<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
(as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec.240.14a-11(c) or 240.14a-12
</TABLE>
Ride, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
- --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
- --------------------------------------------------------------------------------
(3) Filing Party:
- --------------------------------------------------------------------------------
(4) Date Filed:
- --------------------------------------------------------------------------------
<PAGE> 2
RIDE, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
MONDAY, MAY 5, 1997
Notice is hereby given that the Annual Meeting of Shareholders of RIDE,
INC. (the "Company") will be held at 1:00 p.m. local time on Monday, May 5,
1997, at the Bellevue Club, 11200 SE 6th Street, Bellevue, Washington 98004 for
the following purposes:
(1) To ratify the selection of Ernst & Young LLP as the Company's
independent auditors for the fiscal year ending December 31, 1997;
(2) To elect four directors, each to serve until the next annual meeting of
shareholders or until his successor is elected and qualified; and
(3) To transact such other business as may properly come before the
meeting.
The Board of Directors has fixed the close of business on April 1, 1997 as
the Record Date for the determination of shareholders entitled to notice of and
to vote at the Annual Meeting and any adjournments thereof.
By Order of the Board of Directors
/s/ David H. David
David H. Davis
Secretary
Preston, Washington
April 9, 1997
YOUR VOTE IS IMPORTANT
Whether or not you expect to attend the meeting in person, we urge you to sign,
date and return the accompanying proxy at your earliest convenience. This will
ensure the presence of a quorum at the meeting. PROMPTLY RETURNING A SIGNED AND
DATED PROXY WILL SAVE THE COMPANY THE EXTRA EXPENSE OF ADDITIONAL SOLICITATION.
An addressed, postage paid envelope is provided for that purpose. Sending in
your proxy will not prevent you from voting your shares at the meeting if you
desire to do so, as the proxy is revocable at your option in the manner stated
in the accompanying proxy statement.
<PAGE> 3
RIDE, INC.
8160 304TH AVENUE S.E.
PRESTON, WASHINGTON 98050
(206) 222-6015
------------------------
PROXY STATEMENT
------------------------
INFORMATION REGARDING PROXIES
This Proxy Statement and the accompanying form of proxy are furnished in
connection with the solicitation of proxies by the Board of Directors of Ride,
Inc. (the "Company") for use at the Annual Meeting of Shareholders to be held at
1:00 p.m. local time on Monday, May 5, 1997, and at any adjournment thereof (the
"Annual Meeting"). The Annual Meeting will be held at the Bellevue Club, 11200
SE 6th Street, Bellevue, Washington 98004. Only shareholders of record on the
books of the Company at the close of business on April 1, 1997 (the "Record
Date") will be entitled to notice of and to vote at the Annual Meeting.
It is anticipated that these proxy solicitation materials and a copy of the
Company's 1996 Annual Report to Shareholders will be first sent to shareholders
on or about April 11, 1997.
If the accompanying form of proxy is properly executed and returned, the
shares represented thereby will be voted in accordance with the instructions
specified thereon. In the absence of instructions to the contrary, such shares
will be voted for the proposals set forth therein. Any shareholder executing a
proxy has the power to revoke it at any time prior to the voting thereof on any
matter (without, however, affecting any vote taken prior to such revocation) by
delivering written notice to David H. Davis, Secretary of the Company, by
executing and delivering to the Company another proxy dated as of a later date
or by voting in person at the Annual Meeting.
VOTING SECURITIES AND PRINCIPAL HOLDERS
The only outstanding voting securities of the Company are shares of common
stock (the "Common Stock"), each of which is entitled to one vote. As of the
Record Date, there were 10,771,352 shares of Common Stock issued and
outstanding. The presence in person or by proxy of holders of record of a
majority of the outstanding shares of Common Stock is required to constitute a
quorum for the transaction of business at the Annual Meeting.
Under Washington law and the Company's Bylaws, if a quorum is present the
four nominees for election to the Board of Directors who receive the greatest
number of votes cast for the election of directors by shareholders present in
person or represented by proxy at the meeting and entitled to vote shall be
elected directors. Shareholders do not have the right to cumulate their votes in
the election of directors. Abstentions and broker non-votes will be considered
represented at the Annual Meeting for the purpose of calculating a quorum and
will have no effect on the election of directors. However, any abstentions and
broker non-votes will have the practical effect of votes "against" any other
proposals properly coming before the Annual Meeting because each such abstention
or broker non-vote represents one less vote in favor of such proposal. Proxies
and ballots will be received and tabulated by ChaseMellon Shareholder Services,
an independent business entity not affiliated with the Company.
The Common Stock is quoted on Nasdaq National Market. The last sale price
for the Common Stock as reported by Nasdaq National Market on April 1, 1997 was
$4.00 per share.
PROPOSAL ONE -- RATIFICATION OF INDEPENDENT AUDITORS
The Company has selected Ernst & Young LLP to continue as its independent
auditors for the fiscal year ending December 31, 1997. Representatives of Ernst
& Young LLP are expected to be present at the annual
<PAGE> 4
meeting and have the opportunity to make a statement if they so desire and to
respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF THE SELECTION
OF ERNST & YOUNG LLP AS INDEPENDENT AUDITORS OF THE COMPANY.
PROPOSAL TWO -- ELECTION OF DIRECTORS
A Board of Directors consisting of four members will be elected at the
Annual Meeting to hold office until the next annual meeting of shareholders and
until their successors are elected and qualified. The Board of Directors has
approved the nominees listed below, all of whom are currently members of the
Board of Directors. Information concerning each nominee is set forth below.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH OF THE FOLLOWING
NOMINEES.
