SUNRISE INTERNATIONAL LEASING CORP, DEF 14A, 1998-08-18

SUNRISE INTERNATIONAL LEASING CORP
DEF 14A, 1998-08-18
COMPUTER RENTAL & LEASING

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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 INTERNATIONAL LEASING CORPORATION
(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 INTERNATIONAL LEASING CORPORATION

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
to be held
September 17, 1998

TO THE SHAREHOLDERS OF SUNRISE INTERNATIONAL LEASING CORPORATION:

The 1998 Annual Meeting of Shareholders of Sunrise International
Leasing Corporation will be held at the Hyatt Regency Hotel, 1300 Nicollet Mall,
Minneapolis, Minnesota, at 10:00 a.m. (Minneapolis-time) on Thursday, September
17, 1998, for the following purposes:

1. To set the number of members of the Board of Directors at four
(4).

2. To elect members of the Board of Directors.

3. To approve the grant to Peter J. King of a stock option to
purchase 400,000 shares.

4. To approve an amendment to 1991 Stock Option Plan to (i) increase
shares reserved from 750,000 to 1,000,000, (ii) increase formula
grants to outside directors upon initial election, (iii) permit
discretionary grants to outside directors and (iv) change
definition of a committee to make the Plan consistent with the
revised Rule 16b-3 under the Securities Exchange Act of 1934.

5. 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 1998 Annual Report.

Only shareholders of record as shown on the books of the Company at the
close of business on July 23, 1998 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, Executive Vice President and Secretary

Dated: August 14, 1998
Minneapolis, MN

<PAGE>

SUNRISE INTERNATIONAL LEASING CORPORATION

PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
to be held
September 17, 1998

The accompanying Proxy is solicited by the Board of Directors of
Sunrise International Leasing Corporation (the "Company") for use at the Annual
Meeting of Shareholders of the Company to be held on Thursday, September 17,
1998, 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 or about August 14, 1998.

<PAGE>

OUTSTANDING SHARES AND VOTING RIGHTS

The Board of Directors of the Company has fixed the close of business
on July 23, 1998 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, 7,820,296 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.

Name (and Address of Number of shares Percent
5% Holders) or Identity of Group Beneficially Owned(1) of Class(2)

Peter J. King 4,292,879(3) 51.5%
c/o King Management Corporation
5500 Wayzata Boulevard, #750
Minneapolis, MN 55416

Donald R. Brattain 336,300(4) 4.3%

Thomas R. King 22,000(5) *

Jeffrey G. Jacobsen 9,029(6) *

Errol F. Carlstrom 0 *

R. Bradley Pike 2,500(7) *

Barry J. Schwach 128,218(8) 1.6%

Dana C. Prescott 0 *

Stephen D. Higgins, Individually 2,889,179(9) 36.9%
and as a Trustee
23785 Strehler Road
Loretto, MN 55357

Heartland Advisors, Inc. 630,000(10) 8.1%
790 North Milwaukee Street
Milwaukee, WI 53202

All Current Executive Officers and 4,662,708(11) 55.7%
Directors as a Group
(5 persons)
- -------------
*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) Represents (i) 3,436,797 shares that are subject to a Shareholder Voting
Trust Agreement dated May 27, 1998, pursuant to which Mr. Peter King has
the sole power to vote such shares, which shares include (a) 517,158 shares
held by Mr. King directly, (b) 370,818 shares held by The King Management
Corporation, of which Mr. King is a principal shareholder, officer and
director, (c) 1,286,439 shares held by Stephen D. Higgins, Trustee, William
B. King Stock Trust UA dated November 21, 1989 for the benefit of William
B. King (the "WBK Trust"), and (d) 1,262,382 shares held by Stephen D.
Higgins, Trustee, Russell S. King Stock Trust UA dated November 21, 1989
for the benefit of Russell S. King (the "RSK Trust"); (ii) 335,329 shares
held by the WBK Trust, which shares are subject to a proxy granting Mr.
King the power to vote such shares solely for approval of the Company's
stock option plans, as defined by Schedule 14A of the Securities Exchange
Act of 1934, and not with respect to any other matter submitted to
shareholders; and (iii) 520,753 shares which may be acquired by Mr. King
within 60 days after the Record Date upon exercise of an outstanding stock
option. Mr. King does not have dispositive power over the shares held by
the WBK Trust or RSK Trust, but does have sole dispositive power over all
other shares described in this footnote. The Company has relied on
information contained in Amendment No. 6 to Schedule 13D filed by Mr. King
with the Securities and Exchange Commission on July 24, 1998 and
information provided by Mr. King.

(4) Includes 6,000 shares which may be acquired by Mr. Brattain within 60 days
after the Record Date upon exercise of outstanding stock options. Does not
include an option to purchase 20,000 shares, which is exercisable subject
to shareholder approval of the amendment to the Company's 1991 Stock Option
Plan to permit discretionary option grants to Non-Employee Directors--see
Proposal #4.

<PAGE>

(5) Includes 14,000 shares which may be acquired by Mr. Thomas King within 60
days after the Record Date upon exercise of outstanding stock options. Does
not include an option to purchase 20,000 shares, which is exercisable
subject to shareholder approval of the amendment to the Company's 1991
Stock Option Plan to permit discretionary option grants to Non-Employee
Directors--see Proposal #4.

(6) Includes 4,000 shares which may be acquired by Mr. Jacobsen within 60 days
after the Record Date upon exercise of outstanding stock options.

(7) Represents 2,500 shares which may be acquired by Mr. Pike within 60 days
after the Record Date upon exercise of outstanding stock options.

(8) Includes 7,500 shares which may be acquired by Mr. Schwach within 60 days
after the Record Date upon exercise of outstanding stock options.

(9) Includes (i) 2,548,821 shares, of which (a) 1,286,439 shares are held by
Mr. Higgins as Trustee of the WBK Trust and (b) 1,262,382 shares held by
Mr. Higgins as Trustee of the RSK Trust, all of which shares are subject to
a Shareholder Voting Trust Agreement dated May 27, 1998, pursuant to which
Mr. Peter King has the sole power to vote such shares (see note (3) above),
and (ii) 335,329 shares held by Mr. Higgins as Trustee of the WBK Trust, of
which Mr. Higgins has sole voting power; provided, however, that the power
to vote such shares solely with respect to approval of the Company's stock
option plans, and not with respect to any other matter submitted to
shareholders, has been granted to Mr. King pursuant to a proxy (see note
(3) above). Mr. Higgins has sole dispositive power over all of the shares
described in this footnote. The Company has relied on information contained
in Amendment No. 4 to Schedule 13D filed by Mr. Higgins with the Securities
and Exchange Commission on July 24, 1998.

(10) 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, holds 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 2, 1998 filed by Heartland with the
Securities and Exchange Commission.

(11) Includes 547,253 shares of Common Stock which may be acquired within 60
days after the Record Date upon the exercise of outstanding options,
370,818 shares held by a corporation, and 2,884,150 held by certain trusts
described above.

<PAGE>

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 four, and that
four directors be elected. Unless otherwise instructed, the Proxies will be so
voted. Under applicable Delaware law, approval of the proposal to set the number
of directors at four requires the affirmative vote of the holders of 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. Directors are elected by a
plurality of the votes cast.

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.

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.

