<PAGE>
 
                                 Exhibit 10.1
                              SPORT CHALET, INC.



                       EMPLOYMENT CONTRACT FOR EXECUTIVE

     SPORT CHALET, INC., a Delaware corporation, located at 920 Foothill Blvd.,
La Canada, California 91011, hereinafter referred to as Employer, and Mr. Ron
Mann, whose address is 19916 Bear Valley Lane, Porter Ranch, CA. 91326,
hereinafter referred to as Executive, in consideration of the mutual promises
made herein, do, as of July 22, 1998, agree as follows:


                                 R E C I T A L S
                                 - - - - - - - -

          A.  Executive has agreed to serve as Senior Vice President-General
     Merchandise Manager during the term of this agreement.  Pursuant to this
     agreement, the Board of Directors of Employer will appoint Executive to
     that position.


          B.  Executive understands that by virtue of his  position with
     Employer, she will be an Executive Officer of Employer whose compensation
     and other benefits are required to be publicly reported under rules and
     regulations issued by the Securities and Exchange Commission.

                         ARTICLE 1. TERM OF EMPLOYMENT


                               SPECIFIED PERIOD

     SECTION 1.01.  Employer hereby employs Executive and Executive hereby
accepts employment with Employer for a period of twelve months beginning on the
effective date hereof to and including the close of business on August 17, 1999.
Unless notice of  termination is given by either party at least 30 days prior to
the end of the initial term, Executive's employment shall automatically renew
for succeeding one month periods until notice of termination as herein provided
is given by either party. Executive's employment may be subject to earlier
termination as in this Agreement otherwise provided.


                           "EMPLOYMENT TERM" DEFINED

     SECTION 1.03.  As used herein, the phrase "employment term" refers to the
entire period of employment of Executive by Employer hereunder, whether for the
periods provided above, or whether terminated earlier as hereinafter provided or
extended by mutual agreement between Employer and Executive.

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                ARTICLE 2. DUTIES AND OBLIGATIONS OF EXECUTIVE


                                GENERAL DUTIES

     SECTION 2.01.  Executive shall serve as the Senior Vice President- General
Merchandise Manager of Employer. In this capacity, Executive shall, to the best
of his ability, do and perform all services, acts, or things, (i) necessary or
advisable to manage and conduct the business of Employer as it relates to
general merchandising, (ii) as are provided in Employer's Certificate of
Incorporation and Bylaws, or (iii) as may be assigned by the President and Chief
Executive Officer of Employer or by Employer's Board of Directors.  She shall
perform such duties, subject at all times to the policies of Employer and its
Board of Directors and the direction of the President and Chief Executive
Officer, and further subject to the consent of the Board when required by the
terms of this Agreement or the Certificate of Incorporation and/or Bylaws of
Employer.

                             CONDUCT OF EXECUTIVE

     SECTION 2.02.  Executive shall at all times during employment hereunder
conduct herself in a manner consistent with his position with Employer and shall
not knowingly perform any act contrary to the best interests of Employer.


                        DEVOTION TO EMPLOYER'S BUSINESS

     SECTION 2.03.  (a)  Executive shall devote the full working portion of his
entire productive time, ability, and attention to the business of Employer
during the term of this contract.


                    (b) Executive shall not engage in any other business duties
or pursuits whatsoever, or directly or indirectly render any services of a
business, commercial, or professional nature to any other person or
organization, whether for compensation or otherwise, without the prior written
consent of Employer's Board of Directors. However, the expenditure of reasonable
amounts of time for educational, charitable, or professional activities shall
not be deemed a breach of this agreement if those activities do not materially
interfere with the services required under this agreement and shall not require
the prior written consent of Employer's Board of Directors.

                    (c) This agreement shall not be interpreted to prohibit
Executive from making passive personal investments or conducting private
business affairs if those activities do not materially interfere with the
services required under this agreement. However, Executive shall not directly or
indirectly acquire, hold, or retain any interest in any business competing with
or similar in nature to the business of Employer.

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                            COMPETITIVE ACTIVITIES

     SECTION 2.04.  Except as otherwise in this Agreement expressly provided,
during the term of this Agreement, Executive shall not, directly or indirectly,
either an employee, employer, consultant, agent, principal, partner,
stockholder, corporate officer, director, or in any other individual or
representative capacity, engage or participate in any business that is in
competition in any manner whatsoever with the business of Employer.


                      UNIQUENESS OF EXECUTIVE'S SERVICES

     SECTION 2.05.  Executive hereby represents and agrees that the services to
be performed under the terms of this contract are of a special, unique, unusual,
extraordinary, and intellectual character that gives them a peculiar value, the
loss of which cannot be reasonably or adequately compensated in damages in an
action at law. Executive therefore expressly agrees that Employer, in addition
to any other rights or remedies that Employer may possess, shall be entitled to
injunctive and other equitable relief to prevent or remedy a breach of this
contract by Executive.


                            REPORTING REQUIREMENTS

     SECTION 2.06.  Executive shall report to Employer's President and/or Chief
Executive Officer and to Employer's Board of Directors and any of its duly
constituted committees as the board may reasonably request.


                                 TRADE SECRETS

     SECTION 2.07.  (a)  The parties acknowledge and agree that during the term
of this agreement and in the course of the discharge of his duties hereunder,
Executive shall have access to and become acquainted with information concerning
the operation and processes of Employer, including without limitation,
financial, personnel, sales, technology, and other information that is owned by
Employer and regularly used in the operation of Employer's business, and that
such information constitutes Employer's trade secrets.

                    (b) Executive specifically agrees that she shall not misuse,
misappropriate, or disclose any such trade secrets, directly or indirectly, to
any other person or use them in any way, either during the term of this
agreement or at any other time thereafter, except as is required in the course
of his employment hereunder.


                    (c) Executive acknowledges and agrees that the sale or

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unauthorized use or disclosure of any of Employer's trade secrets obtained by
Executive during the course of his employment under this agreement, including
information concerning Employer's current or any future and proposed work,
services, products, strategies or locations, the fact that any such work,
services, strategies or locations are planned, under consideration, or in
process, as well as any descriptions thereof, constitute unfair competition.
Executive promises and agrees not to engage in any unfair competition with
Employer, either during the term of this agreement or at any other time
thereafter.

                    (d) Executive further agrees that all files, records,
documents, drawings, specifications, equipment, and similar items relating to
Employer's business, whether prepared by Executive or others, are and shall
remain exclusively the property of Employer and that they shall be removed from
the premises of Employer, only for use in discharging the duties of Executive
under this agreement or with the express prior written consent of Employer's
Board of Directors.


                            USE OF EXECUTIVE'S NAME

     SECTION 2.08.  Executive shall not, during the term of this agreement, use
or permit the use of his name or likeness in connection with any direct
competitor of Employer.  Employer shall be entitled to use Executive's name and
likeness in any usual and customary communications with the public or Employer's
Stockholders, vendors or affiliates.