Unless otherwise instructed, it is the intention of the persons named in
the accompanying form of proxy to vote shares represented by properly executed
proxies for the nominees. Although the Board of Directors anticipates that each
of the nominees will be available to serve as a director of the Company, should
any one or more of them not accept the nomination, or otherwise be unwilling or
unable to serve, it is intended that the proxies will be voted for the election
of a substitute nominee or nominees designated by the Board of Directors.
Robert E. Hall, age 48, joined the Company in August 1996 as Chief
Executive Officer and President, and was appointed to the Board of Directors in
September 1996. In November 1992 Mr. Hall acquired Galena Creek Trading Company,
Inc., dba SMILEY, a manufacturer of ski and sports apparel, and served as its
Chief Executive Officer until September 1996. In November 1985 Mr. Hall joined
Allegra, Inc., dba Vaurnet-France, a manufacturer of eyewear, accessories and
apparel, as its President and Chief Executive Officer, in which capacity he
served until June 1991. Mr. Hall also serves as a director of Athletic Training
Equipment Company, Inc., a manufacturer of major league baseball pitching
machines. Mr. Hall received his B.S. degree from the University of Colorado.
Cory J. Hechler, age 32, has served as a director of the Company since
December 1993. Mr. Hechler joined Bear Stern Securities, Inc., an investment
banking firm, in January 1986 and has been a Senior Managing Director since
September 1993. Mr. Hechler received his B.A. degree from the State University
of New York at Oneonta.
Mark M. Salter, age 37, has been a director of the Company since April
1993, and served as Vice Chairman of the Board from November 1993 to December
1995. He also served as the Company's Director of Investor Relations from
October 1994 until September 1995. Mr. Salter has been the Director of Fixed
Income Securities for Amherst Securities Group, Inc., a Houston-based securities
broker-dealer, since October 1995. From 1989 to 1994, he was Executive Vice
President and Director of Trading for Westcap Securities L.P., a Houston-based
fixed income securities firm. Mr. Salter received his B.A. degree from York
University in Toronto.
Gerald B. Wasserman, age 59, has been a director of the Company since March
1995, and served as interim Chief Executive Officer from May 1996 until Mr. Hall
joined the Company in August 1996. Mr. Wasserman is currently Chairman,
President and Chief Executive Officer of SLM International, Inc., a world-wide
manufacturer of hockey skates and protective equipment, which he joined in
September 1996. From July 1992 to March 1994, Mr. Wasserman served as President
and Chief Executive Officer of Weider Health and Fitness, a manufacturer and
marketer of home fitness equipment. From April 1988 to July 1992, Mr. Wasserman
was President and Chief Executive Officer of Canstar Sports Inc., a manufacturer
and marketer of hockey skates and related equipment. Mr. Wasserman received his
Bachelor of Commerce degree from McGill University and is a Chartered
Accountant.
Roger B. Madison, Jr., currently a director of the Company, has not been
renominated by the Board of Directors for election as a director at the annual
meeting.
2
<PAGE> 5
ADDITIONAL INFORMATION CONCERNING THE COMPANY
BOARD AND COMMITTEE MEETINGS
During the fiscal year ended December 31, 1996, there were ten meetings of
the Board of Directors and three actions by consent. Each director attended at
least 75% of all meetings of the Board of Directors and Committees on which they
served.
The Board of Directors has a standing Nominating Committee, Audit Committee
and Compensation Committee.
The Nominating Committee consists of Messrs. Hechler, Hall and M. Salter
(Chairman). Under the terms of its charter, the Nominating Committee has been
granted authority to recommend for full Board approval the nomination,
appointment, election or hire, as the case may be, of the Company's directors
and executive officers (to the extent such authority as it relates to executive
officers is not, under the Company's bylaws, vested in the Company's president
and chief executive officer). Formed in January 1997, the Nominating Committee
did not meet during the fiscal year ended December 31, 1996.
The Audit Committee consists of Messrs. Wasserman, M. Salter and Madison
(Chairman). Under the terms of its charter, the Audit Committee has been granted
authority to recommend the Company's independent auditors, assess audit scope,
assess the risk of fraudulent financial reporting, oversee the periodic
financial reporting process and communicate with the Company's accounting
personnel. The Audit Committee did not meet during the fiscal year ended
December 31, 1996.
The Compensation Committee consists of Messrs. Hechler (Chairman), M.
Salter and Wasserman. The Compensation Committee has the authority to set
compensation policies and procedures, to determine the total compensation of all
officers of the Company, and to administer the Company's stock option plans. The
Compensation Committee met once and took 26 actions by consent during the fiscal
year ended December 31, 1996.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Messrs. M. Salter and Wasserman, shareholders and directors of the Company,
are members of the Compensation Committee of the Board, and are former executive
officers of the Company.
BOARD COMPENSATION
Directors who are employees of the Company are not compensated for service
as directors. Non-employee directors of the Company receive $1,000 per board
meeting attended in person. The Company also reimburses each director for
reasonable expenses incurred in attending meetings of the Board of Directors. In
addition, upon initial election to the Board of Directors, each non-employee
director receives an option under the Company's 1994 Directors' Nonqualified
Stock Option Plan to purchase 40,000 shares of Common Stock. The options become
vested and exercisable in 25% increments each year commencing on the first
anniversary of the date of grant. Unvested and unexpired options terminate upon
the first of the following events: (i) ten years from the date of grant; (ii)
the expiration of 90 days from the date of an optionee's termination as a
director for any reason other than death or disability; or (iii) the expiration
of one year from the date of death of an optionee or cessation of the optionee's
service as a director by reason of disability.
