<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant / /
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
TRACK 'N TRAIL
- --------------------------------------------------------------------------------
(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>
TRACK 'N TRAIL
4961-A Windplay Drive
El Dorado Hills, CA 95762-9632
(916) 933-4525
April 23, 1999
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders
of Track 'n Trail, which will be held on Thursday, May 27, 1999, at 10:00 a.m.,
at 4961-A Windplay Drive, El Dorado Hills, California.
The formal notice of the Annual Meeting and the Proxy Statement have
been made a part of this invitation.
After reading the Proxy Statement, please mark, date, sign and return,
as promptly as possible, the enclosed proxy in the prepaid envelope addressed to
American Securities Transfer and Trust, Inc., our agent, to ensure that your
shares will be represented at the Annual Meeting. YOUR SHARES CANNOT BE VOTED
UNLESS YOU SIGN, DATE AND RETURN THE ENCLOSED PROXY OR ATTEND THE ANNUAL MEETING
IN PERSON.
A copy of the Company's 1998 Annual Report to Stockholders is also
enclosed.
The Board of Directors and management look forward to seeing you at the
meeting.
Sincerely,
/s/ David L. Suechting, Jr. /s/ Gregory M. Kilgore
David L. Suechting, Jr. Gregory M. Kilgore
CHAIRMAN OF THE BOARD PRESIDENT AND
CHIEF OPERATING OFFICER
<PAGE>
TRACK 'N TRAIL
------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 27, 1999
------------
To the Stockholders of Track 'n Trail:
The Annual Meeting of Stockholders of Track 'n Trail, a Delaware
corporation (the "Company"), will be held on Thursday, May 27, 1999, at 10:00
a.m. Pacific Daylight Time, at 4961-A Windplay Drive, El Dorado Hills,
California, for the following purposes:
1. To elect to the Board of Directors two Class I directors.
2. To ratify appointment of PricewaterhouseCoopers LLP as the
Company's independent auditors for the current fiscal year; and
3. To transact such other business as may properly come before the
Annual Meeting and any adjournment or postponement of the Annual
Meeting.
Stockholders of record as of the close of business on April 9, 1999 are
entitled to notice of and to vote at the Annual Meeting and any adjournment or
postponement thereof. A complete list of stockholders entitled to vote will be
available at the Secretary's office, 4961-A Windplay Drive, El Dorado Hills,
California, for ten days before the meeting.
IT IS IMPORTANT THAT YOUR SHARES ARE REPRESENTED AT THE MEETING. EVEN
IF YOU PLAN TO ATTEND THE MEETING, WE HOPE THAT YOU WILL PROMPTLY MARK, SIGN,
DATE AND RETURN THE ENCLOSED PROXY. THIS WILL NOT LIMIT YOUR RIGHTS TO ATTEND OR
VOTE AT THE MEETING.
By Order of the Board of Directors
/s/ Daniel J. Nahmens
---------------------------
SECRETARY
El Dorado Hills, California
April 23, 1999
<PAGE>
TRACK 'N TRAIL
------------
PROXY STATEMENT
------------
INFORMATION CONCERNING SOLICITATION AND VOTING
This Proxy Statement is furnished in connection with the solicitation
by the Board of Directors of Track 'n Trail, a Delaware corporation (the
"Company"), of proxies in the accompanying form to be used at the Annual Meeting
of Stockholders to be held at 4961-A Windplay Drive, El Dorado Hills,
California, on Thursday, May 27, 1999, and any adjournment or postponement
thereof (the "Annual Meeting"). The shares represented by the proxies received
in response to this solicitation and not revoked will be voted at the Annual
Meeting. A proxy may be revoked at any time before it is exercised by filing
with the Secretary of the Company a written revocation or a duly executed proxy
bearing a later date or by voting in person at the Annual Meeting. On the
matters coming before the Annual Meeting for which a choice has been specified
by a stockholder by means of the ballot on the proxy, the shares will be voted
accordingly. If no choice is specified, the shares will be voted FOR the
election of the nominees for directors listed in this Proxy Statement and FOR
approval of Proposal 2 described in the Notice of Annual Meeting and in this
Proxy Statement and as to any other matter that may be properly brought before
the Annual Meeting, in accordance with the judgement of the proxy holders.
Stockholders of record at the close of business on April 9, 1999 are
entitled to notice of and to vote at the Annual Meeting. As of the close of
business on such date, the Company had 6,865,899 shares of Common Stock
outstanding and entitled to vote. The presence in person or by proxy of the
holders of a majority of the Company's outstanding shares constitutes a quorum
for the transaction of business at the Annual Meeting. Each holder of Common
Stock is entitled to one vote for each share held as of the record date.
Directors are elected by a plurality vote. The other matters submitted
for stockholder approval at this Annual Meeting will be decided by the
affirmative vote of a majority of shares present in person or represented by
proxy and entitled to vote on each such matter. Abstentions with respect to any
matter are treated as shares present or represented and entitled to vote on that
matter and thus have the same effect as negative votes. If a broker who is the
record holder of certain shares indicates on a proxy that he or she does not
have discretionary authority to vote on a particular matter as to such shares,
or if shares are not voted in other circumstances in which proxy authority is
defective or has been withheld with respect to any matter, these non-voted
shares will be counted for quorum purposes but are not deemed to be present or
represented for purposes of determining whether stockholder approval of a
particular matter has been obtained.
