<PAGE>
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 Section 240.14a-11(c) or Section 240.14a-12
SOLA INTERNATIONAL INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) 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:
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Notes:
<PAGE>
SOLA INTERNATIONAL INC.
2420 SAND HILL ROAD, SUITE 200
MENLO PARK, CALIFORNIA 94025
----------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON FRIDAY, AUGUST 15, 1997
----------------
To the Stockholders of Sola International Inc.:
Notice is hereby given that the Annual Meeting of Stockholders of Sola
International Inc., a Delaware corporation, will be held at the Quadrus
Conference Center, 2400 Sand Hill Road, Menlo Park, California 94025, on
Friday, August 15, 1997 at 10:00 a.m. (local time) for the following purposes:
1. To elect a Board of Directors to serve until the next Annual Meeting of
Stockholders or until their successors are elected and qualified.
2. To ratify the appointment of Ernst & Young LLP as the Company's
independent auditors for the fiscal year ending March 31, 1998.
3. To transact such other business as may properly be brought before the
meeting or any adjournments thereof.
The Board of Directors has fixed the close of business on June 18, 1997 as
the record date for determination of the stockholders entitled to notice and
to vote at the Annual Meeting and only holders of record of the Company's
common stock on said date will be entitled to receive notice of and to vote at
the meeting.
Stockholders are cordially invited to attend the Annual Meeting. Whether or
not you plan to attend the meeting, please mark, sign, date and return the
enclosed proxy. The giving of your Proxy will not affect your right to vote in
person in the event you find it convenient to attend the meeting. You may
revoke the Proxy at any time before the closing of the polls at the meeting by
delivery to the Company of a subsequently executed proxy or a written notice
of revocation or by voting in person at the meeting. Attendance at the Annual
Meeting will be limited to stockholders and invited guests of the Company.
By order of the Board of Directors,
Ian S. Gillies
Secretary
June 25, 1997
PLEASE SIGN, DATE AND RETURN YOUR PROXY CARD PROMPTLY IN THE ENCLOSED
ENVELOPE.
<PAGE>
SOLA INTERNATIONAL INC.
----------------
PROXY STATEMENT IN CONNECTION WITH
THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON FRIDAY, AUGUST 15, 1997
----------------
This Proxy Statement is furnished to stockholders of Sola International
Inc., a Delaware corporation (the "Company"), in connection with the
solicitation by the Board of Directors of the Company (the "Board of
Directors") of proxies to be voted at the Annual Meeting of Stockholders of
the Company to be held at the Quadrus Conference Center, 2400 Sand Hill Road,
Menlo Park, California 94025, on Friday, August 15, 1997, at 10:00 a.m. (local
time), and any adjournments thereof (the "Annual Meeting"). Action will be
taken at the Annual Meeting to elect Directors of the Company and to ratify
the appointment of the Company's auditors.
Holders of record of outstanding shares of the Company's Common Stock, $.01
par value (the "Common Stock"), at the close of business on June 18, 1997, are
entitled to vote at the Annual Meeting or any adjournments thereof. Voting
rights are vested exclusively in the holders of the Common Stock. Each share
of Common Stock outstanding on the record date will be entitled to one vote on
all matters to be voted upon. Shares held as treasury shares by the Company
are not entitled to vote. As of the close of business on the record date, June
18, 1997, 24,266,752 shares of Common Stock were outstanding. This Proxy
Statement, the accompanying form of proxy and the Company's annual report to
stockholders for the fiscal year ended March 31, 1997 are being mailed on or
about June 30, 1997 to each stockholder entitled to vote at the meeting.
VOTING AND REVOCATION OF PROXIES
When proxies in the enclosed form are returned properly executed, the shares
represented thereby will be voted at the meeting and, where instructions have
been given by the stockholder, will be voted in accordance therewith. If the
stockholder does not otherwise specify, the stockholder's shares of Common
Stock will be voted for the election of the nominees set forth in the Proxy
Statement as directors of the Company, and for the appointment of Ernst &
Young LLP as the Company's independent auditor for the fiscal year ending
March 31, 1998. If any other matter is properly presented for action at the
meeting, the persons named in the enclosed proxy will vote on such matter in
their discretion.
The holders of a majority in number of the total outstanding shares of
Common Stock entitled to vote at the meeting, present in person or represented
by proxy, constitute a quorum. Assuming a quorum is present, the affirmative
vote of a plurality of the votes cast at the meeting and entitled to vote in
the election will be required for the election of directors and the
affirmative vote of a majority of the votes cast at the meeting and entitled
to vote thereon will be required to act on all other matters to come before
the Annual Meeting, including the appointment of the independent auditor.
Pursuant to the law of the State of Delaware, where the Company is
incorporated, as well as the provisions of the Company's Certificate of
Incorporation and By-Laws, abstentions, but not broker non-votes, will be
counted as votes cast against the proposal being considered. Votes will be
counted by employees of the First National Bank of Boston, the Company's
independent transfer agent and registrar.
Any proxy may be revoked by the stockholder, either by attending the meeting
and voting in person or by submitting a revocation in writing to the Company
(including a subsequent signed proxy) at any time prior to the closing of the
polls at the meeting.
<PAGE>
ELECTION OF DIRECTORS
The Board of Directors currently consists of eight directors. Seven
directors are to be elected at the Annual Meeting to hold office as directors
until the 1998 Annual Meeting of Stockholders or until their respective
successors have been duly elected and qualified. Unless otherwise directed,
proxies in the accompanying form will be voted FOR the nominees listed below.
All nominees have consented to be named and to serve if elected. If any one or
more of the nominees is unable to serve or for good cause will not serve,
proxies will be voted for the substitute nominee or nominees, if any, proposed
by the Board of Directors. The Board has no knowledge that any nominee will or
may be unable to serve or will or may withdraw from nomination. Each nominee
will be elected if he receives the affirmative vote of a plurality of the
votes cast by holders of shares of Common Stock at the Annual Meeting.
The Board of Directors proposes the election of the following directors of
the Company for a term of one year. All of the nominees are presently
directors of the Company. Set forth below for each nominee is his name, age,
the year in which he became a director of the Company, all positions and
offices with the Company which he holds, if any, his principal occupations
during at least the last five years and any additional directorships in
publicly-held companies or registered investment companies. References to the
Company include the Company and its predecessors.
IRVING S. SHAPIRO, 80, has been Chairman of the Board of the Company since
December 1994. Mr. Shapiro is Of Counsel to Skadden, Arps, Slate, Meagher &
Flom LLP. He was Chairman and Chief Executive Officer of E.I. du Pont de
Nemours and Company from 1974 to 1981. He is Chairman of the Board of the
Howard Hughes Medical Institute and of Marvin & Palmer Associates, Inc., and
is a director of J.P. Morgan Florida Federal Savings Bank, Pediatric Services
of America Inc., and Gliatech, Inc.