                       RESIGNATION FROM PRIOR EMPLOYMENT

     SECTION 2.09.  Executive represents and warrants to Employer that he has
resigned as an officer, director and/or employee of his prior employer and that
he may enter into this Agreement and fulfill its terms and conditions without
impairment from or violation of  the terms of any employment agreement he may
have had with such former employer.


                 INDEMNIFICATION FOR NEGLIGENCE OR MISCONDUCT

     SECTION 2.10.  Executive shall indemnify and hold Employer harmless from
all liability for loss, damage, or injury to persons or property resulting from
the negligence or misconduct of Executive.


                      ARTICLE 3. OBLIGATIONS OF EMPLOYER

                              GENERAL DESCRIPTION

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     SECTION 3.01.  Employer shall provide Executive with the compensation,
incentives, benefits, and business expense reimbursement specified elsewhere in
this agreement.

                    INDEMNIFICATION OF LOSSES OF EXECUTIVE

     SECTION 3.02.  Employer shall indemnify Executive for losses sustained by
Executive in direct consequence of the discharge of his duties on Employer's
behalf in accordance with the Indemnity Agreement for executives and/or
directors in the form of Exhibit A, attached hereto and incorporated herein by
this reference. Executive and Employer shall execute such Indemnity Agreement
concurrently with the execution by them of this Agreement.


                     ARTICLE 4. COMPENSATION OF EXECUTIVE

                                 COMPENSATION

     SECTION 4.01.  (a)  As compensation for the services to be performed
hereunder, Executive shall receive a salary in the amount of one hundred sixty
thousand ($160,000 ) per annum, payable in arrears in equal amounts not less
than once per month on the 1st of each month or the next business day thereafter
following each calendar month (or part thereof) of employment during the term of
this Agreement. All such payments shall be subject to deductions and withholding
as required by law or as the parties may mutually agree.


                    (b) Executive shall receive increases in salary as may be
determined by Employer's Board of Directors in its sole discretion.


                                   SEVERANCE

     SECTION 4.02
                    Upon termination of this Agreement initiated by Employer and
without cause (as hereinafter defined), Employer shall continue to pay
Executive's salary to Executive for a period of twelve months following the date
of termination (herein the "Severance Amount"). The Severance Amount shall be
paid as severance and only upon execution by Executive of the Employer's
standard Severance Agreement and Release. It is in lieu of all other claims,
damages or liabilities Executive might otherwise assert against Employer. Any
such severance payments will immediately cease if Executive becomes a consultant
to or an employee of a competitor of Employer. The Severance Amount will be paid
on the dates Executive's salary would have been paid had the termination not
occurred and will be subject to withholding and deductions as required by law.

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                             DEFERRED COMPENSATION

     SECTION 4.02.  There is no deferred Compensation provided for herein.

 
                                 SIGNING BONUS

     SECTION 4.03   Promptly upon execution by the parties of this Agreement, 
Employer shall cause to be granted to Executive 5,000 shares of its Common Stock
subject to the terms and conditions of the Olberz Family Trust Sport Chalet
Employee Restricted Stock Award Plan.

 
                                 TAX WITHHOLDING

     SECTION 4.05.  Employer shall have the right to deduct or withhold from the
compensation due to Executive hereunder any and all sums required for federal
income and Social Security taxes and all state or local taxes now applicable or
that may be enacted and become applicable in the future.


                        ARTICLE 5. EXECUTIVE INCENTIVES

                                 PROFIT SHARING

     SECTION 5.01.  Executive shall be eligible to participate in the Executive
bonus program of Employer as the Board of Directors or Employer shall determine
from time to time.


                                 STOCK OPTION

     SECTION 5.02.  Executive shall be granted Non-Qualified-Stock-Options
("NQSOs") with respect to Employer's Stock representing 35,000 shares at the
NASDAQ closing market price on August 6, 1998 in accordance with Employer's 1992
Incentive Award Plan as amended and pursuant to a Key Employee Stock Option
Incentive Award Agreement in the form attached as Exhibit B and incorporated
herein by this reference.


                         ARTICLE 6. EXECUTIVE BENEFITS

                                ANNUAL VACATION

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     SECTION 6.01.  Executive shall be entitled to vacation in accordance with
Employer's policies for executive vacations.


                                    ILLNESS

     SECTION 6.02.  Executive shall be entitled to 12 days per year as sick
leave with full pay.  Sick leave may be accumulated up to a total of 24 days.


                               USE OF AUTOMOBILE

     SECTION 6.03.  Employer shall, upon proper documentation, reimburse
Executive for the reasonable cost of operation of his automobile in the business
of Employer.

 
                                DEATH BENEFITS

     SECTION 6.04.  There are no death benefits provided under the terms of this
Agreement.


                                 MEDICAL COVERAGE

     SECTION 6.05.  Employer agrees to include Executive in it existing health
care plan or any substitute therefore as is currently provided to Executives of
Employer and under the same terms and conditions.


                                LIFE INSURANCE

     SECTION 6.06.  Employer agrees to provide to Executive such life insurance,
if any, as is currently provided to its other executives.


                                 QUALIFIED PLANS

     SECTION 6.07.  Employee shall be entitled to participate in Employer's
qualified plans in accordance with the terms and conditions of the plan
documents.


                         ARTICLE 7. BUSINESS EXPENSES


                      REIMBURSEMENT OF BUSINESS EXPENSES

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     SECTION 7.01.  (a)  Employer shall promptly reimburse Executive for all
reasonable and necessary business expenses incurred by Executive in connection
with the business of Employer.

                    (b) Each such expenditure shall be reimbursable only if it
is of a nature qualifying it as a proper deduction on the federal and state
income tax return of Employer and is reasonable in amount.

                    (c) Each such expenditure shall be reimbursable only if
Executive furnishes to Employer adequate records and other documentary evidence
required by federal and state statutes and regulations issued by the appropriate
taxing authorities for the substantiation of each such expenditure as an income
tax deduction.

                       REPAYMENT OF DISALLOWED EXPENSES

     SECTION 7.02.  In the event that any expenses paid for Executive or any
reimbursement of expenses paid to Executive shall, on audit or other examination
of Employer's income tax returns, be determined not to be allowable deductions
from Employer's gross income by reason of a failure of Executive to properly
document such expense, and in the further event that this determination shall be
acceded to by the Employer or made final by the appropriate federal or state
taxing authority or a final judgment of a court of competent jurisdiction, and
no appeal is taken from the judgment or the applicable period for filing notice
of appeal has expired, Executive shall repay to Employer the full amount of the
disallowed expenses.


