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]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement. [ ] Confidential, for use of the
Commission only (as permitted by
Rule 14a-6(e)(2)).
[X] Definitive proxy statement.
[ ] Definitive additional materials.
[ ] Soliciting material pursuant to Rule 14a-12
Sports Resorts International Inc.
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(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.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
- --------------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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[SPORTS RESORTS INTERNATIONAL INC. LOGO]
SPORTS RESORTS INTERNATIONAL, INC.
951 AIKEN ROAD
OWOSSO, MICHIGAN 48867
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
The annual meeting of shareholders of Sports Resorts International, Inc.
(the "Company") will be held at the Company's offices at 951 Aiken Road, Owosso,
Michigan on Tuesday, November 19, 2002 at 10:00 a.m. local time, for the
following purposes:
1. To elect two Directors to the Board of Directors.
2. To confirm the appointment of Grant Thornton LLP as the independent
auditors of the Company for the current fiscal year.
3. To transact any other business that may properly come before the
meeting.
Shareholders of record at the close of business on October 28, 2002 are
entitled to notice of and to vote at the meeting and any adjournment of the
meeting. The following Proxy Statement and enclosed form of proxy are being
furnished to holders of the Company's Common Stock on and after October 28,
2002.
By Order of the Board of Directors
/s/ DONALD J. WILLIAMSON
Donald J. Williamson, Chairman of the
Board and Chief Executive Officer
October 28, 2002
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE
MEETING. EVEN IF YOU EXPECT TO ATTEND THE MEETING,
PLEASE SIGN, DATE AND RETURN YOUR PROXY CARD PROMPTLY.
SPORTS RESORTS INTERNATIONAL, INC.
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON
NOVEMBER 19, 2002
PROXY STATEMENT
Beginning on October 28, 2002 we began mailing this Proxy Statement and the
enclosed proxy card to the holders of record of our Common Stock, $0.01 par
value. Our Board of Directors is soliciting proxies for use at the annual
meeting of shareholders to be held on Tuesday, November 19, 2002. The annual
meeting will be held at our offices at 951 Aiken Road, Owosso, Michigan 48867,
at 10:00 a.m. local time.
The purpose of the annual meeting is to consider and vote upon: (1) the
election of two Directors to the Board of Directors, (2) the ratification of the
appointment of Grant Thornton LLP as our independent auditors for the current
fiscal year and (3) such other business as may properly come before the meeting.
If you properly execute and return to us, the shares represented by the
proxy will be voted as specified at the annual meeting of shareholders. If no
choice is specified, the shares represented by the proxy will be voted for the
election of all nominees of the Board of Directors named in this Proxy Statement
and for the ratification of the appointment of Grant Thornton LLP as our
independent auditors for the current fiscal year. We do not know of any other
matter to be presented at the annual meeting. If other matters are properly
presented, all shares represented by the proxy will be voted in accordance with
the judgement of the persons named as proxies with respect to those other
matters.
A proxy may be revoked at any time prior to its exercise by written notice
delivered to our Corporate Secretary. A proxy may also be revoked by attending
and voting at the annual meeting.
Solicitation of proxies will be made initially by mail. Directors, officers
and employees may also solicit proxies in person or by telephone without
additional compensation. In addition, proxies may be solicited by nominees and
other fiduciaries who may mail material to or otherwise communicate with the
beneficial owners of shares held by them. We will pay all expenses of soliciting
the proxies.
ELECTION OF DIRECTORS
The Board of Directors has nominated the following two persons for
reelection to the Company's Board of Directors:
J. Daniel Frisina
Ronald J. Rolak
It is the intent of the persons named in the accompanying proxy to vote for
the election of the two nominees listed above. The proposed nominees are willing
to be elected and to serve. If any nominee is unable to serve or is otherwise
unavailable for election, which is not contemplated, the incumbent Directors may
or may not select a substitute nominee. If a substitute nominee is selected, all
proxies will be voted for the person so selected. If a substitute nominee is not
selected, all proxies will be voted for the election of the remaining nominees.
Proxies will not be voted for a greater number of persons than the number of
nominees named.
A plurality of the shares represented in person or by proxy and voting at
the meeting is required to elect Directors. For the purpose of counting votes on
the election of Directors, abstentions, broker non-votes and other shares not
voted will not be counted as shares voted, and the number of shares for which a
plurality is required will be reduced by the number of shares not voted.
The shares represented by proxies received from the Company's shareholders
will be voted FOR election of the Board's nominees for Directors unless an
instruction to withhold a vote for any nominee is specified in the proxy. The
Company has been informed by the holders of approximately 97% of the shares
entitled to vote that they intend to vote in favor of the Board's nominees.
2
Certain biographical informational concerning the nominees listed above is
set forth below under the heading "Board of Directors."
