the control share
acquisition, or else certain of the shares acquired in the control share
acquisition will not have voting rights and will be subject to redemption by the
target corporation for a specified period of time at the market value of such
shares. A "control share acquisition" is an acquisition of shares of an issuing
public corporation which results in the acquiring person's voting power
increasing from its preacquisition level to one of the following levels of
voting power: (i) at least 20 percent but less than 33-1/3 percent; (ii) at
least 33-1/3 percent but less than or equal to 50 percent; and (iii) over 50
percent. The definition of a "control share acquisition" specifically excludes
acquisitions of shares from the corporation issuing such shares, and
acquisitions pursuant to plans of merger or exchange which are approved by the
shareholders of the corporation. Such exemption excluded the receipt of shares
issued to Stephen D. Higgins individually and as trustee in connection with the
Company's 1995 merger with International Leasing Corporation ("ILC") from
constituting a control share acquisition, however a transfer of the power to
vote or dispose of such shares could, unless otherwise exempted, constitute a
control share acquisition.
<PAGE>
The information that must be disclosed by the acquiring person includes,
among other things, the terms of the proposed control share acquisition, the
source of funds, any plans to liquidate the corporation and any plans to move
the location of its principal executive offices or business activities. If an
acquiring person meets certain requirements set forth in Section 671, the target
corporation must call a meeting of its shareholders for the purpose of
considering the proposed control share acquisition if the acquiring person so
requests in writing. The notice of the shareholders' meeting must be accompanied
by the information statement and a statement of the position of the board of
directors on the proposed control share acquisition. Unless the disclosure
provisions and the shareholder approval provisions of Section 671 are met,
shares acquired in a control share acquisition that exceed the initial threshold
of any of the new ranges of voting power described above (i.e.,20%, 33-1/3% or
50%) are denied voting rights and are subject to redemption by the target
corporation. Any such shares denied voting rights regain those voting rights
only upon transfer to a person other than the acquiring person or any affiliate
or associate of the acquiring person. Such shares are subject to a call for
redemption by the target corporation at a price equal to the market value of
such shares. The call for redemption must be given by the target corporation
within 30 days after the event giving rise to the option to call the shares for
redemption and must be redeemed within 60 days after the call is given.
Business Combinations. While there is no Delaware statute comparable to
Section 671, both Minnesota and Delaware have business combination statutes that
are intended primarily to deter highly leveraged takeover bids which propose to
use the target's assets as collateral for the offeror's debt financing or to
liquidate the target, in whole or in part, to satisfy financing obligations.
Proponents of the business combination statutes argue that such takeovers have a
number of abusive effects, such as adverse effects on the community and
employees, when the target is broken up. Further, proponents argue that if the
offeror can wholly finance its bid with the target's assets, that fact suggests
that the price offered is not fair in relation to the value of the company,
regardless of the current market price.
The Minnesota statute, MBCA Section 302.673, provides that an issuing
public corporation such as Sunrise Minnesota may not engage in certain business
combinations with any person that acquires beneficial ownership of 10 percent or
more of the voting stock of that corporation (i.e., an "interested shareholder")
for a period of four years following the date that the person became an
interested shareholder (the "share acquisition date") unless, prior to that
share acquisition date, a committee of the corporation's disinterested directors
approve either the business combination or the acquisition of shares. Sunrise
Minnesota currently has one "interested shareholder," whose acquisitions were
approved by a disinterested committee of the Company's Board of Directors
pursuant to the Minnesota statute: Stephen D. Higgins individually and as
trustee, as a result of the Company's 1995 merger with ILC.
<PAGE>
Only defined types of "business combinations" are prohibited by the
Minnesota statute. In general, the definition includes: any merger or exchange
of securities of the corporation with the interested shareholder; certain sales,
transfers or other disposition of assets of the corporation to an interested
shareholder; transfers by the corporation to interested shareholders of shares
that have a market value of five percent or more of the value of all outstanding
shares, except for a pro rata transfer made to all shareholders; any liquidation
or dissolution of, or reincorporation in another jurisdiction of, the
corporation which is proposed by the interested shareholder; certain
transactions proposed by the interested shareholder or any affiliate or
associate of the interested shareholder that would result in an increase in the
proportion of shares entitled to vote owned by the interested shareholder; and
transactions whereby the interested shareholder receives the benefit of loans,
advantages, guarantees, pledges or other financial assistance or tax advances or
credits from the corporation.
For purposes of selecting a committee, a director or person is
"disinterested" under the Minnesota Statute if the director or person is neither
an officer nor an employee, nor has been an officer or employee within five
years preceding the formation of the committee of the issuing public
corporation, or of a related corporation. The committee must consider and act on
any written, good faith proposal to acquire shares or engage in a business
combination. The committee must consider and take action on the proposal and
within 30 days render a decision in writing regarding the proposal.
In contrast to the Minnesota provisions, the Delaware statute provides that
if a person acquires 15 percent or more of the voting stock of a Delaware
corporation, the person is designated an "interested stockholder" and the
corporation may not engage in certain business combinations with such person for
a period of three years. However, an otherwise prohibited business combination
may be permitted if one of three conditions is met. First, if prior to the date
the person became an interested stockholder, the board of directors approved
either the business combination or the transaction which resulted in the
stockholder becoming an interested stockholder, then the business combination is
permitted. Second, a business combination is permitted if the tender offer or
other transaction pursuant to which the person acquires 15 percent stock
ownership is attractive enough such that the interested stockholder is able to
acquire ownership in the same transaction of at least 85 percent of the
outstanding voting stock (excluding for purposes of determining the number of
shares outstanding those shares owned by directors who are also officers and
shares owned by certain employee stock ownership plans). Finally, the business
combination is permissible if approved by the board and authorized at an annual
or special meeting of stockholders, and not by written consent, by the
affirmative vote of two-thirds of the outstanding voting shares held by
disinterested stockholders.
As in Minnesota, only certain Delaware corporations are subject to the
business combination provisions. A corporation is subject to the statute if it
is incorporated under the laws of Delaware and has a class of voting stock that
is listed on a national securities exchange, quoted on Nasdaq, or held of record
by more than 2,000 shareholders. Sunrise Delaware will be subject to the
Delaware statute.
<PAGE>
Only certain "business combinations" are prohibited under Delaware law. A
business combination is defined broadly to include any of the following: any
merger or consolidation with the interested stockholder; any sale, transfer or
other disposition of assets to the interested stockholder if the assets have a
market value equal to or greater than 10 percent of the aggregate market value
of all of the corporation's assets; any transfer of stock of the corporation to
the interested stockholder, except for transfers in a conversion or exchange or
a pro rata distribution; or any receipt by the interested stockholder of any
loans, advances, guarantees, pledges and other financial benefits, except in
connection with a pro rata transfer.
The Delaware provisions do not apply to any business combination in which
the corporation, with the support of a majority of those directors who were
serving as directors before any person became an interested stockholder,
proposes a merger, sale, lease, exchange or other disposition of at least 50
percent of its assets, or supports (or does not oppose) a tender offer for at
least 50 percent of its voting stock. In such a case, all interested
stockholders are released from the three year prohibition and may compete with
the corporation-sponsored transaction.
A comparison of the MBCA and DGCL business combination statutes reveals
that Minnesota law is somewhat more restrictive with respect to a prospective
takeover attempt than Delaware. In Minnesota, an interested shareholder is one
who owns 10 percent of the outstanding shares, while in Delaware 15 percent is
the threshold. In Minnesota, a person is deemed to beneficially own shares which
that person has the right to acquire pursuant to the exercise of stock options,
warrants or other rights, whereas in Delaware a person is not deemed to own such
shares. An interested shareholder must wait four years in Minnesota to engage in
prohibited business combinations, while the waiting period is only three years
in Delaware. Minnesota also has a potentially broader definition of a business
combination which encompasses a larger variety of transactions.
Another difference between the two statutes is the method by which
prohibited transactions become permissible. In Delaware, an otherwise prohibited
business combination may be permitted by board approval, by stockholder
approval, or by an acquisition of 85 percent of the outstanding shares of voting
stock. In Minnesota, a prohibited transaction is only permitted by advance board
committee approval. In addition, the Delaware statute provides that if the
corporation proposes a merger or sale of assets, or does not oppose a tender
offer, all interested stockholders are released from the three year prohibition
and may compete with the company-sponsored transaction in certain circumstances.
The Minnesota statute does not have a comparable provision.
Both the Minnesota and Delaware provisions permit a corporation to
"opt-out" of the business combination statute by electing to do so in its
articles or certificate of incorporation or bylaws. Neither the Restated and
Amended Articles of Incorporation (the "Articles") nor the Bylaws of Sunrise
Minnesota contain such an "opt-out" provision. Similarly, neither the
Certificate of Incorporation (the "Certificate") nor the Bylaws of Sunrise
Delaware contain such an "opt-out" provision.
<PAGE>
Other Anti-Takeover Provisions. The MBCA includes three other provisions
relating to takeovers that are not included in the DGCL. These provisions
address a corporation's use of golden parachutes, greenmail and the standard of
conduct of the board of directors in connection with the consideration of
takeover proposals.
The MBCA contains a provision which prohibits a publicly-held corporation
from entering into or amending agreements (commonly referred to as "golden
parachutes") that increase current or future compensation of any officer or
director during any tender offer or request or invitation for tenders.
The MBCA also contains a provision which limits the ability of a
corporation to repurchase shares at a price above market value (commonly
referred to as "greenmail"). The statute provides that a publicly-held
corporation is prohibited from purchasing or agreeing to purchase any shares
from a person who beneficially owns more than five percent of the voting power
of the corporation if the shares had been beneficially owned by that person for
less than two years, and if the purchase price would exceed the market value of
those shares. However, such a purchase will not violate the statute if the
purchase is approved at a meeting of the shareholders by a majority of the
voting power of all shares entitled to vote or if the corporation's offer is of
at least equal value per share and to all holders of shares of the class or
series and to all holders of any class or series into which the securities may
be converted.