                     ARTICLE 8. TERMINATION OF EMPLOYMENT


                             TERMINATION FOR CAUSE

     SECTION 8.01.  (a)  Employer reserves the right to terminate this agreement
at any time  if Executive willfully breaches or habitually neglects the duties
which he is required to perform under the terms of this agreement; or commits
such acts of dishonesty, fraud, misrepresentation or other acts of moral
turpitude as would prevent the effective performance of his duties.

                    (b) Employer may at its option terminate this agreement for
the reasons stated in this Section by giving written notice of termination to
Executive without prejudice to any other remedy to which Employer may be
entitled either at law, in equity, or under this agreement.

                    (c) The notice of termination required by this section shall
specify the ground for the termination and shall be supported by a statement of
relevant facts.

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                    (d) Termination under this section shall be considered 
"for cause" for the purposes of this agreement.


             EFFECT OF MERGER, TRANSFER OF ASSETS, OR DISSOLUTION

     SECTION 8.02.  (a)  This agreement shall be terminated by any voluntary or
involuntary dissolution of Employer resulting from either a merger or
consolidation in which Employer is not the consolidated or surviving
corporation, or a transfer of all or substantially all of the assets of
Employer.

                    (b)  In the event that there shall be a change of control of
Employer and during the following twelve month period Executive is terminated by
Employer other than for intentional misconduct, such termination shall be deemed
without cause. For purposes of this paragraph, change of control shall mean the
transfer of 50% or more of the common stock of Employer to a person or entity
unrelated or unaffiliated with Norbert and Irene Olberz.

                    (c) Termination under this section shall not be considered
"for cause" and shall be considered an Involuntary Termination for the purposes
of this agreement and the provisions of Section 4.01.


                           TERMINATION BY EXECUTIVE

     SECTION 8.03.  Executive may terminate his obligations under this agreement
by giving Employer at least thirty (30) days advance written notice.


                         ARTICLE 9. GENERAL PROVISIONS

                                 NOTICES

     SECTION 9.01.  Any notices to be given hereunder by either party to the
other shall be in writing and may be transmitted by personal delivery or by
mail, registered or certified, postage prepaid with return receipt requested.
Mailed notices shall be addressed to the parties at the addresses appearing in
the introductory paragraph of this agreement, but each party may change that
address by written notice in accordance with this section. Notices delivered
personally shall be deemed communicated as of the date of actual receipt; mailed
notices shall be deemed communicated as of the third day following the date of
mailing.

                                 ARBITRATION

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     SECTION 9.02.  (a)  Any controversy between Employer and Executive
involving the construction or application of any of the terms, provisions, or
conditions of this agreement shall on the written request of either party served
on the other be submitted to arbitration. Arbitration shall comply with and be
governed by the provisions of the California Arbitration Act.


                    (b) Employer and Executive shall concurrently herewith enter
that certain Agreement to Arbitrate Claims in the form attached hereto as
Exhibit C and incorporated herein by this reference.

                           ATTORNEYS' FEES AND COSTS

     SECTION 9.03.  If any legal action based in contract law is necessary to
enforce or interpret the terms of this agreement, the prevailing party shall be
entitled to reasonable attorneys' fees, costs, and necessary disbursements in
addition to any other relief to which that party may be entitled. This provision
shall be construed as applicable to the entire contract.


                                SEC COMPLIANCE

     SECTION 9.04  Executive understands that Employer is a publicly held
company with reporting requirements under the Securities Exchange Act of 1934.
Executive further understands that she will be a "Executive Officer" of Employer
within the meaning of Exchange Act Rule 3b-7 and that by reason thereof certain
reporting of Executive's compensation will be required. Executive hereby waives
any right of privacy otherwise applicable to Executive to the extent necessary
to permit Employer to comply with the disclosure requirements to which Employer
is subject.  Executive agrees that concurrently herewith she has been provided
with a copy of and will abide by the Employer's Statement of Company Policy Re:
Securities Trades by Company Personnel attached as Exhibit D and incorporated
herein by this reference.


                               ENTIRE AGREEMENT

     SECTION 9.05.  This Agreement, together with its exhibits, supersedes any
and all other agreements, either oral or in writing, between the parties hereto
with respect to the employment of Executive by Employer and contains all of the
covenants and agreements between the parties with respect to that employment in
any manner whatsoever. Each party to this agreement acknowledges that no
representation, inducements, promises, or agreements, orally or otherwise, have
been made by any party, or anyone acting on behalf of any party, which are not
embodied herein, and that no other agreement, statement, or promise not
contained in this agreement shall be valid or binding on either party.

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                                 MODIFICATIONS

     SECTION 9.06.  Any modification of this agreement will be effective only if
it is in writing and signed by the party to be charged and approved by the Board
of Directors of Employer.

                               EFFECT OF WAIVER

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     SECTION 9.07.  The failure of either party to insist on strict compliance
with any of the terms, covenants, or conditions of this agreement by the other
party shall not be deemed a waiver of that term, covenant, or condition, nor
shall any waiver or relinquishment of any right or power at any one time or
times be deemed a waiver or relinquishment of that right or power for all or any
other times.

                              PARTIAL INVALIDITY

     SECTION 9.08.  If any provision in this agreement is held by a court of
competent jurisdiction to be invalid, void, or unenforceable, the remaining
provisions shall nevertheless continue in full force without being impaired or
invalidated in any way.


                            LAW GOVERNING AGREEMENT

     SECTION 9.09.  The agreement shall be governed by and construed in
accordance with the laws of the State of California except that, with respect to
matters of corporate governance, the laws of the State of Delaware shall govern.


                          SUMS DUE DECEASED EXECUTIVE

     SECTION 9.10.  If Executive dies prior to the expiration of the term of his
employment, any sums that may be due him from Employer under this agreement as
of the date of death shall be paid to Executive's executors, administrators,
heirs, personal representatives, successors, and assigns.

      Executed on July 22, 1998, at La Canada, California.


                         EMPLOYER

                         Sport Chalet, Inc.


                         By /s/ Craig Levra
                            --------------------------------             


                         EXECUTIVE


                         /s/ Ronald Mann
                         ------------------------------------
                         Ron Mann

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                                                                       EXHIBIT A

                              SPORT CHALET, INC.

                              INDEMNITY AGREEMENT

     THIS AGREEMENT was made and entered into the 22nd day of July, 1998, by and
between SPORT CHALET, INC. (the "Company"), and RONALD G. MANN (the
"Indemnitee") (together the "Parties") with reference to the following:

                                R E C I T A L S

          A.  The Indemnitee is a member of the Board of Directors and/or is an
Officer of the Company.

          B  In accordance with the provisions of Article V, Section 10 of its
Bylaws, the Company has agreed to indemnify the Indemnitee in connection with
certain actions, suits or proceedings that may be brought against Indemnitee.