JOHN E. HEINE, 53, has served as Chief Executive Officer and President of
the Company since November 1981 and served as Chairman of the Board of the
Company from September 1993 to December 1994. Mr. Heine joined the Company in
1981 as Managing Director of Sola International Holdings, Ltd. and previously
held general management positions with Southern Farmers Holdings, Ltd. in
Adelaide and H.J. Heinz in Melbourne, Australia.
DOUGLAS D. DANFORTH, 74, has been a director of the Company since December
1994. He was Chairman and Chief Executive Officer of Westinghouse Electric
Corporation from 1983 to 1987. He is a director of Travelers, Inc., and Dal-
Tile International Inc.
HAMISH MAXWELL, 70, has been a director of the Company since December 1994.
Mr. Maxwell was Chairman of the Executive Committee of the Board of Directors
of Philip Morris Companies Inc. from September 1991 through April 1995 and was
Chairman and Chief Executive Officer of such company from 1984 to 1991. He is
a director of Bankers Trust Company, Bankers Trust New York Corporation and
The News Corporation Limited, and Chairman of WPP Group plc.
JACKSON L. SCHULTZ, 71, has been a director of the Company since November
1995. Mr. Schultz joined Wells Fargo Bank in 1970, retiring in 1990 as Senior
Vice President responsible for Public and Governmental Affairs. Mr. Schultz
remains a consultant to the bank. Mr. Schultz is also a director of The San
Francisco Company.
MAURICE J. CUNNIFFE, 64, has been a director of the Company since December
1996. He is Chairman and Chief Executive Officer of American Optical
Corporation, a company of which he has been sole shareholder since 1982.
A. WILLIAM HAMILL, 49, has been a director of the Company since December
1996. Mr. Hamill is Executive Vice President and Chief Financial Officer of
Union Camp Corporation, which he joined in 1996. From 1993 through 1996, he
was a partner in SCI Investors Inc. and a director of Custom Papers Group Inc.
From 1991 to 1993, he was Senior Vice President and Chief Financial Officer of
Specialty Coatings International Inc. From 1975 through 1990, Mr. Hamill was
with Morgan Stanley & Co. Incorporated, where he was a Managing Director.
2
<PAGE>
INFORMATION CONCERNING THE BOARD
OF DIRECTORS AND COMMITTEES
The Board of Directors of the Company directs the management of the business
and affairs of the Company, as provided by Delaware law, and conducts its
business through meetings of the Board and two standing committees: Audit and
Compensation. In addition, from time to time, special committees may be
established under the direction of the Board when necessary to address
specific issues. The Company has no nominating or similar committee.
BOARD MEETINGS AND COMMITTEES
The Board of Directors of the Company held four meetings during fiscal 1997.
Each current director attended 75% or more of the aggregate of (i) meetings of
the Board held during the period for which he served as a director and (ii)
meetings of all committees held during the period for which he served on those
committees.
The Compensation Committee is responsible for executive compensation,
including setting the Company's compensation philosophy and policies,
recommending to the Board of Directors the compensation to be paid to the
Chief Executive Officer and determining the compensation for all other
executive officers. The Compensation Committee is also responsible for
administering the Company's executive compensation plans and programs,
including the Sola Investors Inc. Stock Option Plan, the Sola International
Inc. Stock Option Plan and the Management Incentive Plan. The Committee
consists of Hamish Maxwell (Chairman), Ruben F. Mettler, and Irving S. Shapiro
(ex officio). Dr. Mettler is not standing for re-election to the Board of
Directors. The Committee held two meetings during fiscal 1997.
The Audit Committee's principal functions are to review the scope of the
annual audit of the Company by its independent auditors, review the annual
financial statements of the Company and the related audit report of the
Company as prepared by the independent auditors, recommend the selection of
independent auditors each year and review the Company's internal controls and
accounting policies and procedures. The Audit Committee reports its findings
and recommendations to the Board of Directors for appropriate action. The
Audit Committee consists of Douglas D. Danforth (Chairman), Jackson L. Schultz
and Irving S. Shapiro (ex officio), who are not executive officers or
employees of the Company or any of its subsidiaries. The Company's Audit
Committee held two meetings during fiscal 1997.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Decisions with respect to compensation are made by the Compensation
Committee of the Company. The members of the Compensation Committee as of
March 31, 1997 were Hamish Maxwell, Ruben F. Mettler and Irving S. Shapiro (ex
officio). Laurence Za Yu Moh served as a member of the Compensation Committee
during part of fiscal 1997 and resigned as a director of the Company during
fiscal 1997. Dr. Metter will not be standing for re-election to the Board of
Directors.
DIRECTOR COMPENSATION
Directors who are full time employees of the Company receive no compensation
for serving on the Board of Directors or its committees. During fiscal 1997,
directors received an annual fee of $20,000, except for the Chairman who
received an annual fee of $40,000, and $500 for each Board meeting attended.
During fiscal 1998, directors will receive an annual fee of $20,000, except
for the Chairman who will receive an annual fee of $40,000, and $500 for each
Board meeting attended. In April and July 1996 the Board of Directors amended
the Sola International Inc. Stock Option Plan to permit non-employee directors
to receive all or a portion of their annual retainer fee in the form of
options to acquire shares of Common Stock, which amendments were ratified by
the Company's stockholders at the 1996 Annual Meeting of Stockholders.
Directors are reimbursed for traveling costs and other out-of-pocket expenses
incurred in attending meetings. Directors who serve on the Audit Committee or
the Compensation Committee receive no additional compensation for committee
meetings held on the same date as a Board meeting and received $500 in fiscal
1997 (and will receive $500 in fiscal 1998) for each committee meeting held on
a date on which there is or was no Board meeting.
3
<PAGE>
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the beneficial
ownership of the Company's Common Stock by (a) each person who is known to the
Company to be the beneficial owner of more than five percent of the Company's
Common Stock (based on a review by the Company of filings with the Securities
and Exchange Commission), (b) each director of the Company, (c) each of the
executive officers named in the Summary Compensation Table and (d) all
directors and executive officers of the Company as a group. Except as
otherwise indicated, the persons or entities listed below have sole voting and
investment power with respect to all shares of Common Stock beneficially owned
by them, except to the extent such power may be shared with a spouse.
