SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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
[X] Definitive Proxy Statement Commission Only (as permitted
[_] Definitive Additional Materials by Rule 14a-6(e)(2))
[_] Soliciting Material Pursuant to
Rule 14a-11(c) or Rule 14a-12
ROCKSHOX, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
________________________________________________________________________________
1) Title of each class of securities to which transaction applies:
________________________________________________________________________________
2) Aggregate number of securities to which transaction applies:
________________________________________________________________________________
3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
________________________________________________________________________________
4) Proposed maximum aggregate value of transaction:
________________________________________________________________________________
5) Total fee paid:
[_] Fee paid previously with preliminary materials:
________________________________________________________________________________
[_] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
1) Amount previously paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
<PAGE>
----
ROCK
----
SHOX
----
401 Charcot Avenue
San Jose, California 95131
------------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be held on August 24, 1999
------------------------------
To the Stockholders of ROCKSHOX, INC.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the "Annual
Meeting") of ROCKSHOX, INC., a Delaware corporation (the "Company"), will be
held on Tuesday, August 24, 1999, at 10:00 a.m. local time, at the Company's
headquarters located at 401 Charcot Avenue, San Jose, California 95131, for the
following purposes:
1. To elect seven directors to serve until the next annual meeting of
stockholders and until their successors are duly elected and qualify.
2. To ratify the selection of PricewaterhouseCoopers as the Company's
independent public accountants for the fiscal year ending March 31,
2000.
3. To transact such other business as may properly come before the Annual
Meeting or any adjournment or postponement thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
The Board of Directors of the Company has fixed the close of business on
June 28, 1999, as the record date for the determination of stockholders entitled
to notice of and to vote at the Annual Meeting and at any adjournment or
postponement thereof.
By Order of the Board of Directors
Gary Patten
Executive Vice President,
Chief Financial Officer and Secretary
San Jose, California
July 29, 1999
<PAGE>
================================================================================
ALL STOCKHOLDERS ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING IN PERSON.
WHETHER OR NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING, PLEASE COMPLETE, DATE,
SIGN AND RETURN THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE IN ORDER TO ENSURE
YOUR REPRESENTATION AT THE MEETING. A RETURN ENVELOPE (WHICH IS POSTAGE-PREPAID
IF MAILED IN THE UNITED STATES) IS ENCLOSED FOR THAT PURPOSE. EVEN IF YOU HAVE
GIVEN YOUR PROXY, YOU MAY STILL VOTE IN PERSON IF YOU ATTEND THE ANNUAL MEETING.
PLEASE NOTE, HOWEVER, THAT IF YOUR SHARES ARE HELD OF RECORD BY A BROKER, BANK
OR OTHER NOMINEE AND YOU WISH TO VOTE AT THE MEETING, YOU MUST OBTAIN FROM THE
RECORD HOLDER A PROXY ISSUED IN YOUR NAME.
================================================================================
<PAGE>
ROCKSHOX, INC.
401 Charcot Avenue
San Jose, California 95131
------------------------------
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
to be held on
August 24, 1999
General
This Proxy Statement is furnished to stockholders of ROCKSHOX, INC., a
Delaware corporation (the "Company"), in connection with the solicitation of
proxies in the form enclosed herewith for use at the Annual Meeting of
Stockholders of the Company to be held on Tuesday, August 24, 1999, at 10:00
a.m. at the Company's headquarters located at 401 Charcot Avenue, San Jose,
California 95131, and at any and all adjournments or postponements thereof (the
"Annual Meeting"), for the purposes set forth in the Notice of Annual Meeting.
This Proxy Statement and the enclosed form of proxy are being first mailed to
stockholders on or about July 29, 1999.
This solicitation is made by mail on behalf of the Board of Directors of
the Company (the "Board of Directors" or the "Board"). Costs of the solicitation
will be borne by the Company. In addition, the Company has engaged the services
of Corporate Investor Communications, Inc., a firm specializing in proxy
solicitation, to solicit proxies and to assist in the distribution and
collection of proxy material for a fee estimated at approximately $1,000, plus
reimbursement of out-of-pocket expenses. Further solicitation of proxies may be
made by telephone, telegraph, fax or personal interview by the directors,
officers and employees of the Company and its affiliates, who will not receive
additional compensation for the solicitation. The Company will reimburse banks,
brokerage firms and other custodians, nominees and fiduciaries for reasonable
expenses incurred by them in sending proxy materials to stockholders.
Only holders of record of the Common Stock, par value $.01 per share, of
the Company (the "Common Stock") as of the close of business on the record date,
June 28, 1999 (the "Record Date"), are entitled to receive notice of, and to
vote at, the Annual Meeting. Each share of Common Stock entitles the holder
thereof to one vote. Stockholders are not permitted to cumulate their shares of
Common Stock for the purpose of electing directors or otherwise. At the close of
business on the Record Date, there were approximately 13,761,147 shares of
Common Stock issued and outstanding.
Shares represented by proxies in the form enclosed, if the proxies are
properly executed and returned and not revoked, will be voted as specified.
Where no specification is made on a properly executed and returned proxy, the
shares will be voted "FOR" the election of each nominee for director, and "FOR"
the ratification of the selection of PricewaterhouseCoopers to serve as the
Company's independent public accountants for the fiscal year ending March 31,
2000 (the "2000 Fiscal Year"). To be voted, proxies must be filed with the
Secretary of the Company prior to voting. Proxies may be revoked at any time
before voting by filing a notice of revocation with the Secretary of the
Company, by filing a later dated proxy with the Secretary of the Company or by
voting in person at the Annual Meeting. Shares represented by proxies that
reflect abstentions or "broker non-votes" (i.e., shares held by a broker or
nominee that are represented at the Annual Meeting, but with respect to which
such broker or nominee is not empowered to vote on a particular proposal) will
be counted as shares that are present and entitled to vote for purposes of
determining the presence of a quorum.
-1-
<PAGE>
The Board of Directors knows of no matters to come before the Annual
Meeting other than the matters referred to in this Proxy Statement. If, however,
any matters properly come before the Annual Meeting, it is the intention of each
of the persons named in the accompanying proxy to vote such proxies in
accordance with such person's discretionary authority to act in such person's
best judgment.
The principal executive offices of the Company are located at 401 Charcot
Avenue, San Jose, California 95131.