THE BOARD OF DIRECTORS RECOMMENDS A
VOTE FOR THE ELECTION OF ALL NOMINEES AS DIRECTORS
VOTING SECURITIES
Holders of record of Common Stock at the close of business on October 28,
2002 will be entitled to notice of and to vote at the annual meeting and any
adjournment of the meeting. As of October 1, 2002, there were 48,362,953 shares
of Common Stock outstanding, each having one vote on each matter presented for
shareholder action. Shares cannot be voted unless the shareholder is present at
the meeting or represented by a properly executed proxy. All references to
shares of Common Stock throughout this Proxy Statement are reflective of the 2
for 1 stock split to shareholders of record on August 9, 2001. The stock split
was paid on September 6, 2001.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth information concerning the number of shares
of Common Stock held by each shareholder who is known to the Company's
management to be the beneficial owner of more than 5% of the outstanding shares
as of October 1, 2002:
<Table>
<Caption>
NAME AND ADDRESS AMOUNT OF NATURE OF
OF BENEFICIAL BENEFICIAL BENEFICIAL PERCENT OF
OWNER OF COMMON STOCK OWNERSHIP OWNERSHIP CLASS(1)
--------------------- ---------- ---------- ----------
Donald J. Williamson............ 46,956,060 shares Sole voting and investment power 96.5%
951 Aiken Road 0 shares Shared voting or investment 0.0%
power
Owosso, MI 48867
Patsy L. Williamson............. 176,900 shares Sole voting and investment power .4%
951 Aiken Road 0 shares Shared voting or investment 0.0%
power
Owosso, MI 48867
</Table>
SECURITY OWNERSHIP OF MANAGEMENT
The following table shows the beneficial ownership of shares of Common
Stock, held as of October 1, 2002 by each director, each of the named executive
officers and by all directors and executive officers of the Company as a group:
<Table>
<Caption>
AMOUNT OF NATURE OF
NAME OF BENEFICIAL BENEFICIAL BENEFICIAL PERCENT OF
OWNER OF COMMON STOCK OWNERSHIP OWNERSHIP CLASS(1)
--------------------- ---------- ---------- ----------
Maureen C. Cronin(2)(3)......... 22,702 shares Sole voting and investment power *
0 shares Shared voting or investment *
power
J. Daniel Frisina(2)(3)......... 48,509 shares Sole voting and investment power *
0 shares Shared voting or investment *
power
Ted M. Gans(2)(3)............... 48,509 shares Sole voting and investment power *
0 shares Shared voting or investment *
power
Donald R. Gorman(2)(3).......... 47,459 shares Sole voting and investment power *
0 shares Shared voting or investment *
power
Eric Hipple(2)(3)............... 26,979 shares Sole voting and investment power *
0 shares Shared voting or investment *
power
Ronald J. Rolak(2)(3)........... 31,389 shares Sole voting and investment power *
7,900 shares Shared voting or investment *
power
</Table>
3
<Table>
<Caption>
AMOUNT OF NATURE OF
NAME OF BENEFICIAL BENEFICIAL BENEFICIAL PERCENT OF
OWNER OF COMMON STOCK OWNERSHIP OWNERSHIP CLASS(1)
--------------------- ---------- ---------- ----------
William Singleterry(4).......... 30,000 shares Sole voting and investment power *
0 shares Shared voting or investment *
power
Gregory T. Strzynski(4)......... 20,000 shares Sole voting and investment power *
0 shares Shared voting or investment *
power
Donald J. Williamson(4)(5)...... 46,956,060 shares Sole voting and investment power 96.5%
0 shares Shared voting or investment *
power
Directors and Officers as a
group(5)...................... 47,231,607 shares Sole voting and investment power 97.1%
7,900 shares Shared voting or investment *
power
</Table>
- -------------------------
* Does not exceed 1%.
(1) Percentages: The percentages set forth in this column were calculated on the
basis of 48,362,953 shares of Common Stock outstanding as of October 1,
2002, plus shares of Common Stock subject to options held by the listed
persons that were exercisable on October 1, 2002 or that will become
exercisable within 60 days after October 1, 2002. Shares subject to such
options are considered to be outstanding for purposes of this chart. The
number of shares subject to such options for each listed person is set forth
below:
<Table>
<Caption>
WEIGHTED
AVERAGE
DIRECTOR/OFFICER OPTIONS EXERCISE PRICE
---------------- ------- --------------
Maureen C. Cronin........................................... 15,359 $6.29
J. Daniel Frisina........................................... 48,509 4.15
Ted M. Gans................................................. 48,509 4.15
Donald R. Gorman............................................ 47,459 4.17
Eric Hipple................................................. 26,979 4.87
Ronald J. Rolak............................................. 31,389 4.60
William Singleterry......................................... 30,000 4.29
Gregory T. Strzynski........................................ 20,000 4.82
Donald J. Williamson........................................ 20,000 4.82
------- -----
All directors and executive officers as a group............. 288,204 $4.49
======= =====
</Table>
- -------------------------
(2) Stock Option Grants to Directors: Pursuant to the Company's 1995 Long-Term
Incentive Plan (the "LTIP"), the Company's Board of Directors in February
1997, September 2000 and October 2001 granted to each person who was then a
non-employee Director of the Company options to acquire up to 10,000 shares
of Common Stock. These stock options are currently exercisable.
(3) Automatic Stock Option Grants to Non-Employee Directors: Under the LTIP,
each non-employee director of the Company receives an automatic grant of
options in March and September of each year. The number of shares subject to
each option started at 1,000 when the LTIP was inaugurated in 1996. Under
the terms of the LTIP, for each grant after that time the number of shares
subject to each option increases by 5% from the previous grant. When a new
non-employee Director is elected or appointed to the Board, he or she will
immediately receive an option in an amount equal to the last grant. Ms.
Cronin, and Messrs. Frisina, Gans, Gorman, Hipple and Rolak were each
granted options to purchase 1,785 shares of Common Stock on September 1,
2001. On March 1, 2002 Ms. Cronin and Messrs. Frisina, Gans, Gorman, Hipple
and Rolak were each granted options to acquire 1,874 shares of Common Stock
on September 1, 2002. All of these options are currently exercisable.
(4) William Singleterry/Gregory Strzynski/Donald J. Williamson: In February
1997, Mr. Singleterry was granted options to acquire up to 10,000 shares of
Common Stock. In September 2000 and October 2001,
4
Mr. Singleterry, Mr. Strzynski and Mr. Williamson were granted options to
purchase up to 10,000 shares of Common Stock. These stock options are
currently exercisable.
