<PAGE>


       As filed with the Securities and Exchange Commission on June 27, 1997

                                                      Registration No. 000-28822
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------


                          SECURITIES AND EXCHANGE COMMISSION
                                Washington, D.C. 20549

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

                                      FORM 10-K

                    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
                        OF THE SECURITIES EXCHANGE ACT OF 1934

                       For the Fiscal Year Ended March 31, 1997
                            Commission File Number 0-28822

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

                                    ROCKSHOX, INC.

                (Exact name of registrant as specified in its charter)

<TABLE>
<CAPTION>
<S>                                   <C>                      <C>
          DELAWARE                    401 Charcot Avenue                 77-0396555
(State or other jurisdiction of       San Jose, CA  95131      (I.R.S. Employer Identification
incorporation or organization)          (408) 435-7469                      Number)
</TABLE>

     (Address, including zip code and telephone number, including area code)

           Securities registered pursuant to Section 12(b) of the Act:

      TITLE OF EACH CLASS                         NAME OF EACH EXCHANGE ON WHICH
Common Stock, par value $.01 per share                     REGISTERED
                                                      NASDAQ Stock Market

     Securities registered pursuant to Section 12(g) of the Act: None

    Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days.  Yes /X/   No / /

    Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K /X/

    As of June 16, 1997, the aggregate market value of the voting stock held by
non-affiliates of the Registrant was $72,005,677.

    As of June 16, 1997, the Registrant had 13,685,164 shares of Common Stock
outstanding.

DOCUMENTS INCORPORATED BY REFERENCE:

    Portions of the ROCKSHOX, INC. Proxy Statement for the 1997 Annual Meeting
of Stockholders are incorporated by reference in Part III hereof.


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

                                          1
<PAGE>

                                  TABLE OF CONTENTS

ITEM   DESCRIPTION                                                       PAGE
----   -----------                                                       ----

                                        PART I

1      Business. . . . . . . . . . . . . . . . . . . . . . . . . . .      3

2      Properties. . . . . . . . . . . . . . . . . . . . . . . . . .     11

3      Legal Proceedings . . . . . . . . . . . . . . . . . . . . . .     11

4      Submission of Matters to a Vote of Security Holders . . . . .     12


                                       PART II

5      Market for Registrant's Common Equity and Related
         Stockholder Matters. . . . . . . . . . . . . . . . . . . . .    12

6      Selected Financial Data. . . . . . . . . . . . . . . . . . . .    13

7      Management's Discussion and Analysis of Financial Condition
         and Results of Operations. . . . . . . . . . . . . . . . . .    14

7A     Quantitative and Qualitative Disclosures About Market Risk . .    17

8      Financial Statements and Supplementary Data  . . . . . . . . .    17

9      Changes in and Disagreements with Accountants on Accounting
         and Financial Disclosure . . . . . . . . . . . . . . . . . .    17


                                       PART III

10     Directors and Executive Officers of the Registrant . . . . . .    18

11     Executive Compensation . . . . . . . . . . . . . . . . . . . .    18

12     Security Ownership of Certain Beneficial Owners and
         Management . . . . . . . . . . . . . . . . . . . . . . . . .    18

13     Certain Relationships and Related Transactions . . . . . . . .    18


                                       PART IV

14     Exhibits, Financial Statement Schedules and Reports on
         Form 8-K . . . . . . . . . . . . . . . . . . . . . . . . . .    19


                                          2
<PAGE>

    Unless the context indicates otherwise, the "Company" or "RockShox", as 
used in this Annual Report on Form 10-K, means ROCKSHOX, INC., its 
predecessors and their respective parents and subsidiaries on a consolidated 
basis.  Unless the context indicates otherwise, all references to a fiscal 
year are to the Company's fiscal year.  In 1995, the Company changed its 
fiscal year end from December 31 to March 31.  This annual report on Form 
10-K includes references to registered trademarks and brand names of the 
Company, including: ROCKSHOX, JUDY, DELUXE, QUADRA AND MAG. This annual 
report on Form 10-K also contains references to INDY, which is a trademark of 
Indianapolis Motor Speedway Corporation, and is used under license from IMS 
Properties Inc.

                                        PART I

ITEM 1.  BUSINESS

GENERAL

    RockShox is the worldwide leader in the design, manufacture and marketing
of high performance bicycle suspension products.  RockShox suspension products
enhance riding performance and comfort by mitigating the impact of rough terrain
and providing better wheel contact with the riding surface.  The Company, which
currently manufactures both front suspension forks and rear shocks for mountain
bikes, has combined technical innovation with high quality products and creative
marketing to establish one of the most widely recognized brand names in the
bicycle industry.

    The Company's sales have grown rapidly, from approximately $6 million in
fiscal 1991 to approximately $106.2 million in fiscal 1997.  The Company
believes that its growth has been the result of increasing market acceptance of
bicycle suspension worldwide and, more specifically, growing demand for ROCKSHOX
suspension products.

    During fiscal 1997 RockShox marketed ten  front suspension forks and three
rear shocks under its JUDY, INDY, QUADRA, MAG, and DELUXE product lines.  The
Company's products have been repeatedly recognized by the bicycle industry for
their innovative design and superior performance.  As evidence of the advanced
design and technical benefits of its products, ROCKSHOX suspension was used by
more than half of the mountain bike racers competing in the 1996 Olympic Games
in Atlanta.

    Approximately 72% of the Company's sales in fiscal 1997 were to original 
equipment manufacturers ("OEMs"), including Trek Bicycle Corp. ("Trek"), GT 
Bicycles Inc. ("GT") and Specialized Bicycle Components, Inc. ("Specialized") 
who incorporate ROCKSHOX branded components as part of new, fully-assembled 
mountain bikes sold worldwide.  The Company's products are also sold as an 
accessory component to consumers through a network of over 10,000 independent 
bicycle dealers ("IBDs") worldwide.

    The Company was founded by Steve Simons and Paul Turner in 1989 as a North
Carolina corporation and was later reincorporated as a California corporation.
In March 1995, the Company was recapitalized (the "Recapitalization") in a
transaction with MCIT PLC ("MCIT") and certain persons and entities affiliated
with The Jordan Company ("Jordan"), as a result of which Messrs. Simons and
Turner and certain of their respective family members became equal owners in the
Company with MCIT and such affiliates of Jordan.

    The Company's principal executive office is located at 401 Charcot Avenue,
San Jose, California; its telephone number is (408) 435-7469.

PRODUCTS

    ROCKSHOX suspension products are generally designed to enhance riding
performance and comfort, and include front suspension forks and rear shocks
based on elastomer, hydraulic and spring coil technologies.  The Company's
bicycle suspension systems incorporate two functional components: a spring and a
damper.  The spring function absorbs the impact of rough terrain and returns the
fork to its original position after compression.  The damper also absorbs impact
and moderates the movement of the fork as it returns to its original position.
As a result, suspension provides better wheel contact with the riding surface,
especially on off-road or nonpaved surfaces, enabling the cyclist to ride with
more speed, comfort and control.

    Every ROCKSHOX fork uses aerospace alloys and features adjustable 
suspension, a progressive spring rate, structural rigidity and low weight. 
Key to any suspension system is the spring rate, which allows the front 
suspension fork to move easily over small bumps, but not "bottom out" over 
larger ones.  The structural rigidity of ROCKSHOX suspension forks improves 
the rider's ability to control the bike, while low weight enhances overall 
bicycle performance.  Every ROCKSHOX fork is covered by a one-year limited 
warranty.


                                          3
<PAGE>

    The 1997 models represent the Company's broadest line of product 
offerings to date.  For the 1997 model year, the Company offered ten front 
suspension forks, including five new forks, and three rear shocks, including 
one new rear shock.

All of the Company's products that were introduced prior to the current product
year have experienced model year modifications or upgrades since they were
originally introduced.

The following tables summarize the Company's 1997 product offerings of front
forks and rear shocks:


                                  FRONT FORKS

<TABLE>
<CAPTION>
                                      SUGGESTED
                   TYPICAL          RETAIL PRICE IN                                                WEIGHT FOR         DATE OF
                 RETAIL BIKE           ACCESSORY                              SUSPENSION            STANDARD         ORIGINAL
1997 MODEL      PRICE POINT (1)         MARKET        INTENDED USE            TECHNOLOGY          CONFIGURATION    SHIPMENT (2)
------------- -----------------  ------------------- -----------------    --------------------  ----------------  --------------
------------- -----------------  ------------------- -----------------    --------------------  ----------------  --------------
<S>           <C>                <C>                 <C>                  <C>                   <C>               <C>
QUADRA 5           $475-$800      Not offered at     Recreational;        Elastomer               3.2 pounds       May 1994
                                  retail             Light Terrain
INDY C             $500-$850               $199      Recreational;        Coil/Solid              3.25 pounds      April 1996
                                                     Moderate Terrain     Urethane
INDY XC            $600-$1,200             $239      Cross-Country;       Coil/Multicellular      3.1 pounds       May 1996
                                                     Moderate Terrain     Urethane
                                                                          ("MCU")
INDY SL            $900-$2,000             $359      Cross-Country;       Coil/MCU                2.7 pounds       June 1996
                                                     Moderate Terrain
MAG 21             $850-$1,200             $299      Cross-Country;       Air/Oil                 3.0 pounds       September 1992
                                                     Moderate Terrain
JUDY C             $900-$2,000    Not offered at     Cross-Country;       Cartridge               3.25 pounds      July 1996
                                  retail             Extreme Terrain
JUDY XC          $1,100-$2,500             $409      Cross-Country;       Cartridge               2.95 pounds      September 1994
                                                     Extreme Terrain
JUDY DH              $1,500+               $549      Downhill Racing      Cartridge               3.5 pounds       September 1994

JUDY SL              $1,600+               $649      Cross-Country;       Cartridge               2.7 pounds       September 1994
                                                     Extreme Terrain
JUDY DHO             $2,000+             $1,199      Downhill Racing      Cartridge               4.2 pounds       August 1996


                                  REAR SHOCKS


                                      SUGGESTED
                   TYPICAL          RETAIL PRICE IN                                                WEIGHT FOR         DATE OF
                 RETAIL BIKE           ACCESSORY                              SUSPENSION            STANDARD         ORIGINAL
1997 MODEL      PRICE POINT (1)         MARKET        INTENDED USE            TECHNOLOGY          CONFIGURATION    SHIPMENT (2)
------------- -----------------  ------------------- -----------------    --------------------  ----------------  --------------
------------- -----------------  ------------------- -----------------    --------------------  ----------------  --------------
<S>           <C>                <C>                 <C>                  <C>                   <C>               <C>
Deluxe           $1,000-$1,200    Not offered at     Cross-Country;       Coil Over               0.71 pounds      June 1995
                                  retail             Downhill             hydraulic damper
Coupe Deluxe     $1,200-$1,700             $199      Cross-Country;       Coil Over               0.71 pounds      July 1996
                                                     Downhill             hydraulic damper
Super Deluxe        $1,700+                $289      Cross-Country;       Coil Over               0.79 pounds      June 1995
                                                     Downhill             hydraulic damper
                                                                          with oil reservoir
</TABLE>
 

(1) The typical retail bike price point represents management's estimate of the
    U.S. retail range for OEM mountain bikes that include the indicated product.

(2) Following their introduction, models are generally upgraded and revised
    each year.


                                          4
<PAGE>

RESEARCH AND DEVELOPMENT

    As of March 31, 1997, the Company's product development activities, based
in San Jose, California, were supported by 33 professionals, including 10
project engineers, utilizing an array of sophisticated design and analytical
tools.  Development for each major product line (e.g., JUDY, INDY, etc.) is
headed by a senior level project engineer with assistance from at least one
other project engineer.  In addition, the Company has an ongoing advanced
materials/technologies program led by its engineering manager, which
investigates and applies materials and processes not currently used in the
manufacture of current products.

    The Company maintains a testing center in San Jose, California to collect
data and test designs prior to commercial introduction.  The testing center is
staffed by two technicians and managed by a senior project engineer, who perform
various fatigue, impact and cycle tests on components and assembled prototypes
during the design process.  In addition, the Company operates a field test site
in Santa Cruz, California to provide in-use data on new products.

    The product development process usually begins one to two years prior to
the expected commercial introduction of a new product, and generally focuses on
having a product ready for distribution at the start of the applicable model
year.  In addition, short-term projects involving annual upgrades of existing
products and improvements to manufacturing processes occur regularly.  New
product ideas come from a variety of sources, including mountain bike race
teams, OEMs, consumers and the Company's employees.  Products are developed
using design and engineering software tools that provide full parametric
three-dimensional modeling and finite element analysis, allowing for computer
optimization of structures and greatly reducing the time required to develop and
prototype designs.  Currently, an interdepartmental team, including
representatives from the Company's engineering, manufacturing, and, in certain
cases, sales and marketing departments, is established at the beginning of every
development project.  Management believes this interdepartmental approach to
product development reduces the time necessary to bring a successful product to
market.

    Current areas of focus for product development include, among others, (i)
research in the area of new materials and processes to reduce the cost and
improve the performance of the Company's current products; (ii) the continuation
of the development of rear suspension products; (iii) the introduction of
products appropriately priced for the mid-priced segment  of the mountain bike
market; and (iv) the design of new products, including suspension systems for
road and trekking bikes and disc brakes.  The Company's future success will
depend, in part, upon its continued ability to develop and successfully
introduce new and popular bicycle suspension products and other types of bicycle
components such as disc brakes.  There can be no assurance that the Company will
introduce any new products or, if introduced, that any such products will be
commercially successful.

    Research and product development expenditures in fiscal years 1994, 1996 
and 1997 were approximately $2.1 million, $3.4 million and $4.8 million, 
respectively.

MANUFACTURING

    All manufacturing is done in the Company's San Jose facilities on multiple,
continuous flow assembly lines.  These lines are computer-controlled and are
comprised of a combination of automated and manual assembly stations supported
by satellite subassembly operations.  The assembly lines are designed for
efficiency and can potentially produce a complete suspension fork every 20
seconds.  In addition to assembly activities, the Company does some machining of
parts on-site.  Management reviews manufacturing processes available through
sub-contractors to determine if opportunities exist to re-engineer such
processes and to bring them in-house.  To this end, the manufacturing department
has its own engineering function, which is currently carried out by seven
engineers and seven technicians.  Typically, RockShox brings certain machining
operations into the Company on the basis of cost, quality control, lead-time and
the critical nature of the subcomponent in achieving production efficiencies.
Such in-house machining is generally performed on specialized equipment designed
and built by the Company's manufacturing engineers and subcontractors.

    As of March 31, 1997, manufacturing included approximately 210
non-unionized employees plus approximately 60 temporary hires brought in
principally during the peak building season from June through January.  The
Company generally operates on a single shift, adding a second shift when needed.
Extensive training occurs so supervisors and lead assemblers can manage their
own work areas and monitor product quality.  In addition, computerized testing
and statistical process control are used to maintain and measure product quality
during the assembly process.  Finished products are also tested in the Company's
product development test center.