Proposal No. 1 -- Election of Directors
Pursuant to the Company's Amended and Restated Bylaws (the "Bylaws"), all
of the directors are elected at each annual meeting of stockholders. The Bylaws
currently authorize a Board of Directors consisting of not less than one nor
more than fifteen members, the exact number of which shall be fixed from time to
time by the Board of Directors. Currently, the number of directors has been so
fixed at seven directors, and there are no vacancies with respect thereto. Each
director will hold office until the next annual meeting of stockholders and
until such director's successor is duly elected and qualified, or until such
director's earlier resignation or removal.
Stockholders may withhold authority from the proxyholders to vote for the
entire slate as nominated or, by writing the name of an individual nominee in
the space provided on the proxy card, withhold the authority to vote for any
individual nominee. Instructions on the accompanying proxy card to withhold
authority to vote for one or more of the nominees will result in such nominees
receiving fewer votes. If any nominee should become unavailable for election as
a result of any unexpected occurrence, such shares will be voted for the
election of such substitute nominee as management may propose. Each person
nominated for election has agreed to serve if elected, and management has no
reason to believe that any nominee will be unavailable to serve.
The following seven persons have been selected by the Board of Directors as
nominees for election to the Board of Directors: Messrs. Stephen W. Simons, Paul
H. Turner, John W. Jordan II, Adam E. Max, Michael R. Gaulke, George Napier and
Edward T. Post. All of the nominees are incumbent directors. See "Board of
Directors and Executive Officers" for the experience and background of each of
the nominees.
Vote Required
The affirmative vote of a plurality of all of the votes cast at the Annual
Meeting is required for the election of a director. Under applicable Delaware
law, in tabulating the vote, broker non-votes and abstentions will be
disregarded and will have no effect on the outcome of the vote. Unless
instructed to the contrary in the proxy, the shares represented by the proxies
will be voted "FOR" the election of the seven nominees named above as directors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE ABOVE-NAMED
NOMINEES.
Proposal No. 2 -- Ratification of Selection of Independent Public Accountants
The Audit Committee has selected, and the Board of Directors has approved,
PricewaterhouseCoopers as the Company's independent public accountants for the
2000 Fiscal Year, and the Board of Directors has further directed that
management submit the selection of independent public accountants for
ratification by the stockholders at the Annual Meeting. PricewaterhouseCoopers
has audited the Company's consolidated financial statements since 1993.
Representatives of PricewaterhouseCoopers are expected to be present at the
-2-
<PAGE>
Annual Meeting, will have an opportunity to make a statement if they so desire,
and will be available to respond to appropriate questions.
Vote Required
Stockholder ratification of the selection of PricewaterhouseCoopers as the
Company's independent public accountants is not required by the Company's Bylaws
or otherwise. However, the Board of Directors is submitting the selection of
PricewaterhouseCoopers to the stockholders for ratification as a matter of good
corporate practice. If the stockholders fail to ratify the selection, the Board
of Directors will reconsider whether or not to retain that firm. Even if the
selection is ratified, the Board, in its discretion, may direct the appointment
of a different auditing firm at any time during the 2000 Fiscal Year if the
Board of Directors determines that such a change would be in the best interests
of the Company and its stockholders. Unless instructed to the contrary in the
proxy, the shares represented by the proxies will be voted "FOR" the proposal to
ratify the selection of PricewaterhouseCoopers to serve as independent public
accountants for the Company for the fiscal year ending March 31, 2000.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" PROPOSAL NO.
2.
BOARD OF DIRECTORS AND EXECUTIVE OFFICERS
Directors and Executive Officers
The following table sets forth certain information concerning the directors
and executive officers of the Company as of July 16, 1999:
Name Age Position
---- --- --------
Stephen W. Simons 44 Chairman of the Board, Interim Chief Executive
Officer, Chief Technical Officer and Director
George Napier 46 Vice Chairman of the Board and Director
Gary Patten 38 Chief Financial Officer, Executive Vice
President and Secretary
Robert Bonacorsi 48 Vice President, Quality & Engineering
Edwin Medlin 42 Vice President, Marketing & Sales
K. Elaine Skloot 63 Vice President, Human Resources
Gwynne Williams 52 Vice President, Manufacturing
Paul H. Turner 40 Director
John W. Jordan, II 51 Director
Adam E. Max 40 Director
Michael R. Gaulke 53 Director
Edward T. Post 52 Director
Mr. Simons is a co-founder of the Company and has served as a director of
the Company since its inception in 1989. Mr. Simons also served as President
from 1992 until November 1997, and has been Chairman of the Board of Directors
since l996 and Chief Technical Officer since November 1997. Prior to founding
the Company, Mr. Simons founded SIMONS, which developed suspension modifications
and complete motorcycle front forks. On July 15, 1999, Mr. Simons was appointed
Interim Chief Executive Officer of the Company.
-3-
<PAGE>
Mr. Napier has served as a director of the Company since January 1997 and
as Chief Executive Officer and President of the Company since November 1997. Mr.
Napier served as President and Chief Executive Officer of Meridian Sports
Incorporated from May 1992 to July 1996. Between March 1983 and January 1992,
Mr. Napier held various senior positions with Wilson Sporting Goods Co.,
including Chief Operating Officer, President of Wilson USA and President of
Wilson International (subsidiaries of Wilson Sporting Goods Co.). On July 15,
1999, Mr. Napier resigned as Chief Executive Officer and President of the
Company and was appointed Vice Chairman of the Board of Directors.
Mr. Patten has served as the Chief Financial Officer, Executive Vice
President and Secretary of the Company since June 1998. Between June 1997 and
May 1998, Mr. Patten served as Chief Financial Officer of Powermate, The Coleman
Company, and between September 1996 and June 1997, Mr. Patten served as Director
of Financial Planning at The Coleman Company. Between December 1994 and
September 1996, Mr. Patten served as Manager of Business Analysis and Planning
at Lexmark International. Prior to December 1994, Mr. Patten served as Product
Marketing Manager, Finance Manager and Senior Financial Analyst with Square D
Company.
Mr. Bonacorsi has served as Vice President, Quality & Engineering of the
Company since April 1998. Between January 1998 and March 1998, Mr. Bonacorsi
served as Engineering Manager of the Company. Between January 1995 and December
1997, Mr. Bonacorsi served as Director of Quality at Stabilus and between
January 1990 and December 1994 as Director of Engineering at Stabilus.
