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TABLE OF CONTENTS
TABLE OF CONTENTS—ANNEX A

As filed with the Securities and Exchange Commission on May 23, 2003

Registration No. 333-104321



SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549


AMENDMENT NO. 1
TO
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933


GART SPORTS COMPANY
(Exact Name of Registrant as Specified in Its Charter)

Delaware
(State or Other Jurisdiction of Incorporation or Organization)
  5941
(Primary Standard Industrial Classification Code Number)
  84-1242802
(I.R.S. Employer Identification Number)

1050 W. Hampden Avenue
Englewood, Colorado 80110
(303) 200-5050
(Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant's Principal Executive Offices)

Nesa E. Hassanein
Senior Vice President and General Counsel
Gart Sports Company
1050 W. Hampden Avenue
Englewood, Colorado 80110
(303) 200-5050
(Name, Address, Including Zip Code, and Telephone Number, Including Area Code, of Agent For Service)

with copies to:

Brian Hoffmann
Richard D. Pritz
Clifford Chance US LLP
200 Park Avenue
New York, New York 10166
(212) 878-8000
  John S. Fletcher
Morgan, Lewis & Bockius LLP
5300 Wachovia Financial Center
200 South Biscayne Boulevard
Miami, Florida 33131
(305) 415-3300

Approximate date of commencement of proposed sale to the public:
Upon the completion of the merger described herein.

        If the securities being registered on this form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box.    o

        If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

        If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o


        The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until this registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.




GRAPHIC   GRAPHIC

                        , 2003

Dear Fellow Stockholders:

        We are pleased to inform you that Gart Sports Company and The Sports Authority, Inc. have entered into a merger agreement providing for a "merger of equals" that we believe will create the nation's preeminent sporting goods retailer.

        In the merger, The Sports Authority's stockholders will receive 0.37 of a share of Gart common stock for each share of The Sports Authority common stock that they own. Based on the number of shares of The Sports Authority's common stock outstanding on [March 31], 2003, [12,215,011] shares of Gart common stock will be issued in the merger. The number of shares of Gart common stock held by current Gart stockholders will not change as a result of the merger. Stockholders of Gart and The Sports Authority will each own approximately 50% of the combined company. Following the merger, the combined company's board of directors will consist of nine members, four designated by each of Gart and The Sports Authority from their current boards and one new director, currently unaffiliated with either company. The transaction is structured to be tax free to the stockholders of The Sports Authority and is expected to close in the second or early third calendar quarter of 2003.

        If the merger is completed, the combined company will be named The Sports Authority, Inc. Gart common stock is currently traded on the Nasdaq National Market under the symbol "GRTS." Gart has been cleared to apply to have the shares of the combined company listed on the New York Stock Exchange under the symbol "TSA." As of the effective time of the merger, Gart intends to list the shares of the combined company on the New York Stock Exchange and to delist Gart common stock from the Nasdaq National Market.

        After careful consideration, the boards of directors of each of Gart and The Sports Authority have determined that the merger and the transactions associated with it are fair to, and in the best interests of, their respective companies and stockholders. The boards of directors of each of Gart and The Sports Authority have unanimously approved the merger, and unanimously recommend that their stockholders vote "FOR" the proposals relating to the merger.

        Meetings of the stockholders of Gart and The Sports Authority are scheduled to be held on                        , 2003. We cannot complete the merger without the approval of the holders of a majority of the outstanding shares of each of Gart and The Sports Authority.

        Your vote is very important. Please promptly complete, date, sign and return the enclosed proxy card in the enclosed prepaid envelope to ensure that your shares will be represented at your stockholders meeting. If you do not vote, it will, in effect, be counted as a vote against the merger. Please review carefully the entire joint proxy statement/prospectus. In particular, you should consider the matters discussed under the section entitled "Risk Factors," commencing on page 16 of the joint proxy statement/prospectus before voting.

        We look forward to the successful combination of Gart and The Sports Authority and to your continued support as a stockholder of the combined company.

        On behalf of the boards of directors of Gart and The Sports Authority, we urge you to vote "FOR" the approval of the proposals relating to the merger.


Graphic

 

Graphic

John Douglas Morton
Chairman of the Board, President
and Chief Executive Officer
Gart Sports Company

 

Martin E. Hanaka
Chairman of the Board and
Chief Executive Officer
The Sports Authority, Inc.

Your vote is important.

Please complete, sign, date and return your proxy.

        Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this joint proxy statement/prospectus. Any representation to the contrary is a criminal offense.

        This joint proxy statement/prospectus is dated            , 2003 and was first mailed to stockholders on or about            , 2003.


GRAPHIC

Notice of 2003 Annual Meeting of Stockholders

        We will hold an annual meeting of stockholders of Gart Sports Company at Gart's executive offices, located at 1050 W. Hampden Avenue, Englewood, Colorado 80110 at     , local time, on            , 2003, to consider and vote upon the following:

        The accompanying joint proxy statement/prospectus describes the proposed merger, the issuance of shares of Gart common stock, the amendment to Gart's certificate of incorporation, the Gart Sports Company 2003 Long-Term Incentive Compensation Plan, the Gart Sports Company 2003 Performance Bonus Plan and the other proposals in more detail. We encourage you to read the entire document carefully.

        We have fixed the close of business on May 23, 2003 as the record date for the determination of our stockholders entitled to vote at the annual meeting.

        Whether or not you expect to attend the annual meeting, to assure that your shares are represented at the annual meeting, please complete, date, sign and return the enclosed proxy card in the envelope that has been provided. No postage is required for mailing in the United States. If you are able to attend the meeting, you may revoke your proxy and vote your shares in person even if you have previously completed and returned the enclosed proxy card. Thank you for acting promptly.


 

 

By Order of the Board of Directors of
Gart Sports Company,

 

 

Graphic

Nesa E. Hassanein
Secretary

Englewood, Colorado

 

 

            , 2003

 

 

GRAPHIC

Notice of Special Meeting of Stockholders

        We will hold a special meeting of stockholders of The Sports Authority, Inc. at The Sports Authority's corporate offices located at 3383 North State Road 7, Fort Lauderdale, Florida 33319 at    , local time, on            , 2003, to consider and vote upon the following:

        The accompanying joint proxy statement/prospectus describes the proposed merger in more detail. We encourage you to read the entire document carefully.

        We have fixed the close of business on May 23, 2003 as the record date for the determination of our stockholders entitled to vote at the special meeting.

        Whether or not you expect to attend the special meeting, to assure that your shares are represented at the special meeting, please complete, date, sign and return the enclosed proxy card in the envelope that has been provided or vote your shares by using a touch-tone telephone or through the Internet, as explained on the proxy card. No postage is required for mailing in the United States. Voting by mail, by telephone or through the Internet will not prevent you from voting in person at the meeting. If you are able to attend the meeting, you may revoke your proxy and vote your shares in person even if you have previously completed and returned the enclosed proxy card or voted by telephone or through the Internet. Thank you for acting promptly.


 

 

By Order of the Board of Directors of
The Sports Authority, Inc.

 

 

Graphic

Frank W. Bubb
Secretary

Fort Lauderdale, Florida

 

 

            , 2003

 

 

TABLE OF CONTENTS

 
Sources of Additional Information
Questions and Answers
Summary
  The Companies
  What You Will Receive in the Merger
  Ownership of Gart After the Merger
  Board Recommendations
  Opinions of Financial Advisors
  Vote Required for Approval of the Merger; Record Date for Voting
  Stockholder's Agreement
  Executive Officers and Directors to Vote in Favor of the Merger Proposals
  Conditions to the Completion of the Merger
  Termination of the Merger Agreement
  Termination Fees
  Directors and Executive Officers of the Combined Company Following the Merger
  Material Federal Income Tax Consequences of the Merger
  Regulatory Filings and Approvals
  Interests of Certain Persons in the Merger
  No Dissenters' or Appraisal Rights
  Trading of Gart Common Stock
  Risk Factors
  Gart Selected Consolidated Financial Data
  The Sports Authority Selected Consolidated Financial Data
  Selected Unaudited Pro Forma Combined Financial Data
  Comparative Per Share Data
  Comparative Per Share Market Price Data
Risk Factors
  Risks Related to the Merger
  Risks Related to Gart and The Sports Authority
Cautionary Statement Concerning Forward-Looking Statements
The Merger and Related Transactions
  Background of the Merger
  Recommendation of Gart's Board of Directors
  Gart's Reasons for the Merger
  Recommendation of The Sports Authority's Board of Directors
  The Sports Authority's Reasons for the Merger
  Opinion of Gart's Financial Advisor
  Opinion of The Sports Authority's Financial Advisor
  Interests of Certain Persons in the Merger
  Financing of the Combined Company Following the Merger
  Completion and Effectiveness of the Merger
  Material Federal Income Tax Consequences of the Merger
  Accounting Treatment of the Merger
  Regulatory Filings and Approvals Required to Complete the Merger
  Restrictions on Sales of Shares by Affiliates of The Sports Authority
  Listing of Gart Common Stock to be Issued in the Merger
  Delisting and Deregistration of The Sports Authority Common Stock After the Merger
 

i


  No Dissenter's or Appraisal Rights
  Additional Financial Information
The Merger Agreement
  The Merger
  Conversion of The Sports Authority's Shares in the Merger
  Adjustment to Exchange Ratio
  Exchange of Certificates
  Corporate Organization and Governance
  Representations and Warranties
  Covenants
  Treatment of The Sports Authority's Stock Options
  The Sports Authority's Employee Benefit Plans and Agreements
  Conditions to the Completion of the Merger
  Termination of the Merger Agreement
  Termination Fee and Expenses
  Extension, Waiver and Amendment of the Merger Agreement
Related Agreements
  Stockholder's Agreement Between The Sports Authority and Leonard Green
  The Sports Authority Rights Agreement
  Gart Employment Agreements
Market Price and Dividend Information
  Market Price Information
  Dividend Information
  Repurchase of Stock
Unaudited Pro Forma Combined Condensed Financial Statements
Description of Gart Capital Stock
  General
  Common Stock
  Preferred Stock
  Registration Rights of Stockholders
Comparison of Rights of Stockholders and Governance Matters
The Annual Meeting of Gart's Stockholders
  General
  Purpose of the Meeting
  Record Date and Outstanding Shares
  Quorum and Vote Required
  How Shares Will Be Voted at the Annual Meeting
  How to Revoke a Proxy
  Solicitation of Proxies
  Communications by Gart's Stockholders with Gart
  Recommendation of Gart's Board of Directors
Additional Annual Meeting Matters for Gart
  Election of Directors of Gart
    General
    Voting
    Nominees
    The Sports Authority Nominees to Gart's Board of Directors Following the Merger
 

ii


  Information About Gart's Board of Directors and its Committees
    Committees and Meetings of the Board of Directors
    Audit Committee
    Compensation Committee
    Nominating Committees
    Compensation of Directors
    Compensation Committee Interlocks and Insider Participation
  Executive Officers of Gart
  Compensation of Gart's Executive Officers
    Option Grants in the Last Fiscal Year
    Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Option Values
    Securities Authorized for Issuance Under Equity Compensation Plans
    Report of the Compensation Committee
    Compensation and Severance Agreements and Plans
  Report of the Audit Committee of Gart's Board of Directors
  Gart's Relationship with Independent Auditors
    Audit Fees
    Financial Information Systems Design and Implementation
    All Other Fees
    Independent Auditors for the Combined Company
  Performance Graph of Gart
  Section 16(a) Beneficial Ownership Reporting Compliance of Gart
  Certain Relationships and Related Transactions Relating to Gart
  Adoption of the Gart Sports Company 2003 Long-Term Incentive Compensation Plan
    General
    Purpose
    Voting
  Description of the Gart Sports Company 2003 Long-Term Incentive Compensation Plan
    Administration
    Eligibility and Types of Awards
    Available Shares
    Awards Under the Plan
    Change in Control
    Amendment and Termination
    Material U.S. Federal Income Tax Consequences
  Adoption of the Gart Sports Company 2003 Performance Bonus Plan
    General
    Purpose
    Voting
  Description of the Gart Sports Company 2003 Performance Bonus Plan
    Authority to Establish Performance Goals and Bonuses
    Review of Payment of Bonuses
    Administration
    No Rights to Continued Employment
    Amendments
    Termination
  Submission of Proposals by Gart's Stockholders
  Other Matters Presented at the Annual Meeting of Gart's Stockholders
 

iii


The Special Meeting of The Sports Authority's Stockholders
  General
  Purpose of the Meeting
  Record Date and Outstanding Shares
  Quorum and Vote Required
  How Shares Will Be Voted at the Special Meeting
  How to Revoke a Proxy
  Solicitation of Proxies
  Communications by The Sports Authority's Stockholders with The Sports Authority
  Recommendation of The Sports Authority's Board of Directors
  Dissenter's or Appraisal Rights
Security Ownership of Certain Beneficial Owners and Management of Gart
  Options; Restricted Shares; Purchased Shares
Security Ownership of Certain Beneficial Owners and Management of The Sports Authority
Legal Opinion
Tax Opinions
Experts
Where You Can Find More Information

Annex A—Agreement and Plan of Merger
Annex B—Stockholder's Agreement
Annex C—Opinion of Gart's Financial Advisor, Banc of America Securities LLC
Annex D—Opinion of The Sports Authority's Financial Advisor, Credit Suisse First Boston LLC
Annex E—Audit Committee Charter
Annex F—Gart Sports Company 2003 Long-Term Incentive Compensation Plan
Annex G—Gart Sports Company 2003 Performance Bonus Plan

iv



Sources of Additional Information

        This joint proxy statement/prospectus incorporates important business and financial information about Gart and The Sports Authority from documents that are not included in or delivered with this joint proxy statement/prospectus. This information is available to you without charge upon your written or oral request. You can obtain documents incorporated by reference in this joint proxy statement/prospectus by requesting them in writing or by telephone from the appropriate company at the following addresses and telephone numbers:

Gart Sports Company
1050 W. Hampden Avenue
Englewood, Colorado 80110
(303) 863-2293
Attn: Investor Relations
  The Sports Authority, Inc.
3383 North State Road 7
Fort Lauderdale, Florida 33319
(945) 735-1701
Attn: Investor Relations

        If you would like to request documents, please do so by                        , 2003 in order to receive them before your stockholders meeting.

        For a more detailed description of the information incorporated by reference into this joint proxy statement/prospectus and how you may obtain it, see the section entitled "Where You Can Find More Information," commencing on page 127 of this joint proxy statement/prospectus.



Questions and Answers

Q:
Why are the companies proposing to merge?

A:
We are proposing to merge because we believe that the combined company will be a stronger, more competitive company capable of achieving greater financial strength, earnings power and operational efficiencies due to greater economies of scale, improved purchasing ability and an expanded distribution network, sourcing capabilities, product expertise and growth potential. These synergies will enable the combined company to be a stronger, more efficient competitor, better able to serve customers by providing them with a broader selection of sporting goods at competitive prices. We also believe that the complementary geographical presence of our two companies will result in the combined company being the first truly national sporting goods retailer with a presence in many markets in the United States.
Q:
What do I need to do now?

A:
First, please carefully read this joint proxy statement/prospectus. Then, whether or not you expect to attend your stockholders meeting, please mail your completed and signed proxy card in the enclosed return envelope as soon as possible so that your shares may be represented at your stockholders meeting. Your proxy card must be received no later than            local time, on                        , 2003 in order for your shares to be voted at your stockholders meeting, unless you attend and vote at your stockholders meeting. The Sports Authority's stockholders may also vote their shares using a touch-tone telephone or through the Internet. Gart's stockholders may not vote their shares by telephone or through the Internet. If you are able to attend your stockholders meeting, you may revoke your proxy and vote your shares in person even if you have previously completed and returned the proxy card or voted by telephone or through the Internet. If you do not include instructions on how to vote your properly completed, signed and returned proxy card, your shares will be voted "FOR" approval of each of the proposals on the proxy card. For more information about how your shares will be voted at the special meeting of The Sports Authority and the annual meeting of Gart, as applicable, please see the sections entitled "The Annual Meeting of Gart's Stockholders" and "The Special Meeting of The Sports Authority's Stockholders," as applicable, commencing on pages 92 and 119 of this joint proxy statement/prospectus, respectively.

Q:
How can The Sports Authority's stockholders vote by telephone or through the Internet?

A:
You can vote with a touch-tone telephone by calling 1-800-PROXIES and following the instructions. You can vote through the Internet by accessing www.voteproxy.com and following the on-screen instructions. In either case, have your control number available. Your control number is printed on your proxy card.

Q:
How can The Sports Authority's stockholders vote their 401(k) Plan and Employee Stock Purchase Plan Shares?

A:
If you participate in The Sports Authority's 401(k) Savings and Profit Sharing Plan, you may vote The Sports Authority common stock allocated to your account (including unvested shares) as of the record date, which is May 23. You may vote by instructing CIGNA Bank and Trust Company, the trustee of this plan, to vote in accordance with the instructions for stockholders of record under "What do I need to do now?" above. If you do not give instructions, The Sports Authority

2


Q:
If my shares are held in "street name" by my broker, will my broker vote my shares for me?

A:
Gart stockholders:
A:
The Sports Authority stockholders:
Q:
What happens if I do not vote?

A:
Gart stockholders:
A:
The Sports Authority stockholders:
Q:
What do I do if I want to change my vote?

A:
If you want to change your vote, send the secretary of your company written notice of revocation or a later-dated, signed proxy card before your stockholders meeting, or attend the meeting and vote in person.
Q:
Should I send in my stock certificates now?

A:
Gart stockholders:
A:
The Sports Authority stockholders:
Q:
What do I do if I have questions?

A:
Gart stockholders:
A:
The Sports Authority stockholders:

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Summary

        This summary highlights selected information from this joint proxy statement/prospectus and may not contain all of the information that is important to you. You should read carefully this entire joint proxy statement/prospectus and the other documents referred to in this document for a more complete understanding of the merger. For a guide as to where you can obtain more information about Gart and The Sports Authority, see the section entitled "Where You Can Find More Information," commencing on page 127 of this joint proxy statement/prospectus.


The Companies

GART SPORTS COMPANY
1050 West Hampden Avenue
Englewood, Colorado 80110
(303) 200-5050
www.gartsports.com

        Gart, headquartered in Englewood, Colorado, is the largest publicly held full-line sporting goods retailer in the Western United States. Gart's business strategy is to provide its customers with an extensive selection of high-quality, brand name merchandise at competitive prices with a high level of customer service. Gart operated 181 stores in 25 states as of February 1, 2003 under the Gart Sports, Sportmart and Oshman's names. Gart's business was established in 1928 and it was incorporated in Delaware in 1993. Gart operates through its wholly-owned subsidiaries, Gart Bros. Sporting Goods Company, Sportmart, Inc. and Oshman's Sporting Goods, Inc. Gart's retail websites, located at www.gartsports.com, www.sportmart.com and www.oshmans.com, are operated by GSI Commerce Solutions, Inc. under a license and e-commerce agreement.

THE SPORTS AUTHORITY, INC.
3383 North State Road 7
Fort Lauderdale, Florida 33319
(954) 735-1701
www.thesportsauthority.com

        The Sports Authority is the largest full-line sporting goods retailer in the United States. The Sports Authority's strategy is to offer its customers extensive selections of competitively priced, quality, brand name sporting goods, including athletic footwear and apparel, with a focus on customer service through multiple channels, and to establish clear leadership in existing markets through focused growth. At February 1, 2003, The Sports Authority operated 205 stores in 33 states. An additional 39 "The Sports Authority" stores are operated in Japan by Mega Sports Co., Ltd. under a license agreement. Mega Sports is a joint venture between The Sports Authority and AEON Co., Ltd., a major Japanese retailer that owns 9.2% of The Sports Authority's outstanding common stock. The Sports Authority owns 19.9% of Mega Sports and AEON owns the remaining 80.1%. The Sports Authority's retail website, located at www.thesportsauthority.com, offers an internet based shopping alternative augmenting The Sports Authority's store presence and is operated by GSI Commerce Solutions, Inc. under a license and e-commerce agreement.


What you Will Receive in the Merger (Page 59)

Gart stockholders:

        After the merger, each currently outstanding share of Gart common stock will remain outstanding.

The Sports Authority stockholders:

        In the merger, each share of The Sports Authority common stock will be exchanged for 0.37 of a share of Gart common stock. Cash will be paid in lieu of fractional shares.

4




Ownership of Gart After the Merger (Page 59)

        Following the consummation of the merger, the current stockholders and optionholders of Gart and The Sports Authority will each own approximately 50% of the then outstanding shares of Gart common stock on a fully diluted basis.


Board Recommendations (Pages 30, 32)

Gart stockholders:

        Gart's board of directors believes that the merger is in your best interests and unanimously recommends that Gart's stockholders vote "FOR" approval of the issuance of shares of Gart common stock in the merger and the amendment to Gart's certificate of incorporation. Gart's board of directors also unanimously recommends that Gart's stockholders vote "FOR" the election of the seven nominees for Gart's board of directors listed in this joint proxy statement/prospectus and the adoption of the long-term incentive compensation plan and the performance bonus plan.

The Sports Authority stockholders:

        The Sports Authority's board of directors believes that the merger is in your best interests and unanimously recommends that The Sports Authority's stockholders vote "FOR" the adoption of the merger agreement and the approval of the merger.


Opinions of Financial Advisors (Pages 34, 41)

        In connection with the merger, Banc of America Securities LLC delivered a written opinion to Gart's board of directors to the effect that, as of the date of the opinion and based upon and subject to the assumptions and limitations set forth therein, the exchange ratio in the proposed merger was fair, from a financial point of view, to Gart. The full text of Banc of America Securities' written opinion is attached to this document as Annex C. We encourage you to read this opinion carefully in its entirety for a description of the procedures followed, the assumptions made, the matters considered and the limitations on the review undertaken in providing the opinion. Banc of America Securities' opinion is addressed to Gart's board of directors, and does not constitute a recommendation to any stockholder as to how to vote with respect to any matter relating to the merger.

        In connection with the merger, Credit Suisse First Boston LLC delivered a written opinion to The Sports Authority's board of directors to the effect that, as of the date of the opinion and based upon and subject to the matters stated in the opinion, the exchange ratio provided for in the merger was fair, from a financial point of view, to the holders of The Sports Authority common stock. The full text of Credit Suisse First Boston's written opinion is attached to this document as Annex D. We encourage you to read this opinion carefully in its entirety for a description of the procedures followed, the assumptions made, the matters considered and the limitations on the review undertaken in providing the opinion. Credit Suisse First Boston's opinion is addressed to The Sports Authority's board of directors and does not constitute a recommendation to any stockholder with respect to any matter relating to the merger.


Vote Required for Approval of the Merger; Record Date for Voting (Pages 92, 119)

Gart stockholders:

        The holders of a majority of the shares of Gart common stock present in person or represented by proxy at Gart's annual meeting must approve the issuance of Gart common stock in the merger and the holders of a majority of the outstanding shares of Gart common stock entitled to vote at Gart's annual meeting, whether or not present at the meeting, must approve the amendment to Gart's certificate of incorporation. Gart's stockholders are entitled to cast one vote per share of common stock owned by them as of Gart's record date which is May 23, 2003. Based on the number of shares of

5



Gart common stock outstanding on [March 31,] 2003, Gart's directors and executive officers and their affiliates, as a group, beneficially owned an aggregate of [527,792] shares of Gart common stock (excluding shares subject to options and 3,113,200 shares held by Green Equity Investors, L.P.), which would represent approximately [4.4]% of all outstanding shares of Gart common stock entitled to vote at Gart's annual meeting.

The Sports Authority stockholders:

        The holders of a majority of the outstanding shares of The Sports Authority common stock entitled to vote at The Sports Authority's special meeting, whether or not present at the meeting, must adopt the merger agreement. The Sports Authority's stockholders are entitled to cast one vote per share of common stock owned by them as of The Sports Authority's record date, which is May 23, 2003. Based on the number of shares of The Sports Authority common stock outstanding as of [March 31], 2003, The Sports Authority's directors and executive officers and their affiliates, as a group, beneficially owned an aggregate of [929,662] shares of The Sports Authority common stock (excluding shares subject to options and deferred shares), which would represent approximately [2.8]% of all outstanding shares of The Sports Authority common stock entitled to vote at The Sports Authority's special meeting.


Stockholder's Agreement (Page 69)

        Green Equity Investors, L.P., which holds approximately 26% of the outstanding shares of Gart common stock, has agreed to vote all of its shares in favor of, among other things, the issuance of Gart common stock in the merger and the amendment to Gart's certificate of incorporation. We often refer to Green Equity Investors, L.P., a private equity investment fund, and its affiliates as Leonard Green in this joint proxy statement/prospectus.


Executive Officers and Directors to Vote in Favor of the Merger Proposals (Pages 93, 120)

        The executive officers and directors of Gart have advised that they intend to vote their shares in favor of the proposals to issue Gart common stock in the merger and amend Gart's certificate of incorporation effective upon consummation of the merger.

        The executive officers and directors of The Sports Authority have advised that they intend to vote their shares in favor of the proposal to adopt the merger agreement and approve the merger.


Conditions to the Completion of the Merger (Page 65)

        Gart and The Sports Authority will complete the merger only if a number of conditions are satisfied or waived, including, but not limited to, the following:

6



Termination of the Merger Agreement (Page 66)

        Gart and The Sports Authority mutually may agree to terminate the merger agreement at any time. In addition, either party may terminate the merger agreement if:


Termination Fees (Page 67)

        In circumstances set forth in the merger agreement, Gart or The Sports Authority may become obligated to pay a $7.4 million termination fee upon the termination of the merger agreement. Additionally, in other circumstances set forth in the merger agreement, Gart or The Sports Authority may become obligated to reimburse the other for up to a maximum of $3.7 million of out-of-pocket fees and expenses of the other party upon the termination of the merger agreement.


Directors and Executive Officers of the Combined Company Following the Merger (Page 61)

        Following the merger, the combined company's board of directors will consist of nine directors, composed of four designees of Gart from its current board of directors and four designees of The Sports Authority from its current board of directors. The reconstituted board will appoint a ninth member who is not currently affiliated with either company.

        Following the merger, Martin E. Hanaka, the current chairman and chief executive officer of The Sports Authority, will serve as chairman of the combined company; Doug Morton, the current chairman, president and chief executive officer of Gart, will become the combined company's vice chairman and chief executive officer; Elliott Kerbis, the current president and chief merchandising officer of The Sports Authority, will become president and chief merchandising officer of the combined company; and Thomas Hendrickson, executive vice president, chief financial officer and treasurer of Gart, will become non-director vice chairman, chief administrative officer, chief financial officer and treasurer of the combined company.

        The rest of the management team of the combined company will consist of executives of both Gart and The Sports Authority.


Material Federal Income Tax Consequences of the Merger (Page 53)

        Gart and The Sports Authority will each receive opinions of counsel to the effect that the exchange of shares of The Sports Authority common stock for shares of Gart common stock will not cause holders of The Sports Authority common stock to recognize gain or loss for U.S. federal income tax purposes (except for gain or loss recognized because of cash received in lieu of fractional shares). It is a condition to each company's obligation to complete the merger that they receive these opinions of counsel. The condition relating to the tax opinions will not be waived after receipt of stockholder

7



approval unless further stockholder approval is obtained with appropriate disclosure. Holders of Gart common stock will not recognize gain or loss as a result of the merger.

        Tax matters are very complicated and holders of The Sports Authority common stock are strongly urged to consult their tax advisors as to the specific tax consequences to them of the merger, including the applicability and effect of federal, state, local, foreign and other applicable tax laws that relate to their particular circumstances.


Regulatory Filings and Approvals (Page 55)

        The completion of the merger is subject to the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. Gart and The Sports Authority both made the required filings with the Department of Justice and the Federal Trade Commission on March 3, 2003 and the waiting period expired on April 2, 2003.


Interests of Certain Persons in the Merger (Page 46)

        When considering the recommendation of Gart's and The Sports Authority's boards of directors, you should be aware that directors, officers and stockholders of Gart and The Sports Authority have interests in the merger that are different from, or in addition to, yours. Two of Gart's current directors are partners in Leonard Green, which will be paid $4.25 million by Gart upon the completion of the merger in accordance with the terms of a management agreement that Gart entered into with that partnership in 1998. The Sports Authority's and Gart's executive officers have executed or will execute employment agreements with Gart, which will become effective upon completion of the merger. Some of The Sports Authority's directors, officers and employees who hold stock options and/or shares of restricted stock pursuant to existing plans will, in accordance with the provisions of those existing plans, receive benefits upon completion of the merger, including accelerated vesting of those stock options and/or shares of restricted stock. The Sports Authority's executive officers will receive severance payments after the merger is consummated, even if their employment is not terminated after the merger. The Sports Authority's directors and officers will also receive indemnification and liability insurance benefits from Gart pursuant to the merger agreement. Executive officers of Gart that are party to severance agreements with Gart will, in accordance with such agreements, receive severance payments if their employment is terminated without cause after the merger is consummated.

        The board of directors of each of Gart and The Sports Authority was aware of these interests and considered them in making their recommendations.


No Dissenters' or Appraisal Rights (Page 56)

        Under Delaware law, no dissenters' or appraisal rights are available to Gart's or The Sports Authority's stockholders in connection with the merger.


Trading of Gart Common Stock (Page 56)

        Gart common stock is currently traded on the Nasdaq National Market under the symbol "GRTS." In the merger agreement, Gart agreed to change its name to "The Sports Authority, Inc." and to use its reasonable best efforts to cause the common stock of the combined company to be listed on the New York Stock Exchange under the symbol "TSA" as of or prior to the effective time of the merger. Gart has been cleared to apply to list the common stock of the combined company on the New York Stock Exchange. As of the effective time of the merger, Gart intends to list the common stock of the combined company, including the shares of Gart common stock issued by Gart in connection with the merger, on the New York Stock Exchange and to delist the Gart common stock from the Nasdaq National Market.


Risk Factors (Page 16)

        In addition to the other information contained in or incorporated by reference into this joint proxy statement/prospectus, you should carefully consider the factors discussed in the section entitled "Risk Factors," commencing on page 16 of this joint proxy statement/prospectus in deciding whether to vote in favor of the merger proposals.
    

8



Gart Selected Consolidated Financial Data

        The selected consolidated financial data presented below for each of the fiscal years in the five-year period ended February 1, 2003 are derived from Gart's audited consolidated financial statements for each of the fiscal years in the five-year period ended February 1, 2003. This data should be read in conjunction with Gart's consolidated financial statements, the accompanying notes, and the sections of Gart's annual reports entitled, "Management's Discussion and Analysis of Financial Condition and Results of Operations," all of which have been filed with the Securities and Exchange Commission and incorporated into this joint proxy statement/prospectus by reference.

        Gart's 2002 fiscal year began on February 3, 2002 and ended on February 1, 2003 and included 52 weeks of operations, Gart's 2001 fiscal year began on February 4, 2001 and ended on February 2, 2002 and included 52 weeks of operations, Gart's 2000 fiscal year began on January 30, 2000 and ended on February 3, 2001 and included 53 weeks of operations. Gart's 1999 fiscal year began on January 31, 1999 and ended on January 29, 2000 and included 52 weeks of operations. Gart's 1998 fiscal year began on February 1, 1998 and ended on January 30, 1999 and included 52 weeks of operations.

        The results for Gart's 2001 fiscal year are not comparable to the other periods presented, due to the inclusion of Oshman's results of operations, since June 7, 2001, the date of acquisition. The results for Gart's 2000 fiscal year, although it includes a fifty-third week of operations, and Gart's 1999 and 1998 fiscal years are considered comparable to each other. For more information on how you may obtain these documents, see the section entitled "Where You Can Find More Information," commencing on page 127 of this joint proxy statement/prospectus.

 
  Fiscal Year Ended
 
 
  February 1,
2003

  February 2,
2002

  February 3,
2001

  January 29,
2000

  January 30,
1999

 
 
  (Dollars in thousands, except share and per share amounts)

 
STATEMENT OF OPERATIONS DATA:                                
Net sales   $ 1,051,244   $ 935,717   $ 751,124   $ 680,995   $ 658,047  
Cost of goods sold, buying, distribution and occupancy     (776,340 )   (696,296 )   (559,778 )   (517,405 )   (503,379 )
   
 
 
 
 
 
Gross profit     274,904     239,421     191,346     163,590     154,668  
Operating expenses     (228,982 )   (204,429 )   (164,541 )   (150,684 )   (144,948 )
Merger integration costs         (12,490 )           (6,045 )
   
 
 
 
 
 
Operating income     45,922     22,502     26,805     12,906     3,675  
Interest expense     (9,166 )   (10,981 )   (11,670 )   (10,916 )   (9,580 )
Other income, net     1,043     2,030     556     779     302  
   
 
 
 
 
 
Income (loss) before income taxes     37,799     13,551     15,691     2,769     (5,603 )
Income tax benefit (expense)     (14,632 )   (5,285 )   7,405     (996 )   2,185  
   
 
 
 
 
 
Net income (loss)   $ 23,167   $ 8,266 (1) $ 23,096 (5) $ 1,773   $ (3,418 )(7)
   
 
 
 
 
 
Basic earnings (loss) per share   $ 1.97   $ 0.86 (1) $ 3.13 (5) $ 0.23   $ (0.45 )(7)
   
 
 
 
 
 
Weighted average shares of common stock outstanding     11,766,983     9,598,553 (2)   7,380,529     7,632,696     7,676,816  
   
 
 
 
 
 
Diluted earnings (loss) per share   $ 1.86   $ 0.80 (1) $ 2.99 (5) $ 0.23   $ (0.45 )(7)
   
 
 
 
 
 
Weighted average shares of common stock and common stock equivalents outstanding     12,427,086     10,315,785     7,729,601     7,701,427     7,676,816  
   
 
 
 
 
 

9


 
  Fiscal Year Ended
 
 
  February 1,
2003

  February 2,
2002

  February 3,
2001

  January 29,
2000

  January 30,
1999

 
 
  (Dollars in thousands)

 
OTHER DATA:                                
Number of stores at beginning of period     179     120     127     125     123  
Number of stores opened or acquired     9     64 (3)       7     6  
Number of stores closed     (7 )   (5 )(4)   (7 )   (5 )   (4 )
   
 
 
 
 
 
Number of stores at end of period     181     179     120     127     125  
   
 
 
 
 
 
Total gross square feet at end of period     7,468,628     7,215,591     4,517,122     4,600,738     4,361,335  
Comparable store sales increase (decrease)(6)     0.0 %   (0.9 )%   6.4 %   (0.6 )%   (4.5 )%
Depreciation and amortization   $ 23,836   $ 20,746   $ 14,776   $ 13,892   $ 11,826  
BALANCE SHEET DATA (at end of period):                                
Working capital   $ 171,799   $ 142,563   $ 113,324   $ 104,853   $ 94,439  
Total assets     540,240     536,630     335,949     344,085     335,119  
Long-term debt     121,147     158,474     95,900     105,900     100,000  
Stockholders' equity     198,580     135,509     88,886     65,894     63,466  

(1)
Amount includes the effect of $7.6 million, net of tax, or $0.74 per diluted share of one-time merger integration costs associated with the acquisition of Oshman's.

(2)
Gart acquired Oshman's on June 7, 2001. This transaction involved the issuance of 3.4 million shares of Gart common stock.

(3)
Includes 58 Oshman's stores acquired on June 7, 2001.

(4)
Includes four Oshman's stores acquired on June 7, 2001.

(5)
Amount includes the effect of a one-time tax benefit of $13.5 million associated with the reversal of tax asset valuation allowances. Excluding this benefit and utilizing statutory tax rates, Net Income would have been $9.6 million and Basic and Diluted Earnings Per Share would have been $1.30 and $1.24, respectively.

(6)
New stores enter the comparable store sales base at the beginning of their 14th full month of operation. The Oshman's stores that met the criteria above were included in the comparable store sales base beginning August 4, 2002, the beginning of the 14th full month of operations since the date of acquisition by Gart.

(7)
Amount includes the effect of $3.7 million, net of tax, or $0.48 per diluted share of one-time merger integration costs associated with the acquisition of Sportmart.

10



The Sports Authority Selected Consolidated Financial Data

        The table below sets forth The Sports Authority's summary historical consolidated financial data. The Sports Authority has prepared the statement of income data and balance sheet data using The Sports Authority's audited consolidated financial statements for the 52 weeks ended February 1, 2003, the 52 weeks ended February 2, 2002, the 53 weeks ended February 3, 2001, the 53 weeks ended January 29, 2000, and the 52 weeks ended January 24, 1999.

        When you read this summary historical data, it is important that you read it along with the historical consolidated financial statements and related notes in The Sports Authority's annual reports, as well as the sections of The Sports Authority's annual reports entitled "Management's Discussion and Analysis of Financial Condition and Results of Operations," all of which have been filed with the Securities and Exchange Commission and incorporated into this joint proxy statement/prospectus by reference. For more information on how you may obtain these documents, see the section entitled "Where You Can Find More Information," commencing on page 127 of this joint proxy statement/prospectus.

 
  Fiscal Year Ended(1)
 
 
  February 1,
2003

  February 2,
2002

  February 3,
2001

  January 29,
2000

  January 24,
1999

 
 
  (in thousands, except per share data)

 
Statement of Income Data:                                
  Sales   $ 1,426,874   $ 1,415,552   $ 1,485,839   $ 1,492,860   $ 1,599,660  
  Gross margin     396,599     386,799     395,761     360,564     390,959  
  License fee income     4,804     3,446     2,748     1,829     841  
  Selling, general and administrative expenses     371,590     360,788     366,092     394,963     410,730  
  Pre-opening expense     1,734     5     2,131     1,609     11,194  
  Goodwill amortization                 1,963     1,963  
  Store exit costs     1,740     5,553     2,763     8,861     39,446  
  Corporate restructuring         800         (700 )   3,930  
  Impairment of long-lived assets     2,679             88,751     13,457  
   
 
 
 
 
 
  Operating income (loss)     23,660     23,099     27,523     (133,054 )   (88,920 )
  Interest, net     (4,590 )   (13,332 )   (20,744 )   (15,287 )   (11,965 )
  Gain on sale of investment securities         2,538              
  Gain on deconsolidation of joint venture                 5,001      
  Income (loss) before income taxes, extraordinary gain and accounting change     19,070     12,305     6,779     (143,340 )   (100,885 )
  Income tax benefit (expense)(2)     40,599             (22,721 )   35,028  
  Minority interest                     2,066  
   
 
 
 
 
 
  Income (loss) before extraordinary gain and accounting change     59,669     12,305     6,779     (166,061 )   (63,791 )
  Extraordinary gain, net of tax         548     18,647     5,517      
  Cumulative effect of accounting change         (503 )            
   
 
 
 
 
 
  Net income (loss)   $ 59,669   $ 12,350   $ 25,426   $ (160,544 ) $ (63,791 )
   
 
 
 
 
 
  Basic earnings (loss) per common share:                                
    Income (loss) before extraordinary gain   $ 1.82   $ .38   $ .21   $ (5.19 ) $ (2.01 )
    Extraordinary gain, net of tax         .02     .57     .17      
    Cumulative effect of accounting change         (.02 )            
   
 
 
 
 
 
    Net income (loss)   $ 1.82   $ .38   $ .78   $ (5.02 ) $ (2.01 )
   
 
 
 
 
 
  Diluted earnings (loss) per common share:                                
    Income (loss) before extraordinary gain   $ 1.75   $ .37   $ .21   $ (5.19 ) $ (2.01 )
    Extraordinary gain, net of tax         .02     .57     .17      
  Cumulative effect of accounting change         (.02 )            
   
 
 
 
 
 
    Net income (loss)   $ 1.75   $ .37   $ .78   $ (5.02 ) $ (2.01 )
   
 
 
 
 
 

11


 
  Fiscal Year Ended(1)
 
 
  February 1,
2003

  February 2,
2002

  February 3,
2001

  January 29,
2000

  January 24,
1999

 
Other Data:                                
  Stores at end of period     205     198     198     203     226  
  Comparable store sales increase (decrease)(3)     (0.3 )%   (3.0 )%   1.5 %   (3.4 )%   (3.7 )%
 
Weighted average sales per square foot

 

$

164

 

$

165

 

$

175

 

$

172

 

$

177

 
  Depreciation and amortization (in thousands)     38,987     41,663     40,840     46,908     47,921  

Balance Sheet Data—End of Period: (in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
  Working capital(4)   $ 181,826   $ 188,738   $ 160,200   $ 62,102   $ 30,545  
  Total assets     609,008     601,157     662,547     643,003     897,454  
  Long-term debt     121,425     179,333     205,100     126,029     173,248  
  Stockholders' equity     216,877     155,123     142,317     116,110     272,912  

(1)
The fiscal years ended February 3, 2001 and January 29, 2000 consisted of 53 weeks. All other fiscal years shown each consisted of 52 weeks.

(2)
For the fiscal year ended February 1, 2003 (fiscal 2002), The Sports Authority recorded a tax benefit of $40.6 million due to the reversal of the valuation allowance on 100% of its federal deferred tax assets and a portion of its state deferred tax assets. Exclusive of the benefit in fiscal 2002 and a $2 million tax provision on an extraordinary gain on debt repurchased in fiscal 2000, The Sports Authority recorded no income tax provision in fiscal years 2002, 2001 or 2000 due to the utilization of net operating loss carryforwards and the net reversal of other tax deductible differences to offset taxable income.

(3)
Reflects comparable store sales, excluding sales from stores closed in the respective fiscal years. (See Management's Discussion and Analysis of Financial Condition and Results of Operations.) A store is considered comparable in its thirteenth full month of operation.

(4)
The higher levels of working capital beginning in fiscal 2000 reflects the reclassification of borrowings under our Credit Facility from short-term to long-term based on an amendment to the facility in August 2000.

12



Selected Unaudited Pro Forma Combined Financial Data

        The following table presents Gart's selected unaudited pro forma combined financial data, which are derived from the unaudited pro forma combined condensed financial statements that are presented elsewhere in this joint proxy statement/prospectus. See the section entitled "Unaudited Pro Forma Combined Condensed Financial Statements," commencing on page 75 of this joint proxy statement/prospectus. The data has been prepared giving effect to the merger under the purchase method of accounting with Gart as the acquiror. This information should be read in conjunction with the unaudited pro forma combined condensed financial statements and related notes. The selected unaudited pro forma combined financial data is presented for illustrative purposes only and is not necessarily indicative of the operating results or financial position that would have been achieved had the merger been completed as of the dates indicated or that may be achieved in the future.