The MBCA authorizes the board of directors, in considering the best
interests of the corporation with respect to a proposed acquisition of an
interest in the corporation, to consider the interest of the corporation's
employees, customers, suppliers and creditors, the economy of the state and
nation, community and social considerations and the long-term as well as
short-term interests of the corporation and its shareholders, including the
possibility that these interests may be best served by the continued
independence of the corporation.
Directors' Standard of Care and Personal Liability. The MBCA provides that
a director shall discharge the director's duties in good faith, in a manner the
director reasonably believed to be in the best interests of the corporation, and
with the care an ordinarily prudent person in a like position would have
exercised under similar circumstances. A director who so performs those duties
may not be held liable by reason of being a director or having been a director
of the corporation.
The DGCL provides that the board of directors has the ultimate
responsibility for managing the business affairs of a Delaware corporation. In
discharging this function, Delaware law holds directors to fiduciary duties of
care and loyalty to the corporation and its stockholders. Delaware courts have
held that the duty of care requires the exercise of an informed business
judgment. An informed business judgment means that the directors have informed
themselves of all material information reasonably available to them. Having
become so informed, they then must act with requisite care in the discharge of
their duties. Liabilities of directors of a Delaware corporation to the
corporation or its stockholders for breach of the duty of care requires a
finding by the court that the directors were grossly negligent in the
decision-making context. The duty of loyalty requires that, in making a business
decision, directors act in good faith and in the honest belief that the action
taken was in the best interest of the corporation.
<PAGE>
Limitation or Elimination of Directors' Personal Liability. The MBCA
provides that, if the articles of incorporation so provide, the personal
liability of a director for breach of fiduciary duty as a director may be
eliminated or limited, but that the articles may not limit or eliminate such
liability for (a) any breach of the director's duty of loyalty to the
corporation or its shareholders, (b) acts or omissions not in good faith or that
involve intentional misconduct or a knowing violation of law, (c) the payment of
unlawful dividends, stock repurchases or redemptions, (d) any transaction in
which the director received an improper personal benefit, (e) certain violations
of the Minnesota securities laws, and (f) any act or omission occurring prior to
the date when the provision in the articles eliminating or limiting liability
becomes effective. Sunrise Minnesota's Articles contain a provision eliminating
the personal liability of its directors for breach of fiduciary duty as a
director, subject to the foregoing limitations.
The DGCL provides that, if the certificate of incorporation so provides,
the personal liability of a director for breach of fiduciary duty as a director
may be eliminated or limited, but that the liability of a director is not
limited or eliminated for (a) any breach of the director's duty of loyalty to
the corporation or its shareholders, (b) acts or omissions not in good faith or
involving intentional misconduct or a knowing violation of law, (c) the payment
of unlawful dividends, stock repurchases or redemptions, or (d) any transaction
in which the director received an improper personal benefit. Sunrise Delaware's
Certificate contains a provision eliminating the personal liability of its
directors for breach of fiduciary duty as a director, subject to the foregoing
limitations.
The Company is not aware of any pending or threatened litigation to which
the above-described limitation of directors' liability would apply.
Indemnification. The MBCA generally provides for mandatory indemnification
of persons acting in an official capacity on behalf of the corporation if such a
person acted in good faith, received no improper personal benefit, acted in a
manner the person reasonably believed to be in or not opposed to the best
interest of the corporation and, in the case of a criminal proceeding, had no
reasonable cause to believe that the conduct was unlawful.
The DGCL permits a corporation to indemnify officers, directors, employees
or agents and expressly provides that the indemnification provided for therein
shall not be deemed exclusive of any indemnification right provided under any
bylaw, vote of shareholders or disinterested directors or otherwise.
<PAGE>
Delaware law permits indemnification against expenses and certain other
liabilities arising out of legal actions brought or threatened against parties
entitled to indemnity for their conduct on behalf of the corporation, provided
that each such person acted in good faith and in a manner such person reasonably
believed was in or not opposed to the best interests of the corporation.
Indemnification is available in a criminal action only if the person seeking
indemnity had no reasonable cause to believe that the person's conduct was
unlawful. Delaware law does not allow indemnification for directors in the case
of an action by or in the right of the corporation (including stockholder
derivative suits) as to which such director shall have been adjudged to be
liable to the corporation unless indemnification (limited to expenses) is
ordered by a court.
The Bylaws of Sunrise Minnesota provide for indemnification to the full
extent provided by Minnesota law. The Bylaws of Sunrise Delaware also provide
for indemnification to the full extent permitted by Delaware law.
Stockholder Voting. Under both Minnesota law and Delaware law, action on
certain matters, including the sale, lease or exchange of all or substantially
all of the corporation's property or assets, mergers, and consolidations and
voluntary dissolution, must be approved by the holders of a majority of the
outstanding shares. In addition, both states' laws provide that the articles of
incorporation may provide for a supermajority of the voting power of the
outstanding shares to approve such extraordinary corporate transactions.
Appraisal Rights in Connection with Corporate Reorganizations and Other
Actions. Under Minnesota law and Delaware law, shareholders have the right, in
some circumstances, to dissent from certain corporate transactions by demanding
payment in cash for their shares equal to the fair value as determined by
agreement with the corporation or by a court in an action timely brought by the
dissenters. Minnesota law, in general, affords dissenters' rights upon certain
amendments to the articles that materially and adversely affect the rights or
preferences of the shares of the dissenting shareholder, upon the sale of
substantially all corporate assets, and upon merger or exchange by a
corporation, regardless of whether the shares of the corporation are listed on a
national securities exchange or widely held.
Delaware law allows for dissenters' rights only in connection with certain
mergers or consolidations. No such appraisal rights exist, however, for
corporations whose shares are listed on a national securities exchange or held
of record by more than 2,000 stockholders unless the certificate of
incorporation provides otherwise (Sunrise Delaware's Certificate does not
provide otherwise) or unless the shareholders are to receive in the merger or
consolidation anything other than (a) shares of stock of the corporation
surviving or resulting from such merger or consolidation, (b) shares of stock of
any other corporation which at the effective date of the merger or consolidation
will be either listed on a national securities exchange or held of record by
more than 2,000 shareholders, and/or (c) cash in lieu of fractional shares of
the corporation.
<PAGE>
The procedures for asserting dissenters' rights in Delaware impose most of
the initial costs of such assertion on the dissenting shareholder, whereas the
Minnesota procedures pose little financial risk to the dissenting shareholder in
demanding payment in excess of the amount the corporation determined to be the
fair value of its shares.
Cumulative Voting for Directors. Minnesota law provides that each
stockholder entitled to vote for directors has the right to cumulate those votes
in the election of directors by giving written notice of intent to do so, unless
the corporation's articles of incorporation provide otherwise. Sunrise
Minnesota's Articles prohibit such accumulation of votes in elections of
directors. Under Delaware law, no such cumulative voting exists, unless the
certificate of incorporation provides otherwise. Sunrise Delaware's Certificate
does not provide for cumulative voting in elections of directors.
Conflicts of Interest. Under both Minnesota law and Delaware law, a
contract or transaction between a corporation and one or more of its directors,
or an entity in or of which one or more of the corporation's directors are
directors, officers, or legal representatives or have a material financial
interest, is not void or voidable solely by reason of the conflict, provided
that the contract or transaction is fair and reasonable at the time it is
authorized, it is ratified by the corporation's stockholders after disclosure of
the relationship or interest, or is authorized in good faith by a majority of
the disinterested members of the board of directors after disclosure of the
relationship or interest. However, if the contract or transaction is authorized
by the board, under Minnesota law the interested director may not be counted in
determining the presence of a quorum and may not vote. Delaware law permits the
interested director to be counted in determining whether a quorum of the
directors is present at the meeting approving the transaction, and further
provides that the contract or transaction shall not be void or voidable solely
because the interested director's vote is counted at the meeting which
authorizes the transaction.
Classified Board of Directors. Both Minnesota and Delaware permit a
corporation's bylaws to provide for a classified board of directors. Delaware
permits a maximum of three classes; Minnesota law does not limit the number of
classes. The Bylaws of Sunrise Minnesota and of Sunrise Delaware do not provide
for a classified board of directors.
Removal of Director. Under Minnesota law, in general, unless a
corporation's articles provide otherwise, a director may be removed with or
without cause by the affirmative vote of a majority of the shareholders. Under
Delaware law, a director of a corporation may be removed with or without cause
by a majority vote of the directors. However, a director of a Delaware
corporation that has a classified board may be removed only for cause, unless
the certificate of incorporation provides otherwise. Sunrise Delaware's Bylaws
do not provide for a classified board.
<PAGE>
Vacancies on Board of Directors. Under Minnesota law, unless the articles
or bylaws provide otherwise, (a) a vacancy on a corporation's board of directors
may be filled by the vote of a majority of directors then in office, although
less than a quorum, (b) a newly created directorship resulting from an increase
in the number of directors may be filled by the board, and (c) any director so
elected shall hold office only until a qualified successor is elected at the
next regular or special meeting of shareholders. Sunrise Minnesota's Bylaws
follow these provisions.
Under Delaware law, a vacancy on a corporation's board of directors may be
filled by a majority of the remaining directors, although less than a quorum, or
by the affirmative vote of a majority of the outstanding voting shares, unless
otherwise provided in the certificate of incorporation or bylaws. Sunrise
Delaware's Bylaws are the same as the Company's Bylaws on this point.
Annual Meetings of Stockholders. Minnesota law provides that if a regular
meeting of shareholders has not been held during the immediately preceding 15
months, a shareholder or shareholders holding 3% or more of the voting power of
all shares entitled to vote may demand a regular meeting of stockholders.
Delaware law provides that if no date has been set for an annual meeting of
stockholders for a period of 13 months after the last annual meeting, the
Delaware court may order a meeting to be held upon the application of any
stockholder or director.