Current Positions with the Company and
Name and Age Principal Occupations for the Director
of Nominee Past Five Years and Other Information Since

<S> <C> <C>
Peter J. King Mr. King has served as the Company's Chief Executive 1997
70 Officer and Chief Financial Officer since April 1,
1998. In April 1997, Mr. King was re-appointed to the
Company's Board of Directors and was 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. 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 International Leasing Corporation
("ILC") in 1974 and served as its President until ILC
was merged into the Company in February 1995. Mr.
King also serves as Chairman of The King Management
Corporation. Mr. King is not related to Thomas King,
a Director of the Company.

Donald R. Brattain Mr. Brattain has served as a Director of the Company 1989
57 since 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
and Featherlite Mfg., Inc.

Thomas R. King Mr. King has served as a Director of the Company 1991
58 since December 1991. 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 1997
50 Board of Directors in April 1997 and has served as
Secretary of the Company since July 1997. In June
1998, Mr. Jacobsen was appointed an Executive Vice
President of the Company. Mr. Jacobsen served as
President of The King Management Corporation from
April 1997 to June 1998. Mr. Jacobsen served as Vice
President of The Network Systems Group of Storage
Technology from March 1983 to April 1997.
</TABLE>

Board and Committee Meetings

During the fiscal year ended March 31, 1998, the Board of Directors
held seven meetings. Each director attended all of the meetings of the Board of
Directors and all of the meetings of the 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 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 1998, the Audit Committee held three meetings. During
fiscal year 1998, the Audit Committee was comprised of Thomas King, Donald
Brattain and Jeffrey Jacobsen; Mr. Jacobsen resigned in June 1998 when he became
an Executive Vice President of the Company.

<PAGE>

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 1998, the
Compensation and Stock Option Committee held one meeting. During fiscal year
1998, the Compensation and Stock Option Committee was comprised of Thomas King,
Donald Brattain and Jeffrey Jacobsen; Mr. Jacobsen resigned in June 1998 when he
became an Executive Vice President of the Company.

Compensation of Directors

Meeting Fees. During fiscal 1998, the Company paid 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. On June 23, 1998, the annual retainer was
increased to $10,000, and the payment for each Board meeting was increased to
$1,500. Mr. 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.

Stock Option Grants. The Company's 1991 Stock Option Plan has provided
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. On June
23, 1998, the Board amended the 1991 Stock Option Plan to increase the initial
grant to 15,000 shares, which amendment is included in Proposal #4 (see Grants
to Non-Employee Directors in Proposal #4). Mr. 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.

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 opportunities
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.

<PAGE>

Bonuses. The Company's fiscal 1998 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 goal was not met
in fiscal 1998; however, the Committee awarded discretionary bonuses in the
aggregate amount of $87,000 for fiscal 1998 because of the Board's determination
that the failure of the Company to meet earnings goals was not related to the
employees' performance.

No bonus plan has yet been adopted for fiscal 1999. The 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.

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 1998.

Chief Executive Officer Compensation. The fiscal 1998 base salary for
Errol Carlstrom, the Company's Chief Executive Officer in fiscal 1998, was set
at $200,000. Mr. Carlstrom also received a discretionary bonus of $5,000 for
fiscal 1998. Effective the beginning of fiscal 1999, Mr. Carlstrom resigned, and
Mr. Peter King became the Company's Chief Executive Officer. Mr. King's base
salary is $200,000, with no specific arrangement for a bonus; however, Mr. King
would be eligible for a discretionary bonus.

Compensation and Stock Option Committee

Thomas R. King
Donald R. Brattain

<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 during fiscal 1998 in the capacity of (i) Chief Executive
Officer or (ii) an executive officer whose total salary and bonus earned during
fiscal 1998 exceeded $100,000. Mr. Peter King, the Company's current Chief
Executive Officer, is not included in this table since he did not serve in such
capacity during fiscal 1998.

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>
Errol F. 1998 197,600 5,000 --- --- --- --- 2,400(2)
Carlstrom 1997 150,000 111,860 --- --- --- --- 1,913
Former 1996 37,500 15,000 --- --- 250,000 --- ---
Chief
Executive
Officer &
President

Barry J. 1998 126,000(3) --- --- --- --- --- 52,500(4)
Schwach 1997 126,000 10,000 --- --- 25,000 --- 1,606
Former 1996 126,000 62,600 --- --- 4,000 --- 1,499
Executive
Vice President
of Finance and
Administration
and CFO

Dana C. 1998 128,853(5) --- --- --- --- --- 2,400(2)
Prescott 1997 126,000 --- 160,000 --- 4,000 --- 2,250
Former 1996 126,000 --- 12,600 --- 10,000 --- 1,123
Senior Vice
President
- National Sales
Manager

R. Bradley 1998 88,169 7,000 --- --- --- --- 1,831(2)
Pike 1997 75,000 35,795 --- --- 5,000 --- 844
Vice 1996 6,250 --- --- --- --- --- ---
President
- Asset
Management

- ------------------
</TABLE>

(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) Represents total Company matching contributions to the Company's 401(k)
plan.

(3) Includes $42,000 paid to Mr. Schwach pursuant to a Severance Agreement.
See section entitled Employment and Severance Agreements or
Arrangements.

(4) Represents payment made in fiscal year 1998 for severance payments due
for the period April 1, 1998 through August 31, 1998.

(5) Includes $84,000 paid to Mr. Prescott pursuant to a Severance
Agreement. See section entitled Employment and Severance Agreements or
Arrangements.

<PAGE>

Option Grants During 1998 Fiscal Year

The Company did not grant any stock options or stock appreciation
rights during fiscal 1998 to the named executive officers in the Summary
Compensation Table.

Option Exercises During 1998 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 1998 and the
number and value of options held at fiscal year-end. The Company does not have
any outstanding stock appreciation rights.

<TABLE>
<CAPTION>
Value of Unexercised
In-the-Money
Number of Securities Options at
Shares Underlying Unexercised March 31, 1998
Acquired on Value Options at March 31, 1998 Exercisable/
Name Exercise Realized Exercisable/Unexercisable Unexercisable(1)
---- -------- -------- ------------------------- ----------------
<S> <C> <C> <C> <C>
Errol F. Carlstrom -- -- 100,000 exercisable $62,500 exercisable
150,000 unexercisable $93,750 unexercisable

Barry J. Schwach -- -- 33,500 exercisable $32,500 exercisable
0 unexercisable $0 unexercisable

Dana C. Prescott -- -- 14,500 exercisable $1,250 exercisable
5,500 unexercisable $13,438 unexercisable

R. Bradley Pike -- -- 2,500 exercisable $3,125 exercisable
2,500 unexercisable $3,125 unexercisable
</TABLE>

(1) Value is calculated on the basis of the difference between the option
exercise price and $3.875, the closing sale price for the Company's
Common Stock at March 31, 1998 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 March 1998, Errol Carlstrom resigned as the Company's President and
Chief Executive Officer. The Company believed that a severance agreement with
Mr. Carlstrom, which includes non-competition provisions under which Mr.
Carlstrom would not compete against the Company, had been agreed upon and
providing for the payment of $12,500 per month for the period of April 1, 1998
through March 31, 1999. Monthly payments have been made through June 1998, as
well as additional payments, totalling $37,500. No written severance agreement
has been signed, however, and there is no assurance that Mr. Carlstrom will sign
the Company's proposed severance agreement. Pending Mr. Carlstrom's execution of
a severance agreement acceptable to the Company, the Company has suspended the
monthly payments to him.

