SCHEDULE 14A
(RULE 14A-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION

PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. __)

Filed by the Registrant |X|
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Check the appropriate box:
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|_| Definitive Additional Materials by Rule 14a-6(e)(2))
|_| Soliciting Material Under Rule 14a-12

CANNONDALE CORPORATION
_______________________________________________________________________________
(Name of Registrant as Specified in Its Charter)

_______________________________________________________________________________
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

Payment of Filing Fee (Check the appropriate box):

|X| No fee required.
|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

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|_| 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:

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CANNONDALE CORPORATION
16 TROWBRIDGE DRIVE
BETHEL, CONNECTICUT 06801
(203) 749-7000

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

TO BE HELD ON NOVEMBER 13, 2002

To our Stockholders:

The Annual Meeting of Stockholders of Cannondale Corporation will be
held on Wednesday, November 13, 2002, at 10:00 a.m., Eastern Standard Time, at
our corporate headquarters, 16 Trowbridge Drive, Bethel, Connecticut, for the
following purposes:

1. To elect three Class II directors for a three-year term;

2. To ratify the selection of Ernst & Young LLP as our independent
accountants for the 2003 fiscal year; and

3. To transact such other business as may properly come before the
meeting or any adjournments thereof.

Accompanying this Notice is a Proxy, a Proxy Statement and a copy of
our Annual Report to Stockholders for fiscal year 2002.

WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE COMPLETE,
SIGN AND DATE THE PROXY AND RETURN IT IN THE ENCLOSED ENVELOPE PROVIDED OR VOTE
ELECTRONICALLY VIA THE INTERNET OR TELEPHONE. The Proxy may be revoked at any
time prior to the time that it is voted. Only stockholders of record as of the
close of business on October 7, 2002 will be entitled to vote at the meeting.

By Order of the Board of Directors

JOHN T. CAPETTA
Secretary

Bethel, Connecticut
October 11, 2002

CANNONDALE CORPORATION
16 TROWBRIDGE DRIVE
BETHEL, CONNECTICUT 06801

---------------------

PROXY STATEMENT

---------------------

This Proxy Statement is being furnished to our stockholders in
connection with the solicitation by the Board of Directors of Cannondale
Corporation, a Delaware corporation (together with its subsidiaries,
collectively referred to as we, us or our), of proxies for use at our Annual
Meeting of Stockholders to be held at our headquarters, 16 Trowbridge Drive,
Bethel, Connecticut on Wednesday, November 13, 2002, at 10:00 a.m., Eastern
Standard Time, and at any and all postponements or adjournments thereof, for the
purposes set forth in the accompanying Notice of Annual Meeting.

This proxy statement and the other enclosed documents are first being
mailed to stockholders on or about October 11, 2002.

GENERAL

Only holders of record of our common stock at the close of business on
October 7, 2002 are entitled to notice of, and to vote at the Annual Meeting or
any postponements or adjournments thereof. As of October 7, 2002, 7,582,779
shares of our common stock were outstanding and held by approximately 530
holders of record. A list of stockholders entitled to vote at the meeting will
be available for inspection at the meeting. Holders of our common stock are
entitled to one vote on each matter to be considered and voted upon at the
Annual Meeting for each share held.

All shares of our common stock represented by properly executed proxies
received in time for the Annual Meeting will be voted at the Annual Meeting in
the manner specified in the proxies. If no instructions are indicated, shares
represented by proxy will be voted (i) FOR the slate of nominees proposed by our
Board of Directors and (ii) FOR ratification of the appointment of Ernst & Young
LLP as our independent accountants for the fiscal year ending June 28, 2003
("fiscal 2003"). We do not expect that any other matters will be brought before
the Annual Meeting. If, however, other matters are properly presented at the
Annual Meeting, the persons named as proxies will vote in accordance with their
judgment.

The grant of a proxy does not preclude you from voting in person at the
Annual Meeting. You may revoke a proxy at any time prior to the Annual Meeting
by sending a written notice to us stating that you would like to revoke your
proxy, submitting a new, timely proxy or attending the annual meeting and voting
in person. Attendance at the Annual Meeting will not, in and of itself, revoke a
proxy. If your shares are held in the name of your broker, bank or other
nominee, you must bring a legal proxy from your broker, bank or other nominee to
the Annual Meeting in order to vote in person.

The presence at the Annual Meeting, in person or by proxy, of the
holders of a majority of the shares of our common stock outstanding on October
7, 2002, will constitute a quorum. Abstentions and broker non-votes (votes
withheld by brokers in the absence of instructions from the street-name holders)
will be counted as present for establishing a quorum. Directors will be elected
by a plurality of votes cast at the Annual Meeting. Abstentions are not counted
toward a nominee's number of total votes cast. All other matters which properly
come before the Annual Meeting must be approved by a majority of the votes
present at the Annual Meeting. Abstentions will have the practical effect of
voting against such matter, since an abstention is one less vote for approval.
Broker non-votes on any matter will have no impact on such matter since they are
not considered "shares present" for voting purposes.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table reflects shares of our common stock beneficially
owned (or deemed to be beneficially owned pursuant to the rules of the
Securities and Exchange Commission) as of September 27, 2002, by (i) each person
known to us to own more than 5% of our outstanding common stock as of September
27, 2002; (ii) each director and nominee to be a director of ours; (iii) each of
our executive officers named in the Summary Compensation Table included on page
7 of this proxy statement; and (iv) our current directors and executive officers
as a group. Unless otherwise indicated in the footnotes below, the persons named
in the table have sole voting and investment power with respect to all shares
shown as beneficially owned.