(5) Total Stock Ownership: Excludes the 176,900 shares of Common Stock owned by
Patsy Williamson, the wife of Donald J. Williamson. See "Security Ownership
of Certain Beneficial Owners" above.
BOARD OF DIRECTORS
The Company's Board of Directors currently consists of seven members, two
of whom are standing for reelection. The members of the Company's Board of
Directors are (in alphabetical order): Maureen C. Cronin, J. Daniel Frisina, Ted
M. Gans, Donald R. Gorman, Eric Hipple, Ronald J. Rolak, and Donald J.
Williamson.
The Company's Board of Directors is classified into three groups, only one
of which stands for reelection at each annual meeting of shareholders. The terms
of the current Directors are as follows:
<Table>
<Caption>
DIRECTOR TERM EXPIRES
-------- ------------
Maureen C. Cronin........................................... 2003
J. Daniel Frisina........................................... 2002
Ted M. Gans................................................. 2004
Donald R. Gorman............................................ 2004
Eric Hipple................................................. 2003
Ronald J. Rolak............................................. 2002
Donald J. Williamson........................................ 2004
</Table>
INCUMBENT DIRECTORS NOMINATED FOR REELECTION
J. DANIEL FRISINA (54). Mr. Frisina is a Director of the Company and a
Director of Brainerd International Raceway & Resort, Inc. ("BIR"). Mr. Frisina's
principal occupation is an independent consultant to manufacturers and
distributors in the automotive parts industry. Mr. Frisina is also a principal
and President of Boomers Investment Group, which invests in and manages
restaurants, lounges and other hospitality service companies. Previously he was
a Director of Global Development for Shyi Tan Enterprises, a Taiwanese
manufacturer of autobody parts from 1996 to 1999. He also served as a consultant
for Cheng Hong Legion Co., Ltd. (from 1992 to 1996). He was the Chairman of the
Board of the Autobody Parts Association, an association that represents the
interests of the distributors, suppliers and manufacturers of alternative
collision replacement parts. He served as President of The Colonel's from 1988
through 1991. He served as Treasurer and Chief Financial Officer of Brainerd
International, Inc., the Company's predecessor, during 1995. Mr. Frisina serves
on the Audit Committee of the Board of Directors. He has served as a Director of
the Company since 1995. His current term as a Director of the Company expires in
2002.
RONALD J. ROLAK (55). Mr. Rolak is a Director of the Company. Mr. Rolak is
the Development Director for the Powers Catholic High School Educational Trust
Fund, in Flint, Michigan. He has held this position since 1986. From 1973 to
1986, Mr. Rolak was a high school instructor and a varsity football coach at
Powers Catholic High School. Mr. Rolak also serves as a director of a number of
charitable organizations in Genessee County, Michigan. Mr. Rolak serves on the
Audit Committee, the Compensation Committee and the Nominating Committee of the
Board of Directors. He has served as a Director of the Company since 1999. His
current term as a Director of the Company expires in 2002.
INCUMBENT DIRECTORS -- TERMS EXPIRING IN 2003
MAUREEN C. CRONIN (58). Ms. Cronin is a Director of the Company. Ms. Cronin
was an Investment Specialist with Charles Schwab & Company in West Palm Beach,
Florida from 1995 to 2000. From 1994 to 1995, she served as Vice President of
Ted Williams Family Enterprises in Citrus Hills, Florida. From 1991 to 1994, she
served as a Financial Consultant and Broker with Salomon Smith Barney/Dean
Witter, in Boston, Massachusetts. Ms. Cronin serves as the Chairperson of the
Audit Committee. Ms. Cronin has served as a Director since September 2000. Her
current term as a Director expires in 2003.
5
ERIC HIPPLE (45). Mr. Hipple is Senior Account Representative at Rho-Mar
Agency, an insurance agency located in Farmington Hills, Michigan. Mr. Hipple
has been an independent consultant to The Clio Agency, Inc., a company wholly
owned by Donald J. Williamson, and also to Patsy Lou Williamson Buick-GMC, Inc.,
a company wholly owned by Patsy L. Williamson, the wife of Donald J. Williamson.
Mr. Hipple was also President and owner of Hipple & Associates, an insurance
agency in Brighton, Michigan. Mr. Hipple is a former quarterback for the Detroit
Lions. He finished his career in the National Football League in 1989. Mr.
Hipple has served as a local radio and television football analyst for the
Detroit Lions. Mr. Hipple also serves as a director of a number of charitable
organizations in Michigan. Mr. Hipple serves on the Executive Committee of the
Board of Directors. He has served as a Director of the Company since September
2000. His current term as a Director of the Company expires in 2003.
INCUMBENT DIRECTORS -- TERMS EXPIRING IN 2004
TED M. GANS (67). Mr. Gans is a Director of the Company and a Director of
Rugged Liner, Inc. ("RL"). Mr. Gans' principal occupation since 1965 has been as
the President and Director of Ted M. Gans, P.C., a law firm in Bloomfield Hills,
Michigan, of which he is the sole owner. Mr. Gans also serves as a Director of
Patsy Lou Williamson Buick-GMC, Inc., a company wholly owned by Patsy L.
Williamson, the wife of Donald J. Williamson. Mr. Gans serves on the Executive
Committee, the Compensation Committee and the Nominating Committee of the Board
of Directors. He has served as a Director of the Company since 1995. His current
term as a Director of the Company expires in 2004.