Statement of Operations Data:

 
  52 Weeks Ended
February 1, 2003

 
  (dollars in thousands, except per share amounts)

Net sales   $ 2,480,162
Operating income     68,509
Net income   $ 31,468
Earnings per share      
  Basic earnings per share   $ 1.31
   
  Diluted earnings per share   $ 1.25
   
Weighted average shares of common stock outstanding      
  Basic     23,995,420
   
  Diluted     25,111,066
   

Balance Sheet Data

 
  As of
February 1, 2003

 
  (dollars in thousands)

Working capital   $ 300,766
Total assets     1,207,035
Long-term debt     267,042
Stockholders' equity     397,733

13



Comparative Per Share Data

        The following table shows, for the fiscal year ended February 1, 2003, (1) the historical net income and book value per share of Gart common stock and the historical net income and book value per share of The Sports Authority common stock in comparison with the unaudited pro forma combined net income and book value per share after giving effect to Gart's proposed merger with The Sports Authority and (2) the equivalent historical net income and book value per share attributable to 0.37 of a share of Gart common stock, which will be received for each share of The Sports Authority common stock.

        The historical book value per share data is computed by dividing stockholders' equity by the number of shares of Gart common stock or The Sports Authority common stock in each case outstanding at the end of each period. The pro forma book value per share data is computed by dividing pro forma stockholder's equity by the pro forma number of shares of Gart common stock outstanding at the end of each period. The Sports Authority's equivalent pro forma combined net income per share and book value per share amounts are calculated by multiplying Gart's pro forma combined net income per share and book value by 0.37, the exchange ratio used in the merger.

        The following information should be read in conjunction with (1) the separate historical consolidated financial statements and related notes of Gart and The Sports Authority incorporated by reference in this joint proxy statement/prospectus and (2) the unaudited pro forma combined condensed financial information and related notes of the combined company commencing on page 75 of this joint proxy statement/prospectus and the selected consolidated financial data of each of Gart and The Sports Authority commencing on pages 9 and 11, respectively, of this joint proxy statement/prospectus. The pro forma information is presented for illustrative purposes only, and is not necessarily indicative of the operating results or financial position that would have occurred if the merger with The Sports Authority had been completed as of the beginning of the earliest period presented, nor is it necessarily indicative of the future operating results or financial position of the combined company. No cash dividends have been declared or paid on Gart common stock or The Sports Authority common stock for the last five fiscal years of each company.

 
  Gart
  Gart Pro Forma
Combined

Net Income Per Share (fiscal year ended February 1, 2003)            
  Basic:   $ 1.97   $ 1.34
  Diluted:   $ 1.86   $ 1.28
Book Value Per Share (as of February 1, 2003)   $ 16.73   $ 16.52

 

 

The Sports Authority


 

The Sports Authority Equivalent Pro Forma Combined

Net Income Per Share (fiscal year ended February 1, 2003)            
  Basic:   $ 1.82 (1) $ 0.49
  Diluted:   $ 1.75 (1) $ 0.47
Book Value Per Share (as of February 1, 2003)   $ 6.58   $ 6.11

(1)
The Sports Authority net income per basic and diluted share amounts include a tax benefit in the amount of approximately $40.6 million, or $1.24 and $1.19 per share, respectively.

14



Comparative Per Share Market Price Data

        Gart common stock is currently traded on the Nasdaq National Market under the symbol "GRTS." The Sports Authority common stock is traded on the New York Stock Exchange under the symbol "TSA."

        The following table sets forth the closing prices per share of Gart common stock and the closing sales prices per share of The Sports Authority common stock, as reported on the Nasdaq National Market and the New York Stock Exchange, respectively, on (1) February 19, 2003, the business day preceding the public announcement that Gart and The Sports Authority had entered into the merger agreement and (2) May 22, 2003, the last full trading day for which closing sales prices were available at the time of the filing of this joint proxy statement/prospectus.

        The table also includes the equivalent price per share of The Sports Authority common stock on those dates. This equivalent price per share was calculated by multiplying the closing sales price of Gart common stock on those dates by the exchange ratio of 0.37.

 
  Gart Common Stock Closing Sales Price
  The Sports Authority Common Stock Closing Sales Price
  The Sports Authority's Equivalent Price per Share
February 19, 2003   $ 14.94   $ 5.51   $ 5.53
May 22, 2003     23.96     8.72     8.87

        Stockholders are urged to obtain current market quotations.

        In the merger agreement, Gart has agreed to change its name to "The Sports Authority, Inc." and to use its reasonable best efforts to cause the common stock of the combined company to be listed on the New York Stock Exchange. Gart has been cleared to apply to list the common stock of the combined company on the New York Stock Exchange under the symbol "TSA," and as of the effective time of the merger, Gart intends to list the common stock of the combined company on the New York Stock Exchange and to delist its common stock from the Nasdaq National Market.

15




Risk Factors

        Both the merger and an investment in Gart common stock involve a high degree of risk. By voting in favor of the merger, The Sports Authority's current stockholders will be choosing to invest in Gart common stock, and Gart's current stockholders will be choosing to combine The Sports Authority's business with Gart's business and to dilute their percentage ownership interest in Gart. In addition to the other information contained in, or incorporated by reference into, this joint proxy statement/prospectus, you should consider carefully the following risk factors in deciding whether to vote in favor of the merger or the related issuance of shares of Gart common stock and amendment to Gart's certificate of incorporation.


Risks Related to the Merger

        In the merger, The Sports Authority's stockholders will receive 0.37 of a share of Gart common stock in exchange for each share of The Sports Authority common stock. This exchange ratio is a fixed number and will not be adjusted for subsequent changes in the market price of either Gart common stock or The Sports Authority common stock. Neither party may terminate the merger agreement solely because of changes in the market price of Gart common stock or The Sports Authority common stock. Consequently, the specific dollar value of Gart common stock to be received by The Sports Authority's stockholders will depend on the market value of Gart common stock at the time of completion of the merger. The merger may not be completed immediately following the special meeting of The Sports Authority's stockholders if all conditions have not been satisfied or waived. We cannot assure you that the value of the Gart common stock that The Sports Authority's stockholders will receive in the merger will not decline before or after the completion of the merger.

        The merger involves the integration of companies that have previously operated independently. The integration will be a complex, time consuming and expensive process and may materially harm Gart's and The Sports Authority's respective businesses if not completed in a timely and efficient manner. We may not be able to integrate the operations of our companies without encountering difficulties, including possible unanticipated costs, failure to retain key employees, the diversion of management attention or failure to integrate our information systems. Due to the location of the combined company's headquarters in Colorado, a significant number of the members of The Sports Authority's management team will not remain with the combined company. As a result, the combined company may lose some historical knowledge of The Sports Authority's operations and business. In addition, following the merger, the combined company may not realize the increased revenues and cost savings that Gart and The Sports Authority expect to achieve or that would justify the investment made.

        Gart's and The Sports Authority's officers and directors participate in arrangements that provide them with interests in the merger that are different from, or in addition to, yours. The board of directors of each of Gart and The Sports Authority was aware of these interests and considered them in approving the merger agreement and the merger. Gart's stockholders and The Sports Authority's stockholders should consider, however, whether these interests may have influenced these officers and directors to support or approve the merger. You should read more about these interests under the

16


section entitled "The Merger and Related Transactions—Interests of Certain Persons in the Merger," commencing on page 46 of this joint proxy statement/prospectus.

        Gart's and The Sports Authority's current personnel may experience uncertainty about their future roles with the combined company. This uncertainty may adversely affect The Sports Authority's and Gart's ability to attract and retain key personnel. If we cannot attract and retain key personnel, our ability to effectively manage our operations could be significantly reduced. Additionally, our ability to successfully integrate the two companies may be adversely affected if a significant number of Gart's or The Sports Authority's key personnel depart before or after the completion of the merger, which would adversely affect the combined company's business and results of operations.

        We estimate that we will incur, in addition to costs already incurred in connection with the merger, direct transaction costs of approximately $54 million in connection with the merger, including approximately $25 million in connection with severance payments, approximately $19 million in connection with third-party advisors and printing fees and approximately $10 million in connection with costs of relocating current employees of The Sports Authority to Colorado. In addition, Gart has established a reserve of approximately $42 million in connection with stores that the parties expect to close. If the benefits of the merger do not exceed the costs associated with the merger, including any dilution to the stockholders of both companies resulting from the issuance of shares in connection with the merger, the combined company's financial results, including earnings per share, could be adversely affected.


Risks Related to Gart and The Sports Authority

        Except as otherwise specified, the following risk factors relate to the businesses of each of Gart and The Sports Authority prior to the merger. If the merger is not completed for any reason, each company expects to continue to be subject to such risks, in addition to other risks to which each company is subject. If the merger is completed, the combined company will be subject to the risks of each of Gart and The Sports Authority.

        The sporting goods retail market is highly fragmented and intensely competitive. Our current and prospective competitors include many large companies that have substantially greater market presence, name recognition, financial, marketing and other resources than we do separately or on a combined basis. We compete directly or indirectly with the following categories of companies:

        Increased competition in markets in which we have stores, the adoption by competitors of innovative store formats, pricing strategies and retail sale methods, or the entry of new competitors or the expansion of operations by existing competitors in our markets could cause us to lose market share, limit our growth and reduce our profitability.

17



        Our success depends on our ability to anticipate and respond in a timely manner to changing consumer demand and preferences regarding sporting goods. Our products must appeal to a broad range of consumers whose preferences cannot be predicted with certainty and are subject to change. Additionally, we often make commitments to purchase products from our vendors several months in advance of the proposed delivery. If we misjudge the market for our merchandise, we may lose sales or we may overstock unpopular products, which may require us to take significant inventory markdowns. In either case, our revenues and profit margins could significantly decline and our business and financial results may suffer.

        We may be subject to lawsuits resulting from injuries associated with the use of sporting goods equipment that we sell or rent. Among other things, Gart sells long guns, handguns and air pistols and The Sports Authority sells long guns and air pistols (and prior to 1999, handguns), which are products that are associated with an increased risk of injury and related lawsuits.

        The Sports Authority is one of thirty-three named defendants, including firearms manufacturers and retailers, in City of Chicago and County of Cook v. Beretta U.S.A. Corp. et al., Circuit Court of Cook County, Illinois. This suit was served on The Sports Authority in November 1998. The complaint was based on legal theories of public nuisance and negligent entrustment of firearms and alleged that the defendants distributed, marketed and sold firearms in the portion of Cook County outside Chicago that were found illegally in Chicago. The complaint sought damages allocated among the defendants exceeding $433 million to compensate the City of Chicago and Cook County for their alleged costs resulting from the alleged public nuisance. The complaint also sought punitive damages and injunctive relief imposing additional regulations on the methods the defendants use to distribute, market and sell firearms in Cook County. In February 2000, the court dismissed the complaint's negligent entrustment count. The plaintiffs filed an amended complaint with the court's permission in March 2000, which contained both the public nuisance and negligent entrustment counts. In September 2000, the court granted the motions of the defendants to dismiss the amended complaint, in its entirety, with prejudice. In October 2000, the plaintiffs appealed to the Appellate Court of Illinois, First Judicial District, but did not pursue the negligent entrustment issue. On November 4, 2002, the Appellate Court reversed the dismissal of the amended complaint and remanded the case to the trial court for further proceedings on the public nuisance issue. On November 25, 2002, The Sports Authority filed a petition for rehearing with the Appellate Court, which was denied on March 7, 2003. On March 27, 2003, The Sports Authority joined in the petition for leave to appeal to the Illinois Supreme Court by the other defendants of the Appellate Court's decision reversing the trial court's dismissal of the amended case. The Sports Authority is currently unable to predict the outcome of this case.

        There is a risk that claims or liabilities with respect to lawsuits will exceed our insurance coverage. Additionally, we may be unable to purchase adequate liability insurance in the future. Although we have entered into product and infringement liability indemnity agreements with many of our vendors, we cannot assure you that we will be able to collect payments sufficient to offset product liability losses. Furthermore, we are subject to regulation by the Consumer Product Safety Commission and similar state regulatory agencies. If we fail to comply with government and industry safety standards, we may be subject to claims, lawsuits, fines and adverse publicity that could have a material adverse effect on our business and results of operations.

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        Gart purchases merchandise from over 1,000 vendors and The Sports Authority purchases merchandise from over 625 vendors, some of which are the same as Gart's vendors. In fiscal 2002, purchases from Nike represented approximately 11.2% of Gart's total purchases and approximately 12.7% of The Sports Authority's total purchases. Although purchases from no other vendor represented more than 10% of the total purchases of either Gart or The Sports Authority, our dependence on our principal suppliers involves risk. We do not have long-term agreements with our suppliers and cannot guarantee that we will be able to maintain our relationships with them. If there is a disruption in supply from a principal supplier or distributor, we may be unable to obtain the merchandise that we desire to sell and that consumers desire to purchase. Moreover, many of our suppliers provide us with incentives, such as return privileges, volume purchasing allowances and cooperative advertising allowances. A decline or discontinuation of these incentives could reduce our profits.

        Additionally, we believe that a significant portion of the products that we purchase, including those purchased from domestic suppliers, are manufactured abroad. Government regulations, political unrest, war, changes in local economic or labor conditions, trade issues or interruptions or delays in imports could disrupt or delay shipments of merchandise to our stores and cause shortages in our inventory and a decline in our sales. If one or more of these factors occur, our business and financial results could suffer.

        Our business is highly seasonal in nature. Our highest sales and operating profitability historically occurs during the fourth fiscal quarter, which is due, in part, to the holiday selling season and, in part, in the case of Gart, to its strong sales of cold weather sporting goods and apparel. Fourth quarter sales comprised approximately 30.1% of Gart's net sales and approximately 50.1% of Gart's operating income for the 2002 fiscal year, and approximately 27.2% of The Sports Authority's net sales and approximately 56.6% of The Sports Authority's operating income for the 2002 fiscal year. Any decrease in our fourth quarter sales, whether because of a slow holiday selling season, poor snowfall in ski areas near our markets (principally in the case of Gart), or otherwise, could have a material adverse effect on our business, financial condition and operating results for the entire fiscal year.

        Sales of sporting goods historically depend on consumers' discretionary spending. An economic downturn in any of our major markets, or in general, could reduce consumer spending on discretionary items that could adversely impact our revenues and cause our business and financial results to suffer.

        General economic conditions are beyond our control and are affected by:

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        Increasing volatility in financial markets may cause the above factors to change with an even greater degree of frequency and magnitude.

        The combined company, on a pro forma combined basis, would have had approximately $267 million of long-term debt at February 1, 2003. The combined company intends to enter into a new credit facility at the completion of the merger that will provide for loans of up to $600 million. This debt could have significant adverse effects on the business of the combined company. This debt:

        If the combined company is unable to generate sufficient cash flows from operations in the future, it may have to refinance all or a portion of its debt and/or obtain additional financing. We cannot assure you that refinancing or additional financing on favorable terms could be obtained or that the combined company will be able to operate at a profit.

        Additionally, the credit facility to be entered into upon consummation of the merger is likely to impose on the combined company, operating and financial restrictions that may impair its ability to respond to changing business and economic conditions or to grow its business.

        Many of our employees are in entry-level or part-time positions that historically have high rates of turnover. We may be unable to satisfy our labor needs and control our costs due to external factors such as unemployment levels, minimum wage legislation and wage inflation. If general economic conditions improve, it may be more difficult to attract and retain quality employees. As a result, our business may suffer.

        In addition, in June 2000 a former employee of Sportmart brought two class action complaints in California against Gart alleging several wage and hour claims in violation of the California Labor Code, California Business and Professional Code Section 17200 and other related matters. One complaint alleges that Gart classified certain managers in its California stores as exempt from overtime pay when they should have been classified as non-exempt and paid overtime. The second complaint alleges that Gart failed to pay hourly employees in its California stores for all hours worked. In March 2001, a third class action complaint was filed in the same court in California alleging the same wage and hour violations regarding classification of certain managers as exempt from overtime pay. In July 2001, a fourth complaint was filed alleging that store managers should also not be classified as employees exempt from overtime pay. All the complaints seek unspecified amounts of compensatory damages, punitive damages and penalties. Gart expects to settle such litigation, but there is no definitive settlement agreement. If no settlement agreement is signed and approved and if substantial damages

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are awarded, Gart's, and after the merger the combined company's, financial condition could be adversely affected.

        Under the terms of Gart's tax sharing agreement with its former parent, Gart is responsible for its share, on a separate return basis, of any tax liabilities associated with proposed deficiencies or adjustments and related interest and penalties charged to the controlled group that may arise as a result of an assessment by the Internal Revenue Service.

        On July 24, 1997, the Internal Revenue Service proposed adjustments to Gart's and its former parent's (now Thrifty Payless Holdings, Inc., a subsidiary of Rite Aid Corporation) 1992 and 1993 consolidated federal income tax returns, in conjunction with an Internal Revenue Service examination of Gart's former parent. The proposed adjustments relate to the manner in which last-in first-out inventories were characterized on these tax returns. On November 1, 2002, in order to eliminate the accrual of additional interest on taxes owed to the Internal Revenue Service, Gart entered into an agreement with the Internal Revenue Service pursuant to which Gart paid the Internal Revenue Service taxes of $1.1 million and interest of $0.5 million. In fiscal 2002, Gart utilized approximately $20.0 million of net operating loss carry forwards to reduce taxable income in connection with its agreement with the Internal Revenue Service. Gart believes this to be a full and complete settlement of all its separate return issues under review by the Internal Revenue Service. However, the agreement between Gart and the Internal Revenue Service is subject to approval by the Joint Committee of Taxation. If this approval is not granted, Gart could be subject to further liabilities in respect of this matter, which may have an adverse impact on Gart's, and after the merger, the combined company's, liquidity.

        Terrorist attacks or acts of war may cause damage or disruption to us and our employees, facilities, information systems, vendors, and customers, which could significantly impact our net sales, costs and expenses, and financial condition. The threat of terrorist attacks in the United States since September 11, 2001 continue to create many economic and political uncertainties. The potential for future terrorist attacks, the national and international responses to terrorist attacks, and other acts of war or hostility may cause greater uncertainty and cause our business to suffer in ways that we currently cannot predict. The military action taken by the United States and its allies against the government of Iraq could have a short or long term negative economic impact upon the financial markets and our business in general. In addition, events such as those referred to above could cause or contribute to a general decline in equity valuations, which in turn could reduce the market value of your investment in the combined company.

        Leonard Green currently holds approximately 26% of the outstanding common stock of Gart, and also holds approximately 29% of the outstanding common stock of Big 5 Sporting Goods, one of Gart's and The Sports Authority's competitors. Jonathan D. Sokoloff and Jonathan A. Seiffer, equity owners of Leonard Green, both previously served on Big 5 Sporting Goods' board of directors and currently serve on Gart's board of directors. After the consummation of the merger, Leonard Green's ownership interest in Gart will be reduced from approximately 26% to approximately 13% and only Mr. Sokoloff will serve on Gart's board of directors. John G. Danhakl, also an equity owner of Leonard Green, currently serves on the board of directors of Big 5 Sporting Goods. Leonard Green does not have formal procedures to prohibit Messrs. Seiffer, Sokoloff and Danhakl from sharing information about Gart and Big 5 Sporting Goods with each other. Messrs. Seiffer, Sokoloff and Danhakl may have

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conflicts of interest with respect to various matters affecting Gart and The Sports Authority, including the pursuit of business opportunities presented to Leonard Green. Leonard Green does not have procedures in place that are designed to resolve conflicts arising in connection with its investments in entities that compete with each other. All potential conflicts may not be resolved in a manner that is favorable to us. We believe that it is impossible to predict the precise circumstances under which future potential conflicts may arise, and, therefore, we intend to address potential conflicts on a case-by-case basis.

        Anti-takeover provisions in the combined company's certificate of incorporation and bylaws may deter unfriendly offers or other efforts to obtain control over the combined company. These anti-takeover provisions, among other things:

        Section 203 of the Delaware General Corporate Law also imposes restrictions on mergers and other business combinations between the combined company and any holder of 15% or more of the combined company's common stock.

        These measures could make the combined company less attractive to a potential acquiror and deprive stockholders of the opportunity to sell their common stock at a premium price.

        Our sales and results of operations have fluctuated in the past and may vary from quarter to quarter in the future. These fluctuations may adversely affect our business, financial condition and the market price of our common stock, particularly if our quarterly results fall below the expectations of securities analysts. A number of factors, many of which are outside our control, may cause variations in our quarterly net sales and operating results, including:

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        The market price of the common stock of Gart and The Sports Authority has been in the past, and may in the future be, subject to wide fluctuations in response to factors such as:

        Additionally, in recent years, the stock market has experienced significant price and volume fluctuations, which are often unrelated to the performance or condition of particular companies. Such broad market fluctuations could adversely affect the market price of our common stock. Following periods of volatility in the market price of a particular company's securities, securities class action litigation has often been brought against a company. If we become subject to this kind of litigation in the future, it could result in substantial litigation costs, damages awards against us, and the diversion of our management's attention and resources.

        Our future success depends on the continued services of our senior management, particularly John Douglas Morton, who will be the combined company's vice chairman and chief executive officer, and Martin E. Hanaka, who will be the combined company's chairman. Any loss or interruption of the services of our senior management could significantly reduce our ability to effectively manage our operations and implement our key initiatives because we cannot assure you that we would be able to find appropriate replacements for our senior management should the need arise. If we were to lose any key senior management, our business could be materially adversely affected.

        The efficient operation of our business is dependent on the successful integration and operation of our information systems. In particular, we rely on our information systems to effectively manage our sales, warehousing, distribution, merchandise planning and replenishment and to optimize our overall inventory levels. Most of our information systems are centrally located at our respective headquarters, with offsite backup at other locations. Our major retail and financial information systems use compatible software, hardware and operating system environments. However, some versions of the software programs, the manner in which they are configured and the business processes used to operate them are different. Also, some of The Sports Authority's systems have not been fully implemented and require additional configuration, testing and user training before they become fully operational. Systems integration issues are complex, time-consuming and expensive. The failure to successfully integrate our information systems or their failure to perform as we anticipate could disrupt our business, lead to unanticipated costs, adversely affect our revenues and cause our business and financial results to suffer.

        Most of our merchandise is shipped by our vendors to a limited number of distribution centers. Our distribution centers receive and allocate merchandise to our stores. Events such as fire or other

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catastrophic events, any malfunction or disruption of our centralized information systems or shipping problems may result in delays or disruptions in the timely distribution of merchandise to our stores, which could adversely impact our revenues and our business and financial results.

        The Sports Authority is in the process of opening a new distribution center in Burlington, New Jersey. The ability of The Sports Authority to establish this new regional distribution center will depend on the ability of third parties to prepare the facility for use, successful integration of its warehouse management systems and the availability of an adequate labor force. In addition, the success of this and other supply chain initiatives is heavily dependent on the implementation and consistent execution of new processes and the use of new systems capabilities by The Sports Authority's merchandising and supply chain personnel. The Sports Authority's new distribution center may not enable it to improve the flow of merchandise to its stores or improve its inventory management.

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Cautionary Statement Concerning Forward-Looking Statements

        This joint proxy statement/prospectus and the documents incorporated by reference into this joint proxy statement/prospectus contain, in addition to historical information, forward-looking statements that involve risks and uncertainties, including all statements other than statements of historical fact. Because these forward-looking statements involve risks and uncertainties, the actual results of Gart, The Sports Authority and the combined company could differ materially from those expressed or implied by the forward-looking statements in this joint proxy statement/prospectus and the documents incorporated by reference into this joint proxy statement/prospectus. You should specifically consider those factors discussed in the section entitled "Risk Factors," commencing on page 16 of this joint proxy statement/prospectus and the other cautionary statements made in this joint proxy statement/prospectus. The cautionary statements made in this joint proxy statement/prospectus should be read as being applicable to all related forward-looking statements wherever they appear in this joint proxy statement/prospectus and the documents incorporated by reference into this joint proxy statement/prospectus.

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The Merger and Related Transactions

Background of the Merger

        Gart and The Sports Authority are both participants in the retail sporting goods industry and, accordingly, members of the senior management of Gart and The Sports Authority have been familiar with each other for several years. From time to time they have had preliminary discussions regarding a possible business combination of Gart and The Sports Authority.

        During August and September 2002, investment banking firms separately contacted Gart and The Sports Authority and suggested several possible strategic and financing transactions, including the possibility of a combination of Gart and The Sports Authority. In September 2002, Credit Suisse First Boston, financial advisor to The Sports Authority, had telephone conversations with representatives of Leonard Green (which owns approximately 26% of Gart's shares) regarding a possible combination of Gart and The Sports Authority.

        In October 2002, while at an industry association board meeting, John Douglas Morton, Gart's chief executive officer, and Martin E. Hanaka, The Sports Authority's chief executive officer, again raised the possibility that Gart and The Sports Authority might explore a business combination.

        During October and November 2002, Banc of America Securities, financial advisor to Gart, and Credit Suisse First Boston held several discussions on behalf of Gart and The Sports Authority regarding a possible business combination of the two companies. Gart, through Banc of America Securities, proposed a "merger of equals" of Gart and The Sports Authority that would result in 50% of Gart's fully diluted common stock being owned by its current stockholders and 50% by current stockholders of The Sports Authority. It was The Sports Authority's position that its stockholders should receive a premium. The financial advisors also discussed on behalf of their clients additional terms of the possible transaction, including that following the merger the combined company's board of directors would consist of an equal number of directors chosen by each of Gart and The Sports Authority and that the combined company would be headquartered in Englewood, Colorado and be named "The Sports Authority." They also discussed that Mr. Hanaka would be the chairman of the board, Mr. Morton would be the chief executive officer and other members of senior management of the combined company would be chosen from existing management of Gart and The Sports Authority. The financial advisors noted that any agreement on these issues would depend on several factors, including due diligence, the negotiation of financial terms and transaction documents and approval by the companies' respective boards.

        On November 1, 2002, The Sports Authority's board of directors reviewed and discussed with Credit Suisse First Boston the preliminary discussion that had taken place between Credit Suisse First Boston and Banc of America Securities. Credit Suisse First Boston reviewed with The Sports Authority's board the preliminary financial aspects relating to the proposed transaction, including a review of each company's stock prices, the relative contribution of each company to the proposed combined company and terms of other similar transactions, as well as strategic and transaction-related issues that the board should consider. The Sports Authority's board discussed these matters and the appropriate next steps, and concluded that The Sports Authority, through Credit Suisse First Boston, should continue to engage in discussions with Banc of America Securities about a possible transaction with Gart.

        On November 20, 2002, the board of directors of The Sports Authority met again with Credit Suisse First Boston, which presented the proposals described above to the board and provided an analysis of the proposals. After extensive discussion, The Sports Authority's board authorized Credit Suisse First Boston to continue discussions with Gart.

        On November 25, 2002, the companies executed a confidentiality agreement and agreed to meet to discuss a possible business combination.

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        On November 26, 2002, Gart's board of directors held a meeting to discuss the potential business combination with The Sports Authority. At the meeting, Gart's management informed the board of activities being undertaken in connection with the possible transaction and presented the proposals described above to the board. Following a discussion of the issues, the board authorized management to proceed with discussions regarding a combination with The Sports Authority.

        On December 4, 2002, senior management of the two companies, together with representatives of Banc of America Securities and Credit Suisse First Boston, met to continue discussions of a possible transaction, including an overview of their respective businesses and a schedule for conducting due diligence.

        On December 6, 2002, Gart and The Sports Authority executed an exclusivity letter in which both parties agreed that they would not negotiate a business combination with any third parties through January 15, 2003 or any earlier termination of discussions.

        Representatives of the two companies, together with their financial advisors and Clifford Chance US LLP, counsel to Gart, met in New York on December 12, 2002, to make presentations to each other regarding their respective businesses. On December 16, 2002, each of Gart and The Sports Authority commenced due diligence reviews of the other company.

        On December 17, 2002, Morgan, Lewis & Bockius LLP, counsel to The Sports Authority, delivered an initial draft merger agreement to Gart's representatives. The draft agreement contemplated a stock-for stock merger upon the terms previously discussed by the parties and outlined above, including a fixed exchange ratio, although the initial draft did not specify what the exchange ratio would be. The draft agreement also contemplated the possibility of cash consideration being included in the merger but did not specify the amount of cash consideration to be paid. The draft agreement did not permit either party to terminate the agreement if it received a superior proposal and obligated the board of each party to recommend the deal to its stockholders unless it received a superior proposal. The draft agreement did not contain a financing contingency. Shortly after delivery of the draft agreement, Morgan Lewis delivered a proposed stockholder's agreement pursuant to which directors and executive officers of both companies and Leonard Green would agree to vote in favor of the proposals relating to the merger. The parties commenced negotiation of the terms of these agreements.

        On December 18, 2002, the board of directors of The Sports Authority met and further discussed the possible merger with Gart, the status of the due diligence and the negotiations.

        Extensive due diligence continued between December 2002 and mid-February 2003. During the same period, the parties and their advisors continued to meet and negotiate the terms of the transaction and the proposed operation of the combined company. These negotiations included discussions of the financial terms of the transaction, deal protection issues (including the need for Leonard Green to enter into a stockholder's agreement, whether each party would be entitled to terminate the agreement upon receipt of a superior proposal and whether each party would be obligated to recommend the merger to its stockholders unless it received a superior proposal), employment arrangements for senior management and closing conditions (including Gart's desire to include a financing condition applicable to both parties).

        On January 28, 2003, the board of directors of The Sports Authority met to discuss the transaction. The Sports Authority's management, financial advisor, counsel and independent accountants discussed with the board the results of the financial, legal and accounting due diligence conducted to date, and the status of due diligence efforts on behalf of both parties. The Sports Authority's legal advisors also reviewed with the board the directors' fiduciary duties under Delaware law in connection with the proposed transaction. The board also discussed with The Sports Authority's financial advisor the financial aspects of the proposed transaction, and counsel discussed the status of negotiations and the

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principal issues being negotiated. The board authorized management to continue negotiations with Gart and to report back to the board.

        On February 3, 2003, Gart's board of directors met to discuss the transaction. After discussions with management and Gart's legal and financial advisors and independent accountants, the board authorized management to continue negotiations with The Sports Authority with a view toward negotiating a definitive merger agreement for submission to the board for its consideration. At the February 3 meeting, Gart's board considered the advisability of establishing a special committee to negotiate the fee to be paid to Leonard Green (the holder of approximately 26% of Gart's outstanding common stock) in connection with the merger pursuant to an existing management services agreement between Gart and Leonard Green. Gart determined that, in light of the fact that two of Gart's directors are equity owners of Leonard Green, it was prudent to establish a special committee of independent directors to negotiate this fee. For a more detailed description of this special committee and the negotiation of the Leonard Green fee, see the section entitled "The Merger and Related Transactions—Interests of Certain Persons in the Merger," commencing on page 46 of this joint proxy statement/prospectus. Because the merger itself involved an arms' length transaction with an unaffiliated third party, the directors did not anticipate any conflicts of interest, other than those described above, arising with respect to the merger and did not establish a special committee in connection with any other aspect of the merger.

        On February 9, 2003, the board of directors of The Sports Authority held a meeting at which it was advised by The Sports Authority's management and financial and legal advisors regarding the status of the negotiations of a merger agreement with Gart, and by The Sports Authority's independent accountants regarding accounting due diligence. Because the merger itself involved an arms' length transaction with an unaffiliated third party, the directors did not anticipate any conflicts of interest arising with respect to the merger and did not establish a special committee in connection with the merger. However, following the meeting the non-employee directors of The Sports Authority met separately to discuss the status of negotiations of the proposed employment contract between Mr. Hanaka and Gart.

        During February, Gart and The CIT Group/Business Credit, Inc. (the agent under Gart's existing credit facility) negotiated the terms of a commitment letter under which CIT would provide a credit facility to the combined company following the merger. See the section entitled "The Merger and Related Transactions—Financing of the Combined Company Following the Merger," commencing on page 51 of this joint proxy statement/prospectus. Gart and The Sports Authority discussed the terms of the financing and the terms of a closing condition in the merger agreement relating to financing. Gart wanted to ensure that it would not be obligated to consummate the merger if it could not obtain financing for the combined company on acceptable terms and The Sports Authority wanted more certainty of closing. The principal differences of the approaches preferred by each of Gart and The Sports Authority were that Gart proposed that the parties only had to close if Gart could obtain financing for the combined company on specified terms and at specified rates and The Sports Authority based the contingency only on securing financing in an amount reasonably acceptable to both parties.

        During the February negotiations, both parties decided not to require directors or executive officers of either company to enter into stockholder's agreements.

        On February 16, 2003, Gart's board of directors held a meeting at which it was advised by Gart's management and financial and legal advisors regarding the status of the negotiations of the merger agreement with The Sports Authority, and by Gart's independent accountants regarding accounting due diligence. Gart's legal advisors also reviewed with the board the directors' fiduciary duties under Delaware law in connection with the proposed transaction. In addition, the directors discussed the status of negotiations of the proposed employment contracts between Gart and each of Mr. Hanaka and Mr. Morton.

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        On February 19, 2003, the companies and their financial advisors determined that in order to effect a "merger of equals" that would result in 50% of Gart's fully diluted common stock being owned by its current stockholders and 50% being owned by current stockholders of The Sports Authority, it would be necessary to employ an exchange ratio of approximately 0.37 of a share of Gart common stock for each share of The Sports Authority common stock. This exchange ratio provided a nominal premium to The Sports Authority's stockholders based on the market price of both companies' common stock on February 19.

        On February 19, 2003, the board of directors of The Sports Authority held a meeting at which The Sports Authority's management and financial and legal advisors made presentations on the negotiations that had taken place prior to the board meeting. The Sports Authority's legal advisors again reviewed with the board the directors' fiduciary duties under Delaware law in connection with the proposed transaction. The board was presented with and discussed the following proposed terms of the transaction that were the result of the negotiations between the representatives and advisors of the two companies: an exchange ratio of 0.37, the proposed deal protection features (which permitted either party to terminate the merger agreement if it approved a superior transaction, but obligated each party to recommend the merger unless it received a superior proposal), the proposed CIT credit facility and the Leonard Green fee that had been negotiated by Gart's independent directors. For a more detailed description of this fee, see the section entitled "The Merger and Related Transactions—Interests of Certain Persons in the Merger," commencing on page 46 of this joint proxy statement/prospectus. In addition, the non-employee directors of The Sports Authority who had met separately prior to the board meeting announced to the full board of directors that they had reviewed and approved the proposed contract between Mr. Hanaka and Gart. Credit Suisse First Boston rendered its oral opinion to the board, which opinion was subsequently confirmed by delivery of its written opinion dated February 19, 2003, to the effect that, as of that date and based upon and subject to the matters stated in its opinion, the exchange ratio of 0.37 of a share of Gart common stock for each share of The Sports Authority common stock was fair, from a financial point of view, to the holders of The Sports Authority common stock. For a more complete discussion of Credit Suisse First Boston's opinion, see the section entitled "The Merger and Related Transactions—Opinion of The Sports Authority's Financial Advisor," commencing on page 41 of this joint proxy statement/prospectus. After extensive deliberation, the board of directors of The Sports Authority unanimously determined that the merger was fair to and in the best interests of its stockholders, approved the merger agreement subject to the execution of a stockholder's agreement (which was then approved by the board) by Leonard Green and a revision to the financing condition proposed by Gart to remove references to specific rates and terms to increase the likelihood that the transaction would close. The board of directors also amended The Sports Authority rights agreement so that it would not apply to the merger with Gart.

        The Sports Authority reported to Gart that its board of directors had met and was prepared to execute a merger agreement containing only stock consideration and an exchange ratio of 0.37 of a share of Gart common stock for each share of The Sports Authority common stock, provided that Leonard Green agree to the proposed stockholder's agreement and that Gart agree to the proposed revision to the financing condition in the merger agreement which would require Gart to close if it could obtain a credit facility for the combined company providing substantially the same amount of financing as described in the CIT commitment letter or such lesser amount of financing as mutually agreed by the parties.

        On February 19, 2003, Gart's board of directors held a meeting at which Gart's management and financial and legal advisors made presentations, including as to the exchange ratio and The Sports Authority's proposed provisions. Gart's legal advisors again reviewed with the board the directors' fiduciary duties under Delaware law in connection with the proposed transaction. At the meeting, representatives of Banc of America Securities rendered its oral opinion, which opinion was subsequently confirmed by delivery of its written opinion dated February 19, 2003, that, as of that date

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and based upon and subject to the assumptions and limitations set forth in its written opinion, the exchange ratio of 0.37 of a share of Gart common stock per share of common stock of The Sports Authority was fair, from a financial point of view, to Gart. For a more complete discussion of Banc of America Securities' opinion, see the section entitled "The Merger and Related Transactions—Opinion of Gart's Financial Advisor," commencing on page 34 of this joint proxy statement/prospectus. After further deliberation with its management and its legal advisors, Gart's board of directors determined, among other things, that the terms and conditions of the merger were fair to, and in the best interests of, Gart and its stockholders and unanimously approved the merger, the merger agreement, the stockholder's agreement with Leonard Green, the employment arrangements for senior management and the transactions contemplated as a result of these matters.

        Later in the evening of February 19, 2003, Gart and The Sports Authority executed the merger agreement, The Sports Authority and Leonard Green executed the stockholder's agreement and Gart entered into employment agreements with Douglas Morton and Martin Hanaka. The employment agreements will become effective upon consummation of the merger. For a discussion of these agreements, see the section entitled "Related Agreements," commencing on page 69 of this joint proxy statement/prospectus.

        On February 20, 2003, before the markets opened, Gart and The Sports Authority issued a joint press release announcing the merger.


Recommendation of Gart's Board of Directors

        After careful consideration, Gart's board of directors unanimously determined the merger to be fair to, and in the best interests of, Gart's stockholders. Gart's board of directors approved the merger agreement and unanimously recommends that Gart's stockholders vote "FOR" the amendment to Gart's certificate of incorporation to change its name and increase its authorized capital stock and "FOR" the issuance of Gart common stock to The Sports Authority's stockholders in the merger.


Gart's Reasons for the Merger

        Gart's board of directors believes that the merger is fair to, and in the best interests of, Gart and its stockholders because it believes that, as a result of this strategic merger, the long-term value to Gart's stockholders of an investment in the combined company will likely be superior to the long-term value of an investment in Gart as a stand-alone company. In deciding to approve the merger agreement, including the transactions contemplated in the merger agreement, and to recommend the merger to Gart's stockholders, Gart's board of directors considered various factors, including the following:

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        Gart's board of directors also considered the principal potential detriments of the merger to Gart and its stockholders, including the following:

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        Gart's board considered these negative factors, but concluded that, on balance, the potential benefits to Gart and its stockholders of the merger outweighed the risks associated with the merger. The board voted unanimously in favor of the transaction.

        The discussion above is not intended to be exhaustive, but Gart believes that it includes all material factors considered by Gart's board of directors in connection with its evaluation of the merger. In light of the number of factors and the variety of information that Gart's board of directors considered, the board did not find it practicable to, and did not, assign any specific or relative weights to the factors listed above. Additionally, individual directors may have assigned differing weights to different factors. The board of directors was aware of the interests of Gart's management in the merger, as described in the section entitled "The Merger and Related Transactions—Interests of Certain Persons in the Merger," commencing on page 46 of this joint proxy statement/prospectus.


Recommendation of The Sports Authority's Board of Directors

        After careful consideration, The Sports Authority's board of directors unanimously determined the merger to be fair to, and in the best interests of, The Sports Authority's stockholders. The Sports Authority's board of directors unanimously approved the merger agreement and unanimously recommends that The Sports Authority's stockholders vote "FOR" the adoption of the merger agreement and the approval of the merger.


The Sports Authority's Reasons for the Merger

        The Sports Authority's board of directors believes that the merger is fair to, and in the best interests of, The Sports Authority and its stockholders because it believes that, as a result of this strategic merger, the long-term value to The Sports Authority's stockholders of an investment in the combined company will likely be superior to the long-term value of an investment in The Sports Authority as a stand-alone company. In deciding to approve the merger agreement, including the transactions contemplated in the merger agreement, and to recommend the merger to The Sports Authority's stockholders, The Sports Authority's board of directors considered various factors, including the following:

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        The Sports Authority's board of directors also considered the principal potential detriments of the merger to The Sports Authority and its stockholders, including the following:

33


        The Sports Authority's board of directors determined, however, that these detriments were substantially offset by the potential benefits of the merger summarized above, including the opportunity for The Sports Authority's stockholders to share in the benefits of the combined company's long-term prospects. The Sports Authority's board of directors also decided not to pursue other strategic alternatives because the magnitude of the potential benefits of the merger exceeded the potential benefits offered by the other strategic alternatives.

        In reaching its decision to approve the merger agreement and to recommend the adoption of the merger to The Sports Authority's stockholders, The Sports Authority's board of directors did not view any single factor as determinative, and did not find it necessary or practicable to assign relative or specific weights to the various factors considered. Further, individual directors may have given differing weights to different factors. The board of directors was aware of the interests of The Sports Authority's management in the merger, as described in the section entitled "The Merger and Related Transactions—Interests of Certain Persons in the Merger," commencing on page 46 of this joint proxy statement/prospectus, in determining to approve the merger agreement.


Opinion of Gart's Financial Advisor

        Gart retained Banc of America Securities to act as its financial advisor in connection with the merger. Banc of America Securities is an internationally recognized investment banking firm and regularly engages in the valuation of businesses and their securities in connection with mergers and acquisitions, negotiated underwritings, secondary distributions of listed and unlisted securities, private placements and valuations for corporate and other purposes. Gart selected Banc of America Securities to act as its financial advisor on the basis of Banc of America Securities' experience and expertise in transactions similar to the merger, its reputation in the investment community and its familiarity with Gart's business and its long-standing working relationship with Gart.

        In connection with Banc of America Securities' engagement as financial advisor to Gart, Gart requested that Banc of America Securities render an opinion to Gart's board of directors as to the fairness, from a financial point of view, to Gart of the exchange ratio in the merger. On February 19, 2003, Banc of America Securities delivered its oral opinion, which opinion was subsequently confirmed by delivery of its written opinion dated February 19, 2003, to Gart's board of directors that, as of that date and based upon and subject to the various assumptions and limitations summarized below, the exchange ratio in the merger was fair, from a financial point of view, to Gart.

        The full text of Banc of America Securities' written opinion to Gart's board of directors, dated February 19, 2003, is attached as Annex C to this joint proxy statement/prospectus. This opinion sets forth the assumptions made, procedures followed, other matters considered and limitations of the review undertaken. We incorporate the Banc of America Securities opinion in its entirety into this document and this section by reference and urge you to read the opinion carefully and in its entirety. This section is only a summary of the Banc of America Securities opinion and as a summary is qualified by reference to, and not a substitute for, the full text of the opinion.

