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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 14D - 9
SOLICITATION / RECOMMENDATION STATEMENT
PURSUANT TO
SECTION 14 (d) (4) OF THE
SECURITIES EXCHANGE ACT OF 1934
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RIDE, INC.
(Name of Subject Company)
RIDE, INC.
(Name of Person(s) Filing Statement)
COMMON STOCK, WITHOUT PAR VALUE PER SHARE
(Title of Class of Securities)
765689 10 4
(Cusip Number of Class of Securities)
ROBERT F. MARCOVITCH
PRESIDENT AND CHIEF EXECUTIVE OFFICER
RIDE, INC.
8160 304TH AVENUE S.E.
PRESTON, WASHINGTON 98050
(425) 222-6015
(Name, Address and Telephone Number of Person Authorized to
Receive Notice and Communications on Behalf of Person(s) Filing Statement)
COPIES TO:
MICHAEL J. ERICKSON
KAREN A. ANDERSEN
SUMMIT LAW GROUP PLLC
1505 WESTLAKE AVENUE N., SUITE 300
SEATTLE, WASHINGTON 98109
(206) 281-9881
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ITEM 1. SECURITY AND SUBJECT COMPANY
The name of the subject company is Ride, Inc., a Washington corporation
("Ride" or the "Company"), and the address of the principal executive offices of
Ride is 8160 304th Avenue S. E., Preston, Washington 98050. The title of the
class of equity securities to which this statement relates is common stock,
without par value per share (the "Common Stock").
ITEM 2. TENDER OFFER OF THE BIDDER
This statement relates to the cash tender offer by Minotaur Capital,
Inc., a Florida corporation ("Minotaur"), to purchase 51% of the outstanding
shares of Common Stock at a price of $2.25 per share, payable in the form of a
promissory note due within one year (subsequently amended to eight months) from
the Expiration Date of the offer and upon the terms and subject to the
conditions set forth in Minotaur's Tender Offer Statement on Schedule 14D-1
filed with the Securities and Exchange Commission on April 6, 1999, as amended
on April 12, 1999 and April 19, 1999 (collectively, the "Minotaur Offer").
According to the Schedule 14D-1, the principal executive offices of Minotaur are
located at 3300 PGA Boulevard, Gardens Plaza Office Tower, Suite 410, Palm Beach
Gardens, Florida 33410.
ITEM 3. IDENTITY AND BACKGROUND
(a) The name and business address of Ride, which is the entity filing
this statement, are set forth in Item 1 above.
(B) GENERAL. Certain information regarding contracts, agreements,
arrangements or understandings between the Company and certain of its executive
officers, directors and affiliates is set forth in the Company's Notice of
Annual Meeting of Shareholders and Proxy Statement dated April 20, 1998,
relating to its 1998 Annual Meeting of Shareholders (the "Proxy Statement"),
under the headings "Option Repricing" and "Report on Executive Compensation."
Such sections of the Proxy Statement are filed as EXHIBIT 1 hereto and are
incorporated herein by reference. In addition, ANNEX A attached hereto and
incorporated herein describes Ride director and executive officer compensation
and the ownership of Ride Common Stock by its directors and executive officers.
The following describes other arrangements the Company has with its officers and
directors and provides certain updated information:
SEVERANCE AGREEMENTS. The Company has a severance agreement with Robert
Marcovitch, the Company's President and Chief Executive Officer. The agreement
provides that upon termination of Mr. Marcovitch's employment by the Company
other than for "cause," the Company is obligated to pay Mr. Marcovitch severance
payments equal to six months of his base salary.
ANNUAL EQUITY AWARD GRANTS; CHANGE IN CONTROL PROVISIONS. On February
8, 1999, the Company's Compensation Committee made its customary annual grant of
option awards under the Company's stock option plan. Options to purchase an
aggregate of 99,000 shares of Common Stock were granted (the "1999 Grant"), each
of which vests over a four-year period, has a per share exercise price of
$0.625, and a ten-year term. Of the options awarded in the 1999 Grant, options
to purchase an aggregate of 51,000 shares of Common Stock were granted to Ride's
executive officers. See Item 6(a) below. The vesting of each option granted to
the Company's directors and to Robert Marcovitch, the Company's President and
Chief Executive Officer, is subject to acceleration in the event of a change in
control of the Company or the termination of the optionee'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. As a result of the Minotaur Offer, all outstanding
options held by Ride's directors and its President are currently fully vested.
SALARY INCREASES SINCE JUNE 30, 1998. Since June 30, 1998, the
following changes have been made to the executive compensation set forth in
Annex A: On April 1, 1999, Robert Marcovitch, the Company's President and Chief
Executive Officer, received an increase in his annual salary from $200,000 per
year to $225,000 and a car allowance in the amount of $600 per month; on October
9, 1998, Greg Cook, the Company's Chief Financial Officer, received an increase
in his annual salary from $102,112.63 to $130,000; and on February 20, 1999,
Scott
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Mavis, the Company's Vice President of Marketing, received an increase in his
annual salary from $75,000 to $100,000.
PARTICIPATION IN THE COMPANY'S EMPLOYEE STOCK PURCHASE PLAN. From time
to time, various Ride executive officers have purchased shares under the
Company's Employee Stock Purchase Plan. These purchases have been immaterial in
the aggregate.
GUARANTY. Mark Salter, one of the Company's directors, has guaranteed
(the "Salter Guaranty") certain obligations of Ride to U.S. Bank National
Association. In exchange for the Salter Guaranty, Ride granted to Mr. Salter,
among other things, a security interest in certain notes owing to Ride and it
was agreed by Ride's senior lender, among other things, that if Mr. Salter was
required to perform on the Salter Guaranty that Mr. Salter would have a right to
receive all payments to be made under such notes.
Except as incorporated by reference herein, set forth in ANNEX A and as
set forth above, to the knowledge of the Company, as of the date hereof, there
are no material contracts, agreements, arrangements or understandings, or any
actual or potential conflicts of interest between the Company or its affiliates
and (1) the Company, its executive officers, directors or affiliates or (2)
Minotaur or its respective executive officers, directors or affiliates.
ITEM 4. THE SOLICITATION OR RECOMMENDATION
(a) BACKGROUND; RECOMMENDATION.