DONALD R. GORMAN (70). Mr. Gorman is a Director of the Company. Since 1958
Mr. Gorman has been owner and President of D. G. Custom Chrome, LLP. Mr. Gorman
was also the owner and President of P. G. Products, Inc., of Cincinnati, Ohio,
which, prior to the sale of the assets of The Colonel's in December 1998, was
one of the Company's major customers. Mr. Gorman serves on the Compensation
Committee and the Nominating Committee of the Board of Directors. He has served
as a Director of the Company since 1997. His current term as a Director of the
Company expires in 2004.
DONALD J. WILLIAMSON (68). Mr. Williamson is the founder of the Company and
is a Director and the Chairman of the Board and Chief Executive Officer of the
Company. He is also a Director and officer of each of the Company's
subsidiaries. From November 1995 until February 1997 he was the President, Chief
Executive Officer and a Director of the Company. Between February 1997 and May
1998, Mr. Williamson served as a consultant to the Company. Mr. Williamson
serves on the Executive Committee of the Board of Directors. He has served as a
Director of the Company since 1995. His current term as a Director of the
Company expires in 2004.
BOARD COMMITTEES AND MEETINGS
The Company's Board of Directors has four standing committees: the
Executive Committee, the Nominating Committee, the Compensation Committee and
the Audit Committee. Each member of the Committees described below is also a
Director of the Company.
Executive Committee: The Executive Committee has the full power of the
Board in the management of the business and affairs of the Company, except the
power to change the membership of or to fill vacancies in the Board of Directors
or the Executive Committee, the power to amend, add to, rescind or repeal the
Bylaws of the Company; or any other powers that, under Michigan law, may not be
delegated to it by the Board of Directors. The Executive Committee exists for
the purpose of acting on behalf of the Board where Board action is required
between regularly scheduled meetings and where it would be impracticable to
convene special Board meetings. Messrs. Williamson and Gans currently serve on
the Executive Committee. The Executive Committee met one time in 2001.
Compensation Committee: The Compensation Committee is responsible for
establishing the compensation of the executive officers of the Company and its
subsidiaries. Messrs. Gans, Gorman and Rolak currently serve on the Compensation
Committee. The Compensation Committee met one time in 2001.
6
Audit Committee: The Audit Committee reviews audit plans submitted by the
independent auditors with respect to the scope of procedures that will be
performed and the fee that will be charged. The Audit Committee also reviews the
results of the independent audit each year, including any associated
recommendations on internal controls. Ms. Cronin and Messrs. Frisina and Rolak
currently serve on the Audit Committee. Each member of the Audit Committee is
independent as defined in rule 4200 (a) (15) of the National Association of
Securities Dealers ("NASD") listing standards. The Audit Committee met four
times in 2001.
Nominating Committee: The Nominating Committee exists for the purpose of
developing and recommending to the Board of Directors criteria for the selection
of candidates for Director, seeking out and receiving suggestions concerning
possible candidates, reviewing and evaluating the qualifications of possible
candidates and recommending to the Board of Directors candidates for vacancies
occurring from time to time and for the slate of Directors to be proposed on
behalf of the Board of Directors at annual meetings of shareholders. Messrs.
Gans, Gorman and Rolak currently serve on the Nominating Committee. The
Nominating Committee met one time in 2001.
The Nominating Committee will consider nominees recommended by
shareholders. To be timely, a shareholder's nomination notice must be delivered
to or mailed and received at the Company's principal executive offices not less
than 40 days nor more than 60 days prior to the date of a meeting at which
Directors will be elected (an "Election Meeting") as originally scheduled.
However, if less than 50 days notice or prior public disclosures of the date of
the Election Meeting is given or made to shareholders, a notice by a shareholder
will be considered timely if it is so received not later than the close of
business on the 10th day following the day on which such notice of the date of
the Election Meeting was mailed or such public disclosure was made. Any such
nominations should be in writing and state the name, age and address of the
nominee, his or her educational and employment background, his or her present
employment and a full and complete statement as to the qualifications of the
nominee to serve as a Director, as specified in the Company's Bylaws. The
Nominating Committee will not consider any nomination that does not provide this
information.
The Company's full Board of Directors met seven times in 2001. Each of the
Directors attended 75% or more of the aggregate of (1) the total number of
meetings of the Board of Directors and (2) the total number of meetings held by
all committees of the Board of Directors on which he or she served.
EXECUTIVE OFFICERS
As mentioned above, Mr. Williamson is the Chairman of the Board and Chief
Executive Officer of the Company. Two additional executive officers are:
GREGORY T. STRZYNSKI (43). Mr. Strzynski is the Chief Financial Officer of
the Company. He joined the Company in August 1999. Mr. Strzynski was the
Corporate Controller of Kitty Hawk International, Inc., formerly known as
American International Airways, Inc., from 1993 to 1999. From 1990 to 1993, he
served as Corporate Controller for United Solar Systems Corp., a joint venture
research and development company between Energy Conversion Devices, Inc. and
Canon, Inc. of Japan. From 1988 to 1989 he was Corporate Controller for Armada
Products Company, an automotive supplier.
WILLIAM SINGLETERRY (58). Mr. Singleterry is the Vice President of
Marketing and Development of the Company. He also serves as the President of RL.
Mr. Singleterry served as the Director of Operations for the Bumper Division of
The Colonel's from 1991 to 1998. Prior to that time, he was the Regional Sales
Manager. From 1982 to 1989, he served as General Manager for Auto Body
Connection, a bumper manufacturer and distributor.
7
EXECUTIVE COMPENSATION
COMPENSATION SUMMARY
The following Summary Compensation Table shows certain information
concerning the compensation earned during each of the three fiscal years in the
period ended December 31, 2001, of the Chief Executive Officer of the Company
and each executive officer of the Company whose cash compensation exceeded
$100,000.