    The Company works closely with a variety of vendors to meet its production
needs, including machine shops, die casters, forging houses, tube manufacturers
and injection molders.  Although the Company has established relationships with
its principal suppliers and manufacturing sources, the Company does not
currently have long-term contracts with any of its vendors, nor does the Company
currently have multiple vendors for all parts, tooling, supplies or services
critical to


                                       5
<PAGE>

the Company's manufacturing processes.  Currently, all of the Company's major 
suppliers are based in the U.S.  The company continually reviews its vendor 
relationships with regard to cost, delivery and quality.  During fiscal 1997, 
the Company purchased approximately $5.6 million of components from its 
largest vendor.

    Production planning starts with a general forecast several months before
the beginning of the model/fiscal year.  This general forecast is then turned
into a more complete, time-phased forecast by customer and suspension product,
which guides initial planning for parts and labor requirements.  As the year
progresses, the forecast is constantly reviewed and compared with actual
customer orders.  Manufacturing inventory levels are currently managed through
an Integrated ERP ("Enterprise Resource Planning") Package.

    The Company's policy is to require firm purchase orders from OEMs 60 days
prior to shipment, which generally allows the Company to manufacture product
against a known backlog.  As of March 31, 1997, the Company's backlog was
approximately $9.6 million compared to $9.8 million at March 31, 1996.
Substantially all of the Company's backlog orders are expected to be filled
within 90 days, although there can be no assurance that all such backlog orders
will be filled within that time period, if at all.  The backlog of orders at any
given time is affected by a number of factors, including seasonality,
availability of parts and the scheduling of manufacturing and shipment of
products.  Accordingly, the backlog of orders for a particular period is not
necessarily meaningful and may not be indicative of future sales activity or
product popularity.

SALES AND DISTRIBUTION

    The Company's products are primarily sold to OEMs, who incorporate ROCKSHOX
components as part of new, fully-assembled mountain bikes sold worldwide, and
through distributors or, in some cases, directly to IBDs, each of whom serve the
retail accessory market.  For the fiscal year ended March 31, 1997,
approximately 72% of the Company's total net sales were to OEMs and
approximately 28% were to distributors and IBDs.  OEM customers have become
increasingly important to the Company as bicycle suspension has evolved from an
accessory niche component into standard equipment on better quality mountain
bikes.  The following table demonstrates the historical shift in the Company's
customer base and product distribution:

<TABLE>
<CAPTION>
                                                                    Fiscal Year Ended
                                  --------------------------------------------------------------------------------
                                       December 31, 1994            March 31, 1996             March 31, 1997
                                  -------------------------   -------------------------  -------------------------
                                    Net Sales      % of         Net Sales     % of         Net Sales      % of
                                 (in thousands)  Net Sales   (in thousands) Net Sales    (in thousands) Net Sales
                                  -------------------------   -------------------------  -------------------------
<S>                               <C>              <C>        <C>              <C>       <C>            <C>
OEMs . . . . . . .                $   24,482       65%        $   57,103       68%       $   77,000       72%
Distributors and IBDs. . . .          13,418       35%            26,406       32%           29,212       28%
                                  -------------------------   -------------------------  -------------------------
    Total. . . . . . . . . .      $   37,900      100%        $   83,509      100%       $  106,212      100%
                                  -------------------------   -------------------------  -------------------------
                                  -------------------------   -------------------------  -------------------------
</TABLE>
 
    Management believes that the Company's products play an important role in
the sale of OEM bikes and that OEMs are aware of the influence that the ROCKSHOX
brand name has on a consumer's selection of a mountain bike.  Every front
suspension fork sold today to OEMs prominently displays the ROCKSHOX name.  In
addition to its strong brand name, the Company believes that OEMs also choose
ROCKSHOX for product innovation, reliability and quality.  The Company further
solidifies its OEM relationships by providing a high level of customer service,
ranging from early stage engineering and design support to worldwide
distribution and aftermarket service for its products.

    The Company currently sells to over 150 OEM accounts worldwide. The Company
has substantial export sales, a significant portion of which include products
shipped to Asian manufacturing subcontractors for certain U.S.-based OEMs.

    The sales process for OEM customers begins in January and February with
presentations of the Company's product line for the coming model year.
Typically, the Company learns between April and June if its products have been
specified on various OEM bike models and of OEM volume expectations per model,
although such estimates are subject to significant adjustment throughout the
year.  Shipments are then made directly to OEMs or to their subcontractors
(typically bicycle frame manufacturers located in Asia) beginning in the
April-June quarter and peaking in the July-September quarter.  OEM sales slow
down in the second half of the Company's fiscal year and are principally
comprised of OEM reorders, which the Company believes primarily reflect the
popularity and sell-through rates of various OEM mountain bikes that incorporate
ROCKSHOX components.


                                       6
<PAGE>

    Sales to distributors and IBDs generally trail the OEM process, with sales
to distributors at their highest during the middle of the Company's fiscal year
(August and September) and sales to dealers peaking during the following March
and April.  The Company currently has five distributors in the United States,
all of  whom are owned by OEM customers, and 40 additional distributors
worldwide.  Management believes that sales of the Company's products through
OEM-owned distributors are an important revenue source for OEMs and further
strengthen the Company's relationships with its major customers.  Distributors
purchase ROCKSHOX products for resale to IBDs and also provide worldwide
servicing and marketing support for all of the Company's products.  In the U.S.,
the Company generally sells directly to IBDs product quantities too small for
third-party distributors to handle.

    As of March 31, 1997, the Company had approximately 30 people in sales and
customer service functions.  The Company's principal sales activities are based
in San Jose, California.  In addition, the Company has an independent sales
representative based in Bern, Switzerland.  The Company's customer service
activities include a warranty program managed by an in-house technical support
department in the U.S. and a distributor network of technicians outside the U.S.

    In fiscal 1997, approximately 55% of the Company's sales were to the
Company's ten largest customers, certain of which (including Trek) purchase from
the Company as both an OEM customer and a distributor.  Sales to Trek accounted
for more than 10% of the Company's net sales in fiscal 1997.  At March 31, 1997,
the Company's three OEM customers with the largest accounts receivable balances
accounted for approximately 55%, of the Company's accounts receivable.  The
Company has no long-term contracts with any of its customers.

MARKETING

    Management believes that the Company's brand image, in combination with the
performance features of its products, is an important element in the consumer's
decision to purchase ROCKSHOX suspension as an accessory product and that its
OEM customers recognize the strength of the ROCKSHOX brand name as a deciding
factor in the consumer's choice of mountain bikes.

    The Company promotes and maintains its brand name through focused marketing
efforts such as sponsorship of mountain bike racing teams, magazine advertising
and editorial programs, IBD packaging and point of sale materials, participation
in tradeshows and promotional clothing and merchandise.  The Company's marketing
department oversees all aspects of the promotion of the Company's products and
brand name.

    The principal user of the Company's products is the mountain bike
enthusiast between 19 and 34 years of age.  To appeal to this market, the
Company emphasizes the high performance features of its products as well as its
affinity with the mountain biking culture.  The goal of the Company's marketing
efforts is to communicate both technical information and an offbeat and
irreverent image.

    The sponsorship of mountain bike racing teams and racers is an important 
part of the Company's research and product development efforts as well as its 
marketing strategy.  The Company believes that the association of its 
products with successful racers enhances its product development efforts as 
well as increasing consumer awareness of and demand for RockShox suspension 
products. The Company currently co-sponsors 20 world-class and over 50 junior 
and amateur race teams, many of which also have affiliations with OEMs.  The 
Company's sponsorship agreements with racing teams generally are for a 
one-year term, and provide for a retainer plus contingent performance 
payments.  The Company also provides free product and technical support for 
sponsored racers, including access to RockShox's technical service trucks 
that attend many of the major races in the U.S. and Europe.  There can be no 
assurance that such racing teams will continue to be sponsored by the Company 
and use the Company's products on terms the Company deems acceptable, or that 
the Company will be able to attract new mountain bike racing teams to use its 
products in the future.

    The Company's products are advertised in a variety of U.S. and
international consumer and trade bicycle publications, including BICYCLING,
MOUNTAIN BIKE, MOUNTAIN BIKE ACTION, VELO NEWS and BICYCLE RETAILER, as well as
on the World Wide Web.  The Company's goal is to expand awareness of the
ROCKSHOX brand name and to support product line segmentation with advertising
campaigns built around the JUDY, INDY, DELUXE and other product lines.
The Company also seeks to increase RockShox' editorial exposure in bicycle
print media by working closely with magazine editors.  The Company's focus on
editorial content has helped maintain high visibility for the ROCKSHOX brand
name and the Company's products.

    The Company currently supports its brand name in the retail bike market 
by supplying unique packaging and point of sale displays to IBDs, as well as 
by providing brochures that are designed to help explain the technical 
performance features of its products.  Materials are generally provided at 
cost or for free to distributors and IBDs.  The Company also maintains a 
strong presence at national and international tradeshows.  As part of its 
retail marketing efforts, the Company markets a line of mountain bike 
lifestyle clothing known as ROCKSHOX GARB.  The clothing line includes 
T-shirts, cotton jerseys, jackets, vests and hats and is sold to 
distributors, bicycle shops and directly to consumers at race events.

                                       7
<PAGE>

    Sales and Marketing expenditures totaled approximately $1.8 million, $3.7
million and $4.6 million in fiscal years 1994, 1996 and 1997.

COMPETITION

    The markets for bicycle components, in general, and bicycle suspension
products, in particular, are highly competitive.  The Company competes with
other bicycle component companies that produce suspension products for sale to
OEMs, distributors and IBDs as well as with OEMs who produce their own line of
suspension products for their own use and for sale through distributors and
IBDs.

    The Company competes with several component companies that manufacture
front suspension products, including, among others, Answer Products, Inc., a
division of LDI, Ltd., which manufactures Manitou products ("Answer"), Rapid
Suspension Technology USA, Inc. ("RST"), Marzocchi SpA ("Marzocchi"), SR Suntour
USA, Inc., AMP Research Corp. ("Amp") and Girvin, Inc. ("Girvin") which is a
subsidiary of K2 Incorporated ("K2").  The Company also competes with several
component companies that manufacture rear shocks, including, among others, Fox
Factory, Inc. ("Fox"), RST, Risse Racing Technology, Inc., Amp, Marzocchi and
Girvin.  The Company believes that it currently has the leading market share in
front suspension forks.

    Over the past few years, Trek and Scott U.S.A. have discontinued their 
own lines of suspension products and have been specifying ROCKSHOX products 
on many of their mountain bike models.  Today, Cannondale and K2, through its 
Girvin subsidiary, are the only major OEMs that have their own brand of 
suspension products, although Cannondale does use ROCKSHOX products on 
certain bike models.  Both of these OEMs also make their suspension products 
available to the retail accessory market.  In addition, Answer has introduced 
its own bicycle with Manitou-branded front and rear shocks.

    In order to build or retain its market share, the Company must continue 
to successfully compete in areas that influence the purchasing decisions of 
OEMs, distributors, IBDs and consumers, including design, price, quality, 
technology, distribution, marketing, style, brand image and customer service. 
There can be no assurance that any number of bicycle component manufacturers,
OEMs or other companies, including those who are larger and have greater 
resources than the company and who currently do not provide bicycle suspension
products or do so on a limited basis, will not become direct or more 
significant competitors of the Company.  In addition, OEMs frequently design 
their bicycles to meet certain retail price points, and, as a result, may choose
not to use a suspension product or may select a lower priced ROCKSHOX or 
competing product in order to incorporate other components in the bicycle's 
specifications that the OEM perceives as being desirable to the consumer.  The
Company could therefore face competition from existing or new competitors that
introduce and promote suspension products or other bicycle components perceived 
by the bicycle industry or consumers to offer price or performance advantages 
to, or otherwise have greater consumer appeal than, the Company's products.

INTELLECTUAL PROPERTY

    The Company relies on a combination of patents, trademarks, trade names,
licensing arrangements, trade secrets, know-how and proprietary technology in
order to secure and protect its intellectual property rights.

    The Company believes that, among other things, its brand name ROCKSHOX
offers the Company a significant competitive advantage.  In addition, the
Company holds several trademark registrations in the United States and abroad
for the ROCKSHOX mark and other marks in connection with many of the Company's
products, and the Company may file additional applications for U.S. and foreign
trademark protection in the future.  There can be no assurance however that
third parties have not or will not adopt or register marks that are the same or
substantially similar to those of the Company, or that such third parties will
not be entitled to use such marks to the exclusion of the Company.  Selecting
new trademarks to resolve such situations could involve significant costs,
including the loss of goodwill already gained by the marks previously used.

    Several patents have been issued and several patent applications have been
allowed, covering aspects of many of the Company's suspension products in the
U.S. and abroad.  The Company intends to continue to seek patent
protection with respect to its technologies.  There can be no assurance that the
Company's present or future patents will adequately cover the Company's
technologies, or that patents relating to such technologies will not be
successfully challenged or circumvented by competitors.

    The Company intends to enforce vigorously its intellectual property 
rights in the event of infringements or misappropriations by third parties, 
and may be required to undertake litigation to do so.  Any such litigation 
could result in substantial cost to and diversion of effort by the Company.  
In addition, due to considerations relating to, among other things, cost, 
delay or adverse publicity, there can be no assurance that the Company will 
elect to enforce its intellectual property rights in every instance.

                                       8
<PAGE>

    The Company has occasionally received, and may receive in the future,
claims asserting infringement by the Company of intellectual property rights
held by third parties.  Currently, there are two patents and two
trademark-related disputes involving alleged infringements by the Company.
There can be no assurance that the Company is not infringing the intellectual
property rights held by others, or that the Company will not be required to
defend itself against claimed infringement of the rights of others.  Such
disputes may result in substantial cost to and diversion of effort by the
Company, and could have a material adverse effect on the Company or its
prospects.

ENVIRONMENTAL MATTERS

    The Company is subject to federal, state and local laws, regulations and
ordinances that (i) govern activities or operations that may have adverse
environmental effects (such as emissions to air, discharges to water, and the
generation, handling, storage, transportation, treatment and disposal of solid
and hazardous wastes) or (ii) impose liability for cleaning up or remediating
contaminated property (or the costs therefor), including damages from, spills,
disposals or other releases of hazardous substances or wastes, in certain
circumstances without regard to fault.  The Company's manufacturing operations
routinely involve the handling of chemicals and wastes, some of which are or may
be regulated as hazardous substances.  The Company has not incurred, and does
not expect to incur, any significant expenditures or liabilities for
environmental matters.  As a result, the Company believes that its environmental
obligations will not have a material adverse effect on its operations or
financial position.

GOVERNMENT REGULATION

    Bicycle suspension products are within the jurisdiction of the Consumer
Product Safety Commission (CPSC) and other federal, state and foreign regulatory
bodies.  Under CPSC regulations, a manufacturer of consumer goods is obligated
to notify the CPSC, if, among other things, the manufacturer becomes aware that
one of its products has a defect that could create a substantial risk of injury.
If the manufacturer has not already undertaken to do so, the CPSC may require a
manufacturer to recall a product, which may involve product repair, replacement
or refund.