The Company has been financing its operations through the collection of
receivables and advances on its line of credit from CIT Group/Credit Finance,
Inc. ("CIT"). Under the CIT line of credit the Company receives no advances
against inventory in January, February or March. Additionally, the availability
of funds under the CIT line are conditioned on the Company meeting certain
collateral requirements. The Company has been in discussions with CIT to
increase the funds available under the line, but to date CIT has not agreed to
such an increase. The Company also has a $3.0 million line of credit facility
with U.S. Bank National Association. By August 30, 1999 all $3.0 million
outstanding under the U.S. Bank line must be repaid in full. Additionally, in
February 1999 the Company converted its Series B 5% Cumulative Convertible
Preferred Stock into a $1.75 million secured promissory note due June 30,1999
(subject to extension under certain circumstances). In light of the Company's
near-term need for capital, the Company's Board of Directors has been exploring
various financial options and is currently continuing these efforts, as
described in Item 7 below.
On April 6, 1999, the day that the Minotaur Offer was announced, the
Board of Directors of Ride held a telephonic board meeting. At that meeting, the
Board discussed the Minotaur Offer and specifically noted that Minotaur was
newly formed, the payment to tendering shareholders was to be made in one year
pursuant to an unsecured, non-interest bearing promissory note and that no plan
was stated as to how the Company would be funded in the interim. The Board
recognized the need to determine whether Minotaur had any capacity to fund the
Company currently or to ultimately pay shareholders who might tender their
shares. The Board authorized the Company to engage Ladenburg Thalmann & Co. Inc.
("Ladenburg") as its financial advisor with respect to the Minotaur Offer. The
Board then authorized management to seek additional information about Minotaur
and its president and chief executive officer, David J. Feingold, in order that
the Board might evaluate the Minotaur Offer. On behalf of the Board, Robert
Marcovitch, the President and Chief Executive Officer of Ride, sent a letter to
Mr. Feingold seeking information about Minotaur, Mr. Feingold and their
prospects for funding the Company and the Minotaur Offer. That letter, together
with the response the Company received, are set forth below:
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April 7, 1999
VIA EMAIL, FACSIMILE AND AIR COURIER
David J. Feingold
President and CEO
Minotaur Capital, Inc.
3300 Plaza PGA Boulevard
Gardens Plaza Office Tower
Suite 410
Palm Beach Gardens, FL 33410
Dear Mr. Feingold:
We are in receipt of the tender offer made by Minotaur Capital, Inc. yesterday
for shares of Ride, Inc. common stock. In order that it can properly evaluate
this offer, Ride's Board of Directors has asked that I write to you for
additional information on Minotaur and its affiliates (together "Minotaur").
Specifically, Ride's Board of Directors would like more information concerning
the following:
- Potential sources of funding for the tender offer;
- Actual and potential sources of funding for current business
operations and debt repayment;
- Business and financial references for you, Minotaur and its
affiliates; and
- Biographies for you and your affiliates, specifically including any
relevant industry-specific and public company experience.
In addition to the foregoing, please provide any additional information not
specifically identified above that you believe would assist Ride's Board of
Directors in evaluating Minotaur's offer. Please provide the requested
information no later than Friday, April 9, 1999. Thank you in advance for your
anticipated prompt attention to this matter.
Yours very truly,
Robert F. Marcovitch
President and CEO
April 8, 1999
via Fax (425) 222-6379
Mr. Robert Marcovitch
Ride, Inc.
8160 304th Avenue S.
Preston, Washington 98050
Re: Response to your letter of April 7, 1999
Dear Mr. Marcovitch:
Thank you for your letter of April 7, 1999. In response to your
questions, please be advised of the following:
1. There are a number of potential sources of funding that have been
evaluated. The primary sources, based on the size of this transaction, is
anticipated to be persons and/or entities with which I have had a
representational relationship. Many of my clients have significant net worths,
in addition to my own personal funds, which leads me to believe that based on
the present size of the proposed transaction the funding should be obtainable,
although there are no guarantees.
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2. Minotaur Capital has no business references as it is a company that
was formed by me for the sole purpose of making an investment in Ride, Inc.
3. In terms of my own personal background, I am an attorney with
experience in multiple public and private company mergers and acquisitions. I
have been involved with such transactions with multiple investment banking,
brokerage and investment personnel.
I hope that this response will assist you. As the public has been
advised, I am presently working on another offer, which should reflect the
overall desires of your shareholders based on the numerous comments I have
received. I believe that my next offer will be couched in terms that should
satisfy your fiduciary duty of recommending such an offer as my follow up offer
will be based upon the input of your own shareholders.
As always, I remain free to discuss any matters with you as I believe
both of us have nothing but the best interest of the shareholders at stake in
attempting to put a proper value on the company.
Please feel free in calling me in the future.
Sincerely,
David J. Feingold, Esq.
Upon receipt of Mr. Feingold's letter, the Company's management again determined
to attempt to seek additional information and on April 9, 1999 Mr. Marcovitch
sent the following letter to Mr. Feingold:
April 9, 1999
VIA FACSIMILE
David J. Feingold
President and Chief Executive Officer
Minotaur Capital, Inc.
3300 Plaza PGA Boulevard
Gardens Plaza Office Tower
Suite 410
Palm Beach Gardens, Florida 33410
Dear Mr. Feingold:
We are in receipt of your letter dated April 7, 1999. Unfortunately, we
had hoped it would contain more information so that Ride's Board of Directors
could better evaluate your offer. This second letter is another attempt to
obtain such information.
As stated in my letter of April 6, 1999, Ride's Board of Directors
would like additional information on your potential sources of funding for the
tender offer. Specifically, we would like you to provide names and financial
statements for those persons or entities you believe would finance the tender
offer. Additionally, your letter failed to address an issue of great importance
to Ride - how you would fund the capital currently needed by the company. Again,
although we realize that Minotaur was only recently formed, we would appreciate
the names and phone numbers of some of the multiple investment banking,
brokerage and investment personnel with whom you have worked.
We would like to receive the requested material no later than this
Monday, April 12, 1999. Thank you in advance for you prompt attention to this
matter.
Very truly yours,
Robert Marcovitch
President
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On April 12, 1999, Minotaur announced a revised offer increasing the
offer price to $2.25 per share. After the amended offer was announced , the
following letter was received by Mr. Marcovitch from Mr. Feingold:
April 12, 1999
Via Fax (425) 222-6379
Mr. Robert Marcovitch
Ride, Inc.
8160 304th Avenue S.
Preston, Washington 98050
Re: Response to your letter of April 9, 1999
Dear Mr. Marcovitch:
Thank you for your letter of April 9, 1999. As you should be aware, the
tender offer filed by Minotaur Capital, Inc. was amended this morning. The
amendment was done in response to numerous comments that were reviewed. I
believe that all necessary disclosures have been made in the Schedule 14D and
the amendment filed therewith and incorporated by reference.
