SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
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Check the appropriate box:
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14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to 240.14a - 11(c) or 240.14a - 12
Hansen Natural Corporation
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(Name of Registrant as Specified In Its Charter)
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HANSEN NATURAL CORPORATION
2401 East Katella Avenue, Suite 650
Anaheim, California 92806
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD NOVEMBER 14, 1997
October 14, 1997
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders of Hansen
Natural Corporation to be held on Friday, November 14, 1997 at 2:30 p.m., at the
Board Room, Suite 650, 2401 East Katella Avenue, Anaheim, California 92806.
In addition to the specific matters to be voted on at the meeting, there will be
a report on the Company's business and an opportunity for stockholders to ask
questions. I hope that you will be able to join us. If you are unable to attend,
I strongly urge you to complete your enclosed proxy. Your vote is very
important.
Sincerely,
Rodney C. Sacks
Chairman of the Board
HANSEN NATURAL CORPORATION
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD NOVEMBER 14, 1997
TO THE STOCKHOLDERS:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of
Hansen Natural Corporation (the "Company") will be held on Friday, November 14,
1997 at 2:30 p.m., at the Board Room, Suite 650, 2401 East Katella Avenue,
Anaheim, California 92806, for the following purposes:
1. To elect five directors to hold office until the next annual meeting
of stockholders.
2. To ratify the appointment of Deloitte & Touche as independent
auditors of the Company for the year ending December 31, 1997.
3. To approve and adopt certain amendments to the Company's Stock
Option Plan.
4. To transact such other business as may properly come before
the meeting or any adjournment thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
Only stockholders of record at the close of business on October 10,
1997 are entitled to notice of and to vote at the meeting and any adjournment
thereof.
All stockholders are cordially invited to attend the meeting in person.
However, to assure your representation at the meeting, you are urged to mark,
sign, date and return the enclosed proxy card as promptly as possible in the
postage-prepaid envelope enclosed for that purpose. You may revoke your voted
proxy at any time prior to the meeting or vote in person if you attend the
meeting.
A copy of the Company's Annual Report to Stockholders is enclosed.
Sincerely,
Rodney C. Sacks
Chairman of the Board
Anaheim, California
October 14, 1997
IMPORTANT: WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, YOU ARE REQUESTED
TO COMPLETE AND PROMPTLY RETURN THE ENCLOSED PROXY IN THE ENVELOPE
PROVIDED.
HANSEN NATURAL CORPORATION
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PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS
INFORMATION CONCERNING SOLICITATION AND VOTING
GENERAL
The enclosed Proxy is solicited on behalf of Hansen Natural Corporation
(the "Company") for use at the Annual Meeting of Stockholders to be held Friday,
November 14, 1997 at 2:30 p.m. local time, or at any adjournment thereof, for
the purposes set forth herein and in the accompanying Notice of Annual Meeting
of Stockholders. The Annual Meeting of Stockholders will be held at the Board
Room, Suite 650, 2401 East Katella Avenue, Anaheim, California 92806.
These proxy solicitation materials are being mailed on or about October
14, 1997, together with the Company's 1996 Annual Report to Stockholders, to all
stockholders entitled to vote at the meeting.
RECORD DATE AND PRINCIPAL STOCKHOLDERS
Holders of record of Common Stock at the close of business on October
10, 1997 are entitled to notice of and to vote at the meeting. There are no
other outstanding voting securities of the Company. At the record date,
9,122,868 shares of the Company's Common Stock were issued and outstanding. The
following table sets forth, as of the most recent practical date (October 3,
1997), those persons known to the Company to be the beneficial owners of more
than 5% of the Company's Common Stock:
Name and Address Amount and Nature of Percent
of Beneficial Owner Beneficial Ownership of Class
- -------------------------------- --------------------- ---------
Brandon Limited Partnership No.1 (1) 714,490 7.8%
Brandon Limited Partnership No.2 (2) 2,831,667 31.0%
Rodney C. Sacks (3) 3,983,657 (4) 42.1%
Hilton H. Schlosberg (5) 3,933,657 (6) 41.8%
- ---------------------
(1) The mailing address of Brandon Limited Partnership No. 1 ("Brandon No.
1") is P.O. Box 30749, Seven Mile Beach, Grand Cayman, British West
Indies. The general partners of Brandon No. 1 are Rodney C. Sacks and
Hilton H. Schlosberg.
(2) The mailing address of Brandon Limited Partnership No. 2 ("Brandon No.
2") is P.O. Box 30749, Seven Mile Beach, Grand Cayman, British West
Indies. The general partners of Brandon No. 2 are Rodney C. Sacks and
Hilton H. Schlosberg.
(3) The mailing address of Mr. Sacks is 2401 East Katella Avenue,
Suite 650, Anaheim, California 92806.
(4) Includes 87,500 shares of Common Stock owned by Mr. Sacks. Also
includes 714,490 shares beneficially held by Brandon No. 1 because Mr.
Sacks is one of Brandon No. 1's general partners and 2,831,667 shares
beneficially held by Brandon No. 2 because Mr. Sacks is one of Brandon
No. 2's general partners. Also includes options to purchase 200,000
shares of Common Stock exercisable at $1.75 per share granted pursuant
to a Stock Option Agreement dated June 15, 1992 between the Company and
Mr. Sacks and options to purchase 150,000 shares of Common Stock
exercisable at $1.25 per share granted pursuant to a Stock Option
Agreement dated July 3, 1995 between the Company and Mr. Sacks.