<PAGE>

Pursuant to an agreement by and among the Company, Mr. Peter King and
The King Management Corporation ("King Management"), a corporation which is
controlled by Mr. King, dated June 16, 1997, as amended on June 23, 1998 (the
"Management Agreement"), it was agreed that Mr. King or King Management would
provide certain management services to the Company. Pursuant to the Management
Agreement, Mr. King is an employee of the Company and will serve as Chairman of
the Board and Chief Executive Officer until June 30, 2000 at a salary of
$200,000 per year. Pursuant to the Management Agreement, Mr. King was granted
stock options to purchase an aggregate of 541,506 shares at $3.375 per share on
June 16, 1997, and on June 23, 1998, Mr. King was granted (i) a fully vested
seven-year nonqualified stock option to purchase 250,000 shares at $3.25 per
share under the Company's 1991 Stock Option Plan and (ii) a seven-year
nonqualified cliff vesting stock option to purchase 400,000 shares at $3.25 per
share outside of the Company's 1991 Stock Option Plan. The cliff vesting options
vest after six years if Mr. King continues to be an employee of the Company.
Vesting is accelerated if the Company's Common Stock attains certain agreed
closing average stock prices, as reflected in the Nasdaq Market System, for a
period of ten consecutive business days, as follows: 125,000 shares at $5.00,
125,000 shares of $6.00 and 150,000 shares at $7.00. See Proposal #3 Approval of
Stock Option Grant to Peter J. King for a description of all stock options
granted to Mr. King. The Management Agreement provides that Mr. King and/or King
Management will provide certain services to the Company, including but not
limited to working with management on current and prospective vendor
relationships, monitoring problem leases and loans, assisting the Company on
meeting financing requirements and working with the Company's bankers. See the
section entitled Certain Transactions for additional arrangements pursuant to
the Management Agreement.

On November 6, 1997, the Company entered into a Separation Agreement
and Release of Claims with Dana Prescott, the Company's former Senior Vice
President - National Sales Manager, in connection with Mr. Prescott's
resignation as an officer and employee of the Company. Pursuant to the
Agreement, Mr. Prescott continued to receive his base salary of $10,500 per
month through April 30, 1998, plus all benefits in connection with the Company's
employee benefit plans. In addition, Mr. Prescott was paid for accrued but
unused vacation. In addition, Mr. Prescott agreed that, for a two-year period
beginning September 1, 1997, he would not (i) compete with the Company, (ii)
contact the Company's customers or (iii) solicit any of the Company's employees
to leave the Company. The Agreement contains mutual releases.

On November 13, 1997, the Company entered into a Separation Agreement
and Release of Claims with Barry Schwach, the Company's former Chief Financial
Officer, in connection with Mr. Schwach's resignation as an officer and employee
of the Company as of November 30, 1997. The Agreement provides that Mr. Schwach
receive an amount equal to his base monthly salary, $10,500, each month from
December 1, 1997 through August 31, 1998; provided, however, in January 1998,
Mr. Schwach was paid $84,000, the entire balance of such monthly payments. In
addition, Mr. Schwach agreed that, for the period through August 31, 1998, he
would not (i) compete with the Company, (ii) contact the Company's customers or
(iii) solicit any of the Company's employees to leave the Company. Mr. Schwach
also agreed that he would not disclose confidential information relating to the
Company. The Agreement contains mutual releases.

<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, 1998 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, 1993 in the Company's Common Stock and in each of the foregoing
indices and assumes reinvestment of dividends.

[GRAPHIC OMITTED]

03/31/93 03/31/94 03/31/95 03/31/96 03/31/97 03/31/98
<S> <C> <C> <C> <C> <C> <C>
Sunrise International $100.00 $65.71 $55.71 $34.29 $44.29 $44.29
Leasing Corporation

S&P 500 Financial $100.00 $102.93 $123.01 $180.31 $216.88 $382.30
(Diversified) Index

S&P 500 Composite Stock $100.00 $101.47 $117.27 $154.92 $185.63 $274.73
Index
</TABLE>

<PAGE>

APPROVAL OF STOCK OPTION GRANTED TO PETER J. KING
(Proposal #3)

On June 23, 1998, the Board granted to Peter J. King, the Company's
Chief Executive Officer, a stock option to purchase 400,000 shares of the
Company's Common Stock at $3.25 per share, which option was granted outside of
the Company's 1991 Stock Option Plan (the "Plan") pursuant to an agreement
between the Company, Mr. King and King Management (the "Management Agreement").
For details of the Management Agreement, see sections entitled Employment and
Severance Agreements or Arrangements and Certain Transactions. The option vests
and becomes exercisable on June 23, 2004, subject to acceleration provisions,
which provide that, if the closing price of the Company's Common Stock reaches
$5.00, $6.00 or $7.00 for ten successive business days, Mr. King's right to
exercise the option will be accelerated to the extent of 125,000 shares, 125,000
shares and 150,000 shares, respectively. In addition to the foregoing option,
Mr. King currently holds the following options, all of which were granted
pursuant to the Management Agreement: (i) 270,753 shares at $3.375 per share,
which option was granted on June 18, 1997 and is exercisable at any time on or
before June 18, 2002; (ii) 270,753 shares at $3.375 per share, which option was
granted on June 18, 1997 and will become exercisable on June 16, 2001 and shall
be exercisable in full at any time on or before June 18, 2002; provided,
however, that the vesting of such option will be accelerated to June 16, 1999 if
certain conditions are met; and (iii) 250,000 shares at $3.25, which option was
granted on June 23, 1998 under the Plan, is immediately exercisable and
terminates on June 23, 2005.

Vote Required. The Board of Directors recommends that the shareholders
approve the stock option grant to Mr. King. Approval of the option grant
requires the affirmative vote of the holders of 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.

APPROVAL OF AMENDMENT TO THE COMPANY'S 1991 STOCK OPTION PLAN
(Proposal #4)

Amendment

On June 23, 1998, the Board amended the Company's 1991 Stock Option
Plan (the "Plan") to (i) increase the shares reserved under the Plan from
750,000 to 1,000,000 shares, (ii) increase the automatic formula option grant to
Non-Employee Directors upon initial election from 10,000 to 15,000 shares, (iii)
permit the grant of options to outside directors in addition to the formula
grants and (iv) change the definition of "committee" to make the Plan consistent
with Rule 16b-3 under the Securities Exchange Act of 1934 (the "Amendment"). As
of July 23, 1998, the Company had outstanding incentive and nonqualified options
for the purchase of an aggregate of 440,300 shares of the Company's Common Stock
with an average exercise price of approximately $3.49 per share granted under
the Plan. In addition, the company had outstanding nonqualified options to
purchase an aggregate of 941,506 shares at an average exercise price of $3.32
granted outside the Plan. As of July 23, 1998, options to purchase 52,000 shares
under the Plan had been exercised. The increase of shares is necessary to
provide sufficient shares for future options. The Board believes that granting

<PAGE>

fairly-priced stock options to employees and directors is an effective means to
promote the future growth and development of the Company. Such options, among
other things, increase employees' and directors' proprietary interest in the
Company's success and enables the Company to attract and retain qualified
personnel. The Board therefore recommends that all shareholders vote in favor of
the Amendment.