        Banc of America Securities' analyses and opinion were prepared for and addressed to Gart's board of directors and are directed only to the fairness, from a financial point of view, to Gart of the exchange ratio provided for in connection with the merger as of the date of the opinion and do not

34



constitute an opinion as to the merits of the merger or a recommendation to any stockholder as to how to vote on the proposed merger. The exchange ratio was determined through negotiations between Gart and The Sports Authority and not pursuant to recommendations of Banc of America Securities. In furnishing its opinion, Banc of America Securities did not admit that it is an "expert" as that term is used in the Securities Act of 1933, nor did Banc of America Securities admit that its opinion constitutes a report or valuation within the meaning of the Securities Act of 1933. Statements to that effect are included in the Banc of America Securities opinion.

        In arriving at its opinion, Banc of America Securities:

        In conducting its review and arriving at its opinion, Banc of America Securities assumed and relied upon, without independent verification, the accuracy and completeness of the financial and other information reviewed by it for the purposes of the opinion. With respect to the financial forecasts for

35



Gart, including information relating to certain strategic, financial and operational benefits anticipated from the merger, Banc of America Securities was advised by the management of Gart, and assumed, that Gart's forecasts were reasonably prepared on bases reflecting its best currently available estimate and good faith judgment as to the future financial performance of Gart. With respect to the financial forecasts for The Sports Authority, Banc of America Securities was advised by a representative of The Sports Authority, and assumed, that The Sports Authority's forecasts were reasonably prepared on bases reflecting its best currently available estimate and good faith judgment as to the future financial performance of The Sports Authority. Banc of America Securities did not make any independent valuation or appraisal of The Sports Authority's assets or liabilities, nor was Banc of America Securities furnished with any such appraisals. In addition, Banc of America Securities did not assume any obligation to conduct, nor did it conduct, any physical inspection of the properties and facilities of Gart or The Sports Authority. Banc of America Securities assumed that the merger would be consummated as provided in the merger agreement, with full satisfaction of all covenants and conditions and without any waivers thereof. Banc of America Securities also assumed that, in the course of obtaining the necessary regulatory or other consents or approvals (contractual or otherwise) for the merger, no restrictions, including any divestiture requirements or amendments or modifications, would be imposed beyond those restrictions to which the parties would be required to agree under the terms of the merger agreement or that would otherwise have a material adverse effect on the contemplated benefits expected to be derived from the proposed merger. Banc of America Securities was informed by Gart, and it assumed, that the merger would be treated as a tax-free reorganization pursuant to the Internal Revenue Code of 1986, as amended.

        As is customary in the rendering of fairness opinions, Banc of America Securities based its opinion on financial, economic, market and other conditions as in effect on, and the information made available to Banc of America Securities as of, February 19, 2003. It was understood that, although subsequent developments may affect Banc of America Securities' opinion, Banc of America Securities does not have any obligation to update, revise or reaffirm its opinion. Banc of America Securities' opinion did not address the prices at which Gart common stock will trade following the announcement or consummation of the merger. The opinion of Banc of America Securities expressed in its opinion letter was provided for the information of Gart's board of directors. Banc of America Securities expressed no opinion or recommendation as to how the stockholders of Gart and The Sports Authority should vote with respect to the merger.

        In accordance with customary investment banking practice, Banc of America Securities employed generally accepted valuation methods in reaching its opinion. The following is a summary of the material financial analyses that Banc of America Securities utilized in providing its opinion. Some of the summaries of financial analyses are presented in tabular format. In order to understand the financial analyses used by Banc of America Securities more fully, you should read the tables together with the related text. The tables alone do not constitute a complete description of the financial analyses utilized by Banc of America Securities.

        Banc of America Securities compared the pro forma ownership of the combined company to the ownership level implied by the pro forma contribution by each of Gart and The Sports Authority of 2002E and 2003P sales, earnings before interest, taxes, depreciation and amortization (also referred to as EBITDA) and net income (on a fully taxed basis) to the combined company assuming completion of the merger. In conducting its analysis, Banc of America Securities utilized estimated and projected operating and financial information provided by the management of Gart and The Sports Authority and did not take into consideration any synergies anticipated from the merger.

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        The following table sets forth a summary of the exchange ratios implied by the ownership levels suggested by the selected financial performance benchmarks, as compared to the exchange ratio in the merger of 0.370.

 
  Implied Exchange Ratio
 
  Sales
  EBITDA
  Net Income
(Fully Taxed)

High   0.609   0.402   0.341
Low   0.570   0.341   0.215
Exchange Ratio in the Merger   0.370   0.370   0.370

        Banc of America Securities reviewed the historical market prices of Gart and The Sports Authority stock for the 52-week period ended February 19, 2003. Banc of America Securities also reviewed the closing prices of Gart and The Sports Authority common stock over the following periods prior to February 19, 2003 and the average exchange ratios implied by these closing prices, as compared to the exchange ratio of 0.370.

Trading Period

  Average Exchange Ratio
Current Stock Price (February 19, 2003)   0.369
Previous Month   0.393
Previous Three Months   0.371
Last 12 Months   0.361
Exchange Ratio in the Merger   0.370

        Using publicly available and other information, Banc of America Securities compared selected historical and projected operating and financial data of Gart and The Sports Authority with similar data for Big 5 Sporting Goods, Dick's Sporting Goods, Galyan's Trading and Hibbett Sporting Goods, publicly traded companies engaged in businesses that Banc of America Securities judged to be generally comparative to those of Gart and The Sports Authority.

        For each of these companies, Banc of America Securities calculated the multiples of enterprise value (which Banc of America Securities defined as diluted equity market value plus total debt, less cash and cash equivalents) to each of earnings before interest, taxes, depreciation and amortization (EBITDA) for 2002 and 2003 and price-earnings ratio for 2002 and 2003, yielding the ranges as set forth below.

 
  2002E
EBITDA

  2003P
EBITDA

  2002E
P/E

  2003P
P/E

 
High   8.1 x 6.7 x 16.0 x 13.5 x
Mean   6.0   5.1   10.6   9.3  
Low   4.1   3.1   7.3   7.3  
The Sports Authority (Merger Value)   5.3 x 4.5 x 8.3 x 9.0 x
Gart   5.0   4.3   8.1   6.9  

        Banc of America Securities then selected a range of 4.5x to 6.5x for 2002E EBITDA and applied this range to the respective operating statistics of Gart and The Sports Authority. This analysis yielded an implied trading value for Gart common stock of approximately $13.00 to $22.00 per share, as compared to Gart's closing common stock price of $14.94 on February 19, 2003, and an implied trading

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value for The Sports Authority common stock of approximately $4.00 to $7.00 per share, as compared to the price per share of The Sports Authority common stock of $5.53 implied by the exchange ratio. Banc of America Securities also selected a range of 7.0x to 10.0x for 2003P price-earnings ratio and applied this range to the respective operating statistics of Gart and The Sports Authority. This analysis yielded an implied trading value for Gart common stock of approximately $15.00 to $21.50 per share, as compared to Gart's closing common stock price of $14.94 on February 19, 2003, and implied trading value for The Sports Authority common stock of approximately $5.00 to $7.00 per share, as compared to the price per share of The Sports Authority common stock of $5.53 implied by the exchange ratio in the merger.

        Although the selected companies were used for comparative purposes, none of such companies is directly comparable to Gart or The Sports Authority. Accordingly, an analysis of the results of such a comparison is not purely mathematical but instead involves complex considerations and judgments concerning differences in historical and projected financial and operating characteristics of the selected companies and other factors that could affect the public trading value of the companies or Gart or The Sports Authority to which they are being compared.

        Banc of America Securities performed discounted cash flow analyses to determine the diluted equity value per share of Gart common stock and The Sports Authority common stock by using unlevered financial cash flow projections of Gart and The Sports Authority for fiscal year 2003 through fiscal year 2007 prepared by Gart's management. In conducting this analysis, Banc of America Securities assumed that the companies would perform in accordance with these projections. In calculating the range of terminal values, Banc of America Securities applied a multiple of 2007 EBITDA, ranging from 4.5x to 6.5x, to Gart and The Sports Authority projected 2007 EBITDA. Banc of America Securities then calculated the present values of the projected cash flows and the terminal values using weighted-average costs of capital ranging from 11% to 13% for Gart and The Sports Authority. Based on the results of this analysis, Banc of America Securities derived a reference range of equity values of $23.00 to $27.00 per share for Gart common stock and $8.00 to $12.00 per share for The Sports Authority common stock and an implied exchange ratio range of 0.397 to 0.406, as compared to the exchange ratio in the merger of 0.370.

        Banc of America Securities analyzed publicly available financial information relating to selected stock-for-stock merger of equals transactions with equity values in excess of $100,000,000 that were

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completed on or after January 1, 2000 and which Banc of America Securities deemed relevant in evaluating the merger. Banc of America Securities analyzed the following transactions:

Acquiror

  Target

Identix Inc.   Visionics Corp.
Western Multiplex Corp.   Proxim Inc.
Phillips Petroleum Co. Inc.   Conoco Inc.
GlobeSpan Inc.   Virata Corp.
UNB Corp.   BancFirst Ohio Corp.
Santa Fe International Corp.   Global Marine Inc.
Mead Corp.   Westvaco Corp.
Pride International Inc.   Marine Drilling Co.
New York Community Bancorp Inc.   Richmond County Financial Corp.
AmeriSource Health Crop.   Bergen Brunswig Corp.
Chemical Financial Corp.   Shoreline Financial Corp.
Komag Inc.   HMT Technology Corp.
Tuboscope Inc.   Varco International Inc.
National Commerce Bancorp   CCB Financial Corp.
NetIQ Corp.   Mission Critical Software Inc.
America Online Inc.   Time Warner

        Banc of America Securities compared the implied exchange ratio premium for the one day prior to announcement and the average implied exchange ratio premiums for the one week and one month periods prior to the announcements of the selected transactions to the respective exchange ratio premium or discount implied by the exchange ratio in the merger.

 
  Implied Exchange Ratio Premium
 
 
  One Day
  One Week Average
  One Month Average
 
Median   6.9 % 6.4 % 6.7 %
Mean   11.2   8.5   10.8  
Merger   0.3 % (3.5 )% (5.8 )%

        Although the selected transactions were used for comparison purposes, none of these transactions is directly comparable to the merger, and none of the companies in such transactions is directly comparable to Gart or The Sports Authority. Accordingly, an analysis of the results of such a comparison is not purely mathematical but instead involves complex considerations and judgments concerning differences in historical and projected financial and operating characteristics of the companies involved and other factors that could affect the acquisition value of such companies or Gart and The Sports Authority to which they are being compared.

        Banc of America Securities performed pro forma analyses of the financial impact of the merger using financial projections of Gart and The Sports Authority and synergy and integration cost projections for fiscal year 2003 and fiscal year 2004 prepared by Gart's management. In conducting these analyses, Banc of America Securities assumed that the companies would perform in accordance with these projections. For fiscal years 2003 and 2004, Banc of America Securities compared the earnings per share of Gart common stock, on a stand-alone basis, to the earnings per share of the

39


combined company on a pro forma basis. The earnings per share used in this comparison are set forth in the following table and were prepared by management of Gart:

Fiscal Year Earnings Per Share

  Gart
  Combined Company
2003*   $ 2.17   $ 2.11
2004*     2.41     3.06

*
Projected. For additional information regarding projections, please see the section entitled "The Merger and Related Transactions—Additional Financial Information" commencing on page 56 of this joint proxy statement/prospectus.

Based on these analyses, the proposed transaction would result in a decrease in earnings on a per share basis in 2003 and an increase in earnings per share in 2004, as compared to Gart's earnings per share on a stand-alone basis for 2003 and 2004, respectively.

        The summary set forth above does not purport to be a complete description of all the analyses performed by Banc of America Securities. The preparation of a fairness opinion involves various determinations as to the most appropriate and relevant methods of financial analyses and the application of these methods to the particular circumstances and, therefore, such an opinion is not readily susceptible to partial analysis or summary description. Banc of America Securities did not attribute any particular weight to any analysis or factor considered by it, but rather made qualitative judgments as to the significance and relevance of each analysis and factor. Accordingly, notwithstanding the separate factors summarized above, Banc of America Securities believes, and has advised Gart's board of directors, that its analyses must be considered as a whole and that selecting portions of its analyses and the factors considered by it, without considering all analyses and factors, could create an incomplete view of the process underlying its opinion. In performing its analyses, Banc of America Securities made numerous assumptions with respect to industry performance, business and economic conditions and other matters, many of which are beyond the control of Gart and The Sports Authority. These analyses performed by Banc of America Securities are not necessarily indicative of actual values or future results, which may be significantly more or less favorable than suggested by such analyses. In addition, analyses relating to the value of businesses do not purport to be appraisals or to reflect the prices at which businesses or securities may actually be sold. Accordingly, such analyses and estimates are inherently subject to uncertainty, being based upon numerous factors or events beyond the control of the parties or their respective advisors, none of Gart and The Sports Authority, Banc of America Securities or any other person assumes responsibility if future results are materially different from those projected. As mentioned above, the analyses supplied by Banc of America Securities and its opinion were among the factors taken into consideration by Gart's board of directors in making its decision to enter into the merger agreement and should not be considered as determinative of such decision.

        Gart has agreed to pay Banc of America Securities for its financial advisory services in connection with the merger. Banc of America Securities became entitled to a fee of $1,000,000 on February 19, 2003, the date on which it rendered its fairness opinion. Banc of America Securities is also entitled to an additional fee upon consummation of the merger equal to 0.75% of the amount of aggregate consideration to be paid in the merger, which additional fee will be no less than $4 million, less any amounts paid previously. Gart's board of directors was aware of this fee structure and took it into account in considering Banc of America Securities' fairness opinion and in approving the merger. Regardless of whether the merger is completed, Gart has agreed to reimburse Banc of America Securities for all reasonable out-of-pocket expenses, including reasonable fees and disbursements of Banc of America Securities' counsel, and has agreed to indemnify Banc of America Securities against certain liabilities, including liabilities under the federal securities laws. The terms of the fee

40


arrangement with Banc of America Securities, which are customary in transactions of this nature, were negotiated at arm's length between Gart and Banc of America Securities.

        Banc of America Securities acted as joint book-running manager with Merrill Lynch in connection with Gart's offering of 3,500,000 shares of Gart common stock at $32 per share in May 2002. Gart paid Banc of America Securities underwriting fees of $1.82 million in connection with this offering. Banc of America Securities and its affiliates may in the future provide financial advisory and financing services for Gart and may in the future receive fees for the rendering of these services. Bank of America, N.A., an affiliate of Banc of America Securities, is a lender under The Sports Authority's credit facility. In addition, in the ordinary course of their businesses, Banc of America Securities and its affiliates may actively trade the debt and equity securities of The Sports Authority and Gart for their own account and for the accounts of their customers, and, accordingly, Banc of America Securities or its affiliates may at any time hold a long or short position in such securities.


Opinion of The Sports Authority's Financial Advisor

        Credit Suisse First Boston has acted as The Sports Authority's exclusive financial advisor in connection with the merger. The Sports Authority selected Credit Suisse First Boston based on Credit Suisse First Boston's experience and reputation, and its familiarity with The Sports Authority and its business. Credit Suisse First Boston is an internationally recognized investment banking firm and is regularly engaged in the valuation of businesses and securities in connection with mergers and acquisitions, leveraged buyouts, negotiated underwritings, competitive biddings, secondary distributions of listed and unlisted securities, private placements and valuations for corporate and other purposes.

        In connection with Credit Suisse First Boston's engagement, The Sports Authority requested that Credit Suisse First Boston evaluate the fairness, from a financial point of view, to the holders of The Sports Authority common stock of the exchange ratio provided for in the merger. On February 19, 2003, at a meeting of The Sports Authority's board of directors held to evaluate the merger, Credit Suisse First Boston rendered to The Sports Authority's board of directors an oral opinion, which opinion was confirmed by delivery of a written opinion dated February 19, 2003, to the effect that, as of that date and based on and subject to the matters described in its opinion, the exchange ratio was fair, from a financial point of view, to the holders of The Sports Authority common stock.

        The full text of Credit Suisse First Boston's written opinion, dated February 19, 2003, to The Sports Authority's board of directors, which sets forth the procedures followed, assumptions made, matters considered and limitations on the review undertaken, is attached as Annex D and is incorporated into this document by reference. Holders of The Sports Authority common stock are encouraged to read this opinion carefully in its entirety. Credit Suisse First Boston's opinion is addressed to The Sports Authority's board of directors and relates only to the fairness, from a financial point of view, of the exchange ratio, does not address any other aspect of the proposed merger or any related transaction and does not constitute a recommendation to any stockholder as to any matters relating to the merger. The summary of Credit Suisse First Boston's opinion in this document is qualified in its entirety by reference to the full text of the opinion.

        In arriving at its opinion, Credit Suisse First Boston reviewed the merger agreement and related documents, as well as publicly available business and financial information relating to The Sports Authority and Gart. Credit Suisse First Boston also reviewed other information relating to The Sports Authority and Gart, including financial forecasts, provided to or discussed with Credit Suisse First Boston by The Sports Authority and Gart. Credit Suisse First Boston also met with the managements of The Sports Authority and Gart to discuss the businesses and prospects of The Sports Authority and Gart. Credit Suisse First Boston also considered financial and stock market data of The Sports Authority and Gart, and compared those data with similar data for publicly held companies in businesses similar to The Sports Authority and Gart and considered, to the extent publicly available,

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the financial terms of other business combinations and transactions which have been effected or announced. Credit Suisse First Boston also considered other information, financial studies, analyses and investigations and financial, economic and market criteria that it deemed relevant.

        In connection with its review, Credit Suisse First Boston did not assume any responsibility for independent verification of any of the information that was provided to or otherwise reviewed by it and relied on that information being complete and accurate in all material respects. With respect to the financial forecasts for The Sports Authority, Credit Suisse First Boston was advised by the management of The Sports Authority, and assumed, that The Sports Authority's forecasts were reasonably prepared on bases reflecting its best currently available estimate and judgment, as to the future financial performance of The Sports Authority and the strategic benefits and potential synergies, including the amount, timing and achievability thereof, anticipated to result from the merger. With respect to the financial forecasts for Gart, Credit Suisse First Boston was advised by a representative of Gart, and assumed, that Gart's forecasts were reasonably prepared on bases reflecting its best currently available estimate and good faith judgment as to the future financial performance of Gart. Credit Suisse First Boston also assumed, with The Sports Authority's consent, that the merger would be consummated in accordance with the terms of the merger agreement, without amendment, modification or waiver of any material term, condition or agreement contained in the merger agreement, and that, in the course of obtaining any necessary regulatory and third party approvals and consents relating to the merger, no modification, condition, restriction, limitation or delay would be imposed that would have an adverse effect on The Sports Authority or Gart or the contemplated benefits of the merger. Credit Suisse First Boston assumed, with The Sports Authority's consent, that the merger would be treated as a tax-free reorganization for federal income tax purposes.

        Credit Suisse First Boston was not requested to make, and has not made, an independent evaluation or appraisal of the assets or liabilities, contingent or otherwise, of The Sports Authority or Gart, and Credit Suisse First Boston was not furnished with any such evaluations or appraisals. Credit Suisse First Boston's opinion was necessarily based on information available to it, and financial, economic, market and other conditions as they existed and could be evaluated on the date of the Credit Suisse First Boston opinion. Credit Suisse First Boston did not express any opinion as to the actual value of Gart common stock when issued in the merger or the prices at which Gart common stock would trade at any time. Credit Suisse First Boston's opinion did not address the relative merits of the merger as compared to other business strategies that may be available to The Sports Authority, and it did not address the underlying business decision of Sports Authority to engage in the merger.

        In preparing its opinion to The Sports Authority's board of directors, Credit Suisse First Boston performed a variety of financial and comparative analyses, including those described below. The summary of Credit Suisse First Boston's analyses described below is not a complete description of the analyses underlying Credit Suisse First Boston's opinion. The preparation of a fairness opinion is a complex process involving various determinations as to the most appropriate and relevant methods of financial analysis and the application of those methods to the particular circumstances and, therefore, a fairness opinion is not readily susceptible to partial analysis or summary description. In arriving at its opinion, Credit Suisse First Boston made qualitative judgments as to the significance and relevance of each analysis and factor that it considered. Accordingly, Credit Suisse First Boston believes that its analyses must be considered as a whole and that selecting portions of its analyses and factors or focusing on information presented in tabular format, without considering all analyses and factors or the narrative description of the analyses, could create a misleading or incomplete view of the processes underlying its analyses and opinion.

        In its analyses, Credit Suisse First Boston considered industry performance, general business, economic, market and financial conditions and other matters, many of which are beyond the control of The Sports Authority and Gart. No company, transaction or business used in Credit Suisse First Boston's analyses as a comparison is identical to The Sports Authority or Gart or the proposed merger,

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and an evaluation of the results of those analyses is not entirely mathematical. Rather, the analyses involve complex considerations and judgments concerning financial and operating characteristics and other factors that could affect the acquisition, public trading or other values of the companies, business segments or transactions analyzed. The estimates contained in Credit Suisse First Boston's analyses and the ranges of valuations resulting from any particular analysis are not necessarily indicative of actual values or predictive of future results or values, which may be significantly more or less favorable than those suggested by the analyses. In addition, analyses relating to the value of businesses or securities do not purport to be appraisals or to reflect the prices at which businesses or securities actually may be sold. Accordingly, Credit Suisse First Boston's analyses and estimates are inherently subject to substantial uncertainty.

        Credit Suisse First Boston's opinion and financial analyses were only one of many factors considered by The Sports Authority's board of directors in its evaluation of the proposed merger and should not be viewed as determinative of the views of The Sports Authority's board of directors or management with respect to the merger or the exchange ratio.

        The following is a summary of the material financial analyses underlying Credit Suisse First Boston's opinion dated February 19, 2003 delivered to The Sports Authority's board of directors in connection with the merger. The financial analyses summarized below include information presented in tabular format. In order to fully understand Credit Suisse First Boston's financial analyses, the tables must be read together with the text of each summary. The tables alone do not constitute a complete description of the financial analyses. Considering the data in the tables below without considering the full narrative description of the financial analyses, including the methodologies and assumptions underlying the analyses, could create a misleading or incomplete view of Credit Suisse First Boston's financial analyses.

        Credit Suisse First Boston calculated the estimated present value of the stand-alone, unlevered, after-tax free cash flows that each of The Sports Authority and Gart could generate for fiscal years 2003 through 2007 based on two scenarios for each of The Sports Authority and Gart—a management case and a revised case. The Sports Authority management case was based on internal estimates of The Sports Authority's management for fiscal years 2003 through 2005 and extrapolated for fiscal years 2006 and 2007 based on guidance from The Sports Authority's management. Gart's management case was based on internal estimates of Gart's management for fiscal year 2003 and extrapolated for fiscal years 2004 through 2007 based on guidance from Gart's management. The Sports Authority's revised case and Gart's revised case included adjustments to the management case estimates for The Sports Authority and Gart to reflect, among other things, the potential for decreased revenue and profitability. Credit Suisse First Boston calculated ranges of estimated terminal values for The Sports Authority and Gart by multiplying fiscal year 2007 earnings before interest, taxes, depreciation and amortization, commonly referred to as EBITDA, of The Sports Authority and Gart by selected multiples ranging from 5.0x to 6.0x. The estimated after-tax free cash flows and terminal values were then discounted to present value using discount rates of 10% to 11%. This analysis implied per share equity reference ranges for The Sports Authority of $11.15 to $13.89 in the management case and $5.37 to $7.07 in the revised case, and per share equity reference ranges for Gart of $31.09 to $38.20 in the management case and $16.45 to $21.03 in the revised case. Based on these implied per share equity reference ranges, Credit Suisse First Boston then derived the following implied exchange ratio reference ranges, as compared to the exchange ratio provided for in the merger:

Implied Exchange
Ratio Reference Range

   
Management Case

  Revised Case
  Exchange Ratio
in the Merger

0.29x to 0.45x   0.26x to 0.43x   0.37x

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        Credit Suisse First Boston compared financial, operating and stock market data of The Sports Authority, Gart and the following 10 publicly traded companies in the retail industry:

Sporting Goods Retailers

  Small & MidCap Retailers

•Big 5 Sporting Goods Corporation   •Barnes & Noble, Inc.
•Dick's Sporting Goods, Inc.   •Electronics Boutique Holdings Corp.
•Galyan's Trading Company, Inc.   •Guitar Center, Inc.
•Hibbett Sporting Goods, Inc.   •Linens 'n Things, Inc.
    •Michaels Stores, Inc.
    •PETsMART, Inc.

        Credit Suisse First Boston reviewed, among other things, enterprise values, calculated as equity value, plus net debt, as a multiple of fiscal year 2003 EBITDA. Estimated financial data for the selected companies were based on publicly available research analysts' estimates. All multiples were based on closing stock prices on February 18, 2003. Credit Suisse First Boston then applied a range of selected multiples derived from publicly available financial data described above for the selected companies of 4.5x to 5.5x to the estimated fiscal year 2003 EBITDA for The Sports Authority and Gart based on The Sports Authority and Gart management cases. This analysis implied a per share equity reference range of $6.92 to $9.20 for The Sports Authority and $18.86 to $24.64 for Gart. Based on these implied per share equity reference ranges, Credit Suisse First Boston then derived the following implied exchange ratio reference range, as compared to the exchange ratio provided for in the merger:

Implied Exchange
Ratio Reference Range

  Exchange Ratio
in the Merger

0.28x to 0.49x   0.37x

        Credit Suisse First Boston reviewed the enterprise values of the following 20 selected transactions involving companies in the retail and apparel industries:

Acquiror

  Target

•Gart Sports Company   Oshman's Sporting Goods, Inc.
•Luxottica Group S.p.A.   Sunglass Hut International, Inc.
•Bain Capital, Inc.   KB Toy, a division of Consolidated Stores Corporation
•Best Buy Co., Inc.   Musicland Stores Corporation
•The May Department Stores Company   David's Bridal, Inc.
•Barnes & Noble, Inc.   Funco, Inc.
•Grupo Sanborns, S.A. de C.V.   CompUSA Inc.
•The Warnaco Group, Inc.   Authentic Fitness Corporation
•Barnes & Noble, Inc.   Babbage's, Etc. Inc.
•ShopKo Stores, Inc.   Pamida Holdings Corporation
•Freeman, Spogli & Co.   Galyan's Trading Company, Inc.
•Lowe's Companies, Inc.   Eagle Hardware & Garden Inc.
•Gart Sports Company   Sportmart, Inc.
•BAA PLC   Duty Free International, Inc.
•Riddell Sports Inc.   Varsity Spirit Corporation
•Petco Animal Supplies, Inc.   Pet Food Warehouse, Inc.
•Toys "R" Us, Inc.   Baby Superstore, Inc.
•Staples, Inc.   Office Depot, Inc.
•Sears Roebuck and Co.   Orchard Supply Hardware Stores Corporation
•Consolidated Stores Corporation   Kay-Bee Center, Inc.

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        Credit Suisse First Boston compared enterprise values in the selected transactions as a multiple of, among other things, latest 12 months EBITDA. All multiples for the selected transactions were based on information available at the time of the relevant transaction. Credit Suisse First Boston then applied a range of selected multiples derived from the selected transactions of 5.5x to 7.0x to the estimated fiscal year 2002 EBITDA for The Sports Authority and Gart based on The Sports Authority and Gart management cases. This analysis implied a per share equity reference range of $6.45 to $9.12 for The Sports Authority and $20.79 to $28.36 for Gart. Based on these implied per share equity reference ranges, Credit Suisse First Boston then derived the following implied exchange ratio reference range, as compared to the exchange ratio provided for in the merger:

Implied Exchange
Ratio Reference Range

  Exchange Ratio
in the Merger

0.23x to 0.44x   0.37x

        Credit Suisse First Boston compared the relative contributions of The Sports Authority and Gart to, among other things, the combined company's fiscal years 2002 and 2003 estimated EBITDA and net income. Estimated financial data for The Sports Authority and Gart were based on The Sports Authority and Gart management cases. Based on estimated contributions of each of The Sports Authority and Gart to fiscal years 2002 and 2003 estimated EBITDA and net income of the combined company, Credit Suisse First Boston calculated reference ranges of the implied percentage ownership in the combined company of 36.4% to 49.4% for The Sports Authority and 50.6% to 63.6% for Gart. Using these implied percentage ownership reference ranges, Credit Suisse First Boston then derived the following implied exchange ratio reference range, as compared to the exchange ratio provided for in the merger:

Implied Exchange
Ratio Reference Range

  Exchange Ratio
in the Merger

0.21x to 0.36x   0.37x

        Credit Suisse First Boston compared the closing prices of The Sports Authority and Gart common stock on February 18, 2003, the last trading day prior to public announcement of the merger, and the average daily closing prices of The Sports Authority and Gart common stock for one week, one month, three months, six months and one year preceding February 18, 2003, as follows:

 
  Average Closing Price
Time Period

  The Sports Authority
  Gart
February 18, 2003   $ 5.49   $ 14.76
One Week   $ 5.32   $ 13.83
One Month   $ 6.20   $ 15.30
Three Months   $ 7.05   $ 19.38
Six Months   $ 6.54   $ 19.16
One Year   $ 8.62   $ 23.85

        Credit Suisse First Boston then derived the following implied exchange ratio reference range, as compared to the exchange ratio provided for in the merger:

Implied Exchange
Ratio Reference Range

  Exchange Ratio
in the Merger

0.34x to 0.41x   0.37x

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        Credit Suisse First Boston reviewed the potential pro forma effect of the merger on the combined company's estimated earnings per share for fiscal years 2003 and 2004, both before and after taking into account potential cost savings and other synergies anticipated by the management of The Sports Authority to result from the merger. When potential cost savings and other synergies from the merger were taken into account, Credit Suisse First Boston reviewed the potential pro forma effect of the merger on the combined company's estimated earnings per share, both with and without integration costs anticipated by the management of The Sports Authority. Estimated financial data for The Sports Authority and Gart were based on The Sports Authority and Gart management cases. Based on the exchange ratio of 0.37x, this analysis indicated that the merger could be:


        The actual results achieved by the combined company may vary from these projected results and the variations may be material.

        The Sports Authority has agreed to pay Credit Suisse First Boston for its financial advisory services in connection with the merger an aggregate fee equal to the greater of $5 million or 1.25% of the total consideration, including liabilities assumed, to be paid by Gart in the merger. It is currently estimated that the aggregate fee payable to Credit Suisse First Boston will be approximately $5.2 million, of which $4.25 million is contingent upon consummation of the merger. The Sports Authority also has agreed to reimburse Credit Suisse First Boston for its out-of-pocket expenses, including reasonable fees and expenses of legal counsel and any other advisor retained by Credit Suisse First Boston, and to indemnify Credit Suisse First Boston and related parties against liabilities, including liabilities under the federal securities laws, arising out of its engagement.

        Credit Suisse First Boston and its affiliates in the past have provided, currently are providing and may in the future provide, investment banking and financial services to The Sports Authority and Gart unrelated to the merger, for which services Credit Suisse First Boston has received, and expects to receive, compensation. In the ordinary course of business, Credit Suisse First Boston and its affiliates may actively trade the securities of The Sports Authority and Gart for their own accounts and for the accounts of customers and, accordingly, may at any time hold long or short positions in those securities.


Interests of Certain Persons in the Merger

        Gart's and The Sports Authority's officers and directors participate in arrangements and have continuing indemnification against liabilities that provide them with interests in the merger that are different from, or in addition to, yours.

        Gart is a party to a management agreement with Leonard Green (the holder of approximately 26% of Gart's outstanding common stock) that provides for Gart to pay Leonard Green "reasonable and customary fees" for financial advisory and investment banking services in connection with major financial transactions, such as the proposed merger. The financial advisory and investment banking

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services provided by Leonard Green to Gart in connection with the merger included assisting in structuring and negotiating the financial and contractual terms of the merger, assisting Gart in its due diligence investigation of The Sports Authority, assisting Gart in its financial analysis of the combined company and assisting in arranging, structuring and negotiating the combined company's senior credit facility. Jonathan D. Sokoloff and Jonathan A. Seiffer are current directors of Gart and are also partners in Leonard Green. In order to avoid possible conflicts of interest with respect to the determination of the fee payable to Leonard Green in connection with the merger, Gart's board established a special committee consisting of Gordon D. Barker, Peter R. Formanek, Marilyn Oshman and Larry Strutton, comprising all members of the board other than directors who are members of management and directors who are affiliated with Leonard Green, to consider and act on the Leonard Green fee. The special committee retained Cypress Associates LLC as its financial advisor. Following negotiation of the fee, Cypress Associates gave its opinion to the special committee to the effect that the $4.25 million fee to be paid to Leonard Green in connection with the merger was reasonable and customary and was fair, from a financial point of view, to Gart and its stockholders other than Leonard Green. The payment of this fee is contingent upon consummation of the merger. Messrs. Sokoloff and Seiffer are being nominated for re-election to Gart's board of directors at Gart's annual meeting. In addition, Mr. Sokoloff has been designated as a Gart nominee to serve as a member of the board of directors of the combined company following the merger. As a result of their relationship with Leonard Green, Messrs. Sokoloff and Seiffer will receive a benefit from the merger that is in addition to the benefits that will be received by Gart's stockholders.

        Gart and The Sports Authority have agreed that, after the merger is completed, Martin E. Hanaka, The Sports Authority's current chairman and chief executive officer, will serve as the combined company's chairman and that John Douglas Morton, Gart's current chairman, president and chief executive officer, will serve as the combined company's vice chairman and chief executive officer. Gart has entered into employment agreements with each of Mr. Hanaka and Mr. Morton, which will become effective upon the consummation of the merger. Gart and The Sports Authority have also agreed that, after the merger is completed, Elliot Kerbis, The Sports Authority's current president and chief merchandising officer, will serve as the combined company's president and chief merchandising officer; Thomas Hendrickson, Gart's current executive vice president, chief financial officer and treasurer, will serve as the combined company's non-director vice chairman, chief administrative officer, chief financial officer and treasurer, and Todd Weyhrich, The Sports Authority's current senior vice president and controller will serve as the combined company's senior vice president-integration. Gart has indicated that it intends to enter into employment agreements with each of Mr. Kerbis, Mr. Hendrickson and Mr. Weyhrich, as well as with Nesa Hassanein, Gart's senior vice president and general counsel, Gregory Waters, Gart's executive vice president-store operations and Thomas Wildenberg, Gart's senior vice president of finance, in each case effective upon consummation of the merger.

        For a description of the foregoing employment agreements, see the section entitled "Related Agreements—Gart Employment Agreements," commencing on page 70 of this joint proxy statement/prospectus.

        Upon the approval of the merger by The Sports Authority's stockholders, the vesting of all outstanding stock options issued by The Sports Authority pursuant to The Sports Authority's 2000 Stock Option and Stock Award Plan, Directors Stock Plan, and Salaried Employees Stock Option and Stock Award Plan will accelerate in accordance with the terms of such plans. At the effective time of the merger, each such stock option will be deemed to constitute an option to acquire, on the same

47


terms and conditions as were applicable under The Sports Authority's stock option, the number of shares of Gart common stock that is equal to the number of shares of The Sports Authority common stock that were issuable upon exercise of the stock option of The Sports Authority immediately prior to the effective time of the merger multiplied by the 0.37 (rounded down to the nearest whole share), at an exercise price per share equal to the exercise price per share at which the stock option of The Sports Authority was exercisable immediately prior to the effective time divided by 0.37 (rounded up to the nearest whole cent). The following table shows the aggregate number of shares of The Sports Authority common stock that are subject to outstanding options held by directors and executive officers of The Sports Authority, including options, the vesting of which will accelerate as a result of the merger, and the average exercise price of the options held by each such director and executive officer.

Directors and Executive Officers

  Vested
Options

  Unvested
Options

  Average
Exercise
Price

Martin E. Hanaka   766,667   533,333   $ 5.18
Elliott J. Kerbis   50,001   324,999   $ 4.38
George R. Mihalko   220,000   140,000   $ 3.93
Louis-Philippe Vanier   0   75,000   $ 6.05
Art Quintana   127,001   47,499   $ 4.04
Todd Weyhrich   18,334   21,666   $ 6.79
A. David Brown   6,500   14,000   $ 6.47
Mary Elizabeth Burton   6,261   14,000   $ 6.40
Cynthia R. Cohen   6,500   26,400   $ 4.94
Steve Dougherty   15,707   24,000   $ 7.04
Julius W. Erving   10,100   14,000   $ 6.11
Carol A. Farmer   15,707   14,000   $ 8.33
Paul E. Fulchino   0   11,364   $ 9.96
Kevin M. McGovern   5,000   13,896   $ 6.60
Charles H. Moore   6,500   14,000   $ 6.47
    1,254,278   1,288,157   $ 4.99
   
 
 

        Additionally, restrictions on transfer of shares of restricted stock held by directors and executive officers will terminate as a result of the merger in accordance with the terms of such restricted stock. The following table shows the number of shares of restricted stock held by executive officers and directors of The Sports Authority whose vesting will accelerate as a result of the merger.

Executive Officers and Directors

  Restricted
Stock Shares

Martin E. Hanaka   50,000
Elliott J. Kerbis   10,000
George R. Mihalko   20,000
   
    80,000
   

        The Sports Authority has entered into an employment agreement with Martin E. Hanaka, its chairman and chief executive officer, which provides that, upon termination of his employment by The Sports Authority without "cause" or by Mr. Hanaka for "good reason," within two years after a change in control of The Sports Authority, Mr. Hanaka will receive a severance payment equal to 2.99 times his base salary plus his target annual bonus under The Sports Authority's bonus plan for the current or previous fiscal year, whichever is greater, plus medical, dental, long-term disability and life insurance

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benefits for a period of three years. Under this agreement, "good reason" includes a material diminution of the benefits (taken as a whole) provided to Mr. Hanaka immediately prior to the change in control, the relocation of the company's principal executive offices to a location outside of South Florida or any requirement that he be based anywhere other than the company's principal executive offices. Mr. Hanaka will receive the severance payment described above and this agreement will terminate immediately prior to the effective time of the merger and will be superseded by the employment agreement entered into between Gart and Mr. Hanaka that provides that, upon termination of his employment by Gart without "cause" or by Mr. Hanaka for "good reason," Mr. Hanaka will receive a severance payment in an amount equal to the base salary and target bonus payable through the remainder of the term of the agreement (but not less than one year's base salary and target bonus), automatically become fully vested in all outstanding long-term incentive awards and continue to receive health, life insurance, long term disability, dental and medical benefits, and all perquisites through the remainder of the term of the agreement (but for no less than one year following such termination). If Mr. Hanaka terminates his employment with the combined company voluntarily, but remains chairman of the board of directors of the combined company, the health insurance benefit will continue so long as he is associated with the combined company in that capacity. See the section entitled "Related Agreements—Gart Employment Agreements," commencing on page 70 of this joint proxy statement/prospectus.

        The Sports Authority has, in the past, entered into severance agreements with five executive officers (other than Mr. Hanaka) that provide for substantial payments and benefits to be made after a change in control of The Sports Authority (which would include the proposed merger). These executive officers have the right to receive such payments and benefits, subject to limited exceptions, if they are terminated "without cause" within two years following the change in control or if they resign for any "good reason" after 90 days and before two years after a change in control. Under each of these agreements, "good reason" includes a material diminution of the benefits (taken as a whole) provided to the executive immediately prior to the change in control, the relocation of the company's principal executive offices to a location outside of South Florida or any requirement that the executive be based anywhere other than the company's principal executive offices. Therefore, as a result of the merger and the contemplated relocation of The Sports Authority's principal executive offices to Colorado these executive officers would be entitled to terminate their employment for "good reason" and receive these severance payments. These executive officers will receive these severance payments 90 days after the consummation of the merger even if their employment is not terminated.

        In addition, The Sports Authority's severance agreements with three of these executive officers, Elliott Kerbis, George Mihalko and Louis-Philippe Vanier also provide that if the executive remains employed by The Sports Authority during the 90-day period following the consummation of a change in control of The Sports Authority or if his employment is terminated within such 90-day period under circumstances that would have entitled him to the severance payments described above, his base salary for such 90-day period will be increased by 50%. This 50% increase will not be included in any calculation of the annual base salary of an executive at the time of termination for purposes of calculating severance payments due to such executive.

        Under all of the agreements described above, including Mr. Hanaka's, the executive is entitled to reimbursement for any excise tax payable by him (as well as any resulting income taxes payable upon receipt of such reimbursement) upon the receipt of any payments that would result in his receipt of any "excess parachute payment" (as defined under Section 280G of the Internal Revenue Code of 1986).

        In connection with the merger, The Sports Authority's executives will receive (i) payments under change in control severance agreements, (ii) pro-rated target bonuses for fiscal 2003 as provided in the Annual Incentive Bonus Plan and (iii) pro-rated target performance unit payments for the 2001-03 and 2002-04 performance periods under the Performance Unit Plan. In addition, the Supplemental Executive Retirement Plan provides that retirement annuities thereunder vest upon a change in control

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of The Sports Authority, and permit The Sports Authority to pay the present value of such benefits in a lump sum to all plan participants. Gart and The Sports Authority have elected to make such a lump sum payment. The following table sets forth the amounts of the payments described in this paragraph.

 
  Payments under
Change in
Control
Agreements

  FY 2003
Bonus
Payment

  Pro rated PUP
Payment(a)

  SERP
Lump Sum
Payment

  Total
Martin E. Hanaka   $ 4,470,050   $ 247,917   $ 638,889   $ 1,063,209   $ 6,420,065
Elliott J. Kerbis     1,694,000     114,583     319,444     256,050     2,384,078
George R. Mihalko     1,410,000     114,583     319,444     232,999     2,077,027
Louis-Philippe Vanier     1,125,000     88,542         16,793     1,230,335
Todd Weyhrich     738,000     47,500     117,083     56,470     959,053
Art Quintana     822,000     45,833     188,196     260,873     1,316,901
   
 
 
 
 
    $ 10,259,050   $ 658,958   $ 1,583,056   $ 1,886,394   $ 14,387,458
   
 
 
 
 

(a)
The pro rated period is 29 and 17 months out of 36 months for the 2001 and 2002 grants, respectively.

        Executive officers of Gart that are party to severance agreements with Gart will receive severance payments and other benefits as set forth in such agreements if their employment is terminated without cause after the merger is consummated.