Mr. Sacks disclaims beneficial ownership of all shares deemed
beneficially owned by him hereunder except (i) 87,500 shares of Common
Stock, (ii) the 350,000 shares presently issuable under separate Stock
Option Agreements dated June 15, 1992 and July 3, 1995 between the
Company and Mr. Sacks and (iii) his proportionate interest as a
shareholder in the following shares beneficially owned by Hazelwood
Investments Limited, a company controlled by Mr. Sacks and his family
("Hazelwood"): (a) the 247,911 shares held by Brandon No. 1 allocable
to Hazelwood's limited partnership interest in Brandon No. 1 and (b)
the 250,000 shares held by Brandon No. 2 allocable to Hazelwood's
limited partnership interest in Brandon No. 2.
(5) The mailing address of Mr. Schlosberg is 2401 East Katella Avenue,
Suite 650, Anaheim, California 92806.
(6) Includes 87,500 shares of Common Stock owned by Mr. Schlosberg. Also
includes 714,490 shares beneficially held by Brandon No. 1 because Mr.
Schlosberg is one of Brandon No. 1's general partners and 2,831,667
shares beneficially held by Brandon No. 2 because Mr. Schlosberg is one
of Brandon No. 2's general partners. Also includes options to purchase
150,000 shares of Common Stock exercisable at $1.75 per share granted
pursuant to a Stock Option Agreement dated June 15, 1992 between the
Company and Mr. Schlosberg and options to purchase 150,000 shares of
Common Stock exercisable at $1.25 per share granted pursuant to a Stock
Option Agreement dated July 3, 1995 between the Company and Mr.
Schlosberg.
Mr. Schlosberg disclaims beneficial ownership of all shares deemed
beneficially owned by him hereunder except (i) 87,500 shares of Common
Stock, (ii) the 300,000 shares presently issuable under separate Stock
Option Agreements dated June 15, 1992 and July 3, 1995 between the
Company and Mr. Schlosberg and (iii) his proportionate interest as a
shareholder in the following shares beneficially owned by Brandon
Securities Limited, a company controlled by Mr. Schlosberg and his
family: (a) the 247,911 shares held by Brandon No. 1 allocable to
Brandon Securities Limited's limited partnership interest in Brandon
No. 1 and (b) the 250,000 shares held by Brandon No. 2 allocable to
Brandon Securities Limited's limited partnership interest in Brandon
No. 2.
SECTION 16(A) REPORTS
Section 16(a) of the Securities Exchange Act of 1934 (the "34 Act")
requires the Company's directors and executive officers, and persons who own
more than 10% of a registered class of the Company's equity securities, to file
by specific dates with the Securities and Exchange Commission (the "SEC"),
initial reports of ownership and reports of changes in ownership of equity
securities of the Company. Officers, directors and greater than 10% stockholders
are required by SEC regulation to furnish the Company with copies of all Section
16(a) forms that they file.
To the Company's knowledge, based solely on review of copies of such
reports furnished to the Company during the two fiscal years ended December 31,
1996, all Section 16(a) filing requirements applicable to the Company's
officers, directors and greater than ten percent stockholders were complied
with, except with respect to certain reports required to be filed by Raimana
Martin, a former director of the Company, and Norman C. Epstein, a current
director. Mr. Martin failed to file timely reports with respect to sales of
Common Stock on the open market for the months of November and December 1995 and
for the months of January, February, March and April 1996. The Company
understands that Mr. Martin has subsequently filed reports for these months. In
addition, the Company understands that Mr. Martin has not filed reports with
respect to sales made in May, June, October, November and December, 1996 and
January 1997. Mr. Epstein was required to file reports for the months of August
and December 1995 because he was, at the time, a director of Combined Holdings
Ltd. ("Combined") which acquired shares of common stock of the Company on or
about those dates as a distribution of its limited partnership interest in
Brandon No. 2. Mr. Epstein resigned as a director of Combined in October 1996.
The Company understands that Mr. Epstein has subsequently filed the appropriate
reports.
REVOCABILITY OF PROXIES
Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time before its use by delivering to the Company a written
notice of revocation or duly executed proxy bearing a later date or by attending
the meeting and voting in person.
VOTING AND SOLICITATION
In accordance with the Company's by-laws, directors shall be elected by the
affirmative vote of a plurality of the votes cast in person or by proxy by the
holders of shares entitled to vote in the election at the Annual Meeting of
Stockholders, and the adoption of the amendments to the Company's Stock Option
Plan (the "Plan"), and the ratification of Deloitte & Touche as independent
auditors shall be by the affirmative vote of the majority of the shares voting
on the proposal in person or by proxy at the Annual Meeting of Stockholders, in
each case, provided a quorum is present. Thus, abstentions and broker non-votes
will not be included in vote totals and will have no effect on the outcome of
the vote. No stockholder shall be entitled to cumulate votes.
The cost of soliciting proxies will be borne by the Company. The Company may
reimburse brokerage firms and other persons representing beneficial owners of
shares for their expenses in forwarding solicitation material to such beneficial
owners. Proxies may also be solicited by certain of the Company's directors,
officers and regular employees, without additional compensation, personally or
by telephone, telegram or letter.