As you have a fiduciary duty to evaluate an offer in light of the value
that you believe Ride, Inc. to presently have, I would appreciate your sharing
with me that valuation. At a minimum I would expect you to have received a
fairness opinion and I would appreciate your sharing the same with me as that
may further influence Minotaur Capital, Inc. Since I am sure that you have the
best interest of your shareholders at heart, any potential for you to obtain
fair value for them based on a fairness opinion you are probably obligated to
obtain, would certainly best serve your shareholders.
Thank you for your anticipated cooperation.
Sincerely,
David J. Feingold, Esq.
President Minotaur Capital, Inc.
On April 14, 1999, Mr. Marcovitch and Mr. Feingold talked for
approximately 45 minutes on the telephone. Although Mr. Marcovitch repeatedly
asked for information on Mr. Feingold and his financial backers beyond the
limited information provided in the Schedule 14D-1, no such information was
provided.
On April 16, 1999, the Board held a meeting at which the Board reviewed
the Minotaur Offer with Ride's management and its financial and legal advisors.
At this meeting, Ladenburg presented its oral opinion to the effect that the
Minotaur Offer is inadequate, from a financial point of view, to the
shareholders of the Company. Its written opinion to the same effect was
subsequently delivered to the Board. A discussion ensued in which Ride's legal
advisor and certain of the Company's senior executives participated. After the
presentation and discussion by the Board, the Board unanimously determined that
the Minotaur Offer was inadequate and not in the best interests of Ride and its
shareholders.
THE RIDE BOARD OF DIRECTORS HAS UNANIMOUSLY DETERMINED THAT THE
MINOTAUR OFFER IS INADEQUATE AND IS NOT IN THE BEST INTERESTS OF RIDE AND ITS
SHAREHOLDERS. ACCORDINGLY, THE RIDE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
THAT RIDE'S SHAREHOLDERS REJECT THE MINOTAUR OFFER AND NOT TENDER THEIR SHARES
PURSUANT TO THE MINOTAUR OFFER.
A copy of the letter to its shareholders communicating the
recommendation of the Ride Board and the form of the press release announcing
such recommendation are filed as EXHIBITS 4 AND 5 hereto and are incorporated by
reference herein.
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(b) REASONS FOR THE RECOMMENDATION.
In reaching its determination and recommendation described above, the
Board considered a number of factors, including its familiarity with, and
management's view of, Ride's business, financial condition, results of
operations, business strategy and future prospects. The Board also specifically
considered the imminent need of Ride for capital to pay debt obligations and for
current business operations. Finally, the Board took into account its belief,
based on the facts discussed below, that Minotaur would be unable to consummate
the tender offer. In this regard, the Board considered the following:
- THE HIGHLY SPECULATIVE NATURE OF THE FUNDING NECESSARY TO CONSUMMATE
THE MINOTAUR OFFER. The Minotaur Offer is for 51% of the outstanding Common
Stock payable pursuant to a non-interest bearing promissory note due within
one year (subsequently amended to eight months) from the date of the
expiration of the offer. Minotaur is a newly formed corporation with no
assets. The Minotaur Offer itself states that Minotaur:
[Believes] that it would be able to finance the acquisition of shares
proposed in this tender offer. There is no guarantee that such funding
will take place and the proposed selling shareholder is cautioned that
this transaction involves a high degree of risk to the shareholder.
If Minotaur is unable to fund the purchase and defaults on the
promissory notes, shareholders who tender their shares would receive no cash
consideration. Based on the correspondence received from Minotaur in response
to specific questions as well as the due diligence investigation conducted by
the Company, the Board could find no corroborating evidence that would
support a conclusion that the Minotaur Offer was anything other than illusory
- - there was simply nothing to support a belief that Minotaur would be in a
position to fund the tender offer.
- THE FAILURE OF THE MINOTAUR OFFER TO ADDRESS RIDE'S NEED FOR
NEAR-TERM OPERATING CAPITAL. The Minotaur Offer contains no proposal for interim
funding. In his correspondence to the Company in response to its repeated
requests for such a proposal, Mr. Feingold has said nothing. Regarding its plans
for the Company, the Minotaur Offer states only that "If the Company determines
to accept the Offer, the Purchaser would like to undertake to provide assistance
to the Company in the expansion of its business." The Board believes that
without capital to repay the debt obligations of the Company and for current
business operations, the Company's business will be substantially and negatively
impacted.
- THE OPINION OF RIDE'S FINANCIAL ADVISOR THAT THE MINOTAUR OFFER IS
INADEQUATE FROM A FINANCIAL POINT OF VIEW. As part of its presentation to the
Board concerning the financial aspects of the Minotaur Offer, Ladenburg gave its
formal opinion that the Minotaur Offer is inadequate, from a financial point of
view, to the shareholders of the Company. The full text of the opinion dated
April 16, 1999, setting forth the assumptions made, matters considered and
limitations on the review undertaken, is attached hereto as EXHIBIT 6 and is
incorporated by reference herein.
- MINOTAUR'S POSSIBLE LACK OF COMPLIANCE WITH FEDERAL AND STATE
SECURITIES LAWS. Minotaur is offering promissory notes in exchange for shares of
Ride Common Stock. These promissory notes have not been registered with the
Securities and Exchange Commission or, to the Company's knowledge, with any
state securities commission. Unless there exists an exemption from such laws,
the Company believes that the promissory notes may be being offered in violation
of Federal and state securities laws. The Company is also concerned that the
Minotaur Offer has not been adequately published or disseminated as required by
Federal tender offer rules and regulations and as is necessary to ensure that
shareholders receive full information about the proposed offer. In addition,
Federal securities laws prohibit purchases of securities by bidders outside of
the tender offer during the pendency of such offer. As disclosed in Minotaur's
amended Schedule 14D-1, "Bidder has continued to acquire shares of Ride, Inc.
and since the announcement of the tender offer the Bidder has increased its
holdings by over sixty percent and paid for shares in the open market at prices
as high as $1.25 per share." The Board is concerned about the consequences to
the Company of Minotaur's actions, especially since the Company would remain
public if the Minotaur Offer were completed.
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- THE LACK OF PUBLIC COMPANY OR INDUSTRY EXPERIENCE OF MINOTAUR'S
PRINCIPAL. The Company is not aware that Mr. Feingold has had any experience
running any company other than his law firm, let alone a public company or a
company in the contemporary sports industry. The Board believes that it would be
a dereliction of its duty to the Ride shareholders for it to recommend that Mr.
Feingold assume a position of authority and responsibility with respect to Ride.
- THE POTENTIALLY DETRIMENTAL EFFECT OF MINOTAUR'S PARTIAL TENDER
OFFER. In a partial offer such as the one made by Minotaur where a bidder makes
an offer for less than 100% of a company's outstanding securities, shareholders
who do not tender their shares or whose shares are not entirely purchased in the
offer because of a pro rata purchase of tendered shares can be forced to take
different and less attractive consideration for their remaining shares.