<TABLE>
<CAPTION>
NUMBER OF SHARES PERCENTAGE OF
NAME BENEFICIALLY OWNED CLASS(1)
- ---- ------------------ -------------
<S> <C> <C>
5% STOCKHOLDERS:
J.& W. Seligman & Co. Inc. .................. 1,378,435 5.7
100 Park Avenue
New York, N.Y. 10017
John W. Bristol & Co. ....................... 1,252,790 5.2
41st Floor, 233 Broadway
New York, N.Y. 10279
DIRECTORS:
Irving S. Shapiro(2)......................... 20,036 *
Douglas D. Danforth (3)...................... 17,232 *
John E. Heine(4)............................. 391,184 1.6
Hamish Maxwell(5)............................ 70,083 *
Ruben F. Mettler(6).......................... 14,935 *
Jackson L. Schultz(7)........................ 3,454 *
Maurice J. Cunniffe.......................... 40,000 *
A. William Hamill............................ 3,000 *
NAMED EXECUTIVE OFFICERS:
James H. Cox(8).............................. 124,003 *
Ian S. Gillies(9)............................ 116,466 *
Colin M. Perrott(10)......................... 97,873 *
Stephen J. Lee(11)........................... 97,263 *
All directors and executive officers as a
group (19 persons) (12)..................... 1,382,964 5.5
</TABLE>
- --------
* The percentage of shares of Common Stock beneficially owned does not
exceed one percent of the outstanding shares of Common Stock.
(1) Based on 24,266,752 shares of Common Stock outstanding on May 30, 1997.
Calculations of percentage of beneficial ownership assume the exercise by
only the respective named stockholder of all options for the purchase of
Common Stock held by such stockholder which are exercisable within 60
days of May 30, 1997.
(2) Mr. Shapiro's shares are held by a trust of which Mr. Shapiro is both
trustee and sole beneficiary. Includes 825 shares of Common Stock
issuable upon exercise of options that are exercisable within 60 days
from May 30, 1997.
(3) Includes 413 shares of Common Stock issuable upon exercise of options
that are exercisable within 60 days from May 30, 1997.
(4) Includes 317,809 shares of Common Stock issuable upon exercise of options
that are exercisable within 60 days from May 30, 1997 and 73,375 shares
of Common Stock held by a trust for which Mr. Heine and members of his
family are trustees and beneficiaries. Mr. Heine is also a Named
Executive Officer.
(5) Includes 83 shares of Common Stock issuable upon exercise of options that
are exercisable within 60 days from May 30, 1997.
(6) Includes 413 shares of Common Stock issuable upon exercise of options
that are exercisable within 60 days from May 30, 1997. Dr. Mettler will
not be standing for re-election to the Board of Directors.
(7) Includes 454 shares of Common Stock issuable upon exercise of options
that are exercisable within 60 days from May 30, 1997.
(8) Includes 90,816 shares of Common Stock issuable upon exercise of options
that are exercisable within 60 days from May 30, 1997.
(9) Includes 89,816 shares of Common Stock issuable upon exercise of options
that are exercisable within 60 days from May 30, 1997.
(10) Includes 69,093 shares of Common Stock issuable upon exercise of options
that are exercisable within 60 days from May 30, 1997.
(11) Includes 69,093 shares of Common Stock issuable upon exercise of options
that are exercisable within 60 days from May 30, 1997.
(12) Includes shares held by a person who was an executive officer of the
Company on May 30, 1997 and subsequently terminated his employment with
the Company.
4
<PAGE>
COMPENSATION OF EXECUTIVE OFFICERS
EXECUTIVE COMPENSATION
The following table sets forth in summary form all compensation for all
services rendered in all capacities to the Company paid or accrued during the
year ended March 31, 1997 ("fiscal 1997"), the year ended March 31, 1996
("fiscal 1996") and the year ended March 31, 1995 ("fiscal 1995"), to the
Chief Executive Officer of the Company and to the four other most highly
compensated executive officers of the Company in Fiscal 1997 whose total
annual salary and bonus exceeds $100,000 (collectively, with the Chief
Executive Officer, the "Named Executive Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
AWARDS
------------
ANNUAL COMPENSATION SECURITIES
---------------------------------------- UNDERLYING
NAME AND PRINCIPAL OTHER ANNUAL OPTIONS/ ALL OTHER
POSITION YEAR SALARY ($) BONUS ($) COMPENSATION (1)($) SARS(#) COMPENSATION ($)
------------------ ---- ---------- --------- ------------------- ------------ ----------------
<S> <C> <C> <C> <C> <C> <C>
John E. Heine........... 1997 $460,661 $206,057 $102,102 -- -- (2)
President and Chief 1996 430,048 432,427 103,592 --
Executive Officer 1995 425,240 704,521 148,463 --
James H. Cox............ 1997 $302,329 $ 81,540 $ 4,810 5,000 4,500(3)
Executive Vice 1996 261,725 207,368 4,192 -- 4,072
President, Assistant 1995 257,824 293,017 5,749 -- 9,283
Secretary and Assistant
Treasurer; President,
Sola Optical USA
Colin M. Perrott........ 1997 $248,948 $ 85,422 $ 83,262 -- -- (2)
Vice President, 1996 235,870 168,961 93,756 -- --
Technology and 1995 232,601 275,260 165,916 -- --
Development
Ian S. Gillies.......... 1997 $225,701 $ 77,340 $ 76,481 -- $4,500(3)
Vice President, 1996 213,624 152,075 96,290 -- 4,620
Finance, Chief 1995 209,355 247,751 98,470 -- 4,711
Financial Officer,
Secretary and Treasurer
Stephen J. Lee.......... 1997 $225,261 $ 76,346 $ 91,789 -- $4,500(3)
Vice President, Human 1996 209,923 150,151 89,473 -- 4,500
Resources 1995 206,705 244,759 112,049 -- 3,101
</TABLE>
- --------
(1) The amounts indicated for Messrs. Heine, Perrott, Gillies and Lee include
an expatriate accommodation allowance and benefits package of $117,509,
$112,584, $73,534 and $77,791, respectively, for fiscal 1995; $78,445,
$67,277, $68,281 and $64,341, respectively, for fiscal 1996; and $83,330,
$58,853, $58,497 and $62,455 respectively, for fiscal 1997.
(2) In lieu of participation in the Sola Optical Australia Superannuation
Plan, Messrs. Heine and Perrott earn equivalent pensions under separate
Expatriate Superannuation Agreements with the Company. See "--Pension
Plan".
(3) Messrs. Cox, Gillies, and Lee deferred portions of their annual salary
pursuant to the Sola Optical USA 401(k) Savings Plan. The amounts shown
represent cash contributions made by the Company to the plan for the
account of such Named Executive Officers for fiscal 1997 in the amounts of
$4,500, $4,500 and $4,500, respectively.