Special Meetings of Stockholders. Minnesota law provides that the chief
executive officer, the chief financial officer, two or more directors, a person
authorized in the articles or bylaws to call a special meeting, or a shareholder
holding 10 percent or more of the voting power of all shares entitled to vote,
may call a special meeting of the stockholders, except that a special meeting
concerning a business combination must be called by 25 percent of the voting
power of all shares entitled to vote. Under Delaware law, only the board of
directors or those persons authorized by the corporation's certificate of
incorporation or bylaws may call a special meeting of the corporation's
stockholders. The Bylaws of Sunrise Delaware provide that stockholders holding
10 percent of the voting power can call special meetings.
Voluntary Dissolution. Minnesota law provides that a corporation may be
dissolved by the voluntary action of holders of a majority of a corporation's
shares entitled to vote at a meeting called for the purpose of considering such
dissolution. Delaware law provides that voluntary dissolution of a corporation
first must be deemed advisable by a majority of the board of directors and then
approved by a majority of the outstanding stock entitled to vote. Delaware law
further provides for voluntary dissolution of a corporation without action of
the directors if all of the stockholders entitled to vote on such dissolution
shall have consented to the dissolution in writing.
Involuntary Dissolution. Minnesota law provides that a court may dissolve a
corporation in an action by a shareholder where: (a) the situation involves a
deadlock in the management of corporate affairs and the shareholders cannot
break the deadlock; (b) the directors have acted fraudulently, illegally, or in
a manner unfairly prejudicial to the corporation; (c) the shareholders are
divided in voting power for two consecutive regular meetings to the point where
successor directors are not elected; (d) there is a case of misapplication or
waste of corporate assets; or (e) the duration of the corporation has expired.
The Delaware law states that courts may revoke or forfeit the charter of any
corporation for abuse, misuse or nonuse of its corporate powers, privileges or
franchises.
<PAGE>
Inspection of Shareholder Lists. Under Minnesota law, any shareholder has
an absolute right, upon written demand, to examine and copy, in person or by a
legal representative, at any reasonable time, the corporation's share register.
Under Delaware law, any shareholder, upon written demand under oath stating the
purpose thereof, has the right during the usual hours for business to inspect
for any proper purpose a list of the corporation's stockholders and to make
copies or extracts therefrom.
Amendment of the Bylaws. Minnesota law provides that, unless reserved by
the articles to the shareholders, the power to adopt, amend or repeal a
corporation's bylaws is vested in the board, subject to the power of the
shareholders to adopt, repeal or amend the bylaws. After adoption of initial
bylaws, the board of a Minnesota corporation cannot adopt, amend or repeal a
bylaw fixing a quorum for meetings of shareholders, prescribing procedures for
removing directors or filling vacancies in the board, or fixing the number of
directors or their classifications, qualifications or terms of office, but may
adopt or amend a bylaw to increase the number of directors.
Delaware law provides that the power to adopt, amend or repeal bylaws
remains with the corporation's stockholders, but permits the corporation, in its
certificate of incorporation, to place such power in the board of directors.
Sunrise Delaware's Certificate places the power to adopt, amend or repeal its
Bylaws in the corporation's directors. Under Delaware law, the fact that such
power has been placed in the board of directors neither divests nor limits the
stockholders' power to adopt, amend or repeal bylaws.
Amendment of the Charter. Under Minnesota law, before the shareholders may
vote on an amendment to the articles of incorporation, either a resolution to
amend the articles must have been approved by the affirmative vote of the
majority of the directors present at the meeting where such resolution was
considered, or the amendment must have been proposed by shareholders holding
three percent or more of the voting power of the shares entitled to vote.
Amending the articles of incorporation requires the affirmative vote of the
holders of the majority of the voting power present and entitled to vote at the
meeting (and of each class, if entitled to vote as a class), unless the articles
of incorporation require a larger proportion. Minnesota law provides that a
proposed amendment may be voted upon by the holders of a class or series even if
the articles of incorporation would deny that right, if among other things, the
proposed amendment would increase or decrease the aggregate number of authorized
shares of the class or series, change the rights or preferences of the class or
series, create a new class or series of shares having rights and preferences
prior and superior to the shares of that class or series or limit or deny any
existing preemptive right of the shares of the class or series.
<PAGE>
Under Delaware law, the board of directors must adopt a resolution setting
forth an amendment to the certificate of incorporation before the shareholders
may vote thereon. Unless the certificate of incorporation provides otherwise,
amendments of the certificate of incorporation generally require the approval of
the holders of a majority of the outstanding stock entitled to vote thereon, and
if the amendment would increase or decrease the number of authorized shares of
any class or series or the par value of such shares or would adversely affect
the rights, powers or preferences of such class or series, a majority of the
outstanding stock of such class or series also must approve the amendment.
Proxies. Both Minnesota law and Delaware law permit proxies of definite
duration. In the event the proxy is indefinite as to its duration, under
Minnesota law it is valid for 11 months, under Delaware law, for three years.
Preemptive Rights. Under Minnesota law, shareholders have preemptive rights
to acquire a certain fraction of the unissued securities or rights to purchase
securities of a corporation before the corporation may offer them to other
persons, unless the corporation's articles of incorporation otherwise provide.
The Articles of Incorporation of Sunrise Minnesota provide that no such
preemptive right exists in Sunrise Minnesota's shareholders. Under Delaware law,
no such preemptive right will exist, unless the corporation's certificate of
incorporation specifies otherwise. Sunrise Delaware's Certificate does not
provide for any such preemptive rights.
Dividends. Generally, a Minnesota corporation may pay a dividend if its
board determines that the corporation will be able to pay its debts in the
ordinary course of business after paying the dividend and if, among other
things, the dividend payment does not reduce the remaining net assets of the
corporation below the aggregate preferential amount payable in the event of
liquidation to the holders of the shares having preferential rights, unless the
payment is made to those shareholders in the order and to the extent of their
respective priorities. A Delaware corporation may pay dividends out of surplus
or, if there is no surplus, out of net profits for the fiscal year in which the
dividend is declared and/or for the preceding fiscal year, except that dividends
may not be paid out of net profits if, after the payment of the dividend,
capital is less than the capital represented by the outstanding stock of all
classes having a preference upon the distribution of assets.
Shareholders' Action Without a Meeting. Under Minnesota law, any action
required or permitted to be taken at a shareholders' meeting may be taken
without a meeting by written consent signed by all of the shareholders entitled
to vote on such action. This power cannot be restricted by a Minnesota
corporation's articles. Delaware law permits such an action to be taken if the
written consent is signed by the holders of shares that would have been required
to effect the action at an actual meeting of the stockholders. Generally,
holders of a majority of outstanding shares could effect such an action.
However, Delaware law also provides that a corporation's certificate of
incorporation may restrict or prohibit stockholders' action without a meeting,
and Sunrise Delaware's Certificate restricts such stockholder action without a
meeting.
<PAGE>
Action by written consent may, in some circumstances, permit the taking of
shareholder action opposed by the board of directors more rapidly than would be
possible if a meeting of shareholders were required. The Board of Directors
believes, however, that it is important that the Board be able to give advance
notice of and consideration to any such shareholder action in certain
circumstances, and that shareholders be able to discuss at a meeting matters
which may affect their rights. The Board of Directors believes that it is
generally inappropriate for shareholders of a publicly-held corporation to take
action affecting the corporation and its shareholders without a meeting.
Therefore, the Sunrise Delaware Certificate includes a restriction against
shareholder action by written consent without a meeting.
Stock Repurchases. A Minnesota corporation may acquire its own shares if,
after the acquisition, it is able to pay its debts as they become due in the
ordinary course of business and if enough value remains in the corporation to
satisfy all preferences of senior securities. Under Delaware law, a corporation
may purchase or redeem shares of any class except when its capital is impaired
or such purchase would cause impairment of capital, except that a corporation
may purchase or redeem out of capital any of its preferred shares if such shares
will be retired upon the acquisition and the capital of the corporation will be
thereby reduced.
Rights of Dissenting Shareholders
Section 302A.471 of the MBCA grants any shareholder of the Company of
record on September 2, 1997 who objects to the Merger the right to have the
Company purchase the shares owned by the dissenting shareholder at their fair
value at the Effective Time of the Merger. It is the present intention of the
Company to abandon the Merger in the event shareholders exercise dissenter's
rights and the Company becomes obligated to make a substantial payment to said
dissenting shareholders.
To be entitled to payment, the dissenting shareholder must file prior to
the vote for the proposed Merger a written notice of intent to demand payment of
the fair value of the shares and must not vote in favor of the proposed Merger;
provided, that such demand shall be of no force and effect if the proposed
Merger is not effected. The submission of a blank proxy will constitute a vote
in favor of the Merger and a waiver of dissenter's rights. The Company's
liability to dissenting shareholder for the fair value of the shares shall also
be the liability of Sunrise Delaware when and if the reincorporation is
consummated. Any shareholder contemplating the exercise of these dissenter's
rights should review carefully the provisions of Sections 302A.471 and 302A.473
of the MBCA, particularly the procedural steps required to perfect such rights.
SUCH RIGHTS WILL BE LOST IF THE PROCEDURAL REQUIREMENTS OF SECTIONS 302A.471 AND
302A.473 ARE NOT FULLY AND PRECISELY SATISFIED. A COPY OF SECTIONS 302A.471 AND
302A.473 IS ATTACHED AS EXHIBIT D.
<PAGE>
Shareholders of the Company who do not demand payment for their shares as
provided above and in Section 302A.473 of the MBCA shall be deemed to have
assented to the Merger. A vote against the Merger, however, is not necessary to
entitle dissenting shareholders to require the Company to purchase their shares.
If and when the proposed Reincorporation is approved by shareholders of the
Company and the Merger Agreement is not abandoned by the Board of Directors, the
Company shall notify all shareholders who have dissented as provided above of:
(1) the address to which demand for payment and certificates for shares
must be sent to obtain payment and the date by which they must be received;
(2) any restriction on transfer of uncertificated shares that will apply
after the demand for payment is received;
(3) a form to be used to certify the date on which the shareholder, or the
beneficial owner on whose behalf the shareholder dissents, acquired the shares
or an interest in them and to demand payment; and
(4) a copy of Sections 302A.471 and 302A.473 of the MBCA and a brief
description of the procedures to be followed to dissent and obtain payment of
fair values for shares.
