<PAGE> 1
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:
<TABLE>
<S> <C>
/ / Preliminary Proxy Statement / / Confidential, for Use of the Commission Only
/X/ Definitive Proxy Statement (as permitted by Rule 14a-6(e)(2))
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to sec. 240.14a-11(c) or sec. 240.14a-12
</TABLE>
BIKERS DREAM, 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/ $125 per Exchange Act Rules 0-11(c)(1)(ii), or 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
Not Applicable.
----------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
Not Applicable.
----------------------------------------------------------------------
(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):
Not Applicable.
----------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
Not Applicable.
----------------------------------------------------------------------
Set forth the amount on which the filing fee is calculated and state how
it was determined.
/ / 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.:
10-KSB
----------------------------------------------------------------------
(3) Filing Party:
BIKERS DREAM, INC.
----------------------------------------------------------------------
(4) Date Filed:
April 16, 1996
----------------------------------------------------------------------
<PAGE> 2
BIKERS DREAM, INC.
1420 VILLAGE WAY, SANTA ANA, CALIFORNIA 92705
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
JUNE 4, 1996
TO OUR SHAREHOLDERS:
The annual meeting of shareholders of Bikers Dream, Inc., a California
corporation (the "Company"), will be held at the Ramada Plaza Hotel - Orange
County Airport, 2726 South Grand Avenue, Santa Ana, California on June 4, 1996
at 10:00 a.m. for the following purposes:
1. To elect six directors to hold office for one year and until
their successors are elected and qualified.
2. To approve the Company's 1995 Incentive Stock Option Plan, the
1995 Non-Qualified Stock Option Plan, and the 1995 Directors'
Non-Qualified Stock Option Plan.
3. To amend the Articles of Incorporation to authorize a new class
of Preferred Stock.
4. To ratify Coopers & Lybrand, L.L.P. as independent public
accountants for the Company.
5. To transact such other business as may properly be presented at
the meeting.
The Board of Directors has fixed April 19, 1996 as the record date for
determining the shareholders entitled to vote at the meeting and, consequently,
only shareholders of record at the close of business on that date will be
entitled to notice of and to vote at the meeting and any adjournment thereof.
Shareholders are cordially invited to attend the meeting in person. Even though
a shareholder may now plan to attend the meeting, he or she is urged to
complete, sign and date the enclosed proxy card and to mail it promptly in the
enclosed envelope. Any shareholder present at the meeting may withdraw his or
her proxy and vote personally on each matter brought before the meeting.
Shareholders attending the meeting whose shares are held in the name of a
broker or other nominee should bring with them a proxy or letter from that firm
confirming their ownership of shares.
By Order of the Board of Directors
Richard E. King, Jr.
Secretary
<PAGE> 3
BIKERS DREAM, INC.
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS - JUNE 4, 1996
INTRODUCTION
The accompanying proxy is solicited by the Board of Directors of Bikers Dream,
Inc. (the "Company"), 1420 Village Way, Santa Ana, California 92705 for use at
the annual meeting of the Company's shareholders to held on June 4, 1996, and
at any adjournment thereof, pursuant to the accompanying Notice of Annual
Meeting. This proxy statement and the accompanying proxy card are being mailed
to all shareholders on or about May 1, 1996.
The expense of this solicitation will be paid by the Company. In addition to
solicitation by mail, the officers and employees of the Company may solicit
proxies by telephone, by facsimile or in person.
GENERAL INFORMATION REGARDING VOTING, CONFIDENTIALITY AND PROXIES
The persons named in the accompanying proxy will vote FOR the election of the
nominees for directors and FOR the three other proposals, unless otherwise
directed in the proxy. The proxy may be revoked by the shareholder at any time
prior to its use by giving notice of revocation to the independent vote
tabulators. As to any other business which may properly come before the
meeting, the person named in the accompanying proxy card will vote in
accordance with their best judgment, although the Company does not presently
know of any other business.
Holders of record of the Company's common stock at the close of business on
April 19, 1996 are entitled to vote at the meeting. On that date Bikers Dream
had 6,170,911 shares of common stock outstanding. Each shareholder has one
vote per share on all business at the meeting, except for the election of
directors, to which cumulative voting applies. Cumulative voting means that
each shareholder entitled to vote shall have the right to cumulate his votes
and cast a number of votes equal to the number of directors to be elected (6)
multiplied by the number of shares held by the shareholder and to distribute
his or her votes for one or more candidates as he or she decides. No
shareholder shall be entitled to cumulate votes unless the name of the
candidate or candidates for whom such votes would be cast has been placed in
nomination prior to the voting and the shareholder has given notice at that
time of his/her intention to cumulate.