The foregoing discussion of the information and factors considered by
the Board is not intended to be exhaustive. In view of the variety of factors
considered in connection with its evaluation, the Board did not find it
practicable to and did not quantify or otherwise assign relative weights to the
specific factors considered in reaching its determinations and recommendation.
In addition, individual members of the Board may have given different weight to
different factors.
ITEM 5. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED
Ladenburg has been retained by the Company to act as its exclusive
financial advisor and to render one or multiple fairness opinions. Pursuant to a
letter agreement, dated April 15, 1999, between the Company and Ladenburg, the
Company agreed to pay to Ladenburg a retainer fee of $100,000, an opinion fee of
$125,000 for each opinion rendered, and a fee of $350,000 upon the closing of
certain specified transactions during the term of the agreement or within one
year thereafter. The fees paid for up to two opinions will be credited against
such $350,000 fee. The term of the agreement is one year, unless terminated
early by either party in its sole discretion. The Company has also agreed to
reimburse Ladenburg for its reasonable out-of-pocket expenses, including
attorney's fees (provided such fees do not exceed $25,000 without the Company's
consent) and to indemnify Ladenburg against certain liabilities, including
liabilities arising under Federal securities laws. In the ordinary course of its
business, Ladenburg may actively trade the securities of the Company for its own
account and for the accounts of its customers and, accordingly, may at any time
hold a long or short position in such securities.
Except as disclosed herein, neither the Company nor any person acting
on its behalf currently intends to employ, retain or compensate any other person
to make solicitations or recommendations to security holders on its behalf
concerning the Minotaur Offer.
ITEM 6. RECENT TRANSACTIONS AND INTENT WITH RESPECT TO SECURITIES
(a) There have been no transactions in the Common Stock during the past
60 days by the Company or, to the Company's knowledge, by any executive officer,
director, affiliate or subsidiary of the Company, except that: Mark Salter, a
member of the Company's Board of Directors, purchased 50,000 shares of Common
Stock through his investment retirement account on February 23, 1999; Robert F.
Marcovitch, the Company's President, Chief Executive Officer and a director,
purchased 10,000 shares of Common Stock on February 25, 1999 and was granted an
option to purchase up to 15,000 shares of the Company's Common Stock on February
8, 1999; Gregory S. Cook, the Company's Chief Financial Officer, Chief Operating
Officer and Treasurer, was granted an option to purchase up to 10,000 shares of
the Company's Common Stock on February 8, 1999; David H. Davis, the Company's
Secretary and General Counsel, was granted an option to purchase up to 5,000
shares of the Company's Common Stock on February 8, 1999; Mark Braiser, the
Company's Vice President of Sales, was granted an option to purchase up to 8,000
shares of the Company's Common Stock on February 8, 1999; Scott Mavis, the
Company's Vice President of Marketing, was granted an option to purchase up to
8,000 shares of the Company's Common Stock on February 8, 1999; and Girish
Govind, the Company's Vice President of Manufacturing, was granted an option to
purchase up to 5,000 shares of the Company's Common Stock on February 8, 1999.
Additionally, on February 19, 1999 the Company converted all outstanding shares
of Series B 5% Cumulative Convertible Preferred Stock into a secured promissory
note in the aggregate principal amount of $1.75 million payable on June 30, 1999
(subject to extension under certain circumstances).
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(b) To the Company's knowledge, (i) none of its executive officers,
directors, affiliates or subsidiaries presently intends to tender shares
pursuant to the Minotaur Offer and (ii) none of its executive officers,
directors, affiliates or subsidiaries presently intends to otherwise sell any
shares which are owned beneficially or held of record by such persons. The
foregoing does not include shares over which, or with respect to which any such
executive officer, director or affiliate or subsidiary acts in a fiduciary or
representative capacity or is subject to instructions from a third party with
respect to such tender.
ITEM 7. CERTAIN NEGOTIATIONS AND TRANSACTIONS BY THE SUBJECT COMPANY
(a) Beginning prior to the Company's receipt of the Minotaur Offer and
continuing as part of its evaluation of the Minotaur Offer, Ride and Ladenburg
held discussions with a number of parties regarding potential strategic
alternatives available to Ride. These discussions have resulted in ongoing
negotiations between the Company and an institutional investor with respect to a
significant equity investment in the Company. The terms of such an investment
are the subject of continuing negotiation and there can be no assurance that
such an investment will be made.
(b) Other than as set forth above, there are no transactions, Board
resolutions, agreements in principle, letters of intent or signed contracts that
relate to or would result in (i) an extraordinary transaction such as a merger
or reorganization, involving the Company or one or more subsidiaries of the
Company, (ii) a purchase, sale or transfer of a material amount of assets by the
Company or one or more subsidiaries of the Company, (iii) a tender offer for or
other acquisition of securities by or of the Company, or (iv) a material change
in the present capitalization or dividend policy of the Company.
ITEM 8. ADDITIONAL INFORMATION TO BE FURNISHED
(a) THE WASHINGTON TAKEOVER ACT. The Washington Takeover Act (Chapter
19 of the Washington Business Corporation Act) is applicable to Ride and would
apply to Minotaur if the Minotaur Offer were completed. The Washington Takeover
Act provides that if a target corporation has an "acquiring person" as a
shareholder, the target corporation may not engage in any of the defined
"significant business transactions" for a period of five years following the
time of the acquiring person's share acquisition unless the significant business
transaction or the purchase of shares by the acquiring person is approved prior
to the acquiring person's share acquisition by a majority of the members of the
board of directors of the target corporation. An "acquiring person" is a person
who beneficially owns 10% or more of the outstanding voting shares of the target
corporation. After the Washington Takeover Act's five-year moratorium, a
"significant business transaction" may proceed only if (i) it complies with the
"fair price" provisions of the statute - requiring that holders of common stock
receive value per share at least equal to the higher of two specified formulas,
or (ii) such transaction is approved at a shareholders meeting (by the majority
of shares entitled to vote excluding those shares held by the acquiring person)
held at least five years after the acquiring person purchased its shares.
Therefore, unless the board of directors (as it was composed before the
acquiring person acquired its shares) approves of either the transaction or the
acquisition by the acquiror of its shares, the Washington Takeover Act imposes a
five-year moratorium prohibiting the corporation from effecting any of the
enumerated significant business transactions even if its current board wants to
do so.