          C  The Parties desire to document the terms and conditions of the
indemnity provided to Indemnitee.


                                   AGREEMENT

     IT IS THEREFORE AGREED by and between the Parties, for and in consideration
of the premises and mutual covenants herein contained and for other good and
valuable consideration, as follows:

          1.  Subject to the restrictions contained herein, the Certificate of
Incorporation and Bylaws of this Company or otherwise provided by law, the
Company will indemnify and hold harmless Indemnitee from and against any loss,
cost, or expense incurred by Indemnitee by reason of indemnity having been made
or threatened to be made a party to an action or proceeding, whether civil,
criminal, administrative or investigative (hereinafter a "Proceeding") by reason
of the fact that Indemnitee, or a person for whom Indemnitee is the legal
representative, is or was a director or officer of the Company, is or was
serving at the request of the Company as a director or officer of another
corporation or of a partnership, joint venture, trust or other enterprise,
including service with respect to employee benefit plans, whether the basis of
such Proceeding is alleged to be an action taken by Indemnitee in an official
capacity as a director or officer or in any other capacity while serving as a
director or officer.

          2.  The scope of this indemnity shall be the fullest extent authorized
by the General Corporation Law of the State of Delaware as the same now exists
or may hereafter be amended, and the term "loss, cost, or expense" as used in
this Agreement shall include all costs, 

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charges, expenses, liabilities and losses (including attorneys' fees, judgments,
fines, ERISA excise taxes or penalties and amounts paid or to be paid in
settlement which are reasonably incurred or suffered by Indemnitee in connection
with a Proceeding.

          3.  The indemnification provided by this Agreement shall continue as
to Indemnitee even after the Indemnitee ceases to be a director or officer of
the Company and shall inure to the benefit of Indemnitee's heirs, executors and
administrators.

          4.  Notwithstanding anything to the contrary contained herein, the
Company will not indemnify the Indemnitee under the following circumstances:

               a.   In the event the Proceeding (or part thereof) for which
                    Indemnitee seeks indemnification is initiated by Indemnitee,
                    if such proceeding (or part thereof) was not authorized by
                    the Board of Directors of the Company.

               b.   The Company will not indemnify the Indemnitee for amounts
                    paid in settlement of an action indemnified by the Company
                    without the prior written consent of the Company.

               c.   The Company will not indemnify Indemnitee with respect to a
                    Proceeding where such indemnity would be contrary to the
                    General Corporations Law of the State of Delaware.


          5.  The right to indemnity provided in this Agreement shall include
the right to be paid by the Company the expenses incurred in defending a
Proceeding in advance of its final disposition; provided, however, that if the
General Corporations Law of the State of Delaware requires, the payment of such
expenses incurred by Indemnitee by reason of the fact that Indemnitee is or was
a director or officer (and not in any other capacity in which service was or is
rendered by Indemnitee while a director or officer, including, without
limitation, service to an employee benefit plan) in advance of the final
disposition of the Proceeding, shall be made only upon delivery to the Company
of an undertaking, by or on behalf of Indemnitee to repay all amounts so
advanced to Indemnitee if it shall ultimately be determined that Indemnitee is
not entitled to be indemnified under the provisions of this Agreement or
otherwise.

          6.  All claims for indemnification under this Agreement shall be made
by Indemnitee to the Company in writing promptly upon Indemnitee learning of the
circumstances under which this indemnity will become applicable to a particular
Proceeding.  If a claim made under this Agreement is not paid in full by the
Company within thirty (30) days after a written claim has been received by the
Company, the Indemnitee may at any time thereafter, bring suit against the
Company to recover the unpaid amount of the claim and, if successful in whole or
in part, the Indemnitee shall be entitled to be paid also the expenses of
prosecuting that claim.  It 

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shall be a defense to any such action (other than an action brought to enforce a
claim for expenses incurred in defending a Proceeding in advance of its final
disposition where the required undertaking, if any is required, has been
tendered to the Company) that the Indemnitee has not met the standards of
conduct which make it permissible under the General Corporations Law of the
State of Delaware for the Company to indemnify the Indemnitee for the amount
claimed, but the burden of proving such defense shall be on the Company. Neither
the failure of the Company, (including its Board of Directors, independent legal
counsel or its stockholders) to have made a determination prior to the
commencement of such action that indemnification of the Indemnitee is proper
under the circumstances because Indemnitee has met the applicable standard of
conduct set forth in the General Corporations Law of the State of Delaware, nor
an actual determination by the Company (including its Board of Directors,
independent legal counsel or its stockholders) that Indemnitee has not met such
applicable standard of conduct, shall be a defense to the action or create a
presumption that Indemnitee has not met the applicable standard of conduct.

          7.  The right to indemnification and the payment of expenses incurred
in defending a Proceeding in advance of its final disposition conferred in this
Agreement shall not be exclusive of any other right which Indemnitee may have or
hereafter acquire under any statute, provision of the Certificate of
Incorporation, Bylaw, agreement, vote of stockholders or disinterested directors
or otherwise.

          8.  The indemnity provided by this Agreement shall extend to the costs
and expenses actually or reasonably incurred by Indemnitee on Indemnitee's
behalf in connection with any proceeding in which Indemnitee is called as a
witness by reason of Indemnitee's position as an officer or director of the
Company or by reason of serving in a similar capacity at the request of the
Company in any other corporation, partnership, joint venture, trust or other
enterprise.

          9.  This Agreement may be amended by the Company at any time to
conform to the provisions of the Certificate of Incorporation, Bylaws or General
Corporations Laws of the State of Delaware, as they may be from time to time;
provided, however, that no such amendment shall affect the indemnity provided to
Indemnitee for claims for indemnity arising prior to the effective date of such
amendment.

          10.  This Agreement is entered into and shall be governed by,
construed and enforced in accordance with the laws of the State of Delaware.

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          IN WITNESS WHEREOF, the parties have hereunto affixed their signatures
on the day and year first above-written.


 
                                           SPORT CHALET, INC.
 
 
 
                                           By: /s/   Craig Levra
                                               ----------------------------
                                               Craig Levra, its President
 
 
 
                                            INDEMNITEE
 
 
 
                                            By: /s/ Ronald Mann
                                                ---------------------------
                                                Ronald G. Mann

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                                                                       EXHIBIT B
 
                              SPORT CHALET, INC.

                                 KEY EMPLOYEE
                    STOCK OPTION INCENTIVE AWARD AGREEMENT


     THIS AGREEMENT is made and entered into this 22 day of July, 1998, by and
between Sport Chalet, Inc. (the "Company") and Ronald G. Mann (the "Optionee")
(together with the "Parties").


                                   RECITALS

          A.  On October 8, 1992, the Board of Directors of the Company adopted
a Sport Chalet, Inc. 1992 Incentive Award Plan (the "1992 Plan") under which
certain employees of the Company, may be granted options to purchase Common
Stock of the Company.