    In 1996, the CPSC sent a letter to major manufacturers and importers of
mountain bikes as well as several suspension component manufacturers, including
RockShox, expressing concern about reports of injuries and recall activity
relating to failures of mountain bike suspension forks and  urging manufacturers
to participate in the development of voluntary safety performance standards for
such suspension products through the American Society of Testing and Materials
(the "ASTM").  While an employee of the Company is participating in the
development of these standards by chairing an ASTM task force on bicycle
suspension, such standards, if adopted, could increase the development and
manufacturing costs of the Company's products, make the Company's products less
desirable (by, for example, increasing the weight of the product) or favor a
competitors product.  The Company cannot predict whether standards relating to
the Company's products or otherwise affecting the bicycle suspension industry
will be adopted, no assurance can be given that the implementation of such
standards will not have a material adverse effect on the Company or its
prospects.

    Several local, state and federal authorities have recently considered
substantial restrictions or closures of public trails to biking use, citing
environmental concerns and disputes between mountain bikes and other trail users
(including hikers).  Such restrictions or closures, if implemented in a regional
or widespread manner, could lead to a decline in the popularity of mountain
biking, which could have a materiel adverse effect on the Company or its
prospects.

    The Company is subject to federal, state and local environmental laws,
regulations or ordinances.  The Company has not incurred, and does not expect to
incur, any significant expenditures or liabilities for environmental matters.
As a result, the Company believes that its environmental obligations will not
have a material adverse effect on the Company or its prospects.

PRODUCT RECALL

    Bicycles and bicycle components, including suspension products, are 
frequent subjects of product recalls, corrective actions and manufacturers' 
bulletins.  Since its founding in 1989, the Company has conducted one 
voluntary corrective action without CPSC involvement and three voluntary 
corrective actions in conjunction with the CPSC. None of these actions has 
been financially material to the Company.

    The number of suspension products sold by the Company has dramatically 
increased since the Company's founding in 1989, new product introductions are 
occurring frequently, and the Company's products may not have been used by 
riders for a period of time sufficient to determine all of the effects of 
prolonged use and the environment on such products.  As a result, there can 
be no assurance that there will not be recalls, corrective actions or other 
activity voluntarily or involuntarily undertaken by the Company or involving 
the CPSC or other regulatory bodies on a more frequent basis or at 

                                       9
<PAGE>

a higher cost than in the past, involving past, current or future products, 
including those products previously subject to voluntary corrective action, 
any of which could have a material adverse effect on the Company or its 
prospects.

EMPLOYEES

    As of March 31, 1997, the Company employed approximately 375 full-time
employees.  In addition, the Company utilized approximately 60 occasional
personnel in its assembly operations to meet production demand.  The Company is
not a party to any labor agreements and none of its employees is represented by
a labor union.  The Company considers its relationship with its employees to be
excellent and has never experienced a work stoppage.

CERTAIN FACTORS THAT MAY AFFECT THE COMPANY'S  BUSINESS AND FUTURE RESULTS

    This report contains various forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended, that involve risks and
uncertainties.   Forward-looking statements may also be in the registrant's
other reports filed under the Securities Exchange Act of 1934, in its press
releases and in other documents.  In addition, from time to time, the registrant
through its management may make oral forward-looking statements.

    Forward-looking statements generally refer to future plans and performance,
and are identified by the words "believe", "expect", "anticipate", "optimistic".
"intend", "aim", "will" or similar expressions.  Readers are cautioned not to
place undue reliance on theses forward-looking statements, which speak only as
of the date of which they are made.  The registrant undertakes no obligation to
update publicly or revise any forward-looking statements.

    Actual results are uncertain and may be impacted by the following factors.
In particular, certain risks and uncertainties that may impact the accuracy of
the forward-looking statements with respect to, among other things, revenues,
expenses and operating results include, without limitation, cycles of dealer
orders, general economic conditions and changing consumer trends, technological
advances and the number and timing of new product introductions, shipments of
products and componentry from foreign suppliers, the timing of operating and
advertising expenditures and changes in the mix of products ordered by
independent bicycle dealers.  As a result, the actual results may differ
materially from those projected in the forward-looking statements.

    Because of these and other factors that may affect the Company's operating
results, past financial performance should not be considered an indicator of
future performance, and investors should not use historical trends to anticipate
results or trends in future periods.

    Important factors that could cause actual results to differ materially from
the Company's forward-looking statements, as well as affect the Company's
ability to achieve its financial and other goals, include, but are not limited
to, the following:

-   Any decline in general economic conditions, uncertainties regarding
    economic prospects or changes in other economic factors that affect
    consumer spending could have a material adverse effect on the Company's
    direct customers (OEMs, distributors, IBDs) and, therefore, on the Company
    or its prospects.

-   Any material decline or prolonged lack of growth in the popularity of, or
    market demand for mountain bike front suspension forks, in general, or the
    Company's products, in particular, could have a material adverse effect on
    the Company or its prospects.

-   The loss of, substantial decline in purchases of the Company's products by,
    or financial insolvency of, any of the Company's largest customers
    individually, or a number of the Company's other customers in the
    aggregate, could have a material adverse effect on the Company or its
    prospects.

-   Any misjudgment by the Company or any of its OEM customers of the demand
    for any of its respective products could have a material adverse effect on
    the Company or its prospects.

-   Unexpected difficulties encountered during expansion, or management's
    inability to respond effectively to or plan for such expansion, could have
    a material adverse effect on the Company or its prospects.

-   The Company's lack of introduction of new products, or if introduced, the
    lack of commercial success of such products, could have a material adverse
    effect on the Company or its prospects.

-   Competition from existing or new competitors of the Company that introduce
    and promote suspension products or other bicycle components perceived by
    the bicycle industry or consumers to offer price or performance advantages
    to other activity or that other wise have greater consumer appeal than 
    the Company's products could have a material adverse effect on the Company 
    or its prospectus.


                                      10
<PAGE>

-   No assurance can be given that others will not assert rights in, or
    ownership of, and whether such assertions will be successfully rejected 
    by the Company, patents, trademarks and other proprietary rights of 
    RockShox. In addition, the laws of certain foreign countries do not protect
    proprietary rights to the same extent as do the laws of the United States.

-   Failure of a key supplier to meet the Company's product needs on a timely
    basis, loss of a key supplier or significant disruption in the Company's
    production or distribution activities for any other reason, including an
    earthquake or other catastrophic event, could have a material adverse
    effect on the Company or its prospects.

-   Because the bicycle industry is, and many of the Company's OEM customers
    are, highly dependent on manufacturing in overseas locations, changes in
    economic conditions, currency exchange rates, tariff regulations, local
    content laws or other trade restrictions or political instability could
    adversely affect the cost or availability of products sold by or to the
    bicycle industry as a whole and the Company's OEM customers in particular,
    any of which could have a material adverse effect on the Company or its
    prospects.

-   Due to the uncertainty as to the number of product liability claims or the
    nature and extent of liability for personal injuries and changes in the
    historical or future levels of insurance coverage or the terms or cost
    thereof, the Company's product liability insurance may not be adequate or
    available to cover product liability claims or the applicable insurer may
    not be solvent at the time of any covered loss, any of which could have a
    material adverse effect on the Company or its prospects.

-   Adverse publicity relating to mountain bike suspension or mountain biking
    generally, or publicity associated with actions by the United States 
    CPSC or others expressing concerns about the safety or function of the 
    Company's products, other suspension products or mountain bikes, could 
    have a material adverse effect on the Company or its prospects.

-   There can be no assurance that there will not be product recalls,
    corrective actions or other activity voluntarily or involuntarily
    undertaken by the Company or involving the CPSC or other regulatory bodies,
    any of which could have a material adverse effect on the Company or its
    prospects.

-   The loss of any member of the Company's senior management team and other
    key personnel, including certain members of its product development team,
    or the inability to attract, retain and motivate key personnel, could have
    a material adverse effect on the Company or its prospects.

ITEM 2.  PROPERTIES

    The Company's headquarters are located in an approximately 55,000 square
foot building in San Jose, California, pursuant to a lease that expires in 2000.
The Company leases three other facilities of approximately 15,000, 26,000 and
36,000 square feet in the San Jose, area, pursuant to leases that expire in
1997, 2000 and 2001, respectively. The Company leased a 100,000 square foot
manufacturing facility in San Jose, commencing in May 1997 which expires in
2004.  The Company also leases several smaller facilities.  The Company believes
that its existing facilities are adequate to meet its existing requirements.
The Company expects that it will need additional space or to relocate if its
sales continue to grow.

ITEM 3.  LEGAL PROCEEDINGS

    As previously reported, on September 26, 1996, Answer Products, Inc.
("Answer") filed a compliant naming RockShox as the defendant in an action in
the United States District Court for the Southern District of Indiana entitled
ANSWER PRODUCTS, INC. v. ROCKSHOX, INC. (the "Indiana Action").  Answer's
complaint in the Indiana Action alleges that certain RockShox suspension forks
infringe a patent that was issued in 1995 and is exclusively licensed to Answer.
The complaint seeks preliminary and permanent injunctive relief, destruction of
the equipment used to make the allegedly infringing forks, and accounting,
compensatory damages, treble damages, attorney' fees, interest and costs.  The
Company believes, after consultation with patent counsel, that it has
meritorious defenses to Answer's claims in the Indiana Action.

    On September 27, 1996, RockShox commenced an action against Answer in the 
United States District Court for the Northern District of California entitled 
ROCKSHOX, INC. v. ANSWER PRODUCTS, INC. (the "California Action").  RockShox' 
complaint in the California Action seeks a declaratory judgment that the 
patent at issue in the Indiana Action is invalid, unenforceable and not 
infringed by RockShox, as well as preliminary and permanent injunctions 
against Answer, compensatory damages, attorneys' fees and costs.  On October 
21, 1996, Answer filed an answer to RockShox' complaint denying that RockShox 
was entitled to the relief requested in the California Action and requesting 
that the court declare the patent valid and infringed.

                                          11
<PAGE>

    On December 30, 1996, the Indiana Action was transferred to Federal Court
in San Jose for consolidation with the California Action.  Discovery in these
cases is ongoing. (See Note 8 of Notes to Consolidated Financial Statements).

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

    No matters were submitted to a vote of security holders during the fourth
quarter of fiscal 1997.

                                       PART II

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

    Since September 26, 1996, the Company's common stock has been listed on The
NASDAQ Stock Market under the symbol "RSHX".  The following table sets forth,
for the periods indicated, the high and low sales prices of the Company's common
stock, as reported on The NASDAQ Stock Market.

   Year Ended March 31, 1997                        High         Low
   -------------------------                        ----         ---
   Second Quarter (from September 26,1996)         $16.25       $15.00
   Third Quarter . . . . . . . . . .               $16.00       $10.62
   Fourth Quarter. . . . . . . . . .               $19.12       $13.50


    On June 16, 1997, the closing sales price per share of the Company's common
stock as reported on The NASDAQ Stock Market was $14.50.  On June 16, 1997,
there were approximately 2,100 holders of the Company's common stock.

    During the Company's past two fiscal years, the Company's Board of
Directors has not declared a cash dividend on the Company's Common Stock. The
Company currently intends to retain future earnings for use in its business and,
therefore, does not anticipate paying any cash dividends in the foreseeable
future.


                                          12
<PAGE>

ITEM 6.  SELECTED FINANCIAL DATA

    The selected financial data set forth below have been derived from the 
audited consolidated financial statements of the Company and the related 
notes thereto.  The following selected financial data should be read in 
conjunction with the Company's consolidated financial statements and the 
related notes thereto and Item 7, "Management's Discussion and Analysis of 
Financial Condition and Results of Operations."

<TABLE>
<CAPTION>
                                                                                  Three Months          Year
                                                                                     Ended              Ended
                                               Year Ended December 31,              March 31,          March 31,
                                       ------------------------------------      -------------  ----------------------
                                           1992          1993        1994           1995 (1)      1996          1997
                                         --------      --------    --------       ------------  --------      --------
STATEMENT OF OPERATIONS DATA (IN
THOUSANDS, EXCEPT PER SHARE DATA):
<S>                                     <C>          <C>         <C>            <C>            <C>         <C>
Net sales. . . . . . . . . . . . .      $  16,442    $  30,941   $  37,900      $  14,279      $  83,509   $  106,212
Cost of sales. . . . . . . . . . .         10,565       20,113      24,477          9,590         54,110       67,115
                                         ---------   ---------   ---------      ---------      ---------   ----------
    Gross profit . . . . . . . . .          5,877       10,828      13,423          4,689         29,399       39,097

Selling, general and administrative
  expenses . . . . . . . . . . . .          4,703        5,098       4,210          5,404         11,220       12,137
Research, development and
  engineering expense. . . . . . .            838        1,536       2,073          2,223          3,401        4,801
Non-recurring charge . . . . . . .            ---          ---         ---            ---            ---        6,580
                                         ---------   ---------   ---------      ---------      ---------   ----------
    Income (loss) from operations.            336        4,194       7,140         (2,938)        14,778       15,579
Interest and other expense, net. .             67           16           6             51          5,650        2,205
                                         ---------   ---------   ---------      ---------      ---------   ----------
    Income (loss) before income
       taxes . . . . . . . . . . .            269        4,178       7,134         (2,989)         9,128       13,374
Provisions for (benefit from)
  income taxes . . . . . . . . . .            104        1,521       2,420           (653)         3,464        5,149
                                         ---------   ---------   ---------      ---------      ---------   ----------
    Income (loss) before
       extraordinary loss. . . . .            165        2,657       4,714         (2,336)         5,664        8,225
Extraordinary loss, net of tax
  benefit of $885,000. . . . . . .            ---          ---         ---            ---            ---        1,328
                                         ---------   ---------   ---------      ---------      ---------   ----------
    Income (loss) before accretion            165        2,657       4,714         (2,336)         5,664        6,897
Accretion for dividends on
  mandatorily redeemable
  preferred stock. . . . . . . . .            ---          ---         ---            ---            357          185
                                         ---------   ---------   ---------      ---------      ---------   ----------
       Net income (loss) . . . . .      $     165    $   2,657   $   4,714      $  (2,336)      $  5,307   $    6,712
                                         ---------   ---------   ---------      ---------      ---------   ----------
                                         ---------   ---------   ---------      ---------      ---------   ----------
Income (loss) per share before
  extraordinary loss . . . . . . .      $    0.02    $    0.29   $    0.51      $   (0.25)       $  0.57   $     0.69
Loss per share from extraordinary
  item . . . . . . . . . . . . . .            ---          ---         ---            ---            ---        (0.11)
                                         ---------   ---------   ---------      ---------      ---------   ----------
       Net income (loss) per share      $    0.02    $    0.29   $    0.51      $   (0.25)       $  0.57   $     0.58
                                         ---------   ---------   ---------      ---------      ---------   ----------
                                         ---------   ---------   ---------      ---------      ---------   ----------
Cash dividend per share. . . . . .      $     ---          ---   $    0.03            ---            ---          ---
                                         ---------   ---------   ---------      ---------      ---------   ----------
                                         ---------   ---------   ---------      ---------      ---------   ----------
Shares used in per share
  calculation. . . . . . . . . . .          9,240        9,240       9,240          9,240          9,240       11,641
                                         ---------   ---------   ---------      ---------      ---------   ----------
                                         ---------   ---------   ---------      ---------      ---------   ----------

<CAPTION>
                                                   At December 31,                             At March 31
                                        ------------------------------------       ------------------------------------
                                           1992         1993         1994            1995 (1)     1996          1997
                                        ----------   ----------   ----------       ----------- ----------    ----------
<S>                                     <C>          <C>          <C>             <C>          <C>          <C>
BALANCE SHEET DATA (IN THOUSANDS):
Working capital. . . . . . . . . .       $    906     $  2,226    $  5,995        $  1,939      $  2,327    $  23,722
Total assets . . . . . . . . . . .          4,081        7,660      13,493          17,679        26,932       45,875
Total debt . . . . . . . . . . . .          1,146        1,345         998          48,500        44,500          ---
Mandatorily redeemable preferred
    stock. . . . . . . . . . . . .            ---          ---         ---           7,000         7,357          ---
Stockholders' equity (deficit) . .            167        2,774       7,188         (44,922)      (39,615)      31,561
</TABLE>
 
(1) In 1995, the Company changed its fiscal year end from December 31 to March
    31.