Mr. Medlin has served as the Vice President, Corporate Counsel of the
Company since March 1999. Between September 1994 and October 1998, Mr. Medlin
served as General Counsel and General Manager of Fox Factory, Inc., d.b.a. Fox
Racing Shox. Between April 1987 and September 1994, Mr. Medlin was a partner at
the law firm of Ropers, Majeski, Kohn, Bently, Wagner & Kane. On July 15, 1999,
Mr. Medlin was appointed Vice President, Marketing & Sales of the Company.
Ms. Skloot has served as the Vice President, Human Resources of the Company
since April 1998. Between November 1995 and April 1998, Ms. Skloot served as
Human Resources Manager of the Company. Between October 1992 and September 1995,
Ms. Skloot served as Manager of Human Resources at Peripheral Land Inc.
Mr. Williams has served as the Vice President, Manufacturing of the Company
since January 1999. Between July 1991 and January 1999, Mr. Williams was
employed at Arvin Ride Control Products, and served as its Vice President,
Engineering and Sales between August 1994 to January 1999.
Mr. Turner is a co-founder of the Company and has served as a director of
the Company since its inception in 1989. Mr. Turner served as Vice President of
Advanced Research from 1992 until July 1998. Mr. Turner became Vice President of
Advanced Research in 1992, and in such capacity contributes to the Company's
research and development efforts. Mr. Turner has often represented the Company
at industry and public events. Prior to founding the Company, Mr. Turner worked
with Honda Motor Company and founded Paul Turner Racing.
Mr. Jordan has served as a director of the Company since March l995, and
was Chairman of the Board of Directors until October l996. Mr. Jordan is a
managing director of The Jordan Company LLC, a private merchant banking firm
that he founded, since February 1982. Mr. Jordan is also director of AmeriKing
Corporation, Apparel Ventures, Inc., Archibald Candy Corporation, Carmike
Cinemas, Inc., Gear for Sports, Inc., Jordan Industries, Inc., Jordan
Telecommunication Products, Inc., Motors & Gears, Inc., Welcome Home, Inc., and
other private companies.
-4-
<PAGE>
Mr. Max has served as a director of the Company since March 1995, and was a
Vice President from that time until October 1996. Mr. Max is a managing director
of The Jordan Company LLC, which he joined in April 1986. Mr. Max is also a
director of Archibald Candy Corporation and other private companies.
Mr. Gaulke has served as a director of the Company since January 1997. Mr.
Gaulke joined Exponent, Inc. (formerly named The Failure Group, Inc.) in
September 1992, as Executive Vice President and Chief Financial Officer, and
became its President in March l993. In June 1996, Mr. Gaulke was named Chief
Executive Officer of Exponent, Inc., and has been a member of the board of
directors of Exponent, Inc. since January 1994. From November l988 to September
1992, Mr. Gaulke served as Executive Vice President and Chief Financial Officer
of Raynet Corporation, a subsidiary of Raychem Corporation.
Mr. Post has served as a director of the Company since January 1998. Mr.
Post has served as President and Chief Operating Officer of Smith Sports Optics
since January 1994. Prior to such time, Mr. Post served as President of Scott
USA beginning in 1989.
Committees and Meetings of the Board of Directors
The Board of Directors held five regular meetings and acted two times by
unanimous written consent during the 1999 Fiscal Year. During the 1999 Fiscal
Year, each member of the Board of Directors, except for Messrs. Turner and
Jordan, attended at least 75% of the aggregate number of meetings of the Board
of Directors and the committees of which he was a member. The Company has
standing Audit and Compensation Committees. The Company does not have a standing
Nominating Committee.
Audit Committee.~~The Audit Committee, which was established in January
1997, and consists of Messrs. George Napier, Michael R. Gaulke, Adam E. Max and
Edward T. Post (three of whom are non-employee directors), held two meetings
during the 1999 Fiscal Year. The Audit Committee has the power and authority to
(i) select the firm of independent accountants to audit the financial statements
of the Company and its consolidated subsidiaries, subject to approval by the
Board of Directors, (ii) discuss with such independent public accountants and
with the management of the Company, the Company's financial accounting and
reporting principles, policies and practices, (iii) discuss with such
independent accountants, and with management of the Company and such
management's staff, the adequacy of the Company's accounting, financial and
operating controls, and (iv) report to the Board of Directors with respect to
any and all of the foregoing, at such times and in such manner as the Board of
Directors shall determine.
Compensation Committee.~~The Compensation Committee, which was established
in January l997, and consists of Messrs. Stephen W. Simons, Adam E. Max, Michael
R. Gaulke and Edward T. Post (three of whom are non-employee directors), held no
meetings during the l999 Fiscal Year. The Compensation Committee has the power
and authority to review and approve salary and other compensation arrangements,
including annual incentive awards (but excluding the granting of stock options
pursuant to the ROCKSHOX, INC. l996 Stock Plan (the "1996 Plan"), the ROCKSHOX,
INC. 1998 Stock Option Plan (the "1998 Plan"), and any future plans), for
officers and employees of the Company.
Compensation of the Board of Directors
The Company currently pays each of its non-employee directors a quarterly
fee of $5,000. Non-employee directors also are eligible to receive options to
purchase Common Stock under the 1996 Plan and the 1998 Plan as compensation for
their services as directors. Each non-employee director is reimbursed for
reasonable expenses incurred to attend director and committee meetings. Messrs.
Max and Jordan, both non-employee directors, are affiliated with a company that
is party to a consulting arrangement with the Company. See "Certain
Relationships and Related Transactions--Consulting Agreement."
-5-
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT AND PRINCIPAL STOCKHOLDERS
The following table sets forth certain information regarding the beneficial
ownership of Common Stock as of July 16, 1999 by (i) each person known by the
Company to be the beneficial owner of more than 5% of the outstanding shares of
Common Stock (the "Principal Stockholders"), (ii) each of the Company's
directors, (iii) each of the Named Executive Officers (as such term is defined
in the Summary Compensation Table under "Executive Compensation") and (iv) all
directors and executive officers as a group. This table is based on information
provided to the Company or filed with the Securities and Exchange Commission by
the Company's directors, executive officers and Principal Stockholders. Except
as otherwise indicated, the Company believes that the beneficial owners of the
Common Stock listed below, based on information furnished by such owners, have
sole investment and voting power with respect of such shares, subject to
community property laws where applicable. Unless otherwise indicated in the
footnotes to the table, the business address of each beneficial owner is c/o
ROCKSHOX, INC., 401 Charcot Avenue, San Jose, California 95131.