SUMMARY COMPENSATION TABLE
<Table>
<Caption>
LONG-TERM
COMPENSATION
------------
ANNUAL COMPENSATION AWARDS
------------------------------------------- ------------
OTHER SECURITIES
NAME AND ANNUAL UNDERLYING
PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION OPTIONS
------------------ ---- ------ ----- ------------ ----------
Donald J. Williamson...................... 2001 $160,000 $10,000 $0 10,000
Chairman of the Board, 2000 166,923 0 0 10,000
Chief Executive Officer and Director 1999 510,000 0 0 0
William Singleterry....................... 2001 $154,203 $10,000 $0 10,000
Vice President of Development 2000 148,354 0 0 10,000
1999 158,653 0 0 0
Gregory T. Strzynski(1)................... 2001 $117,923 $10,000 $0 10,000
Chief Financial Officer 2000 96,827 21,500 0 10,000
1999 38,365 6,000 0 0
</Table>
- -------------------------
(1) Compensation for 1999 represents approximately five months rather than a
full year because Mr. Strzynski joined the company in August 1999.
STOCK OPTIONS
Pursuant to the automatic grant provisions of the Company's 1995 Long-Term
Incentive Plan (the"LTIP"), during 2001 Ms. Cronin and Messrs. Frisina, Gans,
Gorman, Hipple and Rolak received options to purchase a total of 20,910 shares
of Common Stock. Additionally, in October 2001, each director and Messrs.
Singleterry and Strzynski received options to purchase 10,000 shares of Common
Stock. Ms. Cronin exercised 11,620 options in December of 2001. None of the
Company's Officers or other Directors exercised any of their outstanding options
during 2001.
OPTION GRANTS IN LAST FISCAL YEAR
<Table>
<Caption>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF
STOCK PRICE APPRECIATION
INDIVIDUAL GRANTS OR OPTION TERM
--------------------------------------------------------- -------------------------
% OF TOTAL
OPTIONS
NUMBER OF GRANTED TO
SECURITIES EMPLOYEES/ EXERCISE OR
UNDERLYING DIRECTORS BASE PRICE EXPIRATION
NAME OPTIONS IN FISCAL YEAR ($/SH) DATE 5%($) 10%($)
---- ---------- -------------- ----------- ---------- ----- ------
Donald J. Williamson......... 10,000 9% $6.63 10/19/11 $41,696 $105,665
William Singleterry.......... 10,000 9% $6.63 10/19/11 $41,696 $105,665
Gregory T. Strzynski......... 10,000 9% $6.63 10/19/11 $41,696 $105,665
</Table>
8
FISCAL YEAR-END OPTION VALUES
<Table>
<Caption>
NUMBER OF
SECURITIES UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED IN-THE-MONEY OPTIONS AT
OPTIONS AT FISCAL YEAR-END FISCAL YEAR-END(1)
---------------------------- ----------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ------------- ----------- -------------
Donald J. Williamson........................... 10,000 10,000 $47,100 $10,800
William Singleterry............................ 20,000 10,000 91,700 10,800
Gregory T. Strzynski........................... 10,000 10,000 47,100 10,800
</Table>
- -------------------------
(1) Based on the market value of the Company's Common Stock as of December 31,
2001 ($7.71 per share), minus the exercise price, multiplied by the number
of options.
COMPENSATION OF DIRECTORS
Effective for 2001, Directors will receive an annual fee of $4,500 plus
$1,000 for each Board meeting attended. Additionally, Directors are reimbursed
for expenses incurred in attending meetings of the Board of Directors and
committees thereof and are granted options under terms of the Companies
Long-Term Incentive Plan.
PENSION PLAN
The Company does not provide a retirement plan.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Messrs. Gans, Gorman and Rolak are members of the Compensation Committee of
the Board of Directors. No other Directors or executive officers of the Company
took part in deliberations concerning the compensation of executive officers of
the Company during fiscal 2001. None of Messrs. Gans, Gorman or Rolak has any
employment relationship with the Company or any of its subsidiaries. However,
Mr. Gans is a Director of the Company and practices law with Ted M. Gans, P.C.
During the past year, as well as the current year, the Company and its
subsidiaries retained Ted M. Gans, P.C. for certain legal services. Fees paid
for 2001 were approximately $15,000.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors currently consists of
Messrs. Gans, Gorman and Rolak.
The basic compensation philosophy of the Company is to provide competitive
salaries. The Company's executive compensation policies are designed to achieve
two primary objectives:
- Attract and retain well-qualified executives who will lead the Company
and achieve and inspire superior performance;
- Provide incentives for the achievement of long-term financial goals.
Executive compensation consists primarily of two components: base salary
and benefits; and amounts paid (if any) under the Company's LTIP. Each component
of compensation is designed to accomplish one or both of the compensation
objectives.
The participation of specific executive officers and other key employees in
the Company's LTIP is recommended by the Board's Compensation Committee and all
recommendations (including the level of participation) are reviewed, modified
(to the extent appropriate) and approved by the Board.
9
BASE SALARY
To attract and retain well-qualified executives, it is the Compensation
Committee's policy to establish base salaries at levels and provide benefit
packages that are considered to be competitive. Base salaries of executive
officers are determined by the Board of Directors on an individual basis. In
determining the base salary for an executive officer, the Compensation Committee
will recommend to the full Board for approval a base salary for the officer
determined by the Compensation Committee taking into consideration factors
including: (1) the individual's performance, (2) the individual's contributions
to the Company's success, (3) the level and scope of the individual's
responsibilities, (4) the individual's tenure with the Company and in his or her
position and (5) pay practices for similar positions by comparable companies.