The "significant business transactions" covered by the Washington
Takeover Act include:
(i) the merger, share exchange or consolidation of the target
corporation with an acquiring person;
(ii) the sale, lease, exchange, mortgage, pledge, transfer or other
disposition or encumbrance of the target's assets to or with an acquiring person
over a threshold aggregate market value;
(iii) the termination, as a result of the acquiring person's
acquisition of at least 10 percent of the shares of the target corporation, of
at least five percent of the target corporation's (or subsidiary's) employees
employed in Washington State over the five-year period following the share
acquisition time;
(iv) the issuance or transfer of shares, options, warrants or rights to
acquire its shares to, or the redemption from, an acquiring person by the target
corporation, except under limited circumstances;
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(v) the liquidation or dissolution of the target proposed by or
pursuant to an agreement with an acquiring person;
(vi) the reclassification of securities of the target proposed by or
pursuant to an agreement with an acquiring person that increases the
proportionate share of the outstanding shares of a class or series of voting
shares or securities convertible into voting shares of a target corporation that
is directly or indirectly owned by an acquiring person, except as the result of
immaterial changes due to fractional shares adjustments; or
(vii) receipt by an acquiring person of the direct or indirect benefit,
except proportionately as a shareholder of the target corporation, of loans,
advances, guarantees, pledges or other financial assistance or tax credits or
other tax advantages.
(b) OTHER INFORMATION. Information regarding beneficial ownership of
Ride shares of Common Stock and Ride director and executive officer compensation
is described in ANNEX A hereto and incorporated by reference herein.
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS
Exhibit 1 "Option Repricing" and "Report on Executive Compensation" sections
of the Proxy Statement.
Exhibit 2 Ride Snowboard Company 1994 Stock Option Plan (incorporated by
reference to Exhibit 10.28 to the Company's Registration Statement
on Form SB-2, File No. 33-75770-LA).
Exhibit 3 Ride Snowboard Company 1994 Directors' Nonqualified Stock
Option Plan (incorporated by reference to Exhibit 10.29 to the
Company's Registration Statement on Form SB-2, File No.
33-75770-LA).
Exhibit 4* Ride's letter to its shareholders date April 19, 1999.
Exhibit 5* Press Release dated April 19, 1999.
Exhibit 6* Opinion of Ladenburg Thalmann & Co. Inc. dated April 16, 1999.
- ---------------------------------
* Included in materials mailed to shareholders of the Company.
After reasonable inquiry and to the best of its knowledge and belief,
the undersigned certifies that the information set forth in this statement is
true, complete and correct.
Dated: April 19, 1999 RIDE, INC.
By: S/S ROBERT F. MARCOVITCH
---------------------------------
Name: Robert F. Marcovitch
Title: President and
Chief Executive Officer
10
<PAGE>
ANNEX A
In response to Items 3 and 8 of this Schedule 14D-9, this Annex A describes Ride
director and executive officer compensation and the ownership of Ride Common
Stock by its directors and executive officers.
EXECUTIVE COMPENSATION.
SUMMARY COMPENSATION TABLE. The following table sets forth annual and
long-term compensation for services rendered during the six months ended June
30, 1998 and the years ended December 31, 1997, 1996 and 1995 by the group of
individuals collectively referred to herein as the "Named Executive Officers"
consisting of the Company's Chief Executive Officer and, during the six months
ended June 30, 1998, the other four most highly paid executive officers of the
Company other than the Chief Executive Officer.
<TABLE>
<CAPTION>
ANNUAL COMPENSATION
---------------------------------------------------------------
OTHER ANNUAL
NAME AND PRINCIPAL POSITION YEAR (1) SALARY($) BONUS ($) COMPENSATION ($)
- --------------------------- -------- ----------- ----------- --------------------
<S> <C> <C> <C> <C>
Robert F. Marcovitch (2) 1998 100,000 0 913
President and Chief Executive Officer 1997 200,000 0 1,957
1996 200,000 0 1,957
1995 214,683 0 2,190
-------- ----------- ----------- --------------------
Gregory S. Cook (3) 1998 50,000 0 4,000
Chief Operating Officer 1997 100,000 0 8,571
1996 79,167 4,166 6,884
1995 N/A N/A N/A
-------- ----------- ----------- --------------------
David H. Davis (4) 1998 55,000 0 1,375
Secretary and General Counsel 1997 103,332 0 2,375
1996 33,334 0 792
1995 N/A N/A N/A
-------- ----------- ----------- --------------------
Mark Braiser (5) 1998 75,000 0 2,515
Vice President, Sales 1997 150,000 0 5,986
1996 150,000 6,250 5,507
1995 75,000 10,000 2,750
-------- ----------- ----------- --------------------
Scott Mavis (6) 1998 25,000 0 625
Vice President, Marketing 1997 50,000 0 1,250
1996 50,000 2,083 1,250
1995 50,000 4,166 1,250
-------- ----------- ----------- --------------------
</TABLE>
(1) The information for 1998 is for the six months ended June 30, 1998.
(2) The amount shown for other annual compensation for Mr. Marcovitch
represents contributions by the Company to the Company's Retirement
Savings Plan on behalf of Mr. Marcovitch.
(3) Mr. Cook joined the Company in March 1996; the salary shown for that
year is for a partial year's employment. The amount shown for other
annual compensation represents contributions by the Company to the
Company's Retirement Savings Plan on behalf of Mr. Cook and an
automobile allowance.
(4) Mr. Davis joined the Company in September 1996; the salary shown for
that year 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. Davis. Stock option
grants for 1997 include the cancellation, repricing and reissuance of
10,000 options originally issued in 1996.
(5) Mr. Braiser joined the Company in June 1995; the salary shown for that
year is for a partial year's employment. The amount shown for other
annual compensation represents contributions by the Company to the
Company's Retirement Savings Plan on behalf of Mr. Braiser and an
automobile allowance.
11
<PAGE>
(6) The amount shown for other annual compensation represents contributions
by the Company to the Company's 401(k) savings plan on behalf of Mr.
Mavis.
OPTION GRANTS IN 1998. The following table provides information on
option grants to the Named Executive Officers in 1998.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE
NUMBER OF AT ASSUMED ANNUAL RATE OF
SECURITIES PERCENT OF TOTAL STOCK PRICE APPRECIATION FOR
UNDERLYING OPTIONS GRANTED TO EXERCISE PRICE OPTION
OPTIONS EMPLOYEES IN OR BASE PRICE EXPIRATION -----------------------------
GRANTED(#) FISCAL YEAR (1) ($/SH) DATE 5% 10%
----------------- --------------------- ----------------- --------------- -------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Robert F. Marcovitch 7,500 1.31% 1.875 1/2/2008 8,843 22,411
20,000 3.51% 2.000 5/19/2008 25,155 63,749
----------------- --------------------- ----------------- --------------- -------------- ---------------
David H. Davis 2,500 0.44% 1.875 1/2/2008 2,947 7,470
12,000 2.10% 2.000 5/19/2008 15,093 38,249
----------------- --------------------- ----------------- --------------- -------------- ---------------
Gregory S. Cook 2,500 0.44% 1.875 1/2/2008 2,947 7,470
12,000 2.10% 2.000 5/19/2008 15,093 38,249
----------------- --------------------- ----------------- --------------- -------------- ---------------
Mark Braiser 2,500 0.44% 1.875 1/2/2008 2,947 7,470
12,000 2.10% 2.000 5/19/2008 15,093 38,249
----------------- --------------------- ----------------- --------------- -------------- ---------------
Scott Mavis 2,500 0.44% 1.875 1/2/2008 2,947 7,470
6,000 1.5% 2.000 5/19/2008 7,546 19,124
----------------- --------------------- ----------------- --------------- -------------- ---------------
</TABLE>
(1) Based on an aggregate of 570,500 stock options granted to employees during
the six month period ended June 30, 1998.