        After the execution of the merger agreement, Gart's board of directors authorized the payment of deal bonuses to Gart's executive officers in respect of the significant amount of time spent by such executives negotiating the merger agreement and planning for the integration of Gart and The Sports Authority. The payment of a portion of these bonuses is contingent upon the consummation of the merger. The following table sets forth the amounts of the bonuses described in this paragraph, the amount of each such bonus that has already been paid by Gart and the amount of each such bonus that is contingent upon the consummation of the merger.

 
  Total Deal Bonus
  Amount of Bonus Already Paid
  Amount of Bonus Contingent upon Consummation of the Merger
Thomas Hendrickson   $ 75,000   $ 37,500   $ 37,500
Nesa Hassanein     75,000     37,500     37,500
Thomas Wildenberg     60,000     30,000     30,000
Gregory Waters     50,000     25,000     25,000
   
 
 
    $ 260,000   $ 130,000   $ 130,000
   
 
 

        Gart has agreed in the merger agreement that it will indemnify any of The Sports Authority's officers or directors against liabilities with respect to all acts and omissions arising out of such person's services as an officer or director of The Sports Authority prior to the effectiveness of the merger. Gart also has agreed to cause to be maintained in effect for the next six years directors' and officers' liability insurance to cover any such liabilities.

        In accordance with the merger agreement, immediately following the merger, the combined company will reconstitute its board to consist of four designees of Gart and four designees of The Sports Authority. A ninth director who is currently unaffiliated with either company will be elected by

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the reconstituted board. Gart has designated John Douglas Morton, Jonathan D. Sokoloff, Peter R. Formanek and Gordon D. Barker to serve on the board of the combined company following the merger, and The Sports Authority has designated Martin E. Hanaka, Mary Elizabeth Burton, Cynthia R. Cohen and Kevin M. McGovern to serve on the board of the combined company following the merger.


Financing of the Combined Company Following the Merger

        Gart and The Sports Authority are parties to secured credit facilities that will be accelerated upon consummation of the merger. In the merger agreement, Gart agreed to use its reasonable best efforts to obtain, and the consummation of the merger is subject to, among other things, the condition that Gart has obtained, a credit facility for the combined company providing substantially the same amount of financing as that described in a letter agreement provided by The CIT Group/Business Credit, Inc. (the agent and a lender under Gart's current credit facility) to Gart prior to the execution of the merger agreement or such lesser amount of financing as is otherwise mutually acceptable to Gart and The Sports Authority, and The Sports Authority agreed to use its reasonable best efforts to assist Gart in obtaining such financing. Gart executed a commitment letter agreement with The CIT Group/Business Credit, Inc. in March 2003 pursuant to which CIT has committed to enter into a new secured credit facility following the merger, which will replace Gart's current facility, providing for loans to Gart and its subsidiaries (which after the merger will include The Sports Authority) of up to $600 million. The CIT letter agreement contemplates that:

        The CIT commitment letter contemplates that the credit facility will provide for loans to the combined company on a revolving basis of up to the lesser of $600 million and the sum of: (1) the lesser of (A) 70% of eligible inventory and (B) 85% of the liquidation value of eligible inventory, except for periods of at least 30 days, or a Seasonal Advance Period, when the advance rate may, at Gart's discretion, increase to the lesser of (A) 80% of eligible inventory or (B) 90% of the liquidation value of eligible inventory; (2) the lesser of (A) $40 million and (B) 85% of eligible credit card accounts receivable and wholesale accounts receivable; and (3) the lesser of (A) $20 million during the first year of the term of the loan, $10 million during the second year and zero thereafter and (B) 50% of the fair market value of eligible real estate. The CIT letter also contemplates that the lenders will assist the combined company in obtaining documentary or standby letters of credit, and that up to a maximum amount of $75 million of obligations under documentary or standby letters of credit may be outstanding at any time.

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        The CIT commitment letter provides that the combined company will be able to elect one of two interest rate options:

        Additionally, the CIT commitment letter provides that after the six month anniversary of the closing of the financing, the interest rate will be reduced or increased quarterly, based on the combined company's EBITDA for the 12 months most recently ended (excluding up to $140 million of merger and integration costs incurred in the 12 months following the closing of the merger). The margin for the interest rate will range from 0.0% to 0.50% over the Chase Bank Rate and from 1.50% to 2.50% over the LIBOR Rate.

        The CIT commitment letter provides that the combined company will pay a line of credit fee of 0.375% per annum on the unused portion of the line of credit, payable at the end of each month and for letters of credit, the lenders will receive fees in an amount equal to 1.25% per annum of the face amount of each outstanding letter of credit, less all amounts previously drawn under the letters of credit, payable monthly. The CIT commitment letter provides that any charges imposed on the lenders by the banks issuing the letters of credit will be borne by the combined company.

        Additionally, the CIT commitment letter provides that CIT will receive a commitment fee of $500,000 if the merger is consummated and financing is obtained from a source other than CIT and that Gart will reimburse CIT for all of its out-of-pocket expenses incurred in connection with the line of credit, including reasonable attorneys' fees.

        The CIT commitment letter contemplates that in order to secure its obligations under the credit facility, the combined company will give the lenders a first priority lien on all of its current and future accounts receivable, equipment, inventory, trademarks, patents, general intangibles, owned real estate and issued and outstanding stock of any of Gart's subsidiaries.

        The CIT commitment letter contemplates that all of Gart's subsidiaries that are not borrowers under the credit facility will guarantee the line of credit.

        The CIT commitment letter contemplates that the funding of the new credit facility will be subject to the following conditions and other customary closing conditions:

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        In connection with the new credit facility, the borrowers under the facility also will make customary representations, warranties and covenants. Under the facility contemplated by the CIT commitment letter, financial covenants would be limited to covenants regarding the combined company's minimum fixed charge coverage ratio and its minimum interest coverage ratio. The combined company would not be required to comply with these financial covenants if it maintains availability under the facility of at least $50 million during the first year of the facility, $60 million during the second year of the facility and $75 million thereafter. Up to $140 million of merger and integration costs incurred in connection with the merger in the 12 months following the closing of the merger would be excluded from the calculation of compliance with any covenants. Additionally, under this facility, the borrowers under the facility would be required to provide the lenders with monthly interim financial statements, fiscal year-end audited financial statements and annual operating budgets and the agent under the facility would have the right to require inventory appraisals to be performed.

        The credit facility contemplated by the CIT commitment letter has an initial term of four years, and will be renewable automatically for additional one-year terms, unless terminated by either party at the expiration of the initial term upon 60 days' written notice. Additionally, the lenders will be able to terminate this credit facility upon the occurrence of certain events of default. The combined company will be able to terminate this credit facility at any time, with 60 days' prior written notice to CIT, but the combined company will be required to pay an early termination premium if such termination is before the second anniversary of the closing. The early termination premium will be calculated by multiplying the revolving line of credit by (1) 0.50%, if this credit facility is terminated prior to one year after closing, or (2) 0.25%, if this credit facility is terminated more than one year but prior to two years after closing. No early termination fee will be payable thereafter.


Completion and Effectiveness of the Merger

        Gart and The Sports Authority will complete the merger when all of the conditions to the completion of the merger are satisfied or waived, including adoption of the merger agreement by The Sports Authority's stockholders and approval of the issuance of Gart common stock in connection with the merger and the amendment to Gart's certificate of incorporation by Gart's stockholders. The merger will become effective upon the filing of a certificate of merger with the State of Delaware.

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        Gart and The Sports Authority are working towards completing the merger as quickly as possible. Gart and The Sports Authority currently expect to complete the merger in the second or early third calendar quarter of 2003.


Material Federal Income Tax Consequences of the Merger

        The following, as it relates to matters of U.S. federal income tax law, constitutes the opinions of Clifford Chance US LLP, counsel to Gart, and Morgan, Lewis & Bockius LLP, counsel to The Sports Authority, subject to the qualifications set forth below and contained herein, as to the material federal income tax consequences of the merger to Gart, The Sports Authority and The Sports Authority's stockholders. Such opinions are not binding on the Internal Revenue Service or any court. It is assumed for purposes of this discussion that the shares of The Sports Authority common stock are held as "capital assets" within the meaning of section 1221 of the Internal Revenue Code of 1986, as amended. The tax consequences to each stockholder of The Sports Authority will depend in part upon such stockholder's particular situation. Special tax consequences not described herein may be applicable to particular classes of taxpayers, such as financial institutions, insurance companies, tax-exempt organizations, broker-dealers, traders in securities that elect to mark to market, persons that hold The Sports Authority common stock as part of a straddle, hedge or conversion transaction, persons who are not citizens or residents of the United States, stockholders that are foreign corporations, partnerships, estates or trusts, and stockholders who acquired their shares of The Sports Authority common stock through the exercise of an employee stock option or otherwise as compensation. The following discussion of material federal income tax consequences is based upon the Internal Revenue Code of 1986, as amended, its legislative history, existing and proposed regulations thereunder, published rulings and decisions, all as currently in effect as of the date hereof, and all of which are subject to change, possibly with retroactive effect. Tax consequences under state, local and foreign laws are not addressed herein. The Sports Authority's stockholders are urged to consult with their own tax advisors as to the specific tax consequences to them of the merger, including the application and effect of federal, state, local and foreign income and other tax laws.

        It is a condition to the consummation of the merger that Gart receive an opinion from its counsel, Clifford Chance US LLP, and The Sports Authority receive an opinion from its counsel, Morgan, Lewis & Bockius LLP, dated as of the effective date of the merger, to the effect that the merger will qualify as a reorganization within the meaning of section 368(a) of the Internal Revenue Code of 1986, as amended, for federal income tax purposes. The condition relating to the tax opinions will not be waived after receipt of stockholder approval unless further stockholder approval is obtained with appropriate disclosure. The opinions will be based on customary assumptions and customary representations made by, among others, Gart and The Sports Authority. An opinion of counsel represents counsel's best legal judgment and is not binding on the Internal Revenue Service or any court. Accordingly, there can be no assurance that the Internal Revenue Service will agree with the conclusions set forth in the opinion letters, and it is possible that the Internal Revenue Service or another tax authority could assert a position contrary to one or all of those conclusions and that a court could sustain that contrary position. Neither Gart nor The Sports Authority intends to obtain a ruling from the Internal Revenue Service with respect to the tax consequences of the merger.

        In the opinion of each of Clifford Chance US LLP and Morgan, Lewis & Bockius, LLP, (i) no gain or loss will be recognized by Gart or by The Sports Authority as a result of the merger; and (ii) holders of The Sports Authority common stock who exchange their common stock of The Sports Authority solely for Gart common stock in the merger will not recognize gain or loss for federal income tax purposes, except with respect to cash, if any, they receive in lieu of a fractional share of Gart common stock. The aggregate tax basis in Gart common stock received in the merger by each holder of The Sports Authority common stock will be the same as his or her aggregate tax basis in The Sports Authority common stock surrendered in the merger, decreased by the amount of any tax basis allocable

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to any fractional share interest for which cash is received. The holding period of Gart common stock received in the merger by a holder of The Sports Authority common stock will include the holding period of The Sports Authority common stock that he or she surrendered in the merger. A holder of The Sports Authority common stock who receives cash in lieu of a fractional share of Gart common stock will recognize gain or loss equal to the difference between the amount of cash received and the portion of his or her tax basis in The Sports Authority common stock surrendered in the merger that is allocable to the fractional share. That gain or loss generally will constitute capital gain or loss. In the case of an individual stockholder, any such capital gain generally will be subject to a maximum federal income tax rate of 20% (to be reduced to 15% for taxable years ending on or after May 6, 2003, and before January 1, 2009, upon the execution by the President of the United States of the "Jobs and Growth Tax Relief Reconciliation Act of 2003," expected to be on or about May 23, 2003) if the individual has held his or her common stock of The Sports Authority for more than one year on the date of the merger. If the individual has held his or her common stock of The Sports Authority for less than one year, however, such capital gain will be subject to tax at the federal income tax rate applicable to ordinary income. The deductibility of capital losses is subject to limitations for both individuals and corporations.

        Each stockholder in The Sports Authority that receives Gart common stock in the merger will be required to file a statement with his or her federal income tax return setting forth his or her basis in The Sports Authority common stock surrendered and the fair market value of Gart common stock and cash received in the merger, and to retain permanent records of these facts relating to the merger.

        Unless an exemption applies under applicable law and regulations, the exchange agent is required to withhold, and will withhold at the applicable backup withholding rate (currently 30%) on any cash payments to a stockholder in The Sports Authority unless the stockholder provides the appropriate form described below. Each stockholder in The Sports Authority should complete and sign the Substitute Form W-9 included as part of the letter of transmittal to be sent to each stockholder in The Sports Authority, so as to provide the information, including such stockholder's taxpayer identification number, and certification necessary to avoid backup withholding, unless an applicable exemption exists and is proved in a manner satisfactory to Gart and the exchange agent.

        The Sports Authority's stockholders are urged to consult their own tax advisors as to the specific tax consequences to them of the merger, including tax return reporting requirements, the applicability and effect of federal, state, local, and other applicable tax laws and the effect of any proposed changes in the tax laws.


Accounting Treatment of the Merger

        Gart and The Sports Authority will account for the merger using the purchase method of accounting with Gart as the acquiror.


Regulatory Filings and Approvals Required to Complete the Merger

        The Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, requires each of Gart and The Sports Authority to file Notification and Report Forms with the Bureau of Competition of the Federal Trade Commission and the Antitrust Division of the Department of Justice containing information relating to the parties to the merger agreement and the transactions contemplated by the merger agreement. Gart and The Sports Authority are required to observe a 30-day waiting period after the filings have been made before completing the merger. In compliance with the Hart-Scott-Rodino Antitrust Improvements Act, Gart and The Sports Authority both filed their Notification and Report Forms on March 3, 2003. The waiting period expired on April 2, 2003. Termination or expiration of the waiting period is a condition to the consummation of the merger.

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        The Federal Trade Commission or the Department of Justice frequently scrutinize the legality under the antitrust laws of transactions such as the merger. Accordingly, at any time before or after the completion of the merger, either the Federal Trade Commission or the Department of Justice could take action under the antitrust laws as it deems necessary or desirable in the public interest. Such actions may include seeking to challenge the merger, to limit Gart's or The Sports Authority's ownership of the combined company after the merger, to limit the operation of the combined company after the merger or otherwise to restrict the combined operations of Gart and The Sports Authority as a condition to approving the merger. Any challenges, limitations or restrictions imposed by government agencies could prevent the merger or diminish the benefits of the merger to Gart, The Sports Authority and their stockholders. In addition, state antitrust authorities or private persons or entities could take certain actions, including seeking to enjoin the merger under the antitrust laws at any time prior to the completion of the merger or could compel rescission or divestiture after completion of the merger. Gart and The Sports Authority believe that the consummation of the merger will not violate antitrust laws. There can be no assurance, however, that a challenge to the merger on antitrust grounds will not be made, or, if such a challenge is made, what the result will be.


Restrictions on Sales of Shares by Affiliates of The Sports Authority

        The shares of Gart common stock to be issued in connection with the merger will be registered under the Securities Act of 1933 and will be freely transferable under the Securities Act of 1933, except for shares of Gart common stock issued to any person who is deemed to be an "affiliate" of The Sports Authority. Persons who may be deemed to be affiliates include individuals or entities that control, are controlled by, or are under common control with The Sports Authority and may include some of its officers and directors as well as its principal stockholders. The Sports Authority's affiliates may not sell their shares of Gart common stock acquired in connection with the merger except pursuant to:

        Gart's registration statement on Form S-4, of which this joint proxy statement/prospectus forms a part, does not cover the resale of shares of Gart common stock to be received by affiliates of The Sports Authority or the combined company in the merger.


Listing of Gart Common Stock to be Issued in the Merger

        Gart common stock is currently listed on the Nasdaq National Market under the symbol "GRTS." Gart agreed in the merger agreement to change its name to "The Sports Authority, Inc." and to use its reasonable best efforts to cause the common stock of the combined company to be listed on the New York Stock Exchange at or prior to the effective time of merger under the symbol "TSA." Gart has been cleared to apply to list the common stock of the combined company on the New York Stock Exchange. As of the effective time of the merger, Gart intends to list the shares of Gart common stock currently outstanding and the shares of Gart common stock to be issued in the merger on the New York Stock Exchange, and to delist the shares of Gart common stock currently outstanding from the Nasdaq National Market.

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Delisting and Deregistration of The Sports Authority Common Stock After the Merger

        When the merger is completed, The Sports Authority common stock will be delisted from the New York Stock Exchange and will be deregistered under the Securities Exchange Act of 1934.


No Dissenter's or Appraisal Rights

        In accordance with Delaware law, no holder of Gart common stock or The Sports Authority common stock will have any dissenter's or appraisal rights in connection with the merger.

Additional Financial Information

        During the course of the discussions between Gart and The Sports Authority, each company delivered to the other certain non-public forecasted financial information for each company's fiscal year ending January 31, 2004. These forecasts were prepared on a stand-alone, pre-merger basis. The financial forecasts are "forward-looking statements" and our actual results may differ materially from those set forth in the forecasts. See the section entitled "Forward-Looking Statements" on page 25 of this joint proxy statement/prospectus for a discussion of the risks you should consider in reviewing the forecasts set forth in this joint proxy statement/prospectus.

        We did not prepare the forecasts with a view to public disclosure, use in this joint proxy statement/prospectus or compliance with published guidelines of the Securities and Exchange Commission, nor were they prepared in accordance with the guidelines established by the American Institute of Certified Public Accountants for preparation and presentation of financial forecasts. None of Gart, The Sports Authority or their respective affiliates or independent auditors assume any responsibility for the accuracy of the forecasts. The forecasts were not prepared with the approval of Gart's or The Sports Authority's board of directors.

        The forecasts are subjective in many respects and thus susceptible to interpretation and periodic revision based on actual experience and recent developments. While presented with numeric specificity, the forecasts reflect numerous assumptions made by the management of Gart and The Sports Authority with respect to industry performance and competition, general business, economic, market and financial conditions and other matters, all of which are difficult to predict, many of which are beyond our control.

        For these reasons, you should not regard the inclusion of the forecasts in this joint proxy statement/prospectus as an indication that Gart, The Sports Authority, any recipient of the forecasts or their respective affiliates or representatives, considered or consider the forecasts to be a reliable prediction of future events, and the forecasts should not be relied upon as such. Actual results may be higher or lower than those estimated. We do not generally publish our business plans and strategies or make external disclosures of our anticipated financial position or results of operations. We are not including the forecasts below in this joint proxy statement/prospectus to influence your vote with respect to the merger proposals. We do not intend to, and specifically decline any obligation to, update or otherwise revise the prospective financial information to reflect circumstances existing since their preparation or to reflect the occurrence of unanticipated events, even if any or all the underlying assumptions are shown to be in error. Also, we do not intend to, and specifically decline any obligation to, update or revise the prospective financial information to reflect changes in general economic or industry conditions.

        Neither Gart's nor The Sports Authority's auditors, nor any other independent accountants, have compiled, examined or performed any procedures with respect to these forecasts, nor have they expressed any opinion or any other form of assurance on this information or its achievability, and assume no responsibility for, and disclaim any association with, this prospective financial information. The independent public accountants' reports incorporated by reference in this document relate to the

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historical financial statements of Gart and The Sports Authority. These reports do not extend to these unaudited financial forecasts and should not be read to do so.

Gart

        The material portions of the financial forecasts prepared by management of Gart on January 9, 2003 follow:

 
  Fiscal Year Ending
January 31, 2004

 
  (In millions)

Total Sales   $ 1,144.8
Net Income     27.9
Earnings Per Share (EPS)     2.17
EBITDA*     79.1

*
Earnings before interest, taxes, depreciation and amortization.

The Sports Authority

        The material portions of the financial forecasts prepared by management of The Sports Authority follow:

 
  Fiscal Year Ending
January 31, 2004

 
  (In millions)

Total Sales   $ 1,488.5
Net Income     25.6
Earnings Per Share (EPS)     0.75
EBITDA*     82.3

*
Earnings before interest, taxes, depreciation and amortization.

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The Merger Agreement

        This section of the joint proxy statement/prospectus is a summary of the material terms of the merger agreement, a copy of which is attached as Annex A to this document. Because the description is a summary, it does not contain all of the information that may be important to you. You should refer to the full text of the merger agreement, which is hereby incorporated by reference into this joint proxy statement/prospectus, for details of the merger and the terms and conditions of the merger agreement.


The Merger

        The merger agreement provides that when all closing conditions have been satisfied or waived, Gold Acquisition Corp. will be merged with and into The Sports Authority. As a result of the merger, the separate corporate existence of Gold Acquisition Corp. will cease and The Sports Authority will continue as the surviving corporation. As a result of the merger, The Sports Authority will become a wholly-owned subsidiary of Gart. The merger will become effective on the date of filing of a certificate of merger with the Secretary of State of the State of Delaware or on a later date as is specified in the certificate of merger and agreed upon by the parties. This is referred to as the effective time of the merger.


Conversion of The Sports Authority's Shares in the Merger

        At the effective time of the merger, each share of The Sports Authority common stock issued and outstanding immediately prior to the effective time, other than shares of The Sports Authority common stock held in The Sports Authority's treasury, or owned by Gart or Gold Acquisition Corp. or any subsidiary of The Sports Authority, will be converted into the right to receive 0.37 of a share of Gart common stock.

        No fractional shares of Gart common stock will be issued in the merger. Instead of issuing fractional shares of Gart common stock to the holders of shares of The Sports Authority common stock, Gart will pay cash in an amount equal to the fractional amount of a share of Gart common stock that The Sports Authority common stockholders would otherwise receive multiplied by the closing price of a share of Gart common stock on the National Market System on the business day immediately prior to the day on which the merger is consummated. No interest will be paid or accrued on cash in lieu of fractional shares, if any.


Adjustment to Exchange Ratio

        The exchange ratio will be adjusted to reflect the effect of any stock split, reverse stock split, stock dividend (including a dividend or distribution of securities exchangeable for or convertible into common stock of Gart or The Sports Authority), reorganization, recapitalization or similar event in respect of the common stock of Gart or The Sports Authority occurring after the date of the merger agreement and prior to the effective time of the merger. Additionally, the exchange ratio will be adjusted to reflect the effect of any breach by either Gart or The Sports Authority of their representations and covenants regarding their respective capital structures as of the date of the merger agreement. Any such adjustment will result in holders of common stock or options, rights or convertible securities exercisable for or convertible into Gart and The Sports Authority common stock immediately prior to the effective time owning 50% of Gart common stock on a fully diluted basis immediately after the effective time.


Exchange of Certificates

        Gart will appoint an exchange agent for the purpose of exchanging The Sports Authority's stock certificates for Gart's stock certificates. Promptly after the effective time of the merger, the exchange agent will mail to each stockholder of record of The Sports Authority a letter of transmittal and

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instructions for the surrender of certificates representing The Sports Authority common stock in exchange for certificates representing Gart common stock. If a stock certificate is lost, stolen or destroyed, The Sports Authority stockholder will have to deliver an affidavit and, if required, a bond to receive certificates representing Gart common stock.

        Holders of The Sports Authority common stock should not send in their certificates until they receive a letter of transmittal and instructions from the exchange agent.


Corporate Organization and Governance

        Upon consummation of the merger, The Sports Authority will continue to be governed by the laws of the State of Delaware. The directors of Gold Acquisition Corp. immediately prior to the effective time of the merger will be the directors of the surviving corporation and the officers of The Sports Authority immediately prior to the effective time of the merger will be the officers of the surviving corporation, in each case, until their respective successors are duly elected, appointed or qualified or until their earlier death, removal or resignation in accordance with the certificate of incorporation and bylaws of the surviving corporation.


Representations and Warranties

        The merger agreement contains reciprocal representations and warranties made by each party to the other. All representations and warranties of Gart and The Sports Authority will expire upon the completion of the merger.

        A number of the representations and warranties are qualified by a material adverse effect standard. A material adverse effect with respect to Gart or The Sports Authority means any change, event or effect that has occurred, or to the knowledge of Gart or The Sports Authority, as the case may be, has been threatened, that is or is reasonably expected to be materially adverse to the business, results of operations, properties, condition (financial or otherwise), assets and liabilities of Gart or The Sports Authority, as the case may be, and its subsidiaries, taken as a whole, or that may prevent or materially delay the performance by Gart or The Sports Authority, as the case may be, of any of its obligations under the merger agreement or the consummation of the merger or the other transactions contemplated by the merger agreement, in each case, other than any change, event or effect which occurred prior to the date of the merger agreement and which was disclosed to the other party in writing prior to that date.


Covenants

        The merger agreement contains reciprocal covenants made by each party to the other relating to certain matters. The following summarizes the more significant of these covenants.

        Each of Gart and The Sports Authority has agreed that it will carry on its business in the usual, regular and ordinary course substantially consistent with past practice and will use its reasonable best efforts to maintain its rights and franchises and preserve its relationships with customers, suppliers and others who have business dealings with it. The merger agreement contains a number of specific restrictions on each party and its subsidiaries.

        Each of Gart and The Sports Authority has agreed that it will, and it will cause its subsidiaries to, afford to the other party and to the other party's officers, employees, accountants, counsel, financial advisors and other representatives reasonable access during normal business hours to all of its

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properties, books, contracts, commitments and records and that it will, and will cause its subsidiaries to, furnish promptly to the other party consistent with its legal obligations all other information concerning its business, properties and personnel as the other party may reasonably request. This access will be afforded until the effective time of the merger and will be subject to certain limitations.

        Each of Gart and The Sports Authority has agreed to use its reasonable best efforts to take or cause to be taken all actions necessary, proper or advisable under applicable laws and regulations to complete the merger and the other transactions contemplated by the merger agreement as soon as practicable. This includes using reasonable best efforts to obtain all approvals, consents, waivers, registrations, permits, authorizations, clearances and other confirmations required to be obtained from any third parties or from governmental entities that are necessary, proper or advisable to complete the merger and the other transactions contemplated by the merger agreement. Each of Gart and The Sports Authority has agreed to use its reasonable best efforts to cooperate with the other party in connection with any such filing or submission or investigation or other inquiry related thereto.

        Gart has agreed to use reasonable best efforts to obtain, as of or prior to the closing of the merger, a credit facility providing substantially the same amount of financing as that provided in a financing commitment letter received by Gart from The CIT Group/Business Credit, Inc., or such lesser amount of financing as is otherwise mutually acceptable to Gart and The Sports Authority. The Sports Authority has agreed to use reasonable best efforts to assist Gart in obtaining such financing. For more information about the terms of the CIT letter agreement, see the section entitled "The Merger and Related Transactions—Financing of the Combined Company Following the Merger," commencing on page 51 of this joint proxy statement/prospectus.

        Gart and The Sports Authority have agreed that all rights to indemnification and exculpation now existing in favor of any current or former director or officer of The Sports Authority or any of its subsidiaries as provided in their respective charters or bylaws will survive the merger.

        Additionally, Gart has agreed to maintain or cause to be maintained in effect for six years after the effective time of the merger the current policies (or their equivalent) of directors' and officers' liability insurance maintained by The Sports Authority covering acts or omissions occurring prior to the merger, subject to certain limitations.

        After the merger, the headquarters of the combined company and its subsidiaries will be located in Englewood, Colorado. Gart and The Sports Authority have agreed that, promptly following the effective time, the combined company's board of directors will be reconstituted to consist of four designees of Gart and four designees of The Sports Authority. After the effective time, the reconstituted board will elect to the board of directors an additional individual who will satisfy the independence requirements of the New York Stock Exchange, the Nasdaq National Market and the Sarbanes-Oxley Act of 2002. Gart designated John Douglas Morton, Jonathan D. Sokoloff, Peter R. Formanek and Gordon D. Barker to serve on the board of the combined company following the merger and The Sports Authority designated Martin E. Hanaka, Mary Elizabeth Burton, Cynthia R. Cohen and Kevin M. McGovern to serve on the board of the combined company following the merger. Gart and The Sports Authority have also agreed that as of the effective time Martin E. Hanaka will be

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the combined company's chairman, John Douglas Morton will be combined company's vice chairman and chief executive officer, Elliott J. Kerbis will be the combined company's president and chief merchandising officer, Thomas T. Hendrickson will be combined company's non-director vice chairman, chief administrative officer, chief financial officer and treasurer, Greg A. Waters will be combined company's executive vice president—store operations and chief operating officer and Todd Weyhrich will combined company's senior vice president of integration. The rest of the management team will be comprised of executives of both Gart and The Sports Authority. Gart's name will be changed to "The Sports Authority, Inc." after completion of the merger.

        Gart and The Sports Authority have agreed to hold meetings of their respective stockholders as soon as practicable following the execution of the merger agreement, for the purpose of voting: (1) in the case of The Sports Authority, to adopt the merger agreement; and (2) in the case of Gart, to approve the issuance of Gart common stock in the merger and the amendment to Gart's certificate of incorporation. Gart and The Sports Authority have agreed, to the extent practicable, to hold such meetings on the same date.

        Gart, The Sports Authority and their respective subsidiaries have agreed to use their reasonable best efforts to cause the merger to qualify as a reorganization within the meaning of Section 368 of the Internal Revenue Code of 1986, as amended.

        Gart's shares of common stock are currently listed on the Nasdaq National Market. Gart has agreed to change its name to "The Sports Authority, Inc." and to use its reasonable best efforts to cause the common stock of the combined company to be listed on the New York Stock Exchange under the trading symbol "TSA," subject to official notice of issuance, as of or prior to the effective time of the merger. Gart has been cleared to apply to list the common stock of the combined company, including the shares of Gart common stock to be issued by Gart in the merger, on the New York Stock Exchange. Consequently, as of the effective time of the merger, Gart intends to list the common stock of the combined company on the New York Stock Exchange and to delist the Gart common stock from the Nasdaq National Market.

        In the merger agreement, each party has agreed that it will, and it will cause its subsidiaries and representatives, to cease, as of the date of the merger agreement, any existing discussions with any parties conducted before that date with respect to any Acquisition Proposal.

        An "Acquisition Proposal" refers to any written bona fide proposal made by a third party relating to either:

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        Each party has further agreed that it will not, nor will it permit any of its subsidiaries to, nor will it authorize or permit any of its directors, officers or employees or any representative retained by it, directly or indirectly, to:

        A "Superior Proposal" refers to any written bona fide proposal made by a third party and not solicited by Gart or The Sports Authority, as applicable, relating to either:

        In addition, in order to qualify as a Superior Proposal, the proposal must be on terms that the board of directors of Gart or The Sports Authority, as applicable, determines in its good faith judgment, (after consultation with a financial advisor of nationally recognized reputation and considering any modifications to the merger agreement proposed by the Gart or The Sports Authority, as applicable) taking into account legal, financial, regulatory and other aspects of the proposal deemed appropriate by the board of directors:

        The merger agreement allows each party, prior to the date of the meeting of its stockholders contemplated by this joint proxy statement/prospectus, to furnish information to, negotiate or otherwise engage in discussions with a party in response to an Acquisition Proposal if all of the following conditions are satisfied:

        Each party has also agreed in the merger agreement that its board of directors may not:

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        If prior to the date of its stockholders meeting contemplated by this joint proxy statement/prospectus, however, Gart or The Sports Authority receives a Superior Proposal which was not solicited by it in breach of, or otherwise does not result from a breach of the non-solicitation provisions in the merger agreement, and if its board of directors determines in good faith (after consultation with outside legal counsel and a financial advisor of national reputation) that it is required to do so in order to comply with its fiduciary duties to its stockholders under applicable law, then the board of directors may take any of the actions described above. However, its board of directors may only take any of the actions described above if, simultaneously with taking such action, it also terminates the merger agreement and executes a definitive agreement to implement the Superior Proposal, but only if it has given the other party five business days notice that it is prepared to accept a Superior Proposal. Such notice must specify the terms and conditions of the Superior Proposal. At the time that such party terminates the merger agreement it must pay the other party a $7.4 million termination fee.

        The merger agreement also allows each party's board of directors to take and to disclose to its stockholders a position contemplated by Rule 14d-9 or 14e-2 under the Securities Exchange Act of 1934 and make all other disclosures which, in the good faith judgment of the board of directors, are required by applicable law.

        Each party has agreed to promptly (and no more than 24 hours after receipt) advise the other party of the receipt of any Acquisition Proposal, or any inquiry that would reasonably be expected to lead to an Acquisition Proposal, or of any request for information in connection with a possible Acquisition Proposal, and to provide to the other party the material terms and conditions of such request and the identity of the party making the Acquisition Proposal or inquiry and to keep the other party reasonably and promptly informed of the status of any such request or proposal and the substance of any discussions relating to such Acquisition Proposal. Each party has further agreed to provide the other party with a copy of any written materials received from any third party with respect to or which could lead to an Acquisition Proposal and of any materials provided to such third party.


Treatment of The Sports Authority's Stock Options

        Upon the approval of the merger by The Sports Authority's stockholders, the vesting of all outstanding stock options issued by The Sports Authority pursuant to The Sports Authority's 2000 Stock Option and Stock Award Plan, Directors Stock Plan and Salaried Employees Stock Option and Stock Award Plan will accelerate in accordance with the terms of the options. At the effective time of the merger, each stock option will be deemed to constitute an option to acquire, on the same terms and conditions as were applicable under The Sports Authority's stock option, the number of shares of Gart common stock that is equal to the number of shares of The Sports Authority common stock that were issuable upon exercise of the stock option of The Sports Authority immediately prior to the effective time of the merger multiplied 0.37 (rounded down to the nearest whole share), at an exercise price per share equal to the exercise price per share at which the stock option of The Sports Authority was exercisable immediately prior to the effective time divided by 0.37 (rounded up to the nearest whole cent).

        At the effective time of the merger, Gart will assume all of The Sports Authority's stock options in accordance with the terms of the stock option plan under which they were issued and the stock option agreement by which they are evidenced. As soon as practicable after the effective time of the merger

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Gart will file a registration statement on Form S-8 (or another appropriate form) with respect to the Gart common stock subject to the stock options of The Sports Authority, and will maintain the effectiveness of such registration statement for so long as such stock options remain outstanding.


The Sports Authority's Employee Benefit Plans and Agreements

        Gart has agreed to adopt all The Sports Authority benefit plans and agreements, including the executive severance agreements described under the section entitled "The Merger and Related Transactions—Interests of Certain Persons in the Merger—Entitlement to Severance Payments and Other Benefits" commencing on page 48 of this joint proxy statement/prospectus, and to perform The Sports Authority's obligations under these plans and agreements that are outstanding as of the effective time of the merger. Gart may amend or terminate these plans and agreements but may not reduce the accrued benefits in a manner that is prohibited by law or the relevant plan or agreement. Prior to the effective time of the merger, Gart and The Sports Authority will determine which company's benefit plans will survive following completion of the merger.


Conditions to the Completion of the Merger

        The respective obligations of Gart, Gold Acquisition Corp. and The Sports Authority to complete the merger and the related transactions contemplated by the merger agreement are subject to the satisfaction or waiver of each of the following conditions before the completion of the merger:

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Termination of the Merger Agreement

        The merger agreement may be terminated and the transactions contemplated by the merger agreement may be abandoned at any time prior to the effective time of the merger, whether before or after stockholder approval, as follows:

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Termination Fee and Expenses

        Gart will be required to pay a termination fee in the amount of $7.4 million if:

        The Sports Authority will be required to pay a termination fee in the amount of $7.4 million if:

        Gart will be required to pay to The Sports Authority all fees and expenses (up to $3.7 million) incurred by The Sports Authority in connection with the merger if:

        and, in either case, The Sports Authority is not entitled to the termination fee described above.

        The Sports Authority will be required to pay to Gart all fees and expenses (up to $3.7 million) incurred by Gart in connection with the merger if:

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and, in either case, Gart is not entitled to receive the termination fee described above.


Extension, Waiver and Amendment of the Merger Agreement

        Gart, Gold Acquisition Corp. and The Sports Authority may amend the merger agreement prior to and after the approval of matters presented in connection with the merger by Gart's and The Sports Authority's stockholders by action taken or authorized by their respective boards of directors, unless the amendment requires the approval of the stockholders of Gart, Gold Acquisition Corp. or The Sports Authority, in which case the applicable stockholder approval must be obtained prior to amending the merger agreement.

        Gart and Gold Acquisition Corp., on the one hand, and The Sports Authority, on the other, may extend the time for the performance of any of the other party's covenants, obligations or other acts under the merger agreement, waive any inaccuracies in the other party's representations and warranties, and waive compliance by the other party with any of the agreements or conditions contained in the merger agreement.

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Related Agreements

Stockholder's Agreement Between The Sports Authority and Leonard Green

        In connection with and as a condition to entering into the merger agreement, The Sports Authority has entered into a stockholder's agreement with Leonard Green, which, as of February 1, 2003, owned approximately 26% of the outstanding shares of Gart common stock. Pursuant to the stockholder's agreement, Leonard Green has agreed, among other things:

        The stockholder's agreement will terminate at the earlier of:

        As a means to enforce Leonard Green's performance under the stockholder's agreement, Leonard Green has appointed The Sports Authority as its proxy to vote the shares in any vote related to the above matters. Leonard Green's obligations with respect to the voting of its shares of Gart common stock will terminate if Gart's board of directors, in accordance with the terms of the merger agreement, withdraws its recommendation of the issuance of Gart common shares in the merger and the amendment to Gart's certificate of incorporation. For a more complete description of this stockholder's

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agreement, you should refer to the stockholder's agreement attached as Annex B to this joint proxy statement/prospectus.


The Sports Authority Rights Agreement

        The Sports Authority has adopted a stockholder rights agreement pursuant to which it has declared a dividend distribution of one right per outstanding share of its common stock. Each right entitles the holder to buy a unit consisting of one one-thousandth of a share of Series A Junior Participating Preferred Shares or, in certain circumstances, a combination of securities and assets of equivalent value, at a purchase price of $35 per unit, subject to adjustment. Each unit carries voting and dividend rights that are intended to produce the equivalent of one share of common stock. Unless earlier terminated in accordance with the terms of the rights agreement, the rights expire on September 11, 2011.

        The rights become exercisable only if a person or group acquires 20% or more, or a person or group announces a tender offer for 20% or more, of The Sports Authority's outstanding common stock. In certain events the rights entitle each holder to receive shares of common stock having a value equal to two times the exercise price of the right, and the rights of the acquiring person or group will become null and void. These events include, but are not limited to, a merger in which The Sports Authority is the survivor, and an acquisition of 20% or more of The Sports Authority's outstanding common stock other than through a tender offer that provides fair value to all shareholders. If The Sports Authority is acquired in a merger in which it is not the surviving corporation, or more than 50% of its assets or earning power is sold or transferred, each holder of a right will have the right to receive, upon exercise, common shares of the acquiring company. The Sports Authority can redeem each right for $.01 at any time before the rights become exercisable.

        Prior to the execution of the merger agreement, The Sports Authority amended its rights agreement to provide that the execution of the merger agreement and the stockholder's agreement and the transactions contemplated by such agreements would not cause these rights to become exercisable. This amendment also provides that the rights issued under the rights agreement will expire immediately prior to the consummation of the merger.


Gart Employment Agreements

        In connection with the merger agreement, Gart entered into employment agreements with John Douglas Morton and Martin E. Hanaka that will become effective upon the consummation of the merger. Mr. Morton's agreement has a term of three years commencing at the effective time of the merger (which term will be automatically extended thereafter for consecutive one year periods unless terminated by either party on 90 days prior written notice) and provides that he will serve as vice chairman and chief executive officer of the combined company. Among other things, Gart has agreed to pay Mr. Morton an annual base salary of $1,100,000 and an annual bonus as established by the compensation committee of the board of directors. Mr. Hanaka's agreement has a term of three years commencing at the effective time of the merger (which term will be automatically extended thereafter for consecutive one year periods unless terminated by either party on 90 days prior written notice) and provides that he will serve as chairman of the combined company. Among other things, Gart has agreed to pay Mr. Hanaka an annual base salary of $900,000 and an annual bonus, as determined by the compensation committee of the board of directors, not to exceed $700,000 during 2003 and $500,000 during 2004 and 2005.

        Under the employment agreements, upon the termination of Mr. Morton's or Mr. Hanaka's employment either by the combined company for "cause" or by Mr. Morton or Mr. Hanaka without "good reason," Mr. Morton or Mr. Hanaka, as applicable, will be entitled to receive, among other things, his base salary through the date of termination of his employment.

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        If Mr. Morton terminates his employment for "good reason" or if he is terminated without "cause," he shall be entitled to receive (in addition to salary and certain other benefits earned prior to termination) a single lump sum payment in an amount equal to three times the sum of his then-current annual base salary and his target bonus for the year in which such termination occurs. In addition, Mr. Morton will become fully vested in all outstanding long-term incentive awards, and shall be entitled to certain health and welfare benefits for a period of three years following such termination.

        If Mr. Hanaka terminates his employment for "good reason" or if he is terminated without "cause," he shall be entitled to receive (in addition to salary and certain other benefits earned prior to termination) a single lump sum payment in an amount equal to the annual base salary and target bonus (based upon the year in which such termination occurs) otherwise payable for the remainder of the term of his employment agreement (but no less than one year's base salary and such target bonus). In addition, Mr. Hanaka shall become fully vested in all outstanding long-term incentive awards, and shall be entitled to certain health and welfare benefits for the remainder of the term of his employment agreement (but not less than one year following such termination).

        Under the employment agreements, "cause" means, subject to various exceptions:

        Under the employment agreements, "good reason" means, subject to certain exceptions:

71


        Gart has negotiated term sheets with each of Elliott Kerbis (the current president and chief merchandising officer of The Sports Authority), Thomas Hendrickson (the current executive vice president, chief financial officer and treasurer of Gart), Gregory Waters (the current executive vice president and chief operating officer of Gart) and Nesa Hassanein (the current senior vice president, general counsel and secretary of Gart) and expects to enter into an employment agreement reflecting such terms with each of these individuals. Each of these agreements will become effective upon the consummation of the merger and will have a term of three years.