PERCENT OF
BENEFICIAL OWNER NUMBER OF SHARES (1) COMMON STOCK
---------------- -------------------- ------------

Joseph S. Montgomery (2) (3)......... 1,983,346 24.1%
James Scott Montgomery (2) (4)........ 489,186 6.4
William A. Luca....................... 373,888 4.7
Daniel C. Alloway..................... 277,297 3.5
Leonard J. Konecny.................... 68,583 *
Michael T. Dower...................... 24,831 *
John Sanders.......................... 9,333 *
Sally G. Palmer....................... 9,333 *
Michael J. Stimola (5)................ 19,533 *
Gregory Griffin....................... 11,213 *
Pegasus Partners II, L.P. (6)......... 981,517 11.5
Royce & Associates, LLC (7)........... 808,400 10.7
Dimensional Fund Advisors Inc. (8).... 625,900 8.3
Arthur E. Hall (9).................... 567,500 7.5
James R. Pyne (10).................... 549,451 6.8
All current directors and executive
officers as a group (13 persons).... 3,371,113 36.8%

- ---------------------

* Represents less than 1% of our outstanding common stock.

(1) The number of shares of common stock deemed beneficially owned includes
shares issuable pursuant to stock options which may be exercised within
60 days of September 27, 2002, for the following persons: Mr. Joseph
Montgomery - 187,083 shares, Mr. James Scott Montgomery - 96,000,
Mr. Luca - 343,928, Mr. Alloway - 248,216, Mr. Konecny - 68,583,
Mr. Sanders - 9,333, Ms. Palmer - 9,333, Mr. Stimola - 9,333, and
Mr. Griffin - 9,333.

(2) Mr. Joseph S. Montgomery and Mr. James Scott Montgomery each has a
business address at c/o Cannondale Corporation, 16 Trowbridge Drive,
Bethel, Connecticut 06801.

(3) Includes 462,963 shares issuable upon conversion of a convertible
debenture held by Mr. Montgomery.

(4) Includes 21,954 shares held in trust for Mr. James Scott Montgomery's
minor children.

(5) Includes 5,000 shares held in Mr. Stimola's spouse's Individual Retirement
Account.

(6) Based on information contained in Schedule 13G filed jointly by Pegasus
Partners II, L.P. and certain related entities on August 5, 2002. The
number of shares reported consists of shares issuable upon exercise of
warrants currently exercisable. Pegasus Partners II, L.P. has an address
at 99 River Road, Cos Cob, Connecticut 06807.

(7) Based on information contained in Schedule 13G filed by Royce &
Associates, LLC on September 6, 2002. Royce & Associates, LLC has an
address at 1414 Avenue of the Americas, New York, New York 10019.

(8) Based on information contained in Schedule 13G filed by Dimensional Fund
Advisors Inc. ("Dimensional") on January 30, 2002. Dimensional is a
registered investment advisor that furnishes investment advice to four
registered investment companies and serves as an investment manager to
certain other investment vehicles. Dimensional disclaims beneficial
ownership of the shares reported. Dimensional has an address at 1299 Ocean
Avenue, 11th Floor, Santa Monica, California 90401.

(9) Based on information contained in Schedule 13D filed jointly by
Arthur E. Hall and certain related parties on February 8, 1998.
Mr. Hall has sole voting and dispositive power for 525,000 shares and
shared voting and dispositive power for 42,500 shares. Mr. Hall has an
address at 1726 Cedarwood Drive, Minden, Nevada 89423.

(10) Consists of shares issuable upon conversion of a convertible debenture
held by Mr. Pyne. Mr. Pyne has an address at 5 Tennyson Circle,
New Hartford, New York 13413.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires our executive officers, directors and persons owning more than 10% of
our common stock ("Reporting Persons") to file reports of ownership and reports
of changes of ownership with the Securities and Exchange Commission. Reporting
Persons are required to furnish us with copies of all Section 16(a) reports that
they file. Based solely upon a review of copies of these filings received, we
believe that with respect to the fiscal year ended June 29, 2002, all required
filings were made on a timely basis, except for one Form 3 filed late by Cynthia
Hoboken (Treasurer).

ITEM 1 - ELECTION OF DIRECTORS

Our Board of Directors is divided into three classes, as nearly equal
in number as possible. Each class serves three years, with the terms of office
of the respective classes expiring in successive years. The term of office of
directors in Class II expires at the 2002 Annual Meeting. The Board of Directors
proposes that the nominees described below be elected to Class II for a new term
of three years and until their successors are duly elected and qualified. The
Board of Directors has no reason to believe that any of the nominees will not
serve if elected, but if any of them should become unavailable to serve as a
director, and if the Board designates a substitute nominee, the persons named as
proxies will vote for the substitute nominee designated by the Board.

OUR BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE SLATE OF NOMINEES
DESCRIBED BELOW.

CLASS II - DIRECTORS STANDING FOR ELECTION

JOHN SANDERS, Director since 1998

John Sanders, 54, is currently engaged in venture capital investment
with Milstein Brothers Capital Partners. From 1998 to September 2000, he was
with the New York Islanders Hockey Club, L.P., where he served as President
(1999 to 2000) and Senior Vice President-Administration and General Counsel
(1998 to 1999). Prior to joining the Islanders, Mr. Sanders was a partner with
the law firm of Levett, Rockwood & Sanders since 1981.

JAMES SCOTT MONTGOMERY, Director since 1994

James Scott Montgomery, 41, was appointed our Vice President of
Marketing in February 2002, a position he also held from 1993 to 1997. From 1997
to February 2002, Mr. Montgomery engaged in various private investment and
consulting activities that included providing consulting services to us. His
previous positions with us include founder and President of the Sales and
Trading Divisions of Cannondale Japan KK (1991 to 1993), co-founder and Managing
Director of Cannondale Europe B.V. (1989 to 1991) and Director of Purchasing.
Mr. Montgomery is the son of Joseph S. Montgomery, our Chairman, President and
Chief Executive Officer.

SALLY G. PALMER, Director since 1999

Sally G. Palmer, 47, has served as the Chief Development Officer for
the Credit Suisse First Boston Technology Group since June 2000, where she
oversees the career development of the group's professionals. Previously, she
served as an advisor to us while she was a Principal with the investment banking
division of Robertson, Stephens & Company (1990 to 1998).