Summary of 1991 Stock Option Plan

A general description of the basic features of the Plan is presented
below, but such description is qualified in its entirety by reference to the
full text of the Plan, a copy of which may be obtained without charge upon
written request to Peter J. King, the Company's President and Chief Executive
Officer.

Purpose. The purpose of the Plan is to promote the success of the
Company by facilitating the employment and retention of competent personnel and
by furnishing incentive to directors, officers and employees of the Company and
consultants and advisors to the Company, upon whose efforts the success of the
Company will depend to a large degree.

Term. Incentive stock options may be granted pursuant to the Plan
during a period of ten (10) years from the date the Plan was adopted by the
Board of Directors (until July 18, 2001), and nonqualified stock options may be
granted until the Plan is discontinued or terminated by the Board of Directors.

Administration. With the exception of the stock options automatically
issued to Non-Employee Directors as described below, the Plan is administered by
the Compensation and Stock Option Committee of the Board of Directors (the
"Committee"). Pursuant to the Amendment, the definition of a "committee" that
will comply with Rule 16b-3 of the Act will be a committee comprised of two or
more "non-employee directors" as defined under Rule 16b-3 of the Act. The Plan
gives broad powers to the Committee to administer and interpret the Plan,
including the authority to select the individuals to be granted options and to
prescribe the particular form and conditions of each option granted.

Eligibility. All employees of the Company or any subsidiary are
eligible to receive incentive stock options pursuant to the Plan. All employees,
officers and directors of and consultants and advisors to the Company or any
subsidiary are eligible to receive nonqualified stock options. As of July 23,
1998, the Company had approximately 40 employees, of which three are officers,
and two directors who are not employees.

Options. When an option is granted under the Plan, the Committee, at
its discretion, specifies the option price and the number of shares of Common
Stock which may be purchased upon exercise of the option. The exercise price of
an incentive stock option may not be less than 100% of the fair market value of
the Company's Common Stock, as that term is defined in the Plan, and the
exercise price of a nonqualified stock option may not be less than 85% of the
fair market value on the date of grant. The closing price of the Company's

<PAGE>

Common Stock was $4.375 on July 23, 1998. The period during which an option may
be exercised and whether the option will be exercisable immediately, in stages,
or otherwise is set by the Committee. An incentive stock option may not be
exercisable more than ten (10) years from the date of grant. Optionees may pay
for shares upon exercise of options with cash, certified check or outstanding
Common Stock of the Company valued at the stock's then "fair market value" as
defined in the Plan. Each option granted under the Plan is nontransferable
during the lifetime of the optionee.

Generally, under the form of option agreement which the Committee is
currently using for options granted under the Plan, if the optionee's
affiliation with the Company terminates before expiration of the option for
reasons other than "cause," death or disability, the optionee has a right to
exercise the option for sixty (60) days after termination of such affiliation or
until the option's original expiration date, whichever is earlier. If the
termination is for "cause," as defined in the option agreement, the option
terminates immediately. If the termination is because of death or disability,
the option typically is exercisable until its original stated expiration or
until the six-month anniversary of the optionee's death, whichever is earlier.
The Committee may impose additional or alternative conditions and restrictions
on the incentive or nonqualified stock options granted under the Plan; however,
each incentive option must contain such limitations and restrictions upon its
exercise as are necessary to ensure that the option will be an incentive stock
option as defined under the Internal Revenue Code.

Grants to Non-Employee Directors. The Plan provides for automatic
option grants to each director who is not an employee of the Company (a
"Non-Employee Director"). Prior to the Amendment, each Non-Employee Director was
granted a nonqualified option to purchase 10,000 shares of the Common Stock upon
his initial election, which option is exercisable to the extent of 2,000 shares
immediately and on each of the first four anniversaries of the date of grant.
Pursuant to the Amendment, upon the initial election of a Non-Employee Director,
such Non-Employee Director will be granted a nonqualified option to purchase
15,000 shares of Common Stock, which option will be exercisable to the extent of
2,000 shares on the date of grant, 2,500 shares on the first anniversary of the
date of grant, 3,000 shares on the second anniversary of the date of grant,
3,500 shares on the third anniversary of the date of grant and 4,000 shares on
the fourth anniversary of the date of grant. Each Non-Employee Director who is
re-elected as a director of the Company or whose term of office continues after
a meeting of shareholders at which directors are elected shall, as of the date
of such re-election or shareholder meeting, automatically be granted a
nonqualified option to purchase 2,000 shares of the Common Stock. A Non-Employee
Director may not receive a 2,000-share option for at least twelve (12) months
following the option grant upon such Non-Employee Director's initial election.
All options granted pursuant to these provisions are granted at a per share
exercise price equal to 100% of the fair market value of the Common Stock on the
date of grant, and they expire on the earlier of (i) three months after the
optionee ceases to be a director (except by death or disability) and (ii) ten
(10) years after the date of grant. In the event of the death or disability of a
Non-Employee Director, any option granted to such Non-Employee Director pursuant
to this formula plan may be exercised at any time within twelve (12) months of
the death or disability of such Non-Employee Director or until the date on which
the option, by its terms, expires, whichever is earlier. Prior to the Amendment,
the Non-Employee Directors were entitled to receive options pursuant to this
formula plan only; the Amendment provides that the Non-Employee Directors are
eligible to receive additional nonqualified stock options pursuant to the Plan
in the sole discretion of the Board, or the Committee.

<PAGE>

Amendment. The Board of Directors may from time to time suspend or
discontinue the Plan or revise or amend it in any respect; provided, however,
that no such revision or amendment may impair the terms and conditions of any
outstanding option to the material detriment of the optionee without the consent
of the optionee, except as authorized in the event of a sale, merger,
consolidation or liquidation of the Company. The Plan may not be amended in any
manner that will cause incentive stock options to fail to meet the requirements
of Code Section 422, and may not be amended in any manner that will: (i)
materially increase the number of shares subject to the Plan except as provided
in the case of stock splits, consolidations, stock dividends or similar events;
(ii) change the designation of the class of employees eligible to receive
options; (iii) decrease the price at which options will be granted; or (iv)
materially increase the benefits accruing to optionees under the Plan, without
the approval of the shareholders, if such approval is required to comply with
Code Section 422 or the requirements of Section 16(b) of the Act.

The Board of Directors will equitably adjust the maximum number of
shares of Common Stock reserved for issuance under the Plan, the number of
shares covered by each outstanding option and the option price per share in the
event of stock splits or consolidations, stock dividends or other transactions
in which the Company receives no consideration. Generally, the Board of
Directors may also provide for the protection of optionees in the event of a
merger, liquidation or reorganization of the Company.

Federal Income Tax Consequences of the Plan. Under present law, an
optionee will not realize any taxable income on the date a nonqualified stock
option is granted to the optionee pursuant to the Plan. Upon exercise of the
nonqualified stock option, however, the optionee will realize, in the year of
exercise, ordinary income to the extent of the difference between the option
price and the fair market value of the Company's Common Stock on the date of
exercise. Upon the sale of the shares, any resulting gain or loss will be
treated as capital gain or loss. The Company will be entitled to a tax deduction
in its fiscal year in which nonqualified stock options are exercised, equal to
the amount of compensation required to be included as ordinary income by those
optionees exercising such options.