        Mr. Kerbis' term sheet provides that he will serve as president and chief merchandising officer of the combined company. Among other things, Gart has agreed to pay Mr. Kerbis an annual base salary of $650,000 and an annual target bonus of up to 60% of his base salary based on Gart achieving annual performance targets. Gart has also agreed to pay Mr. Kerbis a one-time $50,000 sign-on bonus. Mr. Kerbis will, after the consummation of the merger, also be entitled to receive options to purchase Gart common stock in an amount equal to at least 75% of the amount of options granted to the combined company's chief executive officer. Upon the termination of Mr. Kerbis' employment for "good reason" or if he is terminated without "cause" (the terms "good reason" and "cause" will have the meanings described above) he will be entitled to receive a single lump sum payment in an amount equal to the annual base salary and target bonus (based upon the year in which such termination occurs) otherwise payable for the remainder of the term of his employment agreement (but no less than two years' base salary and such target bonus). In addition, Mr. Kerbis shall become fully vested in all outstanding long-term incentive awards. Gart has also agreed to provide Mr. Kerbis with a relocation package appropriate for an executive officer and to reimburse him for expenses of travel between South Florida and Englewood, Colorado (including travel expenses of family members) and for reasonable temporary living expenses in Denver for a period of one year. Mr. Kerbis will also be entitled to receive a gross-up payment in respect of taxes paid by him in connection with his relocation package and the payment by Gart of the travel and living expenses described above.

        Mr. Hendrickson's term sheet provides that he will serve as non-director vice chairman, chief administrative officer, chief financial officer and treasurer of the combined company. Among other things, Gart has agreed to pay Mr. Hendrickson an annual base salary of $550,000 and an annual target bonus of up to 60% of his base salary based on Gart achieving annual performance targets. Mr. Hendrickson will, after the consummation of the merger, also be entitled to receive options to purchase Gart common stock in an amount equal to at least 60% of the amount of options granted to the combined company's chief executive officer.

        Mr. Waters' term sheet provides that he will serve as executive vice president-store operations and chief operating officer of the combined company. Among other things, Gart has agreed to pay Mr. Waters an annual base salary of $500,000 and an annual target bonus of up to 60% of his base salary based on Gart achieving annual performance targets.

        Ms. Hassanein's term sheet provides that she will serve as executive vice president, general counsel and secretary of the combined company. Among other things, Gart has agreed to pay Ms. Hassanein an annual base salary of $340,000 and an annual target bonus of up to 60% of her base salary based on Gart achieving annual performance targets.

        Each of Mr. Kerbis, Mr. Hendrickson, Mr. Waters and Ms. Hassanein may be entitled to additional benefits that will be determined upon finalization of their employment agreements. Gart also intends to enter into an employment agreement with each of Todd Weyhrich and Thomas Wildenberg, which agreements will also become effective upon the consummation of the merger. The terms of Mr. Weyhrich's and Mr. Wildenberg's employment agreements have not yet been determined.

72




Market Price and Dividend Information

Market Price Information

        Gart common stock is currently traded on the Nasdaq National Market under the symbol "GRTS." The Sports Authority common stock is traded on the New York Stock Exchange under the symbol "TSA."

        The following table sets forth, for the fiscal quarters indicated, the high and low closing prices per share of Gart common stock, as reported on the Nasdaq National Market, and the high and low sales prices per share of The Sports Authority common stock, as reported on the New York Stock Exchange, in each case based on published financial sources. You should note that all quotations reported on the Nasdaq National Market reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not necessarily represent actual transactions.

 
   
   
  The Sports Authority
Common Stock

 
  Gart Common Stock
Fiscal Year

  High
  Low
  High
  Low
2001:                        
  First Quarter   $ 12.69   $ 8.81   $ 3.74   $ 1.50
  Second Quarter     23.40     12.20     4.00     2.20
  Third Quarter     18.00     11.25     5.70     3.04
  Fourth Quarter     22.99     17.47     8.15     4.27
2002:                        
  First Quarter   $ 37.75   $ 22.75   $ 14.85   $ 7.65
  Second Quarter     36.16     17.31     14.50     6.80
  Third Quarter     21.76     14.40     9.10     4.10
  Fourth Quarter     26.56     15.69     8.90     5.26
2003:                        
  First Quarter   $ 24.00   $ 12.96   $ 8.88   $ 5.00
  Second Quarter (through May 22)     25.05     20.26     9.32     7.44

        The following table sets forth the closing prices per share of Gart common stock, as reported on the Nasdaq National Market, and The Sports Authority common stock, as reported on the New York Stock Exchange, in each case based on published financial sources, on (1) February 19, 2003, the business day preceding the public announcement that Gart and The Sports Authority had entered into the merger agreement and (2) May 22, 2003, the last full trading day for which closing sales prices were available at the time of the filing of this joint proxy statement/prospectus.

        The table also includes the equivalent price per share of The Sports Authority common stock on those dates. This equivalent price per share was calculated by multiplying the closing sales price of Gart common stock on those dates by the exchange ratio of 0.37.

 
  Gart Common Stock Closing Sale Price
  The Sports Authority Common Stock Closing Price per Share
  The Sports Authority Equivalent Price per Share
February 19, 2003   $ 14.94   $ 5.51   $ 5.53
May 22, 2003   $ 23.96   $ 8.72   $ 8.87

        Because the market price of Gart common stock may increase or decrease before the completion of the merger, The Sports Authority's stockholders are urged to obtain current market quotations.

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Dividend Information

        Gart has never declared or paid any dividends on its common stock. Gart plans to retain earnings to finance future growth and therefore has no current plans to pay cash dividends. The payment of any future cash dividend will be at the sole discretion of Gart's board of directors and will depend upon, among other things, future earnings, capital requirements and Gart's general financial condition. The terms of the merger agreement with The Sports Authority restrict Gart's ability to pay dividends prior to the consummation of the merger. Gart's ability to declare or pay dividends on its common stock is not limited under its revolving line of credit. The revolving line of credit does, however, limit the amount of loans that may be made to Gart. Gart's subsidiaries may loan it amounts needed in the ordinary course of business, as defined in the credit agreement, and, in addition, up to $10.0 million in the aggregate and declare up to $6.0 million in dividends each fiscal year. Beginning in August 2002 until August 31, 2003, Gart's subsidiaries may loan Gart additional amounts, totaling up to $15.0 million, to fund repurchases of its common stock.

        The Sports Authority has not declared or paid any dividends on its common stock since its initial public offering in 1994 and intends to retain its earnings to finance future internal investments. Therefore, it does not anticipate paying any cash dividends in the foreseeable future. The declaration and payment of dividends, if any, is subject to the discretion of The Sports Authority's board of directors. In addition, certain agreements contain restrictions on The Sports Authority's ability to pay dividends, including the merger agreement with Gart, which restricts The Sports Authority's ability to pay dividends on its common stock prior to the consummation of the merger. The timing, amount and form of dividends, if any, will depend on, among other things, The Sports Authority's results of operations, financial condition, cash requirements and other factors deemed relevant by its board of directors.


Repurchase of Stock

        During Gart's 1999 fiscal year, its board of directors authorized a discretionary program to purchase up to $3 million of Gart common stock, from time to time, on the open market or in privately negotiated transactions using Gart's available cash. On March 5, 2001, Gart's board of directors authorized it to continue its discretionary share purchase program and authorized it to purchase an additional $3 million of Gart common stock. Gart purchased 194,600 shares of its common stock during its 2000 fiscal year at a cost of approximately $1,191,000 and 229,216 shares of its common stock at a cost of approximately $3,110,000 during its 2001 fiscal year. In July 2002, Gart's board of directors authorized it to continue its discretionary share purchase program and authorized it to purchase an additional $12 million of its common stock. In August 2002, Gart's board of directors authorized it to continue its discretionary share purchase program and authorized it to purchase an additional $15 million of its common stock. During Gart's 2002 fiscal year, Gart repurchased 961,399 shares of its common stock for an aggregate purchase price of approximately $18 million. As of February 1, 2003, Gart has authorization from its board of directors to repurchase up to an additional $9 million shares of Gart common stock. The merger agreement prohibits Gart from further repurchases of stock without The Sports Authority's prior written consent.

74



Unaudited Pro Forma Combined Condensed Financial Statements

        The accompanying unaudited pro forma combined condensed financial statements of the combined company are presented to show how they might have looked if Gart and The Sports Authority had been combined for the fiscal year ended February 1, 2003. The unaudited pro forma combined condensed financial statements are based on the assumptions set forth in the related notes and should be read in conjunction with the separate historical consolidated financial statements of Gart and The Sports Authority and related notes thereto.

        The unaudited pro forma combined condensed statement of income for the 52 weeks ended February 1, 2003 presents the condensed statement of operations of the combined company as if the merger of Gart and The Sports Authority had occurred on February 3, 2002, the first day of the fiscal year ended February 1, 2003. The unaudited pro forma combined condensed balance sheet as of February 1, 2003 reflects Gart's financial position as if the merger of Gart with The Sports Authority had occurred on February 1, 2003.

        The unaudited pro forma combined condensed financial statements give effect to:

        The unaudited pro forma combined condensed financial statements have not been adjusted to reflect any operating efficiencies that may be realized by the combined company as a result of the merger.

        The merger will be treated as a purchase of The Sports Authority by Gart as the accounting acquiror in accordance with Statement of Financial Accounting Standards No. 141, "Business Combinations." Statement of Financial Accounting Standards No. 141 identifies five pertinent circumstances to consider in determination of the accounting acquiror, as follows: the composition of the senior management of the combined entity, the existence of a large minority voting interest in the combined entity, the terms of the exchange of equity securities, the composition of the governing body of the combined entity and the relative voting rights in the combined entity after the combination. Each of the circumstances outlined above indicate that Gart is the accounting acquiror, except relative voting rights and composition of governing body, which are virtually neutral to both companies. Accordingly, the assets and liabilities of The Sports Authority will be adjusted to their fair values and the excess of

75



the purchase price over the fair value of The Sports Authority's net assets will be recorded as goodwill. The preliminary adjustments to net assets and goodwill which are shown in these unaudited combined condensed pro forma financial statements are based upon various estimates and may be further adjusted based on certain valuation studies to be conducted.

        The combined company expects to incur certain charges and expenses related to integrating the operations of Gart and The Sports Authority. Both companies are assessing the combined operating structure, human resource needs, business processes and circumstances that bear upon the operations, facilities and other assets of these businesses and are developing a combined strategic and operating plan. The objective of this plan will be to enhance productivity and efficiency of combined operations. The nature of any integration-related charges and expenses may include provisions for: duplicative costs to operate two corporate offices for a period of time after the merger becomes effective, advertising costs to perform grand re-openings or re-branding of stores in certain markets, costs associated with consolidating corporate offices and relocating employees of The Sports Authority, or other charges identified in connection with the development and implementation of the plan. The unaudited combined condensed pro forma financial statements do not reflect such anticipated charges and expenses.

        The unaudited pro forma combined condensed financial statements do not purport to be indicative of the results of the combined company's operations or financial position that would have been achieved had the merger of Gart and The Sports Authority actually occurred as of the assumed dates and for the periods presented and they do not purport to project or predict the combined company's future results of operations or financial position.

76


GART'S UNAUDITED PRO FORMA
COMBINED CONDENSED STATEMENT OF OPERATIONS
(Dollars in thousands, except share and per share amounts)

 
  Historical
52 Weeks Ended
February 1, 2003

   
   
   
 
 
  Gart
  The Sports
Authority

  Reclassification
Adjustments

  Pro Forma
Adjustments

  Pro Forma
Combined

 
Net sales   $ 1,051,244   $ 1,431,678   $ (2,760 )(J)     $ 2,480,162  
Cost of goods sold     776,340     1,030,275     15,361 (J) $ 1,794 (F)   1,823,770  
   
 
 
 
 
 
Gross profit     274,904     401,403     (18,121 )   (1,794 )   656,392  
Operating expenses     228,982     377,743     (18,121 )(J)   (721 )(G,H)   587,883  
   
 
 
 
 
 
Operating income     45,922     23,660         (1,073 )   68,509  
Interest expense     (9,166 )   (7,237 )       (4,390 )(I)   (20,793 )
Other income     1,043     2,647             3,690  
   
 
 
 
 
 
Income before income taxes     37,799     19,070         (5,463 )   51,406  
Income tax benefit (expense)     (14,632 )   40,599         (45,905 )(K)   (19,938 )
   
 
 
 
 
 
Net income   $ 23,167   $ 59,669   $   $ (51,368 ) $ 31,468  
   
 
 
 
 
 
Earnings per share                                
  Basic earnings per share   $ 1.97   $ 1.82               $ 1.31  
   
 
             
 
  Diluted earnings per share   $ 1.86   $ 1.75               $ 1.25  
   
 
             
 
Weighted average shares of common stock outstanding:                                
  Basic     11,766,983     32,822,137           (20,593,700 )(D)   23,995,420  
   
 
       
 
 
  Diluted     12,427,086     34,053,335           (21,369,355 )(D)   25,111,066  
   
 
       
 
 

77


GART'S UNAUDITED PRO FORMA
COMBINED CONDENSED BALANCE SHEET
(Dollars in thousands)

 
  Historical
as of February 1, 2003

   
   
   
 
 
  Gart
  The Sports
Authority

  Reclassification
Adjustments

  Pro Forma
Adjustments

  Pro Forma
Combined

 
ASSETS                                
  Cash and equivalents   $ 10,156   $ 4,656   $ 7,204 (J) $   $ 22,016  
  Accounts receivable, net     13,245     28,873     (7,204 )(J)       34,914  
  Inventories     333,538     354,223             687,761  
  Prepaid expenses and other assets     10,507     13,819             24,326  
  Deferred income taxes     9,046     7,821         34,649 (A)   51,516  
   
 
 
 
 
 
  Total current assets     376,492     409,392         34,649     820,533  
 
Property and equipment

 

 

87,960

 

 

143,276

 

 


 

 

(2,629

)(A)

 

228,607

 
  Favorable leases acquired, net     11,025             20,496 (A)   31,521  
  Deferred income taxes     9,161     33,280         (25,617 )(A)   16,824  
  Goodwill     44,576             13,567 (A)   58,143  
  Other assets, net     11,026     23,060         17,321 (B)   51,407  
   
 
 
 
 
 
  Total assets   $ 540,240   $ 609,008   $   $ 57,787   $ 1,207,035  
   
 
 
 
 
 
LIABILITIES AND STOCKHOLDERS' EQUITY                                
  Accounts payable   $ 142,025   $ 101,506   $   $ 500 (A) $ 244,031  
  Current portion of long term obligations     665     200             865  
  Accrued expenses     62,003     125,860         87,008 (A)   274,871  
   
 
 
 
 
 
  Total current liabilities     204,693     227,566         87,508     519,767  
 
Long term debt

 

 

121,147

 

 

121,395

 

 


 

 

24,500

(C)

 

267,042

 
  Capital lease obligations, less current     1,139     30             1,169  
  Deferred rent and other long term liabilities     14,681     43,140         (36,497 )(D)   21,324  
   
 
 
 
 
 
  Total liabilities     341,660     392,131         75,511     809,302  
   
 
 
 
 
 
Stockholders' equity                                
  Preferred stock                      
  Common stock     134     330         (208 )(E)   256  
  Additional paid-in capital     156,958     255,349         (56,318 )(E)   355,989  
  Unamortized restricted stock compensation     (2,024 )   (591 )       591 (E)   (2,024 )
  Accumulated other comprehensive loss     (934 )               (934 )
  Retained earnings     67,922     (37,664 )       37,664 (E)   67,922  
  Treasury stock     (23,476 )   (547 )       547 (E)   (23,476 )
   
 
 
 
 
 
Total stockholders' equity     198,580     216,877         (17,724 )   397,733  
   
 
 
 
 
 
Total liabilities and stockholders' equity   $ 540,240   $ 609,008   $   $ 57,787   $ 1,207,035  
   
 
 
 
 
 

78


NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS
(dollars in thousands)

(A)

        These unaudited pro forma combined condensed financial statements reflect a preliminary allocation of the purchase price on February 1, 2003. The preliminary allocation is subject to change based on finalization of the fair values of the tangible and intangible assets acquired and liabilities assumed. The preliminary allocation of the purchase price is as follows:

Common stock (12,228,437 shares at $15.51)(1)   $ 189,663  
Fair value of Gart options converted from TSA stock options(2)     9,489  
Direct costs of acquisition     18,500  
   
 
  Total purchase consideration   $ 217,652  

Historical book value of The Sports Authority's assets and liabilities as of February 1, 2003

 

$

216,877

 
Adjust The Sports Authorities assets and liabilities to fair value:        
  Favorable leases acquired     20,496  
  Property and equipment     (2,629 )
  Lease acquisition and other lease costs     (6,361 )
  Other intangible assets     20,000  
  Unamortized bank fees     (2,318 )
  Accrued change in control and severance payments and relocation costs(3)     (35,200 )
  Reserve to close properties in certain markets(4)     (45,709 )
  Other accrued expenses and accounts payable(5)     (6,600 )
  Deferred rent and other long term liabilities     36,497  
   
 
Total adjustment to record net assets at fair value     (21,824 )
   
 

Total allocation

 

$

195,053

 

Less Net increase in current deferred income tax assets (calculated at a statutory rate of 39.0%)

 

 

(34,649

)
Add Net decrease in long term deferred income tax asset (calculated at a statutory rate of 39.0%)     25,617  
   
 
Goodwill(6)   $ 13,567  
   
 

(1)
The value of the Gart common stock used to determine the overall purchase price was calculated using the average closing price of the stock for two days prior and two days after the date of the announcement of the merger, as well as the closing price on the date the merger was announced.

(2)
A total of 4,336,746 outstanding options to purchase The Sports Authority common stock will be converted into a total of 1,604,596 options to purchase Gart common stock and those options will fully vest at closing. The fair value of these 1,604,596 options was determined using the Black-Scholes model with the following assumptions:


      Expected volatility: 66.5%


      Risk free interest rate: 3.5%


      Expected life of options: 2 years


      Expected dividend yield: 0%

(3)
The $35.2 million accrual for change in control and severance payments and relocation costs of employees of The Sports Authority includes $9.8 million for relocation costs of The Sports Authority's employees and $25.4 million for severance expected to be paid within one year of the transaction.

(4)
The reserve of $45.7 million to close properties was computed by estimating the exit costs, primarily post closing lease buyouts ranging from $0.5 to $5.0 million per store, for the stores that have been preliminarily identified for closure and is expected to be paid over a period of time ranging from six months to three years from the date of the transaction. Approximately half of the properties preliminarily identified for closure are the result of the existence of The Sports Authority's stores in existing Gart markets.

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(5)
The accrual of $6.6 million for other expenses and accounts payable includes $3.1 million for reticketing of The Sports Authority's inventory, $2.5 million for The Sports Authority's physical inventory observations at or near the effective date of the merger, and $1.0 million to settle vendor contracts on non-go forward vendors and other items and is expected to be paid within one year of the transaction.

(6)
The adjustment of The Sports Authority's tangible and intangible assets acquired and liabilities assumed to estimated fair value, indicates an excess of consideration paid over those fair values. The final determination of the estimated fair value of The Sports Authority's tangible and intangible assets acquired and liabilities assumed, are subject to change and it is possible that the amount of consideration paid could equal, exceed, or be less than those final estimated fair values. See the section entitled "The Merger and Related Transactions—Gart's Reasons for the Merger" commencing on page 30 of this joint proxy statement/prospectus for an explanation of why we are willing to pay the amount of consideration outlined above.

        The pro forma adjustments in items (3) through (6) above do not relate to Gart's operations or employees and all relate to The Sports Authority's locations and employees. There are no pro forma adjustments to reflect transactions that have occurred or will occur regardless of whether the merger is consummated.

(B)

        To reflect an intangible asset of $20.0 million established for a license agreement under which The Sports Authority receives royalty payments from Mega Sports and an increase in deferred financing costs of $6.0 million related to obtaining the new line of credit to finance the merger, offset by the writeoff of lease acquisition and other lease costs of $6,361, and unamortized bank fees of $2,318 as described in Note A, above.

(C)

        To reflect $18.5 million in direct costs as described in Note A and $6.0 million in costs related to obtaining the new line of credit to finance the merger as described in Note B.

(D)

        To eliminate the deferred rent liability and other long term liabilities currently recorded by The Sports Authority. The deferred rent liability is approximately $36 million and represented the difference between the historical amounts recorded as expense compared to the actual cash payments made under the terms of The Sports Authority's operating leases for its store locations. This deferred rent does not represent a liability to the combined company and as such is eliminated. A deferred rent liability will be recorded by the combined company for the difference between amounts expensed and cash paid under the terms of these leases on a go forward basis.

(E)

        To reflect the elimination of The Sports Authority's stockholders' equity and to reflect the issuance of Gart common stock and the conversion of options to purchase The Sports Authority common stock into options to purchase Gart common stock of Gart's stock options as consideration for the merger. See the reconciliation of historical weighted average basic and diluted shares to the pro forma weighted average basic and diluted shares used to calculate earnings per share below:


Basic:

 

 

 
Gart weighted average shares   11,766,983  
The Sports Authority weighted average shares   32,822,137  
Elimination of The Sports Authority shares   (32,822,137 )
Shares issued by Gart to The Sports Authority shareholders (at exchange ratio of .37)   12,228,437  
   
 
Pro forma weighted average shares—Basic   23,995,420  
   
 
Diluted:      
Gart weighted average shares   12,427,086  
The Sports Authority weighted average shares   34,053,335  
Elimination of The Sports Authority shares   (34,053,335 )
Shares issued by Gart to The Sports Authority shareholders (at exchange ratio of .37)   12,228,437  
Dilution from Gart stock options converted from TSA options (at exchange ratio of .37)   455,543  
   
 
Pro forma weighted average shares—Diluted   25,111,066  
   
 

80


(F)

        To reflect amortization of the asset recorded for favorable leases, over the remaining terms of the leases, ranging from 1 to 20 years, totaling $2,148, and a decrease in amortization of $354 related to the write off of lease acquisition and other lease costs of certain properties, which were being amortized over terms ranging from 15 to 20 years. The favorable lease asset represents the fair value attributable to the excess of current market rents over the contractual rents in The Sports Authority's store operating leases. Lease acquisition costs represent costs incurred to secure certain store locations, the value of which were considered as part of the favorable lease asset.

(G)

        To reflect a decrease in fixed asset depreciation and an increase in amortization expense of intangible assets.

        The decrease in fixed asset depreciation is due to the reduction in carrying value of certain leasehold improvements of The Sports Authority in connection with the anticipated closing of certain stores. The useful lives of these assets are approximately eight years, and therefore the reduction will result in a decrease of approximately $0.3 million per year. This decrease is offset by amortization of approximately $1.0 million, for an intangible asset established for a license agreement under which The Sports Authority receives royalty payments from Mega Sports. This asset is being amortized over twenty years, the estimated term of the license agreement including extensions.

(H)

        To reflect the elimination of transaction costs recorded by The Sports Authority in its historical results of operations for fiscal 2002 totaling approximately $1,600 for accounting and legal fees associated with the merger that would not have been incurred if not for the merger.

(I)

        To reflect an increase in interest expense due to borrowings under the new line of credit to finance the merger. Interest expense was estimated using an annual interest rate of 5.0%. In addition, interest expense was increased to reflect the amortization of the deferred financing costs described in Note B.

(J)

        To reflect adjustments to The Sports Authority's balances to conform them to Gart's presentation, including adjustments to reclassify certain employee discounts from operating expenses to sales and certain service department fees, payroll and benefits of buying staff, and depreciation on facilities from operating expenses to cost of goods sold. Also, adjustments were made to reclassify credit card deposits in transit from accounts receivable to cash and equivalents.

(K)

        To record the tax effect of the net pro forma adjustments and record tax expense at an estimated statutory rate of 39%, eliminating the effect of a tax benefit recorded by The Sports Authority related to the reversal of deferred tax asset valuation allowances.

GENERAL:

81


82



Description of Gart Capital Stock

        The following summary is a description of the material terms of Gart common stock, does not purport to be complete and is subject in all respects to the applicable provisions of Delaware law and of the constituent documents of Gart and each of its subsidiaries. Gart's certificate of incorporation and bylaws are filed as exhibits to the registration statement of which this document is a part.


General

        Gart's certificate of incorporation currently authorizes the issuance of up to 22,000,000 shares of common stock, $.01 par value per share, and 3,000,000 shares of preferred stock, $.01 par value per share, the rights and preferences of which may be established by Gart's board of directors. At its annual meeting, Gart's stockholders are being asked to approve an amendment to Gart's certificate of incorporation that would be effective upon consummation of the merger and that would increase the number of authorized shares of Gart capital stock from 25,000,000 to 85,000,000, increase the number of authorized shares of Gart common stock, par value $.01 per share, from 22,000,000 to 75,000,000 and increase the number of authorized shares of Gart preferred stock, par value $.01 per share, from 3,000,000 to 10,000,000. As of [March 31], 2003, [11,872,233] shares of Gart common stock were issued and outstanding and held by [574] stockholders of record and no shares of preferred stock were issued and outstanding. At its annual meeting, Gart's stockholders are being asked to approve the issuance of shares of common stock to the current stockholders of The Sports Authority in connection with the merger.


Common Stock

        The holders of Gart common stock are entitled to one vote for each share of Gart common stock and are entitled to vote for the election of directors and on all other matters requiring stockholder action. Subject to the rights of the preferred stock, Gart's board of directors may declare dividends on Gart common stock out of any assets or funds legally available for dividend payments. If Gart liquidates, dissolves or winds up, the holders of Gart common stock will be entitled to share ratably, in accordance with their rights and interests, in the net assets of Gart. Holders of Gart common stock have no preemptive rights or rights to convert their shares of Gart common stock into any other securities. There are no redemption or sinking fund provisions applicable to Gart common stock. All outstanding shares of Gart common stock are fully paid and nonassessable.

        For a summary of the provisions contained in Gart's certificate of incorporation that would have an effect of delaying, deferring or preventing a change in control of Gart and that would operate only with respect to extraordinary corporate transactions, such as a merger, reorganization, tender offer, or sale or transfer of substantially all of Gart's assets or liquidation, see the section entitled "Comparison of Rights of Stockholders and Governance Matters—Provisions Relating to Acquisitions and Business Combinations," commencing on page 89 of this joint proxy statement/prospectus.


Preferred Stock

        Gart's board of directors is authorized to issue, in one or more series, up to an aggregate of 3,000,000 shares of preferred stock. If Gart's stockholders approve the proposed amendment to Gart's certificate of incorporation, Gart will be authorized to issue, in one or more series, up to an aggregate of 10,000,000 shares of preferred stock. The number of authorized shares of preferred stock may be increased or decreased by the affirmative vote of a majority of the holders of Gart's capital stock entitled to vote, without a separate vote of the preferred stock as a class. Subject to any limitations prescribed by law, Gart's board of directors is authorized to fix the designation of each series of preferred stock and the powers, preferences, and rights of the series, including, but not limited to,

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voting rights, dividend rights, conversion rights, redemption privileges, liquidation preferences and sinking fund provisions, as well as to fix the limitations or restrictions of the series.

        The rights of Gart common stock will be subject to, and may be adversely affected by, the rights of holders of any preferred stock that may be issued in the future. Issuance of preferred stock, while providing desirable flexibility in connection with possible acquisitions and other corporate purposes, could have the effect of making it more difficult for a third party to acquire, or of discouraging a third party from attempting to acquire, a majority of Gart's outstanding voting stock. Gart has no present plans to issue any shares of preferred stock.


Registration Rights of Stockholders

        Leonard Green is entitled to require Gart to register shares of Gart common stock under the Securities Act of 1933 pursuant to a January 1998 registration rights agreement with Gart. The agreement provides that, among other things, Leonard Green will have the right to make up to four demands that Gart register their shares and "piggyback" requests that their shares be included in any registration statement relating to an offering of Gart's equity securities for Gart's own account or for the account of others under the Securities Act of 1933. These rights are subject to certain conditions and limitations that are set forth in the agreement. These rights terminate on the earlier of the date when all the shares entitled to be registered have been sold and the date when the shares entitled to be registered may be sold to the public without registration under the Securities Act of 1933.

        Marilyn Oshman and other former stockholders of Oshman's are entitled to require Gart to register shares of Gart common stock under the Securities Act of 1933 pursuant to a June 2001 registration rights agreement with Gart. The agreement provides that, among other things, these stockholders will have the right to make up to three demands that Gart register their shares and "piggyback" requests that their shares be included in any registration statement relating to an offering of Gart's equity securities for Gart's own account or for the account of others under the Securities Act of 1933. These rights are subject to certain conditions and limitations that are set forth in the agreement. These rights terminate no later than five years from the date of the registration rights agreement (subject to extension in certain situations).

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Comparison of Rights of Stockholders and Governance Matters

        The rights of Gart's stockholders currently are governed by Gart's certificate of incorporation and Gart's bylaws. The rights of The Sports Authority's stockholders currently are governed by The Sports Authority's certificate of incorporation and The Sports Authority's bylaws. Upon the completion of the merger, the rights of The Sports Authority's stockholders who become stockholders of Gart in the merger will be governed by Gart's certificate of incorporation and Gart's bylaws. Gart and The Sports Authority are each incorporated under the laws of the State of Delaware. Accordingly, in addition to Gart's certificate of incorporation and bylaws, the Delaware General Corporation Law will continue to govern the rights of The Sports Authority's stockholders after the completion of the merger.

        The following description summarizes the material differences between the rights of holders of Gart common stock and the rights of holders of The Sports Authority common stock. The description, however, is not a complete statement of all those differences, nor is it a complete description of the specific provisions referred to in this summary. The identification of specific differences is not intended to indicate that other equally or more significant differences do not exist. Stockholders should read carefully the relevant provisions of the Delaware General Corporation Law, Gart's certificate of incorporation, Gart's bylaws, The Sports Authority's certificate of incorporation and The Sports Authority's bylaws. For information as to how to obtain those documents, see the section entitled "Where You Can Find More Information," commencing on page 127 of this joint proxy statement/prospectus.

Summary of Material Differences Between Gart and The Sports Authority
in Respect of Rights of Stockholders and Governance Matters

 
  Gart
  The Sports Authority
Authorized Capital Stock

Capital Stock

 

Gart's certificate of incorporation authorizes the issuance of up to 22,000,000 shares of common stock, par value $0.01 per share and 3,000,000 shares of preferred stock, par value $0.01 per share. If the amendment to Gart's certificate of incorporation is approved, Gart's certificate of incorporation will authorize the issuance of up to 75,000,000 shares of common stock and 10,000,000 shares of preferred stock. As of [March 31], 2003, [11,872,233] shares of common stock and no shares of preferred stock were issued and outstanding.

 

The Sports Authority's certificate of incorporation authorizes the issuance of up to 100,000,000 shares of common stock, par value $0.01 per share and 5,000,000 shares of preferred stock, par value $0.01 per share. As of [March 31], 2003, [33,013,544] shares of common stock and no shares of preferred stock were issued and outstanding.

Stockholders

Action by Written Consent

 

Gart's stockholders may take action at annual or special meetings or by written consent.

 

The Sports Authority's stockholders may only take action at annual or special meetings.
         

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Advance Notice Provisions:

Nominations of Directors

 

Under Gart's bylaws, notices of stockholder nominations of directors to be made at a meeting of Gart's stockholders must be received at Gart's principal executive offices no less than 30 days or more than 75 days before the meeting. If less than 40 days' notice or prior public disclosure of the date of the meeting was given or made to Gart's stockholders, however, notice of the nomination must be received no later than the close of business on the tenth day following the day on which the notice of the date of the stockholder meeting was mailed or public disclosure was made (whichever occurs first).

 

Under The Sports Authority's bylaws, notices of stockholder nominations of directors to be made at an annual meeting of The Sports Authority's stockholders must be received at The Sports Authority's principal executive offices no less than 60 days or more than 90 days before the date of the annual meeting. If less than 70 days' notice or prior public disclosure of the date of the meeting was given or made to The Sports Authority's stockholders, however, notice of the nomination must be received no later than the close of business on the tenth day following the day on which the notice of the date of the stockholder meeting was mailed or public disclosure was made (whichever occurs first).

Proposals of Business

 

Under Gart's bylaws, notices of stockholder proposals of business to be brought before a meeting of Gart's stockholders must be received at Gart's principal executive offices no less than 50 days or more than 75 days before the meeting. If less than 60 days' notice or prior public disclosure of the date of the meeting was given or made to Gart's stockholders, however, notice of the proposal must be received no later than the close of business on the tenth day following the day on which the notice of the date of the stockholders' meeting was mailed or public disclosure was made (whichever occurs first).

 

Under The Sports Authority's bylaws, notices of stockholder proposals of business to be brought before an annual meeting of The Sports Authority's stockholders must be received at The Sports Authority's principal executive offices no less than 60 days or more than 90 days before the annual meeting. If less than 70 days' notice or prior public disclosure of the date of the meeting was given or made to The Sports Authority's stockholders, however, notice of the proposal must be received no later than the close of business on the tenth day following the day on which the notice of the date of the stockholder meeting was mailed or public disclosure was made (whichever occurs first).
         

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Ability to Call Special Stockholders' Meetings

 

Gart's bylaws provide that special meetings of Gart's stockholders may be called by: (1) Gart's chairman of the board; (2) Gart's president; or (3) Gart's board pursuant to a resolution approved by a majority of the entire board. Additionally, if Gart's secretary or assistant secretary receives a written request to this effect from a majority of the entire board, or from the holders of outstanding capital stock having at least a majority of the voting power of all shares of Gart capital stock entitled to vote in the election of directors, then he or she must call a special meeting of Gart's stockholders.

 

The Sports Authority's bylaws provide that special meetings of The Sports Authority's stockholders may be called by: (1) The Sports Authority's chairman of the board; (2) The Sports Authority's president; or (3) The Sports Authority's secretary. Additionally, if The Sports Authority's chairman, president or secretary receives a written request to this effect from a majority of the board, then he or she must call a special meeting of The Sports Authority's stockholders.

Board of Directors

Classification

 

Gart's board is not divided into classes.

 

The Sports Authority's board is divided into three classes. Each class consists, as nearly as possible, of one-third of the total number of directors constituting the entire board of directors.

Size

 

Gart's board of directors currently consists of seven directors, but if the merger is consummated, this number will be increased to nine directors.

 

The Sports Authority's board of directors currently consists of ten directors.

Removal

 

Gart's bylaws provide that any of Gart's directors or Gart's entire board, other than directors who may be elected by the holders of any class or series of preferred stock, may be removed from office by the affirmative vote of the holders of at least a majority of the then outstanding shares of Gart capital stock entitled to vote in the election of directors, voting together as a single class.

 

The Delaware General Corporation Law provides that, when a company has a staggered board of directors, directors may only be removed for cause unless the company's certificate of incorporation provides otherwise. The Sports Authority's certificate of incorporation does not provide otherwise.
         

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Vacancies

 

Gart's bylaws provide that any newly created directorships in Gart's board resulting from any increase in the number of authorized directors or vacancies may be filled by the affirmative vote of a majority of the remaining directors then in office, even though less than a quorum, or by a sole remaining director, except as otherwise fixed in accordance with the rights of holders of preferred stock to elect additional directors under specified circumstances.

 

The Sports Authority's bylaws provide that any newly created directorships in The Sports Authority's board resulting from an increase in the number of directors may be filled by a vote of the majority of the directors then in office, provided that a quorum is present. Any other vacancy may be filled by the vote of a majority of the directors in office, even if less than a quorum is present, or by a sole remaining director.

Amendment to Organizational Documents

Certificate of Incorporation

 

An amendment to any provision of Article V (Board of Directors; Stockholder Action; Bylaw Amendments) of Gart's certificate of incorporation requires the approval of the holders of at least a majority of the voting power of all of the then outstanding shares of Gart's voting stock, voting together as a single class; and an amendment to any provision of Article VI (Business Combinations) of Gart's certificate of incorporation requires the approval of at least 662/3% of the voting power of all of the then outstanding shares of Gart's voting stock, voting together as a single class. Any other provision of Gart's certificate of incorporation may be amended by resolution of the board approved by a vote of the majority of the outstanding stock entitled to vote at the special or regular meeting, as the case may be.

 

Any provision of The Sports Authority's certificate of incorporation may be amended by resolution of the board approved by a vote of the majority of the outstanding stock entitled to vote at the special or regular meeting, as the case may be.
         

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Bylaws

 

Article II, Section 7 (Meetings of Stockholders; Notice of Business) and Article III, Section 3 (Directors; Election of Directors) of Gart's bylaws may only be altered, amended or repealed by the affirmative vote of the holders of at least a majority of the voting power of all of the then outstanding shares of Gart's voting stock, voting together as a single class. There are no other restrictions on Gart's board's ability to make, alter, amend or repeal Gart's bylaws.

 

There is no restriction on The Sports Authority's board's ability to make, alter, amend or repeal The Sports Authority's bylaws.

Provisions Relating to Acquisitions and Business Combinations

Delaware General Corporation Law Section 203

 

Gart is subject to Section 203 of the Delaware General Corporation Law. For a summary description of Section 203, see the section entitled "— —Delaware "Business Combination" Statute" commencing on page 89 of this joint proxy statement/prospectus.

 

The Sports Authority's certificate of incorporation expressly opts out of the application of Section 203 of the Delaware General Corporation Law.

Certificate of Incorporation

 

Gart's certificate of incorporation requires the approval of 662/3% of the voting power inc of the then outstanding voting stock not beneficially owned by the interested stockholder or its affiliate to approve certain business combinations between Gart or its subsidiaries and such interested stockholder or its affiliate. For more information, see "— —Business Combination Provision in Gart's Certificate of Incorporation" commencing on page 90 of this joint proxy statement/prospectus.

 

The Sports Authority's certificate of orporation does not contain a "business combination" provision.

        Section 203 of the Delaware General Corporation Law prohibits a Delaware corporation from engaging in any "business combination" with any person, defined broadly to include corporations and other business entities, who is an interested stockholder (defined as a person who owns 15% or more of a corporation's voting stock) for a period of three years following the time that person became an interested stockholder, unless:

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        For purposes of determining whether a person is the "owner" of 15% or more of a corporation's voting stock for purposes of Section 203 of the Delaware General Corporation Law, ownership generally is defined to include the right, directly or indirectly, to acquire the stock or to control the voting or disposition of the stock.

        A "business combination" generally is defined to include:

        A Delaware corporation may elect not to be governed by Section 203 pursuant to a provision contained in (1) its original certificate of incorporation or (2) an amendment by stockholder action to its certificate of incorporation or bylaws, provided that, in addition to any other vote required by law, such an amendment is approved by the affirmative vote of a majority of the shares entitled to vote, which amendment shall not be effective until 12 months after its adoption. In the case of a bylaw, such an amendment adopted thereto may not be further amended by the corporation's board of directors.

        Gart's certificate of incorporation requires that, in addition to any vote required by law, the required vote for the approval of certain business combinations between Gart or any of its subsidiaries and an "interested stockholder" or an affiliate thereof, must represent 662/3% of the voting power of the then outstanding voting stock not beneficially owned by the interested stockholder or an affiliate thereof. Additionally, the stockholders must be present in person or by proxy at the meeting of Gart's stockholders at which the business combination is considered, and must vote together as a single class. For purposes of Gart's certificate of incorporation, an "interested stockholder" is any person or entity that:

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        A person or entity generally has "beneficial ownership" of any shares of Gart's voting stock: (1) if it or any of its affiliates or associates beneficially owns the stock within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934; (2) if it or any of its affiliates or associates has the right to acquire or vote the stock pursuant to any agreement, arrangement or understanding, or upon the exercise or conversion of exchange rights, warrants or options; or (3) that are beneficially owned by any other person or entity with which such person or entity or any of its affiliates or associates has an agreement for acquiring, holding, voting or disposing of any shares of voting stock.

        The following transactions require the special 662/3% vote described above:

        Gart's certificate of incorporation provides that the business combination described above will not be subject to the special 662/3% vote described above if: (1) the business combination is approved by a majority of Gart's disinterested directors or (2) the transaction meets the price and procedure requirements described in Gart's certificate of incorporation. A "disinterested director" is a director of Gart who either (1) is not an affiliate of the interested stockholder and was a director of Gart before the business combination was proposed or (2) succeeded a disinterested director and is not an affiliate of the interested stockholder and was recommended to succeed the interested director by a majority of the disinterested directors on Gart's board of directors.

        The Sports Authority's certificate of incorporation does not contain a "business combination" provision. Instead, it expressly opts out of the application of Section 203.

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The Annual Meeting of Gart's Stockholders

General

        This joint proxy statement/prospectus is furnished in connection with the solicitation of the enclosed proxy from holders of Gart's stock by Gart's board of directors for use at the annual meeting of Gart's stockholders to be held at Gart's executive offices located at 1050 W. Hampden Avenue, Englewood, Colorado 80110 on                        , 2003, beginning at            , local time, and at any adjournment or postponement of the meeting.


Purpose of the Meeting

        The annual meeting will be held to consider and vote upon the following:


Record Date and Outstanding Shares

        Gart's board of directors has fixed the close of business on May 23, 2003, as the record date. Only stockholders of record of Gart common stock on the books of Gart as of the close of business on the record date will be entitled to notice of, and to vote at, the annual meeting and any postponements or adjournments of the meeting. On [March 31], 2003, there were [11,872,233] shares of Gart common stock issued and outstanding held by [574] stockholders of record. The record stockholder number does not include the number of persons whose stock is held in nominee or "street name" accounts through brokers.


Quorum and Vote Required

        A majority of all shares of Gart common stock outstanding on the record date, represented in person or by proxy, constitutes a quorum for the transaction of business at Gart's annual meeting.

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        If a quorum is not obtained, or if fewer shares of Gart common stock are voted in favor of the matters presented for consideration and approval at Gart's annual meeting than the number of shares necessary to approve these matters, Gart expects that the annual meeting will be postponed or adjourned for the purpose of allowing additional time for obtaining additional proxies or votes. At any subsequent reconvening of Gart's annual meeting, all proxies will be voted in the same manner as such proxies would have been voted at the original convening of the annual meeting, except for any proxies that have been effectively revoked or withdrawn prior to the subsequent annual meeting.

        Each holder of Gart common stock will be entitled to one vote, in person or by proxy, for each share of Gart common stock registered in the holder's name on the books of Gart as of the record date on any matter submitted for the vote of the Gart's stockholders. The seven persons who receive the highest number of votes will be elected to Gart's board of directors. The proposals to issue Gart common stock in the merger, and adopt the long-term incentive compensation plan and the performance bonus plan will each be approved if a majority of the shares of Gart common stock present in person or represented by proxy at the meeting are voted in favor of the applicable proposal. The proposal to amend Gart's certificate of incorporation, effective upon consummation of the merger, to change its name and increase its share capital will be approved if a majority of the outstanding shares of Gart common stock entitled to vote are voted in favor of this proposal.