          B.  The 1992 Plan permits the granting of nonstatutory stock options,
which do not qualify as incentive stock options under Section 422 of the United
States Internal Revenue Code of 1986, as amended (the "Code").

          C.  The Optionee has been granted a nonstatutory stock option pursuant
to the 1992 Plan.

          D.  The Optionee is desirous of obtaining a nonstatutory stock option
on the terms and conditions herein contained.

          E.  Unless otherwise stated, all capitalized terms shall have the
meaning set forth in the 1992 Plan.


                                   AGREEMENT

     IT IS THEREFORE agreed by and between the Parties, for and in consideration
of the premises and the mutual covenants herein contained and for other good and
valuable consideration, as follows:

          1.  The Company hereby confirms and acknowledges that it will grant to
the Optionee, on August 6, 1998, an option to purchase 45,000 shares of Common
Stock of the Company (the "Option") upon the terms and conditions herein set
forth and subject to the terms and conditions of the 1992 Plan.  The Option is
granted as a matter of separate agreement, and not in lieu of salary or any
other regular or special compensation for services.

                                       17
<PAGE>
 
          2.  The purchase price of the shares which may be purchased pursuant
to the Option is the closing market price on NASDAQ-NMS on the effective date of
grant.

          3.  The Option shall continue for ten years after the date of grant
set forth in paragraph 1 unless sooner terminated or modified under the
provisions of this Agreement, and shall automatically expire at midnight on the
tenth anniversary of such date.

          4.  The Option may be exercised by the Optionee to purchase the total
number of shares specified in paragraph 1 as follows:

          Twenty Percent (20%) of the total number of shares shall become
          exercisable (subject to the provisions of paragraph 9 hereof) upon the
          last to occur of (i) the first anniversary date of grant of the
          option, or (ii) the effective date of the Company's registration
          statement under the Securities Act of 1933 with respect to its Common
          Stock to be offered to the public; an additional twenty percent (20%)
          of the total number of shares optioned to Optionee shall be
          exercisable on each of the second, third, fourth and fifth
          anniversaries of the original date of grant of such option.

          The Optionee need not exercise any part of the Option when it becomes
          exercisable, but may accrue the fractional increments described above
          and exercise them in any later period, prior to expiration of the
          Option.


          5.  If the Optionee's status as an employee of the Company shall
terminate for any reason other than the Optionee's disability, the option, to
the extent then exercisable as provided in paragraph 4, shall remain exercisable
after the termination of his or her status as an employee for a period of three
months.  If the Optionee's status as an employee is terminated because the
Optionee is disabled within the meaning of Section 22(e)(3) of the Code, the
Option, to the extent then exercisable as provided in paragraph 4, shall remain
exercisable after the termination of his or her status as an employee for a
period of twelve months.  If the option is not exercised during the applicable
period, it shall be deemed to have been forfeited and of no further force or
effect.

          6.  In the event of the Optionee's death, the option may be exercised
by the personal representative of the Optionee's estate or, if no personal
representative has been appointed, by the successor or successors in interest
determined under the Optionee's will or under the applicable laws of descent and
distribution.  The Option may not be transferred, assigned, encumbered or
alienated in any way by the Optionee except pursuant to a qualified domestic
relations order as defined by the Code, Title I of the Employee Retirement
Income Security Act, or the rules thereunder, and any attempt to do so shall
render the Option and any 

                                       18
<PAGE>
 
unexercised portion thereof, at the discretion of the Company, null and void and
unenforceable by the Optionee.

          7.  The Option may be exercised in whole or in part by delivering to
the Company written notice of exercise together with payment in full for the
shares being purchased upon such exercise.

          8.  The Company will, upon receipt of said notice and payment, issue
or cause to be issued to the Optionee (or to his or her personal representative
or other person entitled thereto) a stock certificate for the number of shares
purchased thereby.  The Optionee may designate a member of the Optionee's
immediate family as a co-owner of the said shares.

          9.  The Company may, in its discretion, file and maintain effective
with the Securities and Exchange Commission a Registration Statement on Form S-8
under the Securities Act of 1933, as amended (the "Act"), covering the sale of
the optioned shares to Optionee upon exercise of the option.  If, at the time of
exercise, the Company does not have an effective Registration Statement on file
covering the sale of the optioned shares, the Optionee represents and agrees
that:  (i) the Option shall not be exercisable unless the purchase of optioned
shares upon the exercise of the Option is pursuant to an applicable effective
registration statement under the Act, or unless in the opinion of counsel for
the Company, the proposed purchase of such optioned shares would be exempt from
the registration requirements of the Act, and from the qualification
requirements of any state securities law; (ii) upon exercise of the Option, he
or she will acquire the optioned shares for his or her own account for
investment and not with any intent or view to any distribution, resale or other
disposition of the optioned shares; (iii) he or she will not sell or transfer
the optioned shares, unless they are registered under the Act, except in a
transaction that is exempt from registration under the Act, and each certificate
issued to represent any of the optioned shares shall bear a legend calling
attention to the foregoing restrictions and agreements.  The Company may
require, as a condition of the exercise of the option, that the Optionee sign
such further representations and agreements as it reasonably determines to be
necessary or appropriate to assure and to evidence compliance with the
requirements of the Act.

          10.  If the Company or its stockholders enter into an agreement to
dispose of all, or substantially all, of the assets or outstanding capital stock
of the Company by means of a sale or liquidation, or a merger or reorganization
in which the Company is not the surviving corporation, any unexercised portion
of the Option as of the day before the consummation of such sale, liquidation,
merger or reorganization shall for all purposes under this Agreement become
exercisable in full as of such date even though the anniversary dates, as
provided in paragraph 4, have not yet occurred.

          11.  In consideration of the granting by the Company of the Option,
the Optionee hereby affirms that he or she has a present intention to serve as
an employee of the Company for the period that this option continues.  This
affirmation, however, shall confer no right on the Optionee to continue to serve
as an employee of the Company, nor interfere in any 

                                       19
<PAGE>
 
way with the right of the stockholders of the Company to remove the Optionee
from the Board of Directors (or the Board of Directors to remove Optionee as an
officer if Optionee should hold any other position with the Company) pursuant to
the Delaware General Corporation Law and the Company's Certificate of
Incorporation and Bylaws.

          12.  The Optionee shall have no rights as a stockholder with respect
to the shares of Common Stock which may be purchased pursuant to the option
until such shares are issued to the Optionee.

          13.  This Agreement is entered into and shall be governed by,
construed and enforced in accordance with the laws of the State of California.

