LeMond Cycling, Inc. v. Trek Bicycle Corporation

Filing 139

Attachment 11
DECLARATION of Emily S. Zastrow in Opposition to 117 Memorandum in Support of Motion, 114 MOTION for Summary Judgment filed by Trek Bicycle Corporation. (Attachments: # 1 Placeholder for Exhibits 45,55-57,61,66,70,74, # 2 Placeholder for Exhibits 46-47, # 3 Exhibit 46, # 4 Exhibit 47, # 5 Exhibit 48, # 6 Exhibit 49, # 7 Exhibit 51, # 8 Exhibit 51, # 9 Exhibit 52, # 10 Exhibit 53, # 11 Exhibit 54, # 12 Exhibit 58, # 13 Exhibit 59, # 14 Exhibit 60, # 15 Exhibit 62, # 16 Exhibit 63, # 17 Exhibit 64, # 18 Exhibit 65, # 19 Exhibit 67, # 20 Exhibit 68, # 21 Exhibit 69, # 22 Exhibit 71, # 23 Exhibit 72, # 24 Exhibit 73, # 25 Exhibit 75, # 26 Exhibit 76)(Rolf, Benjamin) SEALED DOCUMENTS RECEIVED IN CLERKS OFFICE on 8/5/2009 (lph). Modified attachment text on 8/6/2009 (RLR).