OPTION EXERCISE TABLE
The following table sets forth the number of shares covered by both
exercisable and unexercisable options granted to the Named Executive Officers
under the Company's option plans as of March 31, 1997. No options were
exercised by the Named Executive Officers during fiscal 1997.
5
<PAGE>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING IN-THE-MONEY OPTIONS/
UNEXERCISED OPTIONS/SARS SARS AT FISCAL YEAR-
AT FISCAL YEAR-END END(1)
------------------------- -------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
John E. Heine............... 317,809 79,452 $4,263,402 $1,065,850
James H. Cox................ 90,816 26,454 1,204,882 301,220
Colin M. Perrott............ 69,093 17,273 926,875 231,719
Ian S. Gillies.............. 89,816 22,454 1,204,882 301,220
Stephen J. Lee.............. 69,093 17,273 926,880 231,720
</TABLE>
- --------
(1) Values for "in-the-money" options represent the positive spread between
$9.71, the exercise price of outstanding options, and the closing price of
$23.125 per share of Common Stock of the Company at March 31, 1997, as
reported on the New York Stock Exchange. Mr. Cox's 5,000 options granted
during fiscal 1997 were not "in the money" as of March 31, 1997.
OPTION GRANT TABLE
The following table sets forth the number of options granted to the Named
Executive Officers under the Company's option plans during fiscal 1997. No
options were exercised by the Named Executive Officers during fiscal 1997.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
-----------------------------------------------
POTENTIAL
REALIZABLE
VALUE AT
ASSUMED ANNUAL
RATES OF STOCK
PERCENT OF PRICE
NUMBER OF TOTAL APPRECIATION
SECURITIES OPTIONS/SARS EXERCISE FOR OPTIONS
UNDERLYING GRANTED TO OR TERM
OPTIONS/SARS EMPLOYEES IN BASE PRICE EXPIRATION ---------------
NAME GRANTED (#) FISCAL YEAR ($/SH) DATE 5%($) 10%($)
- ---- ------------ ------------ ---------- ---------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
John E. Heine........... -- -- -- -- -- --
James H. Cox............ 5,000(1) 1.3% $35.88 12/6/06 292,224 465,317
Colin M. Perrott........ -- -- -- -- -- --
Ian S. Gillies.......... -- -- -- -- -- --
Stephen J. Lee.......... -- -- -- -- -- --
</TABLE>
- --------
(1) Twenty percent of the options became exercisable on the date of grant and
an additional 20% will be exercisable on each of the first four
anniversaries of the date of grant.
EMPLOYMENT AGREEMENTS
The Company and Mr. Heine entered into a severance agreement dated November
20, 1996. If the Company elects to terminate Mr. Heine's employment other than
for Cause (cause is defined as willful misconduct, neglect of duties, or any
act or omission, any or all of which materially adversely affect the Company's
business; or conviction of a felony) or if Mr. Heine terminates his employment
under certain circumstances, the Company is required to continue his
compensation, including annual salary and an average of the past three years
Management Incentive Plan payments made to him, for a 24 month period. In
addition, for a 24 month period Mr. Heine may continue to participate in any
and all benefit plans the Company regularly provides its other executives,
including, but not limited to, health, dental, vision, pension and other
retirement plans, and receive outplacement assistance and consultation up to a
maximum of $25,000. If, within two years of a change of control (as defined in
the agreement), the Company elects to terminate Mr. Heine's employment other
than for Cause or if Mr. Heine terminates his employment with the Company
under certain circumstances, the Company shall pay Mr. Heine in cash an amount
equal to 2.99 times the sum of the amount of Mr. Heine's annual salary in
effect immediately prior to the date of such termination plus the average of
the Management Incentive Plan compensation paid to him over the immediately
prior three years. The agreement also contains covenants not to compete,
covenants not to solicit, and invention assignment and confidentiality
clauses.
6
<PAGE>
The Company and each of Messrs. Cox, Perrott, Gillies and Lee is party to an
employment agreement, each dated as of February 26, 1993. Each agreement has
an initial term of three years and is automatically extended for an indefinite
term unless terminated upon prior notice by either party. If the Company
elects not to extend the term of an agreement or to terminate an agreement
subsequent to the initial term other than for Cause (i.e., a material breach
by the officer of the terms of his employment agreement, failure to perform
his duties as an officer of the Company or commission of fraud or willful
misconduct), the Company is required to give 12 months' notice. Each agreement
provides for an annual base salary at a rate not less than the rate in effect
on the date of the agreement. Such salaries are subject to discretionary
increases in accordance with the Company's normal review procedures and
policies. The agreements also provide for participation in various other plans
and programs provided by the Company. In the event of a transfer of all or
substantially all of the stock or assets of the Company in a privately
negotiated transaction, the Company will assign its obligations under the
employment agreements to the transferee. For purposes of assignment and
transfer provisions in the agreements, a sale of stock of the Company as part
of a public offering will not be treated as pursuant to a privately negotiated
transaction.
Each of the agreements provides that the Company has no further obligations
under such agreement (other than for salary through the officer's termination
date) in the event of an officer's termination by the Company for Cause, by
the officer for other than Good Reason (i.e., diminution of the officer's
responsibilities within the Company) or as a result of the officer's death or
disability. If an officer is terminated by the Company for reason other than
Cause or if the officer terminates his employment for Good Reason, the Company
is required to continue to pay the salary of such officer until the expiration
of (i) the original term of the agreement or (ii) 12-month period commencing
with the date of termination.
PENSION PLAN
Prior to the sale by Pilkington plc of the Company in December 1993 (the
"Acquisition"), Mr. Cox was a participant in the Pilkington Visioncare Pension
Plan. In connection with the Acquisition, the Company implemented the Sola
Optical Pension Plan, which is currently intended, together with the
Pilkington Visioncare Pension Plan, to provide substantially the same benefit
that would have been payable had Mr. Cox continued active participation under
the Pilkington Visioncare Pension Plan, as it existed on December 1, 1993,
until retirement. To that end, retirement benefits under the basic formula of
the Sola Optical Pension Plan currently are substantially identical to the
Pilkington Visioncare Pension Plan for a given level of compensation and
service. Messrs. Heine and Perrott do not participate in the Sola Optical
Pension Plan. In lieu of their participation in the Sola Optical Australia
Superannuation Plan, Messrs. Heine and Perrott earn equivalent pensions under
separate Expatriate Superannuation Agreements with the Company. Under those
agreements, the Company will be required to make a lump sum payment for the
benefit of each of Messrs. Heine and Perrott upon their termination of service
or retirement from the Company based on the benefits they would have accrued
under the Sola Optical Superannuation Plan had they continued their
participation therein. Payments under the Sola Optical Australia plan
generally are based on years of service and final average compensation. The
estimated lump sum benefits for the benefit of Messrs. Heine and Perrott upon
normal retirement from the Company at age 65 are Australian $2,288,000 and
Australian $1,385,000, respectively (U.S.$1,790,000 and U.S.$1,034,000, based
on a conversion rate of 1.278 Australian $ to the U.S.$). Mr. Gillies and Mr.