<TABLE>
<CAPTION>
Amount and Nature Percentage of
of Shares of Outstanding
Name and Address of Common Stock Common Stock
Beneficial Owner Beneficially Owned Beneficially Owned
- ------------------- ------------------ ------------------
<S> <C> <C>
Stephen W. Simons(1) ............................................ 2,205,000 16.0%
George Napier(2) ................................................ 137,320 *
Gary Patten(2) .................................................. 25,000 *
Robert Bonacorsi(2) ............................................. 11,500 *
Edwin Medlin .................................................... 150 *
K. Elaine Skloot(2) ............................................. 5,000 *
Gwynne Williams ................................................. 0 0%
Paul H. Turner(3) ............................................... 2,202,500 16.0%
John W. Jordan, II(4) ........................................... 327,308 2.4%
Adam E. Max(5) .................................................. 210,004 1.5%
Michael R. Gaulke(2) ............................................ 2,500 *
Edward T. Post(2) ............................................... 2,500 *
JZ Equity Partners, PLC(6) ...................................... 2,100,042 15.3%
Dimensional Fund Advisors Inc.(7) ............................... 837,100 6.1%
Royce & Associates, Inc.(8) ..................................... 1,141,800 8.3%
Charles M. Royce(8) ............................................. 1,173,300 8.5%
Wellington Management Company, LLP(9) ........................... 1,361,000 9.9%
Wellington Trust Company, NA(10) ................................ 1,120,000 8.1%
All directors and executive officers as a group (12 persons)(11). 5,128,782 36.8%
</TABLE>
- ---------------
* Less than 1%
(1) Includes (i) 2,053,312 shares held by The Simons Revocable Trust, of which
Mr. Simons and Debra W. Simons, Mr. Simons' wife, are trustees, (ii) 21,688
shares held by The Simons Children Irrevocable Trust, over which Mr. Simons
has no voting or investment power and (iii) 130,000 shares held by the
Wanda Bobowski Fund, the voting or investment power of which is shared with
Debra W. Simons. Mr. Simons disclaims beneficial ownership with respect to
all shares held by The Simons Children Irrevocable Trust and by the Wanda
Bobowski Fund.
(2) Represents shares with respect to which such person has the right to
acquire beneficial ownership by virtue of currently exercisable stock
options and options that become exercisable within 60 days of July 16,
1999.
(3) Includes 549,250 shares held by Turner Family LP, a Colorado limited
partnership (the "Turner Partnership"). Mr. Turner is the sole general
partner of the Turner Partnership, and a trust, the trustees of which are
persons other than Mr. Turner and the beneficiaries of which are certain
family members of Mr. Turner, is the sole limited partner of the Turner
Partnership holding a 40% interest in the Turner Partnership. Mr. Turner
disclaims beneficial ownership of the 219,700 shares representing the
trust's interest in the Turner Partnership. Also includes 134,500 shares
held by Bikes Aren't Bad Foundation, of which Mr. Turner is the sole
director. Mr. Turner disclaims beneficial ownership of all of such shares
held by Bikes Aren't Bad Foundation.
(4) Includes 327,308 shares held by the John W. Jordan Il Revocable Trust, of
which Mr. Jordan is trustee. Excludes 2,100,042 shares held by JZ Equity
Partners, PLC (formerly named MCIT PLC), which is advised by
Jordan/Zalaznick Advisers, Inc., an entity controlled by Mr. Jordan and
certain other persons (see footnote 6 below). Mr. Jordan is a managing
director of The Jordan Company LLC, an entity with which Mr. Max is
affiliated. The business address for Mr. Jordan is c/o Jordan Industries,
Inc., 875 N. Michigan Avenue, Suite 4020, Chicago, Illinois 60611.
-6-
<PAGE>
(5) Mr. Max is a managing director of The Jordan Company LLC, an entity with
which Mr. Jordan is also affiliated. Excludes 2,100,042 shares held by JZ
Equity Partners, PLC. The business address for Mr. Max is c/o The Jordan
Company, 767 Fifth Avenue, 48th Floor, New York, New York 10153.
(6) JZ Equity Partners, PLC is advised by Jordan/Zalaznick Advisers, Inc., an
entity controlled by Mr. Jordan and certain other persons. The John W.
Jordan II Revocable Trust and certain persons who have a controlling
interest in Jordan/Zalaznick Advisers, Inc., are stockholders of JZ Equity
Partners, PLC. See "Certain Relationships and Related Transactions." The
business address for JZ Equity Partners, PLC is c/o Jordan/Zalaznick
Advisors, Inc., 767 Fifth Avenue, 48th Floor, New York, New York 10153.
(7) Pursuant to the Schedule 13G filed as of February 11, 1999 with the
Securities and Exchange Commission, Dimensional Fund Advisors Inc., an
investment advisor registered under the Investment Advisors Act of 1940
("Dimensional"), furnishes investment advice to four investment companies
registered under the Investment Company Act of 1940, and serves as
investment manager to certain other investment vehicles, including
commingled group trusts (these investment companies and investment vehicles
are the "Portfolios"). In its role as an investment advisor and investment
manager, Dimensional has sole voting and dispositive power with respect to
the 837,100 shares. All of these shares are owned by the Portfolios and
Dimensional disclaims beneficial ownership of such shares. The business
address of Dimensional is 1299 Ocean Avenue, 11th Floor, Santa Monica,
California 90401.
(8) Pursuant to the Schedule 13G filed as of February 10, 1999 with the
Securities and Exchange Commission, Royce & Associates, Inc., a New York
corporation ("Royce"), has sole voting and dispositive power with respect
to 1,141,800 shares; Royce Management Company, a Connecticut general
partnership ("RMC"), has sole voting and dispositive power with respect to
31,500 shares; and Charles M. Royce, who may be deemed to be a controlling
person of Royce and RMC, may be deemed to beneficially own the 1,141,800
shares and 31,500 shares beneficially owned by Royce and RMC. Charles M.
Royce does not own any shares outside of Royce and RMC, and disclaims
beneficial ownership of shares held by Royce and RMC. The business address
for each of them is 1414 Avenue of the Americas, New York, New York 10019.
