DEF 14A 1 a2072243zdef14a.htm DEF 14A
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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
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/x/		Definitive Proxy Statement
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/ /		Soliciting Material Pursuant to §240.14a-11(c) or §240.14a-12

K2 INC.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

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LOGO

K2 INC.

Notice of Annual Meeting of Shareholders

May 6, 2002

To the Shareholders of K2 Inc.:

You are cordially invited to attend our Annual Meeting to be held at our main office, 4900 South Eastern Avenue, Los Angeles, California on Monday, May 6, 2002 at 9:00 a.m. (local time).

The Annual Meeting will be held for the following purposes:

1. To elect three directors to serve for a term of three years.

2. To ratify the selection of Ernst & Young LLP as independent auditors for 2002.

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

Only shareholders of record at the close of business on March 22, 2002 are entitled to notice of the meeting and to vote at it or any adjournments thereof.

If it is convenient for you to do so, we hope you will attend the meeting. If you cannot, and wish your stock to be voted, we urge you to fill out the enclosed proxy card and return it to us in the envelope provided. No additional postage is required.


	RICHARD M. RODSTEIN President and Chief Executive Officer

Los Angeles, California
April 1, 2002

Please date and sign the accompanying Proxy Card
and mail it promptly in the enclosed return envelope.

LOGO

K2 INC.
4900 South Eastern Avenue
Los Angeles, California 90040

Proxy Statement

The enclosed proxy is solicited by the Board of Directors of K2 Inc. ("K2"). It may be revoked at any time before it is exercised by delivering a written notice to the Secretary of K2 stating that the proxy is revoked, by executing a subsequent proxy and presenting it to the Secretary of K2 or by attending the annual meeting and voting in person. Only shareholders of record at the close of business on March 22, 2002 will be entitled to notice of and to vote at the annual meeting. As of that date, K2 had outstanding 17,939,076 shares of Common Stock, each share entitled to one vote. It is anticipated that the mailing to shareholders of this Proxy Statement and the enclosed proxy will commence on or about April 1, 2002.

Proxies will be solicited by mail, telephone, fax or telegram and may be personally solicited by directors, officers and other employees of K2 and by Morrow & Co., 445 Park Avenue, New York, New York, which has been engaged for a fee of $7,500 plus expenses for this purpose. The cost of soliciting proxies will be borne by K2.

Both abstentions and broker non-votes are counted for purposes of determining the presence or absence at the annual meeting of a quorum for the transaction of business, but shares represented by broker non-votes on a matter submitted to shareholders are not considered present and entitled to vote on that matter. Directors will be elected by plurality vote of the shares present and entitled to vote. The ratification of the selection of independent auditors will require the affirmative vote of a majority of the shares present and entitled to vote. Consequently, broker non-votes will have no effect, but abstentions will have the effect of a vote against such ratification.

Election of Directors

Under the Certificate of Incorporation of K2, the Board of Directors is divided into three classes, each having a three-year term, with the term of office of one of the classes expiring each year. Proxies solicited herewith will be voted for election to the Board of Directors of the three nominees named below (unless authority to vote for one or more such nominees is withheld), to serve until the 2005 annual meeting of shareholders and until their successors are elected and qualified. While the Board of Directors has no reason to believe that any of those named will not be available as a candidate, should such a situation arise the proxy may be voted for the election of other nominees as directors in the discretion of the persons acting pursuant to the proxy. Directors will be elected by plurality vote.

John H. Offermans, who served as a Director of the Board of K2 from 1987, retired from the Board of Directors during 2001. Former Vice President Dan Quayle has been appointed by the Board of Directors to fill the resulting vacancy. Information concerning Mr. Quayle appears below.

Certain information concerning the nominees and each director whose term of office will continue after the 2002 annual meeting is set forth below:

Nominees for Election at the Annual Meeting
For Term of Office Expiring in 2005

JERRY E. GOLDRESS

Director since 1997

Mr. Goldress, 71, has served as Chairman of the Board and Chief Executive Officer of Grisanti, Galef and Goldress, Inc., a corporate turnaround management firm, since 1981. As a corporate turnaround manager, Mr. Goldress provides assistance to businesses in financial difficulty and, as such, has frequently been appointed a director and an executive officer of such businesses. In this capacity, Mr. Goldress has served as president or chief executive officer of numerous manufacturing, distribution and retail organizations. He is a member of the board of directors of the Alamo Group, a manufacturer of industrial mowing equipment. Mr. Goldress is also Chairman of the Board of Frontier Insurance Group, Inc., a specialty property casualty insurance carrier, and Rockford Corporation, a manufacturer of car stereo equipment.

ALFRED E. OSBORNE, JR.

Director since 1999

Dr. Osborne, 57, has been an Associate Professor of Business Economics in the Anderson Graduate School of Management at the University of California at Los Angeles where he has been employed since 1972, and is the Director of the Harold Price Center for Entrepreneurial Studies at UCLA since its inception twelve years ago. Dr. Osborne is a member of the Board of Directors of Nordstrom, Inc. and Equity Marketing, Inc. Dr. Osborne also serves as a trustee of the WM Group of Funds and is a director of First Pacific Advisors' Capital and New Income Funds. Dr. Osborne was educated at Stanford University, where he earned a B.S. in Electrical Engineering, an MBA in Finance, an MA in Economics and a Ph.D. in Business Economics.