Lee did not participate in the Pilkington Visioncare Pension Plan; however,
they do participate in the Sola Optical Pension Plan.
The following table shows estimated annual benefits payable upon retirement
to Messrs. Cox, Gillies and Lee under the Sola Optical Pension Plan in
combination (to the extent applicable) with the Pilkington Visioncare Pension
Plan. The Sola Optical Pension Plan will provide the amount of the benefit in
excess of a portion of the amount accrued under the Pilkington Visioncare
Pension Plan as of December 1, 1993; assuming retirement at age 65, the amount
of annual benefit payable by the Pilkington Visioncare Pension Plan to Mr. Cox
which will be offset from the Sola Optical Pension Plan will be $16,929.48.
Assets of the Pilkington Visioncare Pension
7
<PAGE>
Plan were not transferred to the Company from Pilkington in connection with
the sale of the Company from Pilkington and the Company has no obligation
under the Pilkington Visioncare Pension Plan.
PENSION PLAN TABLE
<TABLE>
<CAPTION>
YEARS OF SERVICE
---------------------------------------
REMUNERATION 15 20 25 30 35
- ------------ ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
$125,000............................... $26,740 $35,653 $44,566 $53,479 $62,392
150,000............................... 32,462 43,283 54,103 64,924 75,745
175,000............................... 32,462 43,283 54,103 64,924 75,745
200,000............................... 32,462 43,283 54,103 64,924 75,745
225,000............................... 32,462 43,283 54,103 64,924 75,745
250,000............................... 32,462 43,283 54,103 64,924 75,745
300,000............................... 32,462 43,283 54,103 64,924 75,745
350,000............................... 32,462 43,283 54,103 64,924 75,745
400,000............................... 32,462 43,283 54,103 64,924 75,745
450,000............................... 32,462 43,283 54,103 64,924 75,745
500,000............................... 32,462 43,283 54,103 64,924 75,745
</TABLE>
The years of credited service as of March 31, 1997 for Messrs. Cox, Gillies
and Lee are 11.25, 3.33 and 3.33 respectively.
Benefits under the Sola Optical Pension Plan are not offset by Social
Security benefits. The amounts shown are based upon certain assumptions,
including retirement of the employee at exact age 65 on March 31, 1997 and
payment of the benefit under the basic form of the Sola Optical Pension Plan,
a single life annuity for the life of the participant. The amounts will change
if the payment is made under any other form permitted by the Sola Optical
Pension Plan, or if an employee's retirement occurs after March 31, 1997,
since the Social Security Wage Base of such an employee (one of the factors
used in computing the annual retirement benefits) will reflect higher Social
Security tax bases for years after 1997. The Sola Optical Pension Plan
provides a higher level of benefits for the portion of compensation above the
compensation levels on which Social Security benefits are based.
The remuneration levels shown represent the five year average of annual
compensation covered by the Sola Optical Pension Plan as of March 31, 1997.
Compensation covered by the Sola Optical Pension Plan includes regular base
salary, hourly wages, shift differentials, overtime, vacation and sick leave
pay, commissions, sales bonus, amounts deferred under any tax qualified plan
of the Company and amounts paid pursuant to management bonus plans or other
formally adopted incentive compensation plans. The current compensation
covered by the Sola Optical Pension Plan for Messrs. Cox, Gillies and Lee
differs substantially (by more than 10%) from that set forth in the Summary
Compensation Table under the aggregate of the "Salary" and "Bonus" columns
because the amount of compensation which may be covered under a tax qualified
pension plan is limited by the Internal Revenue Code.
The pension amounts shown for remuneration in excess of the compensation cap
($150,000 for 1996) are based upon the compensation cap in each year, as
required by law. The IRC Section 415 defined limit was $125,000 for 1997, but
it did not provide any further limitation on the amounts calculated.
8
<PAGE>
COMPENSATION COMMITTEE REPORT ON
COMPENSATION OF EXECUTIVE OFFICERS OF THE COMPANY
The Company's Compensation Committee is responsible for executive
compensation, including setting the Company's compensation philosophy and
policies, recommending to the Board of Directors the compensation to be paid
to the Chief Executive Officer and determining the compensation for the other
executive officers. The Compensation Committee is also responsible for
administering the Company's executive compensation plans and programs. The
Compensation Committee reviews the Company's executive compensation program on
at least an annual basis to ensure that the program continues to meet the
goals of its compensation policy.
COMPENSATION POLICY
The Compensation Committee has designed the Company's executive compensation
program (i) to attract qualified executive officers from a global pool of
talent, (ii) to reward, motivate and retain the Company's executive officers
and (iii) to align the interests of its executive officers with those of the
Company's stockholders by linking the executives' annual cash and long-term
incentive compensation to Company performance and by encouraging the
executives to purchase equity in the Company.
The Company's compensation program consists of three basic components: base
salary; annual cash incentive-based compensation; and long-term compensation
in the form of stock options. Because the Company was formerly owned by a U.K.
corporation with a generally conservative view of incentive compensation, its
executive compensation program has historically been heavily weighted toward
base salary. Since the Acquisition, the Compensation Committee's goal has been
to base a greater portion of the executives' compensation on Company
performance. Therefore, subsequent to the Acquisition, the base salary of
executives generally has increased at below market rates. At the same time,
the executives' opportunity for cash awards under the Company's incentive
compensation program has been increased and two stock option plans have been
implemented.
To further the Compensation Committee's goal of more closely aligning the
executives' interests with those of the Company's stockholders, share purchase
programs were implemented in connection with the Acquisition and the Company's
initial public offering in March 1995 to encourage the executive officers (as
well as certain other employees) to purchase equity in the Company (and its
former parent). The Company also provides perquisites to its executive
officers to maintain the Company's competitive status in attracting and
retaining executive officers in a competitive global market.
BASE SALARY
The Compensation Committee reviews base salary levels of the executive
officers annually. Adjustments, if any, are made effective January 1. Salary
ranges for each executive officer are determined by the Compensation Committee
using a two-step process. First, the level and functional responsibilities of
the position held by each executive officer is evaluated using the Hay Guide
Chart Job Evaluation Method. Second, based on such evaluation, salary ranges
for each position are determined using marketplace data provided by Hay
Management Consultants and periodically cross-checked with other market
surveys published by Mercer, Cullen-Egan-Dell and other compensation
consultants. Historically, a mid-point base salary has been established around
the 75th percentile among a select group of companies, with a minimum salary
at 80% of the mid-point and a maximum salary at 120% of the mid-point. An
executive officer's progression through the salary range is based upon the
Compensation Committee's evaluation of the individual's job performance.