A majority of the outstanding shares will constitute a quorum at the meeting.
Abstentions and broker non-votes are counted for purposes of determining the
presence or absence of quorum for the transaction of business. Abstentions are
counted as if they were "no" votes in tabulations of the votes cast on
proposals presented to the shareholders, whereas broker non-votes are not
counted for purposes of determining whether a proposal has been approved.
It is the Company's policy that all proxies, ballots and voting materials that
identify the particular vote of a shareholder be kept confidential, except in
the following circumstances: (1) to allow the independent election inspectors
to certify the results of the vote; (2) as necessary to meet applicable
-1-
<PAGE> 4
legal requirements, including the pursuit or defense of a judicial action; (3)
where the Company concludes in good faith that a bona fide dispute exists as to
the authenticity of one or more proxies, ballots, or votes, or as to the
accuracy of the tabulation of such proxies, ballots, or votes; (4) where a
shareholder expressly requests disclosure or has made a written comment on a
proxy card; (5) where contacting shareholders by the Company is necessary to
obtain a quorum, the names of shareholders who have or have not voted (but not
how they voted) may be disclosed to the Company by the independent election
inspectors; (6) aggregate vote totals may be disclosed to the Company from time
to time and publicly announced at the meeting of the shareholders at which they
are relevant; and (7) in the event of any solicitation of proxies or written
consents with respect to any of the securities of the Company by a person other
than the Company of which solicitation the Company has actual notice.
ELECTION OF DIRECTORS
The Company's bylaws, as amended, provide for six directors. At each annual
meeting the directors are all elected by the shareholders for the next annual
term. The Board of Directors elects directors to fill vacancies on the Board,
as they occur, as well as newly created directorships. A director elected to
fill a vacancy is elected only for that term until the next election by the
shareholders, or until his/her successor is elected and qualified. Rowland W.
Day, II, by means of the acquisition contract of Bikers Dream, Inc., the
predecessor company, has the right to appoint two of the directors, one of whom
may be himself. The Board of Directors currently consists of 6 directors.
UNLESS OTHERWISE DIRECTED IN THE PROXY, THE PERSONS NAMED IN THE ACCOMPANYING
PROXY INTEND TO VOTE THE SHARES REPRESENTED BY THE PROXY FOR THE ELECTION AS
DIRECTORS OF THE SIX NOMINEES NAMED BELOW, ALL OF WHOM ARE, AT PRESENT,
DIRECTORS OF THE COMPANY.
Directors are to be elected by a plurality of the votes cast at a meeting in
person or by proxy by the holders of shares entitled to vote in the election.
The Board of Directors is informed that all nominees are willing to serve as
directors, but if any of them should decline or be unable to act as a director,
the persons named in the proxy will vote for such substitute nominee or
nominees as may be designated by the Board of Directors unless the Board
reduces the number of directors accordingly.
NOMINEES FOR DIRECTORS
DENNIS W. CAMPBELL, 36, has been President and Chief Executive Officer of the
operating Company since 1990, when it was originally founded. Prior to the
founding of Bikers Dream, Mr. Campbell was the owner and sole proprietor of a
number of small businesses, including Vee Dub Parts Unlimited and Ed's Machine,
as well as Finance Manager for Bill Maxey Toyota in Huntington Beach,
California. Mr. Campbell is a major shareholder of the Company and holds
approximately 40% of the outstanding shares. Mr. Campbell is a member of the
Board's Compensation Committee and has been a director of the Company since
March, 1995.
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<PAGE> 5
ROWLAND W. DAY, II, 40, is a partner in the law firm of Day, Campbell & McGill.
Mr. Day has practiced in the area of business and corporate law and corporate
finance for 12 years. Mr. Day also served as Chief Executive Officer and Chief
Financial Officer of HDL Communications for 10 years prior to its acquisition
of Bikers Dream, Inc. in 1995. Mr. Day is Chairman of the Board's Audit
Committee, serves as a member of the Compensation Committee, and has been a
director of the Company since 1985.