To receive the fair value of the shares, a dissenting shareholder must
demand payment and deposit share certificates within 30 days after the notice
was given, but the dissenter retains all other rights of a shareholder until the
proposed action takes effect. Under Minnesota law, notice by mail is given by
the Company when deposited in the United States mail. A shareholder who fails to
make demand for payment and to deposit certificates will lose the right to
receive the fair value of the shares notwithstanding the timely filing of the
first notice of intent to demand payment. After the effective date of the
Reincorporation, the Company shall remit to the dissenting shareholders who have
complied with the above-described procedures the amount the Company estimates to
be the fair value of such shareholder's shares, plus interest.
If a dissenter believes that the amount remitted by the Company is less
than the fair value of the shares, with interest, the shareholder may give
written notice to the Company of the dissenting shareholder's estimate of fair
value, with interest, within 30 days after the Company mails such remittance and
demand payment of the difference. UNLESS A SHAREHOLDER MAKES SUCH A DEMAND
WITHIN SUCH THIRTY-DAY PERIOD, THE SHAREHOLDER WILL BE ENTITLED ONLY TO THE
AMOUNT REMITTED BY THE COMPANY.
Within 60 days after the Company receives such a demand from a
shareholder, it will be required either to pay the shareholder the amount
demanded or agreed to after discussion between the stockholder and the Company
or to file in court a petition requesting that the court determine the fair
value of the shares, with interest. All shareholders who have demanded payment
for their shares, but have not reached agreement with the Company, will be made
parties to the proceeding. The court will then determine whether the
shareholders in question have fully complied with the provisions of Section
302A.473 and will determine the fair value of the shares, taking into account
any and all factors the court finds relevant (including the recommendation of
any appraisers that may have been appointed by the court), computed by any
method that the court, in its discretion, sees fit to use, whether or not used
by the Company or a shareholder. The costs and expenses of the court proceeding
will be assessed against the Company, except that the court may assess part or
all of those costs and expenses against a shareholder whose action in demanding
payment is found to be arbitrary, vexatious, or not in good faith.
<PAGE>
The fair value of the Company's shares means the fair value of the shares
immediately before the effectiveness of the Merger. Under Section 302A.471, a
shareholder of the Company has no right at law or equity to set aside the
consummation of the Merger, except if such consummation is fraudulent with
respect to such shareholder or the Company.
Any shareholder making a demand for payment of fair value may withdraw the
demand at any time prior to the determination of the fair value of the shares by
filing written notice of such withdrawal with the Company.
The foregoing summary of the applicable provisions of Sections 302A.471 and
302A.473 of the MBCA is not intended to be a complete statement of such
provisions and is qualified in its entirety by reference to such sections, the
full texts of which are attached as Exhibit D to this Proxy Statement.
Tax Consequences
The Reincorporation provided for in the Merger Agreement is intended to be
tax free under the Internal Revenue Code. Accordingly, no gain or loss will be
recognized by the Company's shareholders for federal income tax purposes as a
result of the consummation of the Reincorporation. Each shareholder will have a
tax basis in the shares of capital stock of Sunrise Delaware deemed received
equal to the tax basis of the shareholder in the shares of capital stock deemed
exchanged therefor, and, provided that the shareholder held the shares of
capital stock as a capital asset, such shareholder's holding period for the
shares of capital stock of Sunrise Delaware deemed to have been received will
include the holding period of the shares of capital stock deemed exchanged
therefor. No gain or loss will be recognized for federal income tax purposes by
Sunrise Minnesota or Sunrise Delaware, and Sunrise Delaware will succeed,
without adjustment, to the tax attributes of the Company.
Shareholders should consult their own tax advisers as to the particular tax
consequences to them of the Reincorporation under state, local or foreign tax
laws.
<PAGE>
Regulatory Requirements
The Company does not have to comply with any federal or state regulatory
requirements, other than the federal and applicable state securities laws, in
connection with the Reincorporation.
Vote Required for Reincorporation
Approval of the Reincorporation and the Merger Agreement will require the
affirmative vote of a majority of the outstanding shares of Common Stock of
Sunrise Minnesota. As a result, the Reincorporation will not be effected if less
than 50 percent of the outstanding shares of Common Stock of Sunrise Minnesota
(approximately 3,893,898 shares) are voted in favor of the Reincorporation.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE MERGER
AGREEMENT AND THE REINCORPORATION.
OTHER BUSINESS
Management knows of no other matters to be presented at the 1997 Annual
Meeting. If any other matter properly comes before the Annual Meeting, the
appointees named in the Proxies will vote the Proxies in accordance with their
best judgment.
SHAREHOLDER PROPOSALS
Any appropriate proposal submitted by a shareholder of the Company and
intended to be presented at the 1998 Annual Meeting must be received by the
Company by April 15, 1998 to be includable in the Company's proxy statement and
related proxy for the 1998 Annual Meeting.
INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen LLP has served as the Company's independent public
accountants since August 1993. Representatives of Arthur Andersen LLP are
expected to be present at the Annual Meeting and will be given an opportunity to
make a statement regarding financial and accounting matters of the Company if
they so desire. Arthur Andersen will be available to respond to appropriate
questions from the Company's shareholders. The Company is considering changing
its independent accountants and therefore has not selected an accountant for the
current fiscal year. There is no disagreement between the Company and Arthur
Andersen.
<PAGE>
FORM 10-K
THE COMPANY WILL PROVIDE AT NO CHARGE A COPY OF ITS ANNUAL REPORT ON FORM 10-K,
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, TO ANY BENEFICIAL OWNER OF
SHARES ENTITLED TO VOTE AT THE 1997 ANNUAL MEETING. PLEASE ADDRESS YOUR REQUEST
TO THE ATTENTION OF BARRY J. SCHWACH, CHIEF FINANCIAL OFFICER. YOUR REQUEST MUST
CONTAIN A REPRESENTATION THAT, AS OF SEPTEMBER 2, 1997, YOU WERE A BENEFICIAL
OWNER OF SHARES ENTITLED TO VOTE AT THE ANNUAL MEETING OF SHAREHOLDERS.
BY ORDER OF THE BOARD OF DIRECTORS
Jeffrey G. Jacobsen, Secretary
Dated: September 16, 1997
<PAGE>
EXHIBIT A
AGREEMENT AND PLAN OF MERGER
DATE: August 28, 1997
PARTIES:
Sunrise Resources, Inc. (a Minnesota corporation) ("Sunrise Minnesota")
5500 Wayzata Boulevard, Suite 725
Golden Valley, Minnesota 55416
Sunrise International Leasing Corporation ("Sunrise Delaware")
(a Delaware corporation)
5500 Wayzata Boulevard, Suite 725
Golden Valley, Minnesota 55416
RECITALS:
A. Sunrise Minnesota is a corporation duly organized, validly existing, and
in good standing under the laws of the State of Minnesota.
B. Sunrise Delaware is a corporation duly organized, validly existing, and
in good standing under the laws of the State of Delaware.
C. The Board of Directors of Sunrise Minnesota and the Board of Directors
of Sunrise Delaware deem it advisable that Sunrise Minnesota merge with and into
Sunrise Delaware in accordance with the applicable laws of the States of
Delaware and Minnesota, and the Board of Directors of each of such corporations
has approved this Agreement and Plan of Merger (the "Merger Agreement").
D. The Board of Directors of Sunrise Minnesota has directed that this
Agreement be submitted to a vote of the Sunrise Minnesota shareholders at the
Annual Meeting of Shareholders to be held on October 17, 1997, or any
adjournment thereof.
AGREEMENTS:
NOW, THEREFORE, in consideration of the agreements, provisions, and
covenants herein contained, the parties hereby agree as follows:
<PAGE>
I. TERMS AND CONDITIONS
1.1 Merger. Sunrise Minnesota shall be merged (the "Merger") with and into
Sunrise Delaware, and Sunrise Delaware shall be the surviving corporation (the
"Surviving Corporation"), effective upon the date that this Agreement or an
appropriate certificate of merger is filed with the Secretary of State of the
State of Delaware, or upon the date that appropriate articles of merger are
filed with the Secretary of State of the State of Minnesota, whichever occurs
later (the "Effective Date").
1.2 Effect of Merger.
(a) On the Effective Date, the separate corporate existence of Sunrise
Minnesota shall cease, and the corporate existence of Sunrise Delaware, as
the Surviving Corporation governed by Delaware law, shall continue
unimpaired and unaffected by the Merger.
(b) On the Effective Date, the shares of Sunrise Delaware Common Stock
theretofore issued and outstanding shall be retired and canceled.
(c) On the Effective Date, each share of Sunrise Minnesota Common
Stock issued and outstanding shall be converted by reason of the Merger and
without any action on the part of the holders thereof into and become one
share of Common Stock of the Surviving Corporation. Except as provided by
Sections 302A.471 and 302A.473 of the Minnesota Business Corporation Act,
the shares of Sunrise Minnesota Common Stock so converted shall cease to
exist as such and shall exist only as shares of Common Stock of the
Surviving Corporation.
1.3 Stock Certificates. On and after the Effective Date, all of the
outstanding certificates which prior to that time represented shares of the
Common Stock of Sunrise Minnesota shall be deemed for all purposes to evidence
ownership of and to represent the shares of the Surviving Corporation into which
the shares of Sunrise Minnesota represented by such certificates have been
converted as herein provided. The registered owner on the books and records of
Sunrise Minnesota or its transfer agent of any such outstanding stock
certificate shall, until such certificate shall have been surrendered for
transfer or conversion or otherwise accounted for to the Surviving Corporation
or its transfer agent, have and be entitled to exercise any voting and other
rights with respect to and to receive any dividend and other distributions upon
the shares of the Surviving Corporation evidenced by such outstanding
certificate as above provided.