(9) Pursuant to the Schedule 13G (Amendment No. 1) filed as of February 10,
1999 with the Securities and Exchange Commission, Wellington Management
Company, LLP ("WMC"), in its capacity as an investment adviser, may be
deemed to beneficially own 1,361,000 shares which are held of record by
clients of WMC. Of that amount, WMC has shared voting power with respect to
811,000 shares and shared dispositive power with respect to all of the
shares. The business address for WMC is 75 State Street, Boston,
Massachusetts 02109.
(10) Pursuant to the Schedule 13G filed as of February 11, 1999 with the
Securities and Exchange Commission, Wellington Trust Company, NA, a Bank as
defined in Section 3(a)(6) of the Act ("WTC"), in its capacity as an
investment adviser, may be deemed to beneficially own 1,120,000 shares
which are held of record by clients of WTC. Of that amount, WTC has shared
voting power with respect to 570,000 shares and shared dispositive power
with respect to all of the shares. The business address for WTC is 75 State
Street, Boston, Massachusetts 02109.
(11) Includes 183,820 shares with respect to which all directors and executive
officers have the right to acquire beneficial ownership by virtue of
currently exercisable stock options and options that become exercisable
within 60 days of July 16, 1999.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The following summarizes various transactions between the Company and
certain of its directors or executive officers or entities associated with such
persons. The Company believes that each such transaction was, and that any
future transaction will be, approved in accordance with the Delaware General
Corporation Law.
Registration Rights Agreement.~~Effective as of the closing of the initial
public offering of the Company's Common Stock, which occurred on October 2,
l996, the Company entered into a registration rights agreement (the
"`Registration Rights Agreement") with, among others, certain trusts the
beneficiaries and/or trustees of which include Messrs. Simons, Turner and
Jordan, as well as Mr. Max (collectively, the "Insider Holders"). Pursuant to
the Registration Rights Agreement and subject to certain conditions, the Insider
Holders have demand registration rights to require the Company to register the
number of shares requested to be so registered until such time as such shares of
Common Stock (i) are effectively registered under the Securities Act of 1933, as
amended (the "Securities Act"), and disposed of in accordance with a
registration statement covering such shares, (ii) are saleable by the holders
thereof pursuant to Rule 144(k) under the Securities Act or (iii) are
distributed for resale pursuant to Rule 144 under the Securities Act
("Registrable Securities"). The Registration Rights Agreement provides that,
subject to certain conditions, the Insider Holders have incidental registration
rights if the Company proposes to file a registration statement under the
Securities Act with respect to an offering of Common Stock (other than a
registration statement or Form S-4 or Form S-8 or any successor form thereto or
filed solely in connection with an exchange offer or an offering made solely to
employees of the Company) to require the Company to include in each such
registration all Registrable Securities as each Insider Holder may request in
accordance with the terms of the Registration Rights Agreement. In the event of
any registration thereunder, the Registration Rights Agreement contains certain
customary provisions relating to holdback and indemnification arrangements. The
Registration Rights Agreement also provides that all reasonable fees and
expenses incident to the performance thereof or compliance therewith by the
Company will be borne by the Company.
-7-
<PAGE>
Supplier Consulting Agreement.~~Mr. Simons provides consulting services to
a supplier to the Company (the "Supplier") pursuant to a consulting agreement
(the "Supplier Consulting Agreement") in consideration of which the Supplier
pays Mr. Simons a fee equal to 3% of the Supplier's net sales (as defined
therein). The Supplier Consulting Agreement terminates on December 31, 2002;
provided, that the Supplier Consulting Agreement (i) will be automatically
renewed for two years, if the total of all consulting fees paid to Mr. Simons
pursuant to the Supplier Consulting Agreement is less than $1,000,000 on
December 31, 2002, (ii) will automatically terminate when the total of all
consulting fees paid to Mr. Simons pursuant to the Supplier Consulting Agreement
equals $1,700,000 and (iii) may be terminated by Mr. Simons at any time upon 30
days' written notice. During the 1999 Fiscal Year, Mr. Simons received no
payments from the Supplier. The Company purchased approximately $1,853,700 of
components from the Supplier in the 1999 Fiscal Year.
Consulting Agreement.~~On March 24, 1995, the Company entered into a
management consulting agreement (the "Consulting Agreement") with TJC Management
Corporation ("TJCMC"), an affiliate of The Jordan Company (Mr. Jordan is a 50%
stockholder of TJCMC and Mr. Max is an affiliate), pursuant to which TJCMC was
retained to render consulting services to the Company. Pursuant to the
Consulting Agreement, TJCMC is entitled to (i) a quarterly fee of $62,500, (ii)
an investment banking and sponsorship fee of 2% of the aggregate consideration
paid (including non-competition and similar payments, but net of transaction
expenses) in connection with an initial public offering of Common Stock, the
sale of all or substantially all of the Common Stock or substantially all of the
assets of the Company to a company other than an affiliate, or the purchase by
the Company of all the equity or substantially all of the assets of a company
(other than an affiliate), and (iii) a financial consulting fee of l% of the
amount obtained or made available pursuant to any financing. The fees payable
under clauses (ii) and (iii) of the preceding sentence are payable with respect
to a transaction only if TJCMC is retained to render services in connection
therewith. The Consulting Agreement also provides that if TJCMC renders services
outside the ordinary course of business, TJCMC is entitled to an additional
amount equal to the value of such services. Also pursuant to the Consulting
Agreement, TJCMC and certain of its affiliates are indemnified from certain
liabilities related to services performed pursuant to the Consulting Agreement
and TJCMC is entitled to reimbursement of reasonable out-of-pocket expenses. The
term of the Consulting Agreement generally continues until April l, 2000. During
the 1999 Fiscal Year, the total amount paid pursuant to the Consulting Agreement
was $312,500 plus approximately $33,000 for reimbursement of out-of-pocket
expenses.
Noncompetition Agreements.~~Each of Stephen Simons, Debra Simons (Mr.
Simons' wife) and Paul Turner has entered into a noncompetition agreement, dated
March 24, 1995, pursuant to which each such person agreed, among other things,
that until three years from and after the date such person ceases to be employed
by the Company, he or she will not directly or indirectly (i) divert or attempt
to divert from the Company any business with any customer or account with which
he or she had any contact or association, which was under his or her
supervision, or the identity of which was learned by him or her as a result of
his or her employment with the Company, (ii) solicit any person transacting
business with the Company to terminate its relationship or association with the
Company, or to represent, distribute or sell services or products in competition
with the services or products of the Company, or (iii) solicit any employee of
the Company to leave its employ. Mrs. Simons resigned as an officer of the
Company on August 1, 1995, and, therefore, the provisions of the preceding
sentence terminated on August 1, 1998, with respect to Mrs. Simons.