CLASS III - TERM EXPIRES AT THE 2003 ANNUAL MEETING

WILLIAM A. LUCA, Director since 1994

William A. Luca, 59, has served as our Vice President of Finance and
Chief Financial Officer since 1994 and as our Chief Operating Officer since
February 2000. He also served as our Treasurer from 1994 to November 2001. Prior
to joining us, he served as a management consultant from 1989 to 1993, including
consulting for us between August and December 1993. From 1980 to 1989, Mr. Luca
was employed by Dual-Lite, Inc., a manufacturer of emergency lighting systems,
as President and Chief Executive Officer (1986-1989), President and

Chief Operating Officer (1983-1986) and Chief Financial Officer (1980-1983).

DANIEL C. ALLOWAY, Director since 1998

Daniel C. Alloway, 43, has held a number of positions since joining us
in 1982, including Vice President of Sales (1998 to present), Vice President of
Sales and Vice President of European Operations (1994 to 1998), Managing
Director of Cannondale Europe (1992 to 1994), Director of Sales and Marketing
(1990 to 1992) and National Sales Manager (1987 to 1990).

GREGORY GRIFFIN, Director since 1999

Gregory Griffin, 53, is a self-employed attorney and businessman.
Previously, Mr. Griffin was Assistant General Counsel with BTR, Inc., a
multinational conglomerate (1995 to 1999), and a partner with the law firm of
Levett Rockwood & Sanders (1981 to 1995).

CLASS I - TERM EXPIRES AT THE 2004 ANNUAL MEETING

JOSEPH S. MONTGOMERY, Director since 1971

Joseph S. Montgomery, 62, founded Cannondale in 1971 and has been our
Chairman, President and Chief Executive Officer and a director since our
formation. Mr. Montgomery is the father of James Scott Montgomery, who is also a
director and our Vice President of Marketing.

MICHAEL J. STIMOLA, Director since 1995

Michael J. Stimola, 45, is the founder, Chief Executive Officer and
President of Sandella's Coffee Cafe, Inc., a company formed in 1994, of which
Mr. Joseph Montgomery is a director and a principal stockholder. Sandella's
licenses a food system service for upscale gourmet quick-service restaurants.
Mr. Stimola is also the President of Sandvick Associates Inc., a design and
construction company headquartered in Georgetown, Connecticut.

DIRECTORS' REMUNERATION; ATTENDANCE

Directors who are also full-time employees of ours receive no
additional compensation for serving as a director. During fiscal 2002, each
non-employee director received a quarterly payment of $1,500, plus $1,000 for
each day on which the member attended a meeting of our Board of Directors or a
committee, together with reimbursement of actual expenses incurred in attending
meetings. Upon election to the Board of Directors, non-employee directors are
granted 1,000 options to purchase our common stock, which are immediately
exercisable, at an exercise price per share equal to the fair market value of a
share of common stock at the time of grant. From time to time, non-employee
directors may be granted additional options to purchase our common stock. There
were no options granted to non-employee directors during fiscal 2002.

Our Board of Directors met five times during fiscal 2002. No director
attended fewer than 75% of the total number of meetings of the Board and
committees on which such director served.

COMMITTEES OF THE BOARD

Our Board of Directors has standing Compensation, Audit and Nominating
Committees.

The Compensation Committee is composed of Messrs. Sanders, Griffin,
Stimola and Ms. Palmer. The Compensation Committee's functions are to review and
set the compensation, including salary, bonuses, stock options (in conjunction
with the Stock Option Plan Administrative Committee) and other incentive
compensation, of our Chief Executive Officer and certain of our most highly
compensated officers, and to recommend to the Board of Directors incentive
compensation, retirement or other similar plans benefiting directors, officers
and other key employees of ours. The Compensation Committee met four times
during fiscal 2002.

The Audit Committee is composed of three independent directors, Messrs.
Sanders, Griffin and Ms. Palmer. The Audit Committee's functions are to oversee
our independent accountants and oversee management on matters relating to
accounting, financial reporting and disclosure, internal controls and compliance
with laws, regulations and corporate policies. The Audit Committee met twice
during fiscal 2002.

The Nominating Committee is composed of Messrs. Sanders, Griffin, Stimola
and Ms. Palmer. The Nominating Committee's functions are to recommend to the
Board of Directors criteria for the selection of candidates for director,
evaluate candidates and recommend nominees to serve as directors. The Nominating
Committee did not meet during fiscal 2002.

REPORT OF THE AUDIT COMMITTEE

The Board of Directors has appointed an Audit Committee consisting of
three directors. Each of the members of the Audit Committee is "independent" as
currently defined under the National Association of Securities Dealers' listing
standards. The Board of Directors has adopted a written charter with respect to
the Audit Committee's roles and responsibilities.

In fulfilling its oversight responsibilities, the Audit Committee
reviewed and discussed our audited financial statements for the fiscal year
ended June 29, 2002 with management and Ernst & Young LLP, our independent
accountants. The Audit Committee also discussed with Ernst & Young LLP the
matters required to be discussed by Statement on Auditing Standards No. 61,
Communications with Audit Committees. This included a discussion of Ernst &
Young LLP's judgments as to the quality, not just the acceptability, of our
accounting principles and the other matters that generally accepted auditing
standards require to be discussed with the Audit Committee. The Audit Committee
also received the written disclosures and the letter from Ernst & Young LLP
required by Independent Standards Board Standard No. 1, Independence Discussion
with Audit Committees, and the Audit Committee discussed the independence of
Ernst & Young LLP with that firm.

Based on the Audit Committee's review and the discussions noted above,
the Audit Committee recommended to the Board of Directors, and the Board
approved, that the audited financial statements be included in our Annual Report
on Form 10-K for the fiscal year ended June 29, 2002 for filing with the
Securities and Exchange Commission.