The expense of printing and mailing proxy materials will be borne by
the Company. In addition to the solicitation of proxies by mail, solicitation
may be made by certain directors, officers and other employees of the Company by
personal interview, telephone or facsimile. No additional compensation will be
paid to such persons for such solicitation. The Company will reimburse brokerage
firms and others for their reasonable expenses in forwarding solicitation
materials to beneficial owners of the Company's Common Stock.
This Proxy Statement and the accompanying form of proxy are being
mailed to stockholders on or about April 23, 1999.
IMPORTANT
PLEASE MARK, SIGN AND DATE THE ENCLOSED PROXY AND RETURN IT AT YOUR
EARLIEST CONVENIENCE IN THE ENCLOSED POSTAGE-PREPAID RETURN ENVELOPE
SO THAT, WHETHER YOU INTEND TO BE PRESENT AT THE ANNUAL MEETING OR
NOT, YOUR SHARES CAN BE VOTED. PROXIES WILL ALSO BE ACCEPTED BY
TRANSMISSION OF A TELEGRAM, CABLEGRAM OR TELECOPY PROVIDED SUCH
TRANSMISSION CONTAINS SUFFICIENT INFORMATION FROM WHICH IT CAN BE
DETERMINED THAT THE TRANSMISSION WAS AUTHORIZED BY THE STOCKHOLDER.
THE TRANSFER AGENT'S TELECOPY NUMBER IS (303)234-5340. THIS WILL NOT
LIMIT YOUR RIGHTS TO ATTEND OR VOTE AT THE ANNUAL MEETING.
<PAGE>
PROPOSAL 1 - ELECTION OF DIRECTORS
NOMINEES
The Company has three classes of directors serving staggered three-year
terms. Class I and Class II consist of two directors each and Class III consists
of one director. Two Class I directors are to be elected at the Annual Meeting
to serve until the 2002 Annual Meeting and until their respective successors
shall have been elected and qualified or until such directors' earlier
resignation, removal from office, death or incapacity. The term of the Class II
directors expires in 2000 and the term of the Class III director expires in
2001.
Unless authority to vote for directors is withheld, it is intended that
the shares represented by the enclosed proxy will be voted for the election of
Helen C. Bulwik and Steven D. Tough as Class I directors. Ms. Bulwik and Mr.
Tough are currently members of the Board of Directors of the Company. Each of
the nominees has been nominated as a Class I director by the Company's Board of
Directors. In the event any of such nominees becomes unable or unwilling to
accept nomination or election, the shares represented by the enclosed proxy will
be voted for the election of the balance of those named and such other nominees
as the Board of Directors may select. The Board of Directors has no reason to
believe that any such nominee will be unable or unwilling to serve. There are no
family relationships among any of the directors or executive officers of the
Company, except that David L. Suechting, Jr., the Chairman of the Board, is the
son of Barbara J. Suechting, who is a director.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ELECTION FOR CLASS I
DIRECTOR OF HELEN C. BULWIK AND STEVEN D. TOUGH.
Set forth below is information regarding the nominees for Class I
director, the continuing directors of Class II and Class III and the Company's
executive officers, and their principal occupations at present and for the past
five years, their ages as of April 9, 1999, and the year in which each became a
director or executive officer of the Company.
<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
David L. Suechting, Jr 39 Chairman of the Board
Barbara J. Suechting............. 57 Director
Gregory M. Kilgore............... 49 President, Chief Operating Officer and Director
Helen C. Bulwik.................. 50 Director
Steven D. Tough.................. 48 Director
John E. Wilkinson................ 49 Executive Vice President-Marketing
Daniel J. Nahmens................ 40 Executive Vice President-Finance, Chief
Financial Officer, Treasurer and Secretary
David T. Morgan.................. 56 Vice President-Real Estate
William Forsberg................. 54 Vice President-Stores
Crystal J. Breazeale............. 37 Vice President-Human Resources and
Administration
</TABLE>
DAVID L. SUECHTING, JR. has served as Chairman of the Board since the
Company's organization in March 1997. Mr. Suechting co-founded Track 'n Trail, a
California corporation ("Track 'n Trail-California"), and has served as its
Chairman of the Board since 1993. Mr. Suechting has also served as the Chairman
of the Board of Overland Management Corporation ("Overland") since its
acquisition in October 1996. From January 1993 to April 1996, Mr. Suechting
served as President of Track 'n Trail-California. Prior to that time, he served
Track 'n Trail-
-2-
<PAGE>
California in various capacities, including Vice President-Stores
from July 1991 to April 1996, Vice President-Operations from October 1989 to
July 1991, Vice President-Merchandise from February 1982 to October 1989 and as
Store Manager/District Manager from 1980 to February 1982.
BARBARA J. SUECHTING has served as a director of the Company since its
organization in March 1997. Ms. Suechting co-founded Track 'n Trail-California
and served as its Secretary and a director from 1980 to October 1997. She also
served as Secretary and a director of Overland from its acquisition in October
1996 to October 1997.
GREGORY M. KILGORE has served as President and Chief Operating Officer
of the Company since its organization in March 1997. Mr. Kilgore has also served
as President and Chief Operating Officer of Track 'n Trail-California since
April 1996. He also has served as a director of Eagles Nest since its
acquisition in August 1998 and as a director of Overland since its acquisition
in October 1996. Prior to being appointed President, Mr. Kilgore served as
Executive Vice President and Chief Operating Officer from September 1991 to
April 1996. From May 1987 to September 1991, Mr. Kilgore functioned as interim
President and Chief Operating Officer of several turnaround and emerging retail
operations. From 1981 to 1987, Mr. Kilgore was Vice President-Operations of
Berman's Leather Experts. Mr. Kilgore has served as a director of the Company
since March 1997, and as a director of Track 'n Trail-California since July
1996. He has also served as a director of Shari's Bear'ys, an emerging specialty
retailer since February 1998.