Incentive stock options granted pursuant to the Plan are intended to
qualify for favorable tax treatment to the optionee under Code Section 422.
Under Code Section 422, an employee realizes no taxable income when the
incentive stock option is granted. If the employee has been an employee of the
Company or any subsidiary at all times from the date of grant until three months
before the date of exercise, the employee will realize no taxable income when
the option is exercised. If the employee does not dispose of shares acquired
upon exercise for a period of two years from the granting of the incentive stock
option and one year after receipt of the shares, the employee may sell the
shares and report any gain as capital gain. The Company will not be entitled to
a tax deduction in connection with either the grant or exercise of an incentive
stock option. If the employee should dispose of the shares prior to the
expiration of the two-year or one-year periods described above, the employee
will be deemed to have received compensation taxable as ordinary income in the
year of the early sale in an amount equal to the lesser of (i) the difference
between the fair market value of the Company's Common Stock on the date of

<PAGE>

exercise and the option price of the shares, or (ii) the difference between the
sale price of the shares and the option price of shares. In the event of such an
early sale, the Company will be entitled to a tax deduction equal to the amount
recognized by the employee as ordinary income. The foregoing discussion ignores
the impact of the alternative minimum tax, which may particularly be applicable
to the year in which an incentive stock option is exercised.

Plan Benefits. Because future grants of stock options are subject to
the discretion of the Committee, the future benefits under the Plan cannot be
determined at this time, except for the automatic grants to Non-Employee
Directors as set forth above. The table below shows the total number of shares
underlying stock options that have been granted under the Plan as of July 23,
1998 to the named executive officers and the groups set forth.

Shares of Common Stock
Name and Position/Group Underlying Options Received
----------------------- ---------------------------
Errol F. Carlstrom 250,000(1)
Former President and Chief Executive Officer

Barry J. Schwach 44,000(2)
Former Chief Financial Officer

Dana Prescott 20,000(3)
Former Senior Vice President - National Sales
Manager

R. Bradley Pike 5,000
Vice President - Asset Management

Current Executive Officers 365,000(4)
as a Group (2 persons)

Current Directors who are not 60,000
Executive Officers as a Group (3 persons)

Current Employees who are not 61,000(5)
Executive Officers or Directors
as a Group (37 persons)
- -------------------

(1) All of the options expired after Mr. Carlstrom's resignation.

(2) Includes options to purchase 10,500 shares which expired after Mr.
Schwach's resignation and options to purchase 26,000 shares which have
been exercised.

<PAGE>

(3) Includes options to purchase 18,000 shares which expired after Mr.
Prescott's resignation and options to purchase 2,000 shares which have
been exercised.

(4) Does not include options to purchase 941,506 shares granted to Mr.
Peter King outside of the Plan.

(5) Includes options to purchase 500 shares which have been exercised.

Vote Required. The Board of Directors recommends that the shareholders
approve the Amendment to the Plan to provide for the (i) increase of the number
of shares reserved from 750,000 to 1,000,000, (ii) increase formula grants to
outside directors upon initial election and (iii) permit the grant of options to
outside directors in addition to the formula grants and (iv) change the
definition of "committee" to make the Plan consistent with Rule 16b-3 under the
Securities Exchange Act of 1934. Approval of the Amendment to the Plan requires
the affirmative vote of the holders of 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.

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 officers and
directors had a material financial interest:

In connection with the February 1995 merger with International Leasing
Corporation, the Company entered into a Consulting and Noncompetition Agreement
("Consulting Agreement") with Peter J. King, whereby Mr. King provided
consulting services to the Company for three years ending February 13, 1998, Mr.
King was paid $5,000 a month during the third year of the Consulting Agreement.

<PAGE>

Sunrise matters from April 1, 1998 through June 30, 1998. For these services,
King Management has been paid $125,000. Two King Management employees, including
Mr. Jacobsen, became full-time employees of the Company on June 23, 1998. Three
King Management employees continue to provide services to the Company for which
King Management will be reimbursed. Employees of the Company may also provide
services to King Management for which King Management may be reimbursed. Upon
joining the Company as employees on June 23, 1998, Mr. Jacobsen received
ten-year options to purchase 100,000 shares of Common Stock, and the second King
Management employee received options to purchase 10,000 shares. In addition,
options for 17,000 shares have been granted to the three other King Management
employees providing services to the Company and who remain King Management
employees. All of these options have an exercise price of $3.25 per share.
Pursuant to the Management Agreement, King Management has agreed to provide
subordinated debt financing, direct financing and/or other financial assistance
to the Company for a period of three 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. King Management has agreed to provide to
the Company the use of its balance sheet resources to enable the Company to meet
its vendor leasing program financing requirements.

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 fiscal year
1998, all filing requirements applicable to its officers, directors and greater
than ten-percent beneficial owners were complied with, except that Mr. Brattain
reported one transaction on a Form 4 that was not timely filed and Mr. Peter
King reported two transactions on a Form 4 that was not timely filed, and as
trustee of a Voting Trust Agreement, filed a Form 3 late.

OTHER BUSINESS

Management knows of no other matters to be presented at the 1998 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.

<PAGE>

SHAREHOLDER PROPOSALS

Any appropriate proposal submitted by a shareholder of the Company and
intended to be presented at the 1999 Annual Meeting must be received by the
Company by March 31, 1999 to be includable in the Company's proxy statement and
related proxy for the 1998 Annual Meeting.

INDEPENDENT PUBLIC ACCOUNTANTS

On November 12, 1997 the Company dismissed Arthur Andersen LLP and
engaged Deloitte & Touche LLP as the independent public accountants for the
Company. There were not, in connection with the audits of the two years ended
March 31, 1997, and the subsequent interim period through November 12, 1997, any
disagreements with Arthur Andersen on any matter of accounting principles or
practices, financial statement disclosure, or auditing scope or procedures,
which disagreements if not resolved to Arthur Andersen's satisfaction would have
caused them to make reference in connection with their opinion to the subject
matter of the disagreement. The audit reports of Arthur Andersen on the
consolidated financial statements of the Company as of and for the years ended
March 31, 1997, 1996 and 1995 did not contain any adverse opinion or disclaimer
of opinion, nor were they qualified or modified as to uncertainty, audit scope
or accounting principles.

Representatives of Deloitte & Touche are expected to be present at the
Annual Meeting, will be given an opportunity to make a statement regarding
financial and accounting matters of the Company if they so desire, and will be
available to respond to appropriate questions from the Company's shareholders.

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 1998 ANNUAL MEETING. PLEASE ADDRESS YOUR REQUEST
TO THE ATTENTION OF PETER J. KING, CHIEF EXECUTIVE OFFICER. YOUR REQUEST MUST
CONTAIN A REPRESENTATION THAT, AS OF JULY 23, 1998, YOU WERE A BENEFICIAL OWNER
OF SHARES ENTITLED TO VOTE AT THE ANNUAL MEETING OF SHAREHOLDERS. THE COMPANY'S
FORM 10-K MAY ALSO BE ACCESSED THROUGH THE SEC'S WEB SITE AT WWW.SEC.GOV.