Members of the Audit Committee

John Sanders
Gregory Griffin
Sally G. Palmer

EXECUTIVE COMPENSATION

REPORT OF THE COMPENSATION COMMITTEE

The Board of Directors has appointed a Compensation Committee
consisting of four non-employee directors. The Board of Directors has also
appointed a Stock Option Plan Administrative Committee consisting of these four
non-employee directors to administer our stock option plans.

Our compensation program for executive officers and our management team
consists of the following three key elements, in addition to the benefit plans
offered to all of our employees: base salary; discretionary bonus; and long-term
incentive compensation consisting of stock options. The Compensation Committee
believes that this approach best serves our interests and the interests of our
stockholders by ensuring that executive officers are compensated in a manner
that advances both our short and long-term interests and the interests of our
stockholders.

Components of Executive Compensation

Base Salary. The base salaries paid to executive officers are reviewed
annually by the Chief Executive Officer based upon his assessment of the nature
and responsibilities of the position, and the contribution, experience and
tenure of the executive officer. Base salary reflects individual performance and
is designed to be competitive with salary levels in effect at companies within
and outside the industry in which we compete for executive talents. The Chief
Executive Officer reviews his salary recommendations for all executive officers
with the Compensation Committee, which is responsible for approving or
disapproving those recommendations.

Annual Bonus. The Chief Executive Officer also makes recommendations to
the Compensation Committee as to annual cash bonuses, if any, to be paid to
individual executive officers, based upon his evaluation of each executive
officer's contribution to our performance. The Chief Executive Officer and the
Compensation Committee determined that no annual cash bonuses were payable to
executive officers in fiscal 2002 based on our financial performance during
fiscal 2001. In addition, there will be no annual cash bonuses payable to
executive officers in fiscal 2003 based on our financial performance during
fiscal 2002.

Stock Options. Our 1994 Stock Option Plan, 1994 Management Stock Option
Plan, 1995 Stock Option Plan, 1996 Stock Option Plan, 1998 Stock Option Plan and
2000 Stock Option Plan authorize the Administrative Committee to grant options
to our executives, directors, employees, consultants and advisors. Option grants
are made from time to time to executives whose contributions are perceived to
have had or to be likely to have a significant impact on our performance. In
fiscal 2002, certain executive officers received grants of non-qualified stock
options. These options were granted at the fair market value of our common stock
on the date of grant. The options become exercisable over a three-year period
and have a ten-year term. In determining the number of stock options granted to
executive officers, the Administrative Committee took into account position
levels, individual performance and the number of shares available for issuance
under our stock plans.

Chief Executive Officer Compensation

Mr. Joseph Montgomery's compensation as Chief Executive Officer is
composed of the same elements and performance measures as our other senior
executives. The Compensation Committee believes that Mr. Montgomery's total
compensation reflects the unique contributions that he makes to our performance
as an innovative leader in the bicycle industry and in leading our advancement
into the motorsports industry. Mr. Montgomery's base salary is reflective of
market rates of compensation paid to chief executive officers of comparable
companies. In addition, Mr. Montgomery's base salary reflects his significant
involvement in the research and development and in the manufacturing process of
the motorsports product line as well as the consolidation of responsibilities in
the motorsports product line. The Compensation Committee did not authorize any
annual cash bonus to Mr. Montgomery for fiscal 2002, given our financial
performance. There were no options granted to Mr. Montgomery during fiscal 2002.

Members of the Compensation Committee

John Sanders
Michael J. Stimola
Sally G. Palmer
Gregory Griffin

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The Compensation Committee currently consists of John Sanders, Gregory
Griffin, Michael J. Stimola, and Sally G. Palmer. Joseph Montgomery serves as a
director of Sandella's, a company formed in 1994, of which Mr. Stimola is the
founder, President and Chief Executive Officer. Sandella's licenses a food
system service for upscale gourmet quick-service restaurants.

EXECUTIVE COMPENSATION SUMMARY TABLES

The following table sets forth certain information with respect to the
compensation paid by us for services rendered to us in all capacities during
fiscal 2002, 2001 and 2000 to our Chief Executive Officer and our other four
most highly compensated executive officers whose aggregate salary and bonus
compensation exceeded $100,000.

SUMMARY COMPENSATION TABLE

LONG TERM
COMPENSATION
------------
AWARDS
------------
ANNUAL COMPENSATION SECURITIES
------------------------------------ UNDERLYING
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS (1) OTHER OPTIONS
- --------------------------- ---- --------- -------------- ----------- -----------

Joseph S. Montgomery........................................... 2002 $500,000 $ 0 $48,091 (2) 0
Chairman, President and Chief Executive Officer 2001 500,000 0 61,538 (2) 75,000
2000 371,538 0 37,073 (2) 0
William A. Luca................................................ 2002 400,000 0 31,131 (3) 15,000
Vice President of Finance, Chief Financial Officer 2001 400,000 0 23,613 (3) 75,000
and Chief Operating Officer 2000 335,769 0 O 80,000
Daniel C. Alloway.............................................. 2002 250,000 0 0 15,000
Vice President of Sales 2001 250,000 0 0 75,000
2000 201,827 0 0 30,000
Leonard J. Konecny............................................. 2002 155,465 0 0 0
Vice President of Purchasing 2001 152,369 0 0 15,000
2000 132,714 0 0 10,000
Michael T. Dower (4)........................................... 2002 138,231 0 0 0
Vice President of Information Technology 2001 130,577 0 0 15,000
2000 121,250 0 0 10,000
- ---------------

(1) Profit-sharing bonuses were not paid to Messrs. Montgomery, Luca, Alloway,
Konecny and Dower in fiscal 2002 for corporate profitability in fiscal
2001. No profit-sharing bonuses will be paid to Messrs. Montgomery, Luca,
Alloway, Konecny and Dower in fiscal 2003 for corporate profitability in
fiscal 2002.