(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.
The Company's Stock Option Plan is administered by the Compensation
Committee of the Board of Directors, which consists of Messrs. Hechler and
Salter. 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.
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 June 30, 1998.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES UNDERLYING VALUE OF UNEXERCISED
SHARES UNEXERCISED OPTION AT FISCAL IN-THE-MONEY OPTIONS AT FISCAL
ACQUIRED ON VALUE YEAR-END (#) YEAR-END ($)
NAME EXERCISE (#) REALIZED ($) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE (1)
- --------------------- ------------- -------------- ---------------------------------- ----------------------------------
<S> <C> <C> <C> <C>
Robert F. Marcovitch -0- N/A 48,125/59,375 $0/$0
-------------- -------------- ---------------------------------- ----------------------------------
David H. Davis -0- N/A 3,125/23,875 $0/$0
-------------- -------------- ---------------------------------- ----------------------------------
Gregory S. Cook -0- N/A 3,125/21,375 $0/$0
-------------- -------------- ---------------------------------- ----------------------------------
Mark Braiser -0- N/A 12,625/21,875 $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
12
<PAGE>
Stock reported on Nasdaq National Market on September 23, 1998, $1.00,
and the per share exercise price of such options.
COMPENSATION OF DIRECTORS. 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, in June 1998 the Directors approved,
subject to shareholder approval, an amendment to the Company's Directors'
Nonqualified Stock Option Plan whereby upon election or appointment to the Board
of Directors, each non-employee director receives an option under such Plan to
purchase 5,000 shares of Common Stock. The option vests and is exercisable on
the earlier of one year from the date of grant or the last business day
preceding the next following Annual Shareholders' Meeting. 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.
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 September 21, 1998 by (i) each person known by the
Company to be the beneficial owner of more than five percent of the Company's
Common Stock; (ii) by each director; and (iii) by the Named Executive Officers.
TABLE OF BENEFICIAL OWNERSHIP
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
NAME OF BENEFICIAL OWNER (1) BENEFICIAL OWNERSHIP PERCENT OF SHARES OUTSTANDING
- ---------------------------- --------------------- -----------------------------
<S> <C> <C>
Mark M. Salter 1,164,818 (2) 9.2%
--------------------- -----------------------------
James J. Salter 1,013,764 (3) 8.03%
--------------------- -----------------------------
Cory J. Hechler 419,000 (4) 3.3%
--------------------- -----------------------------
Robert F. Marcovitch 54,909 (5) *
--------------------- -----------------------------
Mark Braiser 7,875 (6) *
--------------------- -----------------------------
David H. Davis 10,374 (7) *
--------------------- -----------------------------
Gregory S. Cook 3,125 (8) *
--------------------- -----------------------------
</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 on or before November 20, 1998.
(2) Includes: (i) 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; (ii) 6,000
shares held by Mark Salter as custodian for his three minor children,
for which Mr. Salter disclaims beneficial ownership; (iii) 200,000
shares that are issuable upon the conversion of 100,000 shares of the
Company's Series A Convertible Preferred Stock held by Salter Family
Partners, Ltd.; and (iv) 123,818 shares subject to options that are
currently exercisable or exercisable on or before November 20, 1998.
(3) Includes 893,764 shares held by DLS Financial Holdings, Inc., a trust
controlled by Mr. Salter and 120,000 shares subject to options that are
currently exercisable or exercisable on or before November 20, 1998.
(4) Includes 339,000 shares owned directly and 80,000 shares subject to
options that are currently exercisable or exercisable on or before
November 20, 1998.
(5) Includes 534 shares owned directly and 54,375 shares subject to options
that are currently exercisable or exercisable on or before November 20,
1998.
13
<PAGE>
(6) Includes 4,749 shares owned directly and 5,625 shares subject to
options that are currently exercisable or exercisable on or before
November 20, 1998.
(7) Represents 3,125 shares subject to options that are currently
exercisable or exercisable on or before November 20, 1998.
In addition, please see Item 6(a) of the Schedule 14D-9 for updated
information regarding the recent transactions in the Company's Common Stock by
the Company's executive officers, directors and affiliates.
14
<PAGE>
EXHIBIT 1
[EXCERPTS FROM THE COMPANY'S NOTICE OF ANNUAL MEETING OF SHAREHOLDERS AND
PROXY STATEMENT DATED APRIL 20, 1998, RELATING TO ITS 1998
ANNUAL MEETING OF SHAREHOLDERS.]
OPTION REPRICING
The following table sets forth information with respect to repricings
of options held by any executive officer during the period commencing May 5,
1994 (the date the Company went public) and ending December 31, 1997:
<TABLE>
<CAPTION>
NUMBER OF LENGTH OF
SECURITIES MARKET PRICE ORIGINAL OPTION
UNDERLYING OF STOCK AT EXERCISE PRICE NEW TERM REMAINING
OPTIONS TIME OF AT TIME OF EXERCISE AT DATE OF
NAME DATE REPRICED (#) REPRICING ($) REPRICING ($) PRICE REPRICING
---- ---- ------------ -------------- ------------- ----- ---------
<S> <C> <C> <C> <C> <C> <C>
Robert E. Hall 1/23/97 62,500 $6.500 $10.000 $6.500 115 months
Bruce Manke 1/23/97 15,000 6.500 12.063 6.500 116 months
David A. Janes, Jr. 1/23/97 25,000 6.500 17.500 6.500 104 months
1/23/97 35,000 6.500 15.875 6.500 109 months
David H. Davis 1/23/97 10,000 6.500 12.063 6.500 116 months
</TABLE>
On January 23, 1997, as an incentive for the Company's employees, the
Board of directors voted to give all employees currently holding options under
the 1994 Stock Option Plan the opportunity to surrender those options and
receive new options priced at $6.50 per share. Options issued under the
Directors' Plan were excluded from repricing. With the exception of the exercise
price, the terms of the new options, including vesting schedule, are identical
to the terms of the old options. The holders of 399,500 options (having exercise
prices ranging from $7.43 per share to $29.938 per share) elected to exchange
their options under this program.