HELEN C. BULWIK has served as a director of the Company since October
1997. Ms. Bulwik is a director in the global retail practice for Andersen
Consulting which is the largest consulting firm in the world. From 1988 to
January 1998 Ms. Bulwik was President of Seagate International, Inc., a
management services and financial advisory services firm. She was Executive Vice
President of Palo Alto Consulting Center, a division of the Tom Peters Group (a
consulting firm), from 1987 to 1988. From 1982 to 1987, Ms. Bulwik was co-owner
and founder of Sanca International, Inc., a private label apparel manufacturer.
She served as General Manager of Bullock's Northern California from 1978 to 1982
and as Store Merchandiser and Buyer for Macy's California from 1972 to 1978.
STEVEN D. TOUGH has served as a director of the Company since October
1997. Mr. Tough has served as Senior Vice President of Operations of Foundation
Health Corporation, a provider of managed health care services based in
Sacramento, California, since 1993. Mr. Tough has also been President and Chief
Operating Officer of Foundation Health Federal Services, a subsidiary of
Foundation Health Corporation, since 1990. He also served as President and Chief
Operating Officer of Foundation Health (a California Health Plan) from 1988 to
1992.
JOHN E. WILKINSON has served as Executive Vice President-Marketing of
the Company since its organization in March 1997. Mr. Wilkinson has also served
as Executive Vice President-Marketing of Track 'n Trail-California since June
1996. From September 1991 to May 1996, he held the position of Vice
President-Marketing. From 1982 to September 1991, Mr. Wilkinson was associated
with Weinstock's Department Store, a division of Carter Hawley Hale, where he
held the positions of Senior Vice President and General Merchandise Manager from
1989 to 1991, Vice President and General Merchandise Manager from 1987 to 1989
and divisional Vice President from 1982 to 1987.
DANIEL J. NAHMENS has served as Executive Vice-President-Finance since
March 1999, Chief Financial Officer, Vice President-Finance and Treasurer of the
Company since its organization in March 1997, and as Secretary since October
1997. Mr. Nahmens has served as Secretary and a director of Eagles Nest since
its acquisition in August 1998 and Secretary and a director of Track 'n
Trail-California and Overland since October 1997. He has also served as Chief
Financial Officer and Vice President-Finance of Track 'n Trail-California since
November 1993, and as Treasurer since June 1996. From August 1988 to November
1993, Mr. Nahmens served as Controller of Track 'n Trail-California. From
February 1988 to June 1988, he held the position of Chief Financial Officer of
Greenwood Development Co., a local chain of fast-food stores. From October 1981
to February 1988, Mr. Nahmens was associated with Cal Gas Corporation, a
nationwide liquid gas retailer, where he last held the position of Financial
Accounting Manager. From 1980 to 1981, Mr. Nahmens was employed by Peat Marwick,
Mitchell & Co. (presently known as KPMG LLP) as a Certified Public Accountant.
-3-
<PAGE>
DAVID T. MORGAN has served as Vice President-Real Estate of the Company
since its organization in March 1997. Mr. Morgan has also served as Vice
President-Real Estate of Track 'n Trail-California since June 1996, and from
August 1992 to June 1996, he served as Director of Real Estate and Development.
From May 1990 to August 1992, Mr. Morgan was a Real Estate Representative of
Payless Shoe Source, a national retail shoe store chain, and from April 1986 to
May 1990, he was Vice President-Real Estate of Round Table Franchise
Corporation.
WILLIAM FORSBERG has served as Vice President-Stores of the Company
since its organization in March 1997, and as Vice President-Stores of Track 'n
Trail-California since June 1996. Prior to joining Track 'n Trail-California,
Mr. Forsberg was President and Chief Operating Officer of New Century Co. Inc.,
an owner and operator of a chain of video stores and a chain of tailoring and
alteration stores, from April 1994 to June 1996. From October 1983 to April
1994, Mr. Forsberg was employed by Wilsons Suede and Leather, where he last held
the position of Director of In Store Operations. From 1974 to 1983, he was
Regional Manager of Fanny Farmer Candy Shops.
CRYSTAL J. BREAZEALE has served as Vice President-Human Resources and
Administration of the Company since March 1999. Ms. Breazeale has also served as
Director of Human Resources of the Company since its organization in March 1997.
From December 1996 to March 1997, she held the position of Director of Human
Resources of Track 'n Trail-California. From May 1995 to December 1996, Ms.
Breazeale served as Manager of Human Resources for Track 'n Trail-California.
Prior to joining Track 'n Trail-California, Ms. Breazeale was the Human
Resources manager at Data Image Systems Corp., a data processing service firm in
Sacramento, California, from May 1992 to May 1995. From September 1991 to May
1992, she was employed as the Human Resources Manager for RMI, Inc., an
engineering firm in Sacramento, California. Ms. Breazeale was associated with
Progressive Insurance Companies from May 1988 to September 1991, where she last
held the position of Senior Human Resources Generalist.
BOARD MEETINGS AND COMMITTEES
The Board of Directors held five meetings during fiscal 1998. All
directors attended at least 75% of the aggregate number of meetings of the Board
of Directors and of the committees on which such directors serve.
The Board of Directors has appointed a Compensation Committee and an
Audit Committee. The Compensation Committee and Audit Committee are comprised
entirely of independent directors.