-8-
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth, in summary form, the compensation paid by
the Company during the last three completed fiscal years to its chief executive
officer and the four other most highly compensated executive officers for
services rendered to the Company (the "Named Executive Officers"). The
information below pertains to the Company's fiscal years ended March 31.
Summary Compensation Table
<TABLE>
<CAPTION>
Long Term
Compensation
Annual Compensation Awards
------------------------------------- ------------
Securities All
Underlying Other
Name and Principal Position Year Salary($) Bonus($) Options (#) Compensation($)
- ------------------------- ------------------------------------- ----------- ---------------
<S> <C> <C> <C> <C> <C>
George Napier(1) 1999 310,000 50,000(2) -- 145,106(3)
Vice Chairman, former Chief Executive 1998 123,846 -- 410,000 4,400
Officer and former President 1997 -- -- -- --
Stephen W. Simons(l) 1999 250,000 -- -- --
Chairman, Interim Chief Executive 1998 250,000 -- -- 52
Officer and Chief Technical Officer 1997 250,000 $3,915,089(4) -- 3,812
Gary Patten(5) 1999 156,154 60,000 100,000 114,089(3)
Chief Financial Officer, Executive 1998 -- -- -- --
Vice President and Secretary 1997 -- -- -- --
Robert Bonacorsi 1999 136,346 -- 30,000 12,509(3)
Vice President, Quality & 1998 27,692 -- 20,000 65,000
Engineering 1997 -- -- -- --
Barry Tait(6) 1999 137,981 43,750 50,000 18,865(3)
Former Executive Vice President, 1998 -- -- -- --
Marketing & Sales 1997 -- -- -- --
</TABLE>
- ---------------
(l) Mr. Napier resigned as Chief Executive Officer and President of the Company
and was appointed Vice Chairman of the Board effective July 15, 1999. The
Company is currently negotiating the terms of this transition with Mr.
Napier. Mr. Simons was elected Interim Chief Executive Officer effective
upon Mr. Napier's resignation.
(2) Pursuant to Mr. Napier's employment agreement, on May 1, 1998, Mr. Napier
was paid a one-time $50,000 payment in the event he was continuously
employed through May 1, 1998.
(3) All Other Compensation includes the following relocation expenses paid
during the 1999 Fiscal Year: Mr. Napier, $145,106; Mr. Patten, $112,870;
Mr. Bonacorsi, $11,488 and Barry Tait, $17,953. In addition, All Other
Compensation includes the following contributions made by the Company
during the 1999 Fiscal Year to employee accounts under the Company's 401(k)
plan: Mr. Patten, $1,219; Mr. Bonacorsi, $1,021 and Mr. Tait, $912.
(4) Includes $3,665,089 in 1997, which represents payments pursuant to an
employment agreement that was terminated upon the completion of the
Company's initial public offering in October 1996.
(5) Mr. Patten's employment with the Company commenced on June 17, 1998.
(6) Mr. Tait's employment with the Company commenced on June 15, 1998.
Effective July 15, 1999, Mr. Tait resigned as Executive Vice President,
Marketing & Sales of the Company. Mr. Medlin was elected Vice President,
Marketing & Sales effective upon Mr. Tait's resignation.
-9-
<PAGE>
Options Grants and Exercises
The following table sets forth certain information regarding stock options
granted to and exercised by the Named Executive Officers during the 1999 Fiscal
Year and the stock options held by them as of March 31, 1999.
Option Grants in the 1999 Fiscal Year
<TABLE>
<CAPTION>
Individual Grants
----------------------------------------------------------
Number of Percent of Potential Realizable Value At
Securities Total Options Assumed Annual Rates of Stock Price
Underlying Granted to Exercise or Appreciation for Option Term (1)
Options Employees in Base Price Expiration --------------------------------
Name Granted (#)(2) Fiscal Year(%) ($/Sh)(4) Date 5%($) 10%($)
------ -------------- -------------- --------- --------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
George Napier 0 -- -- -- -- --
Stephen W. Simons 0 -- -- -- -- --
Gary Patten 100,000(3) 29.6% $3.84 7/28/08 $241,496 $611,997
Robert Bonacorsi 30,000 12.6% $3.84 7/28/08 $72,449 $183,599
Barry Tait 50,000 21.0% $3.84 7/28/08 $120,748 $305,999
</TABLE>
- ---------------
(1) The potential gains shown are net of the option exercise price and do not
include the effect of any taxes associated with exercise. The amounts shown
are for the assumed rates of appreciation only as required by the
Securities and Exchange Commission, do not constitute projections of future
stock price performance, and may not necessarily be realized. Actual gains,
if any, on stock option exercises depend on the future performance of the
Common Stock, continued employment of the optionee through the term of the
options, and other factors.
(2) Such option was granted under the 1998 Plan (other than Mr. Patten's
option, which was granted under the 1996 Plan). Each such option vests and
becomes exercisable in equal 25% installments on each of July 28, 1999,
2000, 2001 and 2002. To the extent permitted under applicable law, the
option granted is an "incentive stock option" for purposes of Section 422
of the Code.
(3) Mr. Patten's employment agreement provides that all of his unvested options
will accelerate and become exercisable upon the occurrence of certain
change in control transactions.
(4) The exercise price is equal to the fair market value of the Common Stock on
the date of grant.
The following table sets forth certain information regarding the value of
unexercised options to acquire Common Stock held by the Named Executive Officers
as of the end of the 1999 Fiscal Year. None of the Named Executive Officers
exercised any options to acquire Common Stock in the 1999 Fiscal Year.
Aggregated Option Exercises in the 1999 Fiscal Year and FY-End Option Values
Number of Securities
Underlying Value of Unexercised
Unexercised Options at In-The-Money Options at
March 31, 1999(#) March 31, 1999(1)($)
---------------------------- ----------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
- ----- ----------- ------------- ----------- -------------
George Napier 133,320 266,680 $0 $0
4,000 6,000 0 0
Stephen W. Simons 0 0 0 0
Gary Patten 0 100,000 0 0
Robert Bonacorsi 4,000 46,000 0 0
Barry Tait 0 50,000 0 0
- ---------------
(1) The value of unexercised in-the-money options is calculated by multiplying
(A) the number of securities underlying such options by (B) the difference
between (i) the closing price of the Common Stock on the Nasdaq at March
31, 1999 and (ii) the option exercise price.