(2) Perquisites for fiscal 2002 include the personal use of a corporate
airplane of $42,349. Perquisites for fiscal 2001 include the reimbursement
of legal fees of $19,339 incurred in conjunction with the early repayment
of Mr. Montgomery's $12.0 million obligation to us and personal use of a
corporate airplane of $33,899. Perquisites for fiscal 2000 include personal
use of a corporate airplane of $28,830.

(3) Amount represents gross-up payment for tax liabilities associated with a
home mortgage note with us.

(4) Mr. Dower was appointed Vice President of Information Technology in
September 1999.

The following table sets forth certain information regarding stock
options granted during fiscal 2002 by us to the executive officers named in the
Summary Compensation Table above.

OPTION GRANTS IN FISCAL YEAR 2002

INDIVIDUAL GRANTS
----------------------------------
POTENTIAL
PERCENT REALIZABLE VALUE
OF TOTAL AT ASSUMED ANNUAL
NUMBER OF OPTIONS RATES OF STOCK
SECURITIES GRANTED TO PRICE APPRECIATION
UNDERLYING EMPLOYEES EXERCISE FOR OPTION TERM(2)
OPTIONS IN FISCAL PRICE EXPIRATION -------------------
NAME GRANTED(1) FISCAL YEAR PER SHARE DATE 5% 10%
- ---- ---------- ----------- --------- --------- ------ --------

Joseph S. Montgomery -- -- -- -- -- --
William A. Luca..... 15,000 2.73% $4.36 2/27/12 $41,130 $104,231
Daniel C. Alloway... 15,000 2.73 4.36 2/27/12 41,130 104,231
Leonard J. Konecny.. -- -- -- -- -- --
Michael T. Dower.... -- -- -- -- -- --
- ----------------

(1) Options vest over a three-year period from the date of grant.

(2) Amounts represent hypothetical gains that could be achieved for the
respective options if exercised at the end of the option term. These gains
are based upon assumed rates of share price appreciation set by the
Securities and Exchange Commission of five percent and ten percent of the
fair value of our common stock on the date of grant of the options,
compounded annually from the date of grant to the option expiration dates.
The gains shown are net of the option exercise price, but do not include
deductions for taxes or other expenses associated with the exercise. Actual
gains, if any are dependent on the performance of our common stock and the
date on which the option is exercised. There can be no assurance that the
values reflected would be achieved.

The following table sets forth certain information with respect to the
exercises of stock options during the fiscal year ended June 29, 2002 (none of
the named executive officers exercised any options during fiscal 2002), and
presents the fiscal year-end value of unexercised stock options held as of June
29, 2002 by the executive officers named in the Summary Compensation Table
above.

AGGREGATE OPTIONS EXERCISED IN FISCAL 2002 AND
FISCAL 2002 YEAR END OPTION VALUES

NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
SHARES OPTIONS AT JUNE 29, 2002 OPTIONS AT JUNE 29, 2002 (1)
ACQUIRED VALUE ------------------------- ----------------------------
NAME ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- -------- ----------- ------------- ----------- -------------

Joseph S. Montgomery........ - - $ - - 187,083 116,667 $79,050 $ - -
William A. Luca............. - - - - 325,695 143,567 46,614 - -
Daniel C. Alloway........... - - - - 242,216 108,000 55,335 - -
Leonard J. Konecny.......... - - - - 67,583 42,560 - - - -
Michael T. Dower............ - - - - 22,164 37,562 - - - -

- ----------------

(1) The values in this column represent the closing sales price of our common
stock on the Nasdaq National Market on June 28, 2002, $2.38, less the
respective option exercise price.

EQUITY COMPENSATION PLAN INFORMATION

The following table summarizes share and exercise price information
about our equity compensation plans as of June 29, 2002.

NUMBER OF
SECURITIES
NUMBER OF REMAINING AVAILABLE
SECURITIES TO BE FOR FUTURE ISSUANCE
ISSUED UPON UNDER EQUITY
EXERCISE OF WEIGHTED-AVERAGE COMPENSATION PLANS
OUTSTANDING EXERCISE (EXCLUDING
OPTIONS, PRICE OF OUTSTANDING SECURITIES
WARRANTS AND OPTIONS, WARRANTS AND REFLECTED IN
PLAN CATEGORY RIGHTS RIGHTS COLUMN (A))
- ------------- ---------------- --------------------- --------------------
(A) (B) (C)

Equity compensation plans
approved by security
holders (1).................... 2,582,115 $7.38 86,663

Equity compensation plans not
approved by security
holders (2).................... 978,405 $4.80 21,595
---------- --------

Total.......................... 3,560,520 $6.67 108,258
========= =======

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(1) These plans consist of our 1994 Stock Option Plan, 1994 Management Stock
Option Plan, 1996 Stock Option Plan, 1998 Stock Option Plan and 1994
Employee Stock Purchase Plan.

(2) This plan consists of our 2000 Stock Option Plan.

Of our six stock option plans, only our 2000 Stock Option Plan was
adopted without the approval of our stockholders. The 2000 Stock Option Plan is
substantially similar to our other stock option plans except that the 2000 Stock
Option Plan provides that options under the plan may not be granted to persons
who serve as both officers and directors of Cannondale. In addition, under the
2000 Stock Option Plan, persons who are either officers or directors may not be
granted options covering 50% or more of the total number of options granted
under the 2000 Stock Option Plan during any calendar year.

All options granted under our 2000 Stock Option Plan are non-qualified
stock options. The option exercise price per share of our common stock
purchasable under an option is determined by the Stock Option Plan
Administrative Committee at the time of grant, but in no event will the exercise
price of an option be less than the fair market value of our common stock on the
date of grant. The term of each option granted under our 2000 Stock Option Plan
is fixed by the Administrative Committee, but the term of any option may not
exceed ten years from the date of grant. An option granted under any plan shall
be exercisable at such time or times and subject to such conditions as shall be
determined by the Administrative Committee.