LONG-TERM INCENTIVE PLAN
The LTIP is used primarily to grant stock options. However, the LTIP also
permits grants of restricted stock, stock awards, stock appreciation rights and
tax benefit rights if determined to be desirable to advance the purposes of the
LTIP. These grants and awards are referred to as "Incentive Awards." By
combining in a single plan many types of incentives commonly used in long-term
incentive compensation programs, the LTIP provides significant flexibility to
the Compensation Committee to tailor specific long-term incentives that would
best promote the objectives of the LTIP and in turn promote the interests of the
Company's shareholders.
Directors, executive officers and other key employees of the Company and
its subsidiaries are eligible to receive Incentive Awards under the LTIP. A
maximum of 2,000,000 shares of Common Stock (subject to certain antidilution
adjustments) are available for Incentive Awards under the LTIP. Of the 2,000,000
shares authorized for Incentive Awards under the LTIP, only one-half can be
awarded as restricted stock.
The LTIP is administered by the Compensation Committee, which is comprised
of non-employee Directors, none of whom participates or is eligible to
participate in any long-term incentive plan of the Company or its subsidiaries,
except for nondiscretionary stock option grants based upon a specified formula,
and if the Board so determines, each of whom must be an "outside director" as
defined in the rules issued pursuant to Section 162(m) of the Internal Revenue
Code. The Compensation Committee makes determinations, subject to the terms of
the LTIP, as to the persons to receive Incentive Awards, the amount of Incentive
Awards to be granted to each person, the terms of each grant and all other
determinations necessary or advisable for administration of the LTIP.
The LTIP was approved by the shareholders of Brainerd International, Inc.,
the Company's predecessor, on November 21, 1995. During 2001, Ms. Cronin and
Messrs. Frisina, Gans, Gorman, Hipple and Rolak, as non-employee Directors of
the Company, each received automatic stock option grants covering a total of
20,910 shares of Common Stock. Additionally, in September 2001, each director
and Messrs. Singleterry and Strzynski received options to purchase 10,000 shares
of Common Stock.
SECTION 162(M)
Section 162(m) of the Internal Revenue Code provides that publicly held
corporations may not deduct compensation paid to certain executive officers in
excess of $1 million annually, with certain exemptions. The Company has examined
its executive compensation policies in light of Section 162(m) and the
regulations adopted by the Internal Revenue Service to implement that section.
It is not expected that any portion of the Company's deduction for employee
remuneration will be disallowed in 2002 or in future years by reason of actions
expected to be taken in 2002.
Respectfully submitted,
Ted M. Gans
Donald R. Gorman
Ronald Rolak
10
STOCK PRICE PERFORMANCE GRAPH
The following graph compares the cumulative total stockholder return on the
Company's Common Stock to the Nasdaq Domestic Index and an index of peer
companies that produce automobile replacement parts or own and operate motor
sports entertainment facilities, assuming an investment of $100.00 at the
beginning of the period indicated.
The Nasdaq Domestic Index is a broad equity market index consisting of
certain domestic companies traded on the Nasdaq Stock Market. The index of peer
companies was constructed by the Company and includes the companies listed in
the footnote to the graph below. In constructing the peer index, the return of
each peer group company was weighted according to its respective stock market
capitalization at the beginning of each period indicated. Cumulative total
stockholder return is measured by dividing: (1) the sum of (a) the cumulative
amount of dividends for the measurement period, assuming dividend reinvestment,
and (b) the difference between the share price at the end and the beginning of
the measurement period; by (2) the share price at the beginning of the
measurement period.
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN
ASSUMES INITIAL INVESTMENT OF $100
DECEMBER 2001
[PERFORMANCE GRAPH]
(1) The index of peer companies consists of American Axle and Manufacturing
Holdings, Inc; Dana Corp.; Dura Automotive Systems, Inc.; Eaton Corporation;
Johnson Controls, Inc.; Tower Automotive, Inc.; and International Speedway
Corporation
The dollar values for total stockholder return plotted in the graph above
are shown in the table below:
<Table>
<Caption>
NASDAQ PEER
DATE THE COMPANY DOMESTIC INDEX INDEX
---- ----------- -------------- -----
December 31, 1996................................. $100.00 $100.00 $100.00
December 31, 1997................................. 150.00 122.48 134.14
December 31, 1998................................. 113.89 172.68 139.81
December 31, 1999................................. 163.89 320.90 114.76
December 31, 2000................................. 170.84 193.01 88.33
December 31, 2001................................. 342.67 153.15 107.85
</Table>
11
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company and its subsidiaries are parties to certain transactions with
related parties, which are summarized below. Many of the transactions described
below involve Donald and Patsy Williamson, husband and wife. Mr. Williamson is
the Chairman of the Board, the Chief Executive Officer and a Director of the
Company. Together, Mr. and Mrs. Williamson own approximately 97 percent of the
outstanding shares of the Company's Common Stock.
In February 1999, the Company loaned $5,200,000 to South Saginaw, L.L.C., a
limited liability company owned by Mr. Williamson. To evidence this loan, Mr.
Williamson signed a subordinated mortgage providing for interest at the annual
rate of 8% and calling for monthly payments of principal and interest of $43,476
beginning April 1, 1999. The note is current at December 31, 2001. Mr.
Williamson used the proceeds of this loan to purchase real property in Davison,
Michigan.