The members of the Compensation Committee during fiscal 1998 were Helen
C. Bulwik and Steven D. Tough. The Compensation Committee held two meetings
during fiscal 1998. The functions of the Compensation Committee include
reviewing and approving executive compensation policies and practices, reviewing
salaries and bonuses for certain officers of the Company, administering the
Company's Amended and Restated 1996 Stock Option Plan (the "1996 Stock Option
Plan") and other benefit plans, and considering such other matters as may from
time to time be referred to the committee by the Board of Directors.
The members of the Audit Committee during fiscal 1998 were Helen C.
Bulwik and Steven D. Tough. The Audit Committee held three meetings during
fiscal 1998. The functions of the Audit Committee include recommending to the
Board of Directors the retention of independent auditors, reviewing the scope of
the annual audit undertaken by the Company's independent auditors and the
progress and results of their work, and reviewing the Company's financial
statements, internal accounting and auditing procedures and corporate program to
ensure compliance with applicable laws.
DIRECTORS' COMPENSATION
Directors of the Company who are not also employees of the Company or
one of its subsidiaries receive $1,000 for each Board meeting attended and $750
for each committee meeting attended. No other director receives cash
compensation for services as a director. All directors, however, are reimbursed
for their expenses incurred in attending meetings. In addition, directors who
are not common law employees or officers of the Company receive options to
purchase 5,000 shares of the Company's Common Stock upon their initial
appointment as a director of
-4-
<PAGE>
the Company, and receive options to purchase 1,250 shares of Common Stock upon
each annual stockholders' meeting following the meeting at which such director
was initially appointed (unless any director was appointed prior to such a
meeting, in which case such director's annual grant occurs at the second annual
meeting following the initial appointment) at an exercise price equal to or
greater than the fair market value of the Common Stock on the date of grant. The
shares subject to the options vest and become exercisable at the rate of 25% on
each anniversary of the grant date. In fiscal 1998, no options were granted to
directors to purchase shares of the Company's Common Stock.
In fiscal 1998, the Company compensated David L. Suechting, Jr., the
Company's Chairman of the Board, for operations management services. See
"Certain Transactions".
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information as of April 9, 1999,
as to shares of the Company's Common Stock beneficially owned by: (i) each of
the Company's executive officers named in the Summary Compensation Table, (ii)
each of the Company's directors, (iii) all directors and executive officers of
the Company as a group, and (iv) each person who is known by the Company to own
beneficially more than 5% of the Company's Common Stock.
<TABLE>
<CAPTION>
SHARES PERCENTAGE
BENEFICIALLY BENEFICIALLY
NAME AND ADDRESS(1) OWNED OWNED(2)
------------------- ----- --------
<S> <C> <C>
Barbara Suechting............................................. 1,811,470 26.4%
David L. Suechting, Jr. (3)................................... 1,390,403 20.3
Deborah Suechting............................................. 905,735 13.2
Polynous Capital Management, Inc. (4)......................... 795,500 11.6
345 California Street, Suite 1220
San Francisco, CA 94104
Benson Associates, LLC (5).................................... 662,600 9.2
111 SW 5th Avenue, Suite 2130
Portland, OR 97204
Gregory M. Kilgore (6)........................................ 353,118 4.9
John E. Wilkinson (7)......................................... 203,468 2.9
Daniel J. Nahmens (8)......................................... 104,770 1.5
David T. Morgan (9)........................................... 50,117 *
William Forsberg (10)......................................... 50,557 *
Crystal J. Breazeale.......................................... 569 *
Steven D. Tough (9)........................................... 1,250 *
Helen C. Bulwik (9)........................................... 1,250 *
All directors and executive officers as a group
(10 persons)(11)......................................... 3,966,972 52.1%
</TABLE>
- ----------
* Less than 1%.
(1) Unless otherwise indicated, the address for each listed stockholder is c/o
Track 'n Trail, 4961-A Windplay Drive, El Dorado Hills, CA 95762. To the
Company's knowledge, the persons named in the table have sole voting and
investment power with respect to all shares of Common Stock shown as
beneficially owned by them, subject to community property laws where
applicable and the information contained in the footnotes to this table.
-5-
<PAGE>
(2) The percentage of beneficial ownership is calculated based on 6,865,899
shares of Common Stock outstanding on April 9, 1999. Beneficial ownership
is determined in accordance with the rules of the Securities and Exchange
Commission and generally includes voting or investment power with respect
to securities. Shares subject to options presently exercisable or
exercisable within 60 days of April 9, 1999 are deemed to be beneficially
owned by the holder but are not treated as outstanding for the purpose of
computing the beneficial ownership of any other person.
(3) Represents 1,390,403 shares held by the Suechting Family Trust for which
Mr. Suechting and his wife, Jackie Suechting, serve as co-trustees and hold
shared voting and investment power.
(4) According to Schedule 13G, filed with the SEC on September 1, 1998 by
Polynous Capital Management, Inc., such entity beneficially owned 795,500
shares of the Company's Common Stock as of September 1, 1998, of which such
entity had shared voting and dispositive powers with respect to 795,500
shares with Mr. Kevin Laurence Wenck. According to Schedule 13G, filed with
the SEC on September 1, 1998, Mr. Wenck's address is 345 California Street,
Suite 1220, San Francisco, CA 94104.
(5) According to Schedule 13G, filed with the SEC on February 12, 1999 by
Benson Associates, LLC, such entity beneficially owned 662,600 shares of
the Company's Common Stock as of February 12, 1999, of which such entity
had sole voting and dispositive powers with respect to 662,600 shares.
(6) Includes 350,618 shares subject to stock options exercisable within 60 days
of April 9, 1999.
(7) Includes 200,468 shares subject to stock options exercisable within 60 days
of April 9, 1999.