In addition to the executive officers listed in the table above, 118
other employees were affected by the repricing since a significant number of
options had been granted at prices exceeding $6.50 per share. The Board of
Directors approved the option repricing because it believes that options are a
significant factor in the Company's ability to attract and retain key employees
that are important to the Company's long-term success
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.
As more fully discussed below, for 1997 the Committee focused on developing a
uniform stock option program for management-level employees. For 1998, the
Committee intends formulating a plan that will bring similar uniformity and
certainty to the Company's bonus program.
15
<PAGE>
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 1998 will
exceed the $1 million limitation.
THE COMPENSATION COMMITTEE
MARK M. SALTER
CORY J. HECHLER, CHAIRMAN
16
<PAGE>
EXHIBIT 4
[Ride Letterhead]
April 19, 1999
Dear Shareholder:
As you may be aware, Minotaur Capital, Inc. has purportedly commenced
an unsolicited tender offer for 51% of the Common Stock of Ride, Inc. at $2.25
per share payable pursuant to a non-interest bearing promissory note due within
one year (subsequently amended to eight months). AFTER CAREFUL CONSIDERATION,
RIDE'S BOARD OF DIRECTORS HAS VOTED UNANIMOUSLY TO RECOMMEND THAT SHAREHOLDERS
REJECT THE MINOTAUR OFFER AS INADEQUATE.
In arriving at their determination that the Minotaur Offer is
inadequate and not in the best interests of Ride or its shareholders, your Board
gave careful consideration to a number of factors, including the following:
- - THE HIGHLY SPECULATIVE NATURE OF THE FUNDING NECESSARY TO CONSUMMATE THE
MINOTAUR OFFER. The Minotaur Offer provides for payment pursuant to a
non-interest bearing promissory note due one year (subsequently amended to
eight months) from the date of the expiration of the offer. Minotaur is a
shell corporation - newly formed and with no assets. If Minotaur is unable
to fund the purchase and defaults on the promissory notes, shareholders
who tender their shares to Minotaur would receive no cash consideration.
Based on the Company's investigation, the Board found no corroborating
evidence that would allow it to conclude that the Minotaur Offer is
anything other than illusory - there is simply nothing to support a belief
that either Minotaur or David J. Feingold, the president and chief
executive officer of Minotaur, will be in a position to fund the tender
offer.
- - COMPLETE FAILURE OF THE MINOTAUR OFFER TO ADDRESS RIDE'S NEED FOR
NEAR-TERM CAPITAL. The Minotaur Offer contains no proposal for interim
funding. The Board believes that without capital to repay the debt
obligations of the Company and for current operations, the Company's
business will be substantially and negatively impacted.
- - THE OPINION OF RIDE'S FINANCIAL ADVISOR THAT THE MINOTAUR OFFER IS
INADEQUATE FROM A FINANCIAL POINT OF VIEW. As part of its presentation to
the Board concerning the financial aspects of the Minotaur Offer, Ride's
financial advisor, Ladenburg Thalmann & Co. Inc., gave its formal opinion
that the Minotaur Offer is inadequate, from a financial point of view, to
the holders of Ride's Common Stock.
- - MINOTAUR'S COMPLIANCE WITH FEDERAL AND STATE SECURITIES LAWS. As described
in the accompanying Schedule 14D-9, the Board has some serious concerns
with regard to the Minotaur's compliance with Federal and state securities
laws.
- - THE LACK OF PUBLIC COMPANY OR INDUSTRY EXPERIENCE OF MINOTAUR'S PRINCIPAL.
The Company is not aware that Mr. Feingold has had any experience running
any company other than his law firm, let alone a public company or a
company in the contemporary sports industry. The Board believes that it
would be a dereliction of its duty to the Ride shareholders for it to
recommend that Mr. Feingold assume a position of authority and
responsibility with respect to Ride.
- - THE POTENTIALLY DETRIMENTAL EFFECT OF MINOTAUR'S PARTIAL TENDER OFFER. In
a partial offer such as the one made by Minotaur where a bidder makes an
offer for less than 100% of a company's outstanding securities,
shareholders who do not tender their shares or whose shares are not
entirely purchased in the offer because of a pro rata purchase of tendered
shares can be forced to take different and less attractive consideration
for their remaining shares.
The enclosed Schedule 14D-9 describes your Board's decision to reject
the Minotaur Offer and contains other important information relating to its
decision. We urge you to read it carefully. If you have any questions or require
assistance, please call 425-222-6015 ext. 247.
Please be assured that your Board and the management of Ride will
continue to act in the best interests of Ride and its shareholders. Your
Directors thank you for your support.
Very truly yours,
Robert F. Marcovitch
Chief Executive Officer and President
17
<PAGE>
EXHIBIT 5
RIDE DIRECTORS FIND MINOTAUR UNSOLICITED OFFER ILLUSORY AND INADEQUATE
PRESTON, WA, APRIL 19, 1999 - Ride, Inc. (Nasdaq: RIDE) today announced
that its Board of Directors has unanimously determined that the unsolicited
tender offer by Minotaur Capital for 51% of the outstanding shares of Ride at
$2.25 per share payable by a non-interest bearing promissory note due in one
year (subsequently amended to eight months) is inadequate and not in the best
interests of its shareholders, and has unanimously recommended that Ride
shareholders reject the Minotaur Offer and not tender their shares to Minotaur.
In reaching its determination and recommendation described above, the
Board considered a number of factors including the following:
- - THE HIGHLY SPECULATIVE NATURE OF THE FUNDING NECESSARY TO CONSUMMATE THE
MINOTAUR OFFER. The Minotaur Offer provides for payment pursuant to a
non-interest bearing promissory note due one year (subsequently amended to
eight months) from the date of the expiration of the offer. Minotaur is a
shell corporation -- newly formed and with no assets. If Minotaur is
unable to fund the purchase and defaults on the promissory notes,
shareholders who tender their shares would receive no cash consideration.
- - COMPLETE FAILURE OF THE MINOTAUR OFFER TO ADDRESS RIDE'S NEED FOR
NEAR-TERM OPERATING CAPITAL. The Minotaur Offer contains no proposal for
interim funding. The Board believes that without capital to repay the debt
obligations of the Company and for current business operations, the
Company's business will be substantially and negatively impacted.