DAN QUAYLE

Director since 2001

Mr. Quayle, 55, served as a congressman, senator and the 44^th Vice President of the United States. Upon leaving office, he co-founded Circle Investors in 1993 which has been sold. He has authored three books including Standing Firm, which was on the NY Times bestseller list for 15 weeks. He continues to be an active public speaker. Currently, he is Chairman and President of Quayle & Associates and senior advisor to Cerberus Capital, New York. In addition to K-2 Inc., he is a member of the board of directors of Nippon Credit Bank in Tokyo, American Standard Companies Inc., and The Telluride Foundation.

Directors Continuing in Office
For Term of Office Expiring in 2004

WILFORD D. GODBOLD, JR.

Director since 1998

Mr. Godbold, 63, is a private investor. He retired as President and Chief Executive Officer of ZERO Corporation, which provides packaging and climate control products to the telecommunications, instrumentation and data processing markets, where he served in that position from 1984 to August 1998. For the two prior years, he served as chief operating officer of ZERO Corporation. From 1966 through 1982 he practiced law as an attorney with the law firm of Gibson, Dunn & Crutcher LLP in Los Angeles, serving as a Partner from 1973, where his focus was acquisitions, mergers and public financings. Mr. Godbold serves as a member of the board of directors of Sempra Energy, the subsidiaries of which include Southern California Gas Company, a public utility, and San Diego Gas & Electric Co., a public utility. He also serves as a director of Ceradyne Inc., a manufacturer of technical ceramics.

LOU L. HOLTZ

Director since 2001

Mr. Holtz, 65, is the head football coach of the University of South Carolina. Prior to joining the University of South Carolina in 1999, Mr. Holtz held various coaching positions, including 11 seasons at the University of Notre Dame from 1986 to 1996, two seasons at Minnesota from 1984 to1985, seven seasons at the University of Arkansas from 1977 to 1983, four seasons at the University of North Carolina from 1972 to 1975 and three at William and Mary from 1969 to 1971. Mr. Holtz spent 1976 as the head coach of the New York Jets of the National Football League. Mr. Holtz is a noted motivational speaker and is the author of the New York Times best-selling book, The Fighting Spirit.

RICHARD M. RODSTEIN

Director since 1995

Mr. Rodstein, 47, has been President and Chief Executive Officer of K2 since 1996. Mr. Rodstein was president and chief operating officer of K2 from 1990 to 1995 and has held various executive positions with K2 since joining it in 1983. Prior to 1983, Mr. Rodstein was a certified public accountant with Ernst & Young LLP, an international auditing and consulting firm.

Directors Continuing in Office
For Term of Office Expiring in 2003

RICHARD J. HECKMANN

Director since 1997

Mr. Heckmann, 58, has been Chairman of the Board of the Company since April 2000. Mr. Heckmann retired as Chairman of Vivendi Water, an international water products group of Vivendi S.A., a worldwide utility and communications company with headquarters in France, in June 2001. Mr. Heckmann was Chairman, President and Chief Executive Officer of United States Filter Corporation, a worldwide provider of water and wastewater treatment systems and services, from 1990 to 1999. Vivendi acquired US Filter on April 29, 1999. Mr. Heckmann was a director and the owner of Smith Goggles until its sale in 1996. He has served as the associate administrator for finance and investment of the Small Business Administration in Washington, DC and was the founder and chairman of the board of Tower Scientific Corporation. Mr. Heckmann is a member of the board of directors of United Rentals, Inc., a national equipment rental organization and Vivendi Environmental, a world leader in environmental services.

ROBIN E. HERNREICH

Director since 2000

Mr. Hernreich, 57, is an owner of the Sacramento Kings of the National Basketball Association. Mr. Hernreich, has been President of Remonov Capital, Inc., since August 1992, and Vice-President of Remonov & Company, Inc., since November 1996. Both are private investment firms. From November 1989 through June 1996, Mr. Hernreich was Chairman and Chief Executive Officer of Sigma Broadcasting Company, formerly Arkansas' largest television and radio operator, and from January 1988 through September 1990, Mr. Hernreich was Chairman of the United States Repeating Arms, maker of Winchester sporting firearms. Mr. Hernreich is a member of the board of directors of The Eagle Valley Land Trust, the Snowboard Outreach Society, The Youth Foundation of Vail, and a member of the board of trustees of Washington University in St. Louis, Missouri. Mr. Hernreich is also a former member of the board of directors of Ride, Inc.