(8) Includes 100,234 shares subject to stock options exerciseable within 60
days of April 9, 1999.
(9) Represents 50,117 shares subject to stock options exercisable within 60
days of April 9, 1999.
(10) Includes 50,117 shares subject to stock options exerciseable within 60 days
of April 9, 1999.
(11) Includes 754,054 shares subject to stock options exercisable within 60 days
of April 9, 1999.
EXECUTIVE COMPENSATION
The following table sets forth certain summary information concerning
compensation paid to the Company's chief executive officer and three other
officers who were serving as executive officers on December 26, 1998, and whose
total annual salary and bonus exceeded $100,000 in fiscal 1998 (the "Named
Officers"), and for the fiscal years ended December 27, 1997 and December 28,
1996.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION SECURITIES
UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS OPTIONS COMPENSATION(1)
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Gregory M. Kilgore.................................... 1998 $168,511 $ -- -- $8,245
President and Chief Operating Officer 1997 161,293 52,524 -- 7,539
1996 153,951 158,000 350,618 5,977
John E. Wilkinson..................................... 1998 130,436 -- -- 8,418
Executive Vice President-Marketing 1997 124,861 52,186 -- 7,372
1996 117,869 102,000 200,468 5,340
Daniel J. Nahmens..................................... 1998 101,049 -- -- 7,357
Executive Vice President-Finance and Chief 1997 96,850 43,009 -- 7,410
Financial Officer 1996 92,350 131,000 100,234 4,947
William Forsberg...................................... 1998 107,827 -- -- 7,054
Vice President-Stores 1997 102,908 16,374 -- 5,890
</TABLE>
-6-
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C>
1996 50,000 44,874 50,117 1,320
</TABLE>
- ----------
(1) Represents Company-paid health and long-term disability insurance premiums
and Company contributions to the Company's 401(k) plan. In fiscal 1998, the
Company paid health and long-term disability insurance premiums in the
amount of $4,665 for Mr. Kilgore, $4,404 for Mr. Wilkinson, $4,263 for Mr.
Nahmens, and $4,249 for Mr. Forsberg. Company contributions to the
Company's 401(k) plan in fiscal 1998 for Mssrs. Kilgore, Wilkinson,
Nahmens, and Forsberg totaled $3,580, $4,014, $3,094, and $2,805,
respectively. In fiscal 1997, the Company paid $2,934 in health and life
insurance premiums for each of the Named Officers. Company contributions to
the Company's 401(k) plan in fiscal 1997 for Mssrs. Kilgore, Wilkinson,
Nahmens, and Forsberg totaled $4,605, $4,438, $4,476, and $2,956,
respectively. In fiscal 1996, the Company paid $2,638 in health and life
insurance premiums for each of Mssrs. Kilgore, Wilkinson, and Nahmens, and
$1,320 for Mr. Forsberg. Company contributions to the Company's 401(k) plan
in fiscal 1996 for Mssrs. Kilgore, Wilkinson, and Nahmens totaled $3,339,
$2,702, and $2,309, respectively.
STOCK OPTIONS
No options were granted to the Named Officers in fiscal 1998. The
following table sets forth certain information as of December 26, 1998, and for
the fiscal year then ended with respect to stock options exercised, and the
value of options held, by the Named Officers.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR(1)
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
SECURITIES UNDERLYING UNEXERCISED VALUE OF UNEXERCISED IN-THE-MONEY
OPTIONS AT DECEMBER 26, 1998 OPTIONS AT DECEMBER 26, 1998(2)
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Gregory M. Kilgore................... 350,618 -- $466,966 --
John E. Wilkinson.................... 200,468 -- $186,936 --
Daniel J. Nahmens.................... 100,234 -- -- --
William Forsberg..................... 50,117 -- -- --
</TABLE>
- ----------
(1) No options were exercised in fiscal 1998.
(2) Calculated on the basis of the fair market value of the underlying
securities at December 26, 1998 ($1.875 per share) minus the exercise
price.
EMPLOYEE STOCK PURCHASE PLAN
The Company maintains a qualified Employee Stock Purchase Plan (the
"Purchase Plan") to encourage employees to own shares of the Company's Common
Stock, which is generally available to all eligible employees. The Purchase Plan
allows participants to buy shares of the Company's Common Stock at a 15%
discount to market price with up to 15% of their salaries. Employees are
eligible to participate in the Purchase Plan if they have been employed by the
Company or a participating subsidiary for at least one year prior to the
commencement of a participation period. However, any highly compensated employee
(as defined in Section 414 of the Code) who owns 3% or more of the outstanding
stock in the Company may not participate in the Purchase Plan. Daniel J.
Nahmens, John E. Wilkinson, and Crystal J. Breazeale, each executive officers of
the Company, participated in the Purchase Plan in fiscal 1998.
PENSION AND LONG-TERM INCENTIVE PLANS
The Company has no pension or long-term incentive plans.
EMPLOYMENT AGREEMENTS
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The Company has entered into employment agreements (collectively, the
"Employment Agreements") with Gregory Kilgore, President and Chief Operating
Officer; John Wilkinson, Executive Vice President-Marketing; and Daniel Nahmens,
Executive Vice President-Finance and Chief Financial Officer. Each of the
Employment Agreements provides for an initial two-year term which expired on
January 3, 1996, with automatic one-year renewals upon the expiration of the
initial term and on each anniversary thereafter. Each of the Employment
Agreements may be terminated by the Company or the employee without cause (as
defined in the Employment Agreements) upon 30 days notice, or for cause without
any notice. Under the Employment Agreements, Messrs. Kilgore, Wilkinson, and
Nahmens are entitled to minimum annual compensation of $130,000, $105,000, and
$75,000, respectively. Each of the Employment Agreements provides that if the
Company breaches any portion of such Employment Agreement or terminates it
without cause, the Company must pay to the employee an amount equal to one year
of his salary, calculated at the highest salary rate paid to such employee by
the Company in the two-year period prior to the termination.