1.4 Options. Upon the Effective Date, the Surviving Corporation will assume
and continue all existing stock option and stock purchase plans of Sunrise
Minnesota and the outstanding and unexercised portions of all options or
warrants to buy Common Stock of Sunrise Minnesota which shall become options or
warrants for the same number of shares of Common Stock of the Surviving
Corporation with no other changes in the terms or conditions of such options,
including exercise prices.
<PAGE>
II. CHARTER DOCUMENTS, DIRECTORS, AND OFFICERS
2.1 Sunrise Delaware Certificate of Incorporation and Bylaws. The
Certificate of Incorporation of Sunrise Delaware, as in effect on the Effective
Date, shall continue to be the Certificate of Incorporation of the Surviving
Corporation until further amended in accordance with the provisions thereof and
applicable law. The Bylaws of Sunrise Delaware, as amended and in effect on the
Effective Date, shall continue to be the Bylaws of the Surviving Corporation
without change or amendment until further amended in accordance with the
provisions thereof and applicable law.
2.2 Sunrise Directors and Officers. The directors of Sunrise Minnesota on
the Effective Date shall become the directors of the Surviving Corporation and
continue in office until their successors are elected and qualified, or until
their death, resignation, or removal. The officers of Sunrise Minnesota on the
Effective Date shall become the officers of the Surviving Corporation and
continue in office and shall serve at the pleasure of the Board of Directors.
III. CONDITIONS TO MERGER
3.1 Conditions. The consummation of the Merger and the other transactions
contemplated by this Merger Agreement is subject to the satisfaction of the
following conditions prior to or on the Effective Date:
(a) Shareholder Approval. The principal terms of this Merger Agreement
shall have been approved by the shareholders of Sunrise Minnesota; and
(b) Listing. The shares of Surviving Corporation Common Stock to be
issued shall be, upon official notice of issuance, listed on the Nasdaq
National Market(TM).
IV. MISCELLANEOUS
4.1 Abandonment. At any time before the Effective Date, this Merger
Agreement may be terminated and the Merger may be abandoned by the Board of
Directors of Sunrise Minnesota, notwithstanding approval of this Merger
Agreement by the shareholders of Sunrise Minnesota.
4.2 Amendment. At any time before the Effective Date, this Merger Agreement
may be amended, modified, or supplemented by the Boards of Directors of the
parties hereto, notwithstanding approval of this Merger Agreement by the
shareholders of Sunrise Minnesota, provided, however, that no such amendment,
modification, or supplement not approved by the shareholders changes any of this
Merger Agreement's principal terms.
<PAGE>
4.3 Counterparts. In order to facilitate the filing and recording of this
Merger Agreement, the same may be executed in any number of counterparts, each
of which shall be deemed to be an original.
4.4 Further Assurances. From time to time on and after the Effective Date,
each party hereto agrees that it will execute and deliver or cause to be
executed and delivered all such further assignments, assurances or other
instruments, and shall take or cause to be taken all such further actions, as
may be necessary or desirable to consummate the Merger provided for herein, and
the other transactions contemplated by this Merger Agreement.
IN WITNESS WHEREOF, this Merger Agreement, having first been duly approved
by the Board of Directors of each of the parties hereto, is hereby executed on
behalf of each of said corporations by their respective officers thereunto duly
authorized.
SUNRISE RESOURCES, INC.,
a Minnesota corporation
By: /s/ Errol F. Carlsrom
Errol F. Carlstrom, President
Attest:
/s/ Jeffrey G. Jacobsen
Jeffrey G. Jacobsen, Secretary
SUNRISE INTERNATIONAL
LEASING CORPORATION,
a Delaware corporation
By: /s/ Errol F. Carlstrom
Errol F. Carlstrom, President
Attest:
/s/ Jeffrey G. Jacobsen
Jeffrey G. Jacobsen, Secretary
<PAGE>
EXHIBIT B
CERTIFICATE OF INCORPORATION
OF
SUNRISE INTERNATIONAL LEASING CORPORATION
ARTICLE 1 - NAME
1.1) The name of the corporation is Sunrise International Leasing
Corporation.
ARTICLE 2 - REGISTERED OFFICE AND AGENT
2.1) The registered office of the corporation is located at 1013 Centre
Road, Wilmington, County of New Castle, DE 19805. The name of its
registered agent at such address is Corporation Service Company.
ARTICLE 3 - PURPOSES
3.1) The nature of the business or purposes to be conducted or promoted by
the corporation is to engage in any lawful act or activity for which
corporations may be organized under the General Corporation Law of Delaware.
ARTICLE 4 - CAPITAL STOCK
4.1) The aggregate number of shares the corporation has authority to issue
shall be 20,000,000 shares, which shall have a par value of $.01 per share and
which shall consist of 17,500,000 shares of Common Stock and 2,500,000 shares of
Preferred Stock. The Board of Directors of the corporation is authorized to
establish from the shares of Preferred Stock, by resolution adopted and filed in
the manner provided by law, one or more classes or series and to fix the powers,
relative rights and preferences of each such class or series.
4.2) No holder of shares of the corporation of any class now or hereafter
authorized has any preferential or preemptive right to subscribe for, purchase
or receive any shares of the corporation of any class now or hereafter
authorized, or any options or warrants for such shares, which may at any time be
issued, sold or offered for sale by the corporation.
4.3) No holder of shares of the corporation of any class now or hereafter
authorized shall be entitled to cumulative voting.
4.4) The Board is further authorized to issue shares of one class or series
to holders of that class or series or to holders of another class or series to
effectuate share dividends or splits.
<PAGE>
ARTICLE 5 - MEETINGS AND BOOKS
5.1) Meetings of the stockholders may be held outside the State of
Delaware, as the Bylaws may provide. No action shall be taken by the
stockholders by written consent without a meeting.
5.2) The books of the corporation may be kept (subject to any provision
contained in the statutes) outside the State of Delaware at such place or places
as may be designated from time to time by the Board of Directors or in the
Bylaws of the corporation.
ARTICLE 6 - INCORPORATOR
6.1) The name and mailing address of the incorporator are as follows:
John F. Wurm
1100 International Centre
900 Second Avenue South
Minneapolis, Minnesota 55402
ARTICLE 7 - LIMITATION OF DIRECTOR LIABILITY
7.1) A director of the corporation shall not be personally liable to the
corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, except a director shall be liable to the extent provided by
applicable law (i) for any breach of the director's duty of loyalty to the
corporation or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) under
Section 174 of the Delaware General Corporation Law, or (iv) for any transaction
from which the director derived an improper personal benefit. If the Delaware
General Corporation Law is hereafter amended to authorize the further
elimination or limitation of the liability of a director, then the liability of
a director of the corporation shall be so further eliminated or limited to the
fullest extent permitted by the Delaware General Corporation Law, as so amended.
Any repeal or modification of the foregoing provisions of this Article 7 by the
stockholders of the corporation shall not adversely affect any right or
protection of a director of the corporation existing at the time of such repeal
or modification.
ARTICLE 8 - INDEMNIFICATION
8.1) The corporation shall indemnify, to the fullest extent authorized or
permitted by law as now enacted or hereafter amended, any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that such person is or was a director,
officer, employee or agent of the corporation or by reason of the fact that such
person, at the request of the corporation, is or was serving any other
corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise, as a director, officer, employee or agent.
<PAGE>
8.2) The corporation shall, to the fullest extent authorized or permitted
by law as now enacted or hereafter amended, pay the expenses (including
attorneys' fees) incurred by persons identified in the preceding Section 8.1 in
defending such action, suit or proceeding in advance of the final disposition of
the same.
8.3) The rights conferred on any person pursuant to this Article 8 shall
not be exclusive of any other rights which such person may have or hereafter
acquire under any statutes, Bylaw, agreement, vote of stockholders or
disinterested directors, or otherwise.
8.4) The Board of Directors may authorize the purchase and maintenance of
insurance for the purpose of such indemnification or other rights granted
pursuant to this Article 8, against expense liability or loss, whether or not
the corporation would have the power to indemnify such persons against such
expense, liability or loss under the Delaware General Corporation Law, as now
enacted or hereafter amended.
8.5) The indemnification and advancement of expenses provide by, or granted
pursuant to, this Article 8 shall, unless otherwise provided when authorized or
ratified, continue as to a person who has ceased to be a director, officer,
employee or agent and shall inure to the benefit of the heirs, executors and
administrators of such a person.
ARTICLE 9 - BYLAWS
9.1) The Board of Directors is expressly authorized to make and alter
Bylaws of this corporation, subject to the power of the stockholders to change
or repeal such Bylaws and subject to any other limitations on such authority
provided by the General Corporation Law of Delaware.
The undersigned, being the incorporator hereinbefore named, for the purpose
of forming a corporation pursuant to the General Corporation Law of the State of
Delaware, does make this Certificate, hereby declaring and certifying that this
is his act and deed and the facts herein stated are true, and accordingly has
hereunto set his hand this 27th day of August, 1997.
/s/ John F. Wurm
John F. Wurm
<PAGE>
EXHIBIT C
BYLAWS
OF
SUNRISE INTERNATIONAL LEASING CORPORATION
ARTICLE 1.
OFFICES
1.1) Offices. The registered office of the corporation shall be located
1013 Centre Road, in the City of Wilmington, State of Delaware. The corporation
may also have offices and places of business at such other places, within or
without the State of Delaware, as the Board of Directors may from time to time
determine or the business of the corporation may require.
ARTICLE 2.
MEETINGS OF STOCKHOLDERS
2.1) Time and Place. The annual meeting and all special meetings of
stockholders may be held at such time and place within or without the State of
Delaware as shall be stated in the notice of the meeting or in a duly executed
waiver of notice thereof.
2.2) Annual Meetings. The annual meeting of stockholders shall be held on
such day of such month of each year as shall be determined by the Board of
Directors or, if the Board shall fail to act, by the President. At the annual
meeting the stockholders, voting as provided in the Certificate of Incorporation
or by law or in these Bylaws, shall elect directors and shall transact such
other business as may properly be brought before the meeting.