DEADLINE FOR RECEIPT OF STOCKHOLDER PROPOSALS
It is presently intended that next year's Annual Meeting of Stockholders will
be held in June 1998. Accordingly, proposals of stockholders of the Company
which are intended to be presented by such stockholders at next year's Annual
Meeting of Stockholders must be received by the Company by no later than
February 28, 1998 in order that they may be considered for inclusion in the
proxy statement and form of proxy relating to that meeting.
PROPOSAL ONE
ELECTION OF DIRECTORS
NOMINEES
A Board of five directors is to be elected at the meeting. Unless otherwise
instructed, the proxy holders will vote the proxies received by them for the
Company's five nominees named below, all of whom are presently directors of the
Company. In the event that any nominee of the Company is unable or declines to
serve as a director at the time of the Annual Meeting of Stockholders, the
proxies will be voted for any nominee who shall be designated by the present
Board of directors to fill the vacancy. The Company is not aware of any nominee
who will be unable or will decline to serve as a director. The term of office of
each person elected as a director will continue until the next Annual Meeting of
Stockholders or until a successor has been elected and qualified.
The names of the nominees, and certain information about them, are set forth
below.
Name of Nominee Age Director Since
- ---------------------- ----- ---------------
Rodney C. Sacks.............. 47 1990
Hilton H. Schlosberg......... 44 1990
Benjamin M. Polk............. 46 1990
Norman C. Epstein............ 56 1992
Harold C. Taber, Jr.......... 58 1992
Set forth below is a description of each nominee's principal occupation and
business background during the past five years.
Mr. Sacks has been Chairman, Chief Executive Officer, Chief Financial
Officer and director of the Company since November 1990; a member of the
Executive Committee of the Board of Directors of the Company since October 1992;
and Chairman and a director of the Company's wholly owned subsidiary, Hansen
Beverage Company("HBC") since June 1992. Mr. Sacks resigned from his position
as Chief Financial Officer of the Company in July 1996, which office has been
assumed by Mr. Schlosberg.
Mr. Schlosberg has been Vice Chairman, President, Chief Operating
Officer, Secretary, and a director of the Company since November 1990; a member
of the Executive Committee of the Board of Directors of the Company since
October 1992; a member of the Audit Committee since September 10, 1997; and Vice
Chairman and a director of HBC since July 1992. In July 1996, Mr. Schlosberg
assumed the office of Chief Financial Officer, which was previously held by Mr.
Sacks. In addition, Mr. Schlosberg was a Director and/or Deputy Chairman of AAF
Industries PLC, a United Kingdom publicly quoted industrial group, from June
1990 until April 1995.
Mr. Polk has been a director of the Company since November 1990;
Assistant Secretary of HBC since October 1992; a director of HBC since July
1992; a member of the Audit Committee since September 10, 1997 and a member of
the Compensation Committee of the Board of Directors of the Company from April
1991 until September 1997. In addition, Mr. Polk is a partner with Whitman Breed
Abbott & Morgan (New York New York) where Mr. Polk has practiced law with that
firm and its predecessor, Whitman & Ransom, from August 1976 to the present.
Mr. Epstein has been a director of the Company and a member of the
Compensation Committee of the Board of Directors of the Company since June 1992;
a member and Chairman of the Audit Committee since September 10, 1997 and a
director of HBC since July 1992. In addition, Mr. Epstein has been the managing
director of Cheval Acceptances Limited from January 1997. Mr. Epstein was a
partner with Moore Stephens, International from 1974 to December 1996 (senior
partner beginning 1989 and the managing partner of Moore Stephens, New York from
1993 until 1995).
Mr. Taber has been a director of the Company since July 1992 and
President and Chief Executive Officer and a director of HBC from July 1992 to
June 1997. On June 30, 1997, Mr. Taber resigned from his employment as well as
director, President and Chief Executive Officer of HBC. In addition, effective
June 30, 1997, Mr. Taber resigned as a member of the Executive Committee on
which he served since October 1992.
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth information as to the beneficial ownership of
shares of Common Stock as at October 3, 1997 held by persons who are directors
of the Company naming them, and as to directors and officers of the Company as a
group, without naming them.
Name of Amount and Nature Percent
Beneficial Owner of Beneficial Owner of Class
- ------------------- -------------------- ----------
Rodney C. Sacks 3,983,657 (1) 42.1%
Hilton H. Schlosberg 3,933,657 (2) 41.8%
Harold C. Taber, Jr. 174,581.7 (3) 1.9%
Benjamin M. Polk 32,000 (4) *%
Norman C. Epstein 27,000 (5) *%
Officers and Directors as a group (5 members:
4,604,739 shares or 46.5% in aggregate)(6)
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*Less than 1%
THE BOARD OF DIRECTORS URGES STOCKHOLDERS TO VOTE "FOR" EACH OF THE
NOMINEES FOR DIRECTOR SET FORTH ABOVE.
(1) Includes 87,500 shares of Common Stock owned by Mr. Sacks. Also
includes 714,490 shares beneficially held by Brandon No. 1 because Mr.