                                          13
<PAGE>

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS

GENERAL

    RockShox is the worldwide leader in the design, manufacture and marketing 
of high performance bicycle suspension products.  The Company's sales have 
grown from approximately $16.4 million in fiscal 1992 to $106.2 million in 
fiscal 1997. The Company believes that its growth has been the result of 
increasing market acceptance of bicycle suspension worldwide and, more 
specifically, growing demand for RockShox suspension products.

    Substantially all of the Company's historical revenues have been
attributable to sales of mountain bike front suspension forks.  The Company's
two principal channels of distribution are:  (i) sales to OEMs and (ii) sales to
distributors and IBDs (the "retail accessory market").  A large portion of the
Company's sales are to a small group of OEM customers.

    The Company has substantial export sales, a significant portion of which
include products shipped to Asian manufacturing subcontractors for certain
U.S.-based OEMs.  The Company believes that a substantial portion of these
products are ultimately shipped back to the U.S. and sold domestically by OEMs.
The Company recognizes revenue upon shipment of the product and, to date,
product returns have not been material.

    The Company's gross margins have remained relatively consistent over the
past several years. While gross margins are generally higher on retail accessory
market sales compared to OEM sales, OEM sales generate higher unit volume, which
allows the Company an opportunity to capitalize on manufacturing efficiencies.
Research, development and engineering costs are expensed as incurred.

    In 1995, the Company changed its fiscal year end from December 31 to March
31, which more closely corresponds to the Company's product model year and
business cycle.

    In March 1995, the Company consummated the Recapitalization and in 
October 1996 the Company completed an Initial Public Offering ("IPO") (see 
Note 1 of Notes to Consolidated Financial Statements).

RESULTS OF OPERATIONS:

    The following table sets forth operations data as a percentage of net sales
for the periods indicated.

                                                             Year Ended
                                           Year Ended         March 31
                                          December 31,   ------------------
                                              1994         1996      1997
                                         --------------  --------  --------
Net Sales . . . . . . . . . . . . . .         100.0%       100.0%    100.0%
Cost of sales . . . . . . . . . . . .          64.6         64.8      63.2
Gross margin. . . . . . . . . . . . .          35.4         35.2      36.8
Selling, general and administrative 
   expenses . . . . . . . . . . . . .          11.1         13.4      11.4
Research, development and
   engineering expenses . . . . . . .           5.5          4.1       4.5
Non-recurring charge. . . . . . . . .           ---          ---       6.2
Income from operations. . . . . . . .          18.8         17.7      14.7


                                          14
<PAGE>

    FISCAL YEAR ENDED MARCH 31, 1997 (FISCAL 1997) COMPARED TO FISCAL YEAR    
 ENDED MARCH 31, 1996 (FISCAL 1996)     NET SALES.  Net sales for the year 
ended March 31, 1997 increased by 27.2% to $106.2 million from $83.5 million 
in fiscal 1996.  OEM sales increased in fiscal 1997 by 34.8% to $77.0 million 
compared to $57.1 million in fiscal 1996. Sales to the retail accessory 
market increased by 10.7% to $29.2 million compared to $26.4 million in 
fiscal 1996. These increases were principally due to demand for the Company's 
updated 1997 JUDY line and new INDY line of mid-priced forks, both of which 
began shipping during the first quarter of the 1997 fiscal year.

    Export sales, a significant portion of which included products shipped to
Asian manufacturing subcontractors for certain U.S.-based OEMs, accounted for
approximately 54.6% and 48.6% of net sales in fiscal 1997 and 1996, 
respectively.

    GROSS MARGIN.  Gross margin (gross profit as a percentage of net sales) 
for fiscal 1997 increased to 36.8% compared to 35.2% for the prior year.  The 
increase in gross margin was principally due to lower manufacturing costs 
resulting from the Company bringing in-house certain previously subcontracted 
manufacturing processes and an increased sales base for overhead absorption.

    SELLING, GENERAL AND ADMINISTRATIVE EXPENSE.  Selling, general and 
administrative ("SG&A") expense for fiscal 1997 increased by 8.2% to $12.1 
million (or approximately 11.4% of net sales) compared to $11.2 million (or 
approximately 13.4% of net sales) for fiscal 1996.  The decrease of SG&A 
expense as a percent of net sales was principally due to certain fixed 
expenses being allocated over an increased sales base.  SG&A expense for 
fiscal 1997 and 1996 included incremental amounts accrued under an incentive 
based bonus plan that was terminated as of the Company's IPO of $312,000 and 
$812,000, respectively. (See Note 6 of Notes to Consolidated Financial 
Statements.)

    RESEARCH, DEVELOPMENT AND ENGINEERING EXPENSE.  Research, development and 
engineering ("R&D") expense for fiscal 1997 increased by 41.2% to $4.8 
million (or approximately 4.5% of net sales) compared to $3.4 million (or 
approximately 4.1% of net sales) for fiscal 1996.  The increase in R&D 
expense was principally due to increased engineering headcount and certain 
other development expenses incurred in fiscal 1997 for new products.  R&D 
expense for fiscal 1997 and 1996 included incremental amounts accrued under 
an incentive based bonus plan that was terminated as of the Company's IPO of 
$344,000 and $938,000, respectively.  (See Note 6 of Notes to Consolidated 
Financial Statements.)  Excluding these bonuses, R&D expense was 
approximately 4.2% and 2.9% of net sales in fiscal 1997 and fiscal 1996, 
respectively.


    NON-RECURRING CHARGE.  The Company incurred a non-recurring charge during
fiscal 1997 related to the termination of an incentive based bonus plan (the
"Bonus Plan") with the Company's President and Vice President of Advanced
Research upon completion of the Company's IPO.  The non-recurring charge totaled
$6.6 million.  (See Note 6 of Notes to Consolidated Financial Statements.)

    INTEREST EXPENSE.  The Company incurred interest expense (which included 
amortization of capitalized financing costs) of $2.7 million for fiscal 1997 
compared to $5.8 million in fiscal 1996.  The decrease was primarily due to 
the elimination of all outstanding debt upon the closing of the Company's IPO.

    INCOME TAX EXPENSE.  The Company's effective tax rate for fiscal 1997
increased to  38.5% compared to 37.9% for fiscal 1996.

    INCOME BEFORE EXTRAORDINARY ITEM. Income before extraordinary item for 
fiscal 1997 was $8.2 million compared to $5.7 million for the prior year.  
Without considering the non-recurring charge, accretion for dividends on 
mandatorily redeemable preferred stock and extraordinary item discussed 
below, net income for fiscal 1997 would have been approximately $12.2 million 
(or $1.03 per share) compared to  approximately $5.7 million or ($0.57 per 
share) for fiscal 1996.

    EXTRAORDINARY ITEM.  During fiscal 1997, the Company recognized a
non-recurring pre-tax charge, reflected as an extraordinary item, from the
write-off of capitalized financing costs, totaling approximately $2.2 million in
connection with the repayment of all of the Company's outstanding debt upon the
closing of the Company's IPO.


                                          15
<PAGE>

    FISCAL YEAR ENDED MARCH 31, 1996 (FISCAL 1996) COMPARED TO FISCAL YEAR
    ENDED DECEMBER 31, 1994 (FISCAL 1994)

    NET SALES.  Net sales increased by approximately 120.3% to $83.5 million in
fiscal 1996 compared to $37.9 million in fiscal 1994.  (Net sales increased by
approximately 97.7% to $83.5 million in fiscal 1996 compared to $42.2 million
for the twelve months ended March 31, 1995.)  The increase in net sales was
primarily due to higher unit volume in fiscal 1996 of both the Company's JUDY
product, for which significant shipments began in late fiscal 1994, and QUADRA
product line, which experienced increased demand during fiscal 1996.  Sales to
OEMs increased by approximately 133.2% to $57.1 million (or approximately 68.4%
of net sales) in fiscal 1996 from $24.5 million (or approximately 64.6% of net
sales) in fiscal 1994.  Net sales to the retail accessory market increased by
approximately 96.8% to $26.4 million (or approximately 31.6% of net sales) in
fiscal 1996 from $13.4 million (or approximately 35.4% of net sales) in fiscal
1994.

    Export sales, a significant portion of which included products shipped to 
Asian manufacturing subcontractors for certain U.S.-based OEMs, accounted for 
approximately 48.6% and 49.4% of net sales in fiscal 1996 and fiscal 1994, 
respectively.

    GROSS MARGIN.  Gross margin remained relatively constant at approximately
35.2% in fiscal 1996 compared to approximately 35.4% in fiscal 1994.  Increases
in facility expenses and provisions for warranty costs and inventory reserves in
fiscal 1996 were largely offset by a greater absorption of fixed  manufacturing
costs due to the higher sales volumes in fiscal 1996 compared to fiscal 1994.

    SELLING, GENERAL AND ADMINISTRATIVE EXPENSE.  SG&A expense increased by
approximately 166.5% to $11.2 million (or approximately 13.4% of net sales) in
fiscal 1996 from $4.2 million (or approximately 11.1% of net sales) in fiscal
1994 principally due to increased sales and marketing expenses, which related in
part to an increase in headcount, provisions for uncollectible accounts
receivable, an officer bonus of $1.1 million under the Bonus Plan in fiscal 1996
compared to discretionary bonuses paid to certain officers of approximately
$800,000 in fiscal 1994 and certain severance provisions incurred in fiscal
1996.  (See Note 6 of Notes to Consolidated Financial Statements.)

    RESEARCH, DEVELOPMENT AND ENGINEERING EXPENSE.  R&D expense increased by 
approximately 64% to $3.4 million (or approximately 4.1% of net sales) in 
fiscal 1996 compared to $2.1 million (or approximately 5.5% of net sales) in 
fiscal 1994.  R&D expense included an officer bonus in fiscal 1996 of $1.1 
million under the Bonus Plan, as discussed above, and a discretionary bonus 
in fiscal 1994 of approximately $800,000, which was paid to an officer of the 
Company. Excluding these bonuses, R&D expense was approximately  2.8% and 
3.4% of net sales in fiscal 1996 and fiscal 1994, respectively.  (See Note 6 
of Notes to Consolidated Financial Statements.)

    INTEREST EXPENSE.  The Company incurred interest expense (which included
amortization of capitalized financing costs) of $5.8 million in fiscal 1996
compared to $21,000 in fiscal 1994.  The increase was due to debt issued in
connection with the Recapitalization that occurred in March 1995.

    PROVISION FOR INCOME TAXES.  The Company's effective tax rate increased to
37.9% in fiscal 1996 from 33.9% in fiscal 1994 primarily due to a decrease in
research and development tax credits and higher state income taxes in fiscal
1996 compared to fiscal 1994.

LIQUIDITY AND CAPITAL RESOURCES

    During the past two fiscal years, the Company has satisfied its operating 
cash needs, other than expenses related to the Recapitalization, principally 
through cash flow from operations.  For the year ended March 31, 1997, net 
cash provided by operating activities was $7.1 million which was comprised of 
the net income of $6.9 million increased by non-cash charges for depreciation 
and amortization of $3.5 million and the write-off of capitalized financing 
costs of $2.2 million, offset by a net increase in working capital of $5.5 
million. Currently, the Company requires most of its retail accessory market 
customers to pay by credit card or cash on delivery.  The Company may change 
this policy in the future in response to competitive or other market 
conditions.

    Net cash used in investing activities was $6.6 million which principally
consisted of acquisitions of property and equipment.  Net cash provided by
financing activities was $12.4 million which represented net proceeds from the
Company's IPO of $64.5 million offset by repayment of all of the Company's debt
totaling $44.5 million and the redemption of all of the Company's preferred
stock for $7.5 million.


                                          16
<PAGE>

    Capital expenditures totaled $6.6 million for fiscal 1997 and $4.1 
million for fiscal 1996.  As of March 31, 1997 the Company had purchase 
commitments of approximately $2.5 million primarily for tooling and machinery 
to be used in manufacturing beginning in fiscal 1998, which commitments are 
expected to be funded by cash flow from operations.

    At March 31, 1997, the Company had cash of $14.7 million and working
capital of $23.7 million.  The Company believes that its current cash balances
will be sufficient to provide operating liquidity for at least the next twelve
months.

RECENT ACCOUNTING PRONOUNCEMENTS

    During February 1997, the Financial Accounting Standards Board issued
Statement No. 128 ("SFAS 128"), "Earnings per Share," which specifies the
computation, presentation and disclosure requirements for earnings per share.
SFAS 128, which supersedes Accounting Principle Board Opinion No. 15, is
effective for periods, including interim periods, ending after December 15, 1997
and requires that prior periods be restated.  The impact of the adoption of SFAS
No. 128 on the financial statements of the Company has not yet been determined.

SELECTED QUARTERLY FINANCIAL DATA;  SEASONALITY

    The following table presents selected quarterly financial information
(expressed in thousands, except per share data) for the last eight fiscal
quarters.  This information has been prepared by the Company on a basis
consistent with the Company's audited financial statements and includes all
adjustments, consisting of normal recurring adjustments, that management
considers necessary for a fair presentation of the results of such quarters.
The operating results for any quarter are not necessarily indicative of the
results for any entire year.

<TABLE>
<CAPTION>
                                                                        Quarter Ended:
                           ---------------------------------------------------------------------------------------------------------
                            June 30,   September 30,  December 31,    March 31,   June 30,   September 30,  December 31,   March 31,
                             1995          1995           1995           1996       1996          1996          1996         1997
                          ----------   -------------  ------------    ---------  ---------   -------------  ------------   ---------
<S>                       <C>           <C>            <C>          <C>         <C>           <C>            <C>           <C>
Net sales . . . . . . .   $  18,784     $  21,258      $  23,223    $  20,244   $  21,378     $  28,181      $  32,143     $  24,510
Gross profit. . . . . .       6,499         7,493          8,363        7,044       7,645        10,375         12,057         9,020
Operating income (loss)       3,088         3,976          5,337        2,377       3,486          (251)         7,846         4,498
Income (loss) before
  extraordinary loss. .         994         1,587          2,445          638       1,349          (940)         4,925         2,891
Net income (loss) . . .         994         1,587          2,445          638       1,349        (2,268)         4,925         2,891
                           ---------    ---------      ---------    ---------   ---------    ----------      ---------     ---------
                           ---------    ---------      ---------    ---------   ---------    ----------      ---------     ---------
Income (loss) per share
  before extraordinary
  loss. . . . . . . . .   $    0.10     $    0.16      $    0.26    $    0.06   $    0.14    $    (0.11)     $    0.35     $    0.21
Net income (loss) per
  share . . . . . . . .   $    0.10     $    0.16      $    0.26    $    0.06   $    0.14    $    (0.26)     $    0.35     $    0.21
                           ---------    ---------      ---------    ---------   ---------    ----------      ---------     ---------
                           ---------    ---------      ---------    ---------   ---------    ----------      ---------     ---------
Shares used in per share
  calculations. . . . .       9,240         9,240          9,240        9,240       9,240         9,240         14,026        14,059
</TABLE>
 
    Because of the Company's rapid and substantial growth, historical quarterly
operating results do not reflect management's  expectations of future quarterly
operating results.  Management believes that future operating results will
fluctuate on a quarterly basis due to a variety of factors, including seasonal
cycles associated with the bicycle industry; the effects of weather conditions
on consumer purchases; the timing of orders from OEMs, distributors and IBDs;
the number and timing of new product introductions; and changes in the mix of
products ordered and re-ordered by OEMs, distributors and IBDs.  Management
anticipates that the Company's sales will normally be lowest in its first and
fourth fiscal quarters, which end on June 30 and March 31, respectively. (See 
Business--Certain factors that May Affect the Company's Business and Future 
Results).