STEWART M. KASEN

Director since 1997

Mr. Kasen, 62, has been the President of Schwarzschild Jewelers since September 2001. He retired as Chairman of the Board, President and Chief Executive Officer of Factory Card Outlet Corp. where he served in that position from May 1998 to October 1999, and prior to that he served as its chairman from 1997. In April 1996, he retired as Chairman, President and Chief Executive Officer of Best Products Co., Inc., a catalog showroom chain of retail stores and nationwide mail order services. He was also its president and chief executive officer from 1991 to 1996 and its president and chief operating officer from 1989 to 1991. Prior to joining Best Products, Co., Inc., Mr. Kasen served in various capacities in two divisions of Carter Hawley Hale Stores over a 24-year period, including President and Chief Executive Officer of Emporium, from 1987 to 1989, and Thalhimers, from 1984 to 1987. Mr. Kasen is a member of the board of directors of Markel Corporation, a specialty insurance underwriter, the Singer Company, a manufacturer of consumer sewing machines, and Department 56, a marketer of collectibles and specialty giftware. In March 1999, Factory Card Outlet Corp. filed for bankruptcy under the federal bankruptcy laws.

Under the By-Laws of K2, nominations for the election of directors may be made by the Board or by any stockholder entitled to vote in the election of directors, provided that no stockholder may nominate a person for election as a director unless written notice of such nomination is presented to K2 at least 90 days prior to the date of the applicable meeting. No such notice has been given with respect to the election of directors. As a result, no other nominees for election as director will be considered at the annual meeting except nominations made by the Board in the event one of the nominees named herein should unexpectedly be unavailable.

Board of Directors and Committees

The Board of Directors held four meetings in 2001. Each director attended at least 75% of the total number of meetings of the Board of Directors and Committees on which he served.

The Board of Directors currently has four standing committees: Audit Committee, Compensation Committee, Executive Committee and Nominating Committee.

The Audit Committee of the Board of Directors, consisting of Mr. Godbold (Chairman), Mr. Kasen and Dr. Osborne, held five meetings in 2001. The functions of the Committee are set forth in the Audit Committee Charter adopted by the Board of Directors.

The Compensation Committee of the Board of Directors, consisting of Mr. Goldress (Chairman), Mr. Heckmann and Mr. Kasen, held two meetings in 2001, in addition to informal meetings of Committee members, and actions taken from time to time by written consent. The Committee considers and authorizes remuneration arrangements for senior management, including the granting of options under K2's stock option plan.

The Executive Committee of the Board of Directors, consisting of Mr. Godbold, Mr. Goldress, Mr. Heckmann and Mr. Rodstein (Chairman), held one meeting in 2001, and took actions from time to time by written consent. The Committee is authorized to act on behalf of the Board on all corporate actions for which applicable law does not require participation of the full Board.

The Nominating Committee of the Board of Directors, consisting of Mr. Heckmann (Chairman), Mr. Hernreich and Dr. Osborne, held two meetings in 2001, in addition to informal meetings of Committee members with potential nominees for director from time to time. The Committee recruits and interviews qualified candidates to serve as directors and reports on its findings to the full Board.

Report of the Audit Committee

The audit Committee of the Board of Directors is composed entirely of independent outside directors, with their qualifications meeting the requirements described in the Audit Committee Charter. The committee held five meetings during the year ended December 31, 2001

The Audit Committee Charter adopted by the Board sets out the responsibilities, authority and specific duties of the Audit Committee. A copy of the Audit Committee Charter has previously been attached to K2's proxy statement within the past three fiscal years.

Pursuant to the charter, the Audit Committee has the following responsibilities:

•: To evaluate the outside auditors;
•: To review and discuss with management and the outside auditors the audited financial statements;
•: To review the adequacy of internal control systems with management and independent auditors;
•: To reassess the adequacy of the charter at least annually.

In discharging its oversight responsibility, the Audit Committee has met and held discussions with management and Ernst & Young LLP, the independent auditors for K2. Management represented to the Audit Committee that all consolidated financial statements were prepared in accordance with generally accepted accounting principles, and the Audit Committee has reviewed and discussed the consolidated financial statements with management and the independent auditors. The Audit Committee discussed with the independent auditors matters required to be discussed by Statement on Auditing Standards No. 61, "Communications with Audit Committees".

The Audit Committee also obtained from the independent auditors a formal written statement describing all relationships between K2 and the auditors that bear on the auditors' independence consistent with Independence Standards Board Standard No. 1, "Independence Discussions with Audit Committees". The Audit Committee discussed with the independent auditors any relationships that may impact on the firm's objectivity and independence and satisfied itself as to the auditors' independence.

Based on these discussions and reviews, the Audit Committee recommended that the Board of Directors approve the inclusion of K2's audited consolidated financial statements in K2's Annual Report

on Form 10-K for the year ended December 31, 2001, for filing with the Securities and Exchange Commission.

Management is responsible for K2's financial reporting process including its system of internal controls, and for the preparation of consolidated financial statements in accordance with generally accepted accounting principles. K2's independent auditors are responsible for auditing those financial statements. Our responsibility is to monitor and review these processes. It is not our duty or our responsibility to conduct auditing or accounting reviews or procedures. We are not employees of K2 and we are not accountants or auditors by profession or experts in the fields of accounting or auditing. Therefore, we have relied, without independent verification, on management's representation that the financial statements have been prepared with integrity and objectivity and in conformity with accounting principles generally accepted in the United States of America and on the representations of the independent auditors included in their report on K2's financial statements. Our oversight does not provide us with an independent basis to determine that management has maintained appropriate accounting and financial reporting principles or policies, or appropriate internal controls and procedures designed to assure compliance with accounting standards and applicable laws and regulations. Furthermore, our considerations and discussions with management and the independent auditors do not assure that K2's financial statements are presented in accordance with generally accepted accounting principles, that the audit of K2's financial statements has been carried out in accordance with generally accepted auditing standards or that K2's independent accountants are in fact "independent".