EMPLOYMENT AGREEMENTS AND SEPARATION PLANS

We entered into employment agreements with Michael Dower and Leonard
Konecny, as of June 1, 1992 and June 6, 1994, respectively. Pursuant to these
agreements, Mr. Dower agreed to serve as our Manager of Operating Systems and
Mr. Konecny agreed to serve as our Vice President of Purchasing. The annual base
salary to be paid under each agreement to Mr. Dower and Mr. Konecny was $80,000
per annum. The agreements may be terminated either by Mr. Dower and Mr. Konecny
or us upon at least 14 days prior written notice, or by us effective immediately
for cause. The agreements also contain a non-competition provision which
requires among other things, that Mr. Dower and Mr. Konecny not perform
functions or provide the same or substantially similar services to those
performed or provided by them for us for any competitor of ours for a period of
one year following the termination of employment for any reason.

On February 5, 1998, we entered into Change-of Control Employment
Agreements with Joseph Montgomery, William Luca and Daniel Alloway (each, an
"Executive"). Each agreement is identical and provides that upon a Change of
Control (as defined in each agreement), we will continue to employ the Executive
for three years after the Change of Control occurs (the "Employment Period"),
unless the agreement is terminated earlier in accordance with its terms. During
the Employment Period, each Executive will receive an annual base salary at
least equal to 12 times the highest monthly base salary paid or payable to each
respective Executive for the 12 month

period prior to the Change of Control ("Annual Base Salary"). In addition, each
Executive is entitled to receive an annual profit-sharing bonus at least equal
to the highest profit-sharing bonus paid to each respective Executive in the
past three fiscal years ("Annual Bonus"). Pursuant to the terms of each
agreement, each Executive's employment with us may be terminated by the
Executive at any time and for any reason or no reason at all. Upon a termination
of employment during the Employment Period (other than for death or disability
(as defined in each agreement)), we shall pay to the Executive the aggregate of
the following amounts: (1) the Executive's Annual Base Salary through the Date
of Termination (as defined in each agreement) to the extent not already paid;
(2) the product of (x) the higher of (i) the amount of any Annual Bonus,
annualized in the event the Executive was not employed for the full fiscal year
relating thereto and (ii) the Annual Bonus paid or payable, including any bonus
or portion thereof which has been earned but deferred (and annualized for any
fiscal year consisting of less than 12 full months or during which the Executive
was employed for less than 12 full months), for the most recently completed
fiscal year during the Employment Period, if any (such higher amount being
referred to as the "Highest Annual Bonus") times (y) a fraction, the numerator
of which is the number of days in the current fiscal year through the Date of
Termination, and the denominator of which is 365; (3) any compensation
previously deferred by the Executive (together with any accrued interest or
earnings thereon) and any accrued vacation pay, in each case to the extent not
already paid; (4) the amount equal to the product of (i) three and (ii) the sum
of (x) the Executive's Annual Base Salary and (y) the Highest Annual Bonus; and
(5) any Gross-Up Payments (as defined in each agreement) for certain tax
obligations of the Executive. Each Executive shall also be entitled to certain
benefits and limited payments relating to specific obligations of ours. During
the Employment Period, we may terminate each Executive's employment with us upon
an Executive's death or disability with specified payment obligations in each
instance for accrued obligations and other benefits.

We have also entered into identical non-competition agreements, dated as
of February 16, 2000, with each of the Executives. Under the terms of each
agreement, if, after a Change of Control (as defined in the agreement), the
Executive's employment with us is terminated other than for death or disability,
the Executive has agreed that he will not engage in any business that engages in
the bicycle or motorsports manufacturing, marketing or distribution business and
will not interfere with any business relationship between us and any of our
customers, suppliers, lessors, lessees or employees for a period of two years
after the termination of his employment. In consideration for his covenant not
to complete, we would pay to the Executive within 30 days after his termination
of employment a lump sum payment equal to two times the sum of the Executive's
Annual Base Salary and Highest Annual Bonus (as such terms are defined in the
agreement).

On February 16, 2000, we entered into a severance agreement with William
Luca. Together with the non-competition agreement, this agreement replaces and
supersedes a prior employment agreement between us and Mr. Luca. Pursuant to the
terms of the severance agreement, if, prior to a Change of Control (as defined
in the agreement), Mr. Luca's employment is terminated by us without Cause or by
Mr. Luca for Good Reason (as such terms are defined in the agreement), we will
be obligated to pay Mr. Luca substantially the same amounts and provide
substantially the same benefits that Mr. Luca would have been entitled to
receive pursuant to the terms of his change-of-control employment agreement and
his non-competition agreement if his employment was terminated after a Change of
Control. The agreement also contains a two-year non-competition provision which
prohibits Mr. Luca from, among other things, engaging in any business that
engages in the bicycle or motorsports manufacturing, marketing or distribution
business or interfering with any business relationship between us and any of our
customers, suppliers, lessors, lessees or employees for a period of two years
after the termination of his employment.

Leonard Konecny and Michael Dower are participants in our
Change-of-Control Separation Plan A. The plan provides that each of Mr. Konecny
and Mr. Dower will continue to be a participant in the plan until he ceases to
be employed by us or his designation as a participant in the plan is rescinded
by our Board of Directors. Upon a Change of Control (as defined in the plan), we
will be obligated to pay each plan participant, subject to certain federal tax
limitations, the aggregate of the following amounts if the participant is
terminated for any reason other than for cause (as defined in the plan), death
or disability (as defined in the plan): (1) the participant's Annual Base Salary
at the time of a Change of Control through the Date of Termination (as defined
in the plan) to the extent not already paid; (2) any compensation previously
deferred (together with any accrued interest or earnings thereon) and any
accrued vacation pay, in each case to the extent not already paid; and (3) the
amount equal to the product of (i) one and one-half and (ii) the participant's
Annual Base Salary. Upon such termination, the participant shall also be
entitled to certain benefits and limited payments relating to specific
obligations of ours. After a Change of Control, we may also terminate each
participant for death or disability with specified payment obligations in each
instance

for accrued obligations.