Lease of Owosso, Michigan Facility. Rugged Liner, Inc. ("RL") leases its
Owosso, Michigan facility from 620 Platt Road, L.L.C. Donald and Patsy Lou
Williamson are the sole members of 620 Platt Road L.L.C. The lease agreement
requires monthly payments of $50,000 through December 2009. RL pays all taxes,
insurance and maintenance expenses related to the facility. Rent expense on this
lease was $600,000 and $580,000 for the years ending December 31, 2001 and 2000
respectively.
Lease of Flint, Michigan Ticket Office. Brainerd International Raceway &
Resort, Inc. ("BIR") leases its executive and ticket offices from Donald J.
Williamson. BIR pays all taxes, insurance and maintenance expenses related to
the facility. Rent expense on this lease was $25,500 for the year ending
December 31, 2001.
Net Advances to Related Parties. During 2001, 2000 and 1999 the Company
paid certain expenses on behalf of affiliated entities controlled by Donald J.
Williamson. These expenses are predominantly for the use of a common payroll
processing service for which direct reimbursement is made as well as a pro rata
share of general insurance coverage. In 2001, the Company also advanced
$223,000, on behalf of Mr. Williamson, for construction costs related to a
convenience store and gas station being built adjacent to our BIR facility in
Brainerd, Minnesota. The total amount outstanding at December 31, 2001, 2000 and
1999 was $1,496,000, $958,000 and $540,000 respectively. The Company advanced an
additional $1,036,000 in 2002 for construction of the convenience store, which
was completed in the second quarter of 2002. Mr. Williamson transferred the
title of the convenience store and gas station to the Company in the third
quarter of 2002, at which time the construction advances were offset.
Williamson Buick-GMC, Inc. Mrs. Williamson owns an automobile dealership.
The Company engages in certain transactions with this dealership, including the
purchase of automobiles, parts, and automotive services. During 2001, purchases
of automobiles, parts and services by the Company from the Williamson dealership
was approximately $32,000. RL sold approximately $11,000 worth of bedliners and
truck accessories to the Williamson dealership in 2001.
Transactions with Directors. Ted M. Gans is a Director of the Company and
practices law with Ted M. Gans, P.C. During the past year and the current year,
the Company retained Ted M. Gans, P.C. for certain legal services and it is
anticipated that the Company will continue to do so. Fees paid for 2001 were
approximately $15,000.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's Directors, officers and persons who own more than 10% of the
Company's Common Stock to file reports of ownership and changes in ownership
with the Securities and Exchange Commission and Nasdaq. Directors, officers and
greater than 10% beneficial owners are required by Securities and Exchange
Commission regulations to furnish the Company with copies of all Section 16(a)
forms they file.
In October 2001 the Company became aware of improper trading activity of
its common stock through a brokerage account controlled by Patsy Lou Williamson
Buick-GMC, Inc., a company wholly owned by Patsy
12
Lou Williamson, the wife of Donald J. Williamson. In November 2001, the
Company's Board of Directors sought and received on behalf of the Company the
total disgorgement of approximately $31,000 of profits as a result of this
trading. Form 4 reporting this activity for the months of August and September
of 2001 were filed late.
To the best of the Company's knowledge, other than as described in the
paragraph above, no Director, officer or beneficial owner of more than 10% of
the Company's outstanding Common Stock failed to file on a timely basis any
report required by Section 16(a) of the Exchange Act with respect to the year
ended December 31, 2001.
SELECTION OF AUDITORS
On April 17, 2002, Deloitte & Touche LLP notified us of its decision to
resign as our independent public accountants. Deloitte & Touche has not
included, in either of the past two years, an adverse opinion or a disclaimer of
opinion, or a qualification or modification as to uncertainty, audit scope or
accounting principles, with respect to our financial statements. During our two
most recent fiscal years ended December 31, 2001, and the subsequent interim
period through April 17, 2002, there were no disagreements between the Company
and Deloitte & Touche on any matter of accounting principles or practices,
financial disclosure or auditing scope or procedure, which disagreements, if not
resolved to Deloitte & Touche's satisfaction would have caused Deloitte & Touche
to make reference to the subject matter of the disagreement in connection with
its reports. On May 10, 2002 we engaged Grant Thornton LLP as our independent
public accountants for fiscal 2002.
Subject to the approval of shareholders, the Board of Directors has
appointed the firm of Grant Thornton LLP as independent auditors of the Company
for the current fiscal year.
Representatives of Grant Thornton LLP are expected to be present at the
annual meeting, and will have an opportunity to make a statement if they so
desire to do so and are expected to be available to respond to appropriate
questions from shareholders.
The affirmative vote of the holders of a majority of shares of the
Company's Common Stock present in person or by proxy is required to confirm the
appointment of auditors. The shares represented by proxies received from the
Company's shareholders will be voted FOR the proposal unless a vote against the
proposal is specifically indicated in the proxy. For purposes of counting votes
on this proposal, abstentions and broker non-votes will effectively be counted
as votes against the proposal. The Company has been informed by the holders of
approximately 97% of the shares entitled to vote that they intend to vote in
favor of the proposal.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR RATIFICATION
OF THE APPOINTMENT OF GRANT THORNTON LLP
13
AUDIT COMMITTEE REPORT
The Audit Committee of the Board of Directors is comprised of three
independent directors and operates under a written charter adopted by the Board.
The Committee is appointed by the Board and is directly responsible for the
appointment, compensation and oversight of the Company's independent auditors.
It also monitors, among other things, the Company's financial reporting process
and the independence and performance of the Company's independent auditors. It
is the responsibility of management of the Company to prepare financial
statements in accordance with accounting principles generally accepted in the
United States of America and of the Company's independent auditors to audit
those financial statements.