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LeMond Cycling, Inc. v. Trek Bicycle Corporation Doc. 139 Att. 11 Case 0:08-cv-01010-RHK-JSM Document 139-12 Filed 08/05/09 Page 1 of 5 ZASTROW EXHIBIT 58 Dockets.Justia.com Case 0:08-cv-01010-RHK-JSM Document 139-12 Filed 08/05/09 Page 2 of 5 :P t/ tV'! .7 . Tru:K'~USA _K BICYCLE CORPORATION 801 W. Madison St.. PO Box 183, Waterloo, WI 53594 FAX TRANSMITTAL To: From: Date: 1. Greg John Lemond Burke 17, January 1995 am sorry that I did not have an opportunity to speak with you when Warren Gibson called me a couple of weeks ago. I was in an important meeting with a number of people. I and selling a Greg Lemond line both in the United States market and overseas. of In would be interested in the following plan: general, we A. Develop 3-4 road bike models. B. Sell these models through our Gary Fisher sales force. 2. We have an interest in developing road bikes Fisher only has ATB's, and a Greg Lemond line of road bikes would be perfect. C. We would want you to be involved in the design process as much as you would want to be. D. We would want you to be involved in promoting the product. 3. we We would also be interested in other Lemond products; however, don't I know what arrangements you have with other companies. 4. would appreciate it if you çould give me a call at (800) 3138735, Ext. 2254. (\) \J{f'J \lrd-eres.{ ~CÝ ( Best regards, c.?) ßo.oWJ2..1Cv,t\'í' ~e,S;Sl;\ Lv I J4.-pAA-e, s~ ;J; L~) c-- iiJte > \'6 \\e\ '^^-t,.\ V\/A,L- John Burke Vice President Sales & Marketing G) (5) [G/' \Sf' \ CA,.V'\ S~é,^~ I/\J e{' ~ Telephone (4 478-2191 Fax 414-478-2774 TREK000660 Case 0:08-cv-01010-RHK-JSM Document 139-12 Filed 08/05/09 Page 3 of 5 TIU:K@uSA TREK BICYCLE CORPORATION 801 W Madison St, PO Box 183, Waterloo, WI 53594 To: From: Date: Subject: I Greg Lemond John Burke February 20, 1995 Potential For Lemond In The Future am sorry that I have not gotten back to you sooner, very busy. it has been Based on our phone conversations and a number of factors at Trek and Fisher, I see that Lemond would be set up in the following way: A. Product To begin with, Lemond would be positioned as road bikes. For Model Year '96, we would have three to four models in the 1. line. Price points of the models would be $700-$2,000. For 1996, the bikes would have to be made out of welded 3. steel. We have been working on this project for either Trek or Fisher and we have some great designs. The current plan is to use aluminum forks for the two lower end models and carbon forks for the upper end models. We would also be interested in looking at the potential of 4. 2. Lemond B. accessories. Sales and Marketing 1. it's own Lemond would be positioned as a separate brand: and support. catalog, advertising, Lemond would be sold through the Fisher Sales Force in the 2. United States. There are 16 salesmen who work exclusively for Fisher. We currently have 600 dealers in the U.S. By the end of '96 should be up to 24 reps and 850 dealers. we International sales would be through our Fisher distributors. We have our own offices in Germany, Austria, and Switzerland that In addition, we have our own office in the sell both Trek and Fisher. Benelux that would do well with the product. We also have Fisher 15 additional countries. Distributors in around The bad news is that the road bike market has declined 4. significantly in the last five years. I know this well because in the largest market share. U.S. market, Trek has the 3. Telephone (414) 478-2191 Fax 414-478-2774 TREK000650 Case 0:08-cv-01010-RHK-JSM Document 139-12 Filed 08/05/09 Page 4 of 5 5. My projection of Lemond road bikes would be the following: Model Road Road Road Road Grand C. 1 2 3 4 Retail Dlr Price $800 $1000 $1400 $2000 Total $520 $650 $910 $1300 Volume 2,000 2,000 1,200 Sales $1,040,000 $1,300,000 $1,092,000 $390,000 $3,822,000 300 5,500 Your Involvement: Help in the design of the products. 1. We have a great engineering staff. You would give your input, and review all of the designs, and help to make component selection for the models. Help promote the product line by working some of the trade 2. shows, appearing at sales meetings, doing a couple of rides, and visiting some key customers and doing some clinics. I would see a minimum of meetings, depends 6 days at various trade shows, 3-4 rides per year, and 3-4 clinics 3 days at various sales A lot of this per year. on how much you want to get involved. Being available for Catalog shoots. 3. Why This Would Be Successful: 1. We can offer a great product at a great value. We build great bikes in our own factory so that we can control engineering and design. We have the buying power of Trek (Trek is Shimano's largest D. which can lead to great value. Lemond is an incredible brand name. The combination of 2. Trek and Lemond would re-launch the Lemond brand name in the Sales people will be excited, dealers will be excited, and the market. end consumer will be excited. Sales and Service. In the U.S. market we have 16 reps who 3. employees of Fisher and do a great job. Their full attention are be paid to selling Fisher and Lemond. would It is not like dealing with independent reps. Fisher also provides the best service in the Fisher dealers love doing business with Fisher and they industry. will view Lemond as a great opportunity. We have the financial resources to put the cart before the 4. horse and promote the brand strongly. 5. It makes great sense. Gary Fisher for mountain bikes and Greg Lemond for road bikes. Use our leverage in a lot of other ways: 3 warehouses, the 6. ability to give long terms to encourage large commitments, etc, etc. customer worldwide) TREK000651 Case 0:08-cv-01010-RHK-JSM Document 139-12 Filed 08/05/09 Page 5 of 5 How would this deal work financially? This is not an offer, it is a proposal. 1. You would get a royalty of 3% on all bike sales, 5% on parts At first year's sales projection of $3.822 million, this would sales. earn you $114,660 on bike sales. All of your travel and entertainment expenses relating 2. Lemond events would be paid for. E. Why this might make sense for you. It is 1. It is difficult to make money in the bike business. extremely difficult to make money if you are a small frame maker. Name one person who has ever made good money with a small bike F. Financially, this package would allow you to make a 3% Even though the road market is royalty on bikes and 5% on parts. weak, the royalty portion could amount to $75,000 to $150,000 per We would guarantee the minimum $75,000 in royalties. year. You would be working with a very well-respected company. 3. We have a lot of good people to work with. 2. company. As I stated above, this is a proposal. I first need to find out if you We are also looking at a are interested before we get into the details. couple of other opportunities right now and that might have some As we discussed on the phone, there is some sense of impact. urgency based on 1996 timelines, so the sooner I hear from you, the I will be in the office Tuesday, February 21, until 2:00 better. p.m., after which I will be leaving for Alabama on a golf trip. If I don't I would love to talk to you sometime hear from you tommorrow, Please call Cindy, my assistant, at Extension 2491, during the week. with a good time to reach you, preferably early morning or evening. Best regards, j'ok ~L<f<k-c John Burke TREK000652

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