COMPARISON OF CUMULATIVE TOTAL RETURNS

The following graph compares the performance of our common stock with
the performance of the Nasdaq Stock Market (U.S. Companies) Stock Price Index
(the "Nasdaq Index") and a peer group index created by us, during the five-year
period ended June 28, 2002. The graph assumes that $100 was invested on June 27,
1997 in each of our common stock, the Nasdaq Index and the peer group index, and
that all dividends were reinvested.

The peer group index we created is composed of companies in bicycle,
motorsports or other recreational product lines of business. We added Arctic Cat
Inc. to the self-determined peer group this year because we operate in similar
lines of business. There were no other changes made to the self-determined peer
group. The common stock of the following companies has been included in the
self-determined peer group index: Adams Golf Inc., Arctic Cat Inc., Brass Eagle
Inc., Callaway Golf Company, Ducati Motor Holding S.p.A., First Team Sports
Inc., Huffy Corporation, K2, Inc., Oakley Inc., and Polaris Industries Inc. The
prior self-determined peer group index (which excludes Arctic Cat Inc.) is shown
for comparative purposes.

[GRAPH OMITTED]

LEGEND
------

Total Returns Index for: 6/27/97 6/26/98 7/02/99 6/30/00 6/29/01 6/28/02
- ------------------------------ -------- ------- ------- ------- ------- -------
Cannondale Corporation 100.0 69.7 60.6 36.2 22.0 13.3
Nasdaq Stock Market (U.S.
Companies) 100.0 130.3 193.8 280.6 152.1 103.6
Self-Determined Peer Group 100.0 75.4 64.0 62.3 56.4 60.9
Prior Self-Determined Peer
Group 100.0 74.6 62.7 60.6 54.2 58.2

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

In fiscal 2002, we paid James Scott Montgomery $37,000 for consulting
services he provided to us prior to his appointment as our Vice President of
Marketing in February 2002. Beginning at that time through the end of fiscal
2002, we paid Mr. Montgomery approximately $60,600 in salary.

In fiscal 1997, we agreed to provide up to $450,000 in interest-free
loans to William Luca to enable him to purchase a home in the vicinity of our
headquarters. In fiscal 1999, fiscal 2000 and fiscal 2001, we provided Mr. Luca
with an additional $200,000, $200,000 and $95,000, respectively, of
interest-free loans. These advances were incorporated into the original loan
agreement and are subject to the same terms and conditions as the original loan.
As of September 27, 2002, $945,000 had been advanced to Mr. Luca. The loans
mature on December 29, 2006, at which time the entire principal balance is due.
The loans are secured by a mortgage on Mr. Luca's residence.

In fiscal 1997, we agreed to provide up to $125,000 in interest-free
loans to Leonard Konecny to enable him to purchase a home in the vicinity of our
headquarters. In fiscal 2000, we agreed to provide Mr. Konecny an additional
$20,000 of interest-free loans under the same terms and conditions as the
original loan. In the beginning of fiscal 2001, we advanced to Mr. Konecny an
additional $30,000. These advances were incorporated into the original loan
agreement and are subject to the same terms and conditions as the original loan.
As of September 27, 2002, $175,000 had been advanced to Mr. Konecny. The loans
mature on September 1, 2007, at which time the entire principal balance is due.
The loans are secured by a mortgage on Mr. Konecny's residence.

In fiscal 1999, we provided Daniel Alloway with an $80,000 interest-free
advance against his future salary. In fiscal 2000, we advanced to Mr. Alloway an
additional $15,000. The total amount advanced to Mr. Alloway was converted into
a demand note receivable during fiscal 2000. In fiscal 2001, we agreed to
provide Mr. Alloway an additional interest-free advance in the amount of
$66,638. This advance is included in the total demand note receivable with Mr.
Alloway as of September 27, 2002, in the amount of $161,638.

During fiscal 2001, we issued, at par, a $2.0 million debenture to
Joseph Montgomery, which is due June 28, 2005 and is currently convertible into
shares of our common stock at a conversion price of $4.32 per share. The
debenture bears interest at 8.0%. We accrued $196,000 and $28,000 in interest
payable to Mr. Montgomery as of June 29, 2002 and June 30, 2001, respectively,
related to this debenture. On July 29, 2002, we paid Mr. Montgomery
approximately $210,000 which represented the interest payable as of that date.

Our Board of Directors believes that the terms of loans to employees
were fair and reasonable under the circumstances. We anticipate that future
transactions with affiliated parties will be approved by a majority of our
disinterested directors and will be on terms no less favorable to us than those
that could be obtained from unaffiliated parties.

ITEM 2 - RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS

We have appointed Ernst & Young LLP as our independent accountants for
fiscal 2003. Ernst & Young LLP has served as our independent accountants since
1993. Services provided to us by Ernst & Young LLP with respect to fiscal 2002
included the audit of our consolidated financial statements, limited reviews of
quarterly reports, services related to filings with the Securities and Exchange
Commission and consultations on various tax matters. Representatives of Ernst &
Young LLP will be present at the Annual Meeting to respond to appropriate
questions and to make such statements as they may desire.

Ratification of the appointment of Ernst & Young LLP as our independent
accountants for fiscal 2003 will require the affirmative vote of a majority of
the shares of common stock represented in person or by proxy and entitled to
vote at the Annual Meeting. In the event stockholders do not ratify the
appointment of Ernst & Young LLP as our independent accountants for the
forthcoming fiscal year, the Audit Committee and the Board of Directors will
reconsider such appointment.

