<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
July 22, 1999
- -------------------------------------------------------------------------------
(Date of Earliest Event Reported)
RIDE, INC.
- -------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Washington 1-13042 91-1571027
- ------------------------------ ----------- -------------------
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation or File Number) Identification No.)
organization)
8160 - 304th Avenue Southeast
Preston, Washington 98050
- ---------------------------------- -------------------
(Address of principal executive (Zip Code)
offices)
(425) 222-6015
- -------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
<PAGE>
ITEM 5. OTHER EVENTS.
On July 22, 1999, Ride, Inc., a Washington corporation (the "Company"),
K2, Inc., a Delaware corporation ("K2"), and KT Acquisition, Inc., a
Washington corporation and wholly owned subsidiary of K2 ("Sub"), entered
into an Agreement and Plan of Merger (the "Merger Agreement"). Pursuant to
the terms of the Merger Agreement, Sub will be merged (the "Merger") with and
into the Company, with the Company surviving the Merger and becoming a wholly
owned subsidiary of K2. At the effective time of the Merger, each share of
the Company's Common Stock (excluding shares held by the Company or K2 and
excluding shares held by shareholders who perfect their statutory dissenters'
rights under Washington state law) issued and outstanding shall be converted
into the number of shares of K2 Common Stock equal to a ratio (the "Exchange
Ratio") obtained by dividing $1.00 by the average of the daily closing prices
("Average Share Price") for the shares of K2 Common Stock for the five (5)
consecutive trading days on which such shares are actually traded on the New
York Stock Exchange ending at the close of trading on the third trading day
immediately preceding the closing date of the Merger; provided, however, that
if the Average Share Price is greater than $12.00, the Exchange Ratio shall be
one-twelfth (1/12), and if the Average Share Price is less than $10.00, the
Exchange Ration shall be one-tenth (1/10). It is the intention of the Company
and K2 that the Merger for federal income tax purposes will be tax-free to the
Company's shareholders. In addition, the consummation of the Merger is
subject to certain other conditions contained in the Merger Agreement,
including approval of the Merger Agreement by the Company's shareholders.
Each of the Company's directors has entered into an agreement (the
"Shareholder Agreement") to vote his shares in favor of the Merger. The
Company issued a press release announcing the execution of the Merger
Agreement on July 22, 1999, which press release is attached hereto as Exhibit
99.1 and incorporated by reference herein.
In connection with the Merger Agreement, K2 extended interim
financing to the Company in the amount of $2,000,000 in exchange for the
Company's issuance of a Convertible Promissory Note (the "Note"). The Note
bears interest at the rate of eight percent (8%) per annum, increasing by one
percent (1%) per annum after the end of each 180 day period following the
date of the Note to the extent any principal or interest remains then due and
owing, up to a maximum of eighteen percent (18%) per annum. The principal
and interest under the Note is payable in full on November 19, 1999. The
Note is convertible by K2 at any time, and is automatically convertible if
the Merger Agreement is terminated under certain specified circumstances,
into shares of the Company's Series C Cumulative Convertible Preferred Stock
("Conversion Shares") in number equal to the quotient obtained by dividing
(a) the sum of the then unpaid principal balance of the Note, plus the
accrued but unpaid interest thereon, by (b) $1.00. If, prior to repayment of
the Note or conversion of the Note into Conversion Shares, a third party
acquires the Company (a "Third Party Acquisition"), or the Company enters
into a definitive agreement for a Third Party Acquisition, K2 may then or at
anytime thereafter for a period of one year demand in writing to be repaid in
cash in an amount equal to the product obtained by multiplying the number of
Conversion Shares by the greater of: (a) the average price of the Company's
Common Stock (as reported on the Pink Sheets) on the five trading days
immediately preceding the date of notice by K2 demanding conversion of the
Note; and (b) the quotient obtained by dividing the highest share price of
the Company's Common Stock to be paid in the Third Party Acquisition or the
net consideration to be paid in the Third Party Acquisition, as the case may
be, by the number of shares of the Company's Common Stock then outstanding.
In connection with the financing described above, and in order to ensure
that the Company's satisfaction of customer orders would not be interrupted
prior to closing of the merger, the Company and K2 reached an agreement under
which K2 will acquire bindings inventory of the Company with an approximate
cost of $700,000 and assumed the Company's obligations under customer
<PAGE>
orders for approximately $8,400,000 worth of bindings and apparel. K2 also
agreed to purchase from the Company's vendors approximately $4,000,000 of
additional inventory necessary to fulfill these customer orders. The Company
granted K2 a non-exclusive license to use the Company's trademarks and
tradenames in fulfilling these customer orders.