Wilford D. Godbold, Jr., Chairman
Stewart M. Kasen
Alfred E. Osborne, Jr.

April 1, 2002

Stock Price Performance Graph

The graph below compares cumulative total return to shareholders, assuming quarterly reinvestment of dividends, of K2, the Russell 2000 Index and a weighted index of a peer group of companies with market capitalizations similar to that of K2. The peer group is comprised of Cannondale Corporation, Johnson Outdoor Inc., Rawlings Sporting Goods Company, Inc., Rockshox Inc., Adams Golf, Inc., Head NV and Huffy Corporation. The graph assumes investment of $100 on December 31, 1996 in K2's Common Stock, the Russell 2000 Index and common stock of the peer group (except for Adams, which became a public company in 1997 and Head which became a public company in 2000). In 2001, First Team Sports, Inc. was replaced by Head and Huffy due the 2001 sale of First Team Sports.

Comparative 5-year Total Returns
K2 Inc., Russell 2000, Peer Group
Performance results through December 31, 2001

Executive Compensation

The following table sets forth information concerning annual, long-term and other compensation of K2's President and Chief Executive Officer and the four most highly compensated executive officers of K2:

Summary Compensation Table

				Long-Term Compensation Awards of Stock Options (#)
		Annual Compensation
Name and Principal Position		Annual Compensation			All Other Compensation ($)
Name and Principal Position	Year	Salary ($)	Bonus ($)		All Other Compensation ($)
Richard M. Rodstein President and Chief Executive Officer	2001 2000 1999	447,000 400,000 325,000	— 285,000 202,000	— 150,000 150,000	18,000(a) 13,500(a) 17,800(a)
John J. Rangel Senior Vice President—Finance	2001 2000 1999	240,000 240,000 210,000	— 125,000 101,000	— 75,000 75,000	8,100(a) 5,500(a) 14,300(a)
J. Wayne Merck Executive Vice President—Operations	2001 2000 1999	235,000 189,000 155,000	— 125,000 75,000	25,000 65,000 —	2,900(a) 1,200(a) 2,900(a)
David G. Cook Vice President & President of Stearns	2001 2000 1999	165,000 165,000 155,000	100,000 100,000 70,000	— 22,000 —	3,800(b) 3,000(b) 5,600(b)
David H. Herzberg Vice President & President of Shakespeare Industrial Products Group	2001 2000 1999	168,000 160,000 160,000	— 25,000 70,000	— 25,000 —	3,700(a) 2,600(a) 7,500(a)

(a): Dollar value of allocations to the accounts of the named individuals in K2's Employee Stock Ownership Plan: Mr. Rodstein ($800 in 2001, $200 in 2000 and $5,200 in 1999), Mr. Rangel ($800 in 2001, $200 in 2000 and $3,600 in 1999), Mr. Merck ($1,000 in 2001, $100 in 2000 and $1,900 in 1999), and Mr. Herzberg ($1,100 in 2001, $110 in 2000 and $5,200 in 1999); and K2's matching contribution to the accounts of the named individuals in K2's 401(k) Retirement Savings Plan: Mr. Rodstein ($5,300 in 2001, $5,300 in 2000 and $5,000 in 1999), Mr. Rangel ($5,300 in 2001, $5,300 in 2000 and $5,000 in 1999), Mr. Merck ($2,000 in 2001, $1,100 in 2000 and $1,000 in 1999), and Mr. Herzberg ($2,625 in 2001, $2,500 in 2000 and $2,300 in 1999).
(b): Dollar value of allocation to Mr. Cook's account in K2's Employee Stock Ownership Plan ($1,000 in 2001, $194 in 2000 and $2,400 in 1999) and K2's matching contribution to the Stearns 401(k) Payroll Savings and Profit Sharing Plan ($2,800 in 2001, $2,800 in 2000 and $3,200 in 1999).

The following table summarizes the number of shares and the terms and conditions of stock options granted to the named executive officers in 2001.

Option Grants in 2001

								Potential Realizable Value at Assumed Annual Rates of Stock Price Appreciation for Option Term
		% of Total Options Granted Employees During 2001
	Options Granted(a)			Exercise Price Per Share			Expiration Date(d)
Name	Options Granted(a)			Exercise Price Per Share			Expiration Date(d)	5%			10%
J.W. Merck	25,000	76.9	%	$	8.76	(b)	2/27/11	$	137,728	(c)	$	349,030	(d)

(a): All options granted to the named individual for 2001 are exercisable as to 20% after one year from date of grant, an additional 30% after two years and an additional 50% after three years.
(b): The exercise price is the closing price of K2's common stock on February 27, 2001, the date of grant.
(c): All options granted to the named individuals for 2001 expire on the tenth anniversary of the date of grant, subject to earlier expiration in the event of the officer's termination of employment with K2.
(d): In order for the named individuals to realize these potential values, the closing price of K2's common stock on February 27, 2011 would have to be $14.27 and $22.72 per share, respectively.