          14.  No Non-qualified Stock Option granted to an officer of the
Company subject to Section 16(b) of the Exchange Act, nor any shares of Common
Stock issuable upon exercise of any such Non-qualified Stock Option, may be sold
or otherwise disposed of prior to the date that is six (6) months and one (1)
day following the date of grant of the Non-qualified Stock Option.

          15.  The terms and conditions contained in the 1992 Plan, as it may be
amended from time to time hereafter, are incorporated into and made a part of
this Agreement by reference, as if the same were set forth herein in full, and
all provisions of the Option are made subject to any and all terms of the 1992
Plan.

     IN WITNESS WHEREOF, the parties have hereunto affixed their signatures in
acknowledgment and acceptance of the above terms and conditions on the date
first above  mentioned.

<TABLE>
<CAPTION>
<S>                                                         <C> 
SPORTS CHALET, INC.                                                      OPTIONEE
 
 
By:    /s/ Norbert Olberz                                    By: /s/ Ronald Mann
       -----------------------------------                       -------------------------
       Norbert Olberz   Its:  Chairman                           Ronald G. Mann

</TABLE>

                                       20
<PAGE>
 
                                                                       EXHIBIT C

                              SPORT CHALET, INC.
                              ------------------

                         AGREEMENT TO ARBITRATE CLAIMS


          I  recognize that differences may arise between Sport Chalet, Inc.
("the Company") and me during or following my employment with the Company, and
that those differences may or may not be related to my employment. The
differences that cannot be resolved between me and my supervisor and/or manager
will, under this Agreement be submitted to binding arbitration. I understand and
agree that by entering into this Agreement to Arbitrate Claims ("Agreement"), I
anticipate gaining the benefits of a speedy, impartial dispute-resolution
procedure.  I acknowledge that by agreeing to arbitrate any "claims" I may have
(as defined below) I am waiving any right I may have to a jury trial on such
matters.

          The term "the Company" as used in this agreement shall include not
only Sport Chalet, Inc. but also all subsidiary and affiliated entities, all of
their benefit plans, the benefit plans' sponsors, fiduciaries, administrators,
affiliates, and all successors and assigns of any of them.


1.   CLAIMS COVERED BY THE AGREEMENT
     -------------------------------

          The Company and I mutually consent to the resolution by arbitration of
all claims or controversies ("claims"), whether or not arising out of my
employment (or its termination), that the Company may have against me or that I
may have against the Company or against its officers, directors, employees or
agents in their capacity as such or otherwise. The claims covered by this
Agreement include, but are not limited to, claims for wages or other
compensation due; claims for breach of any contract or covenant (express or
implied); tort claims; claims for discrimination or harassment (including, but
not limited to, race, sex, religion, national origin, age, marital status, or
medical condition, handicap or disability) whether in tort or in contract;
claims for benefits  (except where an employee benefit or pension plan specifies
that its claims procedure shall culminate in an arbitration procedure different
from this one), claims for wrongful discharge, failure to promote or wrongful
demotion whether or not in violation of public policy, and claims for violation
of any federal, state, or other governmental law, statute, regulation, or
ordinance, except claims excluded in the following paragraph.


2.  CLAIMS NOT COVERED BY THE AGREEMENT
    -----------------------------------

          Claims I may have for workers' compensation or unemployment
compensation benefits are not covered by this Agreement.

                                       21
<PAGE>
 
          Nothing contained herein shall preclude my pursuit before an
administrative agency of claims over which such agency has jurisdiction. In
addition, either or both of us shall be entitled to seek before a court of
competent jurisdiction any desired provisional remedies in aid of the
arbitration without being deemed to have waived their right to arbitrate their
claims.

3.  REQUIRED NOTICE OF ALL CLAIMS AND STATUTE OF LIMITATIONS
    --------------------------------------------------------

          The Company and I agree that the aggrieved party must give written,
notice of any claim to the other party within a reasonable time after the claim
arises so as to give the other party an opportunity to investigate the facts and
circumstances while the same are readily available.   In no event shall a claim
be considered if it is made after expiration of the applicable state or federal
statute of limitations.

          Written notice to the Company, or its officers, directors, employees
or agents, shall be sent to its Chairman at 920 Foothill Blvd, La Canada, CA
91011.  I will be given written notice at the last address recorded in my
personnel file.  The written notice shall identify and describe the nature of
all claims asserted and the facts upon which such claims are based. The notice
shall be sent to the other party by certified or registered mail, return receipt
requested.


4.  REPRESENTATION
    --------------

          During the Arbitration, any party may be represented by an attorney or
other representative selected by the party.


5.  DISCOVERY
    ---------

          Each party shall have the right to take the deposition of one
individual and any expert witness designated by another party.  Each party also
shall have the right to make requests for production of documents to any party.
The subpoena right specified below is in addition to the discovery allowed
pursuant to this paragraph.

          A party may make application to the Arbitrator for additional
discovery which request the Arbitrator may grant in his or her discretion.

          In no event shall the discovery permitted in the arbitration exceed
that which would be permitted under the law applicable to discovery in a
diversity case in the federal district court for the district in which the
arbitration takes place.

6.  DESIGNATION OF WITNESSES
    ------------------------

                                       22
<PAGE>
 
          At least 30 days before the arbitration, the parties must exchange
lists of witnesses, including any experts, and copies of all exhibits intended
to be used at the arbitration.

7.  SUBPOENAS
    ---------

          Each party shall have the right to subpoena witnesses and documents
for the arbitration.


8.  ARBITRATION PROCEDURES
    ----------------------

          The Company and I agree that, except as provided in this Agreement,
any arbitration shall be in accordance with the then-current Employment
Arbitration Rules of the American Arbitration Agreement ("AAA") before an
experienced neutral arbitrator who is licensed to practice law in the state in
which the arbitration is convened ("the Arbitrators"). The arbitration shall
take place in or near the city in which I am or was last employed by the
Company.  The Arbitrator shall be selected as follows.  AAA shall give each
party a list of 5 arbitrators drawn from its panel of labor and employment
arbitrators. Each party may strike all names on the list it deems unacceptable.
If only one common name remains on the lists of all parties, that individual
shall be designated as the Arbitrator. If more than one common name remains on
the lists of all parties, the parties shall strike names alternately until only
one remains. The party who did not initiate the claim shall strike first. If no
common name remains on the lists of all parties, AAA shall furnish an additional
list or lists until an Arbitrator is selected.

          The Arbitrator shall apply the substantive law (and the law of
remedies, if applicable) of the state in which the claim arose, or federal law,
or both, as applicable to the claim(s) asserted. The Federal Rules of Evidence
shall apply. The Arbitrator, and not any federal, state, or local court or
agency, shall have exclusive authority to resolve any dispute relating to the
interpretation, applicability, enforceability or formation of this Agreement,
including but not limited to any claim that all or any part of this Agreement is
void or voidable. The arbitration shall be final and binding upon the parties,
except as provided in this Agreement.