-10-
<PAGE>
Employment Agreements
On October 2, 1996, Stephen W. Simons and Paul H. Turner (the "Executives")
each entered into an amended and restated employment agreement with the Company,
with an initial one-year term and automatic renewal for additional one-year
terms, not to exceed four one-year renewal terms in total, at the election of
the Executives. Pursuant to the agreements, Messrs. Simons and Turner receive an
annual salary of $250,000 and certain perquisites. In addition, the agreement
provides that for each fiscal year during the term of the agreement in which the
Executive has been an employee of the Company for the entire fiscal year, the
Company will pay to Messrs. Simons and Turner a cash bonus in an amount not to
exceed 100% and 50%, respectively, of his annual salary based upon the Board of
Directors' evaluation of the performance of his individual duties, and in the
case of Mr. Simons, upon the performance of the Company during such fiscal year.
The Company expects to negotiate an amendment to Mr. Simons's agreement
following his appointment as Interim Chief Executive Officer. Effective July 31,
1998, Mr. Turner ceased to be an executive officer of the Company and Mr.
Turner's employment agreement was terminated.
On June 17, 1998, Gary Patten entered into a three-year employment
agreement with the Company. Pursuant to the agreement, Mr. Patten will serve as
Executive Vice President and Chief Financial Officer of the Company and will
receive an initial annual base salary of $200,000, and is eligible to
participate in the Company's bonus plan and, for the Fiscal Year 1999, was
guaranteed a bonus equal to the greater of $60,000 or the amount he earned under
the plan during Fiscal Year 1999. In addition, the Board of Directors of the
Company granted Mr. Patten an option to purchase 100,000 shares of Common Stock
as described above. The agreement further provides that Mr. Patten is entitled
to participate in all savings, retirement and welfare plans, practices, policies
and programs applicable generally to senior executive officers of the Company.
If Mr. Patten is terminated by the Company after December 17, 1998 other than
for death, disability, cause or resignation, he will receive (a) his base salary
at the rate then in effect for a period of twelve months (such period, the
"Severance Period"), (b) continuation of health benefits during the Severance
Period substantially similar to those provided to him immediately prior to
termination, and (c) all outstanding equity incentive awards that would have
vested during the Severance Period shall immediately vest and remain exercisable
for a period of ninety days following termination of his employment. For a
period of one year following termination of employment, Mr. Patten will act as a
non-employee consultant to the Company and will not engage in any activity
competitive with the business of the Company. In consideration of such
consulting and non-competition obligations, Mr. Patten will receive an annual
consulting fee of $25,000.
On November 7, 1997, Robert Bonacorsi entered into an employment agreement
with the Company terminable at-will by either Mr. Bonacorsi or by the Company at
any time with or without cause and with or without notice. Pursuant to the
agreement, Mr. Bonacorsi will serve as Engineering Manager and will receive an
initial annual base salary of $120,000, subject to review and adjustment from
time to time, and is eligible for the Company's discretionary bonus award. Mr.
Bonacorsi also received a one-time $50,000 relocation bonus and was reimbursed
for additional expenses incurred by Mr. Bonacorsi in connection with his
relocation. In addition, the Board of Directors of the Company granted Mr.
Bonacorsi an option to purchase 20,000 shares of Common Stock. The agreement
further provides that Mr. Bonacorsi is entitled to participate in all benefits
programs available from time to time. In April 1998, Mr. Bonacorsi was promoted
to the position of Vice President, Quality and Engineering of the Company.
Compensation Committee Interlocks and Insider Participation
During the 1999 Fiscal Year, the Compensation Committee of the Board of
Directors consisted of Messrs. Gaulke, Simons, Max and Post. However, pursuant
to certain requirements of Rule 16b-3 under the Securities Exchange Act of l934,
as amended, grants of stock options made to the Named Executive Officers in the
1999 Fiscal Year were made by all of the members of the Board of Directors.
During the 1999 Fiscal Year, Mr. Simons was an officer of the Company. In
addition, during the 1999 Fiscal Year, the Company
-11-
<PAGE>
engaged in certain transactions with certain of its directors and certain
entities affiliated with certain of such directors. See "Certain Relationships
and Related Transactions."
Compensation Committee Report on Executive Compensation
The Compensation Committee of the Board of Directors is responsible for
reviewing and approving the Company's compensation policies and the compensation
paid to executive officers. However, Mr. Napier, the former Chief Executive
Officer and former President of the Company, did not and does not participate in
discussions regarding his own compensation. The following is the report of the
Compensation Committee to the Board of Directors describing compensation
policies and rationales applicable to the Company's executive officers with
respect to compensation paid to such executive officers for the 1999 Fiscal
Year.
Compensation Philosophy:
The general philosophy of the Company's compensation program is to offer
executive officers competitive compensation based both on the Company's
performance and on the individual's contribution and performance. The Company's
compensation policies are intended to motivate, reward and retain highly
qualified executives for long-term strategic management and the enhancement of
stockholder value, to support a performance-oriented environment that rewards
achievement of specific internal Company goals and to attract and retain
executives whose abilities are critical to the long-term success and
competitiveness of the Company.
There are three main components in the Company's executive compensation
program:
o Base Salary
o Incentive Bonus
o Incentives
Base Salary:
The salaries of Messrs. Napier, Simons and Patten were fixed pursuant to
the terms of their employment agreements with the Company. The salaries of the
other executive officers are determined annually by the Compensation Committee
with reference to surveys of salaries paid to executives with similar
responsibilities at comparable companies, generally in both the bicycle and
manufacturing industries. The peer group for each executive officer is composed
of executives whose responsibilities are similar in scope and content. The
Company seeks to set executive compensation levels that are competitive with the
average levels of peer group compensation.
Incentive Bonus:
Annual incentive bonuses for executive officers are intended to reflect the
Compensation Committee's belief that a significant portion of the annual
compensation of each executive officer should be contingent upon the performance
of the Company, as well as the individual contribution of each officer.