DONALD J. DUFFY, 29, is a founder of Meyer, Duffy & Associates, a strategic
consulting group. He is also a founder and board member of Predictive Systems,
a network management consulting company, and has served in a variety of
analytical and investment management positions at Oak Hill Advisors, Inc. and
Sloate, Weisman, Murry & Company, Inc. specializing in research and investment
in retail and gaming companies. Mr. Duffy is a member of both the Company's
Audit Committee and the Compensation Committee, and has been a Director of the
Company since December, 1995.
WILLIAM R. GRESHER, 49, is the Senior Vice President, Chief Financial,
Operational and Administrative Officer for the Company. Prior to joining the
Company, Mr. Gresher has served in various financial management positions,
including several Vice President positions at Allergan, Inc. from 1990 to 1995,
and Baxter International, Inc. from 1980 to 1990. Mr. Gresher is a member of
both the Company's Audit and Compensation Committees and has been a director of
the post-acquisition Company since March, 1995.
RICHARD E. KING, JR., 60, is the Corporate Secretary of the Company. Mr. King
is a practicing attorney in the areas of business and corporate law, corporate
finance, tax and international tax and estate planning for the past 34 years.
He has also served as President and Chief Executive Officer of two
corporations in the construction and sports industries and has served on the
Board of Directors of a number of corporations. Mr. King serves as a member of
the Company's Compensation Committee and has been a Director of the Company
since March, 1995.
HUMBERT B. POWELL, III, 57, is Vice Chairman of Marleau, Lemire Securities,
Inc. and Chairman of Marleau, Lemire U.S.A. He previously served as Managing
Director in the Corporate Finance Department of Bear Sterns & Co. for eight
years. In addition, he has served as Senior Vice President and Director of
E.F. Hutton & Co. where he was employed for 18 years. He also serves as
Director of Marleau, Lemire, Inc., Tatham Offshore Corporation, and Salem-Teiko
University. Mr. Powell has been a member of the Board since December, 1995,
and is a member of the Compensation Committee.
INFORMATION REGARDING THE BOARD OF DIRECTORS
The Board of Directors held nineteen (19) meetings during 1995. The
Compensation Committee met various times during the year to address issues in
its jurisdiction, and the Audit Committee was just formed prior to the end of
1995 and therefore had no meeting in 1995. Attendance by directors at all
board meetings was 100% with the exception of Mr. Gresher who did not attend
one meeting, and attendance at the Compensation Committee was 100%.
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<PAGE> 6
Audit Committee - The Audit Committee nominates the firm of independent
auditors for appointment by the Board of Directors and meets with the
independent auditors to discuss the scope and results of their audit
examination and the fees related to such work. It also meets with the
Company's Financial Management to discuss the Company's accounting practices
and procedures; to review the adequacy of the Company's accounting and control
systems; and to report to the Board any considerations and recommendations the
Audit Committee may have with respect to such matters. The Committee also
reviews the audit schedule and considers any issues raised by its members, the
independent public accountants retained to audit the books and records of the
Company, its legal advisors or management. In addition, the Committee monitors
the Business Ethics Policy for the Company's employees, coordinates compliance
reviews and investigates noncompliance matters. Of the three members on the
Audit Committee, only Mr. Gresher is an officer and employee of the Company or
any of its subsidiaries.
Compensation Committee - The Compensation Committee, which had two meetings in
1995, reviews performance of corporate officers, establishes overall employee
compensation policies; and recommends to the Board of Directors major
compensation programs. The Committee also reviews and approves compensation of
corporate officers, including salary and bonus awards. Members of management
who are on the Compensation Committee are not present when matters regarding
their personal compensation are being discussed. The Compensation Committee
was reformulated for 1996 so that all members of the Board serve thereon, with
any director whose compensation is at issue being excluded from deliberation
and vote on that matter.
OFFICER'S COMPENSATION
Bikers Dream's Compensation Committee evaluates performance of executive and
other management personnel, fixes compensation subject to approval of the
entire Board, and makes recommendations to the Board of Directors as to
management compensation.
Bikers Dream's executive compensation programs are designed to attract,
motivate, and retain the executive talent needed to optimize shareholder value
in a competitive environment.
Bikers Dream has entered into three executive employment contracts, one of
which was established by a predecessor corporation ("old" Bikers Dream, Inc.)
and one prior to the formation of the Compensation Committee in late 1995.
These three contracts are with the President, Chief Executive Officer, the
Senior Vice President, Chief Financial, Operational and Administrative Officer,
and the Executive Vice President. The Compensation Committee for 1996 consists
of the entire Board, with affected members on any issue excluded from
deliberations and vote.