The Company's base salary policy was originally established prior to the
Acquisition, when the Company was owned by a U.K. corporation with a generally
conservative view of incentive compensation. Accordingly, a mid-point base
salary for each position was established around the 75th percentile among a
select group of companies so that the Company could maintain its competitive
position in the U.S. market. At the time of the
9
<PAGE>
Acquisition, based on advice from compensation consultants, the Compensation
Committee determined that the Company's incentive compensation arrangements
were not competitive. The Company has subsequently increased the performance
based component of its executives' compensation by increasing the executives'
opportunity for a cash award under the Company's incentive compensation plan
and by introducing stock option plans. Consequently, the Compensation
Committee has determined that a mid-point base salary at the 75th percentile
is no longer necessary to maintain the Company's competitive position in the
U.S. market. As a result, subsequent to the acquisition and through fiscal
1996, executive officers have generally received no increase in base salary or
have received increases below the market rate. In fiscal 1997, the Company
determined that an appropriate balance between incentive compensation and base
salary had been attained. Therefore, in fiscal 1997, salary increases for
executive officers have been generally at the market rate. Effective January
1, 1997 approximately forty percent of the annual housing allowance paid to
Messrs. Heine, Perrot, Gillies and Lee is paid in the form of base salary.
The group of companies to which the Company compares itself with respect to
base salary compensation of its executives is not the same as the group to
which it compares itself on the Performance Graph below. The comparison group
for base salary purposes is comprised of visioncare, healthcare and technology
companies whose businesses are concentrated on the west coast of the United
States. The Compensation Committee selected these companies because it
believes that they are the companies with respect to which the Company must
remain competitive in order to attract and retain qualified executives to work
at its Northern California locations. The comparison group used in the
Performance Graph is comprised of the Company's worldwide competitors.
ANNUAL CASH INCENTIVE COMPENSATION
The Compensation Committee views the annual cash incentive compensation
component of its program as a significant element in attaining its goal of
closely linking Company performance with executive compensation by providing
additional annual cash compensation based on the Company's achievement of
objective financial performance targets.
During fiscal 1995, the Compensation Committee, with the approval of the
Board of Directors, adopted a management incentive plan (the "Management
Incentive Plan") for fiscal years commencing after fiscal 1995 to provide
annual performance-based cash bonuses to officers designated by the
Compensation Committee. Under the Management Incentive Plan, each designated
officer has the opportunity to receive a performance-based cash bonus based on
the Company's achievement of certain pre-established performance targets
related to "trading profit," "trading cash flow" and the ratio of working
capital to net sales, in each instance as measured on a Company-wide and/or
regional basis.
The Compensation Committee establishes target award percentages for each
participant, which is the percentage of a participant's salary that will be
awarded depending on the percentage of the performance target which is
attained. The Compensation Committee will determine whether to establish
maximum target award percentages. The maximum award which any participant may
receive in a fiscal year under the Management Incentive Plan is $1 million.
The Compensation Committee does not have discretion to increase the amount of
a participant's award payable under the plan after the establishment of the
relevant performance targets and target award percentages. Awards are paid
annually upon certification by the Compensation Committee of achievement of
the relevant performance targets at such time and in such manner as the
Compensation Committee shall determine.
The amount of an executive's bonus for fiscal 1997 was based on the
Company's level of achievement measured against its pre-established
performance targets. A bonus equal to 33% of the target bonus amount was
payable if 95% of the performance targets for "trading cash flow" and working
capital for fiscal 1997 were achieved. A bonus equal to 40% of the target
bonus was payable if "trading profit" attained fiscal 1996 levels. A bonus in
excess of 100% of the target bonus amount was payable if greater than 100% of
the performance targets was achieved. No bonus was payable if the Company did
not achieve at least 95% of its performance targets.
10
<PAGE>
Prior to the commencement of fiscal 1997, the Compensation Committee
established target bonus awards equal to 80% of base salary for Mr. Heine and
equal to 60% of base salary for each of the other executive officers, in each
instance payable only upon attainment of 100% of the performance targets. The
Compensation Committee determined such percentages to be appropriate based on
market surveys of executive compensation, including the Executive Compensation
Reports published by Hay Management Consultants. In significant part due to
the generally modest increases in base salary received by executive officers
over the last two fiscal years, the Compensation Committee has determined to
maintain the target bonus awards under the Management Incentive Plan for
fiscal 1997 at 80% of base salary for Mr. Heine and 60% of base salary for all
other executive officers.
STOCK OPTION PLANS
The Compensation Committee believes that the stock option component of its
executive compensation program causes the executives' interests to be more
closely aligned with those of the Company's stockholders because the value of
the options is linked directly to the price of the Company's stock. The
Compensation Committee awarded stock options to the executive officers prior
to fiscal 1995 under the Company's then existing stock option plan. Such plan
has been amended to provide that no options would be granted thereunder after
February 28, 1995 and the International Stock Option Plan has been adopted by
the Company.
In light of the awards made to Mr. Heine and the other named executive
officers in December 1993 under the Company's then existing stock option plan,
the Compensation Committee determined that it was not appropriate to grant
such persons options under the International Stock Option Plan during fiscal
1997, except for a grant to Mr. Cox of 5,000 options. Recognizing the
importance of grants under the International Stock Option Plan to attracting
and retaining its officers, in fiscal 1997 the full Board of Directors has
amended the International Stock Option Plan to provide for the issuance of an
additional 500,000 shares. The amendment was ratified by the shareholders of
the Company at its annual general meeting in August 1996.
PERQUISITES
The Company provides a company car allowance and supplemental medical
coverage to certain named executive officers and an ex-patriate allowance for
housing to each named executive officer who has relocated to California from
outside the United States. The foregoing perquisites are provided to executive
officers because the Compensation Committee believes that they are necessary
to attract and retain executive talent in a global market. Mr. Heine, a former
resident of Australia, is provided with each of the foregoing benefits. Dr.
Perrott was also provided with a family education benefit in fiscal 1997.
SHARE PURCHASE PROGRAM
In connection with the Acquisition, the executive officers (and other
members of management) were eligible to buy shares of Sola Investors Inc., the
Company's former parent, at the fair market value of such shares on the date
of the purchase. Executive officers (and other members of management) were
offered access to a company loan program to enhance their stock purchase
capability in the short-term. All loans made to executive officers under this
program have been repaid.