2.3) Special Meetings. Special meetings of the stockholders entitled to
vote shall be called by the Secretary at any time upon request of the Chairman
of the Board, the President, or the Board of Directors (acting upon majority
vote). In addition, special meetings of the stockholders entitled to vote may be
called by a shareholder or shareholders holding ten percent (10%) or more of the
voting power of all shares entitled to vote who shall demand such special
meeting by giving written notice of demand to the President, Secretary,
Treasurer, Chairman of the Board or any other director specifying the purposes
of the meeting.
2.4) Notice. Written notice of the place, date and hour of any annual or
special meeting of stockholders shall be given personally or by mail to each
stockholder entitled to vote thereat, at such shareholder's address as it
appears on the records of the corporation, not less than ten (10) nor more than
sixty (60) days prior to the meeting. Notice of any special meeting shall state
the purpose or purposes for which the meeting is called.
<PAGE>
2.5) Stockholder List. The officer who has charge of the stock ledger of
the corporation shall prepare, at least ten (10) days before every meeting of
stockholders, a complete list of the stockholders entitled to vote at the
meeting, arranged in alphabetical order, and showing the address of each
stockholder and the number of shares registered in the name of each stockholder.
Such list shall be open to the examination of any stockholder, for any purpose
germane to the meeting, during ordinary business hours, for at least ten (10)
days prior to the meeting, at a place within the city where the meeting is to be
held. The list shall also be produced at the time and place of the meeting, and
open for inspection by any stockholder during the meeting.
2.6) Quorum and Adjourned Meetings. The holders of a majority of all shares
outstanding and entitled to vote, represented either in person or by proxy,
shall constitute a quorum for the transaction of business at any annual or
special meeting of the stockholders. In case a quorum is not present or
represented at any meeting of the stockholders, the stockholders entitled to
vote thereat present in person or represented by proxy shall have power to
adjourn the meeting from time to time, without notice other than announcement at
the meeting, until a quorum shall be present or represented; provided, however,
if the adjournment is for more than thirty (30) days or if after the adjournment
a new record date is set for the adjourned session, notice of any such adjourned
session shall be given in the manner heretofore described. At such adjourned
meeting at which a quorum shall be present or represented, any business may be
transacted which might have been transacted at the original meeting.
2.7) Voting. At each meeting of the stockholders, every stockholder having
the right to vote shall be entitled to vote in person or by proxy. Except as
otherwise provided by law or the Certificate of Incorporation, each stockholder
of record shall be entitled to one (1) vote for each share of stock having
voting power standing in his name on the books of the corporation. Except as
otherwise provided by law, the Certificate of Incorporation or these Bylaws, all
matters shall be determined by vote of a majority of the shares present or
represented at such meeting and voting on such questions.
2.8) Order of Business. The suggested order of business at the annual
meeting and, to the extent appropriate, at all other meetings of the
stockholders shall, unless modified by the presiding chairman, be:
(a) Call of roll
(b) Proof of due notice of meeting or waiver of notice
(c) Determination of existence of quorum
(d) Reading and disposal of any unapproved minutes
(e) Annual reports of officers and committees
(f) Election of directors
(g) Unfinished business
(h) New business
(i) Adjournment.
<PAGE>
ARTICLE 3.
DIRECTORS
3.1) Number, Qualification and Term of Office. The Board of Directors shall
consist of one or more members. The number of members of the first Board (if not
named in the Certificate of Incorporation) shall be determined by the
incorporator. Thereafter, such number shall be fixed from time to time by action
of the stockholders or the Board of Directors and may be increased or decreased
by the stockholders or the directors. Each director shall hold office until his
successor shall have been elected and qualified or until such director's earlier
death, resignation, disqualification, removal or otherwise.
3.2) Vacancies on Board of Directors. If a vacancy on the Board of
Directors occurs by reason of death, resignation, disqualification, removal or
otherwise, or if a newly created directorship results from an increase in the
number of directors, such vacancy may be filled for the unexpired term by a
majority of the directors then in office although less than a quorum, or by the
sole remaining director. Each person so elected shall be a director until such
director's successor is elected by the stockholders, who may make such election
at their next annual meeting or any special meeting duly called for that
purpose.
3.3) Quorum and Voting. A majority of the total number of directors shall
constitute a quorum for the transaction of business; provided, however, that if
any vacancies exist by reason of death, resignation, disqualification, removal
or otherwise, a majority of the remaining directors shall constitute a quorum
for the purpose of filling of such vacancies. Except as otherwise required by
law or the Certificate of Incorporation, the vote of a majority of the directors
present at a meeting at which a quorum is present shall be the act of the Board
of Directors.
3.4) Board Meeting; Place and Notice. Meetings of the Board of Directors
may be held from time to time at any place within or without the State of
Delaware that the Board of Directors may designate. In the absence of
designation by the Board of Directors, Board meetings shall be held at the
principal executive office of the corporation, except as may be otherwise
unanimously agreed orally, or in writing, or by attendance. Any director may
call a Board meeting by giving notice to all directors of the date and time of
the meeting, which notice shall be given in sufficient time for the convenient
assembly of the directors thereat. The notice need not state the purpose of the
meeting, and may be given by mail, telephone, telegram, or in person. If a
meeting schedule is adopted by the Board, or if the date and time of a Board
meeting has been announced at a previous meeting, no notice is required.
3.5) Compensation. Directors and members of any committee of the Board
shall receive only such compensation therefor as may be determined from time to
time by resolution of the Board of Directors. Nothing herein contained shall be
construed to exclude any director from serving the corporation in any other
capacity and receiving proper compensation therefor.
<PAGE>
3.6) Committees of the Board. The Board of Directors may, by resolution
passed by a majority of the whole Board, designate one or more committees, each
to consist of one or more of the directors, each of which, to the extent
provided in such resolution, shall have and may exercise the authority of the
Board in the management of the business of the corporation, and may authorize
the seal of the corporation to be affixed to all papers which may require it. In
the absence or disqualification of a member of a committee, the member or
members thereof present at any meeting and not disqualified from voting, whether
or not such member or members constitute a quorum, may unanimously appoint
another member of the Board of Directors to act at the meeting in the place of
any such absent or disqualified member.
3.7) Order of Business. The suggested order of business at any meeting of
the Board of Directors shall, to the extent appropriate and unless modified by
the presiding chairman, be:
(a) Roll call
(b) Proof of due notice of meeting or waiver of notice,
or unanimous presence and declaration by President
(c) Determination of existence of quorum
(d) Reading and disposal of any unapproved minutes
(e) Reports of officers and committees
(f) Election of officers
(g) Unfinished business
(h) New business
(i) Adjournment.
ARTICLE 4.
OFFICERS
4.1) Number and Designation. The Board of Directors shall elect a
President, a Secretary and a Treasurer, and may elect or appoint a Chairman of
the Board, one or more Vice Presidents and such other officers and agents as it
may from time to time determine. Any number of offices may be held by the same
person.
4.2) Election, Term of Office and Qualifications. Unless otherwise provided
at the time of election or appointment, each officer shall hold office until
such officer's successor is elected or appointed and shall qualify or until such
officer's earlier death or resignation; provided, however, that any officer may
be removed with or without cause by the affirmative vote of a majority of the
entire Board of Directors (without prejudice, however, to any contract rights of
such officer).
4.3) Vacancies in Offices. If there be a vacancy in any office of the
corporation, by reason of death, resignation, removal or otherwise, such vacancy
may be filled for the unexpired term by the Board of Directors.
<PAGE>
4.4) Chairman of the Board. The Board of Directors may, in its discretion,
elect one of its number as Chairman of the Board. Unless the Board shall
otherwise decide, the Chairman shall preside at all meetings of the stockholders
and of the Board and shall exercise general supervision and direction over the
more significant matters of policy affecting the affairs of the corporation,
including particularly its financial and fiscal affairs. The Chairman of the
Board may call a meeting of the Board whenever the Chairman deems it advisable.
4.5) President. The President shall have general active management of the
business of the corporation. In the absence of the Chairman of the Board, the
President shall preside at all meetings of the stockholders and Board of
Directors. Unless otherwise determined by the Board of Directors, the President
shall be the chief executive officer of the corporation and shall see that all
orders and resolutions are carried into effect. The President shall be a member
of all standing committees and shall perform all duties usually incident to the
office of President and such other duties as may from time to time be assigned
to the President by the Board.
4.6) Vice President. Each Vice President shall have such powers and shall
perform such duties as may be specified in these Bylaws or prescribed by the
Board of Directors. In the event of absence or disability of the President, the
Board of Directors may designate a Vice President or Vice Presidents to succeed
to the powers and duties of the President until a successor President has been
appointed and qualified.
4.7) Secretary. The Secretary shall be secretary of and shall attend all
meetings of the stockholders and Board of Directors. The Secretary shall act as
clerk and shall record all the proceedings of such meetings in the minute book
of the corporation. The Secretary shall give proper notice of meetings of
stockholders and directors. The Secretary may, with the Chairman of the Board,
President or Vice President, sign all certificates representing shares of the
corporation and shall perform the duties usually incident to the Secretary's
office and such other duties as may be prescribed by the Board of Directors from
time to time.
4.8) Treasurer. The Treasurer shall keep accurate accounts of all moneys of
the corporation received or disbursed, and shall deposit all moneys, drafts and
checks in the name of and to the credit of the corporation in such banks and
depositories as the Board of Directors shall designate from time to time. The
Treasurer shall have power to endorse for deposit the funds of the corporation
as authorized by the Board of Directors. The Treasurer shall render to the
Chairman of the Board, President and the Board of Directors, whenever required,
an account of all of the Treasurer's transactions as Treasurer and statements of
the financial condition of the corporation, and shall perform the duties usually
incident to such office and such other duties as may be prescribed by the Board
of Directors from time to time.
4.9) Other Officers. The Board of Directors may appoint one or more
Assistant Secretaries, one or more Assistant Treasurers, and such other
officers, agents and employees as the Board may deem advisable. Each officer,
agent or employee so appointed shall hold office at the pleasure of the Board
and shall perform such duties as may be assigned by the Board, Chairman of the
Board or President.
<PAGE>
ARTICLE 5.