The contract with Mr. Campbell, President and CEO, is a five year employment
agreement which became effective September 1, 1994. Pursuant to that
contract, Mr. Campbell is entitled to receive an annual salary of $120,000, a
monthly car allowance of $500, a bonus of $50,000 for each new Bikers Dream
Superstore that is opened and a bonus of 20% of the franchise fee for each
Bikers Dream franchise sold by the Company that is opened. The Company has
also agreed to pay the premiums on a disability policy providing income
continuation of 60% of Mr. Campbell's salary in the event he becomes disabled,
and has also agreed to pay the premiums on a term life insurance policy
providing for death benefits in the amount of $500,000 to a beneficiary
designated by Mr.
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<PAGE> 7
Campbell. The Company also pays for Mr. Campbell's medical and dental
insurance coverage under the Company's sponsored benefits plan. Upon
termination of the agreement by the Company without good cause (as defined in
the agreement), Mr. Campbell is entitled to received an amount equal to four
years annual salary at the then current rate of compensation.
The Company has entered into a five year employment agreement with Jeffrey L.
Simons, Executive Vice President, effective as of March 1, 1995, pursuant to
which Mr. Simons is entitled to receive an annual salary of $108,000. Mr.
Simons is also entitled to receive a bonus of $2,750 for each new Bikers Dream
Superstore that is opened, other than the Dallas Superstore, and 20% of the
initial franchise fee for each new franchise store that is opened. The Company
has agreed to issue to Mr. Simons an option to purchase, at an exercise price
of $1.50 per share, 100,000 shares. The option vests on a pro-rata quarterly
basis, 10,000 shares, 15,000 shares, 20,000 shares, 25,000 shares and 30,000
shares of the Company's Common Stock during the fiscal years 1995, 1996, 1997,
1998 and 1999, respectively. The Company has also agreed to pay Mr. Simons a
net cash bonus equal to $1.50 for each share issued to Mr. Simons upon exercise
of the option.
An employment agreement was entered into between the Company and William R.
Gresher effective September 25, 1995, pursuant to which Mr. Gresher is entitled
to receive an annual salary of $185,000. Mr. Gresher is also entitled to
receive a bonus of 5% of the first million dollars of annual net after tax
profits and 2% of the second million dollars of annual net after-tax profits of
the Company. The Company has agreed to grant Mr. Gresher options to purchase,
at an exercise price of $2.50 per share, 300,000 shares of Common Stock,
240,000 of which shall be granted under the Company's Incentive Stock Option
Plan. The options are immediately vested as to 50,000 of such shares and vest
over a five year period as to the balance of such shares. The Company has
agreed to pay the premiums on a term life insurance policy providing for death
benefits in the amount of $500,0000 to a beneficiary designated by Mr. Gresher.
Upon termination of the agreement by the Company without good cause (as defined
in the Agreement) during the first 12 months of employment, Mr. Gresher is
entitled to receive severance pay in an amount equal to his monthly salary for
a period of 12 months plus one additional month for each month of service
performed, up to an additional 12 months.
The following tables and narrative text discuss the compensation paid in 1995
to the Company's Chief Executive Officer and the Company's three most highly
compensated executive offices.
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<PAGE> 8
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM COMPENSATION
----------------------------------------- ------------------------------------
OTHER SECURITIES
ANNUAL RESTRICTED UNDERLYING
COMPEN- STOCK OPTIONS/ LTIP ALL OTHER
NAME AND SALARY BONUS SATION AWARD(S) SARS PAYOUTS COMPENSATION
PRINCIPAL POSITION YEAR ($) ($) ($) ($) (#) ($) ($)
------------------ ---- ------ ------- ------- ---------- ---------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
CEO - Dennis W. Campbell 1995 95,000 115,000 8,940(2) -- 50,000 -- 51,571(1)
CFO - William R. Gresher 1995 49,333 -- 1,089 -- 350,000 -- --
Executive Vice Pres -
Jeffrey L. Simons 1995 81,346 17,750 34,101 -- 100,000 -- --
</TABLE>
(1) In accordance with the HDL acquisition agreement to acquire Bikers Dream,
Inc., Mr. Campbell was required to remove certain personal assets and
accounts receivable carried on the Company's books from the Company prior
to its acquisition. This action created additional taxable income for Mr.