The information set forth above shall not be deemed to constitute an
offer to sell any security. Any such offer to sell will be made only by
means of a prospectus.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(c) EXHIBITS.
99.1 Press release dated July 22, 1999 announcing the execution of the
Merger Agreement.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
RIDE, INC.
Date: August 5, 1999
By: /S/ GREG COOK
---------------------------
Greg Cook
Chief Financial Officer
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- -----------
<S> <C>
99.1 Press release dated July 22, 1999 announcing the execution of the
Merger Agreement.
</TABLE>
<PAGE>
EXHIBIT 99.1
Friday July 23, 2:41 pm Eastern Time
Company Press Release
SOURCE: Ride Sports
Ride To Merge With K2
PRESTON, Wash., July 23 /PRNewswire/ -- Ride, Inc. (OTC Bulletin Board: RIDE
- -news) announced today that it has signed a definitive agreement to merge
with K2 Inc. (NYSE: KTO - news), a Los Angeles, California-based designer,
manufacturer, and marketer of brand name sporting goods, other recreational
products, and industrial products including the well known brand names of K2
and Olin alpine skis, K2 snowboards, boots, and bindings, K2 in- line skates,
Stearns sports equipment, Shakespeare fishing tackle, K2 bikes and Dana
Design backpacks. The Company's other recreational products include Hilton
corporate casuals, and Planet Earth skateboard and snowboard products. K2's
industrial products include Shakespeare extruded monofilaments, marine
antennas and fiberglass light poles.
"There are many compelling reasons for the company to join forces with K2,"
stated Robert Marcovitch, president and chief executive officer of Ride Inc.
"The strong market position of Ride and its family of brands combined with
K2's reputation for innovation and financial strength will help solidify the
combined company's position in the growing snowboard category. Furthermore,
the synergies afforded by the combination will enhance Ride's ability to
continue to develop and manufacture the technically innovative, superior
quality products our customers around the world have come to come to expect."
"This acquisition will enable us to create one of the strongest snowboard
organizations in the world," said Richard M. Rodstein, president and chief
executive officer of K2 Inc. "This is an exciting acquisition of one of the
early innovators in the snowboard business. Ride's demonstrated ability to
design innovative and high quality snowboards, strap and step-in bindings and
snowboards boots and apparel have resulted in upward momentum for its brands
in the marketplace. While it is our intention to maintain the
distinctiveness of the Ride brand, we see exciting opportunities to combine
the talents of our companies that will enable us to deliver higher quality
products, more new products, and higher service levels to our valued customer
base. The acquisition creates an opportunity to benefit from the synergistic
combination and to leverage each company's strengths in different markets to
grow our global presence."
Under the terms of the agreement, K2 will acquire all outstanding shares of
common stock of Ride Inc., in exchange for shares of K2 Inc. common stock.
The shareholders of Ride Inc. will receive a fraction of a K2 share with an
approximate value of $1.00 for each share of Ride stock owned. The exact
exchange ratio will be determined by dividing $1.00 by the market price of K2
stock during a five day period prior to the merger, but not less than $10 nor
more than $12. Based on the current number of Ride Inc. shares outstanding,
the value of the transaction is approximately $14.3 million. In the
aggregate, K2 will issue 1.4 million shares at closing and will reserve
approximately 324,000 additional shares for possible future issuance on
exercise of options and warrants.
The merger transaction is expected to close within 100 days and will be
accounted for as a purchase. The board of directors of both companies have
approved the agreement. The transaction is subject to the approval of Ride
Inc. shareholders and satisfaction of regulatory requirements and other
customary terms and conditions.
<PAGE>
Established in 1992, Ride is headquartered at the foothills of the Cascade
Mountains, in Preston, Washington. For passionate action sports enthusiasts
of all ages, Ride represents an uncompromised approach to fun and provides
superior product and lifestyle experiences under the brand names: Ride,
Liquid, 5150, Fulltilt, and Smiley Hats.
To the extent this Press Release discusses financial projections, information
or expectations about Ride, Inc.'s products or markets, or otherwise makes
statements about the future, such statements are forward-looking statements
within the meaning of that term in the Private Securities Litigation Reform
Act of 1995. Such forward-looking statements are subject to a number of risks
and uncertainties that could cause actual results to differ materially from
statements made. Factors which could cause actual results to differ
materially include, but are not limited to, those set forth in the "Risk
Factors" section of the Company's 1998 10-K, as well as any additional
disclosures in the Company's most recent quarterly report on Form 10-Q, each
as filed with the Securities and Exchange Commission.
SOURCE: Ride Sports