INFLATION

    The Company does not believe inflation has had a material impact on the
Company in the past, although there can be no assurance that this will be the
case in the future.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

    None.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

    See "Index to Consolidated Financial Statements" on page 21 for a listing 
of the consolidated financial statements submitted as part of this report.

ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE

    None.


                                          17
<PAGE>

                                       PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

    The information required by this item will be contained in the Company's
Proxy Statement for its Annual Meeting of Stockholders to be held on August 14,
1997 to be filed with the Securities and Exchange Commission within 120 days
after March 31, 1997 and is incorporated herein by reference.

ITEM 11. EXECUTIVE COMPENSATION AND OTHER INFORMATION

    The information required by this item will be contained in the Company's
Proxy Statement for its Annual Meeting of Stockholders to be held on August 14,
1997 to be filed with the Securities and Exchange Commission within 120 days
after March 31, 1997 and is incorporated herein by reference.

ITEM 12. SECURITY  OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

    The information required by this item will be contained in the Company's
Proxy Statement for its Annual Meeting of Stockholders to be held on August 14,
1997 to be filed with the Securities and Exchange Commission within 120 days
after March 31, 1997 and is incorporated herein by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

    The information required by this item will be contained in the Company's
Proxy Statement for its Annual Meeting of Stockholders to be held on August 14,
1997 to be filed with the Securities and Exchange Commission within 120 days
after March 31, 1997 and is incorporated herein by reference.








                                          18
<PAGE>

                                       PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

(a)  (1) See page 21 for a listing of financial statements submitted as part of
         this report.

     (2) The financial statements listed on the accompanying Index to
         Consolidated Financial Statements and Financial Statement Schedule are
         filed as part of this report.

(a)  (3) The following exhibits are included in this report:

    2.        Form of Agreement and Plan of Merger between RSx Holdings, Inc.
              and RockShox, Inc. *

    3.1       Form of Amended and Restated Certificate of Incorporation of
              RockShox, Inc. *

    3.2       Form of Amended and Restated Bylaws of RockShox, Inc. *

    4         Form of Common Stock Certificate of RockShox, Inc. *

    10.1      Management Consulting Agreement, dated as of March 24, 1995,
              between TJC Management Corporation and RSx Holdings, Inc. *

    10.2      Form of Registration Rights Agreement among RockShox, Inc.,
              Stephen Simons, Debra Simons, Paul Turner and other
              stockholders named therein. *

    10.3      Form of Amended and Restated Employment Agreement between
              RockShox, Inc. and Stephen Simons. *

    10.4      Form of Amended and Restated Employment Agreement between
              RockShox, Inc. and Paul Turner. *

    10.5      Noncompetition Agreement, dated March 24, 1995, between RSx
              Holdings, Inc. and Stephan Simons. *

    10.6      Noncompetition Agreement, dated March 24, 1995, between RSx
              Holdings, Inc. and Debra Simons. *

    10.7      Noncompetition Agreement, dated March 24, 1995, between RSx
              Holdings, Inc. and Paul Turner. *

    10.8      Consultant Agreement, dated January 1, 1994 by and between Simons
              & Susslin, Inc. and Stephen Simons. *

    10.9      Form of Lease, dated as of May 1, 1994 between Charcot Center
              Joint Venture and RockShox, Inc. *

    10.10     Form of First Amendment to Lease, dated as of August 15, 1994,
              between Charcot center Joint Venture and RockShox, Inc. *

    10.11     Form of Lease, dated as of October 1, 1995, between Whitecliffe I
              Apartments, Ltd. And RockShox, Inc. *

    10.12     Form of Indemnity Agreement. *

    10.13     Form of Lease, dated as of March 7, 1997, between S. Stephen 
              Nakashima and RockShox, Inc.

    10.14     Amended and Restated RSx Holdings, Inc. 1996 Stock Plan. *

    10.15     Agreement, dated as of May 7, 1996, between RockShox, Inc. and 
              Charles E. Noreen, Jr.

    11        Statement regarding computation of net income (loss) per share.

    21        List of Subsidiaries of RockShox, Inc. *

    23        Consent of Coopers & Lybrand L.L.P.

    27        Financial Data Schedule.


    ---------------------------------------------------------------------------
    *  Previously filed with the Registration Statement on Form S-1 of
        ROCKSHOX, INC. (Registration No. 333-8069)

(b)      Reports on Form 8-K

    No reports on Form 8-K were filed by the Company during the fourth quarter
of the Company's fiscal year ended March 31, 1997.

(c)      See (a)(3) above for a listing of exhibits included as a part of this
         report



                                          19
<PAGE>

                                    ROCKSHOX, INC.

                                      FORM 10-K

                              ITEMS 8, 14 (a) AND 14 (d)


INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULE


1.  Consolidated Financial Statements

    Report of Independent Accountants . . . . . . . . . . . . . . . . . .   21

    Consolidated Balance Sheets at March 31, 1996 and 1997  . . . . . . .   22

    Consolidated Statements of Operations for the Year Ended
        December 31, 1994, the Three Months Ended March 31,
        1995 and the Years Ended March 31, 1996 and 1997. . . . . . . . .   23

    Consolidated Statements of Stockholders' Equity (Deficit)
        for the Year Ended December 31, 1994 the Three Months
        Ended March 31, 1995 and the Years Ended March 31,
        1996 and 1997 . . . . . . . . . . . . . . . . . . . . . . . . . .   24

    Consolidated Statements of Cash Flows for the Year Ended
        December 31, 1994 the Three Months Ended March 31, 1995
        and the Years Ended March 31, 1996 and 1997 . . . . . . . . . . .   25

    Notes to Consolidated Financial Statements. . . . . . . . . . . . . .   26


2.  Consolidated Financial Statement Schedule
    Schedule II -- Valuation and Qualifying Accounts. . . . . . . . . . .   37






                                          20
<PAGE>

                          REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Stockholders
RockShox, Inc.

    We have audited the accompanying consolidated balance sheets of RockShox,
Inc. as of March 31, 1996 and 1997, and the related consolidated statements of
operations, stockholders' equity (deficit), and cash flows for the year ended
December 31, 1994, the three month period ended March 31, 1995 and the years
ended March 31, 1996 and 1997.  These financial statements are the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these financial statements based on our audits.

    We conducted our audits in accordance with generally accepted auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

    In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of RockShox, Inc.
as of March 31, 1996 and 1997, the consolidated results of their operations and
their cash flows for the year ended December 31, 1994, the three month period
ended March 31, 1995 and the years ended March 31, 1996, and 1997 in conformity
with generally accepted accounting principles.


                                       COOPERS & LYBRAND L.L.P.

San Jose, California
April 25, 1997







                                          21
<PAGE>

                                    ROCKSHOX, INC.

                             CONSOLIDATED BALANCE SHEETS
                  (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

                                        ASSETS
<TABLE>
<CAPTION>
                                                                                       MARCH 31,
                                                                                       ---------
                                                                                  1996           1997
                                                                               ----------     ----------
<S>                                                                            <C>            <C>
Current assets:
  Cash and cash equivalents. . . . . . . . . . . . . . . . . . . . . . .         $  1,808      $  14,747
  Accounts receivable, net of allowance for doubtful accounts $1,432 
   in 1996 and $1,589 in 1997. . . . . . . . . . . . . . . . . . . . . .            5,571          6,618
  Inventories. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .            8,436         10,800
  Prepaid expenses and other current assets. . . . . . . . . . . . . . .              397          1,132
  Deferred income taxes. . . . . . . . . . . . . . . . . . . . . . . . .            3,805          4,739
                                                                               ----------     ----------
    Total  current assets. . . . . . . . . . . . . . . . . . . . . . . .           20,017         38,036
Property and equipment, net. . . . . . . . . . . . . . . . . . . . . . .            4,313          7,700
Capitalized financing costs, net . . . . . . . . . . . . . . . . . . . .            2,513            ---
Other  assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .               89            139
                                                                               ----------     ----------
    Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . .        $  26,932      $  45,875
                                                                               ----------     ----------
                                                                               ----------     ----------

                  LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

Current liabilities:
  Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . .         $  1,769       $  3,459
  Accounts payable to related parties. . . . . . . . . . . . . . . . . .              494            ---
  Accrued incentive compensation payable to stockholders . . . . . . . .            2,125            ---
  Accrued liabilities. . . . . . . . . . . . . . . . . . . . . . . . . .           10,302         10,855
  Current portion of long-term bank debt . . . . . . . . . . . . . . . .            3,000            ---
                                                                               ----------     ----------
    Total current liabilities. . . . . . . . . . . . . . . . . . . . . .           17,690         14,314
Long-term bank debt, net of current portion. . . . . . . . . . . . . . .           24,500            ---
Notes payable to related parties, net of current portion . . . . . . . .           17,000            ---
                                                                               ----------     ----------
    Total liabilities. . . . . . . . . . . . . . . . . . . . . . . . . .           59,190         14,314
                                                                               ----------     ----------

Commitments and contingencies (Note 8).
Mandatorily redeemable preferred stock issued to stockholders, $1.00 par
value:
  Authorized: 9,132 shares in 1996 and none in 1997;
  Issued and outstanding: 7,000 shares in 1996 and none in 1997;
  Redemption and liquidation value of $7,357 in 1996 and none in 1997. .            7,357            ---
                                                                               ----------     ----------

Preferred stock, $0.01 par value:
  Authorized:  10,000,000 shares
  Issued and outstanding:  none in 1996 and 1997 . . . . . . . . . . . .              ---            ---
Common stock, $0.01 par value:
  Authorized:  50,000,000 shares
  Issued and outstanding:  8,820,000 shares in 1996 and 13,620,000
    shares in 1997 . . . . . . . . . . . . . . . . . . . . . . . . . . .               88            136
Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . . .              412         64,828
Distributions in excess of net book value. . . . . . . . . . . . . . . .          (45,422)       (45,422)
Retained earnings. . . . . . . . . . . . . . . . . . . . . . . . . . . .            5,307         12,019
                                                                               ----------     ----------
    Total stockholders' equity (deficit) . . . . . . . . . . . . . . . .          (39,615)        31,561
                                                                               ----------     ----------
    Total liabilities, mandatorily redeemable preferred stock and
    stockholders' equity (deficit) . . . . . . . . . . . . . . . . . . .        $  26,932      $  45,875
                                                                               ----------     ----------
                                                                               ----------     ----------
</TABLE>
 
     The accompanying notes are an integral part of these consolidated financial
statements.

                                          22
<PAGE>

                                    ROCKSHOX, INC.

                        CONSOLIDATED STATEMENTS OF OPERATIONS
                       (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
                                                 THREE MONTHS
                                     YEAR ENDED     ENDED         YEAR ENDED     YEAR ENDED
                                    DECEMBER 31,   MARCH 31,       MARCH 31,      MARCH 31,
                                       1994          1995            1996           1997
                                   ------------- ------------    ------------   ------------
<S>                               <C>            <C>            <C>            <C>
Net sales. . . . . . . . . .      $   37,900     $   14,279     $   83,509     $  106,212
Cost of sales. . . . . . . .          24,477          9,590         54,110         67,115
                                   -----------    -----------    -----------    -----------
  Gross profit . . . . . . .          13,423          4,689         29,399         39,097
                                   -----------    -----------    -----------    -----------
Selling, general and
 administrative expense. . .           4,210          5,404         11,220         12,137
Research, development and
  engineering expense. . . .           2,073          2,223          3,401          4,801
Non-recurring charge . . . .             ---            ---            ---          6,580
                                   -----------    -----------    -----------    -----------
  Operating expenses . . . .           6,283          7,627         14,621         23,518
                                   -----------    -----------    -----------    -----------
  Income (loss) from
    operations . . . . . . .           7,140         (2,938)        14,778         15,579
Interest income. . . . . . .              15              7            136            492
Interest expense . . . . . .             (21)           (58)        (5,786)        (2,697)
                                   -----------    -----------    -----------    -----------
  Income (loss) before
    income taxes . . . . . .           7,134         (2,989)         9,128         13,374
Provision for (benefit from)
  income taxes . . . . . . .           2,420           (653)         3,464          5,149
                                   -----------    -----------    -----------    -----------
  Income (loss) before
    extraordinary loss . . .           4,714         (2,336)         5,664          8,225
Extraordinary loss from early
  extinguishment of debt, net of
  tax benefit of $885,000. .             ---            ---            ---          1,328
                                   -----------    -----------    -----------    -----------
    Net income (loss) before
       accretion . . . . . .           4,714         (2,336)         5,664          6,897
Accretion for dividends on
  mandatorily redeemable
  preferred stock. . . . . .             ---            ---            357            185
                                   -----------    -----------    -----------    -----------
    Net income (loss)
       available to common
       stockholders. . . . .        $  4,714      $  (2,336)      $  5,307       $  6,712
                                   -----------    -----------    -----------    -----------
                                   -----------    -----------    -----------    -----------

Income (loss) per share before
  extraordinary item . . . .       $  0.51         $  (0.25)       $  0.57        $  0.69
Loss per share from
  extraordinary item . . . .          ---            ---            ---             (0.11)
                                   -----------    -----------    -----------    -----------
    Net income (loss) per
       share . . . . . . . .         $  0.51       $  (0.25)       $  0.57        $  0.58
                                   -----------    -----------    -----------    -----------
                                   -----------    -----------    -----------    -----------
Cash dividend per share. . .         $  0.03         ---            ---            ---
                                   -----------    -----------    -----------    -----------
                                   -----------    -----------    -----------    -----------
Shares used in per share
  calculations . . . . . . .           9,240          9,240          9,240         11,641
                                   -----------    -----------    -----------    -----------
                                   -----------    -----------    -----------    -----------
</TABLE>
 
     The accompanying notes are an integral part of these consolidated financial
statements.



                                          23
<PAGE>

                                    ROCKSHOX, INC.

              CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
                                    (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                                      DISTRIBUTIONS
                                                COMMON STOCK            ADDITIONAL    IN EXCESS OF
                                          -------------------------      PAID-IN        NET BOOK       RETAINED
                                            SHARES         AMOUNT        CAPITAL         VALUE         EARNINGS        TOTAL
                                          ----------     ----------     ----------     ----------     ----------     ----------
<S>                                       <C>            <C>            <C>            <C>           <C>            <C>
Balances, January 1, 1994 . . . . . . .     8,820           $  1            ---            ---       $  2,773       $  2,774
  Dividends declared  . . . . . . . . .       ---            ---            ---            ---           (300)          (300)
  Net income. . . . . . . . . . . . . .       ---            ---            ---            ---          4,714          4,714
                                          ----------     ----------     ----------     ----------     ----------     ----------
Balances, December 31, 1994 . . . . . .     8,820              1            ---            ---          7,187          7,188
  Issuance of common stock. . . . . . .     8,820              1         $  499            ---            ---            500
  Recapitalization and
    distributions to stockholders . . .    (8,820)            86            (87)      $(45,422)        (4,851)       (50,274)
  Net loss. . . . . . . . . . . . . . .       ---            ---            ---            ---         (2,336)        (2,336)
                                          ----------     ----------     ----------     ----------     ----------     ----------
Balances, March 31, 1995. . . . . . . .     8,820             88            412        (45,422)           ---        (44,922)
  Accretion for dividends on
    mandatorily redeemable
    preferred stock . . . . . . . . . .       ---            ---            ---            ---           (357)          (357)
  Net income. . . . . . . . . . . . . .       ---            ---            ---            ---          5,664          5,664
                                          ----------     ----------     ----------     ----------     ----------     ----------
Balances, March 31, 1996. . . . . . . .     8,820             88            412        (45,422)         5,307        (39,615)
  Issuance of common stock in
    initial public offering . . . . . .     4,800             48         64,416            ---            ---         64,464
  Accretion for dividends on
    mandatorily redeemable
    preferred stock . . . . . . . . . .       ---            ---            ---            ---           (185)          (185)
  Net income. . . . . . . . . . . . . .       ---            ---            ---            ---          6,897          6,897
                                          ----------     ----------     ----------     ----------     ----------     ----------
Balances, March 31, 1997. . . . . . . .    13,620         $  136      $  64,828     $  (45,422)       $12,019        $31,561
                                          ----------     ----------     ----------     ----------     ----------     ----------
                                          ----------     ----------     ----------     ----------     ----------     ----------
</TABLE>
 



     The accompanying notes are an integral part of these consolidated financial
statements.


                                          24
<PAGE>

                                    ROCKSHOX. INC.

                        CONSOLIDATED STATEMENTS OF CASH FLOWS
                                    (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                    YEAR        THREE MONTHS       YEAR          YEAR
                                                                    ENDED          ENDED           ENDED         ENDED
                                                                 DECEMBER 31,     MARCH 31,      MARCH 31,      MARCH 31,
                                                                     1994           1995           1996           1997
                                                                  ----------     ----------     ----------     ----------
<S>                                                               <C>           <C>             <C>            <C>
Cash flows from operating activities:
  Net income (loss). . . . . . . . . . . . . . . . . . .          $  4,714      $  (2,336)      $  5,664       $  6,897
Adjustments to reconcile net income (loss) to net cash
   provided by (used in) operating activities:
   Depreciation and amortization . . . . . . . . . . . .               193             78          1,746          3,467
   Write-off of capitalized financing costs. . . . . . .               ---            ---            ---          2,213
   Provision for doubtful accounts . . . . . . . . . . .               ---             32          1,518            175
   Provision for excess and obsolete inventories . . . .                69            ---          2,009            825
   Deferred income taxes . . . . . . . . . . . . . . . .              (388)        (1,010)        (2,298)          (934)
Changes in operating assets and liabilities:
   Accounts receivable . . . . . . . . . . . . . . . . .            (2,874)           617         (1,699)        (1,222)
   Inventories . . . . . . . . . . . . . . . . . . . . .              (803)          (291)        (6,095)        (3,189)
   Prepaid expenses and other current assets . . . . . .              (268)           (68)            86           (735)
   Accounts payable and accrued liabilities. . . . . . .             1,738          1,835          7,589           (376)
                                                                  ----------     ----------     ----------     ----------
    Net cash provided by  (used in) operating activities             2,381         (1,143)         8,520          7,121
                                                                  ----------     ----------     ----------     ----------
Cash flows from investing activities:
   Purchase of property and equipment. . . . . . . . . .              (890)          (409)        (4,074)        (6,554)
   Other . . . . . . . . . . . . . . . . . . . . . . . .                (1)           129             52            (50)
                                                                  ----------     ----------     ----------     ----------
    Net cash used in investing activities. . . . . . . .              (891)          (280)        (4,022)        (6,604)
                                                                  ----------     ----------     ----------     ----------
Cash flows from financing activities:
   Proceeds from Initial Public Offering, net of expenses              ---            ---            ---         64,464
   Repayment of mandatorily redeemable preferred
    stock. . . . . . . . . . . . . . . . . . . . . . . .               ---            ---            ---         (7,542)
   Proceeds from issuance of bank debt . . . . . . . . .               ---         31,250            ---            ---
   Repayment of short-term borrowings and bank debt. . .               ---            ---         (3,750)       (27,500)
   Payment of financing costs. . . . . . . . . . . . . .               ---         (3,203)           ---            ---
   Repayment of notes payable to related  parties. . . .            (1,345)          (998)          (250)       (17,000)
   Issuance of notes payable to related  parties . . . .               998         11,250            ---            ---
   Proceeds from issuance of mandatorily redeemable
       preferred stock . . . . . . . . . . . . . . . . .               ---          3,000            ---            ---
   Payment of dividends. . . . . . . . . . . . . . . . .              (300)           ---            ---            ---
   Proceeds from issuance of common stock. . . . . . . .               ---            500            ---            ---
   Distributions related to reorganization . . . . . . .               ---        (40,274)           ---            ---
                                                                  ----------     ----------     ----------     ----------
    Net cash provided by (used in) financing activities.              (647)         1,525         (4,000)        12,422
                                                                  ----------     ----------     ----------     ----------
       Net increase in cash and cash equivalents . . . .               843            102            498         12,939
Cash and cash equivalents, beginning of period . . . . .               365          1,208          1,310          1,808
                                                                  ----------     ----------     ----------     ----------
       Cash and cash equivalents, end of period. . . . .          $  1,208       $  1,310       $  1,808      $  14,747
                                                                  ----------     ----------     ----------     ----------
                                                                  ----------     ----------     ----------     ----------
Supplemental disclosure of cash flow information:
   Income taxes paid . . . . . . . . . . . . . . . . . .            $3,232            ---         $4,180         $5,065
   Interest paid . . . . . . . . . . . . . . . . . . . .                21          $  21          4,939          3,599
   Non-cash distributions in excess of net book value -
    mandatorily redeemable preferred stock . . . . . . .               ---          4,000            ---            ---
   Non-cash distributions in excess of  net book value -
    junior subordinated notes. . . . . . . . . . . . . .               ---          6,000            ---            ---
   Accretion for dividends on  mandatorily redeemable
    preferred  stock . . . . . . . . . . . . . . . . . .               ---            ---            357            185
</TABLE>
 



     The accompanying notes are an integral part of these consolidated financial
statements.


                                          25
<PAGE>

                                    ROCKSHOX, INC.
                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.  NATURE OF OPERATIONS AND EQUITY TRANSACTIONS:

    NATURE OF OPERATIONS:

    The Company designs, manufactures and markets high performance bicycle 
suspension products.  During the fiscal year ended March 31, 1997, the 
Company marketed front suspension forks and rear shocks under its JUDY, INDY, 
QUADRA, MAG, and DELUXE product lines.  The Company's products are primarily 
sold to bicycle manufacturers ("OEMs"), who incorporate ROCKSHOX  branded 
components as part of new, fully assembled mountain bikes sold worldwide, and 
directly to independent bicycle dealers ("IBDs") and through distributors 
(together with IBDs, the retail accessory market).  For the year ended 
December 31, 1994, the three months ended March 31, 1995, the years ended 
March 31, 1996 and 1997, approximately 65%, 62%, 68%, and 72% respectively, 
of the Company's total net sales were to OEMs.  For the year ended December 
31, 1994, the three months ended March 31, 1995, the years ended March 31, 
1996 and 1997, approximately 35%, 38%, 32%, and 28% respectively, of the 
Company's total net sales were to the retail accessory market.

    RECAPITALIZATION AND INITIAL PUBLIC OFFERING:

    In October 1996, ROCKSHOX, INC., a Delaware corporation ("the Company")
merged (the "Merger") with and into its parent company RSx Holdings, Inc.
("Holdings") and each share of common stock of RSx Holdings was converted into
88.2 shares of common stock of the Company.  All share and per share data in the
accompanying financial statements have been retroactively restated to reflect
the Merger.

    Holdings was formed in March 1995 as a holding company which acquired all
of the outstanding shares of capital stock of RockShox, Inc., a California
corporation ("Old RockShox") and the predecessor of the Company, in a series of
transactions that occurred on March 24, 1995.  On March 24, 1995, the
stockholders of Old RockShox transferred all of the outstanding  shares of
capital stock of Old RockShox to Holdings and RSx Acquisition Inc.
("Acquisition").  In exchange therefore, the stockholders of Old RockShox
received consideration of $50,274,000, which consisted of $39,049,000 of cash,
$6,000,000 aggregate principal amount of junior subordinated notes payable of
Holdings ("junior notes"), $4,000,000 of non-convertible mandatorily redeemable
Series B preferred stock of Holdings ("Series B Preferred Stock"), 50% of the
common stock of Holdings and $1,225,000 paid to third parties for fees and
expenses on behalf of the Old RockShox stockholders.  Holdings then acquired all
of the capital stock of Acquisition and contributed to Acquisition all of
Holdings shares of capital stock of Old RockShox, whereupon Old RockShox became
a wholly owned subsidiary of Acquisition.  Old RockShox was then merged into
Acquisition and Acquisition changed its name to ROCKSHOX, INC.  The transactions
described in this paragraph are collectively referred to as the
Recapitalization.

    As part of the Recapitalization, MCIT PLC, an investment company organized
under the laws of England and Wales ("MCIT"), and certain persons and entities
affiliated with The Jordan Company ("Jordan") purchased the remaining 50% of the
common stock of Holdings, $11,000,000 aggregate principal amount of senior
subordinated notes payable of Holdings (senior notes and, together with the
junior notes, subordinated notes) and $3,000,000 of non-convertible mandatorily
redeemable Series A preferred stock of Holdings ("Series A Preferred Stock" and,
together with the Series B Preferred Stock, "the Preferred Stock") for an
aggregate purchase price of approximately $14,500,000.  Acquisition also entered
into a $36,000,000 bank credit facility in connection with the Recapitalization
pursuant to which Acquisition borrowed $30,000,000 under a term loan, and was
permitted to borrow up to $6,000,000 under a bank line of credit.

    The transaction was accounted for as a recapitalization and accordingly, no
change in the accounting basis of Old RockShox assets has been made in the
accompanying consolidated financial statements.  The amount of consideration
paid and securities issued to the stockholders of Old RockShox of $50,274,000
exceeded Old RockShox' net assets of $4,852,000 on the date of the
Recapitalization by $45,422,000.  This amount has been recorded within
stockholders' equity as distributions in excess of net book value.

    On September 26, 1996, the Company priced an of 4.8 million shares of 
common stock, at $15.00 per share.  The net proceeds to the Company were 
approximately $64.5 million after deducting the underwriting discount and 
offering expenses.  From the net proceeds, $43 million was used to repay all 
of the Company's debt, $7.5 million was used to redeem all of Holding's 
outstanding Preferred Stock and accrued dividends, and $7.3 million was used 
to terminate an incentive bonus plan ("Bonus Plan") with the Company's 
President and Vice President of Advanced Research.  The bonus termination 
fee, less accrued bonus payments, has been disclosed as a non-recurring 
charge in the fiscal 1997 Statement of Operations.  The remaining net 
proceeds were used for working capital purposes.

                                          26
<PAGE>

2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

    PRINCIPLES OF CONSOLIDATION:
    The consolidated financial statements include the accounts of the Company
and its wholly owned subsidiaries.  All intercompany transactions and amounts
have been eliminated.

    FISCAL YEAR END:
    Effective March 31, 1995, the Company changed its fiscal year end from
December 31 to March 31 to more closely correspond with the Company's product
model year and business cycle.

    USE OF ESTIMATES:
    The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and the
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period.  Actual results could differ from those estimates.

    RISKS AND UNCERTAINTIES:
    Substantially all of the Company's historical revenues have been
attributable to sales of mountain bike suspension products and, therefore, any
material decline or prolonged lack of growth in the popularity of, or market
demand for, mountain bike suspension forks or rear shocks, in general, or the
Company's products, in particular, could have a material adverse effect on the
Company or its prospects.  The markets for bicycle components, in general, and
bicycle suspension products, in particular, are highly competitive.  In order to
build or retain its market share, the Company must continue to successfully
compete in the areas that influence the purchasing decisions of OEMs,
distributors, IBDs and consumers, including design, price, quality, technology,
distribution, marketing, style, brand image and customer service.

    The Company does not currently have long-term contracts with any of its
vendors, nor does the Company currently have multiple vendors for all parts,
tooling, supplies or services critical to the Company's manufacturing processes.
Failure of a key supplier to meet the Company's product needs on a timely basis,
loss of a key supplier or significant disruption in the Company's production or
distribution activities for any other reason, including an earthquake or other
catastrophic event, could have a material adverse effect on the Company or its
prospects.

    While the Company is currently manufacturing its products only in the
United States, the bicycle industry is, and many of the Company's OEM customers
are,  highly dependent on manufacturing in overseas locations.  Changes in
economic conditions, currency exchange rates, tariff regulations, local content
laws or other trade restrictions or political instability ("International
Conditions") could adversely affect the cost or availability of products sold by
or to the bicycle industry as a whole and the Company's OEM customers in
particular, any of which could have a material adverse effect on the Company or
its prospects.  In addition, insufficient international consumer demand for
mountain bikes and related products, including the Company's products, whether
due to changes in International Conditions, consumer preferences or other
factors, could have a material adverse effect on the Company or its prospects.

    CARRYING VALUE OF FINANCIAL INSTRUMENTS:
    Financial instruments that potentially expose the Company to concentrations
of credit risk consist principally of trade accounts receivable and cash and
cash equivalents.  The carrying amounts for cash and cash equivalents, accounts
receivable, accounts payable and accrued liabilities approximate their estimated
fair values based on information available as of March 31, 1997 and 1996.

    CONCENTRATION OF CREDIT RISK:
    The Company performs ongoing credit evaluations, generally does not require
collateral of its customers and maintains allowances for potential credit
losses.  At March 31, 1997, three OEM customers accounted for 32%, 13% and 10%
of accounts receivable.  At March 31, 1996, three OEM customers accounted for
32%, 16% and 13% of accounts receivable. (See Note 13 for concentrations of
revenue.)

                                          27
<PAGE>

2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):

    CASH EQUIVALENTS:
    The Company considers all investments purchased with original or 
remaining maturities of three months or less at the date of purchase to be 
cash equivalents. Substantially all cash balances are held in two financial 
institutions domiciled in the United States.

    INVENTORIES:
    Inventories are stated at the lower of cost, determined on a first-in,
first-out basis, or market.