3
<PAGE> 6
EXECUTIVE OFFICERS WHO ARE NOT DIRECTORS
David H. Davis, 37, joined the Company as Secretary and General Counsel in
September 1996. Prior to that he served as Corporate Counsel and Assistant
Secretary of Egghead, Inc., a reseller of computer software, hardware and
peripherals, where he was employed from September 1994 through August 1996.
Before joining Egghead, Mr. Davis was an associate attorney with the Seattle law
firm of Stanislaw Ashbaugh from April 1990 through September 1994. Mr. Davis
earned his BA degree from Whitman College and his JD from the University of
Oregon.
David Janes, Jr., age 35, was appointed Sr. Vice President of Manufacturing
in September, 1996. From September 1995 until September 1996 he served as
President of Ride Manufacturing, Inc., formerly Thermal Snowboards, Inc., a
subsidiary of the Company. From 1992 through September 1995, he held a variety
of positions, incuding vice president, for California Manufacturing Enterprises,
Inc., a diversified aerospace and industrial manufacturing company. Mr. Janes
holds a BA degree from UCLA and an MBA from UCLA's Anderson Graduate School of
Business.
Bruce Manke, age 54, joined the Company in September 1996 as Senior Vice
President of Winter Sports and Administration. From July 1992 until February
1996, Mr. Manke was President of the Polish American Trade Group, a trading
company doing business in Poland and the Eastern Bloc. From 1985 to 1992, he
served as Executive Vice President of Allegra, Inc, dba Vaurnet-France, a
manufacturer of eyewear, accessories and apparel. Mr. Manke holds a BS degree
from the University of Connecticut, a BA degree from New Hampshire College, and
an MBA from Rutgers University.
Robert F. Marcovitch, age 40, began serving as Sr. Vice President of the
Company's Apparel and International divisions in October 1996. Prior to that he
as was employed by C.A.S. Sports International, Inc., a Canadian-based former
subsidiary of the Company, where he served as President from August 1994 through
October 1996. From December 1992 to August 1994, Mr. Marcovitch was Director of
Apparel for Nike Canada, where he was responsible for all of Nike's non-footwear
business in Canada. From 1989 to 1992, Mr. Marcovitch was Strategic Account
Manager of Nike Canada's apparel division. Mr. Marcovitch attended Concordia
University in Montreal.
G. Scott Stewart, 34, served as the Company's Vice President from April
1995 until September 1996, when he was appointed Senior Vice President of
Finance. He has also been the Company's Chief Financial Officer since April
1995, and Treasurer since July 1995. From November 1990 to April 1995, Mr.
Stewart was a Senior Manager in the audit department of Ernst & Young LLP. Mr.
Stewart received BA and BS degrees from the University of Washington and an MBA
degree from Seattle University. He is a licensed Certified Public Accountant.
COMMON STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information regarding the beneficial
ownership of the Company's Common Stock as of March 14, 1997 by each person
known by the Company to be the beneficial owner of more than five percent of the
Company's Common Stock; by each director and nominee; by the following group of
individuals, who are collectively referred to as "the Named Executive Officers":
(i) all individuals serving as the Company's Chief Executive Officer or acting
in a similar capacity during the year ending December 31, 1996, (ii) the other
four most highly paid executive officers of the Company other than the Chief
Executive Officer who were serving as executive officers at the end of the year
ending December 31, 1996 and (iii) Timothy G. Pogue and Kenneth J. Finkelstein,
both of whom served as executive officers of the Company during the year ended
December 31, 1996; and by all directors and executive officers of the Company as
a group.
4
<PAGE> 7
TABLE OF BENEFICIAL OWNERSHIP
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF PERCENT OF SHARES
NAME OF BENEFICIAL OWNER (1) BENEFICIAL OWNERSHIP OUTSTANDING
-------------------- -----------------
<S> <C> <C>
James J. Salter....................................... 1,200,082(2) 10.9%
2700 Dufferin Street, #B3 Toronto, Ontario M6B 4J3
Canada
Mark M. Salter........................................ 1,128,738(3) 10.2%
1900 W. Loop South, #550 Houston, TX 77027
Roger B. Madison, Jr.................................. 689,146(4) 6.3%
22229 NE. 140th Way Woodinville, WA 98027
Cory J. Hechler....................................... 377,500(5) 3.5%
Timothy G. Pogue...................................... 370,196(6) 3.4%
Kenneth J. Finkelstein................................ 117,570(7) 1.1%
Gerald B. Wasserman................................... 65,000(8) *
Robert F. Marcovitch.................................. 20,000(9) *
G. Scott Stewart...................................... 10,571(10) *
Robert E. Hall........................................ -0- *
David A. Janes, Jr.................................... -0- *
Bruce Manke........................................... -0- *
All directors and executive officers as a group (13
persons)............................................ 3,993,803 33.9%
</TABLE>
- ---------------
* Less than 1%.
(1) Except as otherwise noted in these footnotes, each of the persons named in
the table has sole voting and investment power with respect to the shares
shown beneficially owned by such person. As noted in these footnotes,
shares beneficially owned may include shares subject to options that are
exercisable within 60 days of April 1, 1997.
(2) Includes 993,764 shares held by DLS Financial Holdings, Inc., a trust
controlled by Mr. Salter and 206,318 shares subject to options that are
currently exercisable or exercisable on or before May 30, 1997.
(3) Includes 835,000 shares held by Salter Family Partners, Ltd., a limited
partnership of which Mark Salter and his wife are the sole general
partners, with shared voting and investment control. Includes 200,000
shares which are issuable upon the conversion of 100,000 shares of the
Company's Series A Convertible Preferred Stock held by Salter Family
Partners, Ltd. Includes 4,000 shares held by Mark Salter as custodian for
his two minor children, for which Mr. Salter disclaims beneficial
ownership. Includes 89,739 shares subject to options that are currently
exercisable or exercisable on or before May 30, 1997.