The following table summarizes exercises of stock options in 2001 which were previously granted to the President and Chief Executive Officer and the other named executive officers, as well as the number of all unexercised options held by them at the end of 2001, and their value at that date if they were in-the-money.

Aggregated Stock Option Exercises in 2001 and Year-End Option Values

					Value of Unexercised In-The-Money Options At 12/31/01
			Number of Unexercised Options At 12/31/01		Value of Unexercised In-The-Money Options At 12/31/01
					Exercisable		Unexercisable
Name	Shares Acquired on Exercise(a)	Value Realized			Exercisable		Unexercisable
Name	Shares Acquired on Exercise(a)	Value Realized	Exercisable	Unexercisable	Shares	Total $	Shares	Total $
R. M. Rodstein	—	—	368,420	150,000	75,000	28,125	75,000	28,125
J. J. Rangel	—	—	201,575	75,000	37,500	14,063	37,500	14,063
D. H. Herzberg	—	—	63,008	12,500	12,500	4,668	12,500	4,668
J. W. Merck	—	—	45,500	69,500	12,500	4,668	12,500	4,668
D. G. Cook	—	—	60,854	11,000	11,000	4,125	11,000	4,125

(a): Optionees, in the discretion of the Compensation Committee, may be granted the right to borrow money from K2 in connection with the exercise of options under the 1999, 1994 and 1988 Incentive Stock Option Plans. Each currently outstanding loan bears interest, payable quarterly, at a fixed rate equal to the applicable federal rate, as published by the Internal Revenue Service, for the period during which the loan was made. At December 31, 2001, one loan was outstanding to executive officers in connection with the exercise of stock options. The principal balance of the loan to Mr. Merck was $38,500 and the weighted average Applicable Federal Rate at which it bears interest was 5.97%.

Pension Plans

K2 maintains the Pension Plan of K2 Inc. (the "K2 Plan"), a defined benefit pension plan with varying formulas for the benefit of eligible K2, Shakespeare and Stearns employees. The plan is a tax-qualified, Company-funded plan subject to the provisions of ERISA. Contributions to the plan, which are made solely by K2, are actuarially determined. Benefits under the plans are based on years of service and remuneration and are subject to varying benefit formulas based on the eligible employee's business unit.

The table below illustrates approximate annual benefits under the K2 Plan, based on the formula for eligible K2 employees ("K2 Formula") and based on the indicated assumptions. For 2001, the Internal Revenue Code (the "Code") limits the K2 Plan's covered compensation to $170,000.

	Approximate annual pension upon retirement at age 65 (a)
	Years of Service
Covered Compensation	15		20		25		30		35
$125,000	$	18,750	$	25,000	$	31,250	$	37,500	$	43,750
$150,000		22,500		30,000		37,500		45,000		52,500
$175,000		25,500		34,000		42,500		51,000		59,500

(a): An individual retiring at age 65 earns his maximum pension (as a percentage of covered compensation) at 35 years of service.

The K2 Formula defines remuneration on which annual benefits are based as the average of the participant's highest five consecutive years' earnings. Earnings include salary, wages, overtime pay, commissions, bonuses, and similar forms of incentive compensation actually paid during the year not exceeding certain amounts for sales personnel and subject to the $170,000 Code Limit in 2001 for all personnel.

Compensation for 2001 that would be included in the calculation of covered compensation and credited years of service at December 31, 2001 is shown below for the individuals named in the Summary Compensation Table who are participants in the plan and are eligible for the K2 Formula.

Name		Covered Compensation			Years of Service
Richard M. Rodstein		$	170,000		18
John J. Rangel			170,000		17

The formula for eligible salaried Shakespeare Company employees (the "Shakespeare Formula") defines remuneration upon which annual benefits are based as the average of the employee's highest five consecutive years' earnings. Earnings include the employee's regular basic monthly earnings excluding commissions, bonuses, overtime and other extra compensation, not exceeding certain amounts for field sales personnel and subject to the $170,000 Code Limit in 2001 for all personnel.

The table below illustrates approximate annual benefits under the Shakespeare Formula based on the indicated assumptions.

	Approximate annual pension upon Retirement at age 65 (a)
			Years of Service
Covered Compensation	15		20		25		45
$125,000	$	26,250	$	43,750	$	61,250	$	75,000
$150,000		31,500		52,500		73,500		90,000
$175,000		35,700		59,500		83,300		102,000

(a): An individual retiring at age 65 earns his maximum pension (as a percentage of covered compensation) after approximately 43 years of service.

Name		Covered Compensation			Years of Service
David H. Herzberg		$	170,000		22
J. Wayne Merck		$	170,000		11

The formula for eligible salaried Stearns Company employees (the "Stearns Formula") defines remuneration on which annual benefits are based as the average of the participant's highest 60 months' compensation. Compensation includes salary, wages, overtime pay, bonuses, and commissions, subject to the $170,000 Code limit for 2001. The 2001 covered compensation of Mr. Cook, the only individual named in the Summary Compensation Table who participates in the Stearns Formula, was $170,000, and he had 22 years of service as of December 31, 2001.