Sacks is one of Brandon No. 1's general partners and 2,831,667 shares
beneficially held by Brandon No. 2 because Mr. Sacks is one of Brandon
No. 2's general partners. Also includes options to purchase 200,000
shares of Common Stock exercisable at $1.75 per share granted pursuant
to a Stock Option Agreement dated June 15, 1992 between the Company and
Mr. Sacks and options to purchase 150,000 shares of Common Stock
exercisable at $1.25 per share granted pursuant to a Stock Option
Agreement dated July 3, 1995 between the Company and Mr. Sacks.
Mr. Sacks disclaims beneficial ownership of all shares deemed
beneficially owned by him hereunder except (i) 87,500 shares of Common
Stock, (ii) the 350,000 shares presently issuable under separate Stock
Option Agreements dated June 15, 1992 and July 3, 1995 between the
Company and Mr. Sacks and (iii) his proportionate interest as a
shareholder in the following shares beneficially owned by Hazelwood
Investments Limited, a company controlled by Mr. Sacks and his family
("Hazelwood"): (a) the 247,911 shares held by Brandon No. 1 allocable
to Hazelwood's limited partnership interest in Brandon No. 1 and (b)
the 250,000 shares held by Brandon No. 2 allocable to Hazelwood's
limited partnership interest in Brandon No. 2.
(2) Includes 87,500 shares of Common Stock owned by Mr. Schlosberg. Also
includes 714,490 shares beneficially held by Brandon No. 1 because Mr.
Schlosberg is one of Brandon No. 1's general partners and 2,831,667
shares beneficially held by Brandon No. 2 because Mr. Schlosberg is one
of Brandon No. 2's general partners. Also includes options to purchase
150,000 shares of Common Stock exercisable at $1.75 per share granted
pursuant to a Stock Option Agreement dated June 15, 1992 between the
Company and Mr. Schlosberg and options to purchase 150,000 shares of
Common Stock exercisable at $1.25 per share granted pursuant to a Stock
Option Agreement dated July 3, 1995 between the Company and Mr.
Schlosberg.
Mr. Schlosberg disclaims beneficial ownership of all shares deemed
beneficially owned by him hereunder except (i) 87,500 shares of Common
Stock, (ii) the 300,000 shares presently issuable under separate Stock
Option Agreements dated June 15, 1992 and July 3, 1995 between the
Company and Mr. Schlosberg and (iii) his proportionate interest as a
shareholder in the following shares beneficially owned by Brandon
Securities Limited, a company controlled by Mr. Schlosberg and his
family: (a) the 247,911 shares held by Brandon No. 1 allocable to
Brandon Securities Limited's limited partnership interest in Brandon
No. 1 and (b) the 250,000 shares held by Brandon No. 2 allocable to
Brandon Securities Limited's limited partnership interest in Brandon
No. 2.
(3) Includes 74,581.7 shares of Common Stock owned by Mr. Taber. Also
includes presently exercisable options to purchase 100,000 shares of
Common Stock at $1.38 per share pursuant to a Stock Option Agreement
dated as of June 20, 1997 between the Company and Mr. Taber.
(4) Includes 20,000 shares of Common Stock jointly owned by Mr. Polk and
his wife. Also includes presently exercisable options to purchase
12,000 shares of Common Stock at $1.38 per share pursuant to an Option
Agreement dated as of June 30, 1995 between the Company and Mr. Polk
granted pursuant to the Directors Plan.
(5) Includes 15,000 shares of Common Stock registered in the name of
Optimal Hedge Limited, a nominee for Mr. Epstein. Also includes
presently exercisable options to purchase 12,000 shares of Common Stock
at $1.38 per share pursuant to an Option Agreement between the Company
and Mr. Epstein dated as of June 30, 1995 granted pursuant to the
Directors Plan.
(6) Shares are held indirectly to the extent indicated.
CHANGE OF CONTROL
There are no arrangements known to the Company, the operation of which may at a
subsequent date result in a change of control of the Company.
PROPOSAL TWO
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has selected Deloitte & Touche, independent
auditors, to audit the financial statements of the Company for the year ending
December 31, 1997. In the event of a negative vote on such ratification, the
Board of Directors will reconsider its selection.
Representatives of Deloitte are expected to be present at the meeting with
the opportunity to make a statement if they desire to do so, and are expected to
be available to respond to appropriate questions from stockholders.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" RATIFICATION
OF DELOITTE & TOUCHE AS THE COMPANY'S INDEPENDENT AUDITORS.
PROPOSAL THREE
AMENDMENTS TO THE HANSEN NATURAL CORPORATION
STOCK OPTION PLAN
The Executive Committee of the Board of Directors has adopted certain
amendments to the Plan, subject to approval by the stockholders of the Company
at the Annual Meeting of Stockholders, pursuant to which the Plan would be
amended to (i) increase the number of shares of Common Stock that may be issued
under the Plan from 1,500,000 to 2,000,000 and (ii) limit to 500,000 over a
60-month period the number of shares of Common Stock for which options may be
awarded or issued to any individual participant in the Plan that is an officer
of the Company. The amendments, if approved by the stockholders, would be
effective as of February 21, 1997, the date such amendments were adopted by the
Executive Committee.
The purpose of increasing the number of shares that may be issued pursuant
to options granted under the Plan from 1,500,000 (approximately 16.4% of the
currently issued shares) to 2,000,000 (approximately 21.9% of the currently
issued shares) is to permit the grant of a greater number of stock options to
the employees of the Company. Management of the Company believes that awards of
stock options are an essential ingredient of compensation for key employees.