Campbell and accordingly his employment contract was amended to increase
his compensation for the amount of assets withdrawn and the related income
taxes. The gross impact on this transaction was to increase compensation
in 1995 by $49,155. This is a non-recurring compensation component.
(2) Also included in other annual compensation in 1995 is an automobile
allowance, and disability and medical insurance premiums paid by the
Company.
OPTION/SAR GRANTS IN FISCAL YEAR
(INDIVIDUAL GRANTS)
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES PERCENT OF
UNDERLYING TOTAL OPTIONS/
OPTIONS/SARS SARS GRANTED EXERCISE OR
GRANTED TO EMPLOYEES BASE PRICE
NAME (#) IN FISCAL YEAR ($/SHARE) EXPIRATION DATE
---- ------------ ------------- ----------- ---------------
<S> <C> <C> <C> <C>
CEO - Dennis W. Campbell 50,000 3.7% $1.50 04/04/05
CFO - William R. Gresher 240,000 17.6% $2.50 09/25/05
60,000 4.4% $2.50 09/25/05
50,000 3.7% $1.50 04/04/05
Executive Vice President -
Jeffrey L. Simons 100,000 7.3% $1.50 03/01/05
</TABLE>
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<PAGE> 9
DIRECTOR'S COMPENSATION
All of the Board's current six members, two of whom are officers of the
Company, receive compensation in the form of non-qualified stock options. Each
director receives a grant of 50,000 shares of the Company's Common Stock upon
appointment or election and acceptance of the position. Options vest quarterly
over a five year period. The four directors who were appointed in March, 1995,
were vested in 10,000 shares of their respective options in April, 1995, for
prior services leading up to the acquisition of Bikers Dream by HDL
Communications on March 13, 1995.
The two directors appointed in December, 1995 did not have prior service with
the Company, and did not vest options upon acceptance of the position. Option
prices were established for the first four initial directors based upon the
value of warrants issued at the time of the acquisition, since there was no
market price for the Company's newly issued common stock. All subsequent
option grants were valued at the closing bid price for the stock on the date
the option was granted by the Board.
All vested options are exercisable for a period of ten years following the
vesting of the last option. Upon voluntary resignation of a Director, all
options not vested expire. Involuntary removal of a director from office
results in immediate vesting of all options granted. The Non-Qualified Stock
Option Plan provides that the number of shares available under the plan shall
be adjusted in the event of certain changes in capitalization, such as stock
splits and stock dividends.
Directors are compensated for all out-of-pocket expenses incurred in attending
meetings of the Board of Directors and its Committees. There is no other
additional compensation paid to Board members.
CERTAIN TRANSACTIONS
During 1995, the Company incurred $219,045.41 in legal fees from a law firm of
which Rowland W. Day, II, a director of the Company, is a partner.
In November and December of 1995, M.D. Strategic L.P., a partnership of which
Donald J. Duffy, a director of the Company, is a principal, loaned the Company
a total of $200,000 for 90 days at 8% per annum, which converted into common
stock at $1.70 per share in March, 1996.
In 1995, the Company entered into an agreement with Meyer Duffy & Associates,
Inc., of which Donald J. Duffy is a principal, whereby Meyer Duffy & Associates
will use its best efforts to secure up to $20 million in capital for the
Company, in consideration of options to purchase 10,000 shares of the Company's
common stock at $2.20 per share for each $1 million in capital received up to a
maximum of 100,000 shares.
Meyer Duffy & Associates also arranged bridge financing for the Company in the
amount of $1.1 million in convertible debt, in consideration of which Meyer
Duffy was granted an option to purchase 50,000 shares of the Company's common
stock at $1.70 per share, and a fee of approximately $49,000.
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<PAGE> 10
COMPLIANCE WITH SEC REPORTING REQUIREMENTS
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
executive officers, directors and persons who own more than ten percent of a
registered class of the Company's equities to file reports of ownership and
changes in ownership with the Securities and Exchange Commission ("SEC").
Executive officers, directors and greater than ten percent beneficial owners
are required by SEC regulation to furnish the Company with copies of all
Section 16(a) forms they file.
Based solely on its review of the copies of such forms furnished to the Company
and written representations that no other reports were required during the
fiscal year ended December 31, 1995, all Section 16(a) filing requirements
applicable to its officers, directors and greater than ten percent beneficial
owners were complied with, except for one transaction on one occasion by
Rowland W. Day, II.