SHARES AND THEIR TRANSFER
5.1) Certificates of Stock. Every owner of stock of the corporation shall
be entitled to a certificate, in such form as the Board of Directors may
prescribe, certifying the number of shares of stock of the corporation owned by
such stockholder. The certificates for such stock shall be numbered (separately
for each class) in the order in which they shall be issued and shall be signed
in the name of the corporation by the Chairman of the Board, President or a Vice
President, and by the Secretary, Assistant Secretary, Treasurer, or Assistant
Treasurer. Any signature upon a certificate may be a facsimile. Certificates on
which a facsimile signature of a former officer, transfer agent, or registrar
appears may be issued with the same effect as if such person were an officer,
transfer agent, or registrar on the date of issue.
5.2) Stock Record. As used in these Bylaws, the term "stockholder" shall
mean the person, firm or corporation in whose name outstanding shares of capital
stock of the corporation are currently registered on the stock record books of
the corporation. The corporation shall keep, at its principal executive office
or at another place or places within the United States determined by the Board,
a share register not more than one year old containing the names and addresses
of the stockholders and the number and classes of shares held by each
stockholder. The corporation shall also keep at its principal executive office
or at another place or places within the United States determined by the Board,
a record of the dates on which certificates representing shares were issued.
Every certificate surrendered to the corporation for exchange or transfer shall
be cancelled and no new certificate or certificates shall be issued in exchange
for any existing certificate until such existing certificate shall have been so
cancelled (except as provided for in Section 5.4 of this Article 5).
5.3) Transfer of Shares. Transfer of shares on the books of the corporation
may be authorized only by the stockholder named in the certificate (or the
stockholder's legal representative or duly authorized attorney-in-fact) and upon
surrender for cancellation of the certificate or certificates for such shares.
The stockholder in whose name shares of stock stand on the books of the
corporation shall be deemed the owner thereof for all purposes as regards the
corporation; provided, that when any transfer of shares shall be made as
collateral security and not absolutely, such fact, if known to the corporation
or to the transfer agent, shall be so expressed in the entry of transfer; and
provided, further, that the Board of Directors may establish a procedure whereby
a stockholder may certify that all or a portion of the shares registered in the
name of the stockholder are held for the account of one or more beneficial
owners.
5.4) Lost Certificates. In the event any stockholder claims that a
certificate of stock has been lost, stolen or destroyed, a duplicate certificate
may be issued in place thereof, upon such terms, including receipt of a bond
sufficient to indemnify the corporation against any claim that may be made
against it on account of the alleged loss, theft or destruction of such
certificate, as the Board of Directors may prescribe.
<PAGE>
5.5) Treasury Stock. Treasury stock shall be held by the corporation
subject to disposal by the Board of Directors in accordance with the Delaware
General Corporation Law, the Certificate of Incorporation and these Bylaws, and
shall not have voting rights nor participate in dividends.
ARTICLE 6.
GENERAL PROVISIONS
6.1) Record Dates. In order to determine the stockholders entitled to
notice of and to vote at a meeting, or entitled to receive payment of a dividend
or other distribution, the Board of Directors may fix a record date which shall
not be less than ten (10) days nor more than sixty (60) days preceding the date
of such meeting or distribution. In the absence of action by the Board, the
record date for determining stockholders entitled to notice of and to vote at a
meeting shall be at the close of business on the day preceding the day on which
notice is given, and the record date for determining stockholders entitled to
receive a distribution shall be at the close of business on the day on which the
Board of Directors authorizes such distribution.
6.2) Dividends. Subject to the provisions of law and of the Certificate of
Incorporation, the Board of Directors may declare dividends from the surplus or,
if there is no surplus, the net profits of the corporation whenever and in such
amounts as, in its opinion, the condition of the affairs of the corporation
shall render it advisable.
6.3) Surplus and Reserves. Subject to the provisions of law, the Board of
Directors in its discretion may use and apply any of the capital or surplus of
the corporation to purchase or acquire any of the shares of the capital stock of
the corporation in accordance with law, or any of its bonds, debentures, notes,
scrip or other securities or evidences of indebtedness, or from time to time may
set aside from its surplus or net profits such sums as it, in its absolute
discretion, may think proper as a reserve fund to meet contingencies, for the
purpose of maintaining or increasing the property or business of the
corporation, or for any other purpose it may think conducive to the best
interests of the corporation.
6.4) Fiscal Year. The fiscal year of the corporation shall be established
by the Board of Directors.
6.5) Seal. The corporation shall have such corporate seal or no corporate
seal as the Board of Directors shall from time to time determine.
6.6) Securities of Other Corporations.
(a) Voting Securities Held by the Corporation. Unless otherwise
ordered by the Board of Directors, the President shall have full power and
authority on behalf of the corporation (i) to attend and to vote at any
meeting of security holders of other companies in which the corporation may
hold securities; (ii) to execute any proxy for such meeting; and (iii) to
execute a written action in lieu of a meeting of such other company. At
such meeting, by such proxy or by such writing in lieu of meeting, the
President shall possess and may exercise any and all rights and powers
incident to the ownership of such securities that the corporation might
have possessed and exercised if it had been present. The Board of Directors
may, from time to time, confer like powers upon any other person or
persons.
<PAGE>
(b) Purchase and Sale of Securities. Unless otherwise ordered by the
Board of Directors, the President shall have full power and authority on
behalf of the corporation to purchase, sell, transfer or encumber any and
all securities of any other company owned by the corporation which
represent not more than ten percent (10%) of the outstanding securities of
such other company, and may execute and deliver such documents as may be
necessary to effectuate such purchase, sale, transfer or encumbrance. The
Board of Directors may, from time to time, confer like powers upon any
other person or persons.
ARTICLE 7.
MEETINGS
7.1) Waiver of Notice. Whenever any notice whatsoever is required to be
given by these Bylaws, the Certificate of Incorporation or any of the laws of
the State of Delaware, a waiver thereof in writing, signed by the person or
persons entitled to such notice, whether before or after the time stated
therein, shall be deemed equivalent to the actual required notice. Attendance by
a person at a meeting shall constitute a waiver of notice of such meeting except
when the person attends a meeting for the express purpose of objecting at the
beginning of the meeting to the transaction of any business because the meeting
is not lawfully called or convened.
7.2) Participation by Conference Telephone. Members of the Board of
Directors, or any committee designated by the Board, may participate in a
meeting of the Board of Directors or of such committee by means of conference
telephone or similar communications equipment whereby all persons participating
in the meeting can hear and communicate with each other, and participation in a
meeting pursuant to this Section shall constitute presence in person at such
meeting.
7.3) Consents. Any action of the Board of Directors or any committee of the
Board which may be taken at a meeting thereof, may be taken without a meeting if
authorized by a writing signed by all of the directors or by all of the members
of such committee, as the case may be. No action shall be taken by the
stockholders by written consent without a meeting.
<PAGE>
ARTICLE 8.
AMENDMENTS
8.1) Power to Amend. The Board of Directors shall have power to amend,
repeal or adopt Bylaws, subject to the power of the stockholders to change or
repeal such Bylaws and subject to any other limitations on such authority of the
Board provided by the General Corporation Law of Delaware.
The undersigned, Secretary of Sunrise International Leasing Corporation
hereby certifies that the foregoing Bylaws were duly adopted as the Bylaws of
the corporation by the first Board of Directors on August 28, 1997.
/s/ Jeffrey G. Jacobsen
Jeffrey G. Jacobsen, Secretary
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EXHIBIT D
302A.471. RIGHTS OF DISSENTING SHAREHOLDERS
Subdivision 1. Actions creating rights. A shareholder of a corporation may
dissent from, and obtain payment for the fair value of the shareholder's shares
in the event of, any of the following corporate actions:
(a) An amendment of the articles that materially and adversely affects the
rights or preferences of the shares of the dissenting shareholder in that it:
(1) alters or abolishes a preferential right of the shares;
(2) creates, alters, or abolishes a right in respect of the redemption
of the shares, including a provision respecting a sinking fund for the
redemption or repurchase of the shares;
(3) alters or abolishes a preemptive right of the holder of the shares
to acquire shares, securities other than shares, or rights to purchase
shares or securities other than shares;
(4) excludes or limits the right of a shareholder to vote on a matter,
or to cumulate votes, except as the right may be excluded or limited
through the authorization or issuance of securities of an existing or new
class or series with similar or different voting rights; except that an
amendment to the articles of an issuing public corporation that provides
that section 302A.671 does not apply to a control share acquisition does
not give rise to the right to obtain payment under this section;
(b) A sale, lease, transfer, or other disposition of all or Substantially
all of the property and assets of the Corporation, but not including a
transaction permitted without shareholder approval in section 302A.661,
subdivision 1, or a disposition in dissolution described in section 302A.725,
subdivision 2, or a disposition pursuant to an order of a court, or a
disposition for cash on terms requiring that all or substantially all of the net
proceeds of disposition be distributed to the shareholders in accordance with
their respective interests within one year after the date of disposition;
(c) A plan on merger, whether under this chapter or under chapter 322B, to
which the Corporation is a party, except as provided in subdivision 3;
(d) A plan of exchange, whether under this chapter or under chapter 322B,
to which the Corporation is a party as the Corporation whose shares will be
acquired by the acquiring corporation, if the shares of the shareholder are
entitled to be voted on the plan; or
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(e) Any other corporate action taken pursuant to a shareholder vote with
respect to which the articles, the bylaws, or a resolution approved by the board
directs that dissenting shareholders may obtain payment for their shares.
Subd. 2. Beneficial owners.
(a) A shareholder shall not assert dissenters' rights as to less than all
of the shares registered in the name of the shareholder, unless the shareholder
dissents with respect to all the shares that are beneficially owned by another
person but registered in the name of the shareholder and discloses the name and
address of each beneficial owner on whose behalf the shareholder dissents. In
that event, the rights of the dissenter shall be determined as if the s shares
as to which the shareholder has dissented and the other shares were registered
in the names of different shareholders.