The Employment Agreements with each of Gregory Kilgore, John Wilkinson,
and Daniel Nahmens also provide that the Company will indemnify such individuals
for any losses, costs, damages or expenses incurred as a direct consequence of
the discharge of their duties or by reason of their status as agents of the
Company.
LIMITATION OF LIABILITY AND INDEMNIFICATION MATTERS
The Company has adopted provisions in its Certificate of Incorporation
that limit the liability of its directors for monetary damages for breach of
their fiduciary duty as directors, except for liability that cannot be
eliminated under the Delaware General Corporation Law ("Delaware Law"). The
Delaware Law provides that directors of a company will not be personally liable
for monetary damages for breach of their fiduciary duty as directors, except for
liability (i) for any breach of their duty of loyalty to the Company or its
stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) for unlawful payment
of dividend or unlawful stock repurchase or redemption, as provided in Section
174 of the Delaware Law, or (iv) for any transaction from which the director
derived an improper personal benefit. Any amendment or repeal of these
provisions requires the approval of the holders of shares representing at least
66 2/3% of the shares of the Company entitled to vote in the election of
directors, voting as one class.
The Company's By-Laws also provide that the Company shall indemnify its
directors and officers to the fullest extent permitted by the Delaware Law. The
Company has entered into separate indemnification agreements with its directors
and certain of its officers that require the Company, among other things, to
indemnify them against certain liabilities that may arise by reason of their
status or service as directors or officers and to advance their expenses
incurred as a result of any proceeding against them as to which they could be
indemnified. The Company believes that the limitation of liability provision in
its Certificate of Incorporation and the indemnification agreements will
facilitate the Company's ability to continue to attract and retain qualified
individuals to serve as directors and officers of the Company.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee of the Board of Directors was appointed by
the Board of Directors effective October 16, 1997. The Compensation Committee
consists of two directors, Helen C. Bulwik and Steven D. Tough, neither of whom
is an officer or employee of the Company.
REPORT ON EXECUTIVE COMPENSATION
To: The Board of Directors
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<PAGE>
As members of the Compensation Committee, we are responsible for
administering the Company's various incentive plans. In addition, we review
compensation levels of members of senior management, evaluate the performance of
corporate management and consider management succession and related matters. The
Committee reviews compensation for the executive officers of the Company with
the Board. The Committee is comprised entirely of non-employee directors.
COMPENSATION PHILOSOPHY AND POLICIES
The Company's compensation programs and policies are designed to
enhance stockholder value by aligning the financial interests of the executive
officers of the Company with those of its stockholders. It is the Company's
policy generally to qualify compensation paid to executive officers for
deductibility under section 162(m) of the Internal Revenue Code. Section 162(m)
generally prohibits the Company from deducting the compensation of executive
officers that exceeds $1,000,000 unless that compensation is based on the
satisfaction of objective performance goals. Income arising under the Company's
1996 Stock Option Plan currently does not qualify as performance-based
compensation. The Company intends to retain the flexibility necessary to provide
total cash compensation in line with competitive practice, the Company's
compensation philosophy and the Company's best interests, including compensation
that may not be deductible.
COMPONENTS OF EXECUTIVE OFFICER COMPENSATION
There are four primary components of executive compensation: Base
Salary, Bonus, Stock Options and Employee Stock Purchase Plan.
Base Salary
Base salaries for fiscal 1998 reported herein were determined by the
Compensation Committee. The Compensation Committee reviews salaries recommended
by the Chief Operating Officer for executive officers other than the Chief
Operating Officer. In conducting its review, the Compensation Committee takes
into consideration the competitive level of salaries in the industry, the
overall performance of the Company, the performance of the department(s) under
the executive officer's management control and the individual executive
officer's contribution and performance. Final decisions on base salary
adjustments for executives other than the Chief Operating Officer are made in
consultation with the Chief Operating Officer.
The Compensation Committee independently determines the base salary for
the Chief Operating Officer by: (a) examining the Company's performance against
its preset goals, (b) examining the Company's performance within its speciality
retailers industry, (c) evaluating the overall performance of the Chief
Operating Officer, and (d) comparing the base salary of the Chief Operating
Officer to that of other chief executive officers in the speciality retail
industry. Based upon the data and performance, the Chief Operating Officer's
base salary was raised from $161,293 to $168,511 for fiscal 1998.
Bonuses
The 1998 Executive Bonus Plan is a cash-based incentive bonus program.
The 1998 Executive Bonus Plan provides for payment of a cash bonus to each named
executive officer that is directly related to the earnings per share ("EPS") and
certain expense controls of the Company. The bonus is determined each year by
the Compensation Committee under a predetermined objective formula; provided,
however, the maximum bonus payable under the Executive Bonus Plan to any
executive officer shall not exceed 1.5 times the executive officer's annual base
pay in effect during fiscal 1998. The bonus is the product of (i) the executive
officer's individual multiplier set by the Compensation Committee before the
bonus year begins and (ii) a multiplier determined from a matrix that charts EPS
and certain expense controls of the Company's annual operating plan established
by the Compensation Committee before the bonus year begins. For fiscal 1998, the
Company did not achieve the 1998 Executive Bonus Plan's EPS
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<PAGE>
and expense control goals and, as a result, the Compensation Committee did not
award a bonus to any of the executive officers, including the Chief Operating
Officer.