The purpose of limiting the number of shares that may be issued to officers
of the Company is to enable income attributable to such options to qualify as
performance-based compensation. As such, it will be deductible by the Company
since it will be exempt from the $1 million limitation on deduction of executive
compensation under Section 162(m) of the Internal Revenue Code of 1986, as
amended. In order to qualify for the exception, no options will be granted to
any officer unless these proposed amendments are approved by the stockholders.
To the extent consistent with the compensation goals of the Company, the
Compensation Committee believes that compensation to its officers should be
structured to permit deduction of such compensation by the Company.
A copy of the resolutions to be voted upon for adoption by the stockholders
and the proposed amendments to the Plan are set forth in Appendix A to this
proxy statement.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" APPROVAL OF
THE AMENDMENTS TO THE HANSEN NATURAL CORPORATION STOCK OPTION PLAN.
MANAGEMENT
BOARD MEETINGS AND COMMITTEES
The Board of Directors of the Company held two meetings during the period
January 1, 1996 to December 31, 1996. Each of the then incumbent directors
attended such meetings, other than Raimana Martin, who did not attend either
meeting in person but was available telephonically; and Norman Epstein, who did
not attend one of the meetings, but was available telephonically.
In April 1991, the Board of Directors established a Compensation Committee
consisting of non-employee directors to administer the Plan. Following the
resignation of Benjamin M. Polk in September 1997, the Compensation Committee
presently has one member, Norman C. Epstein. The Compensation Committee did not
hold a meeting during the year ended December 31, 1996. Awards granted to date
by the Committee have been authorized by written consent.
In October 1992, the Board of Directors established an Executive Committee
comprised of Rodney C. Sacks, Hilton H. Schlosberg and Harold C. Taber, Jr.
Following the resignation of Mr. Taber in June 1997, the Executive Committee
presently has two members. The Executive Committee did not hold any meetings
during the year ended December 31, 1996. Decisions made by the Executive
Committee during the year ended December 31, 1996 were authorized by written
consent.
On September 10, 1997, the Board of Directors established an Audit
Committee consisting of Hilton H.Schlosberg and two independent directors,
Norman C. Epstein (Chairman) and Benjamin M. Polk.
EMPLOYMENT AGREEMENTS
The Company entered into an employment agreement dated as of January 1,
1994 with Rodney C. Sacks pursuant to which Mr. Sacks renders services to the
Company as its Chairman and Chief Executive Officer for an annual base salary of
$170,000, subject to adjustment annually, plus an annual bonus in an amount
determined at the discretion of the Board of Directors and certain fringe
benefits for the period commencing January 1, 1994 and ending December 31, 1998.
For 1995, Mr. Sacks agreed to a temporary reduction of his annual base salary to
$150,000. Beginning January 1, 1996, Mr. Sacks agreed to a temporary reduction
of his annual base salary to $135,000.
The Company also entered into an employment agreement dated as of January
1, 1994 with Hilton H. Schlosberg pursuant to which Mr. Schlosberg renders
services to the Company as its Vice Chairman and President, for an annual base
salary of $170,000 starting when he commenced full-time employment, subject to
adjustment annually, plus an annual bonus in an amount to be determined by the
Board of Directors and certain fringe benefits for the period commencing January
1, 1994 and ending December 31, 1998. From commencement of full-time employment
during July 1995, Mr. Schlosberg agreed to a temporary reduction of his annual
base salary to $150,000. Beginning January 1, 1996, Mr. Schlosberg agreed to a
temporary reduction of his annual base salary to $127,500.
Effective June 30, 1997, Mr. Taber terminated his employment with HBC and
simultaneously resigned as President and Chief Executive Officer of HBC and from
the Executive Committee of the Company. In connection with his resignation, Mr.
Taber entered into a Severance and Consulting Agreement dated as of June 20,
1997 (the "Consulting Agreement") with the Company for a term of two years,
which provides for monthly consulting fees of $5,000, payable in arrears,
commencing July 1, 1997. In addition, in connection with Mr. Taber's Consulting
Agreement, the Stock Option Agreement dated as of June 30, 1995 between the
Company and Mr. Taber was cancelled and replaced with a new Stock Option
Agreement dated as of June 20, 1997 (the "Replacement Stock Option Agreement")
between the parties. Under the terms of this agreement, Mr. Taber was granted
options to purchase 100,000 shares of common stock exercisable until June 30,
1999 at $1.38 per share.
In addition, under the terms of the Consulting Agreement, Taber's
employment agreement was terminated effective June 30, 1997, other than with
respect to certain restrictive covenants, and Taber agreed to repay amounts owed
by him to HBC under a certain promissory note by offsetting amounts owed under
the note against accrued and unpaid base pay payable under Taber's employment
agreement and amounts payable under the Consulting Agreement. See "Certain
Relationships and Related Transactions."
The preceding descriptions of the employment agreements for Messrs. Sacks
and Schlosberg are qualified in their entirety by reference to such agreements
which have been filed or incorporated by reference as exhibits to the Company's
annual report on Form 10-K for the year ended December 31, 1993. The Company
intends to file the Consulting Agreement and the Replacement Stock Option
Agreement as exhibits to its quarterly report on Form 10-Q for the period ending
September 30, 1997.