(4) Includes 552,828 shares owned directly, and 136,318 shares subject to
options that are currently exercisable or exercisable on or before May 30,
1997.
(5) Includes 330,000 shares owned directly and 47,500 shares subject to options
that are currently exercisable or exercisable on or before May 30, 1997.
(6) Includes 251,150 shares owned directly and 119,046 shares subject to
options that are currently exercisable or exercisable on or before May 30,
1997.
(7) Includes 320 shares owned directly and 117,250 shares subject to options
that are currently exercisable or exercisable on or before May 30, 1997.
5
<PAGE> 8
(8) Represents shares subject to options that are currently exercisable or
exercisable on or before May 30, 1997.
(9) Represents shares subject to options that are currently exercisable or
exercisable on or before May 30, 1997.
(10) Includes 571 shares owned directly, and 10,000 shares subject to options
that are currently exercisable or exercisable on or before May 30, 1997.
EXECUTIVE COMPENSATION
The following table sets forth annual and long-term compensation for
services rendered during the years ending December 31, 1996, 1995 and 1994 by
the Named Executive Officers.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
------------
ANNUAL COMPENSATION AWARDS
--------------------------------- ------------
OTHER SECURITIES
ANNUAL UNDERLYING ALL OTHER
COMPEN- OPTIONS/ COMPEN-
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) SATION($) SARS(#) SATION($)
- ------------------------------ ---- ------- ------- --------- ------------ ---------
<S> <C> <C> <C> <C> <C> <C>
CURRENT OFFICERS
Robert E. Hall(1) 1996 76,590 0 5,255 62,500 0
Chief Executive Officer 1995 N/A N/A N/A N/A N/A
and President 1994 N/A N/A N/A N/A N/A
David Janes, Jr.(2) 1996 180,982 0 13,445 35,000 50,000
Sr. Vice President of 1995 27,700 119,112 3,690 25,000 0
Manufacturing 1994 N/A N/A N/A N/A N/A
Bruce Manke(3) 1996 49,800 0 2,375 15,000 0
Sr. Vice President of 1995 N/A N/A N/A N/A N/A
Winter Sports and 1994 N/A N/A N/A N/A N/A
Administration
Robert F. Marcovitch(4) 1996 200,000 0 0 0 0
Sr. Vice President of 1995 214,683 0 0 80,000 0
Apparel and International 1994 55,410 0 0 25,000 0
G. Scott Stewart(5) 1996 100,000 0 1,479 0 0
Sr. Vice President, Chief 1995 48,657 10,000 0 30,000 0
Financial Officer 1994 N/A N/A N/A N/A N/A
and Treasurer
FORMER OFFICERS
Kenneth J. Finkelstein(6) 1996 172,224 0 9,000 10,000 69,738
former Sr. Vice 1995 78,000 40,000 0 20,000 0
President 1994 N/A N/A N/A N/A N/A
Timothy G. Pogue(7) 1996 200,000 0 2,375 0 22,576
former President 1995 144,886 75,000 0 70,000 0
1994 75,000 20,000 0 40,000 269,010
James J. Salter(8) 1996 258,408 0 15,500 0 89,583
former Chief Executive 1995 300,000 200,000 0 120,000 0
Officer and former Vice 1994 150,000 20,000 0 86,318 1,667
Chairman of the Board
Gerald B. Wasserman(9) 1996 25,000 0 0 25,000 0
former interim Chief 1995 N/A N/A N/A N/A N/A
Executive Officer 1994 N/A N/A N/A N/A N/A
</TABLE>
- ---------------
(1) Mr. Hall joined the Company in August 1996; the salary shown for 1996 is for
a partial year's employment. The amount shown for other annual compensation
represents contributions by the Company to the Company's 401(k) savings plan
on behalf of Mr. Hall and an automobile allowance.
6
<PAGE> 9
(2) Mr. Janes joined the Company in September 1995; the salary shown for 1995 is
for a partial year's employment. The amount shown for other annual
compensation represents contributions by the Company to the Company's 401(k)
savings plan on behalf of Mr. Janes and an automobile allowance. The amount
shown for all other compensation in 1996 represents a payment made to Mr.
Janes in consideration for modifying the terms of his employment contract.
(3) Mr. Manke joined the Company in September 1996; the salary shown for 1996 is
for a partial year's employment. The amount shown for other annual
compensation represents contributions by the Company to the Company's 401(k)
savings plan on behalf of Mr. Manke.
(4) Mr. Marcovitch joined the Company in August 1994; the salary shown for 1994
is for a partial year's employment.
(5) Mr. Stewart joined the Company in April 1995; the salary shown for 1995 is
for a partial year's employment. The amount shown for other annual
compensation represents contributions by the Company to the Company's 401(k)
savings plan on behalf of Mr. Stewart.
(6) Mr. Finkelstein served as Sr. Vice President of the Company from October
1995 until October 1996. The amount shown for other annual compensation
represents an automobile allowance. The amount shown for all other
compensation in 1996 represents severance payments made to Mr. Finkelstein
in 1996 pursuant to his separation agreement.