BY ORDER OF THE BOARD OF DIRECTORS

Jeffrey G. Jacobsen,
Executive Vice President and Secretary

Dated: August 14, 1998

<PAGE>

SUNRISE INTERNATIONAL LEASING CORPORATION
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The undersigned hereby appoints PETER J. KING 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
International Leasing Corporation to be held on September 17, 1998, 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. SET THE NUMBER OF DIRECTORS AT FOUR (4).

[ ] FOR [ ] AGAINST [ ] ABSTAIN

2. ELECTION OF DIRECTORS. NOMINEES: Peter J. King, 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)

---------------------------------------------------
[ ] WITHHOLD AUTHORITY to vote for all nominees listed above.

3. APPROVE STOCK OPTION GRANT TO PETER J. KING.

[ ] FOR [ ] AGAINST [ ] ABSTAIN

4. APPROVE AMENDMENT TO 1991 STOCK OPTION PLAN.

[ ] 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, 3 and 4.

Dated:_______________________________, 1998

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

<PAGE>

EXHIBIT
SUNRISE INTERNATIONAL LEASING CORPORATION

1991 STOCK OPTION PLAN

(as amended through June 23, 1998)

SECTION 1.
DEFINITIONS

As used herein, the following terms shall have the meanings indicated
below:

(a) The "Company" shall mean Sunrise International Leasing
Corporation, a Delaware corporation.

(b) A "Subsidiary" shall mean any corporation of which fifty
percent (50%) or more of the total voting power of outstanding stock is
owned, directly or indirectly in an unbroken chain, by the Company.

(d) The "Plan" shall mean the Sunrise International Leasing
Corporation 1991 Stock Option Plan, as amended hereafter from time to
time, including the forms of Option Agreements as they may be modified
by the Board from time to time.

(e) The "Optionee" for purposes of Section 9 shall mean an
employee of the Company or any Subsidiary to whom an incentive stock
option has been granted under the Plan. For purposes of Section 10, the
"Optionee" shall mean the director, officer, employee, advisor or
consultant of the Company or any Subsidiary to whom a nonqualified
stock option has been granted.

(f) "Committee" shall mean a Committee of two or more
directors who shall be appointed by and serve at the pleasure of the
Board. As long as the Company's securities are registered pursuant to
Section 12 of the Securities Exchange Act of 1934, as amended, then, to
the extent necessary for compliance with Rule 16b-3, or any successor
provision, each of the members of the Committee shall be a
"Non-Employee Director." For purposes of this Section 1(f)
"Non-Employee Director" shall have the same meaning as set forth in
Rule 16b-3, or any successor provision, as then in effect, of the
General Rules and Regulations under the Securities Exchange Act of
1934, as amended.

(g) The "Internal Revenue Code" shall mean the Internal
Revenue Code of 1986, as amended from time to time.

<PAGE>

(h) "Non-Employee Directors" shall mean members of the Board
who are not employees of the Company or of any Subsidiary.

SECTION 2.
PURPOSE

The purpose of the Plan is to promote the success of the Company by
facilitating the employment and retention of competent personnel and by
furnishing incentive to officers, directors, employees and consultants upon
whose efforts the success of the Company will depend to a large degree.

It is the intention of the Company to carry out the Plan through the
granting of stock options which will qualify as "incentive stock options" under
the provisions of Section 422 of the Internal Revenue Code, and through the
granting of nonqualified stock options pursuant to Section 10 of this Plan.
Adoption of this Plan shall be and is expressly subject to the condition of
approval by the shareholders of the Company within twelve (12) months before or
after the adoption of the Plan by the Board of Directors.

SECTION 3.
EFFECTIVE DATE OF PLAN

The Plan shall be effective as of the date it is adopted by the Board
of Directors of the Company.

SECTION 4.
ADMINISTRATION

The Plan shall be administered by the Board of Directors of the Company
(the "Board") or, to the extent empowered by the Board, by a Stock Option
Committee (hereinafter referred to as the "Committee" and as defined in Section
1(f) of this Plan) which may be appointed by the Board from time to time. The
Board shall have all of the powers vested in it under the provisions of the
Plan, including but not limited to exclusive authority (where applicable and
within the limitations described herein, and except with respect to the
automatic grants of options pursuant to Section 17 of this Plan) to determine,
in its sole discretion, whether an incentive stock option or nonqualified stock
option shall be granted, the individuals to whom, and the time or times at
which, options shall be granted, the number of shares subject to each option and
the option price, terms and conditions of each option. The Committee shall have
such powers as are granted to it by the Board. The Board, or the Committee if so
empowered by the Board, shall have full power and authority to administer and
interpret the Plan, to make and amend rules, regulations and guidelines for
administering the Plan, to prescribe the form and conditions of the respective
stock option agreements (which may vary from Optionee to Optionee) evidencing
each option and to make all other determinations necessary or advisable for the
administration of the Plan. The Board's interpretation of the Plan, or the
Committee's interpretation if so empowered by the Board, and all actions taken

<PAGE>

and determinations made by the Board pursuant to the power vested in it
hereunder, or by the Committee to the extent empowered by the Board, shall be
conclusive and binding on all parties concerned. No member of the Board or the
Committee shall be liable for any action taken or determination made in good
faith in connection with the administration of the Plan.

In the event the Board appoints a Committee as provided hereunder, any
action of the Committee with respect to the administration of the Plan shall be
taken pursuant to a majority vote of the Committee members or pursuant to the
written resolution of all Committee members.

SECTION 5.
PARTICIPANTS

Except with respect to the options granted to Non-Employee Directors
pursuant to Section 17 of the Plan, the Board, or the Committee if so empowered
by the Board, shall from time to time, at its discretion and without approval of
the shareholders, designate those directors (including Non-Employee Directors),
officers, employees, consultants or advisors of the Company or of any Subsidiary
to whom nonqualified stock options shall be granted; provided, however, that
consultants or advisors shall not be eligible to receive stock options hereunder
unless such consultant or advisor renders bona fide services to the Company or
Subsidiary and such services are not in connection with the offer or sale of
securities in a capital-raising transaction. The Board, or the Committee if so
empowered by the Board, shall also designate those employees of the Company or
of any Subsidiary to whom incentive stock options shall be granted.

The Board, or the Committee if so empowered by the Board, may grant
additional incentive stock options or nonqualified stock options to some or all
participants then holding options or may grant such options solely or partially
to new participants. In designating participants, the Board, or the Committee if
so empowered by the Board, shall also determine the number of shares to be
optioned to each such participant.

SECTION 6.
STOCK

The Stock to be optioned under this Plan shall consist of authorized
but unissued shares of Common Stock. One Million (1,000,000) shares of Common
Stock shall be reserved and available for options under the Plan; provided,
however, the total number of shares of Common Stock reserved for options under
this Plan shall be subject to adjustment as provided in Section 12 of the Plan.
In the event that any outstanding option under the Plan for any reason expires
or is terminated prior to the exercise thereof, the shares of Common Stock
allocable to the unexercised portion of such option shall continue to be
reserved for options under the Plan and may be optioned hereunder.

<PAGE>

SECTION 7.
DURATION OF PLAN

Incentive stock options may be granted pursuant to this Plan from time
to time during a period of ten (10) years from the earlier of the date the Plan
is approved by the Board of Directors or the date it is approved by the
shareholders of the Company. Nonqualified stock options may be granted pursuant
to the Plan from time to time after the date the Plan is adopted by the Board of
Directors and until the Plan is discontinued or terminated by the Board.