EXECUTIVE COMPENSATION
The following tables set forth for the fiscal year ended December 31, 1996,
certain information regarding the total remuneration paid and grants of
options/SARs made to the chief executive officer and each of the executive
officers of the Company and its subsidiaries and who received total cash
compensation in excess of $100,000 during the period. These amounts reflect
total cash compensation paid by the Company and its subsidiaries to these
individuals during the fiscal years December 31, 1994 through 1996.
SUMMARY COMPENSATION TABLE
--------------------------------
Long-Term Compensation
Annual Compensation (1) Awards (2) Payouts (3)
- -----------------------------------------------------------------------------------------------------------------------
Other Securities
Annual Underlying All Other
Name and Salary Compensation Options/SARs Compensation
Principal Positions Year ($) ($) (#) ($)
- -----------------------------------------------------------------------------------------------------------------------
Rodney C. Sacks
Chairman, CEO and Director 1996 135,000 10,293 -- --
1995 150,000 9,665 150,000 --
1994 160,000 8,350 -- --
Hilton H. Schlosberg 1996 127,500 5,358 -- --
Vice-Chairman, President, 1995 82,500 2,594 150,000 --
CFO and Secretary
Harold C. Taber, Jr. 1996 165,000 19,299 -- 4,864
Director; President of HBC 1995 200,000 18,668 -- 4,194
1994 200,000 20,424 -- 4,000
James A. Vangelos 1996 105,000 6,735 -- --
Senior Vice-President of
Sales of HBC
(1) SALARY - Pursuant to his employment agreement, Mr. Sacks is entitled to an
annual base salary of $170,000. For 1996, Mr. Sacks agreed to a temporary
reduction of his annual base salary to $135,000. For 1995, Mr. Sacks agreed to a
temporary reduction of his annual base salary to $150,000. For 1994, Mr. Sacks
agreed to a temporary reduction of his annual base salary to $160,000.
Pursuant to his employment agreement, Mr. Schlosberg is entitled to an annual
base salary of $170,000 starting when he commenced full-time employment, during
July 1995. For 1996, Mr. Schlosberg agreed to a temporary reduction of his
annual base salary to $127,500. For 1995, Mr. Schlosberg agreed to a temporary
reduction of his annual base salary to $150,000.
Pursuant to his employment agreement, Mr. Taber is entitled to an annual base
salary of $170,000 and the payment of $30,000 per annum in lieu of a retirement
plan. For 1996, Mr. Taber agreed to a temporary reduction of his annual base
salary to $135,000. See "Employment Agreements" above.
OTHER ANNUAL COMPENSATION - The cash value of perquisites of the named persons
did not total $50,000 or 10% of payments of salary and bonus, except for Mr.
Taber for the years 1994 and 1996. Mr. Taber's perquisites include $11,606 for
automobile related expenses, $3,934 for health insurance covering dependents and
$3,759 for disability insurance during 1996; $12,668 for automobile related
expenses, $2,444 for health insurance covering dependents and $3,556 for
disability insurance during 1995; and $11,687 for automobile related expenses,
$5,325 for health insurance covering dependents and $3,412 for disability
insurance during 1994.
BONUS - None paid.
(2) RESTRICTED STOCK AWARDS - The Company does not have a plan for restricted
stock awards.
(3) LTIP PAYOUTS - None paid. No plan in place.
ALL OTHER COMPENSATION - Includes amounts paid by the Company for premiums on a
life insurance policy insuring Mr.Taber.
OPTION/SAR EXERCISES AND FY-END VALUE TABLE (1)
---------------------------------------------------
Underlying Year-end Value
Unexercised of In-the-money
Options/SARs Unexercised
(# of shares) Options/SARs
Exercisable/ Exercisable/
Name Unexercisable Unexercisable
- -------------------------------- --------------------------- ----------------
Rodney C. Sacks 275,000/75,000 (2) $0/$0
Hilton H. Schlosberg 225,000/75,000 (3) $0/$0
Harold C. Taber, Jr. 220,478/35,072 (4) $0/$0
James A. Vangelos 15,000/60,000 (5) $0/$0
OPTION/SAR GRANTS FOR THE YEAR ENDED DECEMBER 31, 1996
----------------------------------------------------------
Potential Realizable Value at
Individual Grants Assumed Annual Rates of Stock
Price Appreciation For Option
Term
- ------------------------------------------------------------------------------------------------------------------------------
Percent of
Number of Total
Securities Options/SARs
underlying Granted to
options/SARs Employees in Exercise is Expiration
Name Granted (#) 1996 Base Price Date 5% 10%
- ------------------------------------------------------------------------------------------------------------------------------
None -- -- -- -- -- --
(1) There were no shares acquired upon exercise by any reporting executive
officer in 1996.
(2) Includes options to purchase 200,000 shares of Common Stock exercisable at
$1.75 per share granted pursuant to a Stock Option Agreement dated June 15, 1992
between the Company and Mr. Sacks and options to purchase 150,000 shares of
Common Stock at $1.25 per share, of which 75,000 shares are exercisable at
December 31, 1996, granted pursuant to a Stock Option Agreement dated July 3,
1995 between the Company and Mr. Sacks.