(7) Mr. Pogue served as President of the Company from November 1994 until
September 1996, and as Senior Vice President from September 1996 until his
separation from the Company in December 1996. The amount shown for other
annual compensation in 1996 represents contributions by the Company to the
Company's 401(k) savings plan on behalf of Mr. Pogue. The amount shown for
all other compensation in 1996 represents the value of a Company vehicle
transferred to Mr. Pogue pursuant to his separation agreement. The amount
shown for all other compensation in 1994 represents the value of 153,720
shares of the Company's Common Stock purchased by Mr. Pogue in October 1992
that were subject to a forfeiture restriction until the restriction's
removal in April 1994.
(8) Mr. Salter served as the Company's Chief Executive Officer from August 1994
until May 1996. The amount shown for other annual compensation represents an
automobile allowance. The amount shown for all other compensation in 1996
represents severance payments made to Mr. Salter in 1996 pursuant to his
separation agreement. The amount shown for all other compensation in 1994
represents premiums paid by the Company for life insurance, the beneficiary
of which is Mr. Salter's wife.
(9) Mr. Wasserman served as interim Chief Executive Officer of the Company from
May 1996 through August 1996. He was not an employee of the Company in 1994
or 1995.
7
<PAGE> 10
OPTION GRANTS IN 1996
The following table provides information on option grants to the Named
Executive Officers in 1996.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
INDIVIDUAL GRANTS VALUE AT ASSUMED
---------------------------------------------------------- ANNUAL
NUMBER OF RATES OF STOCK PRICE
SECURITIES PERCENT OF TOTAL APPRECIATION FOR
UNDERLYING OPTIONS/SARS OPTION
OPTIONS/SARS GRANTED TO EXERCISE OR TERM(2)
GRANTED EMPLOYEES IN BASE PRICE EXPIRATION ---------------------
NAME (#) FISCAL YEAR(1) ($/SH) DATE 5% 10%
- ----------------------- ------------ ---------------- ----------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
CURRENT OFFICERS
Robert E. Hall(3)...... 62,500 22.5% $10.000 8/7/2006 $393,056 $996,087
David Janes, Jr.(3).... 35,000 12.6% $15.875 2/28/2006 $349,426 $885,521
Bruce Manke(3)......... 15,000 5.4% $12.063 9/3/2006 $113,789 $288,367
FORMER OFFICERS
Kenneth J.
Finkelstein.......... 10,000 3.6% $10.375 8/2/2006 $ 65,247 $165,350
Gerald B.
Wasserman(3)......... 25,000 9.0% $10.750 5/23/2006 $169,013 $428,317
</TABLE>
- ---------------
(1) Based on an aggregate of 278,150 stock options granted to employees during
1996.
(2) Potential realizable value is based on an assumption that the value of the
Common Stock appreciates at the annual rate shown (compounded annually) from
the date of grant until the end of the option term. This formula is
calculated based on SEC requirements and does not reflect the Company's
estimate of future stock price growth.
(3) In January 1997, the exercise price of these option grants were reduced to
$6.50 per share.
The Company's Stock Option Plan is administered by the Compensation
Committee of the Board of Directors, which consists of Messrs. Hechler, Salter
and Wasserman. The Compensation Committee determines to whom options are
granted, the number of shares subject to each option, the vesting schedule and
the exercise price. The exercise price may not be less than the fair market
value of the Common Stock on the date of grant. Options generally vest over four
years and have a duration of ten years. The exercise price may be paid in cash,
by delivering shares of Common Stock already owned by the option holder or by
complying with any other payment mechanism approved by the plan administrator.
Subject to certain limitations, the Compensation Committee may modify the terms
of and reprice outstanding options.
8
<PAGE> 11
OPTION EXERCISES AND FISCAL YEAR-END OPTION VALUES
The following table shows data relating to stock options exercised by the
Company's Named Executive Officers and unexercised options held by such persons
at the end of 1996.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS/SARS IN-THE-MONEY OPTIONS/SARS
AT FISCAL YEAR-END AT FISCAL YEAR-END
SHARES ACQUIRED VALUE REALIZED (#) ($)
NAME ON EXERCISE(#) ($) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE(1)
- ----------------------- --------------- -------------- ------------------------- ----------------------------
<S> <C> <C> <C> <C>
CURRENT OFFICERS
Robert E. Hall......... 0 0 0/62,500 $0/$0
David Janes, Jr........ 0 0 6,250/53,750 $0/$0
Bruce Manke............ 0 0 0/15,000 $0/$0
Robert F. Marcovitch... 32,500 $246,602 0/72,500 $0/$36,562
G. Scott Stewart....... 0 0 2,500/22,500 $6/$56
FORMER OFFICERS
Kenneth J.
Finkelstein.......... 34,250 $300,494 117,250/10,000 $157,939/$0
Timothy G. Pogue....... 0 0 119,046/0 $187,941/$0
James J. Salter........ 0 0 206,318/0 $280,269/$0
Gerald B. Wasserman.... 0 0 45,000/60,000 $0/$0
</TABLE>
- ---------------
(1) The amount shown is the aggregate number of shares of Common Stock that may
be purchased pursuant to the exercise of outstanding options, multiplied by
the difference between the closing price of the Common Stock reported on
Nasdaq National Market on December 31, 1996, $5.8125, and the per share
exercise price of such options.
EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT, AND CHANGE IN CONTROL
ARRANGEMENTS
MR. HALL'S EMPLOYMENT AGREEMENT. Mr. Hall serves as the Company's Chief
Executive Officer and President pursuant to an employment agreement that
provides for (i) a term ending August 19, 2001; (ii) an annual base salary of
$200,000, which shall be increased annually by at least five percent (5%)
beginning December 31, 1997, (iii) the opportunity to earn annual bonuses in the
form of stock options equal to fifty thousand (50,000) shares of Common Stock
multiplied by the percentage by which actual consolidated net income of the
Company for the year in question exceeds budgeted consolidated net income, and
(iv) the use of a late model Chevrolet Suburban or, at Mr. Hall's option, an
automobile allowance in an amount necessary to lease an automobile with a
purchase price of $40,000, together with an expense account for the
reimbursement of repairs, maintenance, fuel and insurance on the automobile. In
connection with Mr. Hall's entering into the employment agreement and beginning
employment with the Company, he received, pursuant to the employment agreement's
terms, a stock option to purchase sixty-two thousand five hundred (62,500)
shares of Common Stock under the Company's 1994 Stock Option Plan, which will
vest in twenty-five percent (25%) increments on each of the first four
anniversaries of the date of grant. Under the employment agreement, if the
Company terminates Mr. Hall's employment without cause (as defined in the
employment agreement), Mr. Hall will receive termination payments from the
Company equal to his then-current monthly salary for a period of six months
following termination. Under the agreement, Mr. Hall has agreed not to compete
with the Company anywhere in the world snowboard and apparel market during the
term of his employment with the Company and for two years thereafter.
MR. J. SALTER'S SEPARATION AGREEMENT. By Agreement dated May 7, 1996, as
amended by Amendment No. 1 to Resignation Agreement dated October 11, 1996, Mr.
J. Salter resigned as an officer of the Company, effective May 7, 1996, and as a
director of the Company, effective October 11, 1996. Pursuant to the agreement,
all options granted to Mr. Salter to purchase shares of Common Stock became
immediately vested and exercisable as of October 11, 1996. In addition, Mr. J.
Salter will continue to be bound, for a period of three years following his
resignation, by the terms of non-competition and non-solicitation covenants set
forth
9
<PAGE> 12
in his employment agreement, dated February 22, 1994, with the exception of the
Brokered OEM Business and the Close Out Business, as each term is defined in
that certain Stock Purchase Agreement, dated October 11, 1996, by and among the
Company and Gen-X Equipment, Inc., which is controlled by Messrs. J. Salter and
Finkelstein. See "Certain Relationships and Related Transactions."
MR. FINKELSTEIN'S SEPARATION AGREEMENT. By Agreement dated, August 2,
1996, as amended by Amendment No. 1 to Resignation Agreement, dated October 11,
1996, Mr. Finkelstein resigned as an officer and director of the Company,
effective October 11, 1996. Pursuant to the agreement, all options granted to
Mr. Finkelstein to purchase shares of Common Stock became immediately vested and
exercisable upon his resignation. In addition, Mr. Finkelstein will continue to
be bound, for a period of three years following his resignation, by the terms of
non-competition and non-solicitation covenants set forth in his employment
agreement, dated October 15, 1995, with the exception of the Brokered OEM
Business and the Close Out Business, as each term is defined in that certain
Stock Purchase Agreement, dated October 11, 1996, by and among the Company and
Gen-X Equipment, Inc., which is controlled by Messrs. J. Salter and Finkelstein.
See "Certain Relationships and Related Transactions."
MR. POGUE'S SEPARATION AGREEMENT. Mr. Pogue and the Company entered into a
separation agreement on October 28, 1996, under which he resigned immediately as
a director and resigned as an officer effective December 31, 1996. The agreement
provided for a severance payment equal to Mr. Pogue's then-current salary for a
three (3) month period, through and including March 31, 1997, and clear title to
a 1996 Chevrolet Suburban then in Mr. Pogue's possession. Pursuant to the
agreement, all options granted to Mr. Pogue and his wife to purchase shares of
Common Stock became immediately vested and exercisable as of December 31, 1996.
In addition, Mr. Pogue continues to be bound by the terms of non-competition and
non-solicitation covenants for a period of three years following his resignation
as an officer.
MR. MADISON'S SEPARATION AND FINANCIAL ADVISORY AGREEMENT. By letter,
dated December 17, 1996, the Company notified Mr. Madison that it was
terminating his Employment Agreement, dated February 22, 1994, effective
February 22, 1997. Under the terms of his Employment Agreement, Mr. Madison is
to receive severance payment equal to Mr. Madison's salary as of the date of
termination for a period of six (6) months from and after February 22, 1997. In
addition, all options granted to Mr. Madison to purchase shares of the Company's
Common Stock became immediately vested and exercisable as of the date of
termination pursuant to resolution of the Board of Directors, dated March 26,
1996. By Letter Agreement, dated January 15, 1997, the Company entered into an
arrangement with Mr. Madison whereby Mr. Madison is to provide certain financial
advisory services for the Company for a period of one (1) year. Compensation
under the agreement is contingent upon the successful completion of certain
transactions facilitated by Mr. Madison. To date, no payments are due or have
been made to Mr. Madison under this arrangement. The agreement may be renewed
for successive annual periods unless terminated by either party. In April 1997,
Mr. Madison resigned as Chairman of the Board and has not been renominated for
election as a director.
CHANGE IN CONTROL ARRANGEMENTS. Options to purchase shares of Common Stock
granted to each named executive officer under the Company's Stock Option Plan
automatically become vested in the event of a change in control of the Company
or the termination of the executive's employment other than termination by the
Company for cause or resignation of the executive without cause. A "change in
control" is defined as certain mergers of the Company with or into other
entities, a sale of substantially all of the assets of the Company, a successful
proxy contest by a third party, the commencement of a tender offer for the
Common Stock or the acquisition by any person of 20% of the outstanding Common
Stock.
10
<PAGE> 13
REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board (the "Committee") is responsible
for recommending to the Board compensation for the Company's executive officers,
and for reviewing and approving compensation recommendations made by the Chief
Executive Officer for the other officers and key employees. The Committee is
also responsible for administering all of the Company's compensation programs.