          The Arbitrator shall have jurisdiction to hear and rule on pre-hearing
disputes and is authorized to hold pre-hearing conferences by telephone or in
person as the Arbitrator deems necessary. The Arbitrator shall have the
authority to entertain a motion to dismiss and/or a motion for summary judgment
by any party and shall apply the standards governing such motions under the
Federal Rules of Civil Procedure.

          Either party, at its expense, may arrange for and pay the cost of a
court reporter to provide a stenographic record of proceedings.

          Either party, upon request at the close of hearing, shall be given
leave to file a post-hearing brief. The time for filing such a brief shall be
set by the Arbitrator.

                                       23
<PAGE>
 
          Either party may bring an action in any court of competent
jurisdiction to compel arbitration under this Agreement and to enforce an
arbitration award. Except as otherwise provided in this Agreement, both the
Company and I agree that neither of us shall initiate or prosecute any lawsuit
in any way related to any claim covered by this Agreement.

          The Arbitrator shall render an award and opinion in the form typically
rendered in labor arbitrations. The remedies and relief that the arbitrator may
award shall be as extensive and the same as those which, by reason of the nature
of the claim, might be awarded by a court of law.


9.  ARBITRATION FEES AND COSTS
    --------------------------

          The party filing the claim shall pay the filing fees established by
AAA for such party.  The Company shall pay costs of the Arbitrator.  Otherwise,
each party shall pay for its own costs and attorneys' fees, if any.  However, if
any party prevails on a statutory claim which affords the prevailing party
attorneys' fees, or if the claim is based on a written contract containing an
attorneys' fee provision, the Arbitrator may award reasonable fees to the
prevailing party.


10.  JUDICIAL REVIEW
     ---------------

          Either party may bring an action in any court of competent
jurisdiction to compel arbitration under this Agreement and to enforce an
arbitration award. A party opposing enforcement of an award may not do so in an
enforcement proceeding, but must bring a separate action in any court of
competent jurisdiction to set aside the award, where the standard of review will
be the same as that applied by an appellate court reviewing a decision of a
trial court sitting without a jury.


11.  INTERSTATE COMMERCE
     -------------------

          I understand and agree that the Company is engaged in transactions
involving interstate commerce and that my employment involves activities
affecting such commerce.


12.  REQUIREMENTS FOR MODIFICATION OR REVOCATION
     -------------------------------------------

          This Agreement to arbitrate shall survive the termination of my
employment. It can only be revoked or modified by a writing signed by the
parties which specifically states an intent to revoke or modify this Agreement.

                                       24
<PAGE>

13.   SOLE AND ENTIRE AGREEMENT
      -------------------------

This is the complete agreement of the parties on the subject of arbitration of
disputes.  This Agreement supersedes any prior or contemporaneous oral or
written understanding on the subject. No party is relying on any
representations, oral or written, on the subject of the effect, enforceability
or meaning of this Agreement, except as specifically set forth in this
Agreement.


13.     CONSTRUCTION
        ------------

          If any provision of this Agreement is adjudged to be void or otherwise
unenforceable, in whole or in part, such adjudication shall not affect the
validity of the remainder of the Agreement.  However, if it should be determined
that any material provision of this agreement is not binding on one of the
parties, the other party shall have the option of not having such provision
applied to it.


14.    CONSIDERATION
       -------------

          The mutual promises by the Company and by me to arbitrate differences,
rather than litigate them before courts or other bodies, provide consideration
for this agreement.


15.    NOT AN EMPLOYMENT AGREEMENT
       ---------------------------

          This Agreement is not, and shall not be construed to create, any
contract of employment, express or implied.  The Company and I hereby
acknowledge that either of us may elect to terminate  my employment at any time,
with or without cause, for any reason that does not violate the public policy of
the State of California.


16.    VOLUNTARY AGREEMENT
       -------------------

          I ACKNOWLEDGE THAT I HAVE CAREFULLY READ THIS AGREEMENT, THAT I
UNDERSTAND ITS TERMS, THAT ALL UNDERSTANDINGS AND AGREEMENTS BETWEEN THE COMPANY
AND ME RELATING TO THE SUBJECTS COVERED IN THE AGREEMENT ARE CONTAINED IN IT,
AND THAT I HAVE ENTERED INTO THE AGREEMENT VOLUNTARILY AND NOT IN RELIANCE ON
ANY PROMISES OR REPRESENTATIONS BY THE COMPANY OTHER THAN THOSE CONTAINED IN
THIS AGREEMENT ITSELF.

          I ACKNOWLEDGE THAT IN AGREEING TO ARBITRATE CLAIMS, I AM WAIVING ANY
RIGHT TO HAVE THESE CLAIMS DETERMINED IN A COURT OF LAW BY A JUDGE OR JURY. I
FURTHER ACKNOWLEDGE THAT I HAVE BEEN GIVEN THE OPPORTUNITY TO DISCUSS THIS
AGREEMENT WITH MY PRIVATE 

                                       25
<PAGE>
 
LEGAL COUNSEL AND HAVE AVAILED MYSELF OF THAT OPPORTUNITY TO THE EXTENT I WISH
TO DO SO.

DATE: July 22, 1998                  EMPLOYEE
 
 
 
                                     /s/ Ronald Mann
                                     -------------------------------
                                     Ronald G. Mann
 
 
 
 DATE: July 22, 1998                 SPORT CHALET, INC.
                                                                    
 
 
                                     By:  /s/ Norbert Olberz
                                         -------------------       
                                     Its:  Chairman

                                       26
<PAGE>
 
                              SPORT CHALET, INC.


                     STATEMENT OF COMPANY POLICY REGARDING

                    SECURITIES TRADES BY COMPANY PERSONNEL


THE NEED FOR A POLICY STATEMENT.
------------------------------- 

          The Securities and Exchange Commission (the "Commission") and the U.S.
Justice Department recently have been vigorously pursuing violations of insider
trading laws.  To date, their efforts have concentrated on individuals directly
involved in trading abuses.  In 1988, however, to further deter insider trading
violations, Congress expanded the authority of the Commission and the Justice
Department by adopting the Insider Trading and Securities Fraud Enforcement Act
("Act").  In addition to increasing the penalties for insider trading, the Act
puts the burden on companies and possibly other "controlling persons" for
violations by company personnel.

          Although the Act was aimed primarily at the securities industry,
lawyers recently have begun to focus on the application of the Act to companies
in other industries.  The conclusion that many are reaching is that if companies
like ours do not take steps to adopt preventative policies and procedures
covering securities trades by company personnel, the consequences could be
severe.

          In addition to responding to the Act, the Company is adopting this
Policy Statement to avoid even the appearance of improper conduct on the part of
anyone employed by or associated with our Company (not just so-called insiders).
We have all worked hard over the years to establish our reputation for integrity
and ethical conduct.  We cannot afford to have it damaged.