Stock Options
Under the Company's compensation policy, ownership of the Company's
Common Stock is a key element of executive compensation. The Compensation
Committee grants options under the 1996 Stock Option Plan with an exercise price
equal to or greater than the fair market value of the Company's common stock on
the date of the grant. The grant of stock options is intended to retain and
motivate key executives and to provide a direct link with the interests of the
stockholders of the Company. In general, stock option grants are determined
based on: (i) prior award levels, (ii) total awards received to date by
individual executives, (iii) the total stock award to be made and the
executive's percentage participation in that award, (iv) the executive's direct
ownership of the Company's shares, (v) the number of options vested and
nonvested, and (vi) the options outstanding as a percentage of total shares
outstanding. The Board of Directors did not award the Chief Operating Officer
any options to purchase shares of Common Stock in fiscal 1998.
Employee Stock Purchase Plan
The Company maintains a qualified Employee Stock Purchase Plan (the
"Purchase Plan") to encourage employees to own shares of the Company's Common
Stock, which is generally available to all eligible employees. The Purchase Plan
allows participants to buy shares of the Company's Common Stock at a 15%
discount to market price with up to 15% of their salaries. However, the number
of shares that may be purchased by each participant is limited by applicable tax
laws. Additionally, highly compensated employees (as defined in Section 414 of
the Code) who own 3% or more of the outstanding stock in the Company may not
participate in the Purchase Plan. The Chief Operating Officer did not
participate in the Purchase Plan in fiscal 1998.
The foregoing report has been furnished by the Compensation Committee
of the Board of Directors and shall not be deemed incorporated by reference by
any general statement incorporating by reference this proxy statement into any
filing under the Securities Act of 1933 or under the Securities Act of 1934,
except to the extent the Company specifically incorporates this report by
reference and shall not otherwise be deemed filed under such Acts.
Respectfully submitted,
Helen C. Bulwik
Steven D. Tough
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Company's executive officers and directors, and persons who own
more than ten percent of a registered class of the Company's equity securities,
to file reports of ownership on Forms 3, 4 and 5 with the Securities and
Exchange Commission (the "SEC"). Officers, directors and greater than ten
percent stockholders are required by SEC regulation to furnish the Company with
copies of all Forms 3, 4 and 5 they file. Based solely on the Company's review
of the copies of such forms it has received and written representations from
certain reporting persons that they were not required to file Forms 5 for
specified fiscal years, the Company believes that all of its officers, directors
and greater than ten percent beneficial owners complied with all filing
requirements applicable to them with respect to transactions during fiscal 1998.
CERTAIN TRANSACTIONS
David L. Suechting, Jr., Chairman of the Board, and Barbara J.
Suechting, a director of the Company, have guaranteed several equipment leases
currently providing for aggregate annual rental payments in the amount of
$88,000.
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<PAGE>
In July 1998, the Board of Directors approved an annual salary of
$60,000 for David L. Suechting, Jr., Chairman of the Board, as compensation for
operations management services. In fiscal 1998, Mr. Suechting received $25,385
for these services. Additionally, the Company paid $5,560 for health, life, and
long-term disability insurance premiums on behalf of Mr. Suechting in fiscal
1998.
For information concerning indemnification of directors and officers,
see "Executive Compensation -- Limitation of Liability and Indemnification
Matters."
The Company has entered into an employment agreement with certain of
its executive officers. See "Executive Compensation -- Employment Agreements."
The Company believes that the foregoing transactions were in its best
interests.
STOCK PRICE PERFORMANCE GRAPH
The following graph compares the cumulative total stockholder return of
the Company's Common Stock with The Nasdaq Stock Market (US) and Nasdaq Retail
Trade Stocks. The comparison assumes the investment of $100 on October 9, 1997
(the date the Company's Common Stock became registered under Section 12 of the
Securities Exchange Act of 1934) based on the initial public offering price of
such stock on that date and that dividends were reinvested when paid. The
comparisons in the graph are required by the Securities and Exchange Commission
and are not intended to forecast or be indicative of possible future performance
of the Company's Common Stock.
COMPARISON OF CUMULATIVE TOTAL RETURN AMONG TRACK 'N TRAIL, THE NASDAQ STOCK
MARKET (US) AND NASDAQ RETAIL TRADE STOCKS
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[OBJECT OMITTED]
<TABLE>
<CAPTION>
10/09/97 12/27/97 3/28/98 6/27/98 9/26/98 12/26/98
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Nasdaq Stock Market (US) $100 $87 $105 $107 $101 $125
Nasdaq Retail Trade Stocks 100 92 113 116 88 113
Track 'n Trail 100 81 68 48 35 18
</TABLE>
PROPOSAL 2 - RATIFICATION OF THE APPOINTMENT OF INDEPENDENT AUDITORS
Upon the recommendation of the Audit Committee, the Board of Directors
has appointed the firm of PricewaterhouseCoopers LLP as the Company's
independent auditors for the fiscal year ending December 25, 1999, subject to
ratification by the stockholders. PricewaterhouseCoopers LLP has audited the
Company's financial statements since January 1996. Representatives of
PricewaterhouseCoopers LLP are expected to be present at the Company's Annual
Meeting. They will have an opportunity to make a statement, if they desire to do
so, and will be available to respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF
PRICEWATERHOUSECOOPERS LLP AS THE COMPANY'S INDEPENDENT AUDITORS FOR THE CURRENT
FISCAL YEAR.