        Leonard Green has entered into a stockholder's agreement with The Sports Authority, pursuant to which Leonard Green has agreed, among other things, to vote its shares in favor of the issuance of Gart common stock in connection with the merger, the amendment to Gart's certificate of incorporation and any other matter necessary to complete the transactions contemplated by the merger agreement. As of [March 31], 2003, Leonard Green held 3,113,200 shares of Gart common stock, which represented approximately 26% of all outstanding shares of Gart common stock entitled to vote at Gart's annual meeting. See the section entitled "Related Agreements—Stockholder's Agreement Between The Sports Authority and Leonard Green," commencing on page 69 of this joint proxy statement/prospectus. Based upon the number of shares of Gart common stock outstanding as of [March 31], 2003, Gart's directors and executive officers and their affiliates, as a group, beneficially owned an aggregate of [527,792] shares of Gart common stock (excluding shares subject to options and 3,113,200 shares held by Leonard Green), which would represent approximately [4.4]% of all outstanding shares of Gart common stock entitled to vote at Gart's annual meeting. Gart's officers and directors have informed Gart that they intend to vote their shares in favor of the merger proposals.


How Shares Will Be Voted at the Annual Meeting

        All shares of Gart common stock represented by proxies properly executed and received by Gart before or at Gart's annual meeting, and not revoked, will be voted in accordance with the instructions indicated on the proxies. If a proxy is properly executed and returned and no instructions are indicated thereon, the shares will be voted:


        All proxies voted "FOR" the approval of the issuance of Gart common stock in the merger and "FOR" the approval of the amendment to Gart's certificate of incorporation, effective upon consummation of the merger may, at the discretion of the proxy holder, be voted "FOR" a motion to

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adjourn or postpone Gart's annual meeting to another time and/or place for the purpose of soliciting additional proxies or otherwise.

        Abstentions and broker non-votes are included in the determination of the number of shares present and voting. However, abstentions and broker non-votes will have the same effect as a vote against a particular proposal, other than the proposal relating to the election of directors. A broker "non-vote" occurs on a proposal when a broker is not permitted to vote on that proposal without instruction from the beneficial owner of the shares and no instruction is given.

        Gart's board of directors currently is not aware of any business to be acted upon at the annual meeting other than as described in this joint proxy statement/prospectus. If, however, other matters are properly brought before the annual meeting, or any adjournments or postponements of the meeting, in the absence of instructions to the contrary, persons appointed as proxies will have discretion to vote or act on the matters in their best judgment.


How to Revoke a Proxy

        The presence of a Gart stockholder at the annual meeting, or at any adjournment or postponement thereof, will not automatically revoke the stockholder's proxy. A Gart stockholder who is the record holder of such stock, however, may revoke a proxy at any time prior to its exercise by:

        If a stockholder's shares are held in the name of a broker or nominee, that stockholder may change its vote by submitting new voting instructions to its broker or nominee. A stockholder whose shares are held in the name of a broker or nominee may not vote its shares in person at its stockholders meeting unless it obtains a signed proxy from the record holder giving it the right to vote its shares.


Solicitation of Proxies

        Proxies may be solicited by mail, personal interview, telephone, facsimile and electronic mail by Gart's directors, officers and employees on a part-time basis and for no additional compensation. Gart will bear the costs it incurs in the solicitation of proxies under this joint proxy statement/prospectus, including amounts paid in reimbursement to banks, brokerage firms, custodians, nominees and others for its expenses in forwarding soliciting material to the beneficial owners of Gart common stock.


Communications by Gart's Stockholders with Gart

        Any written revocation of a proxy or other communications in connection with this joint proxy statement/prospectus and requests for additional copies of this joint proxy statement/prospectus or the proxy card should be addressed to Investor Relations, Gart Sports Company, 1050 W. Hampden Avenue, Englewood, Colorado 80110. If you have any questions or need further assistance in voting your shares, please call Investor Relations at (303) 863-2293.


Recommendation of Gart's Board of Directors

        Gart's board of directors has, by unanimous vote, approved each of the proposals and unanimously recommends that Gart's stockholders vote "FOR" the approval of the proposals.

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Additional Annual Meeting Matters for Gart

Election of Directors of Gart

General

        At Gart's annual meeting, Gart's stockholders will be asked to vote on the election of seven directors. If the merger is not consummated, each director so elected will hold office until Gart's next annual meeting and until his or her successor is elected and duly qualified. If the merger is consummated, Gart's board of directors will be reconstituted to consist of four designees of Gart and four designees of The Sports Authority and the reconstituted board will elect a ninth director who is currently unaffiliated with either company.

        There are no family relationships between any director, nominee or executive officer of Gart and any other director, nominee or executive officer of Gart. Except as described in this joint proxy statement/prospectus, there are no arrangements or understandings between any director, nominee or executive officer of Gart and any other person pursuant to which he or she has been or will be selected as a director and/or executive officer of Gart.


Voting

        The seven persons who receive the highest number of votes at Gart's annual meeting will be elected to Gart's board of directors. Each nominee has consented to being named in this joint proxy statement/prospectus and to serve if elected. Stockholders are not allowed to cumulate their votes in the election of directors. An abstention will have the same effect as a vote withheld for the election of directors. A broker non-vote will not be treated as voting in person or by proxy on the proposal.

        Each proxy received will be voted in accordance with the instructions indicated on the proxy. If a proxy is properly executed and returned but no instructions are indicated on the proxy, then the proxy will be voted "FOR" the election of each of the nominees named below. Although it is not contemplated that any nominee named below will decline or be unable to serve as a director, if any nominee declines or is unable to serve as a director, the proxies may be voted with discretionary authority for any substitute designated by Gart's board of directors.


Nominees

        The names of the nominees and related information as of May 22, 2003 are set forth below.

        Gart's board of directors recommends that Gart's stockholders vote "FOR" the election of the seven nominees listed below.

Name

  Age
  Current Position with Gart
  Director
Since

John Douglas Morton   52   President, Chief Executive Officer and Chairman of the Board   1995
Jonathan D. Sokoloff   45   Director   1993
Jonathan A. Seiffer   31   Director   1998
Gordon D. Barker   57   Director   1998
Peter R. Formanek   59   Director   1998
Larry D. Strutton   62   Director   2001
Marilyn Oshman   63   Director   2001

        John Douglas Morton.    Mr. Morton became president, chief executive officer and chairman of the board in May 1995. Mr. Morton joined Gart in 1986 as division manager of Gart's Utah region. In 1988, he was promoted to division vice president of that region, and, in 1990, he was promoted to vice president of operations. In 1994, Mr. Morton was promoted to executive vice president with

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responsibility for stores, distribution and marketing. Before joining Gart, he served in various positions with Wolfe's Sporting Goods, a seven-store sporting goods retailer, from 1972 to 1980. Mr. Morton's positions at Wolfe's Sporting Goods included merchandise manager—ski, camping, golf and tennis, store manager and operations manager. From 1980 until joining Gart, he served as a district manager for Malone and Hyde's sporting goods division, a 40-store retail sporting goods retailer. Mr. Morton has worked for over 30 years in the sporting goods retail industry.

        Jonathan D. Sokoloff.    Mr. Sokoloff became a director of Gart in April 1993. Since 1990, Mr. Sokoloff has been a partner of Leonard Green and the general partner of Green Equity Investors, L.P., the holder of approximately 26% of the outstanding shares of Gart common stock. Mr. Sokoloff was employed at Drexel Burnham Lambert Incorporated from 1985 to 1990, most recently as a managing director. Mr. Sokoloff also is a director of Twinlab Corporation, Rite Aid Corporation, Diamond Triumph Auto Glass, Inc., Dollar Financial Group, Inc. and several private companies.

        Jonathan A. Seiffer.    Mr. Seiffer became a director of Gart in December 1998. Since January 1999, Mr. Seiffer has been a partner of Leonard Green. From December 1997 to January 1999, Mr. Seiffer was a vice president of Leonard Green and, from October 1994 to December 1997, he was an associate at Leonard Green. Before October 1994, Mr. Seiffer was a member of the corporate finance department of Donaldson, Lufkin & Jenrette Securities Corporation. Mr. Seiffer also is a director of Diamond Triumph Auto Glass, Inc., Dollar Financial Group, Inc., Liberty Group Publishing, Inc. and several private companies.

        Gordon D. Barker.    Mr. Barker became a director of Gart in April 1998. Mr. Barker was the chief executive officer and a director of Thrifty Payless Holdings, Inc., a subsidiary of Rite Aid Corporation, from 1996 until its acquisition by Rite Aid Corporation in 1997. He previously served in various capacities at Thrifty Payless since 1968, including as chief operating officer from 1994 to 1996 and as president from 1994 to 1997. Mr. Barker also is a director of United Natural Foods, a distributor of natural food products, listed on the Nasdaq National Market under the symbol "UNFI." Mr. Barker also currently serves as chief executive officer of Snyder Drug Stores/Drug Emporium, a mid-western chain of approximately 240 corporate and affiliate drug stores.

        Peter R. Formanek.    Mr. Formanek became a director of Gart in April 1998. Mr. Formanek was co-founder of AutoZone Inc., a retailer of aftermarket automotive parts, and served as president and chief operating officer of AutoZone Inc. from 1986 until his retirement in 1994. He currently is a director of The Perrigo Company, a manufacturer of store brand over-the-counter drug products and vitamins, and Borders Group, Inc., the second largest operator of book superstores and the largest operator of mall-based bookstores in the United States.

        Larry D. Strutton.    Mr. Strutton became a director of Gart in June 2001. Mr. Strutton served as publisher and chief executive officer of the Denver Rocky Mountain News since August 1990 until his retirement in January 2001. Prior to that, Mr. Strutton was president of the Baltimore Sun from April 1989 to August 1990. Mr. Strutton was executive vice president of the Los Angeles Times from January 1986 to 1989, and he was vice president for operations of the Los Angeles Times from November 1983 to January 1986. Mr. Strutton currently is a director of Ultimate Electronics, Inc.

        Marilyn Oshman.    Ms. Oshman became one of our directors in June 2001 when we acquired Oshman's. Ms. Oshman served as a director of Oshman's from 1970 until we acquired Oshman's and was the chairman of the board of Oshman's since 1993.

        Gart has designated John Douglas Morton, Jonathan D. Sokoloff, Peter R. Formanek and Gordon D. Barker to serve on the board of the combined company following the merger.

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The Sports Authority Nominees to Gart's Board of Directors Following the Merger

        If the merger is consummated, Gart's board of directors will consist of nine members, four designated by each of Gart and The Sports Authority from their current boards and one new director who is currently unaffiliated with either company. Pursuant to the terms of the merger agreement, Gart agreed to take action following the merger to cause The Sports Authority nominees to be appointed to the board of directors of the combined company.

        There are no family relationships between any nominee of The Sports Authority and any other nominee of The Sports Authority or any director, nominee or executive officer of Gart. Except as described in this joint proxy statement/prospectus, there are no arrangements or understandings between any nominee of The Sports Authority and any other person pursuant to which he or she has been or will be selected as a director of Gart.

        The Sports Authority has designated Martin E. Hanaka, Mary Elizabeth Burton, Cynthia R. Cohen and Kevin M. McGovern to serve on the board of the combined company following the merger. Mr. McGovern is the chairman of the board of directors and owner of approximately 30% of the outstanding common stock of Redington Inc., which supplies fly fishing equipment to The Sports Authority pursuant to a vendor agreement. Since February 2, 2002, The Sports Authority has made aggregate payments to Redington under this agreement in the amount of approximately $70,000. Additionally, The Sports Authority committed $1.1 million per year to the Boys & Girls Clubs of America for 2002 and 2003 to fund the operations of the Fitness Authority, a health and fitness educational program that encourages young people to participate in training, fitness evaluations and fitness events. Mr. Hanaka is a National Trustee of the Boys & Girls Clubs of America.

        Information with respect to The Sports Authority nominees as of May 22, 2003 is set forth below.

Name

  Age
  Current Position with The Sports Authority
  Director
Since

Martin E. Hanaka   53   Director, Chairman and Chief Executive Officer   1998
Mary Elizabeth Burton   51   Director   1999
Cynthia R. Cohen   50   Director   1998
Kevin M. McGovern   54   Director   2000

        Martin E. Hanaka.    Mr. Hanaka joined The Sports Authority in February 1998 as its vice chairman and currently serves as its chief executive officer since his election in September 1998. Mr. Hanaka has served as The Sports Authority's chairman since November 1999. From 1994 until October 1997, Mr. Hanaka served as president and chief operating officer and a director of Staples, Inc., an office supply retailer. Mr. Hanaka's extensive retail career includes serving as executive vice president of marketing and as president and chief operating officer of Lechmere, Inc. from 1992 to 1994, and serving in various capacities during his 20-year career at Sears Roebuck & Co., most recently as vice president in charge of Sears Brand Central. Mr. Hanaka also serves as a director of Trans-World Entertainment, a movie and video retail chain under several brands, and the Sporting Goods Manufacturers Association, as a national trustee of the Boys & Girls Clubs of America, and as a member of the Cornell University Entrepreneurship and Personal Enterprise Council and the Cornell University Council.

        Mary Elizabeth Burton.    Ms. Burton currently serves as the chairman and chief executive officer of BB Capital, Inc., a company that she founded in 1992 that provides retail advisory services and interim management. Previously, Ms. Burton served as the chief executive officer of a number of companies, including Supercuts, Inc., PIP Printing and Cosmetic Center, Inc. Ms. Burton is also a director of Staples, Inc., Aeropostale, Inc. and Rent-A-Center, Inc.

        Cynthia R. Cohen.    Ms. Cohen is the founder of Strategic Mindshare, a strategic management consulting firm serving retailers, consumer product manufacturers and e-businesses. She has served as

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president of Strategic Mindshare since the company's organization in 1990. Prior to that, Ms. Cohen was a partner in management consulting with Deloitte & Touche LLP. Ms. Cohen is a director of Office Depot, Inc., an office supply retailer, and Hot Topic, a teen apparel retailer. In addition, Ms. Cohen serves on the executive advisory board for the Center for Retailing Education and Research at the University of Florida and is vice chair of the board of the Center for Women's Business Research.

        Kevin M. McGovern.    Mr. McGovern is currently the chairman and chief executive officer of McGovern Capital LLC, which structures, funds and implements capital formation, joint ventures and business alliances. He is the principal in the law firm of McGovern & Associates. Mr. McGovern also serves as the chairman of Greenwich Alliances, which specializes in the formation and negotiation of strategic alliances. He is also a Trustee of Cornell University.


Information About Gart's Board of Directors and its Committees

Committees and Meetings of the Board of Directors

        Gart's board of directors has an Audit Committee and a Compensation Committee, which are described below. If the merger is completed, Gart will establish two nominating committees, as described below. During Gart's fiscal year ended on February 1, 2003, Gart's board of directors held six meetings, the Audit Committee held six meetings, and the Compensation Committee held two meetings. During Gart's fiscal year ended on February 1, 2003, each of Gart's directors attended at least 94% of the aggregate of: (1) the total number of meetings of the board of directors (held during the period in which the director served as a director of Gart) and (2) the total number of meetings held by all committees of the board of directors on which the director served (during the periods in which the director served on the committees).


Audit Committee

        As of the date of this joint proxy statement/prospectus, the members of Gart's Audit Committee are Gordon D. Barker, Jonathan A. Seiffer and Larry D. Strutton. Mr. Barker and Mr. Strutton are "independent" as that term is defined by Rule 4200(a)(15) of the National Association of Securities Dealers' listing standards. Mr. Seiffer may not be considered "independent," however, because he may be deemed to be an affiliate of Leonard Green, Gart's principal stockholder. Notwithstanding Mr. Seiffer's lack of independence, Gart's board of directors has resolved that Mr. Seiffer's presence on the Audit Committee is beneficial to Gart and has identified special circumstances as the basis for its determination. Mr. Seiffer, who is a partner of Leonard Green, has extensive experience with respect to sophisticated financial matters. Additionally, Mr. Seiffer has developed a thorough understanding of Gart's financial accounting as a result of his several years of service as a director of Gart, and has additional experience with other companies in the retail sporting goods industry. The Audit Committee charter, which was revised by Gart's board of directors on April 1, 2003, and which is attached to this joint proxy statement/prospectus as Annex E, sets forth the functions of the Audit Committee, which include:

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Compensation Committee

        As of the date of this joint proxy statement/prospectus, the members of the Compensation Committee are Jonathan D. Sokoloff, Peter R. Formanek and Larry D. Strutton. The functions of the Compensation Committee are:


Nominating Committees

        As of the effective time of the merger, and continuing until the election of directors at Gart's 2004 annual meeting of stockholders, Gart shall have two special interim committees, comprised of four directors each. The first committee will be comprised of directors who, immediately prior to the effective time of the merger, were members of Gart's board of directors. This committee will have all the power and authority of Gart's board in respect of filling any vacancy on the board resulting from the death, resignation, disqualification or removal of a director who, immediately prior to the effective time of the merger, was a member of Gart's board of directors or, subsequent to the effective time of the merger was designated to fill a vacancy on Gart's board of directors by this committee. The second committee will be comprised of directors who, immediately prior to the effective time of the merger, were members of The Sports Authority's board of directors. This second committee will have all the power and authority of Gart's board in respect of filling any vacancy on the board resulting from the death, resignation, disqualification or removal of a director who, immediately prior to the effective time of the merger, was a member of The Sports Authority's board of directors or, subsequent to the effective time of the merger was designated to fill a vacancy on Gart's board of directors by this second committee.


Compensation of Directors

        Directors who are also Gart's employees or consultants receive no additional compensation for serving as directors. Mr. Sokoloff and Mr. Seiffer, who are non-employee directors, also do not receive any compensation for serving as directors. All directors are reimbursed for the expenses they incur in attending meetings.

        Gart's non-employee directors (other than Mr. Sokoloff and Mr. Seiffer) are entitled to the following compensation:

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Compensation Committee Interlocks and Insider Participation

        During Gart's fiscal year ended on February 1, 2003, Jonathan D. Sokoloff, Peter R. Formanek and Larry D. Strutton were members of the Compensation Committee. Mr. Sokoloff, a non-employee director, is a partner of Leonard Green, which provides management, consulting and financial planning services to Gart. See the sections entitled "Certain Relationships and Related Transactions Relating to Gart" and "The Merger and Related Transactions—Interests of Certain Persons in the Merger," commencing on pages 111 and 46, respectively, of this joint proxy statement/prospectus for a description of this arrangement and other relationships between Gart and entities controlled by Mr. Sokoloff.


Executive Officers of Gart

        The following table sets forth certain information regarding Gart's current executive officers. Each such executive officer serves at the pleasure of Gart's board of directors.

Name

  Age
  Position with Gart
  Office
Held
Since

John Douglas Morton   52   President, Chief Executive Officer, and Chairman of the Board   1995
Thomas T. Hendrickson   48   Executive Vice President, Chief Financial Officer and Treasurer   1998
Greg Waters   42   Executive Vice President—Store Operations   2001
Arthur S. Hagan   64   Senior Vice President—Merchandising   1998
James M. Van Alstyne   42   Senior Vice President—Merchandising   2000
June J. Shirai   52   Senior Vice President—Chief Information Officer   2002
Nesa E. Hassanein   50   Senior Vice President—General Counsel and Secretary   2000
Anthony Forde   47   Senior Vice President—Merchandise Allocation and Marketing   2000
Thomas R. Wildenberg   45   Senior Vice President—Finance   2002

        John Douglas Morton.    See section entitled "Election of Directors of Gart—Nominees," commencing on page 95 of this joint proxy statement/prospectus for information concerning Mr. Morton.

        Thomas T. Hendrickson.    Mr. Hendrickson became executive vice president, chief financial officer and treasurer of Gart in January 1998. Mr. Hendrickson previously served as the executive vice president and chief financial officer of Sportmart since September 1996. He joined Sportmart in January 1993 as vice president—financial operations. In March 1993, he was named chief financial officer of Sportmart and in March 1995 he was named senior vice president and chief financial officer of Sportmart. From 1987 until joining Sportmart, Mr. Hendrickson was employed as the vice president and controller of Millers Outpost Stores. Mr. Hendrickson is a certified public accountant and has over 20 years of business experience.

        Greg Waters.    Mr. Waters became Gart's executive vice president—store operations in June 2001. Mr. Waters joined Gart in April 1998 as senior vice president—store operations. Before joining Gart,

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Mr. Waters served as the western regional vice president for The Sports Authority since 1994 and as a district manager for The Sports Authority since 1991. Mr. Waters was employed by Herman's World of Sporting Goods from 1983 until 1991, most recently as a district manager.

        Arthur S. Hagan.    Mr. Hagan became Gart's senior vice president—merchandising in January 1998. Mr. Hagan joined Gart in 1988 as Gart's division merchandise manager for golf, tennis, ski clothing/equipment and garden furniture and was promoted to vice president—store operations in 1995 and to senior vice president—store operations in May 1997. He was president and owner of Hagan Sports Ltd., a six-store sporting goods retailer acquired by Gart in 1987, and president and chief executive officer of Aspen Leaf of Colorado, Inc., a 12-store ski equipment and apparel retailer. Mr. Hagan has over 30 years of retailing experience.

        James M. Van Alstyne.    Mr. Van Alstyne became Gart's senior vice president—merchandising in April 2000. Mr. Van Alstyne joined Gart in 1986 as a buyer and held that position until 1993. Mr. Van Alstyne returned to Gart in 1998 as vice president—merchandising—hardlines and held that position until April 2000. From 1993 to 1998, Mr. Van Alstyne served as Easton Sports, Inc.'s western regional sales manager, national sales manager and vice president of sales for the United States, Latin America and Australia.

        June J. Shirai.    Ms. Shirai became senior vice president—chief information officer and joined Gart in January 2002. Prior to joining Gart, Ms. Shirai was executive vice president at LakeWest Group, a retail consulting firm, from 1995 to 2002. Prior to LakeWest Group, Ms. Shirai was senior vice president for National Vision Associates, an optical retailer, from 1991 to 1995. Prior to National Vision Associates, Ms. Shirai was chief information officer with Checker Schucks Kragen, an automotive aftermarket retailer, and Pace Membership Warehouse. Ms. Shirai has over 30 years retailing experience.

        Nesa E. Hassanein.    Ms. Hassanein became Gart's senior vice president, general counsel and secretary in June 2000. Ms. Hassanein joined Gart in July 1998 as vice president and corporate counsel. Before joining Gart, during 1997, Ms. Hassanein served as senior vice president and general counsel for Atlas Air Inc. From 1995 to 1997, Ms. Hassanein was a partner of Morrison & Foerster LLP. From 1992 to 1995, she was a shareholder of Brownstein Hyatt Farber & Strickland P.C. From 1982 to 1991, she was as an associate of Skadden, Arps, Slate, Meagher & Flom LLP.

        Anthony Forde.    Mr. Forde became Gart's senior vice president—marketing & merchandise allocations in June 2000. He joined Gart in January 1998 as vice president-merchandise allocations. Before joining Gart, Mr. Forde was vice president—merchandising allocations for Thrifty Payless. Since 1980, Mr. Forde served as store manager, district manager, category manager and visual director for Phar Mor Inc. and Giant Eagle, Inc. Mr. Forde has over 25 years of retail experience.

        Thomas R. Wildenberg.    Mr. Wildenberg became senior vice president—finance in August 2002. Mr. Wildenberg joined Gart in 1999 as vice president—finance. Prior to joining Gart, Mr. Wildenberg was chief accounting officer and controller for Wilsons the Leather Experts Inc. from 1996 to 1999 and served as controller for Wilsons from 1994 to 1996. Prior to joining Wilsons, Mr. Wildenberg held several positions at Woman's World Shops, Inc., a retail apparel company from 1990 to 1994, most recently as director of finance-controller from 1992 to 1994. Mr. Wildenberg is a certified public accountant and has over 20 years of business experience.


Compensation of Gart's Executive Officers

        The following table sets forth information regarding the annual and long- term compensation paid to Gart's chief executive officer and Gart's four other most highly compensated executive officers receiving a total annual salary and bonus of $100,000 or more.

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Summary Compensation Table

 
   
  Annual Compensation
  Long-Term Compensation Awards
 
Name and Position
(a)

  Fiscal
Year
(b)

  Salary($)
(c)

  Bonus($)
(d)

  Other
Annual
Compensation
($)
(e)

  Restricted
Stock
Award(s)
($)(5)(6)
(f)

  Securities
Underlying
Options (#)
(g)

  All Other
Compensation
($)
(h)

 
John Douglas Morton
Chairman, President and Chief Executive Officer
  2002
2001
2000
  573,076
479,806
418,268
  261,625
286,344
578,256
 

 
225,000
299,250

(1)
(2)

28,000
60,000
  10,938
2,587
3,150
(3)
(4)
(4)

Thomas T. Hendrickson
Executive Vice President, Chief Financial Officer and Treasurer

 

2002
2001
2000

 

350,191
300,576
272,038

 

136,988
153,638
322,365

 




 


112,500
117,905


(1)
(2)


16,000
45,000

 

6,570
1,800

(3)
(4)

Greg Waters
Executive Vice President—Store Operations

 

2002
2001
2000

 

275,576
243,267
220,961

 

107,738
124,313
218,199

 




 


61,875
52,500


(1)
(2)


8,000
30,000

 

5,525


(3)


Arthur S. Hagan
Senior Vice President—Merchandising

 

2002
2001
2000

 

257,307
237,691
203,268

 

83,688
102,000
200,727

 




 


61,875
31,500


(1)
(2)


8,000
15,000

 

4,694
346
1,426

(3)
(4)
(4)

Nesa Hassanein
Senior Vice President—General Counsel

 

2002
2001
2000

 

240,037
203,269
178,267

 

78,000
86,594
189,450

 




 


61,875
39,375


(1)
(2)


8,000
25,000

 

4,846


(3)


(1)
Represents the market value of restricted shares granted during Gart's 2001 fiscal year based on the closing sales price of $11.25 per share on September 25, 2001, the date of grant. These shares vest 20% per year through September 25, 2006, subject to the named executive officer's continued employment by Gart.

(2)
Represents the market value of restricted shares granted during Gart's 2000 fiscal year based on the closing sales price of $5.25 per share on June 27, 2000, the date of grant. These shares become 100% vested on June 27, 2005, subject to the named executive officer's continued employment by Gart.

(3)
Represents contributions made by Gart on behalf of the named executives to its 401(k) Savings Plan and also its non-qualified Deferred Compensation Plan.

(4)
Represents contributions made by Gart on behalf of the named executives to its 401(k) Savings Plan.

(5)
Dividends, if declared, are paid on those restricted shares that are vested.

(6)
As of the end of fiscal year 2002, the named executives held an aggregate of 389,708 shares of restricted stock with an aggregate market value of $6.1 million as of February 1, 2003.

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Option Grants in the Last Fiscal Year

        The following table sets forth information with respect to the options that Gart granted during the Gart's fiscal year ended on February 1, 2003 to the named executive officers:

 
  Individual Grants
  Potential Realizable Value At Assumed Annual Rates Of Stock Price Appreciation For Option Term(2)
Name
(a)

  Number of
Securities
Underlying
Options Granted
(b)(1)

  Percent of
Total Options
Granted to Employees
in Fiscal Year
(c)

  Exercise Of
Base Price
($/Sh)
(d)

  Expiration
Date
(e)

  5% ($)
(f)

  10% ($)
(g)

John Douglas Morton   75,000   17.7 % $ 20.000   12/18/2012   $ 943,342   $ 1,217,594
Thomas T. Hendrickson   30,000   7.1 % $ 20.000   12/18/2012   $ 377,337   $ 487,037
Greg Waters   20,000   4.7 % $ 20.000   12/18/2012   $ 251,558   $ 324,692
Arthur S. Hagan   10,000   2.4 % $ 20.000   12/18/2012   $ 125,779   $ 162,346
Nesa E. Hassanein   15,000   3.5 % $ 20.000   12/18/2012   $ 188,668   $ 243,519

(1)
These options were granted under Gart's 1994 Management Equity Plan described below.

(2)
Based upon the estimated fair value of Gart common stock on the date of grant and assumed appreciation over the term of the options at the respective annual rates of stock appreciation shown. Potential gains are net of the exercise price but before taxes associated with the exercise. The 5% and 10% assumed annual rates of compounded stock appreciation are mandated by the rules of the Securities and Exchange Commission and do not represent Gart's estimate or projection of the future price of common stock. Actual gains, if any, on stock option exercises are dependent on the future financial performance of Gart and overall market conditions. The actual value realized may be greater or less than the potential realizable value set forth in the table.


Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Option Values

        The following table sets forth certain information regarding the number and value of unexercised options held by the named executives at February 2, 2002:

Name
(a)

  Shares
Acquired
on Exercise (#)
(b)

  Value
Realized ($)(1)
(c)

  Underlying
Unexercised Options at
Fiscal Year-End (#)
Exercisable/Unexercisable
(d)

  In-the-Money
Options at
Fiscal Year-End ($)
Exercisable/Unexercisable(2)
(e)

John Douglas Morton   85,000   $ 2,175,612   166,800   154,200   $ 709,571   $ 485,734
Thomas T. Hendrickson   38,000   $ 740,710   24,516   83,800   $ 133,773   $ 357,344
Greg Waters   8,800   $ 195,094   15,600   55,600   $ 88,048   $ 241,792
Arthur S. Hagan   45,800   $ 1,090,459   7,000   26,200   $ 35,948   $ 105,632
Nesa E. Hassanein         11,600   40,400   $ 91,893   $ 188,122

(1)
Represents the market value, as of the exercise date, of the shares of Gart common stock acquired on exercise of options, less the aggregate option price.

(2)
Represents the value of the shares of Gart common stock subject to outstanding options, based on the market value of $15.70 per share at February 1, 2003, less the aggregate option exercise price.


Securities Authorized for Issuance Under Equity Compensation Plans

        The following table provides information as of February 1, 2003 in respect of compensation plans under which equity securities of Gart are authorized for issuance. These plans are Gart's 1994 Management Equity Plan, as amended, and the Sportmart, Inc. Stock Option Plan, as amended. Gart does not intend to issue further equity securities under the Sportmart, Inc. Stock Option Plan, as amended. If Gart stockholders vote to adopt the Gart Sports Company 2003 Long-Term Incentive

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Compensation Plan, no further equity securities will be issued pursuant to the 1994 Management Equity Plan, as amended.

Plan Category

  Number of securities to be issued upon exercise of outstanding options, warrants and rights
(a)

  Weighted-average exercise price of outstanding options, warrants and rights
(b)

  Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
(c)

Equity compensation plans approved by security holders:   1,359,003   $ 13.90   349,054
Equity compensation plans not approved by security holders:              
Total   1,359,003   $ 13.90   349,054


Report of the Compensation Committee

        Notwithstanding anything to the contrary set forth in any of Gart's previous filings under the Securities Act of 1933 or the Securities Exchange Act of 1934 that might incorporate future filings, including this joint proxy statement/prospectus, in whole or in part, the following Report of the Compensation Committee and the Performance Graph set forth on page 110 of this joint proxy statement/prospectus shall not be incorporated by reference into any such filings.

        The Compensation Committee of Gart's board of directors, composed of outside directors of Gart's board of directors, reviews the performance of Gart's executive officers, determines the compensation of Gart's executive officers and is active in reviewing salaries, bonuses and other forms of compensation for other of Gart's officers and key employees. The Compensation Committee is empowered by Gart's board of directors to award stock options, grants of restricted shares of Gart common stock, and permitted purchases of Gart common stock to Gart's key employees.

        The Compensation Committee has access to independent compensation data and is authorized, if determined appropriate in any particular case, to engage outside compensation consultants.

        The objectives of the Compensation Committee are to support Gart's achievement of desired standards of performance, to provide compensation and benefits that will attract and retain superior talent and reward performance, and to cause some portion of compensation to be based on Gart's performance.

        Gart's executive compensation program generally is composed of base salary, bonuses based upon Gart's achievement of a target level of earnings before income taxes, interest expense and other financing costs, and depreciation, and amortization, and long-term incentives in the form of stock options, restricted stock grants and permitted stock purchases.

        In Gart's fiscal year ended on February 1, 2003, base salaries for Gart's executive officers were competitively set relative to salaries of officers of companies included in the Standard & Poor's Retail Index that are comparable to Gart in business and size. In each instance, base salary takes into account individual experience and performance specific to Gart. The Compensation Committee generally attempts to provide compensation approximating the median of comparable companies. Except for increases associated with promotions or increased responsibility, increases in base salaries for Gart's executive officers from year to year are limited to adjustments to reflect increases in the rate of inflation.

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        The Compensation Committee is aware that the Internal Revenue Code of 1986, as amended, treats certain elements of executive compensation in excess of $1 million a year as an expense not deductible by Gart for federal income tax purposes. For the fiscal year ended February 1, 2003, no executive officer's compensation exceeded the cap on deductibility. To the extent compensation to an executive officer exceeds the cap in the future, the Compensation Committee will consider the facts and circumstances at that time to reach a determination regarding the impact of the cap on such compensation.

        Bonuses for executive officers and certain other officers and members of Gart's target bonus management team are paid pursuant to Gart's Bonus Plan. The purpose of the Bonus Plan is to provide an incentive for executives and other of Gart's key employees and to reward them in relation to the degree to which specified earnings goals are achieved. Under the Bonus Plan, eligible employees are awarded cash bonuses based upon the extent to which Gart achieves a target level of pre-tax earnings established each year by the Compensation Committee. The amount of each employee's cash bonus, as determined by the Compensation Committee, is a percentage of salary ranging from a maximum of 70% (for the chief executive officer) to 10% depending on position, if Gart achieves 100% of the target pre-tax earnings. Bonuses also can be increased or decreased, at the discretion of the Compensation Committee, if the target pre-tax earnings is exceeded or not achieved. Bonuses were awarded in respect of the fiscal year ended on February 1, 2003 based on Gart achieving 65% of the target pre-tax earnings. Gart's board of directors may choose to continue, amend or terminate the Bonus Plan in future years. In addition, subject to the approval of its stockholders at its 2003 annual meeting, Gart intends to adopt a new bonus plan. Gart will not adopt this new bonus plan unless it is approved by Gart stockholders. See the section entitled "Adoption of the Gart Sports Company 2003 Performance Bonus Plan" commencing on page 116 of this joint proxy statement/prospectus.

        The Compensation Committee administers Gart's 1994 Management Equity Plan, as amended. Under the terms of the 1994 Management Equity Plan, the Compensation Committee may award key employees (including officers and directors who are employees) of Gart or its subsidiaries (1) grants of Gart common stock ("Grant Shares"), (2) permitted purchases of Gart common stock ("Purchased Shares") or (3) options to purchase shares of Gart common stock, or any combination of the foregoing as determined by the Compensation Committee. Three million shares of Gart common stock have been reserved for issuance pursuant to awards that may be granted under Gart's 1994 Management Equity Plan and, as of February 1, 2003, 349,054 shares of Gart common stock were available for issuance pursuant to awards that may be granted under this plan. If Gart stockholders vote to adopt the Gart Sports Company 2003 Long-Term Incentive Compensation Plan, no further equity securities will be issued pursuant to the 1994 Management Equity Plan, as amended.

        The Compensation Committee believes that employee equity ownership provides significant additional motivation to maximize value for Gart's stockholders. Therefore, the Compensation Committee periodically grants stock options to Gart's employees, including executive officers. Stock options are granted typically at the prevailing market price and, therefore, will only have value if Gart common stock increases over the exercise price. The Compensation Committee believes that the grant of stock options provides a long-term incentive to employees to contribute to Gart's growth and establishes a direct link between compensation and stockholder return, measured by the same index used by stockholders to measure Gart's performance. The terms of the stock options granted by Gart, including number of shares, vesting, exercisability and stock option term, are determined by the Compensation Committee, based upon the position and responsibilities of the applicable employee, the historical and expected contributions of the applicable employee, any previous option grants to the

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applicable employee and a review of competitive equity compensation for executive officers of similar rank in companies that are comparable to Gart's industry and size.

        In the case of stock options, the Compensation Committee has the authority to determine whether stock options shall be intended as "incentive stock options" or "non-incentive" or "nonqualified" stock options under Section 422 of the Internal Revenue Code of 1986, as amended. No more than an aggregate of 600,000 shares of Gart common stock may be issuable upon the exercise of outstanding incentive stock options at any time. Stock options may be transferred by an optionee during his or her lifetime only to the extent permitted by the Compensation Committee. Gart, subject to the approval of its stockholders at its 2003 annual meeting, intends to adopt a new long-term incentive compensation plan. See the section entitled "Adoption of the Gart Sports Company 2003 Long-Term Incentive Compensation Plan," commencing on page 111 of this joint proxy statement/prospectus.

        The compensation package of John Douglas Morton, Gart's president, chief executive officer and chairman, was determined in accordance with the principles described above. In 2002, Mr. Morton received a base salary of $537,076 and a bonus of $261,625. In addition, Mr. Morton received certain other customary perquisites and benefits in 2002. The Compensation Committee approved Mr. Morton's total compensation based on the following factors, which are listed in the order of importance to the Compensation Committee: (1) improvement in Gart's financial performance and (2) Gart's comparative performance with other companies in its industry. In February 2003, Gart entered into an employment agreement with Mr. Morton, which will be effective upon consummation of the merger. For a description of this agreement see the section entitled "Related Agreements—Gart Employment Agreements" commencing on page 70 of this joint proxy statement/prospectus.


Compensation and Severance Agreements and Plans

        Gart is party to a change in control severance agreement with most of its officers, including Mr. Morton and each of the other executives officers named in the Summary Compensation Table; provided that, if the merger is consummated, Gart's severance agreement with Mr. Morton, as well as with various other executive officers, will be superceded by employment agreements which will become effective at the effective time of the merger. For a description of these employment agreements, see the section entitled "Related Agreements—Gart Employment Agreements," commencing on page 70 of this joint proxy statement/prospectus.

        The severance agreements provide that an officer is entitled to a severance payment if a transaction resulting in a change in control occurs and, within one year from the date of the transaction, either the officer's employment is terminated, other than for cause, or the officer resigns for "good reason" (as defined in the severance agreements). The severance payments consist of: (1) payment, in one lump sum, of an amount equal to the officer's base salary for a specified severance period (three years for Gart's president, two years for executive vice presidents, one and one-half years for senior vice presidents, and one year for vice presidents), (2) payment of the "on plan" bonus amount for the fiscal year in which termination of employment occurs, multiplied by the applicable

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severance period for the officer, (3) medical, dental, life and other insurance benefits for the applicable severance period and (4) any automobile that Gart provides to the officer. After a transaction resulting in a change of control occurs, Gart's officer may resign for "good reason" and receive his or her severance payment if the officer's base salary or bonus is reduced, the officer's responsibilities and position are reduced, or the officer is required to work at a location more than 30 miles from Gart's current executive offices.

        Gart maintains a non-standard 401(k) profit sharing plan for all eligible employees. The non-standard 401(k) profit sharing plan allows eligible employees to make tax deferred contributions and provides for discretionary matching contributions by Gart as determined by Gart's board of directors. Gart currently makes a matching contribution in an amount equal to 30% of a participant's deferral (up to 6% of such participant's compensation). In Gart's fiscal year ended on February 1, 2003, the aggregate amount of Gart's matching contributions was approximately $522,000.

        During the 1999 fiscal year, Gart began a nonqualified deferred compensation plan for some members of management. Eligible employees may contribute a portion of their base salary or bonuses to the plan annually. The nonqualified deferred compensation plan provides for additional matching contributions by Gart, with limitations similar to those under Gart's 401(k) plan, as well as discretionary contributions, in an amount determined by Gart before the end of each plan year. Gart made no matching contributions to the deferred compensation plan during its fiscal year ended on February 1, 2003.

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Report of the Audit Committee of Gart's Board of Directors

        The Audit Committee has reviewed and discussed Gart's consolidated financial statements with management. The Audit Committee has discussed with Deloitte & Touche LLP the matters required to be discussed by Statement on Auditing Standards No. 61 (Codification of Statements on Auditing Standards, AU (S) 380). The Audit Committee has received the written disclosures and the letter from Deloitte & Touche LLP required by Independence Standards Board Standard No. 1 (Independence Standards Board Standard No. 1, Independence Discussions with Audit Committees) and has discussed with Deloitte & Touche LLP that firm's independence.

        Based upon the Audit Committee's review and discussions referred to above, the Audit Committee recommended that Gart's audited consolidated financial statements be included in Gart's Annual Report on Form 10-K for the fiscal year ended February 1, 2003 for filing with the Securities and Exchange Commission.

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Gart's Relationship with Independent Auditors

Audit Fees

        The aggregate fees billed to Gart by Deloitte & Touche LLP for professional services rendered for the audit of Gart's consolidated financial statements for the fiscal year ended February 1, 2003 and the reviews of Gart's consolidated financial statements included in Gart's Quarterly Reports on Form 10-Q for the fiscal quarters ended May 4, 2002, August 3, 2002 and November 2, 2002 were $282,229.


Financial Information Systems Design and Implementation

        There were no fees billed to Gart by Deloitte & Touche LLP for financial information systems design and implementation for the fiscal year ended February 1, 2003.


All Other Fees

        The aggregate fees billed to Gart by Deloitte & Touche LLP for services rendered, other than the services covered above under "Audit Fees" and "Financial Information Systems Design and Implementation," for the fiscal year ended February 1, 2003 were $699,037. Non-audit fees consisted of $517,000 for financial due diligence in connection with the proposed merger with The Sports Authority, $99,000 for services related to the registration statement filed for our secondary stock offering in May 2002 and $83,000 for tax services.

        The Audit Committee has determined that the provision of services other than audit services to Gart by Deloitte & Touche LLP is compatible with maintaining Deloitte & Touche LLP's independence.


Independent Auditors for the Combined Company

        The audit committee of the combined company will select independent auditors for the combined company following consummation of the merger.

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Performance Graph of Gart

        The following graph shows a comparison of cumulative total returns for Gart common stock registered under Section 12 of the Securities Exchange Act of 1934, the Nasdaq Composite Index, the Standard & Poor's Retail Index and a peer group of companies during the period commencing January 31, 1998 (the last trading day preceding the first day of Gart's fifth preceding fiscal year) and ending on February 1, 2003. In reviewing this graph, you should keep in mind the possible effect that the limited trading in Gart common stock may have had on the price of Gart common stock.

        The comparison assumes $100.00 was invested on January 31, 1998 and assumes the reinvestment of all dividends, if any. The peer group consists of the following publicly traded sporting goods retailers: Sport Chalet, Inc., Hibbett Sporting Goods, Inc. and The Sports Authority, Inc.