SECTION 8.
PAYMENT

Optionees may pay for shares upon exercise of options granted pursuant
to this Plan with cash, a certified check, or, if authorized by the Board of
Directors or the Committee, in the form of Company stock.

SECTION 9.
TERMS AND CONDITIONS OF INCENTIVE STOCK OPTIONS

Each incentive stock option granted pursuant to the Plan shall be
evidenced by a written stock option agreement (the "Option Agreement"). The
Option Agreement shall be in such form as may be approved from time to time by
the Board or the Committee (if so empowered by the Board) and may vary from
Optionee to Optionee; provided, however, that each Optionee and each Option
Agreement shall comply with and be subject to the following terms and
conditions:

(a) Number of Shares and Option Price. The Option Agreement
shall state the total number of shares covered by the incentive stock
option. The option price per share shall not be less than one hundred
percent (100%) of the fair market value of the Common Stock per share
on the date the Board, or the Committee if so empowered by the Board,
grants the option; provided, however, that, if an Optionee owns stock
possessing more than ten percent (10%) of the total combined voting
power of all classes of stock of the Company or of its parent or any
Subsidiary, the option price per share of an incentive stock option
granted to such Optionee shall not be less than one hundred ten percent
(110%) of the fair market value of the Common Stock per share on the
date of the grant of the option. For purposes hereof, if such stock is
then reported in the national market system or is listed upon an
established exchange or exchanges, "fair market value" of the Common
Stock per share shall be the highest closing price of such stock in
such national market system or on such stock exchange or exchanges on
the date the option is granted or, if no sale of such stock shall have
occurred on that date, on the next preceding day on which there was a
sale of stock. If such stock is not so reported in the national market
system or listed upon an exchange, "fair market value" shall be the

<PAGE>

mean between the "bid" and "asked" prices quoted by a recognized
specialist in the Common Stock of the Company on the date the option is
granted, or if there are no quoted "bid" and "asked" prices on such
date, on the next preceding date for which there are such quotes. If
such stock is not publicly traded as of the date the option is granted,
the "fair market value" of the Common Stock shall be determined by the
Board, or the Committee if so empowered by the Board, in its sole
discretion by applying principles of valuation with respect to all such
options. The Board, or the Committee if so empowered by the Board,
shall have full authority and discretion in establishing the option
price and shall be fully protected in so doing.

(b) Term and Exercisability of Incentive Stock Option. The
term during which any incentive stock option granted under the Plan may
be exercised shall be established in each case by the Board, or the
Committee if so empowered by the Board, but in no event shall any
incentive stock option be exercisable during a term of more than ten
(10) years after the date on which it is granted. The Option Agreement
shall state when the incentive stock option becomes exercisable and
shall also state the maximum term during which the option may be
exercised. In the event an incentive stock option is exercisable
immediately, the manner of exercise of the option in the event it is
not exercised in full immediately shall be specified in the Option
Agreement. The Board, or the Committee if so empowered by the Board,
may accelerate the exercise date of any incentive stock option granted
hereunder which is not immediately exercisable as of the date of grant.

(c) Other Provisions. The Option Agreement authorized under
this Section 9 shall contain such other provisions as the Board, or the
Committee if so empowered by the Board, shall deem advisable,
including, without limitation, rights of repurchase and transfer
restrictions with respect to any shares acquired by the Optionee
pursuant to the exercise of the option. Any such Option Agreement shall
contain such limitations and restrictions upon the exercise of the
option as shall be necessary to ensure that such option will be
considered an "Incentive Stock Option" as defined in Section 422 of the
Internal Revenue Code or to conform to any change therein.

(d) Holding Period. The sale or other disposition of any
shares of Common Stock acquired by an Optionee pursuant to the exercise
of an option described above shall be eligible for the favorable
taxation treatment of Section 421(a) of the Internal Revenue Code if no
disposition of such shares is made by the Optionee within two (2) years
from the date of the granting of the option under which the shares were
acquired nor within one year after the acquisition of such shares
pursuant to the exercise of such option, or such other periods as may
be prescribed by the Internal Revenue Code. In the event of an
Optionee's death, such holding period shall not be applicable pursuant
to Section 421(c)(1) of the Internal Revenue Code.

<PAGE>

SECTION 10.
TERMS AND CONDITIONS OF NONQUALIFIED STOCK OPTIONS

Each nonqualified stock option granted pursuant to the Plan shall be
evidenced by a written Option Agreement. The Option Agreement shall be in such
form as may be approved from time to time by the Board or the Committee (if so
empowered by the Board), and may vary from Optionee to Optionee; provided,
however, that each Optionee and each Option Agreement shall comply with and be
subject to the following terms and conditions:

(a) Number of Shares and Option Price. The Option Agreement
shall state the total number of shares covered by the nonqualified
stock option. Unless otherwise determined by the Board of Directors, or
the Committee if so empowered by the Board, the option price per share
shall be equal to one hundred percent (100%) of the fair market value
of the Common Stock per share on the date the Board or the Committee
grants the option; provided, that in no event shall the option price be
equal to less than eighty-five percent (85%) of such fair market value
on the date of grant. For purposes hereof, the "fair market value" of a
share of Common Stock shall have the same meaning as set forth under
Section 9(a) herein.

(b) Term and Exercisability of Nonqualified Stock Option. The
term during which any nonqualified stock option granted under the Plan
may be exercised shall be established in each case by the Board, or the
Committee if so empowered by the Board. The Option Agreement shall
state when the nonqualified stock option becomes exercisable and shall
also state the maximum term during which the option may be exercised.
In the event a nonqualified stock option is exercisable immediately,
the manner of exercise of the option in the event it is not exercised
in full immediately shall be specified in the stock option agreement.
The Board, or the Committee if so empowered by the Board, may
accelerate the exercise date of any nonqualified stock option granted
hereunder which is not immediately exercisable as of the date of grant.

(c) Withholding. In the event the Optionee is required under
the Option Agreement to pay to the Company, or make arrangements
satisfactory to the Company respecting payment of, any federal, state,
local or other taxes required by law to be withheld with respect to the
option's exercise, the Board or the Committee may, in its discretion
and pursuant to such rules as it may adopt, permit the Optionee to
satisfy such obligation, in whole or in part, by electing to have the
Company withhold shares of Common Stock otherwise issuable to the
Optionee as a result of the option's exercise equal to the amount
required to be withheld for tax purposes. Any stock elected to be
withheld shall be valued at its "fair market value," as provided under
Section 9(a) hereof, as of the date the amount of tax to be withheld is
determined under applicable tax law. The Optionee's election to have
shares withheld for this purpose shall be made on or before the date
the option is exercised or, if later, the date that the amount of tax
to be withheld is determined under applicable tax law. Such election
shall also comply with such rules as may be adopted by the Board or the
Committee to assure compliance with Rule 16b-3, as then in effect, of
the General Rules and Regulations under the Securities Exchange Act of
1934, if applicable.

<PAGE>

(d) Other Provisions. The Option Agreement authorized under
this Section 10 shall contain such other provisions as the Board, or
the Committee, as the case may be, shall deem advisable.