STOCKHOLDER PROPOSALS FOR THE 2000 ANNUAL MEETING
Under Rule 14a-8 under the Securities Exchange Act of 1934, as amended,
if a stockholder desires to include a proposal in the Company's proxy statement
and form of proxy for presentation at the Company's 2000 Annual Meeting of
Stockholders, the proposal must be received by the Company at its principal
executive offices by December 25, 1999 and otherwise comply with the
requirements of Rule 14a-8.
Under the Company's bylaws, certain procedures are provided which a
stockholder must follow to nominate persons for election as directors or to
introduce an item of business at an annual meeting of stockholders.
Nomination of directors by a stockholder must be made by notification
in writing delivered or mailed to the Secretary of the Company at the Company's
principal executive offices not less than 120 days prior to any
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<PAGE>
meeting of stockholders called for election of directors; provided, however,
that if less than 130 days notice of the date of the meeting is given to
stockholders of the Company, then notice by the stockholder to be timely must be
received by the Company not later than the close of business on the tenth day
following the day on which notice of the meeting was mailed. The Company's 2000
Annual Meeting of Stockholders is expected to be held on May 25, 2000.
Accordingly, any stockholder nomination for the 2000 Annual Meeting of
Stockholders, to be timely, must be received by the Company on or before January
26, 2000. The Company's bylaws also provide that notices regarding nomination of
directors must contain certain information about the director nominee. The
Chairman of the meeting is required to disregard any nomination made at the
meeting which the Chairman determines is not made in accordance with the
foregoing procedures.
Notice of any business proposed to be brought before an annual meeting
by a stockholder must be received by the Secretary of the Company not less than
50 nor more than 75 days prior to the annual meeting; provided, however, that if
less than 65 days notice or prior public disclosure of the date of the meeting
is given to stockholders, notice by the stockholder to be timely must be
received by the Company not later than the close of business on the tenth day
following the day on which notice of the meeting was mailed. As stated above,
the Company's 2000 Annual Meeting of Stockholders is expected to be held on May
25, 2000. Accordingly, notice of a stockholder proposal for the 2000 Annual
Meeting of Stockholders, to be timely, must be received by the Company no
earlier than March 11, 2000, and no later than April 5, 2000. The Company's
bylaws also provide that notice of a stockholder proposal must include a brief
description of the business desired to be brought before the meeting and certain
information regarding the stockholder giving the notice. If the Company does not
receive proper and timely notice of a stockholder proposal, the Company's bylaws
preclude transaction of the proposed business at the annual meeting.
Stockholders may obtain a copy of the Company's bylaws by sending a
written request to the Secretary of the Company at the Company's principal
executive offices.
OTHER MATTERS
The Company knows of no other business that will be presented at the
Annual Meeting. If any other business is properly brought before the Annual
Meeting, it is intended that proxies in the enclosed form will be voted in
accordance with the judgment of the persons voting the proxies.
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<PAGE>
Whether or not you intend to be present at the Annual Meeting, we urge
you to return your signed proxy promptly.
By Order of the Board of Directors.
/s/ Daniel J. Nahmens
Daniel J. Nahmens
SECRETARY
El Dorado Hills, California
April 23, 1999
<PAGE>
TRACK 'N TRAIL
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR ANNUAL MEETING ON MAY 27, 1999
The undersigned stockholder of Track 'n Trail, a Delaware corporation (the
"Company"), acknowledges receipt of Notice of the Annual Meeting of Stockholders
and Proxy Statement each dated April 23, 1999 and the undersigned revokes all
prior proxies and appoints GREGORY M. KILGORE and DANIEL J. NAHMENS, or each of
them, proxies for the undersigned to vote all shares of Common Stock of the
Company which the undersigned would be entitled to vote at the Annual Meeting of
Stockholders to be held at 4961-A Windplay Drive, El Dorado Hills, California at
10:00 a.m. on May 27, 1999 and any postponement or adjournment thereof, and
instructs said proxies to vote as follows:
1. ELECTION OF DIRECTORS:
FOR each of the nominees listed below (except as marked to the contrary
below)
WITHHOLD AUTHORITY to vote for the nominees listed below
Nominees: Helen C. Bulwik (Class I), Steven D. Tough (Class I).
Instruction: To withhold authority to vote for any individual nominee,
write that nominee's name in the space provided below.
2. TO RATIFY THE APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP AS THE
COMPANY'S INDEPENDENT AUDITORS:
FOR AGAINST ABSTAIN
3. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting.
THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE SPECIFICATIONS MADE. IF NO
SPECIFICATIONS ARE MADE, THIS PROXY WILL BE VOTED FOR THE ELECTION OF THE TWO
NOMINEES FOR DIRECTOR AND FOR PROPOSAL 2.
PLEASE INDICATE BELOW WHETHER YOU PLAN TO ATTEND THE ANNUAL MEETING:
I PLAN TO ATTEND I DO NOT PLAN TO ATTEND
TRACK 'N TRAIL
BOARD OF DIRECTORS PROXY
Annual Meeting of Stockholders May 27, 1999
Dated this ____ day of __________, 1999
--------------------------------------------
(Signature of Stockholder)
--------------------------------------------
(Signature of Stockholder)
Please sign exactly as your name or names
appear hereon. When signing as attorney,
executor, administrator, trustee or guardian,
please give full title as such. If shares are
held jointly, each holder must sign.
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, YOU ARE URGED TO MARK,
SIGN, DATE AND MAIL THIS PROXY CARD PROMPTLY, USING THE ENCLOSED ENVELOPE.