(3) Includes options to purchase 150,000 shares of Common Stock exercisable at
$1.75 per share granted pursuant to a Stock Option Agreement dated June 15, 1992
between the Company and Mr. Schlosberg and options to purchase 150,000 shares of
Common Stock exercisable at $1.25 per share, of which 75,000 shares are
exercisable at December 31, 1996, granted pursuant to a Stock Option Agreement
dated July 3, 1995 between the Company and Mr.
Schlosberg.
(4) Includes options to purchase 75,550 shares of Common Stock exercisable at
$3.88 per share pursuant to a Stock Option agreement dated July 27, 1992 (such
number of options are subject to decrease and such exercise price is subject to
increase pursuant to its terms, and which options expire on July 27, 1997), and
options to purchase 180,000 shares of Common Stock exercisable at $1.38 per
share, of which 144,928 shares are exercisable at December 31, 1996, granted
pursuant to separate Stock Option Agreements dated July 27, 1992 and as of June
30, 1995, respectively, between the Company and Mr. Taber.
(5) Includes options to purchase 75,000 shares of Common Stock exercisable at
$1.13 per share, of which 15,000 shares are exercisable at December 31, 1996,
granted pursuant to a Stock Option Agreement dated October 16, 1995 between the
Company and Mr. Vangelos.
PERFORMANCE GRAPH
The following graph shows a five-year comparison of cumulative total returns.(6)
[GRAPHIC OMITTED]
TOTAL SHAREHOLDER RETURNS - DIVIDENDS REINVESTED
----------------------------------------------------
ANNUAL RETURN PERCENTAGE
Years Ending
---------------------------------------------------------------------------
COMPANY NAME/INDEX DEC 92 DEC 93 DEC 94 DEC 95 DEC 96
- ------------------------------- -------------- -------------- --------------- -------------- --------------
HANSEN NATURAL CORP 97.20 (40.84) (28.57) (63.36) 54.59
S & P SMALLCAP 600 INDEX 21.04 18.79 (4.77) 29.96 21.32
PEER GROUP (28.23) (38.34) (42.92) (13.16) 151.46
INDEXED RETURNS
Years Ending
------------------------------------------------------------------------------
COMPANY NAME/INDEX DEC 91 DEC 92 DEC 93 DEC 94 DEC 95 DEC 96
- ------------------------------- ------------ ------------ ------------- ------------ ------------ ------------
HANSEN NATURAL CORP 100.00 197.20 116.67 83.33 30.53 47.20
S & P SMALLCAP 600 INDEX 100.00 121.04 143.78 136.92 177.94 215.88
PEER GROUP 100.00 71.77 44.25 25.26 21.94 55.16
(6) Annual return assumes reinvestment of dividends. Cumulative total return
assumes an initial investment of $100 on December 31, 1991. The Company's
self-selected peer group is comprised of Atlantic Beverage Company, Inc. (which
began trading in November 1993); Great Pines Water, Inc. (which began trading in
August 1993); Bev-Tyme, Inc. (formerly New Day Beverage, Inc.) (which began
trading in February 1993); Saratoga Beverage Group (which began trading in June
1993); National Beverage Corporation (which began trading in September 1991).
Cable Car Beverage Corporation and Clearly Canadian Beverage Company, which are
also members of the peer group, traded during the entire five-year period.
COMPENSATION OF DIRECTORS
The Company's current policy is to pay outside directors (non-executive
officers) who are not contractually entitled to be nominated to serve as
directors, annual fees of $6,000 plus $500 for each meeting attended of the
Board of Directors or any committee thereof. Benjamin Polk and Norman Epstein
received total directors fees of $7,000 and $6,500 respectively, for the
one-year period ended December 31, 1996. See "Certain Relationships and Related
Transactions" below for description of contractual obligations to nominate
certain of the outside directors. Under the terms of his Consulting Agreement,
Harold C. Taber, Jr. will not receive any additional compensation for serving as
a director of the Company.
COMPANY STOCK OPTION PLAN
Pursuant to the Plan, Messrs. Sacks and Schlosberg have been granted
options to purchase 200,000 and 150,000 shares of Common Stock, respectively,
each of which vest in increments of 50,000 on the date of grant and annually
beginning January 1, 1993, pursuant to individual stock option agreements each
dated June 15, 1992 exercisable for a ten-year period at an exercise price of
$1.75 per share.
In addition, pursuant to the Plan, Messrs. Sacks and Schlosberg have each
been granted options to purchase 150,000 shares of Common Stock, each of which
vest in increments of 75,000 on January 1, 1996 and the balance of 75,000 on
January 1, 1997, pursuant to individual stock option agreements each dated July
3, 1995 exercisable for a ten-year period at an exercise price of $1.25 per
share.
OUTSIDE DIRECTORS STOCK OPTION PLAN
Messrs. Polk and Epstein have each been granted options to purchase 12,000
shares of common stock, under an option plan that the Company has for its
outside directors (the "Directors Plan"), pursuant to individual stock option
agreements, each dated as of June 30, 1995, exercisable for a ten year period at
an exercise price of $1.38 per share.
OTHER OPTION GRANTS
As discussed above, effective June 20, 1997, Taber's existing stock option
agreement with the Company was cancelled and Taber was granted options to
purchase 100,000 shares of Common Stock exercisable until June 30, 1999 at $1.38
per share, pursuant to the Replacement Stock Option Agreement. These options
were not granted under the Plan or the Directors Plan.