SECTION 11.
TRANSFER OF OPTION

No option shall be transferable, in whole or in part, by the Optionee
other than by will or by the laws of descent and distribution and, during the
Optionee's lifetime, the option may be exercised only by the Optionee. If the
Optionee shall attempt any transfer of any option granted under the Plan during
the Optionee's lifetime, such transfer shall be void and the option, to the
extent not fully exercised, shall terminate.

SECTION 12.
RECAPITALIZATION, SALE, MERGER, EXCHANGE
CONSOLIDATION OR LIQUIDATION

In the event of an increase or decrease in the number of shares of
Common Stock resulting from a subdivision or consolidation of shares or the
payment of a stock dividend or any other increase or decrease in the number of
shares of Common Stock effected without receipt of consideration by the Company,
the number of shares of Common Stock covered by each outstanding option and the
price per share thereof shall be equitably adjusted by the Board of Directors to
reflect such change. Additional shares which may be credited pursuant to such
adjustment shall be subject to the same restrictions as are applicable to the
shares with respect to which the adjustment relates.

In the event of the sale by the Company of substantially all of its
assets and the consequent discontinuance of its business, or in the event of a
merger, exchange, consolidation or liquidation of the Company, the Board of
Directors may, in connection with the Board's adoption of the plan for sale,
merger, exchange, consolidation or liquidation, provide for one or more of the
following: (i) the acceleration of the exercisability of any or all outstanding
options; (ii) the complete termination of this Plan and cancellation of
outstanding options not exercised prior to a date specified by the Board (which
date shall give Optionees a reasonable period of time in which to exercise the
options prior to the effectiveness of such sale, merger, exchange, consolidation
or liquidation); and (iii) the continuance of the Plan with respect to the
exercise of options which were outstanding as of the date of adoption by the
Board of such plan for sale, merger, exchange, consolidation or liquidation and
provide to Optionees holding such options the right to exercise their respective
options as to an equivalent number of shares of stock of the corporation
succeeding the Company by reason of such sale, merger, exchange, consolidation
or liquidation. The grant of an option pursuant to the Plan shall not limit in
any way the right or power of the Company to make adjustments,
reclassifications, reorganizations or changes of its capital or business
structure or to merge, exchange or consolidate or to dissolve, liquidate, sell
or transfer all or any part of its business or assets.

<PAGE>

SECTION 13.
INVESTMENT PURPOSE

No shares of Common Stock shall be issued pursuant to the Plan unless
and until there has been compliance, in the opinion of Company's counsel, with
all applicable legal requirements, including without limitation, those relating
to securities laws and stock exchange listing requirements. As a condition to
the issuance of Common Stock to Optionee, the Board, or the Committee if so
empowered by the Board, may require Optionee to (a) represent that the shares of
Common Stock are being acquired for investment and not resale and to make such
other representations as the Board, or the Committee if so empowered by the
Board, shall deem necessary or appropriate to qualify the issuance of the shares
as exempt from the Securities Act of 1933 and any other applicable securities
laws, and (b) represent that Optionee shall not dispose of the shares of Common
Stock in violation of the Securities Act of 1933 or any other applicable
securities laws. Company reserves the right to place a legend on any stock
certificate issued upon exercise of an option granted pursuant to the Plan to
assure compliance with this Section 13.

SECTION 14.
RIGHTS AS A SHAREHOLDER

An Optionee (or the Optionee's successor or successors) shall have no
rights as a shareholder with respect to any shares covered by an option until
the date of the issuance of a stock certificate evidencing such shares (except
as otherwise provided in Section 12 above). No adjustment shall be made for
dividends (ordinary or extraordinary, whether in cash, securities or other
property), distributions or other rights for which the record date is prior to
the date such stock certificate is actually issued (except as otherwise provided
in Section 12).

SECTION 15.
AMENDMENT OF THE PLAN

The Board of Directors of the Company may from time to time, insofar as
permitted by law, suspend or discontinue the Plan or revise or amend it in any
respect; provided, however, that no such revision or amendment shall impair the
terms and conditions of any option which is outstanding on the date of such
revision or amendment to the material detriment of the Optionee without the
consent of the Optionee. Notwithstanding the foregoing, no such revision or
amendment shall, (i) materially increase the number of shares subject to the
Plan except as provided in Section 12 hereof, (ii) change the designation of the
class of employees eligible to receive options, (iii) decrease the price at
which options may be granted, or (iv) materially increase the benefits accruing
to Optionees under the Plan, unless such revision or amendment is approved by
the shareholders of the Company. Furthermore, the Plan may not, without the
approval of the shareholders, be amended in any manner that will cause incentive
stock options to fail to meet the requirements of "Incentive Stock Options" as

<PAGE>

defined in Section 422 of the Internal Revenue Code. In addition to and
notwithstanding the foregoing, the provisions of Section 17 below shall not be
amended more than once every six months, other than to comport with changes in
the Internal Revenue Code, the Employee Retirement Income Security Act, or the
rules thereunder.

SECTION 16.
NO OBLIGATION TO EXERCISE OPTION

The granting of an option shall impose no obligation upon the Optionee
to exercise such option. Further, the granting of an option hereunder shall not
impose upon the Company or any Subsidiary any obligation to retain the Optionee
in its employ or as a director for any period.

SECTION 17.
GRANTING OF OPTIONS TO NON-EMPLOYEE DIRECTORS

(a) Upon Joining Board. Each Non-Employee Director of the
Company who is elected for the first time as a director of the Company
shall, as of the date of such election, automatically be granted an
option to purchase 15,000 shares of the Common Stock at an option price
per share equal to 100% of the fair market value of the Common Stock on
such date. Such option shall be exercisable to the extent of: 2,000
shares on the date of grant, 2,500 shares on the first anniversary of
the date of grant, 3,000 shares on the second anniversary of the date
of grant, 3,500 shares on the third anniversary of the date of grant
and 4,000 shares on the fourth anniversary of the date of grant.

(b) Upon Re-election to Board. Each Non-Employee Director who,
on and after November 11, 1992, the date of approval of this Section by
the Board, is re-elected as a director of the Company or whose term of
office continues after a meeting of shareholders at which directors are
elected shall, as of the date of such re-election or shareholder
meeting, automatically be granted an option to purchase 2,000 shares of
the Common Stock at an option price per share equal to 100% of the fair
market value of the Common Stock on the date of such re-election or
shareholder meeting; provided that a Non-Employee Director who received
an option pursuant to subsection (a) above shall not be entitled to
receive an option pursuant to this subsection (b) until at least twelve
months after such Non-Employee Director's initial election to the
Board. Options granted pursuant to this subsection (b) shall be
immediately exercisable in full.

(c) General. No director shall receive more than one option to
purchase 2,000 shares pursuant to this Section 17 in any one fiscal
year. All options granted pursuant to this Section 17 shall be
designated as non-qualified options and shall be subject to the same
terms and provisions as are then in effect with respect to granting of
non-qualified options to officers and employees of the Company except
that the option shall expire on the earlier of (i) three months after
the optionee ceases to be a director (except by disability or death)
and (ii) ten (10) years after the date of grant. Notwithstanding the
foregoing, in the event of the disability or death of a Non-Employee
Director, any option granted to such Non-Employee Director may be
exercised at any time within twelve months of the disability or death
of such Non-Employee Director or on the date on which the option, by
its terms expires, whichever is earlier.