Principal Share Owners
- ----------------------
Set forth in the table below is information as of March 27, 1996 with respect
to persons known to the Company to be the beneficial owners of more than five
percent of the Company's issued and outstanding stock excluding rights to
unexercised options:
<TABLE>
<CAPTION>
NUMBER OF SHARES
NAME & ADDRESS BENEFICIALLY OWNED PERCENT OF CLASS
- -------------- ------------------ ----------------
<S> <C> <C>
Dennis W. Campbell 2,457,990 41.6%
1420 Village Way
Santa Ana, California 92705
Rowland W. Day, II 481,181 8.1%
and affiliates
3070 Bristol Street, Suite 650
Costa Mesa, California 92626
Donald J. Duffy 432,205 7.3%
237 Park Avenue, Eighth Floor
New York, New York 10017
William R. Gresher 330,632 5.6%
and affiliates
1420 Village Way
Santa Ana, California 92705
</TABLE>
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<PAGE> 11
QUALIFIED INCENTIVE STOCK OPTION PLAN FOR EMPLOYEES
The Board of Directors adopted an Incentive Stock Option Agreement for
employees in April of 1995, subject to the approval of the shareholders. The
options under the Plan are intended to be qualified options which meet the
requirements of Section 422A of the Internal Revenue Code of 1986, as amended.
Under the Plan, options may be granted by the Compensation Committee to its
officers, key employees, and other employees according to responsibility and
length of service. Options may not be granted to employees owning more than
10% of the total combined voting power of stock of the corporation.
Options granted under the Plan shall be granted within 10 years of the date of
the adoption of the Plan, and must be exercised within 10 years of the date of
the grant.
The aggregate number of shares that may be issued pursuant to the Plan is
500,000 shares over the life of the Plan, and the aggregate fair market of the
stock for exercise by an Optionee for the first time during any calendar year
is $100,000 per individual.
<TABLE>
<S> <C> <C>
The options vest as follows: 1 year from date of grant 25%
(unless specifically authorized 2 years from date of grant 50%
otherwise by the Board of 3 years from date of grant 75%
Directors) 4 years from date of grant 100%
</TABLE>
The option price is determined by the bid price of the Company's shares quoted
on NASDAQ or the Bulletin Board at the close of business on the date of the
grant.
Shares issued under the Plan are restricted, until or unless registered by the
Company.
The Plan contains certain other provisions relating to options affected by the
termination or death of an employee, and non-transferability . The Plan will
be available for inspection by a shareholder at anytime during business hours
prior to May 17, 1996. For inspection of the plan, a shareholder should
contact in writing William R. Gresher, Senior Vice President and Chief
Financial Officer of the corporation at 1420 Village Way, Santa Ana, California
92705, or Richard E. King, Jr., Secretary of the corporation, 2244 West Coast
Highway, Suite 100, Newport Beach, California 92663.
NON-QUALIFIED STOCK OPTION PLANS
The Non-Qualified Stock Plan was adopted by the Board of Directors in April of
1995, subject to the approval of the shareholders.
This Plan exists to provide incentives to management and executive personnel of
the Company. The Plan is administered by the Board, 1,000,000 shares may be
granted pursuant to it, and the aggregate value of underlying shares granted in
any year for any single employee may not exceed $100,000 in value.
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<PAGE> 12
The option price is fixed by the bid price of the Company's shares as quoted on
NASDAQ or the Bulletin Board at the close of business on the date of the grant.
The options are not transferable.
Options must be exercised within 10 years of the grant thereof and shall vest
at such time or times as the board of directors shall fix on the date of the
grant.
Shares issued pursuant to the Plan are restricted shares, until or unless
registered by the Company.
Director's Plan
- ---------------
The Board of Directors adopted a Directors' Non-Qualified Stock Option Plan in
April of 1995.
The Plan provides, as amended, for 300,000 shares, 50,000 shares to be granted
to each director on assuming office. The underlying share price is determined
by bid price on NASDAQ or the Bulletin Board on the date of the grant.
On April 4, 1995, 50,000 shares were granted each to the then directors, Dennis
W. Campbell, William R. Gresher, Richard E. King, Jr., and Rowland W. Day, II.
10,000 of the options vested immediately at $1.50 per option share in
recognition of services leading up to the merger/acquisition of HDL
Communications and Bikers Dream, Inc. The balance of these options vest in
increments of 2,500 options per quarter.
Members of the Board elected at a later date, Donald J. Duffy and Humbert B.