See "Additional Information Concerning the Company -- Board and Committee
Meetings".
In determining the base salary for a particular executive within the salary
range for his or her position, the Committee initially takes into account the
salary necessary to encourage the executive to join the Company in lieu of
pursuing other employment opportunities. In later years, the Committee considers
the amount budgeted by the Board for salary increases and the executive's
success in achieving the performance objectives established for such executive.
For 1996, the Company devised a performance bonus plan for certain executive
officers of the Company as a means to motivate their respective performance. The
plan based payment of a pre-determined bonus amount on the particular executive
meeting or exceeding budget targets. Budget targets were not met in 1996, and no
bonus payments were made.
In January 1997, the Company adopted a stock option program whereby
executives and certain additional employees by grade of employment are granted
on option to purchase a predetermined amount of the Company's Common Stock on an
annual basis. This program is intended to replace the Company's less structured
stock option grant program. The newly adopted option program is one element of a
three-pronged compensation strategy currently in development by the Company to
compensate its senior executives. The remaining elements of this plan are base
salary and a bonus based on divisional performance. The Committee believes the
new compensation strategy will more closely align the interests of executives
and other key employees to that of the Company and its shareholders, and will
also serve to attract and retain high quality employees.
Under the Omnibus Budget Reconciliation Act of 1993, the federal income tax
deduction for certain types of compensation paid to the chief executive officer
and four other most highly compensated executive officers of publicly held
companies is limited to $1 million per officer per fiscal year unless such
compensation meets certain requirements. The Committee is aware of this
limitation and believes no compensation paid by the Company during 1997 will
exceed the $1 million limitation.
THE COMPENSATION COMMITTEE
GERALD B. WASSERMAN
MARK M. SALTER
CORY J. HECHLER, CHAIRMAN
11
<PAGE> 14
PERFORMANCE GRAPH
The following chart presents a comparison of the cumulative total
shareholder returns since the date of the Company's initial public offering (May
6, 1994) of the Company's Common Stock, the Nasdaq US Index, and the Standard &
Poor's Leisure Time (Products) Index. The graph assumes an initial investment of
$100 and reinvestment of all dividends. The stock performance shown on the graph
below is not necessarily indicative of future price performance.
<TABLE>
<CAPTION>
S&P's Leisure
Measurement Period Ride, Inc. Common Time (Products)
(Fiscal Year Covered) Stock Nasdaq US Index Index
<S> <C> <C> <C>
May 6, 1994 100.00 100.00 100.00
Dec. 31, 1994 230.56 145.67 84.45
Dec. 31, 1995 1450.00 146.19 76.11
Dec. 31, 1996 258.33 179.83 88.83
</TABLE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On October 11, 1996, the Company sold the excess inventory and brokered-OEM
portions of its C.A.S. Sports International, Inc. and C.A.S. Sports Agency, Inc.
subsidiaries (collectively, "CAS") to a corporation formed for that purpose by
an investor group that included two former Company executives and a number of
former CAS employees. The sale transaction was consummated pursuant to the terms
of a Stock Purchase Agreement (the "Agreement"), dated October 11, 1996, by and
among the Company and Gen-X Equipment, Inc., a Washington corporation ("Gen-X").
The aggregate purchase price was comprised of $700,000 in cash, a short-term,
non-interest bearing promissory note in the amount of $300,000 and two long-term
promissory notes aggregating $2.0 million. The short term note was collected in
full by the Company in December 1996. The long-term notes are secured by the
stock of the sold corporations and bear interest at prime. No principal or
interest payments are due on the long-term notes for one year from the date of
the transaction. Thereafter, repayment is due in quarterly principal
installments of $100,000 plus interest though September 2002. The proceeds of
the sale were used by the Company to repay current bank borrowings. The Company
recognized a pre-tax gain of approximately $482,000 on the sale. The Company
received an opinion from an investment banking firm as to the fairness of the
consideration received in this transaction.
12
<PAGE> 15
Immediately prior to the stock sale, all assets and liabilities of CAS,
other than fixed assets and certain prepaid assets, were transferred to the
Company and excluded from the sale. The Company will continue to operate the
branded and licensed products portions of the C.A.S. businesses. Under the terms
of the Agreement, Gen-X is prohibited from competing in the Branded Products
Business, as defined in the Agreement, for two years from the date of the
transaction and in the Licensed Products Business, as defined, until December
31, 1997. The Company is prohibited from competing in the Excess Inventory and
Brokered-OEM businesses for two years, as those terms are defined in the
Agreement.
Gen-X is controlled by James J. Salter, former CEO and Director of the
Company and Kenneth J. Finkelstein, former Senior Vice President and Director of
the Company. Mr. Salter resigned as a Director prior to the consummation of the
transaction. He had previously resigned as an officer of the Company. Mr.
Finkelstein resigned his officer and Director positions prior to the
transaction. Mr. Salter's resignation agreement with the Company, dated May 7,
1996 and Mr. Finkelstein's resignation agreement with the Company, dated August
2, 1996, were amended in connection with the sale transaction to allow Messrs.
Salter and Finkelstein to operate the purchased Excess Inventory and
Brokered-OEM businesses.
Subsequent to the sale date, the Company sold approximately $1.8 million in
inventories associated with the CAS excess inventory business to Gen-X at the
Company's cost-basis. Terms on these sales were 120 days from date of shipment.