GRAPHIC


Section 16(a) Beneficial Ownership Reporting Compliance of Gart

        Section 16(a) of the Securities Exchange Act of 1934 requires Gart's directors, executive officers and persons who own more than 10% of a registered class of Gart's equity securities to file reports of initial ownership and reports of changes in ownership with the Securities and Exchange Commission. Such directors, officers and 10% stockholders are required to furnish Gart with copies of all Section 16(a) forms they file.

        Based solely on a review of the copies of such reports furnished to Gart, Gart believes that during the 2002 fiscal year, all section 16(a) requirements applicable to its directors, executive officers and 10% stockholders were complied with.

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Certain Relationships and Related Transactions Relating to Gart

        Gart entered into noncancelable consulting agreements with Alvin N. Lubetkin and Marilyn Oshman, who are former Oshman's executives in connection with its acquisition of Oshman's on June 7, 2001. Ms. Oshman is currently a director of Gart and Mr. Lubetkin was a director of Gart until his resignation effective June 27, 2002. Pursuant to the consulting agreements, Gart agreed to pay a fee of $175,000 per year to Ms. Oshman for her services to be rendered over a period of 12 months, and Gart agreed to pay a fee of $400,000 per year to Mr. Lubetkin for his services to be rendered over a period of 30 months. The agreement with Ms. Oshman terminated in June 2002.

        Gart leases properties from partnerships or trusts, the partners and trust accounts of which are affiliated with certain of its current and former directors and their family members. Eight leases are with partnerships or trusts, the partners and trust accounts of which are affiliated with Mr. Lubetkin (a former Gart director), Ms. Oshman (a current Gart director) and their family members. One such lease is for a store sold by a third party to an entity controlled by Mr. Lubetkin. Seven related leases are for a distribution center and Oshman's former corporate offices in Houston, Texas, which Gart leases from Oshman family trusts, including trusts for the benefit of Ms. Oshman. For fiscal 2002, rent expense under these leases was in the aggregate approximately $1.1 million.

        Leonard Green owns approximately 26% of Gart's currently outstanding common stock. Gart has entered into a management services agreement with Leonard Green, whereby Leonard Green receives an annual retainer fee plus reasonable expenses for providing certain management, consulting and financial planning services. The management services agreement also provides that Leonard Green may receive reasonable and customary fees and reasonable expenses from time to time for providing financial advisory and investment banking services in connection with major financial transactions that Gart undertakes.

        At Gart's request, Gart and Leonard Green amended the management services agreement in June 2001 to phase out the annual fee payable to Leonard Green in an effort to reduce Gart's costs attributable to their relationship. The amendment provides that Gart will pay Leonard Green an annual fee of (i) $1 million if Leonard Green's ownership of Gart is at or above 25%, (ii) $500,000 if Leonard Green's ownership of Gart is at or above 10%, but under 25% and (iii) $0 if Leonard Green's ownership of Gart is under 10%. The amendment does not affect the level of services that Leonard Green is obligated to provide under the agreement. Although Leonard Green currently owns approximately 26% of Gart's outstanding stock, if Gart had not been implementing a stock repurchase program since 1999, Leonard Green would currently own less than 25% of Gart. Accordingly, Leonard Green agreed to waive its entitlement to the $1 million annual fee and agreed that the current annual fee payable to Leonard Green is $500,000. The management services agreement terminates on April 20, 2004. Gart paid a management fee to Leonard Green of $625,000 for fiscal year 2002, $4.833 million (which includes a fee of $4 million in connection with its acquisition of Oshman's in 2001) for fiscal 2001 and $500,000 for fiscal 2000. In addition, Gart will pay Leonard Green a fee of $4.25 million, plus out-of-pocket expenses, in connection with the merger. In 2002, Gart also paid Leonard Green's out-of-pocket expenses in connection with its sale of 3,000,000 shares of Gart common stock in a public offering.


Adoption of the Gart Sports Company 2003 Long-Term Incentive Compensation Plan

General

        At Gart's annual meeting, Gart stockholders will be asked to adopt the Gart Sports Company 2003 Long-Term Incentive Compensation Plan, a copy of which is attached to this joint proxy statement/prospectus as Annex F. Gart stockholders are encouraged to review the incentive compensation plan carefully. Any description in this joint proxy statement/prospectus of the incentive compensation plan is qualified in its entirety by a reference to Annex F. Stockholders are being asked to approve the

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incentive compensation plan, with the intent of avoiding the possibility that the deductibility for federal income tax purposes of various types of awards under the plan will be limited by Section 162(m) of the Internal Revenue Code of 1986 (which, under certain circumstances, causes compensation in excess of $1 million to an employee in a year not to be deductible to the employer). On May 16, 2003, Gart's compensation committee approved the incentive compensation plan, subject to approval by Gart's stockholders at Gart's annual meeting. The incentive compensation plan will not become effective if it is not approved by Gart's stockholders.


Purpose

        The purpose of the incentive compensation plan is to provide Gart with the flexibility selectively to use stock options and other awards as part of an overall compensation package for key employees, which should enhance the Gart's ability to attract and retain these individuals who are important to the success and growth of the business and Gart's subsidiaries in an intensely competitive business environment. Gart believes that awards under the incentive compensation plan may serve to broaden the equity participation of key employees and further link the long-term interests of management and stockholders. Gart will consider awards pursuant to the incentive compensation plan in light of its overall compensation philosophy and competitive conditions in the marketplace. A number of Gart's competitors utilize equity and other awards as a component of their incentive compensation programs. The use of equity-based and other compensation should more closely align executive incentives with the long-term goals of the Gart's stockholders, in a tax-efficient manner.


Voting

        The proposal to adopt the incentive compensation plan will be approved if, at Gart's annual meeting, a majority of the shares present in person or represented by proxy are voted in favor of this proposal. Abstentions and broker non-votes will count as votes against this proposal because they will be counted as present at the meeting and entitled to vote on, but not for, this proposal.

        Each proxy received will be voted in accordance with the instructions indicated on the proxy. If a proxy is properly completed, signed and returned but no instructions are indicated on the proxy, then the proxy will be voted "FOR" the adoption of the incentive compensation plan.

        Gart's board of directors recommends that Gart stockholders vote "FOR" the proposal to adopt the Gart Sports Company 2003 Incentive Compensation Plan.


Description of the Gart Sports Company 2003 Long-Term Incentive Compensation Plan

Administration

        The incentive compensation plan will be administered by a committee of Gart's board of directors, consisting of two or more non-employee directors, each of whom is intended to be, to the extent required by Rule 16b-3 under the Securities Exchange Act of 1934 and Section 162(m) of the Internal Revenue Code of 1986, a non-employee director under Rule 16b-3 and an outside director under Section 162(m). If no committee exists, the functions of the committee will be exercised by Gart's board of directors.

        The committee has the full authority to administer and interpret the incentive compensation plan, to authorize the granting of awards, to determine the eligibility of an employee, director or consultant to receive an award, to determine the number of shares of common stock to be covered by each award (subject to the individual participant limitations provided in the incentive compensation plan), to determine the terms, provisions and conditions of each award (which may not be inconsistent with the terms of the incentive compensation plan), to prescribe the form of instruments evidencing awards and to take any other actions and make all other determinations that it deems necessary or appropriate in

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connection with the incentive compensation plan or the administration or interpretation thereof. In connection with this authority, the committee may establish performance goals that must be met in order for awards to be granted or to vest, or for the restrictions on any such awards to lapse. The performance goals may be based upon (i) the extent of achievement of specified levels of (x) Gart's consolidated pre-tax or after-tax earnings or earnings before interest, tax, depreciation and amortization, (y) the pre-tax or after-tax earnings, or earnings before interest, tax, depreciation and amortization, of Gart or any particular subsidiary, division or other business unit of Gart, or (z) changes (or the absence of changes) in the per share or aggregate fair market value of Gart common stock, or (ii) the extent of achievement of specified levels of revenues, gross margin (rate or dollars), comparable store sales, earnings, costs, return on assets, return on equity, return on capital, return on investment, number of units sold or average sale prices with regard to Gart, particular subsidiaries, divisions or other business units of Gart or particular employees or groups of employees of Gart.


Eligibility and Types of Awards

        Key employees, directors and consultants of Gart and its subsidiaries are eligible to be granted stock options, restricted stock, phantom shares, dividend equivalent rights and other stock-based awards under the incentive compensation plan. As of the date hereof, no awards have been granted under the incentive compensation plan. Eligibility for awards under the incentive compensation plan is determined by the committee.


Available Shares

        Subject to adjustment upon certain corporate transactions or events, a maximum of 2,500,000 shares of Gart common stock, may be subject to stock options, shares of restricted stock, phantom shares and dividend equivalent rights under the incentive compensation plan. The maximum number of shares of Gart common stock subject to incentive stock options granted under the incentive compensation plan may not exceed 2,500,000. In addition, subject to adjustment upon certain corporate transactions or events, a participant may not receive options for more than 2,500,000 shares of Gart common stock over the life of the incentive compensation plan. Gart common stock withheld or surrendered by plan participants in connection with the payment of an option exercise price or in connection with tax withholding will not count towards the 2,500,000 share limitation and will be available for issuance under the incentive compensation plan.


Awards Under the Plan

        The terms of specific options, including whether options shall constitute "incentive stock options" for purposes of Section 422(b) of the Internal Revenue Code, shall be determined by the committee. The exercise price of an option shall be determined by the committee and reflected in the applicable award agreement. The exercise price with respect to incentive stock options may not be lower than 100% (110% in the case of an incentive stock option granted to a 10% stockholder of Gart) of the fair market value of Gart common stock on the date of grant. Each option will be exercisable after the period or periods specified in the award agreement, which will generally not exceed ten years from the date of grant (or five years in the case of an incentive stock option granted to a 10% stockholder of Gart). Options will be exercisable at such times and subject to such terms as determined by the committee at the time of grant.

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        Restricted stock will be subject to restrictions (including, without limitation, any limitation on the right to vote a share of restricted stock or the right to receive any dividend or other right or property) as the committee shall determine. Except as otherwise determined by the committee, upon a termination of employment or other service for any reason during the applicable restriction period, all shares of restricted stock still subject to restrictions shall be forfeited to Gart.

        Phantom shares will vest as provided in the applicable award agreement. A phantom share represents a right to receive the fair market value of a share of Gart common stock, or, if provided by the committee, the right to receive the fair market value of a share of Gart common stock in excess of a base value established by the committee at the time of grant. Subject to the provisions of the applicable award agreement, upon a participant's termination of employment or other service, all phantom shares (whether or not otherwise vested) will be forfeited and cease to be outstanding. Phantom shares may generally be settled in cash or by transfer of shares of common stock (as may be elected by the participant or the committee). The committee may, in its discretion and under certain circumstances, permit a participant to receive as settlement of the phantom shares installments over a period not to exceed ten years. In addition, the committee may establish a program under which distributions with respect to phantom shares may be deferred for additional periods as set forth in the preceding sentence.

        A dividend equivalent is a right to receive (or have credited) the equivalent value (in cash or shares of common stock) of dividends declared on shares of common stock otherwise subject to an award. The committee may provide that amounts payable with respect to dividend equivalents shall be converted into cash or additional shares of Gart common stock. The committee will establish all other limitations and conditions of awards of dividend equivalents.

        The incentive compensation plan authorizes the granting of other awards based upon the common stock (including the grant of securities convertible into Gart common stock and stock appreciation rights), and subject to terms and conditions established at the time of grant.


Change in Control

        Upon a change in control of Gart (as defined in the incentive compensation plan), the committee may make such adjustments as it, in its discretion, determines are necessary or appropriate in light of the change in control, but only if the committee determines that the adjustments do not have an adverse economic impact on the participants (as determined at the time of the adjustments).


Amendment and Termination

        Gart's board of directors may amend the incentive compensation plan as it deems advisable, except that it may not amend the incentive compensation plan in any way that would adversely affect a participant with respect to an award previously granted unless the amendment is required in order to comply with applicable laws. In addition, Gart's board of directors may not amend the incentive compensation plan if the amendment would cause the incentive compensation plan to fail to comply with any requirement of applicable law or regulation, unless and until such amendment is approved by Gart's stockholders.

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Material U.S. Federal Income Tax Consequences

        In general, neither the grant nor the exercise of an incentive stock option will result in taxable income to an option holder or a deduction for Gart. To receive special tax treatment as an incentive stock option under the Internal Revenue Code as to shares acquired upon exercise of an incentive stock option, an option holder must neither dispose of the shares within two years after the incentive stock option is granted nor within one year after the transfer of the shares to the option holder pursuant to exercise of the option. In addition, the option holder must be an employee of Gart or a qualified subsidiary at all times between the date of grant and the date three months (one year in the case of disability) before exercise of the option. (Special rules apply in the case of the death of the option holder.) Incentive stock option treatment under the Internal Revenue Code generally allows the sale of Gart common stock received upon the exercise of an incentive stock option to result in any gain being treated as a capital gain to the option holder, but Gart will not be entitled to a tax deduction. The exercise of an incentive stock option (if the holding period rules described in this paragraph are satisfied), however, will give rise to income includable by the option holder in his or her alternative minimum taxable income for purposes of the alternative minimum tax in an amount equal to the excess of the fair market value of the stock acquired on the date of the exercise of the option over the exercise price.

        If the holding period rules noted above are not satisfied, gain recognized on the disposition of the shares acquired upon the exercise of an incentive stock option will be characterized as ordinary income. This gain will be equal to the difference between the exercise price and the fair market value of the shares at the time of exercise. (Special rules may apply to disqualifying dispositions where the amount realized is less than the value at exercise.) Gart will generally be entitled to a deduction equal to the amount of such gain included by an option holder as ordinary income. Any excess of the amount realized upon such disposition over the fair market value at exercise will generally be long-term or short-term capital gain depending on the holding period involved. Notwithstanding the foregoing, if exercise of the option is permitted other than by cash payment of the exercise price, various special tax rules may apply.

        No income will be recognized by an option holder at the time a non-qualified stock option is granted. Ordinary income will generally be recognized by an option holder, however, at the time a non-qualified stock option is exercised in an amount equal to the excess of the fair market value of the underlying common stock on the exercise date over the exercise price. Gart will generally be entitled to a deduction for federal income tax purposes in the same amount as the amount included in ordinary income by the option holder with respect to his or her non-qualified stock option. Gain or loss on a subsequent sale or other disposition of the shares acquired upon the exercise of a non-qualified stock option will be measured by the difference between the amount realized on the disposition and the tax basis of such shares, and will generally be long-term or short-term capital gain depending on the holding period involved. The tax basis of the shares acquired upon the exercise of any non-qualified stock option will be equal to the sum of the exercise price of the non-qualified stock option and the amount included in income with respect to the option. Notwithstanding the foregoing, in the event that exercise of the option is permitted other than by cash payment of the exercise price, various special tax rules may apply.

        Unless a holder of restricted stock makes an "83(b) election" (as discussed below), there generally will be no tax consequences as a result of the grant of restricted stock until the restricted stock is no

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longer subject to a substantial risk of forfeiture or is transferable (free of the risk). Generally, when the restrictions are lifted, the holder will recognize ordinary income, and Gart will be entitled to a deduction, equal to the difference between the fair market value of the stock at that time and the amount, if any, paid by the holder for the restricted stock. Subsequently realized changes in the value of the stock generally will be treated as long-term or short-term capital gain or loss, depending on the length of time the shares are held prior to disposition of the shares. In general terms, if a holder makes an 83(b) election (under Section 83(b) of the Internal Revenue Code) upon the award of restricted stock, the holder will recognize ordinary income on the date of the award of restricted stock, and Gart will be entitled to a deduction, equal to (i) the fair market value of the restricted stock as though the stock were (A) not subject to a substantial risk of forfeiture or (B) transferable, minus (ii) the amount, if any, paid for the restricted stock. If an 83(b) election is made, there will generally be no tax consequences to the holder upon the lifting of restrictions, and all subsequent appreciation in the restricted stock generally would be eligible for capital gains treatment.

        The phantom shares have been designed with the intention that there will be no tax consequences as a result of the granting of a phantom share until payment is made with respect to the phantom share. When payment is made, the participant generally will recognize ordinary income, and Gart will generally be entitled to a deduction, equal to the fair market value of the common stock and cash, as applicable, received upon payment.

        There generally will be no tax consequences as a result of the award of a dividend equivalent. When payment is made, the holder of the dividend equivalent generally will recognize ordinary income, and Gart will be entitled to a deduction, equal to the amount received in respect of the dividend equivalent.

        Additional special tax rules may apply to those award holders who are subject to the rules set forth in Section 16 of the Securities Exchange Act of 1934.

        The foregoing tax discussion is a general description of certain expected federal income tax results under current law, and all affected individuals should consult their own advisors if they wish any further details or have special questions.


Adoption of the Gart Sports Company 2003 Performance Bonus Plan

General

        At Gart's annual meeting, Gart stockholders will be asked to adopt the Gart Sports Company 2003 Performance Bonus Plan, a copy of which is attached to this joint proxy statement/prospectus as Annex G. Gart stockholders are encouraged to review the performance bonus plan carefully. Any description in this joint proxy statement/prospectus of the performance bonus plan is qualified in its entirety by a reference to Annex G. Stockholders are being asked to approve the performance bonus plan, with the intent of avoiding the possibility that the deductibility for federal income tax purposes of bonus compensation thereunder will be limited by Section 162(m) of the Internal Revenue Code of 1986 (which, under certain circumstances, causes compensation in excess of $1 million to an employee in a year not to be deductible to the employer). On May 16, 2003, Gart's compensation committee approved the performance bonus plan, subject to approval by Gart's stockholders at Gart's annual meeting. The performance bonus plan will not become effective if it is not approved by Gart stockholders.

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Purpose

        The purpose of the performance bonus plan is to enable the compensation committee of Gart to establish performance goals for officers and key employees to determine bonuses that will be awarded on the basis of these goals and to ensure that bonus payments are in accordance with the arrangements established by the committee.


Voting

        The proposal to adopt the performance bonus plan will be approved if, at Gart's annual meeting, a majority of the shares present in person or represented by proxy are voted in favor of this proposal. Abstentions and broker non-votes will count as votes against this proposal because they will be counted as present at the meeting and entitled to vote on, but not for, this proposal.

        Each proxy received will be voted in accordance with the instructions indicated on the proxy. If a proxy is properly completed, signed and returned but no instructions are indicated on the proxy, then the proxy will be voted "FOR" the adoption of the long-term incentive plan.

        Gart's board of directors recommends that Gart stockholders vote "FOR" the proposal to adopt the Gart Sports Company 2003 Performance Bonus Plan.


Description of the Gart Sports Company 2003 Performance Bonus Plan

Authority to Establish Performance Goals and Bonuses

        Under the performance bonus plan, Gart's compensation committee may establish for officers or key employees (as determined by the committee) a performance goal, and bonus formula related to that performance goal. Performance goals may relate to particular fiscal years or to periods that are longer or shorter than a single fiscal year. A bonus formula may be (1) a percentage of the consolidated pre-tax or after-tax earnings or earnings before interest, taxes, depreciation or amortization, often referred to as EBITDA, of Gart and its subsidiaries, or of the separate pre-tax or after-tax earnings or EBITDA of particular subsidiaries or divisions of Gart, (2) changes (or the absence of changes) in the per share or aggregate market price of Gart common stock or (3) the extent of achievement of specified levels of revenues, gross margin (rate or dollars), comparable stores sales, earnings, costs, return on assets, return on equity, return on capital, return on investment, number of units sold or average sale prices with regard to Gart, particular subsidiaries, divisions or other business units of Gart or particular officers or groups of employees. Performance goals may be in absolute amounts or percentages of amounts or may be relative to the performance of other companies or of an index. A bonus formula shall be established in writing by the committee before the commencement of the period of service to which the formula relates, or not later than 90 days after the commencement of the period of service to which the formula relates (as long as the outcome is substantially uncertain at the time the committee actually establishes the formula, and the formula is not established after 25% or more of the period of service has elapsed (determined in good faith by the committee at the time the formula is established)). Bonuses can, however, be granted on bases other than those set forth above in the case of any bonus for which an exception from the limitations of Section 162(m) of the Internal Revenue Code is not being sought.

        No officer or key employee may, however, be awarded a bonus for any fiscal year in excess of $10 million.

        Bonuses may be payable in single lump sums, or over a period of years, with or without interest on deferred payments, and may be made forfeitable to the extent recipients do not continue to be employed by Gart or its subsidiaries throughout the period during which the bonuses are payable.

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Review of Payment of Bonuses

        At the end of each fiscal year, management will present to the compensation committee a list showing, by employee, the employee's performance goal or bonus formula, the extent to which the performance goal was achieved and the bonus, if any, to which the employee is therefore entitled. No bonuses may be paid until the compensation committee certifies that the bonus presented by management is correct based on the performance goals and bonus formula in respect of that employee.


Administration

        The compensation committee will administer the plan, and have full power to interpret the plan, and to change the rules and regulations for its administration. Interpretations of the plan, performance goals, bonus formulas and bonuses by the committee will bind Gart and all employees who are affected by it. The committee will have total discretion to determine what performance goals and bonus formulas to establish for what officers and key employees. The committee will not be required to establish similar goals and formulas for similarly situated employees.


No Rights to Continued Employment

        Nothing in the performance bonus plan or its administration, and no award of any bonus payable immediately or in the future, will give any officer or employee a right to continue as an employee or otherwise affect Gart's ability to terminate the employee at any time.


Amendments

        The compensation committee may, with the approval of Gart's board of directors, amend the plan at any time, except that no amendment to the plan will be effective if it materially changes any of the criteria on which bonuses may be based, alters the amount of maximum bonus that may be paid to recipients with regard to a fiscal year or other period or otherwise materially changes the plan unless the amendment is approved by the stockholders.


Termination

        The plan may be terminated at any time by the compensation committee with the approval of Gart's board of directors. Terminating the plan, however, will not affect any previously established performance goal or bonus formula, nor the right to receive payments of a bonus earned prior to the termination.


Submission of Proposals by Gart's Stockholders

        In order to be eligible for inclusion in Gart's proxy statement and proxy card for the next annual meeting of Gart stockholders pursuant to Rule 14a-8 under the Securities Exchange Act of 1934, stockholder proposals must be received by the secretary of Gart at its principal executive offices no later than                         , 2004. In order for such stockholder proposals to be eligible to be brought before the Gart stockholders at the next annual meeting of Gart stockholders, however, the Gart stockholder submitting the proposals also must comply with the procedures, including the deadlines, required by Gart's bylaws. Stockholder nominations of directors are not stockholder proposals within the meaning of Rule 14a-8 and are not eligible for inclusion in Gart's proxy statement.


Other Matters Presented at the Annual Meeting of Gart's Stockholders

        Gart does not know of any other business to be presented at the annual meeting of Gart's stockholders, and does not intend to bring any other matters before the annual meeting. If any other matters properly come before the annual meeting, however, the persons named in the accompanying proxy are empowered, in the absence of instructions to the contrary, to vote according to their best judgment.

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The Special Meeting of The Sports Authority's Stockholders

General

        This joint proxy statement/prospectus is furnished in connection with the solicitation of the enclosed proxy from holders of The Sports Authority common stock by The Sports Authority's board of directors for use at the special meeting of The Sports Authority's stockholders to be held at The Sports Authority's corporate offices located at 3383 North State Road 7, Fort Lauderdale, Florida 33319 on                        , 2003, beginning at                        , local time, and at any adjournment or postponement of the meeting.


Purpose of the Meeting

        The special meeting will be held to consider and vote upon the following:


Record Date and Outstanding Shares

        The Sports Authority's board of directors has fixed the close of business on May 23, 2003, as the record date. Only stockholders of record of The Sports Authority common stock on the books of The Sports Authority as of the close of business on the record date will be entitled to notice of, and to vote at, the special meeting and any postponements or adjournments of the meeting. On [March 31], 2003, there were [33,013,544] shares of The Sports Authority common stock issued and outstanding held by [2,001] stockholders of record. The record stockholder number does not include the number of persons whose stock is held in nominee or "street name" account through brokers.


Quorum and Vote Required

        A majority of all shares of The Sports Authority common stock outstanding on the record date, represented in person or by proxy, constitutes a quorum for the transaction of business at The Sports Authority's special meeting.

        If a quorum is not obtained, or if fewer shares of The Sports Authority common stock are voted in favor of the matters presented for consideration and approval at The Sports Authority's special meeting than the number of shares necessary to approve these matters, The Sports Authority expects that the special meeting will be postponed or adjourned for the purpose of allowing additional time for obtaining additional proxies or votes. At any subsequent reconvening of The Sports Authority's special meeting, all proxies will be voted in the same manner as such proxies would have been voted at the original convening of the special meeting, except for any proxies that have been effectively revoked or withdrawn before the subsequent special meeting.

        Each holder of The Sports Authority common stock will be entitled to one vote, in person or by proxy, for each share of The Sports Authority common stock registered in the holder's name on books of The Sports Authority as of the record date on any matter submitted for the vote of The Sports Authority's stockholders. The proposal to adopt the merger agreement and approve the merger will be approved if a majority of the outstanding shares of The Sports Authority common stock entitled to vote are voted in favor of the adoption of merger agreement and approval of the merger.

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        None of The Sports Authority's stockholders have entered into voting agreements with Gart. Based on the number of shares of The Sports Authority common stock outstanding as of [March 31], 2003, The Sports Authority's directors and executive officers and their affiliates, as a group, beneficially owned an aggregate of [929,662] shares of The Sports Authority common stock (excluding shares subject to options and rights to receive deferred shares under the Director's Stock Plan), which would represent approximately [2.8]% of all outstanding shares of The Sports Authority common stock entitled to vote at The Sports Authority's special meeting. The Sports Authority's officers and directors have informed The Sports Authority that they intend to vote their shares in favor of the merger proposals.


How Shares Will Be Voted at the Special Meeting

        All shares of The Sports Authority common stock represented by proxies properly executed and received by The Sports Authority before or at The Sports Authority's special meeting will be voted in accordance with the instructions indicated on the proxies. If the proxy is properly completed, signed and returned but no instructions are indicated, the shares will be voted "FOR" the adoption of the merger agreement and the approval of the merger contemplated thereby.

        All proxies voted "FOR" the adoption of the merger agreement and the approval of the merger contemplated thereby may, at the discretion of the proxy holder, be voted "FOR" a motion to adjourn or postpone The Sports Authority's special meeting to another time and/or place for the purpose of soliciting additional proxies or otherwise.

        Abstentions and broker non-votes are included in the determination of the number of shares present and voting. However, abstentions and broker non-votes will have the same effect as a vote against a particular proposal. A broker "non-vote" occurs on a proposal when a broker is not permitted to vote on that proposal without instruction from the beneficial owner of the shares and no instruction is given.

        The Sports Authority's board of directors currently is not aware of any business to be acted upon at the special meeting other than as described in this joint proxy statement/prospectus. If, however, other matters are properly brought before the special meeting or any adjournments or postponements of the meeting, in the absence of instructions to the contrary, persons appointed as proxies will have discretion to vote or act on the matters in their best judgment.


How to Revoke a Proxy

        The presence of a stockholder of The Sports Authority at the special meeting, or at any adjournment or postponement thereof, will not automatically revoke the stockholder's proxy. However, a stockholder of The Sports Authority who is the record holder of the shares may revoke a proxy at any time prior to its exercise by:

        If a stockholder's shares are held in the name of a broker or nominee, that stockholder may change its vote by submitting new voting instructions to its broker or nominee. A stockholder whose

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shares are held in the name of a broker or nominee may not vote its shares in person at its stockholders meeting unless it obtain a signed proxy from the record holder giving it the right to vote its shares.


Solicitation of Proxies

        Proxies may be solicited by mail, personal interview, telephone, facsimile and electronic mail by The Sports Authority's directors, officers and employees on a part-time basis and for no additional compensation. The Sports Authority will bear the costs it incurs in the solicitation of proxies under this joint proxy statement/prospectus, including amounts paid in reimbursement to banks, brokerage firms, custodians, nominees and others for their expenses in forwarding soliciting material to the beneficial owners of The Sports Authority common stock.

        The Sports Authority has retained The Altman Group to assist it with the solicitation of proxies and to verify certain records related to the solicitations. The Sports Authority has agreed to pay The Altman Group a fee of $6,000 in addition to its out-of-pocket expenses for services rendered and to indemnify The Altman Group against certain liabilities arising out of The Altman Group's engagement (except for those resulting from The Altman Group's gross negligence or misconduct).


Communications by The Sports Authority's Stockholders with The Sports Authority

        Any written revocation of a proxy or other communications in connection with this joint proxy statement/prospectus and requests for additional copies of this joint proxy statement/prospectus or the proxy card should be addressed to The Altman Group. If you have any questions or need further assistance in voting your shares, please call The Altman Group at (800) 215-5608.


Recommendation of The Sports Authority's Board of Directors

        The Sports Authority's board of directors believes that the terms of the merger and the merger agreement are fair to, and in the best interests of, The Sports Authority and its stockholders. The Sports Authority's board of directors has, by unanimous vote, approved the merger agreement and the transactions contemplated by the merger agreement and unanimously recommends that The Sports Authority's stockholders vote "FOR" the adoption of the merger agreement and approval of the merger.


Dissenter's or Appraisal Rights

        Dissenter's or appraisal rights are not available with respect to a merger or consolidation by a corporation the shares of which are either listed on a national securities exchange or Nasdaq or held of record by more than 2,000 stockholders if such stockholders are required to receive only shares of the surviving corporation, shares of any other corporation which are either listed on a national securities exchange or Nasdaq or held of record by more than 2,000 holders, cash in lieu of fractional shares or a combination of the foregoing. Therefore, The Sports Authority's stockholders will not be able to exercise any dissenter's or appraisal rights in connection with this merger.

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Security Ownership of Certain Beneficial
Owners and Management of Gart

        The shares of Gart common stock constitute the only outstanding class of voting securities of Gart. As of March 31, 2003, there were 11,872,233 shares of Gart common stock outstanding and entitled to vote and 574 stockholders of record.

        The table below sets forth certain information regarding beneficial ownership of Gart common stock as of March 31, 2003, assuming the exercise of options exercisable within 60 days of the date thereof, with respect to: (i) each person or entity who owns of record or beneficially five percent or more of Gart common stock, (ii) each executive officer and each director and (iii) all executive officers and directors as a group. To Gart's knowledge, each of such stockholders has sole voting and investment power as to the shares shown unless otherwise noted.

Name and Address of Beneficial Owner

  Amount and Nature
of Beneficial
Ownership(1)

  Percent of Class
 
Green Equity Investors, L.P.(2)
11111 Santa Monica Boulevard
Suite 2000
Los Angeles, CA 90025
  3,113,200   26.2 %
FMR Corp.(3)
82 Devonshire Street
Boston, MA 02109
  866,665   7.3 %
John Douglas Morton(4)**   185,276   1.5 %
Thomas T. Hendrickson(5)**   32,516   *  
Greg Waters(6)**   21,200   *  
Arthur S. Hagan(7)**   8,500   *  
Nesa E. Hassanein(8)**   13,336   *  
Anthony Forde(9)**   7,600   *  
June J. Shirai(10)**   3,236   *  
James M. Van Alstyne(9)**   7,600   *  
Thomas R. Wildenberg(11)**   3,800   *  
Gordon D. Barker(12)**   21,700   *  
Peter R. Formanek(13)**   145,109   1.2 %
Marilyn Oshman(14)**   385,676   3.2 %
Jonathan A. Seiffer**   700   *  
Jonathan D. Sokoloff(2)**      
Larry D. Strutton(15)**   5,527   *  
All Directors and executive officers as a group (15 persons)(16)   841,776   6.9 %

*
Less than 1%.

**
1050 W. Hampden Avenue, Englewood, Colorado 80110

(1)
Applicable percentage of ownership is based on 11,872,233 shares of Gart common stock outstanding as of March 31, 2003. Shares of Gart common stock that a person has the right to acquire within 60 days of March 31, 2003 are deemed outstanding for purposes of computing the percentage ownership of the person holding such rights, but are not deemed outstanding for purposes of computing the percentage ownership of any other person, except with respect to the percentage ownership of all directors and executive officers as a group.

(2)
Green Equity Investors, L.P. is a Delaware limited partnership, the general partner of which is Leonard Green & Associates, L.P. The general partner of Leonard Green & Associates, L.P. is

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(3)
Based upon information contained in stockholder's publicly available filing on Schedule 13G, filed on February 13, 2003.

(4)
Includes 182,600 shares of Gart common stock issuable upon the exercise of outstanding options.

(5)
Includes 32,516 shares of Gart common stock issuable upon the exercise of outstanding options.

(6)
Includes 21,200 shares of Gart common stock issuable upon the exercise of outstanding options.

(7)
Includes 7,400 shares of Gart common stock issuable upon the exercise of outstanding options.

(8)
Includes 12,600 shares of Gart common stock issuable upon the exercise of outstanding options.

(9)
Includes 7,600 shares of Gart common stock issuable upon the exercise of outstanding options.

(10)
Includes 2,000 shares of Gart common stock issuable upon the exercise of outstanding options.

(11)
Includes 3,800 shares of Gart common stock issuable upon the exercise of outstanding options.

(12)
Includes 11,667 shares of Gart common stock issuable upon the exercise of outstanding options.

(13)
Includes 102,516 shares of Gart common stock held by Formanek Investment Trust with self as trustee, and 11,667 shares of Gart common stock issuable upon the exercise of outstanding options.

(14)
Includes 29,945 shares of Gart common stock held by Andrew Lubetkin 1987 Grantor Trust with Marilyn Oshman as trustee, 26,995 shares of Gart common stock held by Karen Desenberg 1987 Grantor Trust with Marilyn Oshman as trustee, 12,462 shares of Gart common stock held by Karen Desenberg 2000 Grantor Trust with Marilyn Oshman as trustee, and 10,000 shares of Gart common stock issuable upon the exercise of outstanding options. Ms. Oshman disclaims beneficial ownership of the shares held by the Andrew Lubetkin 1987 Grantor Trust, the Karen Desenberg 1987 Grantor Trust, and the Karen Desenberg 2000 Grantor Trust.

(15)
Includes 3,334 shares of Gart common stock issuable upon the exercise of outstanding options.

(16)
Includes 313,984 shares of Gart common stock issuable upon the exercise of outstanding options.

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        As of March 31, 2003, Gart's chief executive officer and the four other named executives in Gart's "Summary Compensation Table" have received a total of 851,916 stock options, 389,708 awards of restricted shares and 47,000 purchased shares, as follows:


Options; Restricted Shares; Purchased Shares

 
  Options
  Restricted
Shares

  Purchased
Shares

John Douglas Morton   438,000   202,000   32,000
Thomas T. Hendrickson   165,916   94,208  
Greg A. Waters   106,000   40,500  
Arthur S. Hagan   79,000   32,500   15,000
Nesa E. Hassanein   63,000   20,500  
Total   851,916   389,708   47,000

        Directors who are not executive officers of Gart and who are standing for re-election at Gart's Annual Meeting have received a total of 80,000 stock options and 19,802 awards of restricted shares. As of March 31, 2003, the executive officers as a group have received a total of 1,026,916 stock options, 456,708 awards of restricted shares and 47,000 purchased shares. The current employees who are not executive officers of Gart have received a total of 830,056 stock options, 115,286 awards of restricted shares and 18,300 purchased shares.

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Security Ownership of Certain Beneficial
Owners and Management of The Sports Authority

        The shares of The Sports Authority common stock constitute the only outstanding class of The Sports Authority's voting securities. As of March 31, 2003, there were 33,013,544 shares of The Sports Authority common stock outstanding and entitled to vote and approximately 2,001 stockholders of record.

        The following table sets forth certain information concerning the beneficial ownership of shares by each shareholder who is known by The Sports Authority to own beneficially more than five percent of its outstanding shares. This information is shown as of December 31, 2002 and is based on the most recent Schedule 13Gs filed by these shareholders with the Securities and Exchange Commission, where indicated. Except as otherwise indicated, these shareholders have sole voting power and sole dispositive power with respect to the number of shares shown.

Name and Address

  Number of Shares
  Percent of Shares
Outstanding

 
AEON Co., Ltd.
51-1, 1-chome, Nakase, Mihama-ku
Chiba-shi, Chiba 261, Japan
  3,030,000   9.2 %
Dimensional Fund Advisors Inc.(1)
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 90401
  1,818,193   5.5 %

(1)
Dimensional Fund Advisors Inc. reported on its Schedule 13G for 2002 that it possesses voting and/or investment power over the shares that are owned by four investment companies and other commingled group trusts and separate accounts to which it furnishes investment advice. Dimensional disclaims beneficial ownership of the shares.

        The following table shows the number of shares of The Sports Authority beneficially owned by each director and executive officer, and by all directors and executive officers as a group, as of March 31, 2003. Except as otherwise indicated, all persons listed below have sole voting power and sole dispositive power with respect to the number of shares shown, except to the extent that power is shared by spouses under applicable law. The number of shares shown includes shares that the person has the

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right to acquire pursuant to options that are vested or that will vest within 60 days after March 31, 2003, as well as all deferred shares and restricted shares held by such person.

Name

  Number of Shares
  Percent of Shares
Outstanding

 
A. David Brown   34,870 (1) *  
Mary Elizabeth Burton   32,858 (2) *  
Cynthia R. Cohen   25,906 (3) *  
Steve Dougherty   114,931 (4) *  
Julius W. Erving   30,201 (5) *  
Carol A. Farmer   40,666 (6) *  
Paul E. Fulchino   0    
Martin E. Hanaka   1,286,911 (7) 3.8 %
Elliott J. Kerbis   120,081 (8) *  
George R. Mihalko   364,714 (9) 1.1 %
Kevin M. McGovern   35,736 (10) *  
Charles H. Moore   28,310 (11) *  
Art Quintana   156,938 (12) *  
Todd Weyhrich   32,534 (13) *  
All Directors and executive officers as a group (14 persons)   2,304,656   6.7 %

*
Represents less than one percent.

(1)
Includes 25,395 shares of The Sports Authority common stock granted under the Director Stock Plan, receipt of which Mr. Brown elected to defer under the terms of that Plan, and options to purchase 6,500 shares of The Sports Authority common stock.

(2)
Includes 19,716 shares of The Sports Authority common stock granted under the Director Stock Plan, receipt of which Ms. Burton has elected to defer under the terms of that Plan, and options to purchase 6,261 shares of The Sports Authority common stock.

(3)
Includes options to purchase 17,500 shares of The Sports Authority common stock.

(4)
Includes options to purchase 25,707 shares of The Sports Authority common stock.

(5)
Includes options to purchase 10,100 shares of The Sports Authority common stock.

(6)
Includes options to purchase 15,707 shares of The Sports Authority common stock.

(7)
Includes options to purchase 791,667 shares of The Sports Authority common stock and 135,580 restricted shares.

(8)
Includes options to purchase 50,001 shares of The Sports Authority common stock and 10,000 restricted shares.

(9)
Includes options to purchase 220,001 shares of The Sports Authority common stock and 54,230 restricted shares.

(10)
Includes 18,794 shares of The Sports Authority common stock granted under the Director Stock Plan, receipt of which Mr. McGovern has elected to defer under the terms of that Plan, and options to purchase 5,000 shares of The Sports Authority common stock.

(11)
Includes 10,810 shares of The Sports Authority common stock granted under the Director Stock Plan, receipt of which Mr. Moore has elected to defer under the terms of that Plan, and options to purchase 6,500 shares of The Sports Authority common stock.

(12)
Includes options to purchase 127,001 shares of The Sports Authority common stock and 11,980 restricted shares.

(13)
Includes options to purchase 18,334 shares of The Sports Authority common stock.

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Legal Opinion

        Clifford Chance US LLP will pass upon the validity of the shares of Gart common stock offered by this joint proxy statement/prospectus for Gart.


Tax Opinions

        Clifford Chance US LLP is passing upon certain of the transaction's tax consequences for Gart.

        Morgan, Lewis & Bockius LLP is passing upon certain of the transaction's tax consequences for The Sports Authority.


Experts

        Gart's financial statements incorporated in this joint proxy statement/prospectus by reference from Gart's Annual Report on Form 10-K for the fiscal year ended February 1, 2003 have been audited by Deloitte & Touche LLP, independent auditors, as stated in their report (which report expresses an unqualified opinion and includes an explanatory paragraph relating to the change in the method of accounting for goodwill and other intangible assets in 2002 with the adoption of Statement of Financial Accounting Standards No. 142), which is incorporated herein by reference, and have been so incorporated in reliance upon the report of such firm given upon their authority as experts in accounting and auditing.

        Ernst & Young LLP, independent certified public accountants, have audited the consolidated financial statements of The Sports Authority included in its Annual Report on Form 10-K for the year ended February 1, 2003, as set forth in their report, which is incorporated by reference in this joint proxy statement/prospectus and elsewhere in the registration statement. Such financial statements are incorporated by reference in reliance on Ernst & Young LLP's report, given on their authority as experts in accounting and auditing.


Where You Can Find More Information

        This joint proxy statement/prospectus incorporates documents by reference that are not presented in or delivered with this joint proxy statement/prospectus.

        All documents filed by Gart and The Sports Authority pursuant to Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 after the date of this joint proxy statement/prospectus and before the date of its stockholders meeting are incorporated by reference into and to be a part of this joint proxy statement/prospectus from the date of filing of those documents.

        The following documents, which were filed by Gart with the Securities and Exchange Commission, are incorporated by reference into this joint proxy statement/prospectus:

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        The following documents, which were filed by The Sports Authority with the Securities and Exchange Commission, are incorporated by reference into this joint proxy statement/prospectus:

        Any statement contained herein or in a document incorporated or deemed to be incorporated by reference into this joint proxy statement/prospectus will be deemed to be modified or superseded for purposes of this joint proxy statement/prospectus to the extent that a statement contained in this joint proxy statement/prospectus or any other subsequently filed document that is deemed to be incorporated by reference into this joint proxy statement/prospectus modifies or supersedes the statement. Any statement so modified or superseded will not be deemed, except as so modified or superseded, to constitute a part of this joint proxy statement/prospectus.

        The documents incorporated by reference into this joint proxy statement/prospectus are available from Gart or The Sports Authority, as applicable without charge upon your written or oral request. You can obtain documents incorporated by reference in this joint proxy statement/prospectus by requesting them in writing or by telephone from the appropriate company at the following addresses and telephone numbers:

Gart Sports Company
1050 W. Hampden Avenue
Englewood, Colorado 80110
(303) 863-2293
Attn: Investor Relations
  The Sports Authority, Inc.
3383 North State Road 7
Fort Lauderdale, Florida 33319
(945) 735-1701
Attn: Investor Relations

        If you would like to request documents, please do so by                        , 2003 in order to receive them before your stockholders meeting.