Stock Incentives:
The Company utilizes stock options as long-term incentives to reward and
retain executive officers. The Board of Directors, which in the 1999 Fiscal Year
had responsibility for making option grants under the 1996 Plan and the 1998
Plan, believes that stock option grants provide an incentive which focuses the
executives' attention on the Company from the perspective of an owner with an
equity stake in the business. Because options are typically granted with an
exercise price equal to the fair market value of the Common Stock on the date of
grant, the Company's stock will provide value to the recipient only when the
price of the
-12-
<PAGE>
Company's stock increases above the exercise price, that is, only to the extent
that stockholders as a whole have benefitted. Generally, stock options vest over
a three to five year period and optionees must be employed by the Company at the
time of vesting in order to exercise the options.
Compensation of the Chief Executive Officer and Other Executives:
Mr. Napier's base salary is set at $300,000 per year pursuant to his
employment agreement. Mr. Napier resigned as Chief Executive Officer and
President of the Company on July 15, 1999. Salary increases for senior
executives effected during the 1999 Fiscal Year were based on individual
performance, position, tenure, leadership and competitive data in compensation
surveys of comparable companies.
Senior executives in the Company also participate in the 1996 Plan and 1998
Plan, and the Board granted such executives options to purchase shares of Common
Stock during the 1999 Fiscal Year. In determining the number of shares to award
to the executive officers noted above and the other executives, the Board
considered several factors, including primarily the above-mentioned executive
officers' and such other executives' actual and potential contributions to the
Company's long-term success, and the size of awards provided to other executives
holding similar position in comparable companies.
Pursuant to their employment agreements with the Company, senior executives
may receive an annual bonus as determined by the Board. In determining the
amounts of such bonuses, the Board considers certain criteria, including the
individual performance of each executive and the performance of the Company. The
Board has determined that no bonus amounts will be paid for the 1999 Fiscal Year
based upon the Company's performance.
Section 162(m) Policy:
Section 162(m) of the Internal Revenue Code of 1986, as amended, generally
provides that publicly held companies may not deduct compensation paid to
certain of its top executive officers to the extent such compensation exceeds $1
million per officer in any year. However, pursuant to regulations issued by the
Treasury Department, certain limited exemptions to Section l62(m) apply with
respect to "qualified performance-based compensation" and to compensation paid
in certain circumstances by companies in the first few years following their
initial public offering of stock. The Company granted non-qualified stock
options under the 1996 Plan to Mr. Patten. Because stockholders had approved the
1996 Plan, the grant qualifies as "performance-based compensation" under Section
162(m). The Company will continue to monitor the applicability of Section 162(m)
to its ongoing compensation arrangements. Accordingly, the Company does not
expect that amounts of compensation paid to its executive officers will fail to
be deductible on account of Section 162(m).
Respectfully submitted,
STEPHEN W. SIMONS*
PAUL H. TURNER*
JOHN W. JORDAN II*
ADAM E. MAX
MICHAEL R. GAULKE
GEORGE NAPIER
EDWARD T. POST
* With respect to that portion of the report entitled "Stock Incentives"
only.
The Compensation Committee Report will not be deemed to be incorporated by
reference into any filing by the Company under the Securities Act of 1933, as
amended, or the Securities Exchange Act of 1934, as amended, except to the
extent that the Company specifically incorporates the same by reference.
-13-
<PAGE>
Performance Graph:
The following line graph compares the cumulative total stockholder return
for the Company's Common Stock with the NASDAQ U.S. Index and a Peer Group (as
defined below) for the period commencing September 27, 1996 and ending March 31,
1999. The peer group (the "Peer Group") is composed of the following companies:
K2 Inc., Huffy Corp., Cannondale Corp., Aldila Inc. and Ride Inc.
The graph assumes that $100 was invested on September 27, 1996, the date of
the commencement of public trading of the Common Stock, and that all dividends
are reinvested. Historical stock price perfor mance should not be considered
indicative of future stock price performance.
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE CHART IN THE PRINTED MATERIAL.]
Comparison of Cumulative Total Return Among ROCKSHOX, INC.,
NASDAQ Stock Market-US, NASDAQ Non-Financial Index and Selected Peer Groups
9/27/96 3/31/97 3/31/98 3/31/99
------- ------- ------- -------
NASDAQ U.S. 100 99 150 202
Peer Group 100 86 85 41
ROCKSHOX, INC. 100 100 51 8
The Stock Price Performance Graph will not be deemed to be incorporated by
reference into any filing by the Company under the Securities Act of 1933, as
amended, or the Securities Exchange Act of 1934, as amended, except to the
extent that the Company specifically incorporates the same by reference.
-14-
<PAGE>
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires the Company's directors and
executive officers, and persons who own more than 10% of the Company's Common
Stock, to file reports of beneficial ownership of the Company's Common Stock and
changes in such ownership with the Securities and Exchange Commission, The
Nasdaq Stock Market and the Company. Specific due dates for these reports have
been established, and the Company is required to disclose in this Proxy
Statement any failure to file these reports on a timely basis. Based solely on
its review of the copies of these reports received or written representations
from these reporting persons that no Forms 5 were required for such persons, the
Company believes that, during the 1999 Fiscal Year, all of such filing
requirements under Section 16(a) were timely met, subject to the following
exceptions: A Form 3 was not timely filed on behalf of each of Mr. Bonacorsi,
Mr. Medlin, Ms. Skloot, Mr. Tait and Mr. Williams.
Stockholder Proposals
Any proposal of a stockholder intended to be presented at the Company's
2000 annual meeting of stockholders must be received by the Secretary of the
Company by March 31, 2000 for inclusion in the notice of meeting and proxy
statement relating to the Company's 2000 annual meeting of stockholders. The
proposal must comply in all respects with the rules and regulations of the
Securities and Exchange Commission and the Bylaws of the Company.
Stockholder proposals submitted to the Company for consideration at the
Company's 2000 annual meeting of stockholders outside the processes of Rule
14a-8 (i.e., the procedures for placing a stockholder's proposal in the
Company's proxy materials) will be considered untimely if received by the
Company after June 14, 2000. Accordingly, the proxy with respect to the
Company's 2000 annual meeting of stockholders will confer discretionary
authority to vote on any stockholder proposals received by the Company after
June 14, 2000.
By Order of the Board of Directors
Gary Patten
Executive Vice President,
Chief Financial Officer and Secretary
San Jose, California
July 29, 1999
-15-