INDEPENDENT ACCOUNTANTS' FEES

During fiscal 2002, Ernst & Young LLP billed us for the following
professional services:

o Audit Fees rendered for the audit of our financial statements and
for the review of our unaudited quarterly financial statements
for the year ended June 29, 2002 amounted to approximately
$264,000.

o Financial Information System Design and Integration Fees amounted
to approximately $3,000.

o All Other Fees including both audit and non-audit related
services amounted to approximately $113,000. Audit related
services generally include fees for accounting consultations,
pension and statutory audits, and Securities and Exchange
Commission registration statements.

The Audit Committee has considered whether the provision of non-audit
services is compatible with maintaining the independence of Ernst & Young LLP,
and has determined that, in its opinion, they are compatible.

OUR BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" RATIFICATION OF THE
APPOINTMENT OF ERNST & YOUNG LLP AS OUR INDEPENDENT ACCOUNTANTS FOR FISCAL 2003.

OTHER MATTERS

As of the date of this proxy statement, we know of no business that will
be presented for consideration at the Annual Meeting other than the items
referred to above. Proxies will be voted in respect of any other business that
is properly brought before the Annual Meeting in accordance with the judgment of
the person or persons voting the proxies.

STOCKHOLDER PROPOSALS FOR THE 2003 ANNUAL MEETING

Pursuant to the Securities and Exchange Commission rules promulgated
under the Securities Exchange Act of 1934, any proposal of a stockholder
intended to be presented at our 2003 Annual Meeting of Stockholders must be
received by our Secretary, for inclusion in our proxy statement relating to the
2003 Annual Meeting, by June 13, 2003. In accordance with the advance notice
provisions contained in our Bylaws, we generally must receive notice of a
stockholder's intent to propose any business at an annual meeting no later than
the close of business on the 70th day and no earlier than the close of business
on the 90th day prior to the first anniversary of this year's Annual Meeting
(November 13, 2003).

Any stockholder of record may nominate candidates for election to our
Board of Directors if a written notice is delivered to our Secretary at our
principal executive offices no later than the close of business on the 70th day
and no earlier than the close of business on the 90th day prior to the first
anniversary of the preceding year's annual meeting. The written notice must set
forth: (i) as to each person whom the stockholder proposes to nominate for
election as a director all information relating to such person that is required
to be disclosed in solicitations of proxies for election of directors pursuant
to the Securities Exchange Act of 1934 (including such person's written consent
to being named in the proxy statement as a nominee and to serving as a director
if elected), and (ii) as to the stockholder and the beneficial owner, if any, on
whose behalf the nomination is made (a) the name and address of the stockholder
and such beneficial owner, (b) the number of shares of our common stock that are
owned beneficially and held of record by such stockholder and such beneficial
owner, (c) a representation that the stockholder is a holder of record entitled
to vote at the meeting and (d) a representation whether the stockholder the
beneficial owner, if any, intends to solicit proxies from stockholders in
support of the nomination.

INTERNET AND TELEPHONE VOTING

If you hold your shares in the name of a bank or broker, you may have
the opportunity vote via the Internet or by telephone. Your ability to vote via
the Internet or by telephone depends on your bank's or broker's voting
procedures. To determine if you may vote via the Internet or by telephone,
please refer to the accompanying instructions. Please follow the directions on
your proxy card carefully.

ADDITIONAL INFORMATION

We will bear the cost of soliciting proxies. Our officers and regular
employees may, but without compensation other than their regular compensation,
solicit proxies by further mailing or personal conversations, or by telephone,
telex or facsimile. We will, upon request, reimburse brokerage firms and others
for their reasonable expenses in forwarding solicitation material to the
beneficial owners of our common stock.

October 11, 2002 By Order of the Board of Directors

JOHN T. CAPETTA
Secretary

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PROXY
CANNONDALE CORPORATION
ANNUAL MEETING OF STOCKHOLDERS

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The undersigned hereby appoints Joseph S. Montgomery and William A. Luca, and
each of them individually, as proxies, each with the power of substitution, and
hereby authorizes them to vote all shares of Common Stock of the undersigned at
the Annual Meeting of the Company, to be held at the Company's Corporate
Headquarters, 16 Trowbridge Drive, Bethel, Connecticut, on Wednesday, November
13, 2002 at 10:00 a.m., Eastern Standard Time, and at any adjournments or
postponements thereof.

WHEN PROPERLY EXECUTED, THIS PROXY WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE
VOTED "FOR" THE ELECTION OF DIRECTORS AND "FOR" THE PROPOSAL SET FORTH ON THE
REVERSE SIDE.

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SEE REVERSE CONTINUED AND TO BE SIGNED ON REVERSE SIDE SEE REVERSE
SIDE SIDE
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PLEASE DATE, SIGN AND MAIL YOUR
PROXY CARD BACK AS SOON AS POSSIBLE!

ANNUAL MEETING OF STOCKHOLDERS
CANNONDALE CORPORATION

NOVEMBER 13, 2002

Please Detach and Mail in th Envelope Provided
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___
A | X | Please mark your
|___| votes as in this
example.

The Board of Directors recommends a vote FOR proposals 1 and 2.

1. Election of Class II Directors

FOR WITHHELD NOMINEES:
_ _ (01) John Sanders
|_| |_| (02) James Scott Montgomery
(03) Sally G. Palmer
_
|_|______________________________________
For all nominees except at noted above

2. Selection of Independent Accountants.

FOR WITHHELD ABSTAIN
_ _ _
|_| |_| |_|

3. The proxies are authorized to vote upon such other business that may
properly come before the meeting, in accordance with the judgment of
the person or persons voting this proxy.

_
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT |_|

Signature:------------------------------------- Date:-------------------------

NOTE: Please sign exactly as name appears hereon. Joint owners should each
sign. When signing as attorney, executor, administrator, trustee or
guardian, please give full title as such.

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