        Gart and The Sports Authority both file annual, quarterly and current reports, proxy statements and other information with the Securities and Exchange Commission. You may read copies of these reports, proxy statements and other information at the public reference room maintained by the Securities and Exchange Commission at 450 Fifth Street, N.W., Washington, DC 20549. You can request copies of these documents by writing to the Securities and Exchange Commission and paying a fee for the copying cost. Please call the Securities and Exchange Commission at 1-800-SEC-0330 for more information about the operation of the public reference room. Gart's and The Sports Authority's public filings are also available at the Securities and Exchange Commission's website at www.sec.gov. In addition, you can read and copy Gart's Securities and Exchange Commission filings at the office of the National Association of Securities Dealers, Inc. at 1735 K Street, N.W., Washington, D.C. 20006 and you can read and copy The Sports Authority's Securities and Exchange Commission filings at the office of the New York Stock Exchange at 11 Wall Street, New York, NY 10005.

        Gart has filed a registration statement on Form S-4 under the Securities Act of 1933 with the Securities and Exchange Commission with respect to Gart common stock to be issued to The Sports Authority's stockholders in the merger. This joint proxy statement/prospectus does not contain all of the information set forth in the registration statement because certain parts of the registration

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statement are omitted as provided by the rules and regulations of the Securities and Exchange Commission. You may inspect and copy the registration statement at any of the addresses listed above.

        Gart's stockholders should call Investor Relations at (303) 863-2293 with any questions about the matters described in this joint proxy statement/prospectus.

        The Sports Authority's stockholders should call Investor Relations at (954) 735-1701 with any questions about the matters described in this joint proxy statement/prospectus.

        You should only rely on the information contained or incorporated by reference in this joint proxy statement/prospectus. Gart and The Sports Authority have not authorized anyone to provide you with information that is different from the information contained or incorporated by reference in this joint proxy statement/prospectus.

        This joint proxy statement/prospectus is dated                        , 2003. You should not assume that the information contained in this joint proxy statement/prospectus is accurate as of any date other than                        , 2003 and neither the mailing of this joint proxy statement/prospectus to Gart's stockholders or The Sports Authority's stockholders nor the issuance of Gart common stock in the merger shall create any implication to the contrary.

        This joint proxy statement/prospectus does not constitute an offer to sell, or a solicitation of an offer to purchase, the securities offered by this joint proxy statement/prospectus or the solicitation of a proxy, in any jurisdiction to or from any person to whom or from whom it is unlawful to make this offer, solicitation of an offer or proxy solicitation in that jurisdiction. Neither the delivery of this joint proxy statement/prospectus nor any distribution of securities pursuant to this joint proxy statement/prospectus shall, under any circumstances, create any implication that there has been no change in the information set forth in, or incorporated by reference into, this joint proxy statement/prospectus or in Gart's affairs since the date of this joint proxy statement/prospectus. The information contained in this joint proxy statement/prospectus with respect to Gart and its subsidiaries was provided by Gart. The information contained in this document with respect to The Sports Authority and its subsidiaries was provided by The Sports Authority.

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ANNEX A

        AGREEMENT AND PLAN OF MERGER

BY AND AMONG

GART SPORTS COMPANY,

GOLD ACQUISITION CORP.

AND

THE SPORTS AUTHORITY, INC.

DATED AS OF FEBRUARY 19, 2003



TABLE OF CONTENTS

 
   
ARTICLE I THE MERGER
  Section 1.1   The Merger
  Section 1.2   Effective Time; Closing
  Section 1.3   Effect of the Merger
  Section 1.4   Conversion of Company Common Stock
  Section 1.5   Conversion of Common Stock of Merger Sub
  Section 1.6   Tax-Free Reorganization
ARTICLE II EXCHANGE OF CERTIFICATES
  Section 2.1   Exchange Agent
  Section 2.2   Exchange Procedures
  Section 2.3   Distributions with Respect to Unexchanged Shares
  Section 2.4   No Further Ownership Rights in the Company Common Stock
  Section 2.5   No Fractional Shares of Parent Common Stock
  Section 2.6   No Liability
  Section 2.7   Lost Certificates
  Section 2.8   Withholding Rights
  Section 2.9   Stock Transfer Books
  Section 2.10   Shares held by the Company Affiliates
ARTICLE III CERTAIN CORPORATE MATTERS
  Section 3.1   Certificates of Incorporation
  Section 3.2   Bylaws
  Section 3.3   Directors and Officers
  Section 3.4   Corporate Headquarters
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY
  Section 4.1   Organization and Standing
  Section 4.2   Capitalization
  Section 4.3   Authority for Agreement
  Section 4.4   No Conflict
  Section 4.5   Required Filings and Consents
  Section 4.6   Compliance
  Section 4.7   SEC Filings, Financial Statements
  Section 4.8   Absence of Certain Changes or Events
  Section 4.9   Taxes
  Section 4.10   Title to Assets
  Section 4.11   Litigation
  Section 4.12   Employee Benefit Plans and Agreements
  Section 4.13   Labor and Employment Matters
  Section 4.14   Real Estate
  Section 4.15   Environmental Compliance and Disclosure
  Section 4.16   Intellectual Property
  Section 4.17   Material Contracts
  Section 4.18   Insurance Policies
  Section 4.19   Merchandise Vendors
  Section 4.20   Vendors and Landlords
  Section 4.21   Terminated Leases
  Section 4.22   Information Supplied
  Section 4.23   Transactions with Affiliates
  Section 4.24   Brokers
     

A-i


  Section 4.25   Board Approval
  Section 4.26   Vote Required
  Section 4.27   Disclosure
ARTICLE V REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
  Section 5.1   Organization and Standing
  Section 5.2   Capitalization
  Section 5.3   Authority for Agreement
  Section 5.4   No Conflict
  Section 5.5   Required Filings and Consents
  Section 5.6   Compliance
  Section 5.7   SEC Filings, Financial Statements
  Section 5.8   Absence of Certain Changes or Events
  Section 5.9   Taxes
  Section 5.10   Title to Assets
  Section 5.11   Litigation
  Section 5.12   Employee Benefit Plans and Agreements
  Section 5.13   Labor and Employment Matters
  Section 5.14   Real Estate
  Section 5.15   Environmental Compliance and Disclosure
  Section 5.16   Intellectual Property
  Section 5.17   Material Contracts
  Section 5.18   Insurance Policies
  Section 5.19   Merchandise Vendors
  Section 5.20   Vendors and Landlords
  Section 5.21   Terminated Leases
  Section 5.22   Information Supplied
  Section 5.23   Transactions with Affiliates
  Section 5.24   Brokers
  Section 5.25   Board Approval
  Section 5.26   Merger Sub
  Section 5.27   Vote Required
  Section 5.28   Disclosure
ARTICLE VI COVENANTS RELATING TO CONDUCT OF BUSINESS
  Section 6.1   Covenants of the Company
  Section 6.2   Covenants of Parent
ARTICLE VII ADDITIONAL AGREEMENTS
  Section 7.1   Preparation of the Form S-4 and the Joint Proxy Statement/Prospectus; Stockholders Meetings
  Section 7.2   Access to Information
  Section 7.3   Reasonable Best Efforts.
  Section 7.4   No Solicitation by the Company
  Section 7.5   No Solicitation by Parent
  Section 7.6   Company Options, Restricted Stock, Company Plans and Severance Agreements
  Section 7.7   Fees and Expenses
  Section 7.8   Indemnification, Exculpation and Insurance
  Section 7.9   Public Announcements
  Section 7.10   NYSE Listing
  Section 7.11   Affiliate Letter
     

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  Section 7.12   Tax Treatment
  Section 7.13   Further Assurances
  Section 7.14   Notices of Certain Events
  Section 7.15   Stockholder Litigation
ARTICLE VIII CONDITIONS
  Section 8.1   Conditions to the Obligation of Each Party
  Section 8.2   Conditions to Obligations of Parent and Merger Sub to Effect the Merger
  Section 8.3   Conditions to Obligations of the Company to Effect the Merger
ARTICLE IX TERMINATION, AMENDMENT AND WAIVER
  Section 9.1   Termination
  Section 9.2   Effect of Termination
  Section 9.3   Amendments
  Section 9.4   Waiver
ARTICLE X GENERAL PROVISIONS
  Section 10.1   No Third-Party Beneficiaries
  Section 10.2   Entire Agreement
  Section 10.3   Succession and Assignment
  Section 10.4   Counterparts
  Section 10.5   Headings
  Section 10.6   Governing Law
  Section 10.7   Submission to Jurisdiction; Waivers
  Section 10.8   Severability
  Section 10.9   Construction
  Section 10.10   Non-Survival of Representations, Warranties and Agreements
  Section 10.11   Certain Definitions
  Section 10.12   Notices

EXHIBITS:

Exhibit A—Persons to be the Executive Officers of Parent following the Effective Time

Exhibit B—Affiliates Letter

Exhibit C—Tax Opinion of Counsel to Parent

Exhibit D—Letter of Representations in support of Tax Opinion of Counsel to Parent

Exhibit E—Tax Opinion of Counsel to the Company

Exhibit F—Letter of Representations in support of Tax Opinion of Counsel to the Company

Exhibit G—Amendment to Parent Bylaws

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Index of Defined Terms

Defined Term

  Section Where
Defined

"Adjusted Option"   7.6(c)
"Agreement"   Preamble
"Associate"   10.11(a)
"Affiliate"   10.11(a)
"Business Day"   10.11(b)
"CERCLA"   4.15(b)
"Certificate"   1.4(c)
"Certificate of Merger"   1.2
"Closing"   1.2
"Closing Date"   1.2
"Code"   Recitals
"Company"   Preamble
"Company Acquisition Agreement"   7.4(c)
"Company Acquisition Proposal"   7.4(b)
"Company Agreements"   7.6(a)
"Company Applicable Period"   7.4(a)
"Company Benefit Plans"   4.12(a)
"Company Board Approval"   4.25
"Company Bylaws"   4.1
"Company Certificate of Incorporation"   4.1
"Company Common Stock"   Recitals
"Company Disclosure Letter"   Article IV
"Company ERISA Affiliate"   4.12(e)
"Company February 2002 Balance Sheet"   4.7(c)
"Company Financial Statements"   4.7(b)
"Company Improvements"   4.14(g)
"Company Leased Real Property"   4.14(b)
"Company Leases"   4.14(b)
"Company Licensed Intellectual Property"   4.16(b)
"Company Material Adverse Effect"   10.11(c)
"Company Material Contracts"   4.17
"Company Options"   4.2
"Company Owned Intellectual Property"   4.16(b)
"Company Owned Registered Intellectual Property"   4.16(b)
"Company Owned Real Property"   4.14(a)
"Company Owned Software"   4.16(c)
"Company Preferred Stock"   4.2
"Company Real Property"   4.14(c)
"Company Real Property Permits"   4.14(h)
"Company Rights Agreement"   1.4(a)
"Company SEC Reports"   4.7(a)
"Company Shareholder Approval"   4.3(a)
"Company Stockholders Meeting"   7.1(b)
"Company Superior Proposal"   7.4(b)
"Company Stock Plans"   4.2
"Company Termination Fee"   7.7(b)(1)
"Company 10-K"   4.7(c)
     

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"Company's Independent Advisor"   4.3(c)
"Confidentiality Agreement"   7.2
"Contracts"   4.4
"DGCL"   Recitals
"DOJ"   7.3(b)
"Effective Time"   1.2
"Environment"   4.15(d)
"Environmental Laws"   4.15(a)
"ERISA"   4.12(a)
"Exchange Act"   4.5
"Exchange Agent"   2.1
"Exchange Ratio"   1.4(a)
"Expenses"   7.7(a)
"Form S-4"   7.1(a)
"FTC"   7.3(b)
"GAAP"   4.7(b)
"Governmental Entity"   4.5
"hazardous materials"   4.15
"HSR Act"   4.5
"Joint Proxy Statement/Prospectus"   7.1(a)
"Knowledge"   10.11(d)
"Law"   2.3
"Litigation"   4.11
"Merger"   Recitals
"Merger Consideration"   1.4(a)
"Merger Sub"   Preamble
"NLRB"   4.13(b)
"NMS"   2.5(b)
"NYSE"   3.3(a)
"Parent"   Preamble
"Parent Acquisition Agreement"   7.5(c)
"Parent Acquisition Proposal"   7.5(b)
"Parent Applicable Period"   7.5(a)
"Parent Benefit Plans"   5.12(a)
"Parent Board Approval"   5.25
"Parent Bylaws"   5.1
"Parent Certificate of Incorporation"   5.1
"Parent Common Stock"   Recitals
"Parent Disclosure Letter"   Article V
"Parent ERISA Affiliate"   5.12(e)
"Parent February 2002 Balance Sheet"   5.7(c)
"Parent Financial Statements"   5.7(b)
"Parent Improvements"   5.14(g)
"Parent Leased Real Property"   5.14(b)
"Parent Leases"   5.14(b)
"Parent Licensed Intellectual Property"   5.16(b)
"Parent Material Adverse Effect"   10.11(e)
"Parent Material Contracts"   5.17
"Parent Options"   5.2
     

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"Parent Owned Intellectual Property"   5.16(b)
"Parent Owned Real Property"   5.14(a)
"Parent Owned Registered Intellectual Property   5.16(b)
"Parent Owned Software"   5.16(c)
"Parent Preferred Stock"   5.2
"Parent Real Property"   5.14(c)
"Parent Real Property Permits"   5.14(h)
"Parent SEC Reports"   5.7(a)
"Parent Shareholder Approval"   5.3(a)
"Parent Stock Plans"   5.2
"Parent Stockholders Meeting"   7.1(c)
"Parent Superior Proposal"   7.5(b)
"Parent Termination Fee"   7.7(c)(1)
"Parent 10-K"   5.7(c)
"Parent's Independent Advisor"   5.3(b)
"Person"   10.11(f)
"Regulatory Law"   7.3(c)
"Release"   4.15(d)
"Representatives"   7.4(a)
"Required Approval"   7.3(a)
"SEC"   4.7(a)
"Securities Act"   4.5
"Subsidiary"   10.11(g)
"Surviving Corporation"   1.1
"Tax"   4.9
"Taxes"   4.9
"Tax Return"   4.9
"Termination Date"   9.1(b)
"Voting Agreement"   Recitals

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AGREEMENT AND PLAN OF MERGER

        THIS AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of February 19, 2003, by and among GART SPORTS COMPANY, a Delaware corporation ("Parent"), GOLD ACQUISITION CORP., a Delaware corporation ("Merger Sub") and wholly owned subsidiary of Parent, and THE SPORTS AUTHORITY, INC., a Delaware corporation (the "Company").

W I T N E S S E T H:

        WHEREAS, the respective Boards of Directors of each of Parent, Merger Sub and the Company deem it advisable and in the best interests of each corporation and its respective stockholders that Parent and the Company combine in order to advance the long-term business strategies of Parent and the Company; and

        WHEREAS, the Board of Directors of the Company has unanimously determined that the merger of Merger Sub with and into the Company (the "Merger") and this Agreement are fair to, and in the best interests of, the Company and the holders of the common stock of the Company, par value $.01 per share (the "Company Common Stock"); and

        WHEREAS, the Board of Directors of Parent has unanimously determined that the Merger and this Agreement are fair to, and in the best interests of, Parent and the holders of the common stock of Parent, par value $.01 per share (the "Parent Common Stock"); and

        WHEREAS, the respective Boards of Directors of each of Parent, Merger Sub and the Company have approved and declared advisable this Agreement and the Merger on the terms and conditions contained in this Agreement; and

        WHEREAS, immediately following execution of this Agreement by the parties hereto, this Agreement shall be submitted to Parent, as the sole stockholder of Merger Sub, and Parent, as the sole stockholder of Merger Sub, shall adopt this Agreement and approve the transactions contemplated by this Agreement by unanimous written consent in lieu of a meeting in accordance with the requirements of the Delaware General Corporation Law (the "DGCL") and the Certificate of Incorporation and Bylaws of Merger Sub; and

        WHEREAS, as a condition and inducement to the Company entering into this Agreement, concurrently with the execution and delivery of this Agreement, the Company and Green Equity Investors, L.P. are entering into a stockholder agreement (the "Voting Agreement"), pursuant to which, among other things, Green Equity Investors, L.P. agrees to vote all of the shares of Parent's capital stock owned by it in favor of the charter amendment and the share issuance contemplated hereby; and

        WHEREAS, for United States federal income tax purposes, it is intended by the parties hereto that the Merger shall qualify as a "reorganization" within the meaning of Section 368 of the Internal Revenue Code of 1986, as amended (the "Code").

        NOW, THEREFORE, in consideration of the foregoing and the respective representations, warranties, covenants and agreements contained in this Agreement and intending to be legally bound hereby, the parties hereto agree as follows:


ARTICLE I

THE MERGER

        Section 1.1    The Merger.     Upon the terms and subject to the conditions of this Agreement, and in accordance with the DGCL, at the Effective Time, Merger Sub shall be merged with and into the Company. As a result of the Merger, the separate corporate existence of Merger Sub shall cease and the Company shall continue as the surviving corporation following the Merger (the "Surviving Corporation").

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        Section 1.2
    Effective Time; Closing.     As promptly as practicable (and in any event within three Business Days) after the satisfaction or waiver of the conditions set forth in Article VIII hereof (other than conditions to be satisfied at the Closing but subject to satisfaction of such conditions), the parties hereto shall cause the Merger to be consummated by filing a Certificate of Merger (the "Certificate of Merger") with the Secretary of State of Delaware and by making all other filings or recordings required under the DGCL in connection with the Merger, in such form as is required by, and executed in accordance with the relevant provisions of, the DGCL. The Merger shall become effective at such time as the Certificate of Merger is duly filed with the Secretary of State of Delaware, or at such later time as the parties hereto shall agree and shall be specified in the Certificate of Merger (the date and time the Merger becomes effective, the "Effective Time"). On the date of such filing (the "Closing Date"), a closing (the "Closing") shall be held at 9:00 a.m., New York Time, at the offices of Clifford Chance US LLP, 200 Park Avenue, New York, New York 10166, or at such other time and location as the parties hereto shall otherwise agree.


        Section 1.3
    Effect of the Merger.     At the Effective Time, the effects of the Merger shall be as provided in the applicable provisions of the DGCL and this Agreement. Without limiting the generality of the foregoing, and subject thereto, at the Effective Time all the property, rights, privileges, powers and franchises of the Company and Merger Sub shall vest in the Surviving Corporation, and all debts, liabilities, obligations, restrictions, disabilities and duties of the Company and Merger Sub shall become the debts, liabilities, obligations, restrictions, disabilities and duties of the Surviving Corporation.


        Section 1.4
    Conversion of Company Common Stock.     At the Effective Time, by virtue of the Merger and without any action on the part of any holder thereof:

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        Section 1.5
    Conversion of Common Stock of Merger Sub.     Each share of common stock, par value $.01 per share, of Merger Sub issued and outstanding immediately prior to the Effective Time shall be converted into and become one validly issued, fully paid and nonassessable share of common stock, par value $.01 per share, of the Surviving Corporation and shall constitute the only outstanding shares of capital stock of the Surviving Corporation.


        Section 1.6
    Tax-Free Reorganization.     The Merger is intended to be a reorganization within the meaning of Section 368(a) of the Code, and this Agreement is intended to be a "plan of reorganization" within the meaning of the regulations promulgated under Section 368(a) of the Code and for the purpose of qualifying as a tax-free transaction for federal income tax purposes. The parties hereto agree to report the Merger as a tax-free reorganization under the provisions of Section 368(a). None of the parties hereto will take or cause to be taken any action which would prevent the transactions contemplated by this Agreement from qualifying as a reorganization under Section 368(a).


ARTICLE II

EXCHANGE OF CERTIFICATES

        Section 2.1    Exchange Agent.     Prior to the Effective Time, Parent shall appoint a commercial bank or trust company reasonably satisfactory to the Company to act as exchange agent hereunder for the purpose of exchanging Certificates for the Merger Consideration (the "Exchange Agent"). At or prior to the Effective Time, Parent shall deposit with the Exchange Agent, in trust for the benefit of holders of shares of the Company Common Stock, certificates representing the Parent Common Stock issuable pursuant to Section 1.4. Parent shall also deposit with the Exchange Agent from time to time, as needed, amounts sufficient to pay cash in lieu of fractional shares in accordance with Section 2.5 and any dividends and other distributions required to be paid upon the surrender of Certificates pursuant to Section 2.3.


        Section 2.2
    Exchange Procedures.     As soon as reasonably practicable after the Effective Time (and in any event within five Business Days), Parent and the Surviving Corporation shall cause the Exchange Agent to mail to each holder of record of a Certificate immediately prior to the Effective Time (i) a letter of transmittal which shall specify that delivery shall be effected, and risk of loss and title to the Certificates shall pass only upon delivery of the Certificates to the Exchange Agent, and (ii) instructions for effecting the surrender of such Certificates in exchange for the applicable Merger Consideration. Upon surrender of a Certificate to the Exchange Agent together with such letter of transmittal, duly executed and completed in accordance with the instructions thereto, and such other documents as may reasonably be required pursuant to such instructions, the holder of such Certificate shall be entitled to receive in exchange therefor (A) a certificate representing, in the aggregate, the whole number of shares of Parent Common Stock that such holder has the right to receive pursuant to Section 1.4 and (B) cash in lieu of any fractional shares of applicable Parent Common Stock pursuant

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to Section 2.5, and any dividends or other distributions pursuant to Section 2.3 (after giving effect to any required tax withholdings from cash payments), and in each case the Certificate so surrendered shall forthwith be canceled. No interest will be paid or will accrue on any cash payable pursuant to Section 2.3 or Section 2.5.


        Section 2.3
    Distributions with Respect to Unexchanged Shares.     No dividends or other distributions declared or made with respect to shares of Parent Common Stock with a record date after the Effective Time shall be paid to the holder of any unsurrendered Certificate with respect to the shares of Parent Common Stock that such holder would be entitled to receive upon surrender of such Certificate and no cash payment in lieu of fractional shares of Parent Common Stock shall be paid to any such holder pursuant to Section 2.5 until such holder shall surrender such Certificate in accordance with Section 2.2. Subject to the effect of any applicable United States federal, state or local or any applicable foreign statute, law, rule, regulation, ordinance, code, order, judgment, decree or any other applicable requirement or rule of law (a "Law"), following surrender of any such Certificate, there shall be paid to such holder of shares of Parent Common Stock issuable in exchange therefor, without interest, (a) promptly after the time of such surrender, the amount of any cash payable in lieu of fractional shares of Parent Common Stock to which such holder is entitled pursuant to Section 2.5 and the amount of dividends or other distributions with a record date and payment date after the Effective Time but prior to such surrender which would have been paid if the whole shares of Parent Common Stock had been issued as of such record date and (b) at the appropriate payment date, the amount of dividends or other distributions with a record date after the Effective Time but prior to such surrender and a payment date subsequent to such surrender payable with respect to such whole shares of Parent Common Stock.


        Section 2.4
    No Further Ownership Rights in the Company Common Stock.     All shares of Parent Common Stock issued and cash paid in lieu of any fractional shares of Parent Common Stock pursuant to Section 2.5 and any dividends or other distributions made pursuant to Section 2.3 upon conversion of shares of Company Common Stock in accordance with the terms of this Article II shall be deemed to have been issued or paid in full satisfaction of all rights pertaining to the shares of Company Common Stock.


        Section 2.5
    No Fractional Shares of Parent Common Stock.     


        Section 2.6
    No Liability.     If any Certificate shall not have been surrendered prior to one year after the Effective Time, any such Merger Consideration or dividends or distributions in respect thereof

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shall, to the extent permitted by applicable Law, be delivered to Parent, upon demand, and any holders of Company Common Stock who have not theretofore complied with the provisions of this Article II shall thereafter look only to Parent for satisfaction of their claims for such Merger Consideration or dividends or distributions in respect thereof. Notwithstanding the foregoing, none of Parent, Merger Sub, the Company, the Surviving Corporation or the Exchange Agent shall be liable to any Person in respect of any Merger Consideration or any dividends or distributions with respect thereto, in each case delivered to a public official pursuant to any applicable abandoned property, escheat or similar Law. If any Certificate shall not have been surrendered prior to six years after the Effective Time (or immediately prior to such earlier date on which any Merger Consideration, any dividends or distributions payable to the holder of such Certificate or any cash payable in lieu of fractional shares of Parent Common Stock pursuant to this Article II, would otherwise escheat to or become the property of any Governmental Entity), any such Merger Consideration or dividends or distributions in respect thereof shall, to the extent permitted by applicable Law, become the property of Parent, free and clear of any claims or interest of any Person previously entitled thereto.


        Section 2.7
    Lost Certificates.     If any Certificate shall have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the Person claiming such Certificate to be lost, stolen or destroyed and, if required by the Surviving Corporation, the posting by such Person of a bond in such reasonable amount as the Surviving Corporation may direct as indemnity against any claim that may be made against it with respect to such Certificate, the Exchange Agent will deliver in exchange for such lost, stolen or destroyed Certificate the applicable Merger Consideration with respect to the shares of Company Common Stock formerly represented thereby and unpaid dividends and distributions on shares of Parent Common Stock deliverable in respect thereof, pursuant to this Agreement.


        Section 2.8
    Withholding Rights.     Parent shall be entitled to deduct and withhold from the consideration otherwise payable pursuant to this Agreement to any holder of shares of Company Common Stock such amounts as it is required to deduct and withhold with respect to the making of such payment under the Code and the rules and regulations promulgated thereunder, or any provision of state, local or foreign tax Law. To the extent that amounts are so withheld by the Surviving Corporation such withheld amounts shall be treated for all purposes of this Agreement as having been paid to the holder of the shares of Company Common Stock in respect of which such deduction and withholding was made by the Surviving Corporation.


        Section 2.9
    Stock Transfer Books.     At the close of business on the Closing Date, the stock transfer books of the Company shall be closed and there shall be no further registration of transfers of shares of Company Common Stock thereafter on the records of the Company. From and after the Effective Time, the holders of Certificates shall cease to have any rights with respect to such shares of Company Common Stock formerly represented thereby, except as otherwise provided herein or by Law. On or after the Effective Time, any Certificates presented to the Exchange Agent or Parent for any reason shall be converted into the Merger Consideration with respect to the shares of Company Common Stock formerly represented thereby and any dividends or other distributions to which the holders thereof are entitled pursuant to Section 2.3.


        Section 2.10
    Shares held by the Company Affiliates.     Anything to the contrary in this Agreement notwithstanding, no shares of Parent Common Stock (or certificates therefor) shall be issued in exchange for any certificate to any Person who may be an Affiliate of the Company (identified pursuant to Section 7.11) until the Person shall have delivered to Parent and the Company a duly executed letter as contemplated by Section 7.11.

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ARTICLE III

CERTAIN CORPORATE MATTERS

        Section 3.1    Certificates of Incorporation.     


        Section 3.2
    Bylaws.     The Bylaws of Merger Sub as in effect immediately prior to the Effective Time shall be the Bylaws of the Surviving Corporation until the same shall thereafter be altered, amended or repealed in accordance with applicable Law.


        Section 3.3
    Directors and Officers.     

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        Section 3.4
    Corporate Headquarters.     From and after the Effective Time, the corporate headquarters of Parent shall remain in the Denver, Colorado metropolitan area until determined otherwise, if ever, by the Board of Directors of Parent.


ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

        Except as set forth in the Disclosure Letter delivered by the Company to Parent prior to the execution of this Agreement (the "Company Disclosure Letter"), which identifies exceptions only by specific Section or subsection references (provided, that disclosure made with respect to any Section and/or subsection will also be deemed to be disclosure against other Sections and/or subsections of this Agreement to the extent that it is readily apparent that such disclosure is applicable to such other Section and/or subsections), the Company hereby represents and warrants to Parent and Merger Sub as follows:


        Section 4.1
    Organization and Standing.     Each of the Company and each Subsidiary of the Company (i) is a corporation duly organized, validly existing and in good standing under the Laws of the jurisdiction of its organization, (ii) has all requisite corporate power and authority and all necessary government approvals to own, lease and operate its properties and assets and to conduct its business as presently conducted and (iii) is duly qualified or licensed to do business as a foreign corporation and is in good standing in each jurisdiction where the character of the properties owned, leased or operated by it or the nature of its business makes such qualification or licensing necessary, except where the failure to be so qualified or licensed would not, individually or in the aggregate, result in a Company Material Adverse Effect. The Company has furnished or made available to Parent correct and complete copies of its certificate of incorporation (the "Company Certificate of Incorporation") and bylaws (the "Company Bylaws") and the certificate of incorporation and bylaws (or equivalent organizational documents) of each of its Subsidiaries, each as amended to date. Such certificate of incorporation, bylaws or equivalent organizational documents are in full force and effect, and neither the Company nor any such Subsidiary is in violation of any provision of its certificate of incorporation, bylaws or equivalent organizational documents.


        Section 4.2
    Capitalization.     The authorized capital stock of the Company consists of 100,000,000 shares of Company Common Stock and 5,000,000 shares of preferred stock, $.01 par value per share ("Company Preferred Stock"). As of February 6, 2003, (i) 32,975,115 shares of Company Common Stock were issued and outstanding, all of which are validly issued, fully paid and nonassessable and free of preemptive rights, (ii) 58,651 shares of Company Common Stock were held in the treasury of the Company, (iii) options to purchase 4,390,169 shares of Company Common Stock were outstanding pursuant to the Company's 2000 Stock Option and Stock Award Plan, the Directors Stock Plan and the Salaried Employees Stock Option and Stock Award Plan, (together with the Employee Stock Purchase Plan, the "Company Stock Plans"), (iv) the Company is obligated to issue 74,715 shares under the Director Stock Plan upon a change in control, (v) 3,267,057 shares of Company Common Stock were available for future issuance as options or restricted stock under the Company Stock Plans; (vi) options to purchase 50,000 shares of Company Common Stock had been granted outside of the Company Stock Plans, and (vii) no shares of Company Preferred Stock were issued and outstanding. All outstanding options granted by the Company pursuant to the Company Stock Plans or otherwise are referred to in this Agreement as the "Company Options." Since February 6, 2003, there have been no changes in the foregoing except in connection with the exercise of Company Options or forfeitures of Company Options or restricted stock in accordance with their terms. Section 4.2 of the Company Disclosure Letter sets forth a correct and complete list of the outstanding Company Options, as of February 6, 2003, organized by employee, and includes the exercise price, vesting schedule and expiration date of each such Company Option. Except as set forth above, there are no options, warrants, convertible securities, subscriptions, stock appreciation rights, phantom stock plans or stock equivalents or other rights,

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agreements, arrangements or commitments (contingent or otherwise) of any character issued or authorized by the Company relating to the issued or unissued capital stock of the Company or any Subsidiary of the Company (including, without limitation, rights the value of which is determined with reference to the capital stock or other securities of the Company or any of its Subsidiaries) or obligating the Company or any Subsidiary of the Company to issue or sell any shares of capital stock of, or options, warrants, convertible securities, subscriptions or other equity interests in, the Company or any Subsidiary of the Company. All shares of Company Common Stock subject to issuance as aforesaid, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, will be duly authorized, validly issued, fully paid and nonassessable. There are no outstanding contractual obligations of the Company or any Subsidiary of the Company to repurchase, redeem or otherwise acquire any shares of Company Common Stock or any capital stock of any Subsidiary of the Company or to pay any dividend or make any other distribution in respect thereof or to provide funds to, or make any investment (in the form of a loan, capital contribution or otherwise) in, any Person. The Company owns beneficially and of record all of the issued and outstanding capital stock of each Subsidiary of the Company listed in Section 4.2 of the Company Disclosure Letter and does not own an equity interest in any other corporation, partnership or entity, other than in such Subsidiaries. Each outstanding share of capital stock of each Subsidiary of the Company is duly authorized, validly issued, fully paid and nonassessable and each such share owned by the Company or another Subsidiary of the Company is free and clear of all security interests, liens, claims, pledges, options, rights of first refusal, agreements, limitations on the Company's or such other Subsidiary's voting rights, charges and other encumbrances of any nature whatsoever. Neither the Company nor its Subsidiaries have outstanding any bonds, debentures, notes or other obligations the holders of which have the right to vote (or, except as set forth in this Section 4.2, convertible into or exercisable for securities having the right to vote) with the stockholders of the Company on any matter. To the Knowledge of the Company, there are no irrevocable proxies and no voting agreements with respect to any shares of capital stock or other voting securities of the Company or any of its Subsidiaries.


        Section 4.3
    Authority for Agreement.     

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        Section 4.4
    No Conflict.     The execution and delivery of this Agreement by the Company do not, and the performance of this Agreement by the Company and the consummation of the Merger and the other transactions contemplated by this Agreement will not, (i) conflict with or violate the Company's Certificate of Incorporation or the Company's Bylaws or equivalent organizational documents of any of its Subsidiaries, (ii) subject to Section 4.5, conflict with or violate any Law applicable to the Company or any of its Subsidiaries or by which any property or asset of the Company or any of its Subsidiaries is bound or affected, or (iii) result in a breach or violation of, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, give to others any right of termination, amendment, acceleration or cancellation of, result in triggering any payment or other obligations, result in any loss of any benefit provided in any Contract (as defined below), require any notice, consent or waiver, or result in the creation of a lien or other encumbrance on any property or asset of the Company or any of its Subsidiaries pursuant to, any note, bond, mortgage, indenture, contract, agreement, license, permit, franchise or other instrument, obligation, arrangement or understanding (but specifically excluding leases) ("Contracts") to which the Company or any of its Subsidiaries is a party or by which the Company or any of its Subsidiaries or any property or asset of any of them is bound or affected, except in the case of clauses (ii) and (iii) above for any such conflicts, violations, breaches, defaults or other occurrences not reasonably expected to result in, individually or in the aggregate, a Company Material Adverse Effect. Neither the Company nor any of its Subsidiaries is a party to or is bound by any agreement or covenant not to compete or by any agreement or covenant restricting or that will restrict in any material respect either the type of business in which Parent or its Subsidiaries may engage or the manner or locations in which any of them may so engage.


        Section 4.5
    Required Filings and Consents.     The execution and delivery of this Agreement by the Company does not, and the performance of this Agreement by the Company will not, require any consent, approval, authorization or permit of, or filing with (including without limitation the filing of transfer or similar tax returns) or notification to, any federal, state, local or foreign government or court, administrative or regulatory agency or commission or other governmental authority or agency, domestic or foreign (a "Governmental Entity"), except (i) for applicable requirements, if any, of the

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Securities Act of 1933 and the rules and regulations promulgated thereunder (the "Securities Act"), Securities and Exchange Act of 1934 and the rules and regulations promulgated thereunder (the "Exchange Act"), state securities or "blue sky" Laws, the rules and regulations of the NYSE and filing and recordation of appropriate merger documents as required by the DGCL, (ii) for those required by the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act") and (iii) where failure to obtain such consents, approvals, authorizations or permits, or to make such filings or notifications, would not reasonably be expected to result in, individually or in the aggregate, a Company Material Adverse Effect.


        Section 4.6
    Compliance.     Each of the Company and its Subsidiaries is being operated in compliance with all Laws applicable to the Company or any of its Subsidiaries or by which any property, business or asset of the Company or any of its Subsidiaries is bound or affected except as would not reasonably be expected to, individually or in the aggregate, have a Company Material Adverse Effect. Neither the Company nor any of its Subsidiaries and, to the Knowledge of the Company, no other party thereto, is in violation of or in default under (nor does there exist any condition which upon the passage of time or the giving of notice or both would cause such a violation of or default under, give to others any rights of termination, amendment, acceleration or cancellation of, result in triggering any payment or other obligations, result in any loss of benefit, require any notice, consent or waiver, or result in the creation of a lien or other encumbrance on any property or asset of the Company or any of its Subsidiaries pursuant to) any Contract to which it is a party or by which it or any of its properties or assets is bound, except for violations or defaults that would not reasonably be expected to result in, individually or in the aggregate, a Company Material Adverse Effect.


        Section 4.7
    SEC Filings, Financial Statements.     

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        Section 4.8
    Absence of Certain Changes or Events.     Except as specifically contemplated by this Agreement, since February 2, 2002, the Company and its Subsidiaries have conducted their respective businesses only in the ordinary course and consistent with prior practice and there has not been (i) any events or occurrence of any conditions that have had or would reasonably be expected to result, individually or in the aggregate, in a Company Material Adverse Effect, (ii) any declaration, setting aside or payment of any dividend or any other distribution with respect to any of the capital stock of the Company or any Subsidiary of the Company, (iii) any material change in accounting methods, principles or practices employed by the Company or any of its Subsidiaries, or (iv) any action of the type described in Section 6.1 which, had such action been taken after the date of this Agreement, would be in violation of any such Section.


        Section 4.9
    Taxes.     The Company and each of its Subsidiaries have timely filed all material Tax Returns required to be filed by any of them. All such Tax Returns are correct and complete in all material respects. All Taxes of the Company and its Subsidiaries which are (i) shown as due on such Tax Returns, (ii) otherwise due and payable or (iii) claimed or asserted by any taxing authority to be due, have been paid, except for those Taxes being contested in good faith and for which adequate reserves have been established in the financial statements included in the Company SEC Reports in accordance with GAAP. There are no liens for any Taxes upon the assets of the Company or any of its Subsidiaries, other than statutory liens for Taxes not yet due and payable and liens for real estate Taxes contested in good faith. The Company does not know of any proposed or threatened Tax claims or assessments, which, individually or in the aggregate, exceed $250,000. The Company and each Subsidiary has disclosed on its Tax Returns all positions taken therein that would give rise to a substantial understatement of Tax within the meaning of Section 6662 of the Code and any similar provision of state, local or foreign Law. Neither the Company nor any of its Subsidiaries has made an election under Section 341(f) of the Code. Neither the Company nor any of its Subsidiaries has waived any statute of limitations in respect of Taxes or agreed to any extension of time with respect to a Tax assessment or deficiency. The Company and each Subsidiary has withheld and paid over to the relevant taxing authority all Taxes required to have been withheld and paid in connection with payments to employees, officers, directors, independent contractors, creditors, stockholders or other third parties, except for such Taxes which individually or in the aggregate are not reasonably expected to result in a Company Material Adverse Effect. The unpaid Taxes of the Company and its Subsidiaries for the current taxable period did not, as of the most recent Company Financial Statement, exceed the reserve for Tax liability (disregarding any reserve for deferred Taxes established to reflect timing differences between book and Tax income) set forth on the face of the balance sheet in the most recent Company Financial Statement. Neither the Company nor any of its Subsidiaries is required to include in income any adjustment pursuant to Section 481(a) of the Code by reason of a change in accounting method. Neither the Company nor any of its Subsidiaries is a party to or subject to any tax sharing agreement, other than tax sharing agreements among the Company and/or its Subsidiaries. Neither the Company nor any of its Subsidiaries has entered into any agreement that could obligate it to make any payment that would be a nondeductible expense under Section 162(m) or Section 280G of the Code. Neither the Company nor any of its Subsidiaries has been the "distributing corporation" (within the meaning of Section 355(c)(2) of the Code) with respect to a transaction described in Section 355 of the Code within the 3-year period ending as of the date of this Agreement. Neither the Company nor any of its Subsidiaries has a permanent establishment in any foreign country as defined in any applicable Tax treaty or convention between the United States and that foreign country. Neither the Company nor any of its Subsidiaries owns an interest in a "passive foreign investment company," as defined in

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Section 1297 of the Code or a "controlled foreign corporation" as defined in Section 957 of the Code. Neither the Company nor any of its Subsidiaries (i) has been a member of an affiliated group, as defined in Section 1504(a) of the Code (other than a group the common parent of which was the Company); and (ii) has liability for the Taxes of any Person, other than the Company or any of its Subsidiaries, under (A) Section 1.1502-6 of the Treasury regulations (or any similar provision of state, local or foreign Law), (B) as a transferee or successor, (C) by contract or (D) otherwise. Neither the Company nor any of its Subsidiaries has taken or agreed to take any action or knows of any fact or circumstance that may prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code. For purposes of this Agreement, (a) "Tax" (and, with correlative meaning, "Taxes") means any federal, state, local or foreign income, gross receipts, property, sales, use, license, excise, franchise, employment, payroll, premium, withholding, alternative or added minimum, ad valorem, transfer or excise tax, or any other tax, custom, duty, governmental fee or other like assessment or charge of any kind whatsoever, together with any interest or penalty or addition thereto, whether disputed or not, imposed by any Governmental Entity, and (b) "Tax Return" means any return, report or similar statement required to be filed with respect to any Tax (including any attached schedules), including, without limitation, any information return, claim for refund, amended return or declaration of estimated Tax.


        Section 4.10
    Title to Assets.     The Company and each of its Subsidiaries have good and marketable title to, or a valid leasehold or subleasehold interest in, all of their real and personal properties and assets reflected in the Company February 2002 Balance Sheet or acquired after February 2, 2002 (other than assets disposed of since February 2, 2002 in the ordinary course of business consistent with past practice), in each case free and clear of all mortgages, title defects, liens, pledges, encumbrances and restrictions, except for (i) liens for Taxes accrued but not yet payable; (ii) liens arising as a matter of Law in the ordinary course of business with respect to obligations incurred after February 2, 2002, provided that the obligations secured by such liens are not delinquent; and (iii) such title defects, liens, encumbrances and restrictions, if any, as individually or in the aggregate are not reasonably expected to result in a Company Material Adverse Effect. Section 4.10 of the Company Disclosure Letter sets forth a correct and complete list of all real property owned or leased by the Company or a Subsidiary of the Company. The Company and each of its Subsidiaries either own, or have valid leasehold interests in, all properties and assets used by them in the conduct of their business.


        Section 4.11
    Litigation.     There is (i) no claim, suit, action, investigation, indictment or information, or administrative, arbitration or other proceedings ("Litigation") pending or, to the Knowledge of the Company, threatened against the Company or any of its Subsidiaries; and (ii) no judgment, order, injunction, decree, stipulation or award (whether rendered by a court, administrative agency, or by arbitration, pursuant to a grievance or other procedure) against or relating to the Company or any of its Subsidiaries which, in the case of either (i) or (ii) above, if adversely determined, would reasonably be expected to result in, a loss to the Company or any of its Subsidiaries in excess of $25,000.


        Section 4.12
    Employee Benefit Plans and Agreements.     

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