THE CONSEQUENCES.
---------------- 

          The consequences of insider trading violations can be staggering:
          For individuals who trade on inside information (or tip information to
          others):

          .  A civil penalty of up to three times the profit gained or loss
               avoided;

          .  A criminal fine (no matter how small the profit) of up to $1
               million; and

                                  EXHIBIT "D"

                                      27
<PAGE>
 
          .  A jail term of up to ten years.


          For a company (as well as possibly any supervisory person) that fails
to take appropriate steps to prevent illegal trading in its securities:

          .  A civil penalty of the greater of $1 million or three times the
               profit gained or loss avoided as the result of the employee's
               violation; and

          .  A criminal penalty of up to $2.5 million.


          Moreover, if an employee violates the Company's insider trading
policy, Company-imposed sanctions, including dismissal for cause, could result.
Needless to say, any of the above consequences, or even a Commission
investigation that does not result in prosecution, could tarnish one's
reputation and irreparably damage a career.


OUR  POLICY.
----------- 

          If a director, officer or any employee has material non-public
information relating to our Company, it is our policy that neither that person
nor any related person may buy or sell securities of the Company or engage in
any other action to take advantage of, or pass on to others, that information.
This policy also applies to information relating to any other company
obtained in the course of employment.

          Transactions that may be necessary or justifiable for independent
reasons (such as the need to raise money for an emergency expenditure) are no
exception.  Even the appearance of an improper transaction must be avoided in
order to preserve our reputation for adhering to the highest standards of
conduct.

          Material information.  Material information is any information that a
reasonable investor would consider important in a decision to buy, hold or sell
stock.  In short, any information which reasonably affects the price of the
stock.

          Examples.  Common examples of information that will frequently be
regarded as material are: projections of future earnings or losses; news of a
pending or proposed merger, acquisition or tender offer; news of a new hospital
contract; news of a significant sale of assets; changes in dividend policies or
the declaration of a stock split or the offering of additional securities;
changes in management; and impending bankruptcy or financial liquidity problems.
Either positive or negative information may be considered material.

                                  EXHIBIT "D"

                                      28
<PAGE>
 
          Twenty-Twenty Hindsight.  Remember, if your securities transactions
became the subject of scrutiny, they will be viewed after-the-fact with the
benefit of hindsight.  As a result, before engaging in any transaction you
should carefully consider how regulators and others might view your transaction
in hindsight.

          Transactions by Family Members.  The very same restrictions apply to
your family members and others living in your household.  Employees are expected
to be responsible for the compliance of their immediate family and personal
household.

          Tipping Information To Others.  Whether the information is proprietary
information about our Company or information that could have an impact on our
stock price, employees must not pass the information on to others.  The above
penalties apply whether or not you derive any benefit from another's actions.
In fact, the Commission has recently imposed substantial penalties on tippers
even though they did not profit from their tippees, trading.

          When Information Is Public.  As you can appreciate, it is also
improper for an officer, director or employee to enter into a trade immediately
after the Company has made a public announcement of material information.
Because the Company's shareholders and the investing public should be afforded
the time to receive the information and act upon it, as a general rule you
should not engage in any transactions until the third business day after the
information has been released. (Thus, if an announcement is made on a Monday,
Thursday generally would be the first day in which you should trade.  If an
announcement is made on Friday, Wednesday generally would be the first day.) It
may be necessary to allow additional time when more complex matters are
announced.


ADDITIONAL PROHIBITED TRANSACTIONS.
---------------------------------- 

          Because we believe it is improper and inappropriate for any Company
personnel to engage in short term or speculative transactions involving Company
stock, it is the Company's policy that directors, officers and employees should
not engage in any of the following activities with respect to securities of the
Company:

          1.  Trading in Securities on a Short Term Basis.  Any company stock
              -------------------------------------------                    
purchased on the open market must be held for a minimum of six months and
ideally longer. (The Commission's, "short swing profit" rule already prevents
officers and directors from selling any Company stock within six months of a
purchase.  We are simply expanding this rule to all employees.  However, the
rule does not apply to stock option exercises and subsequent sales of the stock
received upon exercise of the option.)

                                      29
<PAGE>
 
          2.  Purchases of company stock on margin.

          3.   Short sales.

          4.   Buying or selling put or call options.


COMPANY ASSISTANCE.
------------------ 

          Any person who has any questions about specific transactions may
obtain additional guidance from the Company's counsel, who has been assigned
responsibility for administering this Policy Statement.  Remember, however, the
ultimate responsibility for adhering to the Policy Statement and avoiding
improper transactions rests with you.  In this regard, it is imperative that you
use your best judgment.


PRECLEARANCE OF ALL TRADES BY DIRECTORS, OFFICERS AND OTHER KEY (E.G.,
----------------------------------------------------------------------
FINANCIAL, ETC.) PERSONNEL.
-------------------------- 

          To provide assistance in preventing inadvertent violations and
avoiding even the appearance of an improper transaction (which could result, for
example, where an officer, consultant or technician engages in a trade while
unaware of a pending major development), we are implementing the following
procedure:

          All transactions in company stock (acquisitions, dispositions,
transfers, etc.) by directors, officers and persons involved in an executive
officer capacity, must be precleared by Company or Counsel.  If you contemplate
a transaction you should contact one of these individuals in advance.  This
requirement does not apply to stock option exercises but would cover market
sales of option stock.


CERTIFICATIONS.
-------------- 

          Employees will be required to certify their understanding of and
intent to comply with this Policy Statement.  Officers and directors and other
key employees may be required to certify compliance on an annual basis.


Mr. Ronald G. Mann
Senior Vice President - General Merchandising Manager
920 Foothill Boulevard
La Canada, CA  91011

                                      30
<PAGE>
 
     Re:  Certification of the Company's Policy Statement on 
          Securities Trades by Company Personnel.
                     --------------------------- 

Dear Employee:

          Enclosed is the copy of the Company's Policy Statement covering
securities trades by Company personnel.  As you will see from the Statement, the
consequences of an insider trading violation can be devastating to both the
individual involved and the Company.

          Please take the time required right now to read and understand the
enclosed Policy Statement and then sign and return the attached copy of this
letter to me.


                              Sincerely,


                              /s/ Norbert Olberz
                              ----------------------

                              Norbert Olberz


                                 CERTIFICATION
                                 -------------


     The undersigned hereby certifies that he/she has read and understands, and
agrees to comply with, the Sport Chalet, Inc. Statement of Company Policy
Regarding Securities Trades by Company Personnel, a copy of which was
distributed with this letter.


Date: 7/22/98                                      /s/ Ronald Mann
      ----------------------                       -------------------------
                                                   Signature: Ronald G. Mann

                                      31