Powell, III, were each granted 50,000 options at the bid price on the date of
grant, with no immediate vesting until the quarterly vesting of 2,500 shares.
The Non-Qualified Plan bears different tax characteristics than that of the
Incentive Stock Option Plan.
The grant of an Option under the 1995 Plans will create no income tax
consequences to the participant or to the Company. A participant who is
granted a non-qualified Option will generally recognize ordinary income at the
time of exercise in an amount equal to the excess of the fair market value of
the Common Stock at such time over the exercise price. The Company will be
entitled to a deduction in the same amount and at the same time as ordinary
income is recognized by the participant. A subsequent disposition of Common
Stock acquired on exercise of an Option will give rise to capital gain or loss
to the extent the amount realized from the sale differs from the tax basis,
i.e., the fair market value of the Common Stock on the date of exercise. The
capital gain or loss will be a long-term capital gain or loss if the Common
Stock has been held for more than one year from the date of exercise.
Generally, for Incentive Stock Option Plan options, the appreciated value of
the underlying stock received upon exercise will be taxable to the participant
as a capital gain upon sale of the stock, and the Company will not receive any
tax deduction.
-10-
<PAGE> 13
The number of options granted under each plan during 1995 are represented by
the following:
Options granted under the Incentive Stock Option Plan during 1995 to officers
and directors were as follows:
<TABLE>
<S> <C>
William R. Gresher 240,000(1)
- ------------------
Senior Vice President
Jeffrey L. Simons 100,000(1)
- -----------------
Executive Vice President
John Pagnini 7,500
- ------------
(Formerly) Vice President
</TABLE>
(1) These options vest in increments over four years.
Options granted to other managers and junior managers during 1995 were: 2,300.
Options granted under the Non-Qualified Stock Option Plan including the
Director's Plan, during 1995:
<TABLE>
<S> <C> <C>
William R. Gresher, Senior Vice President, Director 60,000
50,000 (Director)(1)
Dennis W. Campbell, President, Director 50,000 (Director)(1)
Richard E. King, Jr., Director 50,000 (Director)(1)
Rowland W. Day, II, Director 50,000 (Director)(1)
Donald J. Duffy, Director 50,000 (Director)(1)
Humbert B. Powell, III, Director 50,000 (Director)(1)
</TABLE>
(1) These options vest over a period of five years from inception of board
membership.
In connection with the acquisition/merger of HDL Communications and Bikers
Dream, Inc. in March, 1995, the following non-qualified stock options were
granted:
<TABLE>
<S> <C>
Rowland W. Day, II, Family Trust 200,000
Rowland W. Day, II 180,000
Rowland W. Day, Sr. 50,000
Eric Meyer, Consultant 10,000
Donald J. Duffy, Consultant 10,000
Caldwell R. Campbell, Partner - Day & Campbell 100,000
Meyer, Duffy & Associates, Inc., Consultants 30,000
</TABLE>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ADOPTION OF THE PLANS.
-11-
<PAGE> 14
PROPOSAL TO CREATE CLASS OF PREFERRED STOCK
In order for the Company to expand its retail operations more quickly, it is
essential that it be able to raise the necessary growth capital without
necessarily creating debt. This additional capital will enable the Company to
lease new facilities and stock them with inventory for sale to retail
customers.
To date the Company has been able to raise capital through the issuance of
convertible debt and subsequent conversion into common shares of the Company.
In order to enhance the ability of the Company to raise additional capital, the
Company seeks shareholder approval to amend the Articles of Incorporation to
create a Preferred Class of stock of 10 million shares to enable the Company to
have more alternatives to meet prospective investor needs.
The proposal as presented by the Board of Directors is to amend the Articles of
Incorporation to authorize the establishment of the new class of preferred
shares, and to authorize the Board of Directors from time to time to issue such
shares and determine the terms and conditions thereof via Board Resolution when
the need arises for them to be issued.
It is expected that the new class of Preferred Stock may have certain
characteristics which would have an effect on common shareholders.
If the Preferred Stock is converted into common stock voting shares, the voting
power of existing common shareholders will be diluted proportionally. In any
case, book value of all outstanding shares will be diluted, as in any issue of
additional stock by the Company.
Preferred Stock is likely to carry with it a priority over common stock in the
event of liquidation.
If the Preferred Stock carries a dividend preference, preferred shareholders
will be paid dividends prior to any distribution thereof to common
shareholders.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSAL.