At December 31, 1996, the Company had accounts receivable of $1.8 million due
from Gen-X. In addition, Gen-X agreed to collect approximately $10.4 million in
outstanding CAS accounts receivable as of October 11 on behalf of the Company
for a fee equal to 1.75% of the amount collected. Approximately $7.0 million of
these accounts receivable were collected and remitted to the Company during 1996
for which the Company paid $123,000 in collection fees. Finally, the Company
shared office space with Gen-X from October 11, 1996 through December 31, 1996.
The Company paid Gen-X approximately $10,000 for rent during this period.
Mr. Janes, Jr., Senior Vice President of Manufacturing of the Company, is a
former executive of California Manufacturing Enterprises ("CME"), a manufacturer
of snowboards and snowboard binding parts, and one of the Company's suppliers.
Mr. Janes' father, David A. Janes, Sr. has a financial interest in CME. In
fiscal year 1996, aggregate purchases by the Company from CME were approximately
$260,000. All purchases were made in the ordinary course of business, and were
based on competitive bids and/or specialized capabilities needed to support the
Company.
OTHER BUSINESS
Management knows of no other business which will be presented for action at
the Annual Meeting. If any other business requiring a vote of the shareholders
should come before the meeting, the persons designated as your proxies will vote
or refrain from voting in accordance with their best judgment.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") requires directors, certain officers and greater-than-10%
shareholders ("Reporting Persons") of all publicly-held companies to file
certain reports ("Section 16 Reports") with respect to beneficial ownership of
such companies' equity securities.
Based solely on its review of the Section 16 Reports furnished to the
Company by its Reporting Persons and, where applicable, any written
representation by them that no Form 5 was required, all Section 16(a) filing
requirements applicable to the Company's Reporting Persons during and with
respect to fiscal 1996 have been complied with on a timely basis, except as
described as follows: Robert E. Hall, David H. Davis, David A. Janes, Jr., and
Bruce Manke, all newly elected to office in 1996, were late in the filing of
Forms 3; Gerald B. Wasserman, a director, was late in reporting one transaction
on a Form 5; and Kenneth J. Finkelstein and James L. Salter, both former
directors and officers of the Company filed late Forms 4 with respect to two
transactions each.
13
<PAGE> 16
SOLICITATION OF PROXIES
This solicitation is made on behalf of the Board of Directors of the
Company. Proxies may be solicited by officers, directors and employees of the
Company, none of whom will receive any additional compensation for their
services. Solicitations of proxies may be made personally, or by mail,
telephone, telegraph or messenger.
The Company may pay persons holding shares of Common Stock in their names
or in the names of nominees, but not owning such shares beneficially, such as
brokerage houses, banks and other fiduciaries, for the expense of forwarding
soliciting materials to their principals. All of the costs of solicitation of
proxies will be paid by the Company.
SHAREHOLDER PROPOSALS FOR THE 1998 ANNUAL MEETING OF SHAREHOLDERS
In order to be eligible for inclusion in the proxy materials of the Company
for the 1998 Annual Meeting of Shareholders, any shareholder proposal to take
action at such meeting must be received no later than December 9, 1997. Such
proposals must be mailed to the Company's main office at 8610 304th Avenue S.E.,
Preston, Washington 98050, Attention: David H. Davis, Corporate Secretary. Any
such proposal shall be subject to the requirements of the proxy rules under the
Exchange Act.
By Order of the Board of Directors
/s/ David H. David
David H. Davis
Secretary
Preston, Washington
April 9, 1997
14
<PAGE> 17
PROXY
RIDE, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Robert E. Hall and G. Scott Stewart, or
either of them, as proxies, each with full power of substitution, to vote for
and on behalf of the undersigned, as designated below, the number of shares of
Common Stock of Ride, Inc. (the "Company") which the undersigned would be
entitled to vote if personally present at the Annual Meeting of Shareholders to
be held on May 5, 1997 at 1:00 p.m., and at any adjournments thereof. The
undersigned directs that this proxy be voted as follows:
(CONTINUED, AND TO BE MARKED, DATED AND SIGNED, ON THE OTHER SIDE)
- --------------------------------------------------------------------------------
FOLD AND DETACH HERE
<PAGE> 18
Please mark
your votes as
indicated in
this example. /x/
(1) A proposal to ratify the selection of Ernst & Young LLP as the Company's
independent public accountants for the fiscal year ending December 31,
1997.
FOR AGAINST ABSTAIN
/ / / / / /
(2) Election of Directors (please mark appropriate box):
FOR WITHHOLD
all nominees named below AUTHORITY
(except as indicated to to vote for all nominees
the contrary below) listed below.
/ / / /
Robert E. Hall, Cory J. Hechler,
Mark M. Salter, Gerald B. Wasserman
INSTRUCTION: To withhold authority to vote for individual nominee(s),
print the nominee's name(s) in the following space(s):
------------------------------------------------------------------------
------------------------------------------------------------------------
------------------------------------------------------------------------
(3) In their discretion, the holders of this proxy are authorized to vote
upon such other business as may properly come before the meeting.
The shares of stock represented by this proxy will be voted as specified above,
unless otherwise directed. IF NO SPECIFICATION IS MADE ON THE ELECTION OF
DIRECTORS, A VOTE FOR ALL NOMINEES NAMED ABOVE WILL BE ENTERED. The undersigned
hereby revokes any proxy or proxies heretofore given for such stock and
ratifies all that the above-named proxies or their substitutes may lawfully do
by virtue hereof.
PLEASE SIGN, DATE, AND RETURN PROMPTLY
USING THE ENCLOSED RETURN ENVELOPE.
Signature(s) Date
-------------------------------------------- ------------------
Please sign exactly as your name appears on this proxy. When shares are held by
joint tenants, both should sign. When signing as attorney, 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.
- --------------------------------------------------------------------------------
FOLD AND DETACH HERE