The table below illustrates approximate annual benefits under the Stearns Formula based on the indicated assumptions.

	Approximate annual pension upon Retirement at age 65 (a)
			Years of Service
Covered Compensation			Years of Service
Covered Compensation	15		20		25		45
$125,000	$	25,430	$	33,900	$	42,380	$	50,850
$150,000		31,050		41,400		51,750		62,100
$175,000		33,550		47,400		59,250		71,100

(a): An individual retiring at age 65 earns his maximum pension (as a percentage of covered compensation) at 30 years of service.

Employment Agreements

During 2001, new employment agreements were granted to Messr's Rodstein and Rangel which expire May 7, 2004. Mr. Rodstein's agreement calls for base salary at the annual rate of $400,000, subject to such increases as the Board may approve, and participation in K2's incentive compensation and benefit programs on a basis which is appropriate in light of his position. Mr. Rangel's agreement calls for base salary at the annual rate of $240,000 and is otherwise similar to Mr. Rodstein's. Each of the agreements provides for severance benefits payable following a change in control, based upon 299% of the employee's total compensation prior to the termination, and accelerated vesting of outstanding stock options.

Directors' Compensation

In 2001, directors who were not salaried officers of K2 were paid $5,000 per calendar quarter for their services as directors and $1,000 per meeting day for each meeting of the Board of Directors and of any committee which they attended. They were also reimbursed for out-of-pocket expenses. Directors may elect to defer the receipt of fees. Interest on deferred fees is accrued quarterly based on the average interest rate paid by K2 in the preceding quarter on its short-term borrowings.

Under the 1999 Incentive Stock Option Plan, all new nonemployee directors and those existing directors electing to participate in the new plan, receive an initial grant of 10,000 stock options on the first grant date after their election and annual grants thereafter of 5,000 stock options. All grants to nonemployee directors are at fair market value on date of grant and are immediately exercisable. In 2001, grants of 10,000 stock options were made to Lou L. Holtz and Dan Quayle. The stock option grant to Mr. Holtz had an exercise price of $8.20 per share, the closing price on the March 21, 2001 grant date and was for a ten-year term. The stock option grant to Mr. Quayle had an exercise price of $8.72 per share, the closing price on the August 21, 2001 grant date and was for a ten-year term. In 2002, grants of 5,000 stock options were made to Wilford D. Godbold, Jr., Jerry E Goldress, Richard J. Heckmann, Robin E. Hernreich, Stewart M. Kasen and Alfred E. Osborne, Jr. These stock options granted had an exercise price of $7.75 per share, the closing price on the January 5, 2001 grant date, and was for a ten-year term.

Compensation Committee Report

Compensation Objectives and Practices

The compensation committee is comprised of directors who are not employees or former employees of K2. K2's executive compensation program is designed to help K2 attract, motivate and appropriately reward management who are responsible for K2's short-term and long-term profitability, growth and return to shareholders. The key elements of the program consist of base salary, annual performance-based cash awards and long-term incentive awards. The committee utilizes the services of an independent executive compensation consulting firm in evaluating awards.

Base salary: Base salaries are generally established by evaluating the responsibilities of the position, the experience of the individual and salaries for comparable positions in the marketplace based on survey data provided by the compensation consultant. Depending on the overall financial performance of K2, salaries are adjusted from time to time to reflect increased responsibilities, to keep pace with competitive practices and to reflect the performance of individual executives. The program has been designed to place a significant amount of compensation at risk by setting annual base salaries at levels just below the 50th percentile of the marketplace for similar positions based on the survey data obtained.

Annual cash incentive: The amount of the annual performance-based cash incentive available for allocation to the executive officers who participated in the plan is based on a formula adopted pursuant to the Executive Officers' Incentive Compensation Plan. The formula makes available for allocation a percentage of K2's incentive compensation income in excess of a required minimum return on average shareholders' equity. Performance criteria were also adopted for the plan participants to assist the compensation committee in determining the allocation of any bonus pool generated. The performance criteria were designed to create value for K2 and its shareholders. The individuals' performance is subjectively evaluated against their criteria. The targeted annual incentive award is meant to bring total annual cash compensation (base salary plus annual incentive award) to above the average, as defined by survey data provided by the compensation consultant for comparable positions at similar-sized companies, when superior performance levels are achieved.

Long-term Stock Incentive: Stock incentives are provided to encourage management to take actions that will maximize long-term stockholder value, and to link their interests to those of K2's stockholders. All stock options have an exercise price equal to the market price of K2's stock on the date of grant and vest over three years. By utilizing such pricing and vesting, the compensation committee intended that the full benefit would be realized only if stock price appreciation occurs and if the key employee does not leave K2 during that period. In determining the number of options awarded to executive officers, the compensation committee considered information provided by K2's independent compensation consultants, which included, among other things, market studies of annual stock option grants as a percentage of shares outstanding and individual grants as a percentage of compensation utilizing the Black-Scholes formula.