(b) The beneficial owner of shares who is not the shareholder may assert
dissenters' rights with respect to shares held on behalf of the beneficial
owner, and shall be treated as a dissenting shareholder under the terms of this
section and section 302A.473, if the beneficial owner submits to the Corporation
at the time of or before the assertion of the right a written consent of the
shareholder.
Subd. 3. Rights not to apply. Unless the articles, the bylaws, or a
resolution approved by the board otherwise provide, the right to obtain payment
under this section does not apply to a s shareholder of the surviving
corporation in a merger, if the shares of the shareholder are not entitled to be
voted on the merger.
Subd. 4. Other rights. The shareholders of a corporation who have a right
under this section to obtain payment for their shares do not have a right at law
or in equity to have a corporate action described in subdivision 1 set aside or
rescinded, except when the corporate action is fraudulent with regard to the
complaining shareholder or the Corporation.
302A.473. PROCEDURES FOR ASSERTING DISSENTERS' RIGHTS
Subdivision 1. Definitions.
(a) For purposes of this section, the terms defined in this subdivision
have the meanings given them.
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(b) "Corporation" means the issuer of the shares held by a dissenter before
the corporate action referred to in section 302A.471, subdivision 1 or the
successor by merger of that issuer.
(c) "Fair value of the shares" means the value of the shares of a
corporation immediately before the effective date of the corporate action
referred to in section 302A.471, subdivision 1.
(d) "Interest" means interest commencing five days after the effective date
of the corporate action referred to in section 302A.471, subdivision 1, up to
and including the date of payment, calculated at the rate provided in section
549.09 for interest on verdicts and judgments.
Subd. 2. Notice of action. If a corporation calls a shareholder meeting at
which any action described in section 302A.471, subdivision 1 is to be voted
upon, the notice of the meeting shall inform each shareholder of the right to
dissent and shall include a copy of section 302A.471 and this section and a
brief description of the procedure to be followed under these sections.
Subd. 3. Notice of dissent. If the proposed action must be approved by the
shareholders, a shareholder who wishes to exercise dissenters' rights must file
with the Corporation before the vote on the proposed action a written notice of
intent to demand the fair value of the shares owned by the shareholder and must
not vote the shares in favor of the proposed action.
Subd. 4. Notice of procedure; deposit of shares. (a) After the proposed
action has been approved by the board and, if necessary, the shareholders, the
Corporation shall send to all shareholders who have complied with subdivision 3
and to all shareholders entitled to dissent if no shareholder vote was required,
a notice that contains:
(1) The address to which a demand for payment and certificates of
certificated shares must be sent in order to obtain payment and the date by
which they must be received;
(2) Any restrictions on transfer of uncertificated shares that will
apply after the demand for payment is received;
(3) A form to be used to certify the date on which the shareholder, or
the beneficial owner on whose behalf the shareholder dissents, acquired the
shares or an interest in them and to demand payment; and
(4) A copy of section 302A.471 and this section and a brief
description of the procedures to be followed under these sections.
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(b) In order to receive the fair value of the share, a dissenting
shareholder must demand payment and deposit certificated shares or comply with
any restrictions on transfer of uncertificated shares within 30 days after the
notice required by paragraph (a) was given, but the dissenter retains all other
rights of a shareholder until the proposed action takes effect.
Subd. 5. Payment; return of shares.
(a) After the corporate action takes effect, or after the Corporation
receives a valid demand for payment, whichever is later, the Corporation shall
remit to each dissenting shareholder who has complied with subdivision 3 and 4
the amount the Corporation estimates to be the fair value of the shares, plus
interest, accompanied by:
(1) The Corporation's closing balance sheet and statement of income
for a fiscal year ending not more than 16 months before the effective date
of the corporate action, together with the latest available interim
financial statements; and
(2) An estimate by the Corporation of the fair value of the shares and
a brief description of the method used to reach the estimate; and
(3) A copy of section 302A.471 and this section, and a brief
description of the procedure to be followed in demanding supplemental
payment.
(b) The Corporation may withhold the remittance described in paragraph (a)
from a person who was not a shareholder on the date the action dissented from
was first announced to the public or who is dissenting on behalf of a person who
was not a beneficial owner on that date. If the dissenter has complied with
subdivision 3 and 4, the Corporation shall forward to the dissenter t the
materials described in paragraph (a), a statement of the reason for withholding
the remittance, and an offer to pay to the dissenter the amount listed in the
materials if the dissenter agrees to accept that amount in full satisfaction.
The dissenter may decline the offer and demand payment under subdivision 6.
Failure to do so entitles the dissenter only to the amount offered. If the
dissenter makes demand, subdivision 7 and 8 apply.
(c) If the Corporation fails to remit payment within 60 days of the deposit
of certificates or the imposition of transfer restrictions on uncertificated
shares, it shall return all deposited certificates and cancel all transfer
restrictions. However, the Corporation may again give notice under subdivision 4
and require deposit or restrict transfer at a later time.
Subd. 6. Supplemental payment; demand. If a dissenter believes that the
amount remitted under subdivision 5 is less than the fair value of the shares
plus interest, the dissenter may give written notice to the corporation of the
dissenter's own estimate of the fair value of the shares, plus interest, within
30 days after the Corporation mails the remittance under subdivision 5, and
demand payment of the difference. Otherwise, a dissenter is entitled only to the
amount remitted by the Corporation.
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Subd. 7. Petition; determination. If the Corporation receives a demand
under subdivision 6, it shall, within 60 days after receiving the demand, either
pay to the dissenter the amount demanded or agreed to by the dissenter after
discussion with the Corporation or file in court a petition requesting that the
court determine the fair value of the shares, plus interest. The petition shall
be filed in the county in which the registered office of the Corporation is
located, except that a surviving foreign corporation that receives a demand
relating to the shares of a constituent domestic corporation shall file the
petition in the county in this state in which the last registered office of the
constituent corporation was located. The petition shall name as parties all
dissenters who have demanded payment under subdivision 6 and who have not
reached agreement with the Corporation. The Corporation shall, after filing a
petition, serve all parties with a summons and copy of the petition under the
rules of civil procedure. Nonresidents of this state may be served by registered
or certified mail or by publication as proved by law. Except as otherwise
provided, the rules of civil procedure apply to this proceeding. The
jurisdiction of the court is plenary and exclusive. The court may appoint
appraisers, with powers and authorities the court deems proper, to receive
evidence on and recommend the amount of the fair value of the shares. The court
shall determine whether the shareholder or shareholders in question have fully
complied with the requirements of this section, and shall determine the fair
value of the shares, taking into account any and all factors the court finds
relevant, computed by any method or combination of methods that the court, in
its discretion, sees fit to use, whether or not used by the corporation or by a
dissenter. The fair value of the shares as determined by the court is binding on
all shareholders, wherever located. A dissenter is entitled to judgment in cash
for the amount by which the fair value of the shares as determined by the court,
plus interest, exceeds the amount, if any, remitted under subdivision 5, but
shall not be liable to the corporation for the amount, if any, by which the
amount, if any, remitted to the dissenter under subdivision 5 exceeds the fair
value of the shares as determined by the court, plus interest.
Subd. 8. Costs; fees; expenses.
(a) The court shall determine the costs and expenses of a proceeding under
subdivision 7, including the reasonable expenses and compensation of any
appraisers appointed by the court, and shall assess those costs and expenses
against the Corporation, except that the court may assess part or all of those
costs and expenses against a dissenter whose action in demanding payment under
subdivision 6 is found to be arbitrary, vexatious, or not in good faith.
(b) If the court finds that the Corporation has failed to comply
substantially with this section, the court may assess all fees and expenses of
any experts or attorneys as the court deems equitable. These fees and expenses
may also be assessed against a person who has acted arbitrarily, vexatiously, or
not in good faith in bringing the proceeding, and may be awarded to a party
injured by those actions.
(c) The court may award, in its discretion, fees and expenses to any
attorney for the dissenters out of the amount awarded to the dissenters, if any.
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SUNRISE RESOURCES, INC.
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints ERROL F. CARLSTROM and JEFFREY G. JACOBSEN,
and each of them, with power to appoint a substitute, to vote all shares the
undersigned is entitled to vote at the Annual Meeting of Shareholders of Sunrise
Resources, Inc. to be held on October 17, 1997, and at all adjournments thereof,
as specified below on the following matters which are further described in the
Proxy Statement related hereto, and, in their discretion, upon any other matters
which may be brought before the meeting.
1. PROPOSAL TO SET THE NUMBER OF DIRECTORS AT FIVE (5).
[ ] FOR [ ] AGAINST [ ] ABSTAIN
2. ELECTION OF DIRECTORS. NOMINEES: Peter J. King, Errol F. Carlstrom, Donald
R. Brattain, Thomas R. King and Jeffrey G. Jacobsen.
[ ] VOTE FOR all nominees listed above (except vote withheld from the
following nominees, if any, whose names are written below)
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[ ] WITHHOLD AUTHORITY to vote for all nominees listed above.
3. PROPOSAL TO APPROVE THE REINCORPORATION OF THE COMPANY UNDER DELAWARE LAW
AND THE AGREEMENT AND PLAN OF MERGER pursuant to which Sunrise Resources,
Inc., a Minnesota corporation, will merge with and into Sunrise
International Leasing Corporation, a Delaware corporation.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting. This proxy, when properly
executed, will be voted in the manner directed herein by the undersigned
shareholder. If no direction is made, this proxy will be voted for all directors
named in Item 2 and for Proposals 1 and 3.
Dated: ______________________________________________, 1997
Please sign exactly as name appears at left. When shares are
held as joint tenants, both should sign. When signing as
attorney, executor, administrator, trustee or guardian,
please give full title as such. If a corporation, please
have signed in full corporate name by President or other
authorized officer. If a partnership, please have signed in
partnership name by authorized person.
___________________________________________________________
Signature
___________________________________________________________
Signature, if held jointly
PLEASE MAKE, SIGN, DATE AND RETURN THIS PROXY
PROMPTLY, USING THE ENCLOSED ENVELOPE