Throughout the year, the Committee has met and held discussions with
management and the independent auditors. Management represented to the Committee
that the Company's consolidated financial statements were prepared in accordance
with accounting principles generally accepted in the United States of America
and the Committee has reviewed and discussed the consolidated financial
statements with management and the independent auditors. The Committee discussed
with the independent auditors matters required to be discussed by Statement on
Auditing Standards No. 61 (Communications with Audit Committees).
The Committee has been advised by the Company that the total fees and
expenses billed for fiscal 2001 by Deloitte & Touche LLP, the Company's former
principal accounting firm were $348,415. Of that amount, an aggregate of
$263,675 was for audit services and the review of financial statements included
in the Company's Quarterly Reports on Form 10Q and $84,740 was for tax services.
Deloitte & Touche LLP was not engaged by the Company in fiscal 2001 to perform
any information technology services relating to financial information systems
design and implementation.
In addition, the Committee has discussed with the independent auditors, the
auditor's independence from the Company and its management, including the
matters in the written disclosures required by the Independence Standards Board
Standard No. 1 (Independence Discussions with Audit Committees). Further, the
Committee has considered whether the provision of non-audit services by the
independent auditors is compatible with maintaining the auditor's independence.
Further, the Committee meets with the independent auditors, with and
without management present, to discuss the results of their examinations, the
evaluations of the Company's internal controls, and the overall quality of the
Company's financial reporting.
Based on the reviews and discussions referred to above, the Committee
recommended to the Board that the audited financial statements be included in
the Company's Annual Report on Form 10-K for the year ended December 31, 2001,
for filing with the Securities and Exchange Commission.
Each member of the Audit Committee is independent as defined under the
listing standards of the Nasdaq National Market.
Respectfully Submitted,
Maureen C. Cronin
J. Daniel Frisina
Ronald J. Rolak
14
SHAREHOLDER PROPOSALS
Proposals of shareholders must be received by the Company no later than
July 31, 2003 to be considered for inclusion in the Company's proxy statement
for its 2003 annual meeting of shareholders. Such shareholder proposals should
be made in accordance with Securities and Exchange Commission Rule 14a-8 and
should be addressed to the attention of the Secretary of the Company, 951 Aiken
Road, Owosso, Michigan 48867.
By Order of the Board of Directors,
/s/ DONALD J. WILLIAMSON
Donald J. Williamson
Chairman of the Board and Chief Executive Officer
October 28, 2002
15
---
[X] PLEASE MARK VOTES REVOCABLE PROXY |
AS IN THIS EXAMPLE SPORTS RESORTS INTERNATIONAL, INC.
WITH- FOR ALL
FOR HOLD EXCEPT
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS 1. ELECTION OF DIRECTORS (except
as marked to the contrary below) [ ] [ ] [ ]
The undersigned shareholder hereby appoints Gregory T. Strzynski and
William H. Singleterry, and each of them, each with full power of Nominees: J. DANIEL FRISINA AND RONALD J. ROLAK
substitution, proxies to represent the shareholder listed on this Proxy
and to vote all shares of Common Stock of Sports Resorts International,
Inc. that the shareholder would be entitled to vote on all matters which
come before the Annual Meeting of Shareholders to be held at the offices INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY
of Sports Resorts International, Inc., 951 Aiken Road, Owosso, Michigan, INDIVIDUAL NOMINEE, MARK "FOR ALL EXCEPT" AND WRITE
on Tuesday, November 19, 2002 at 10 a.m. local time, and any adjournment THAT NOMINEE'S NAME IN THE SPACE PROVIDED BELOW.
of that meeting.
--------------------------------------------------------
YOUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR ALL
NOMINEES.
FOR AGAINST ABSTAIN
2. RATIFICATION OF THE [ ] [ ] [ ]
APPOINTMENT OF GRANT
THORNTON LLP AS THE COMPANY'S
INDEPENDENT AUDITORS
YOUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR
THE RATIFICATION OF GRANT THORNTON AS THE COMPANY'S
INDEPENDENT AUDITORS.
If this Proxy is properly executed, the shares
represented by this Proxy will be voted as specified.
If no specification is made, the shares represented by
this Proxy will be voted for the election of all
Please be sure to sign and date ------------------------- nominees named on this Proxy as directors and the
this Proxy in the box below. |Date | ratification of Grant Thornton LLP as the Company's
| | independent auditors for the current fiscal year ending
- ------------------------------------------------------------ December 31, 2002. THE SHARES REPRESENTED BY THIS PROXY
| | WILL BE VOTED IN THE DISCRETION OF THE PROXIES ON ANY
| | OTHER MATTERS THAT MAY COME BEFORE THE MEETING.
| |
|--Shareholder sign above---Co-holder (if any) sign above--| Please sign exactly as your name(s) appears on this
Proxy. When signing on behalf of a corporation,
partnership, estate or trust, indicate title or
capacity of person signing. If shares are held jointly,
each holder should sign.
+ +
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/\ DETACH ABOVE CARD, SIGN, DATE AND MAIL IN POSTAGE PAID ENVELOPE PROVIDED. /\
SPORTS RESORTS INTERNATIONAL, INC.
- ------------------------------------------------------------------------------------------------------------------------------------
PLEASE ACT PROMPTLY
SIGN, DATE & MAIL YOUR PROXY CARD TODAY
- ------------------------------------------------------------------------------------------------------------------------------------
IF YOUR ADDRESS HAS CHANGED, PLEASE CORRECT THE ADDRESS IN THE SPACE PROVIDED BELOW AND RETURN THIS PORTION WITH THE PROXY IN THE
ENVELOPE PROVIDED.
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