    PROPERTY AND EQUIPMENT:
    Property and equipment are recorded at cost and are depreciated over their
estimated useful lives of one to seven years using the straight line method.
Leasehold improvements are amortized over the length of the lease or estimated
useful life, whichever is less.  Major additions and betterments are
capitalized, while replacements, maintenance and repairs that do not improve or
extend the life of the assets are charged to  expense.  In the period assets are
retired or otherwise disposed of, the costs and related accumulated depreciation
and amortization are removed from the accounts, and any gain or loss on disposal
is included in results of operations.

    CAPITALIZED FINANCING COSTS AND EXTRAORDINARY ITEM:
    As discussed in Note 1, on September 26, 1996, the Company completed its
IPO.  In connection with the IPO the Company repaid all outstanding debt and
terminated a $6 million bank line of credit.  In connection with the
extinguishment of this debt, the Company wrote off the unamortized balance of
capitalized financing costs of $2.2 million as an extraordinary item, net of
income tax benefit, in the accompanying Statement of Operations.

    Capitalized financing costs associated with the issuance of the bank debt
and subordinated notes were being amortized over the terms of the related debt
using the straight-line method for the line of credit and the interest method
for the term loan and subordinated notes.  Amortization expense for the years
ended March 31, 1997 and 1996 was $300,000 and $690,000, respectively.  There
was no amortization expense for the year ended December 31, 1994 and the amount
was immaterial for the three month period ended March 31, 1995.

    REVENUE RECOGNITION:
    The Company recognizes revenue, net of allowances for estimated returns,
upon shipment of product.

    RESEARCH, DEVELOPMENT AND ENGINEERING:
    Research, development and engineering expenses are charged to operations as
incurred.

    WARRANTY:
    All of the Company's suspension products are covered by a one-year limited
warranty.  Estimated future costs of repair, replacement or customer
accommodation are accrued and charged to cost of sales based upon estimates of
future product returns and repair costs derived from historical product sales
information and analyses of historical data.  In estimating the level of
accrual, the Company's management makes assumptions relating to the level of
product returns and costs of repair.  Management reviews the adequacy of these
assumptions based on historical experience.

    ADVERTISING COSTS:
    Advertising costs are charged to operations as incurred.  Advertising costs
were $594,000, $342,000, $1,089,000 and $1,590,000 for the year ended December
31, 1994, the three months ended March 31, 1995 and the years ended March 31,
1996 and 1997, respectively.

    INCOME TAXES:
    The Company's provisions for (benefit from) income taxes comprises its
estimated tax liability currently payable and the change in its deferred income
taxes.  Deferred tax assets and liabilities are determined based on differences
between the


                                          28
<PAGE>

2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):

financial statement and tax bases of assets and liabilities using enacted tax
rates in effect for the period in which the differences are expected to affect
taxable income.

    RECENT ACCOUNTING PRONOUNCEMENTS:
    During February 1997, the Financial Accounting Standards Board issued
Statement No. 128 ("SFAS 128"), "Earnings per Share," which specifies the
computation, presentation and disclosure requirements for earnings per share.
SFAS 128, which supersedes Accounting Principle Board Opinion No. 15, is
effective for periods, including interim periods, ending after December 15, 1997
and requires that prior periods be restated.  The impact of the adoption of SFAS
No. 128 on the financial statements of the Company has not yet been determined.

    COMPUTATION OF NET INCOME (LOSS) PER SHARE:
    Net income (loss) per share is computed using the weighted average number 
of common shares outstanding during the period and, pursuant to Securities 
and Exchange Commission Staff Accounting Bulletin No. 83, all common and 
common equivalent shares issued during the twelve months preceding the filing 
date of the Company's IPO are also included in the calculation as if the 
shares had been outstanding for all periods presented using the treasury 
stock method.  For periods subsequent to the IPO, the Company has used the 
treasury stock method to compute earnings per share.  Under this method the 
weighted average number of common shares outstanding during the period is 
added to the weighted average of all dilutive common equivalent shares 
outstanding during the period.  All per share data has been restated to 
reflect the merger of the Company's former parent into the Company which was 
effected concurrent with the IPO.

    STOCK BASED COMPENSATION:
    The Company accounts for its stock option plan in accordance with 
provisions of the Accounting Principles Board Opinion No. 25 ("APB 25"), 
"Accounting for Stock Issued to Employees."  In 1995, the Financial 
Accounting Standards Board issued Statement of Financial Accounting Standards 
No. 123 ("SFAS No. 123"), "Accounting for Stock-Based Compensation."  SFAS 
No. 123 established a fair value based method of accounting for stock-based 
compensation plans and is effective for fiscal years beginning after December 
15, 1995.  The Company is continuing to account for its employee stock plan 
in accordance with the provisions of APB 25, and has provided pro forma 
disclosure in Note 10 as if the measurement provisions of SFAS No. 123 had 
been adopted.

    RECLASSIFICATIONS:
    Certain amounts in the prior periods' financial statements have been
reclassified to conform to the fiscal 1997 presentation.  These
reclassifications did not change previously reported stockholders' equity
(deficit) or net income (loss).

3.INVENTORIES (IN THOUSANDS):

                                          MARCH 31,
                                   -----------------------
                                     1996          1997
                                   ----------- -----------
Raw materials . . . . . . . . .     $  5,320     $  6,357
Finished goods. . . . . . . . .        3,116        4,443
                                   ----------- -----------
                                    $  8,436    $  10,800
                                   ----------- -----------
                                   ----------- -----------


    Any misjudgment by the Company or any of its OEM customers of the demand
for any of its respective products may cause the Company's excess and obsolete
inventory to exceed estimated allowances for such inventory.


                                          29
<PAGE>

4.  PROPERTY AND EQUIPMENT, NET (IN THOUSANDS):

                                          MARCH 31,
                                   -----------------------
                                     1996          1997
                                   ----------- -----------
  Computer equipment, 
    furniture and fixtures . . . .  $  1,553     $  2,838
  Machinery and equipment. . . . .     1,627        3,107
  Tooling. . . . . . . . . . . . .     1,243        4,055
  Leasehold improvements . . . . .       251          273
                                   ----------- -----------
                                       4,674       10,273
  Less:  accumulated
    depreciation and amortization .   (1,493)      (3,818)
                                   ----------- -----------

  Construction in progress . . . .     1,132        1,245
                                   ----------- -----------
                                    $  4,313     $  7,700
                                   ----------- -----------


    Depreciation and amortization expense on property and equipment for the
year ended December 31, 1994, the three months ended March 31, 1995 and the
years ended March 31, 1996 and 1997 was $193,000, $78,000, $1,056,000 and
$3,167,000, respectively.

5.  ACCRUED LIABILITIES (IN THOUSANDS):

                                          MARCH 31,
                                   -----------------------
                                     1996          1997
                                   ----------- -----------
  Accrued payroll and benefits      $  1,401     $  2,200
  Accrued income taxes
    payable. . . . . . . . . . .       1,823          667
  Accrued warranty . . . . . . .       4,231        4,725
  Accrued interest payable . . .         902          ---
  Other. . . . . . . . . . . . .       1,945        3,263
                                   ----------- -----------
                                   $  10,302    $  10,855
                                   ----------- -----------
                                   ----------- -----------


    The Company had $4,231,000 and $4,725,000 in accrued warranty costs at
March 31,1996 and March 31, 1997, respectively.  There can be no assurance that
such accrued liabilities may not change in the future or that future warranty
costs for sales made through such dates will not be greater than the amounts
accrued by the Company on its consolidated financial statements, either of which
could have a material adverse effect on the Company or its prospects.  No
provision for these possible excess warranty costs has been recorded in the
accompanying financial statements.

6.  RELATED PARTY TRANSACTIONS:

    CONSULTING AND EMPLOYMENT AGREEMENTS:
    In connection with the Recapitalization on March 24, 1995 (see Note 1), the
Company entered into annual employment agreements (the "Employment Agreements"
or the "Bonus Plan") with the Company's President and Vice President of Advanced
Research, and a management consulting agreement (the "Consulting Agreement")
with an affiliate of Jordan.  These agreements were substantially terminated in
connection with the Company's IPO.

    Each of Stephen W. Simons and Paul Turner entered into an employment
agreement with the Company, dated as of March 24, 1995 (each, an "Employment
Agreement").  Each Employment Agreement was for an initial one-year term and
automatically renewed for additional one-year terms, not to exceed four one-year
renewal terms in total, at the election of Messrs. Simons or Turner, as the case
may be.  Each Employment Agreement could be terminated by the Company for cause
(as defined therein) or by Messrs. Simons or Turner, as the case may be, for
good reason (as defined therein).  Pursuant to his respective Employment
Agreement, each of Messrs. Simons and Turner (i) received initial payments of


                                          30
<PAGE>

6.  RELATED PARTY TRANSACTIONS (CONTINUED):

$2,820,000 and $1,880,000, respectively, (ii) received an annual salary of
$250,000 and certain perquisites and (iii) was entitled to receive an annual
payment under the Bonus Plan based upon the Company's operating results up to a
maximum payment of $1.5 million for any one fiscal year during the period
commencing April 1, 1995 and ending March 31, 2000, but not to exceed an
aggregate of $5 million during such period.  Aggregate incentive compensation
earned under the Bonus Plan was $2,125,000 for the fiscal year ended March 31,
1996, of which $1,062,500 was included in selling, general and administrative
expense and $1,062,500 was included in research and development expense in the
statement of operations.

    Effective simultaneously with the closing of the IPO, the Company
terminated the Employment Agreements, entered into amended and restated
employment agreements with each of Messrs. Simons and Turner (each, an "Amended
Employment Agreement") and recorded a non-recurring charge of approximately $6.6
million related to the termination of the Employment Agreements in fiscal 1997.
The Amended Employment Agreements are substantially similar to the Employment
Agreements, except that pursuant to the Amended Employment Agreements the Bonus
Plan was terminated and, in consideration thereof, the Company paid to each of
Messrs. Simons and Turner approximately $3.7 million.  Each Amended Employment
Agreement also provides that, for each fiscal year commencing April 1, 1996
during the term of the Amended Employment Agreement in which Messrs. Simons and
Turner, as the case may be, has been an employee of the Company for the entire
fiscal year, the Company will pay to Messrs. Simons or Turner a cash bonus of an
amount not to exceed 100% and 50% respectively, of his annual salary of
$250,000, based upon an evaluation of his duties and, in the case of Mr. Simons,
upon the performance of the Company during the fiscal year.  Aggregate incentive
compensation earned under the Amended Employment Agreement was $375,000 in
fiscal 1997, of which $250,000 was included in selling, general and
administrative expense and $125,000 was included in research and development
expense in the statement of operations.

    The Consulting Agreement is dated as of March 24, 1995 and generally 
continues until April 1, 2000.  Under the terms of the Consulting Agreement, 
an affiliate of Jordan is entitled to a quarterly consulting fee of $62,500, 
potential fees relating to certain future transactions and reimbursement for 
any reasonable expenses. In connection with the Consulting Agreement, the 
Company paid $1,000,000 to an affiliate of Jordan for services rendered in 
connection with the IPO in October 1996.

    NOTES PAYABLE:
    In conjunction with the Company's IPO, the subordinated notes payable to
stockholders were repaid in October 1996. (See Note 1.)  Each of the
subordinated notes bore interest at 13.5% per annum, with the interest payable
semi-annually.

    INVENTORY PURCHASES:
    For the year ended December 31, 1994, the three months ended March 31, 1995
and the years ended March 31, 1996 and 1997, the Company paid $3,118,000,
$1,271,000, $8,529,000 and $2,915,000 respectively, to a supplier of raw
materials.  Prior to March 18, 1994, the President of the Company owned 50% of
the common stock of this supplier.  The President sold such stock on March 18,
1994.  The President provides consulting services to this supplier, in
consideration of which the President receives payments of approximately 3% of
this supplier's net sales (as defined), generally through 2002.

7.  BANK DEBT:

    In conjunction with the Company's IPO, the outstanding obligation was
repaid in full on October 2, 1996.  The term loan bore interest at a floating
rate that changed depending on certain ratios, subject to a maximum annual
borrowing rate, as defined in the agreement (8.56% at March 31, 1996).

8.  COMMITMENTS AND CONTINGENCIES:

    COMMITMENTS:
    The Company leases its manufacturing and sales facilities and certain of
its equipment under noncancelable operating leases that expire at various times
through 2004.  Certain of these leases require escalating monthly payments and,
therefore, periodic rent expense is being recognized on a straight-line basis.
Under these leases, the Company is


                                          31
<PAGE>

8.  COMMITMENTS AND CONTINGENCIES (CONTINUED):

responsible for maintenance costs, including real property taxes, utilities and
other cost.  Also, certain of these leases contain renewal options.

    Total rent expense for these leases for the year ended December 31, 1994,
the three months ended March 31, 1995, the years ended March 31, 1996 and 1997
was $292,000, $97,000, $520,000 and $876,000, respectively.

Following is a summary, by fiscal year, of future minimum lease payments under
operating leases at March 31, 1997 (IN THOUSANDS):

    Fiscal Year                                    Total
    -----------
    1998 . . . . . . . . . . . . . . . . . .     $  1,496
    1999 . . . . . . . . . . . . . . . . . .        1,587
    2000 . . . . . . . . . . . . . . . . . .        1,624
    2001 . . . . . . . . . . . . . . . . . .        1,353
    2002 . . . . . . . . . . . . . . . . . .          670
    Thereafter . . . . . . . . . . . . . . .        1,452
                                                -----------
    Total minimum lease payments . . . . . .     $  8,182
                                                -----------
                                                -----------

    LEGAL PROCEEDINGS

    On September 26, 1996, Answer Products, Inc. ("Answer"), filed a compliant
naming RockShox as the defendant in an action in the United States District
Court for the Southern District of Indiana entitled ANSWER PRODUCTS, INC. v.
ROCKSHOX, INC. (the "Indiana Action").  Answer's complaint in the Indiana Action
alleges that certain RockShox suspension forks infringe a patent that was issued
in 1995 and is exclusively licensed to Answer.  The complaint seeks preliminary
and permanent injunctive relief, destruction of the equipment used to make the
allegedly infringing forks, and accounting, compensatory damages, treble
damages, attorney' fees, interest and costs.  The Company believes, after
consultation with patent counsel, that it has meritorious defenses to Answer's
claims in the Indiana Action.

    On September 27, 1996, RockShox commenced an action against Answer in the
United States District Court for the Northern District of California entitled
ROCKSHOX, INC. v. ANSWER PRODUCTS, INC. (the "California Action").  RockShox'
complaint in the California Action seeks a declaratory judgment that the patent
at issue in the Indiana Action is invalid, unenforceable and not infringed by
RockShox, as well as preliminary and permanent injunctions against Answer,
compensatory damages, attorneys' fees and costs.  On October 21, 1996, Answer
filed an answer to RockShox' complaint denying that RockShox was entitled to the
relief requested in the California Action and requesting that the court declare
the patent valid and infringed.

    On December 30, 1996, the Indiana Action was transferred to Federal Court
in San Jose for consolidation with the California Action.  Discovery in these
cases is ongoing.  While the Company has estimated the cost of resolving this
matter and has accrued such amounts in the accompanying financial statements,
due to the uncertainties surrounding litigation, the ultimate outcome of this
matter is not determinable.