Chief Executive's Compensation

Mr. Rodstein's base salary was 16% below the targeted 50th percentile of the marketplace for similar positions, according to survey data after considering an increase to his annualized base salary to $475,000, effective May 2001. In determining the Chief Executive Officer's incentive compensation award for 2001, the Committee considered K2's performance for the year in meeting earnings targets, stock price performance, improvement in margins, returns on investment and meeting cash flow objectives, implementation of cost reduction programs, and augmenting K2's long-term strategic plan for sustainable growth. The Committee noted that while K2's stock price decreased 10% for the year, K2's peer group index decreased 16% in the same period. The Committee also noted that despite a significant decline in the sales of inline skates and a collapse of the scooter market, K2's remaining businesses reported significant improvements in operating earnings in 2001 due in part to sales of new products, to the transfer of certain production to China and an aggressive cost reduction program. The Committee noted the successful transfer of production of alpine skis to China and the implementation of significant cost reduction measures that should benefit future years. Finally, the committee considered the significant cash flow and debt reduction of K2 during the period despite the substantial decline in sales. After consideration of the above factors, the committee elected not to grant any award to the Chief Executive Officer for the year 2001 compared to an award of $285,000 in the prior year. The 2001 total compensation for the Chief Executive Officer represents a 47% shortfall from the 50th percentile for total compensation of the marketplace for similar positions, according to survey data.

Jerry E. Goldress, Chairman
Richard Heckmann
Stewart M. Kasen

Compensation Committee Interlocks and Insider Participation

Messrs. Goldress, Heckmann and Kasen served on the compensation committee of K2 during the year 2001. No member of the compensation committee was, during the year 2001, either an officer or employee or a former officer or employee of K2 or any of its subsidiaries, nor did any member have any relationship with K2 which would be required to be disclosed.

Stock Ownership of Certain Beneficial Owners

Set forth below is the name, address and number of shares of Common Stock beneficially owned as of March 22, 2002 by each person known to K2 to own 5% or more of the outstanding shares of Common Stock.

Shareholder	Shares of Common Stock		Percent of Class
ICM Asset Management, Inc. W. 601 Main Avenue, Suite 600 Spokane, WA 99201	1,558,448	(a)	8.7
Trust under Company's Employee Stock Ownership Plan 4900 South Eastern Avenue Los Angeles, CA 90040	1,474,532	(b)	8.2
Dimensional Fund Advisors 1299 Ocean Avenue, 11^th Floor Santa Monica, CA 90401	1,450,229	(c)	8.1
The Anthony Family Trust 65 Park Lane Concord, MA 01742	1,001,249	(d)	5.6

(a): Based on the most recently filed Form 13G of ICM Asset Management, Inc. dated February 5, 2002.
(b): Includes shares allocated to the accounts of participants in the ESOP, the voting of which is directed by such participants. Until shares are allocated to the accounts of participants in the ESOP, the terms of the Trust require the Trustee to vote those shares in the same proportion as the allocated shares are voted.
(c): Based on the most recently filed Form 13G of Dimensional Fund Advisors dated February 12, 2002.
(d): Based on the most recently filed Form 13D of The Anthony Family Trust dated May 22, 1996.

Stock Ownership of Directors and Executive Officers

Name		Shares of Common Stock Beneficially Owned on March 22, 2002 (a)	Percent of Class (b)
Directors and Nominees for Director
	Wilford D. Godbold, Jr.	22,000	.1	%
	Jerry E. Goldress	23,500	.1	%
	Richard J. Heckmann	131,000	.7	%
	Robin E. Hernreich	35,150	.2	%
	Lou Holtz	10,000	*
	Stewart M. Kasen	23,000	.1	%
	Alfred E. Osborne, Jr.	37,000	.2	%
	Dan Quayle	11,000	*
	Richard M. Rodstein	512,913	2.8	%
Executive Officers (c)
	John J. Rangel	253,681	1.4	%
	J. Wayne Merck	58,569	.3	%
	David H. Herzberg	100,873	.6	%
	David G. Cook	104,123	.6	%
All Directors and Executive Officers as a group (17)		1,427,568	7.4	%