CEO COMPENSATION
The Compensation Committee determines Mr. Heine's compensation on the same
basis and under the same philosophy it uses in determining the compensation of
other executive officers. As discussed above, the goal of the Compensation
Committee is to link a significant portion of the compensation of its
executive officers, including Mr. Heine, to Company performance. The
Compensation Committee did not increase Mr. Heine's base salary for fiscal
1994, 1995 or 1996 in order to ensure that the proportion of his compensation
tied to Company performance would be increased (although as of January 1,
1997, approximately 40% of his annual housing allowance has been paid in the
form of base salary). In fiscal 1997, recognizing that an appropriate balance
between incentive compensation and base salary had been attained and in order
to maintain a competitive level of base salary, Mr. Heine's salary was
increased by 10%.
11
<PAGE>
To further link Mr. Heine's compensation to Company performance, a
substantial amount of Mr. Heine's potential compensation for fiscal 1997 was
tied to the Company's achievement of certain objective financial targets
described above under the Management Incentive Plan. Based on the Company's
performance for fiscal 1997, Mr. Heine realized a bonus award equal to
approximately 46% of his base salary.
In deciding not to award additional stock options to its named executive
officers, including Mr. Heine, in fiscal 1997, except for the grant of 5,000
options to Mr. Cox, the Compensation Committee determined that in light of the
awards made in December 1993 no awards were appropriate.
SECTION 162(M)
Section 162(m) of the Internal Revenue Code of 1986, as amended, generally
disallows a deduction to any publicly-held corporation for compensation paid
in excess of $1 million in a taxable year to its chief executive officer or
any of the four other most highly-compensated executive officers employed by
the Company on the last day of its taxable year.
The deduction limitation of Section 162(m) does not apply to compensation
payable during a transition period pursuant to plans or arrangements in effect
while a corporation is not publicly held. The Compensation Committee has
structured the Company's executive compensation program with the intent that
compensation paid to the executive officers thereunder will not be subject to
the deduction limitation of Section 162(m) during such transition period,
which for the Company expires in 1999. The Compensation Committee will
determine whether or not to administer the Company's executive compensation
program so that compensation payable after the expiration of the transition
period would be subject to the deduction limitation.
Respectfully submitted,
Hamish Maxwell, Chairman
Ruben F. Mettler
Irving S. Shapiro
12
<PAGE>
PERFORMANCE GRAPH
The following graph compares the cumulative total return on $100 invested on
February 23, 1995 in each of the Common Stock of the Company, Standard &
Poor's 500 Index and the Dow Jones World Stock Index--Medical Supplies, the
latter of which the Company finds representative given the inclusion of
certain competitors of the Company in such index. The return of the Standard &
Poor's 500 Index is calculated assuming reinvestment of dividends. The Company
has not paid any dividends. The graph covers the period from February 23,
1995, when the Company's Common Stock was first offered to the public, through
March 31, 1997. The stock price performance shown on the graph below is not
necessarily indicative of future price performance.
COMPARISON OF CUMULATIVE TOTAL RETURN
OF SOLA INTERNATIONAL INC., S&P 500 AND DOW JONES
WORLD STOCK INDEX - MEDICAL SUPPLIES
[GRAPH APPEARS HERE]
<TABLE>
COMPARISON OF FIVE YEAR CUMULATIVE RETURN
AMONG S&P 500 INDEX, DOW JONES WORLD STOCK INDEX MEDICAL SUPPLIES
AND SOLA INTERNATIONAL INC.
<CAPTION> DJWSI
Measurement period S&P 500 MEDICAL SUPPLIES SOLA
(Fiscal year Covered) INDEX INDEX INTERNATIONAL
- --------------------- --------- --------- ---------
<S> <C> <C> <C>
Measurement PT -
2/23/95 $ 100.0 $ 100.0 $ 100.0
FYE 3/31/95 $ 102.6 $ 104.0 $ 130.3
FYE 3/31/96 $ 132.2 $ 125.3 $ 188.6
FYE 3/31/97 $ 155.1 $ 153.4 $ 140.2
</TABLE>
CERTAIN TRANSACTIONS
The Company has entered into agreements to provide indemnification for its
directors and executive officers in addition to the indemnification provided
for in the Company's Amended and Restated Certificate of Incorporation and
Amended and Restated By-Laws. The Company has also purchased directors and
officers insurance for its directors and executive officers.
On June 19, 1996 the Company acquired substantially all of the worldwide
ophthalmic business of American Optical Corporation ("AOC") pursuant to the
terms of the Purchase Agreement dated as of May 6, 1996 between the Company
and AOC. Mr. Maurice J. Cunniffe, a director of the Company from December 5,
1996, is sole shareholder of AOC.
13
<PAGE>
RATIFICATION OF APPOINTMENT
OF INDEPENDENT AUDITORS
The Board of Directors, upon the recommendation of the Audit Committee, has
appointed Ernst & Young LLP, Palo Alto, California, as the firm of independent
public accountants to audit the books and accounts of the Company for the
fiscal year ending March 31, 1998. Although the appointment of independent
public accountants is not required by law or the Company's By-Laws to be
approved by the Company's stockholders, the Board of Directors believes that
stockholders should participate in the selection of the Company's independent
public accountants. Accordingly, the stockholders will be asked at the Annual
Meeting to ratify the appointment by the Board of Directors of Ernst & Young
LLP as the Company's independent public accountants for the fiscal year ending
March 31, 1998. In the event the stockholders do not approve the appointment
of Ernst & Young LLP, the selection of other independent accountants will be
considered by the Board of Directors. A representative of Ernst & Young LLP
will be in attendance at the 1997 Annual Meeting and will have an opportunity
to make a statement if such representative desires to do so, and will be
available to respond to appropriate questions.
STOCKHOLDERS' PROPOSALS FOR THE
1998 ANNUAL MEETING OF STOCKHOLDERS
Proposals of stockholders intended to be presented at the 1998 Annual
Meeting of Stockholders must be received at the Company's principal offices,
2420 Sand Hill Road, Suite 200, Menlo Park, California 94025, Attention:
Secretary, for inclusion in the Company's Proxy Statement and form of proxy
relating to that Annual Meeting no later than March 2, 1998. Proposals, as
well as any questions related thereto, should be submitted in writing to the
Secretary of the Company. Proposals may be included in the proxy statement for
the 1998 Annual Meeting if they comply with certain rules and regulations
promulgated by the U.S. Securities and Exchange Commission and with certain
procedures described in the Company's By-Laws, a copy of which may be obtained
from the Secretary of the Company.