    In addition, the Company is involved in certain trademark and employment 
related legal matters in the ordinary course of business.  No provision for 
any liability that may result upon the resolution of these matters has been 
made in the accompanying financial statements nor is the amount or range of 
possible loss, if any, reasonably estimable.  While the Company has accrued 
certain amounts for the estimated costs associated with defending these 
matters, there can be no assurance that the Answer complaint or other third 
party assertions will be resolved without costly litigation, in a manner that 
is not adverse to the Company's financial position or results of operations, 
or without requiring royalty payments in the future which may adversely 
impact gross margins.

9.  MANDATORILY REDEEMABLE PREFERRED STOCK ISSUED TO STOCKHOLDERS:

    In connection with the Recapitalization in March 1995, Holdings issued 
3,000 shares of Series A Preferred Stock and 4,000 shares of Series B 
Preferred Stock to Stockholders, both at a price of $1,000 per share.  All of 
such Preferred Stock, together with accrued dividends, was redeemed for 
$7,542,000 from a portion of the proceeds of the IPO in October 1996.

                                          32
<PAGE>

10. STOCKHOLDERS' EQUITY:

    STOCK OPTION PLAN:

    In May 1996, Holding's Board of Directors adopted and Holding's 
stockholders approved the Amended and Restated RSx Holdings Inc. 1996 Stock 
Plan (such plan, as amended, "the Stock Plan").  The Stock Plan was assumed 
by the Company in the Merger.  The Stock Plan provides for the issuance of up 
to a maximum of 979,020 shares of common stock pursuant to awards under the 
Stock Plan.  The Company has reserved 979,020 shares of common stock for 
issuance under the Stock Plan.  Under the Stock Plan, incentive stock options 
may be granted only to employees of the Company or any parent or subsidiary 
thereof, and non-statutory stock options and stock purchase rights may be 
granted to employees and directors of, and consultants to, the Company or any 
parent or subsidiary thereof.

    The exercise price of options is determined by the Board of Directors of
RockShox upon the establishment thereof, provided that (i) an incentive stock
option may not be granted with an exercise price less than the fair market value
(as defined in the Stock Plan) of the common stock on the date of grant, (ii) an
option granted to an optionee who, at the time of such grant, owns stock
possessing more than 10% of the total combined voting power of all classes of
stock of the Company or any parent, subsidiary or predecessor of the Company may
not have an exercise price less than 110% of the fair market value of the common
stock as of the date of grant and (iii) a non-statutory stock option may not be
granted with an exercise price less than 85% of the fair market value of the
common stock on the date of grant.

    Unless otherwise provided in the option agreement, each option will become
exercisable for 20% of the total number of shares of common stock subject to
such option each year.  Options expire no more than ten years after the date of
grant, other than incentive stock options granted to an optionee who, at the
time of such grant, owns stock representing more than 10% of the voting power of
all classes of stock of the Company or any parent or subsidiary of the Company,
which will expire no more than five years from the date of grant.  The following
is a summary of activity of the Stock Plan for fiscal 1997:

<TABLE>
<CAPTION>
                                 SHARES           NUMBER                                      WEIGHTED
                                AVAILABLE           OF         EXERCISE                        AVERAGE
OUTSTANDING OPTIONS             FOR GRANT         SHARES        PRICE        TOTAL              PRICE
-------------------            -----------       ---------   ----------- ------------        ---------
<S>                            <C>             <C>          <C>           <C>               <C>
 Options reserved               979,020
 Options granted               (846,291)       846,291      $4.39-$15     $6,353,306          $7.05
 Options canceled                 7,750         (7,750)        $15          (116,250)        $15.00
                              ------------     -----------  -----------   --------------    ---------
 Balances,
   March 31, 1997               140,479        838,541      $4.39-$15     $6,237,056          $7.44
</TABLE>

    At March 31, 1997, 227,618 outstanding options were exercisable under
the Plan.

    As discussed in Note 2, the Company continues to account for the Stock Plan
in accordance with ABP 25.  Consistent with the provisions of SFAS No. 123, the
Company's net income and net income per share would have been adjusted to the
pro forma amounts indicated below (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS):

<TABLE>
<CAPTION>

                                                                                 1997
                                                                             ------------
   <S>                                                                         <C>
   Net income available to common stockholders - as reported                   $6,712
   Net income available to common stockholders - pro forma                     $6,221
   Net income available to common stockholders - per share - as reported       $0.58
   Net income available to common stockholders- per share - pro forma          $0.54


                                                                                 1997
                                                                             ------------

   Income before extraordinary item - as reported                              $8,225
   Income before extraordinary item - pro forma                                $7,734
   Income before extraordinary item - per share - as reported                  $0.69
   Income before extraordinary item - per share - pro forma                    $0.65
</TABLE>


                                          33
<PAGE>

10. STOCKHOLDERS' EQUITY (CONTINUED):

    The above pro-form disclosures are not necessarily representative of the 
effects on reported net income for future years.  The aggregate fair value 
and weighted average fair value per share of options granted in the years 
ended March 31, 1997 and 1996 were $1.9 million and none and $2.27 and none, 
respectively.  The fair value of each option grant is estimated on the date 
of grant using the Black-Scholes model with the following weighted average 
assumptions:

                                                    1997
                                                -------------
         Risk-free interest rate . . . . . .      6.08%-6.27%
         Expected life . . . . . . . . . . .          3.5
         Expected dividends. . . . . . . . .          ---
         Expected volatility . . . . . . . .         0-58%

    The risk-free interest rate was calculated in accordance with the grant.

The options outstanding and currently exercisable by exercise price at March 31,
1997 were as follows:

<TABLE>
<CAPTION>
                                                                         Options Currently
                             Options Outstanding                            Exercisable
                      ------------------------------    -----------------------------------------
                                        Weighted
                                        Average          Weighted                      Weighted
                                        Remaining        Average                       Average
  Exercise            Number            Contractual      Exercise     Number           Exercise
  Price               Outstanding       Life             Price        Exercisable      Price
-----------------    -----------        -----------     -----------   ------------    -----------
<S>                  <C>                 <C>            <C>           <C>             <C>
  $4.39-$4.69         596,316                8.70        $  4.43        214,038        $  4.41
  $13.75               28,950                9.75        $ 13.75             50        $ 13.75
  $15.00              213,275                8.09        $ 15.00         13,530        $ 15.00
                     -----------         -----------    -----------   ------------    -----------
                      838,541                8.32        $  7.44        227,618        $  5.04


11. INCOME TAXES:

    The components of the provision for (benefit from) income taxes, all of
which arise from domestic income, are summarized as follows (IN THOUSANDS):

                                                                                Year
                                            Year        Three Months            Ended
                                            Ended          Ended               March 31,
                                         December 31,    March 31,     --------------------------
                                            1994           1995          1996           1997
                                         -----------     ----------    -----------    -----------
<S>                                      <C>             <C>           <C>            <C>
Current:
    State . . . . . . . . . .              $  558          $  45       $  1,127       $  1,133
    Federal . . . . . . . . .               2,250            312          4,635          4,950
                                         -----------     ----------    -----------    -----------
                                            2,808            357          5,762          6,083
                                         -----------     ----------    -----------    -----------

Deferred:
    State . . . . . . . . . .                 (48)          (150)          (281)          (121)
    Federal . . . . . . . . .                (340)          (860)        (2,017)          (813)
                                         -----------     ----------    -----------    -----------
                                             (388)        (1,010)        (2,298)          (934)
                                         -----------     ----------    -----------    -----------
                                         $  2,420        $  (653)      $  3,464       $  5,149
                                         -----------     ----------    -----------    -----------
                                         -----------     ----------    -----------    -----------
</TABLE>


                                          34
<PAGE>

11. INCOME TAXES (CONTINUED):

     The principal items accounting for the difference between income taxes
computed at the U.S. statutory rate and the provision for (benefit from) income
taxes reflected in the statements of operations are as follows:

<TABLE>
<CAPTION>
                                                                                          Year
                                                    Year         Three Months             Ended
                                                    Ended           Ended               March 31,
                                                 December 31,     March 31,    --------------------------
                                                    1994            1995          1996            1997
                                                 ----------      ----------    ----------      ----------
<S>                                             <C>             <C>            <C>             <C>
United States statutory rate. . .                   34.0%         (34.0)%         35.0%          35.0%
States taxes, net of federal
  benefit . . . . . . . . . . . .                    4.6           (5.0)           5.1            5.0%
Other . . . . . . . . . . . . . .                   (4.7)          17.2           (2.2)          (1.5)%
                                                 ----------      ----------    ----------      ----------
                                                    33.9%         (21.8)%         37.9%          38.5%
                                                 ----------      ----------    ----------      ----------
                                                 ----------      ----------    ----------      ----------
</TABLE>

The tax effects of temporary differences that give rise to significant portions
of the deferred tax assets and liabilities are as follows (IN THOUSANDS):

                                                            March 31,
                                                     -----------------------
                                                         1996        1997
                                                     ----------- -----------
Allowance for doubtful accounts . . . . . . .         $    681    $    581
Allowance for excess and obsolete inventory .              685         979
Accrued warranty. . . . . . . . . . . . . . .            1,545       1,728
Accrued liabilities . . . . . . . . . . . . .              105         691
Other.. . . . . . . . . . . . . . . . . . . .              789         760
                                                     ----------- -----------
  Net deferred tax asset. . . . . . . . . . .         $  3,805    $  4,739
                                                     ----------- -----------
                                                     ----------- -----------

    No valuation allowance has been recorded as management believes the net
deferred tax asset will be realized in future periods through carryback to prior
years when the Company paid income taxes or through estimated future taxable
income.  The amount of the deferred tax asset that is realizable could be
reduced in the near term if actual results differ significantly from estimates
of future taxable income.

12. EMPLOYEE BENEFIT PLAN:

    The Company has established a defined contribution retirement plan that is
intended to qualify under Section 401 of the Internal Revenue Code ("the Plan").
The Plan covers substantially all officers and employees of the Company.
Company contributions to the Plan are determined at the discretion of the Board
of Directors.  No Company contributions were made to the Plan for the year ended
December 31, 1994, the three months ended March 31, 1995 or the year ended March
31, 1996.  For the year ended March 31, 1997 Company contributions amounted to
approximately $42,000.

13. BUSINESS SEGMENT AND GEOGRAPHICAL INFORMATION:

    The Company currently operates in one industry segment, the bicycle 
industry, for financial reporting purposes.  Summarized below are the 
Company's export sales (including sales to domestic OEM's of products shipped 
to their overseas manufacturing subcontractors), all of which are denominated 
in U.S. dollars: (IN THOUSANDS)

                                                                Year
                                Year       Three Months         Ended
                                Ended         Ended           March 31,
                             December 31,   March 31,  -----------------------
                                1994          1995        1996         1997
                            -----------    ----------  ----------  -----------
Asia. . . . . . . .         $  10,563      $  2,800    $  22,813   $  31,013
Europe. . . . . . .             6,096         1,961       13,708      21,179
Other . . . . . . .             2,072           964        4,091       5,846
                            -----------    ----------  ----------  -----------
                            $  18,731      $  5,725    $  40,612   $  58,038
                            -----------    ----------  ----------  -----------
                            -----------    ----------  ----------  -----------


                                          35
<PAGE>

13. BUSINESS SEGMENT AND GEOGRAPHICAL INFORMATION (CONTINUED):

Revenues from individual customers in excess of 10% of net sales were as follows
(IN THOUSANDS, EXCEPT PERCENT DATA):

<TABLE>
<CAPTION>
                                                        Three Months
                                 Year Ended                 Ended                  Year Ended               Year Ended
                             December 31, 1994         March 31, 1995           March 31, 1996           March 31, 1997
                          -----------------------  -----------------------  -----------------------  -----------------------
  Customer                 Percent        Amount    Percent        Amount    Percent        Amount    Percent        Amount
------------------------  ------------   --------  ------------   --------  ------------   --------  ------------   --------
<S>                       <C>           <C>        <C>            <C>       <C>           <C>        <C>            <C>
A . . . . . . . . .        10.7%        $4,061      14.5%         $2,073     17.9%        $14,950     20.0%         $21,262
B . . . . . . . . .           ---           ---     12.2%          1,737         ---            ---       ---            ---
</TABLE>






                                          36
<PAGE>

                                     SCHEDULE II

                                    ROCKSHOX, INC.

                          VALUATION AND QUALIFYING ACCOUNTS

           YEAR ENDED DECEMBER 31, 1994, THREE MONTHS ENDED MARCH 31, 1995
                     AND THE YEARS ENDED MARCH 31, 1996 AND 1997
                                    (IN THOUSANDS)

<TABLE>
<CAPTION>
                                           BALANCE AT     CHARGED TO     DEDUCTIONS       BALANCE
                                            BEGINNING      COSTS AND         AND         AT END OF
DESCRIPTION                                 OF PERIOD      EXPENSES      WRITE-OFFS       PERIOD
-----------                               ------------    -----------  -------------    -----------
<S>                                       <C>             <C>          <C>              <C>
As of December 31, 1994
Allowance for excess and                                    
  obsolete inventory .................     $  ---            $69         $  (32)         $  37
Allowance for doubtful                
  accounts ...........................         16            ---             --             16

As of March 31, 1995
Allowance for excess and              
  obsolete inventory .................         37            ---            ---             37
Allowance for doubtful                
  accounts ...........................         16             32             (7)            41

As of March 31, 1996
Allowance for excess and              
  obsolete inventory .................         37          2,009            (37)         2,009
Allowance for doubtful                
  accounts ...........................         41          1,518           (127)         1,432

As of March 31, 1997
Allowance for excess and              
  obsolete inventory .................      2,009            825           (158)         2,676
Allowance for doubtful                
  accounts ...........................      1,432            175            (18)         1,589
</TABLE>






                                          37
<PAGE>

                                      SIGNATURES

    Pursuant to the requirements of Section 13 or 15 (d) of the Securities Act
of 1934, the Registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.

                                                 ROCKSHOX, INC.


    Date:  June 26, 1997             By:  /s/ Charles E. Noreen, Jr.
                                            -------------------------------
                                               Charles E. Noreen, Jr.
                                                 Chief Financial Officer


    Pursuant to the requirements of the Securities Act of 1934, this report has
been signed by the following persons in the capacities and on the dates
indicated.




By:/s/ Stephen W. Simons         Director, Chairman of the        June 26, 1997
   ------------------------        Board, and President
       Stephen W. Simons           (Principal Executive Officer)



By: /s/ Charles E. Noreen, Jr.   Chief Financial Officer and      June 26, 1997
   ---------------------------    Secretary (Principal Financial
        Charles E. Noreen, Jr.    and Accounting Officer)



By: /s/ Paul H. Turner           Director                         June 22, 1997
   ------------------------
        Paul H. Turner



By: /s/ John W. Jordan II        Director                         June 19, 1997
   ------------------------
        John W. Jordan II



By: /s/  Adam E. Max             Director                         June 23, 1997
   ------------------------
         Adam E. Max



By: /s/ Michael R. Gaulke        Director                         June 21, 1997
   ------------------------
        Michael R. Gaulke



By: /s/ George Napier            Director                         June 23, 1997
   ------------------------
        George Napier



                                          38