(a): Includes the following shares subject to options exercisable within 60 days of the date of this Proxy Statement: Wilford D. Godbold, Jr.—21,000 shares; Jerry E. Goldress—22,000 shares; Richard J. Heckmann—21,500 shares; Robin E. Hernreich—20,000 shares; Lou Holtz—10,000 shares; Stewart M. Kasen—21,500 shares; Alfred E. Osborne, Jr.—20,000 shares; Dan Quayle—10,000 shares; Richard M. Rodstein—368,420 shares; John J. Rangel—201,575 shares; J. Wayne Merck—50,500 shares; David H. Herzberg—63,008 shares; David G. Cook—60,854 shares; and all directors and officers as a group—989,565 shares. The above include options granted on January 5, 2001 to Mr. Godbold, Mr. Goldress, Mr. Heckmann, Mr. Hernreich, Mr. Kasen and Dr. Osborne under the directors' compensation plan which was effective as of January 1, 2000. In addition, Mr. Holtz and Mr. Quayle were granted options above under the same plan when they were appointed to the board on February 23, 2001 and July 9, 2001, respectively. These options, which are exercisable at the market price at the date of grant, vest immediately. With the exception of the shares referred to in the preceding sentence and the shares allocated to the accounts of Mr. Rodstein (15,354 shares), Mr. Rangel (8,191 shares), Mr. Herzberg (15,294 shares), Mr. Merck (1,769 shares), Mr. Cook (3,625 shares), and all directors and officers as a group (48,017 shares), under K2's ESOP, each of the named persons has sole voting and investment power with respect to the shares beneficially owned by him.
(b): The shares subject to options described in note (a) for each individual were deemed to be outstanding for purposes of calculating the percentage owned by such individual.
(c): Executive officers named in the Summary Compensation Table (other than Mr. Rodstein, whose securities holdings are listed above).
*: Less than .1%.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934 requires K2's directors and executive officers to file initial reports of ownership and reports of changes of ownership of K2's Common Stock with the Securities and Exchange Commission. Executive officers and directors are required to furnish K2 with copies of all Section 16(a) forms that they file. Based upon a review of these filings and written representations from certain of K2's directors and executive officers that no other reports were required, all such Forms were filed on a timely basis by reporting persons.

Employment of Independent Auditors

During the year ended December 31, 2001, K2 paid Ernst & Young LLP, its outside auditors, the following fees: audit fees of $466,842; other fees (primarily for tax-related services and benefit plan audits) of $247,715. No fees were paid or services provided for financial information systems design and implementation. Upon the recommendation of the Audit Committee, the Board of Directors has chosen the firm of Ernst & Young LLP as independent auditors to examine the consolidated financial statements of K2 for the year 2002. A representative of Ernst & Young LLP is expected to be present at the annual meeting with the opportunity to make a statement, if he so desires, and to be available to respond to appropriate questions.

Shareholder Proposals

Any proposal by a shareholder intended to be presented at K2's 2003 annual meeting of shareholders must be received by K2 no later than November 30, 2002 for inclusion in the proxy statement and form of proxy for that meeting.

Other Matters

The Board of Directors knows of no other business to be presented at the meeting. If other matters do properly come before the meeting, the persons acting pursuant to the proxy will vote on them in their discretion. A copy of the 2001 Annual Report to shareholders is being mailed with this Proxy Statement.

Upon the written request of any shareholder of record as of March 22, 2002, a copy of K2's Annual Report on Form 10-K for the year ended December 31, 2001 (excluding exhibits) as filed with the Securities and Exchange Commission will be supplied without charge. Requests should be directed to the Secretary of K2 Inc., 4900 South Eastern Avenue, Los Angeles, California 90040.


	RICHARD M. RODSTEIN President and Chief Executive Officer

Los Angeles, California
April 1, 2002

PROXY		K2, INC.		PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

RICHARD M. RODSTEIN, RICHARD J. HECKMANN and DIANA C. CRAWFORD, and each of them, with full power of substitution, are hereby authorized to represent and to vote the stock of the undersigned in K2 INC. at the Annual Meeting of Shareholders to be held on May 6, 2002 and at any adjournment thereof as set forth below:

1.: ELECTION OF DIRECTORS
Nominees:

01-Jerry E. Goldress		02-Alfred E. Osborne, Jr.		03-Dan Quayle
o FOR o WITHHOLD		o FOR o WITHHOLD		o FOR o WITHHOLD

2.: PROPOSAL TO RATIFY THE SELECTION OF ERNST & YOUNG LLP as independent auditors for 2002.

o FOR

o AGAINST

o ABSTAIN

3.: Upon or in connection with the transaction of such other business as may properly come before the meeting or any adjournment thereof.

o FOR

o AGAINST

o ABSTAIN

(CONTINUED AND TO BE SIGNED ON REVERSE SIDE.)

This proxy will be voted as specified and, unless otherwise specified, this proxy will be voted FOR the election of directors and FOR proposal 2.

YOUR VOTE IS IMPORTANT! PLEASE MARK, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE.

QuickLinks

Proxy Statement
Election of Directors
Nominees for Election at the Annual Meeting For Term of Office Expiring in 2005
Directors Continuing in Office For Term of Office Expiring in 2004
Directors Continuing in Office For Term of Office Expiring in 2003
Board of Directors and Committees
Report of the Audit Committee
Stock Price Performance Graph
Comparative 5-year Total Returns K2 Inc., Russell 2000, Peer Group Performance results through December 31, 2001
Executive Compensation
Summary Compensation Table
Option Grants in 2001
Aggregated Stock Option Exercises in 2001 and Year-End Option Values
Pension Plans
Employment Agreements
Directors' Compensation
Compensation Committee Report
Compensation Committee Interlocks and Insider Participation
Stock Ownership of Certain Beneficial Owners
Stock Ownership of Directors and Executive Officers
Section 16(a) Beneficial Ownership Reporting Compliance
Employment of Independent Auditors
Shareholder Proposals
Other Matters

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