EXPENSES OF SOLICITATION
The solicitation of proxies in the form enclosed is made on behalf of the
Board of Directors of the Company. All expenses relating to the solicitation
will be borne by the Company. In addition to the solicitation of proxies by
use of the mails, some of the officers, directors and regular employees of the
Company and its subsidiaries, none of whom will receive additional
compensation therefor, may solicit proxies in person or by telephone,
telegraph or other means. As is customary, the Company will, upon request,
reimburse brokerage firms, banks, trustees, nominees and other persons for
their out-of-pocket expenses in forwarding proxy materials to their
principals.
OTHER MATTERS
The persons named in the enclosed form of proxy have no intention of
bringing before the meeting for action any matter other than as specifically
referred to above, nor has management or the Board of Directors any such
intention, and none of such persons, management or the Board of Directors is
aware of any matters which may be presented by others. If any such business
should properly come before the meeting, the persons named in the form of
proxy intend to vote thereon in accordance with their best judgment.
14
<PAGE>
SECTION 16(A) BENEFICIAL
OWNERSHIP REPORTING COMPLIANCE
The directors, executive officers and ten percent stockholders of the
Company are required to file reports of their ownership of the Company's
Common Stock with the Securities and Exchange Commission and the New York
Stock Exchange pursuant to Section 16(a) of the Securities Exchange Act of
1934. To the Company's knowledge, based solely on a review of the copies of
such reports furnished to the Company and written representations that no
other reports were required, all of such reporting requirements were satisfied
during fiscal 1997; provided, however, that initial reports on Form 3 were
filed late by Peter M.R. Kendall and Adrian Walker and timely reports on Form
4 were not filed by Aurelio B. De Seco (six transactions in May 1996), John J.
Bastian (three option exercises in November 1996), A. William Hamill (two
purchase transactions in February 1997) and Maurice J. Cunniffe (two purchase
transactions in February 1997).
THE COMPANY WILL FURNISH, WITHOUT CHARGE, TO EACH PERSON WHOSE PROXY IS
BEING SOLICITED, UPON WRITTEN REQUEST, A COPY OF ITS ANNUAL REPORT ON FORM 10-
K FOR THE FISCAL YEAR ENDED MARCH 31, 1997, AS FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION (INCLUDING FINANCIAL STATEMENTS AND FINANCIAL STATEMENT
SCHEDULES BUT EXCLUDING EXHIBITS). COPIES OF ANY EXHIBITS THERETO ALSO WILL BE
FURNISHED UPON THE PAYMENT OF A REASONABLE DUPLICATING CHARGE. REQUESTS IN
WRITING FOR COPIES OF ANY SUCH MATERIALS SHOULD BE DIRECTED TO SOLA
INTERNATIONAL INC., 2420 SAND HILL ROAD, SUITE 200, MENLO PARK, CALIFORNIA
94025, ATTENTION: INVESTOR RELATIONS.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. THEREFORE, STOCKHOLDERS
ARE URGED TO DATE, SIGN AND RETURN THE ACCOMPANYING FORM OF PROXY IN THE
ENCLOSED ENVELOPE.
By order of the Board of Directors,
Ian S. Gillies
Secretary
Menlo Park, California
June 30, 1997
A copy of the Company's Annual Report for the fiscal year ended March 31,
1997, including financial statements, accompanies this Proxy Statement. The
Annual Report is not to be regarded as proxy soliciting material or as a
communication by means of which any solicitation is to be made.
15
<PAGE>
IMPORTANT INFORMATION
SOLA INTERNATIONAL INC.
1997 ANNUAL MEETING
Sola International Inc.'s Annual Meeting of
Stockholders will be held at the Quadrus
Conference Center, 2400 Sand Hill Road, Menlo
Park, California 94025 on Friday, August 15,
1997, at 10:00 a.m. (local time).
<PAGE>
PROXY
DETACH HERE
SOLA INTERNATIONAL INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF SOLA INTERNATIONAL INC. FOR THE ANNUAL MEETING OF
STOCKHOLDERS TO BE HELD ON AUGUST 15, 1997
The undersigned hereby appoints John E. Heine, James H. Cox and Ian S.
Gillies and each of them, as attorneys and proxies with full power of
substitution, to vote for and on behalf of the undersigned all shares of common
stock of Sola International Inc. held of record by the undersigned on June 18,
1997, at the Sola International Inc. Annual Meeting of Stockholders to be held
on August 15, 1997 and at any adjournment thereof, upon the following matters
and upon any other business that may properly come before the meeting, as set
forth in the related Notice of Annual Meeting and Proxy Statement, both of
which have been received by the undersigned.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE UNDERSIGNED SHARE OWNER. IF THIS PROXY IS EXECUTED BUT
NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR THE ELECTION OF THE DIRECTOR
NOMINEES AND RATIFICATION OF ERNST & YOUNG LLP AS INDEPENDENT ACCOUNTANTS FOR
FISCAL 1998.
PLEASE INDICATE YOUR VOTE FOR THE ELECTION OF DIRECTORS ON THE OTHER
SIDE. THE NOMINEES FOR DIRECTOR ARE: MAURICE J. CUNNIFFE, DOUGLAS D. DANFORTH,
A. WILLIAM HAMILL, JOHN E. HEINE, HAMISH MAXWELL, IRVING S. SHAPIRO AND JACKSON
L. SCHULTZ.
-----------
CONTINUED AND TO BE SIGNED ON REVERSE SIDE SEE REVERSE
SIDE
-----------
<PAGE>
DETACH HERE
[X] PLEASE MARK
VOTES AS IN
THIS SAMPLE
The Board of Directors recommends a vote "For All Nominees" on proposal 1 and
a vote "For" proposal 2.
1. Election of seven directors:
Nominees: Maurice J. Cunniffe, Douglas D. Danforth, A. William Hamill, John E.
Heine, Hamish Maxwell, Irving S. Shapiro and Jackson L. Schultz
FOR WITHHELD
[ ] [ ]
[ ]
---------------------------------------
For all nominees except as noted above
2. Ratification of Ernst & Young LLP as independent public accountants for
fiscal 1998.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
MARK HERE MARK HERE
FOR ADDRESS IF YOU PLAN
CHANGE AND [ ] TO ATTEND [ ]
NOTE AT LEFT THE MEETING
Please sign this proxy and return it promptly whether or not you expect
to attend the meeting. You may nevertheless vote in person if you
attend. Give full title if an Attorney, Executor, Administrator,
Trustee, Guardian, etc. If a corporation, please sign in full corporate
name by authorized officer. If a partnership, please sign in partnership
name by authorized person. For an account in the name of two or more
persons, each should sign, or if one signs, he or she should attach
evidence of authority.
Signature: Date:
------------------------------------ -------------------------
Signature: Date:
------------------------------------ -------------------------