INDEPENDENT AUDITORS
Coopers & Lybrand, L.L.P., the Company's independent auditors, audited the
financial statements of the company for the fiscal year ended December 31,
1995. Representatives of Coopers & Lybrand are expected to be present at the
shareholders' meeting, will have the opportunity to make a statement if they
desire to do so, and will be available to respond to appropriate questions.
Subject to shareholder ratification, the Board of Directors has elected Coopers
& Lybrand to audit the account of the Company for the fiscal year ended
December 31, 1996.
If shareholders do not ratify the appointment of Coopers & Lybrand, L.L.P.,
other certified public accountants will be considered by the Board of
Directors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION OF THE
APPOINTMENT OF COOPERS & LYBRAND, L.L.P. AS INDEPENDENT ACCOUNTANTS FOR THE
COMPANY FOR 1996.
-12-
<PAGE> 15
ANNUAL REPORTS
The Company's Annual Report for the calendar year ended December 31, 1995,
including audited financial statements, is being mailed to shareholders along
with this Proxy Statement. In addition, the Company has filed an Annual Report
on Form 10-KSB for its calendar year ended December 31, 1995 with the
Securities and Exchange Commission. SHAREHOLDERS MAY OBTAIN A COPY OF THE FORM
10-KSB ANNUAL REPORT INCLUDING FINANCIAL STATEMENTS, WITHOUT CHARGE, BY WRITING
THE COMPANY AT THE ADDRESS LISTED ABOVE, TO WILLIAM R. GRESHER, CHIEF FINANCIAL
OFFICER.
OTHER BUSINESS
At the time of the preparation of this Proxy Statement, the Company's Board of
Directors had not been informed of any other matters which would be presented
for action at the Annual Meeting. If any other matters are properly presented,
the persons named in the accompanying proxy card will vote or refrain from
voting in accordance with their best judgment.
Santa Ana, California By Order of the Board of Directors
Dated: April 22, 1996 Dennis W. Campbell
Chief Executive Officer
-13-
<PAGE> 16
[BIKERS DREAM LOGO]
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Richard E. King, Jr., as Proxy with the power to
appoint his substitute and hereby authorizes him to represent and to vote as
designated below all the common shares of Bikers Dream, Inc. held on record by
the undersigned on April 19, 1996 at the annual meeting of shareholders on June
4, 1996 or any adjournment thereof. If no direction is made, this proxy will be
voted "FOR" on Proposals 1, 2, 3 and 4.
1. ELECTION OF DIRECTORS
The undersigned casts the number of votes set forth opposite the names of
the nominees for directors in favor of his election as director:
Nominee Number of Votes Cast
------- --------------------
a. Dennis W. Campbell _____________
b. Rowland W. Day, II _____________
c. Donald J. Duffy _____________
d. William R. Gresher _____________
e. Richard E. King, Jr. _____________
f. Humbert B. Powell, III _____________
TOTAL NUMBER OF VOTES
HELD BY THE UNDERSIGNED _____________
(Number of shares multiplied by the number of directors to be elected, which
are six, i.e., if you have 1000 shares, you have 6000 votes.)
_______________________________________________________________________________
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE
ENCLOSED ENVELOPE.
_______________________________________________________________________________
VOTING ITEMS CONTINUE ON REVERSE --
<PAGE> 17
2. PROPOSAL TO APPROVE THE THREE COMMON STOCK OPTION PLANS:
/ / FOR / / AGAINST / / ABSTAIN
3. PROPOSAL TO AMEND THE ARTICLES OF INCORPORATION TO AUTHORIZE A CLASS OF
PREFERRED STOCK:
/ / FOR / / AGAINST / / ABSTAIN
4. PROPOSAL TO APPROVE COOPERS & LYBRAND L.L.P. as the independent
accountants for the corporation:
/ / FOR / / AGAINST / / ABSTAIN
5. IN THEIR DISCRETION, THE PROXY IS AUTHORIZED TO VOTE UPON SUCH OTHER
BUSINESS AS MANY PROPERLY COME BEFORE THE MEETING.
Please sign exactly as name appears below. When shares are held by joint
tenant, both should sign. When signing as attorney, as executor,
administrator, trustee or guardian, please give full title as such. If a
corporation, please sign in full corporate name by President or other
authorized officer. If a partnership, please sign in partnership name by
authorized person.
_________________________________ _________________________________
Signature Date Signature Date
____________________________________________________________________
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE
ENCLOSED ENVELOPE
____________________________________________________________________