- - THE OPINION OF RIDE'S FINANCIAL ADVISOR THAT THE MINOTAUR OFFER IS
INADEQUATE FROM A FINANCIAL POINT OF VIEW. Ride's financial advisor,
Ladenburg Thalmann & Co. Inc. gave its formal opinion to the Ride Board
that the Minotaur Offer is inadequate, from a financial point of view, to
the holders of Ride's Common Stock.
- - THE LACK OF PUBLIC COMPANY OR INDUSTRY EXPERIENCE OF MINOTAUR'S PRINCIPAL.
The Company is not aware that David J. Feingold, the President and Chief
Executive Officer of Minotaur, has had any experience running any company
other than his law firm, let alone a public company or a company in the
contemporary sports industry.
Said Robert Marcovitch, Ride's President and Chief Executive Officer,
"After investigation, the Board found no corroborating evidence whatsoever that
would allow it to conclude that the Minotaur Offer is anything other than
illusory - there is simply nothing to support a belief that either Minotaur or
Mr. Feingold will be in a position to fund the tender offer. Moreover, based on
our investigation, we have some serious concerns about the validity of the offer
under state and federal securities laws. Today's amendment by Minotaur does not
diminish any of these concerns."
Ride also announced that it is involved in ongoing negotiations with an
institutional investor with respect to a significant capital infusion in the
Company, but stated that no letter of intent has been executed and the Company
cannot predict whether one will be.
Ride also announced that it has filed with the Securities and Exchange
Commission a Solicitation/Recommendation Statement on Schedule 14D-9 setting
forth the Company's formal recommendation with respect to the Minotaur Offer.
Additional information with respect to the Board's decision to recommend that
the shareholders reject the Minotaur Offer and the matters considered by the
Board in reaching such decision is contained in the Schedule 14D-9.
Established in 1992, Ride is headquartered in the foothills of the
Cascade Mountains in Preston, Washington. Ride is a leading manufacturer of
contemporary sports equipment, including snowboard equipment, wakeboards and
apparel under the brand names: Ride, Liquid, 5150, Smiley Hats and FullTilt.
This press release contains forward-looking statements with respect to
the Company's financing needs and its ability to obtain near-term financing.
Such forward-looking statements involve known and unknown risks, uncertainties
and other factors that may cause such statements to be materially different from
any future results expressed or implied by such forward-looking statements.
Readers are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date hereof. The Company undertakes no
obligation to publicly release the result of any revision to these
forward-looking statements that may be made to reflect events or circumstances
after the date hereof or to reflect the occurrences of unanticipated events.
18
<PAGE>
EXHIBIT 6
[Ladenburg Thalmann & Co. Inc. Letterhead]
April 16, 1999
The Board of Directors of
Ride, Inc.
8160 304th Avenue SE
Preston, WA 98050
Gentlemen:
On April 6, 1999 Minotaur Capital, Inc. (the "Purchaser") commenced a
tender offer to purchase 51% of all outstanding shares of common stock, no par
value, (the "Shares") of Ride, Inc. (the "Company") at $2.25 per share net to
the seller in cash via a balloon payment secured by a non-interest bearing
promissory note issued by the Purchaser, due and payable within one year of the
expiration date of the Tender Offer and upon the terms and subject to the
conditions set forth in the Schedule 14D-1 dated April 6, 1999 and Amendment
No.1 to Schedule 14D-1 dated April 12, 1999 (taken together the "Tender Offer").
You have engaged us pursuant to an engagement letter, dated April 15,
1999 (the "Engagement Letter"), between the Company and Ladenburg Thalmann & Co.
Inc. ("Ladenburg"). Specifically, Ladenburg has been requested to advise you
with respect to the fairness to the stockholders of the Company, from a
financial point of view, of the consideration to be received by such holders and
to render our opinion (the "Opinion") as to whether or not the consideration to
be paid to the stockholders of the Company in connection with the proposed
Tender Offer is fair, from a financial point of view, to the stockholders of the
Company.
In conducting our analysis, we reviewed and considered such information
as we deemed necessary or appropriate for the purposes of stating our Opinion
including, without limitation, the following: (i) Tender Offer Statement on
Schedule 14D-1 filed by the Purchaser with the Securities and Exchange
Commission and the draft Solicitation/Recommendation Statement on Schedule 14D-9
which we understand may be filed by the Company with the Securities and Exchange
Commission; (ii) certain business and financial information relating to the
Company, provided by the Company, including, without limitation, the financial
condition and results of operations of the Company, the historical financial
performance of the Company, and certain projected financial information; (iii)
certain public filings made by the Company with the Securities and Exchange
Commission; and (iv) certain publicly available market trading data and
historical trading performance data for the Company's common stock. In addition,
we conducted such other analyses and examinations and reviewed and considered
such other financial, economic and market data as we deemed appropriate in
arriving at our Opinion. Ladenburg also met with members of senior management of
the Company to discuss, among other things, the historical and prospective
industry environment, and financial condition and operating results.
In rendering our Opinion, we have assumed and relied upon the accuracy,
completeness and fairness, without assuming any responsibility for the
independent verification of, all financial and other information that was
available to us from public sources, that was provided to us by the Company, or
that was otherwise reviewed by us. With respect to financial forecasts, we have
assumed that they have been reasonably prepared reflecting the best currently
available estimates and judgments of the management of the Company as to the
future financial performance of the Company. We have not made or been provided
with an independent evaluation or appraisal of the assets or liabilities
(contingent or otherwise) of the Company, and we do not assume any
responsibility for verifying any of the information reviewed by us. Our Opinion
is necessarily based upon information available to us, and financial, stock
market, economic and other conditions and circumstances existing and disclosed
to us, as of the date hereof.
19
<PAGE>
In conducting our investigation and analyses and in arriving at our
Opinion expressed herein, we have taken into account and relied solely on the
financial terms and disclosures as outlined in the Tender Offer. We have also
considered such other information, financial studies, analyses and
investigations and financial, economic and market criteria which we deemed
relevant.
Ladenburg, as part of its investment banking services, is regularly
engaged in the valuation of businesses and securities in connection with
mergers, acquisitions, underwritings, sales and distributions of listed and
unlisted securities, private placements and valuations for estate, corporate or
other purposes. Ladenburg has been retained by the Board of Directors of the
Company to provide this Opinion and has received fees and indemnification
against certain liabilities for the services rendered pursuant to this
engagement.
In the ordinary course of business, we actively trade securities for
our own account and for the accounts of our customers and, accordingly, may at
any time hold a long or short position in the debt or equity securities of the
Company.
Based upon and subject to the foregoing, it is our opinion that, as of
the date hereof, the Tender Offer is inadequate, from a financial point of view,
to the stockholders of the Company.
Very truly yours,
LADENBURG THALMANN & CO. INC.
20