No options have been exercised in 1997 through October 10, 1997.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The description of the agreements and relationships set forth below is
qualified by reference to the specific terms of such agreements and the
description of such relationships set forth in reports and registration
statements and exhibits thereto filed or to be filed by the Company with the SEC
under the 34 Act and the Securities Act of 1933, including any post-effective
amendments to the Company's registration statement on Form S-3 (No. 33-35796).
Copies of any such reports and registration statement or exhibits thereto will
be provided upon written request directed to the Chairman, Hansen Natural
Corporation, 2401 East Katella Avenue, Suite 650, Anaheim, California 92806 and
payment of a fee in the amount of the Company's reasonable expenses in
furnishing such documents.
Pursuant to the terms of a certain Assignment Agreement dated July 27, 1992
between Hansen Juices, Inc. ("HJI") and HBC, the Company has agreed to nominate
and solicit proxies for the election to the Company's Board of Directors of one
of the trustees designated by the trustees of a certain trust (the "Trust")
formed pursuant to an Agreement of Trust dated July 27, 1992 for so long as the
Trust shall be in existence for the benefit of HBC and HJI. The initial designee
of the Trust nominated to the Board was Anthony F. Kane, who resigned as a
director on June 21, 1993 due to personal time constraints. No other candidate
has subsequently been designated by the Trust.
On September 15, 1992, $75,000 was loaned by the Company to Mr. Taber.
As of September 30, 1997, Mr. Taber owed the Company a total of $59,227 of
principal and interest with respect to such loan.
Benjamin M. Polk is a partner of Whitman Breed Abbott & Morgan, a law firm
retained by the Company since 1992 and in the current fiscal year.
OTHER MATTERS
The Company knows of no other matters to be submitted to the meeting. If
any other matters properly come before the meeting, it is the intention of the
persons named in the enclosed proxy to vote the shares they represent as the
Board of Directors may recommend.
It is important that your shares be represented at the meeting, regardless
of the number of shares which you hold. You are, therefore, urged to execute and
return, at your earliest convenience, the accompanying proxy card in the
stamped, self-addressed envelope which has been enclosed.
BY ORDER OF THE BOARD OF DIRECTORS
Dated: October 14, 1997
APPENDIX A
Resolution Proposed for Adoption by Stockholders in connection with the
Amendment of the Hansen Natural Corporation Stock Option Plan.
RESOLVED, that the Hansen Natural Corporation Stock Option
Plan (the "Plan") be and it hereby is amended and restated to provide
that (i) the number of shares of Common Stock issuable upon exercise of
options granted under the Plan shall be increased from 1,500,000 to
2,000,000 and (ii) the number of shares of Common Stock that (x) may be
awarded under the Plan or (y) may be issued pursuant to the grant of an
option under the Plan to any officer of the Company during any 60-month
period shall not exceed 500,000;
and be it
FURTHER RESOLVED, that the Company take such action as
necessary or appropriate to give effect to the intent and purpose of
the foregoing resolution.
Proposed Amendments to Hansen Natural Corporation Stock Option Plan.
1. Amending the first sentence of Section 3 of the Plan:
3. Shares Subject to the Plan
The aggregate number of shares of Stock which may be awarded
under the Plan or subject to purchase by exercising Options is
2,000,000 shares.
2. Adding a new paragraph (m) to the end of Section 4 of the Plan:
(m) No officer of the Corporation may be (x) awarded shares of
Stock or (y) granted Options during any consecutive 60-month period for
more than 500,000 shares of Stock (subject to adjustment pursuant to
Section 10).
PROXY SOLICITED BY THE BOARD OF DIRECTORS OF
HANSEN NATURAL CORPORATION
FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON NOVEMBER 14, 1997
The undersigned hereby appoints Rodney C. Sacks and Hilton H. Schlosberg,
or either of them, with full power of substitution as proxyholders to represent
and to vote, as designated on the reverse hereof, the common stock of the
undersigned at the Annual Meeting of Stockholders of the Company to be held on
November 14, 1997, and any adjournment thereof.
(Continued and to be signed on reverse side)
Please mark your
/X/ votes as in this
example.
The Board of Directors Recommends a Vote "For" All Proposals
FOR all nominees WITHHOLD
listed at right AUTHORITY to
(except as vote for all nominees
instructed below) listed at right
1. To elect five Directors / / / /
Nominees: Rodney C. Sacks
Hilton H. Schlosberg
Benjamin M. Polk
Norman C. Epstein
Harold C. Taber, Jr.
INSTRUCTION: To withhold authority to vote for any
individual nominee, strike through the name of the
nominee(s) for whom authority is withheld.
FOR AGAINST ABSTAIN
2. To ratify the appointment of
Deloitte & Touche as independent / / / / / /
auditors.
FOR AGAINST ABSTAIN
3. To approve and adopt the amendments
to the Hansen Natural Corporation / / / / / /
Stock Option Plan.
The shares represented in this proxy card will be voted as directed above.
IF NO DIRECTION IS GIVEN AND THE PROXY CARD IS VALIDLY EXECUTED, THE SHARES
WILL BE VOTED FOR ALL LISTED PROPOSALS. IN THEIR DISCRETION, THE
PROXYHOLDERS ARE AUTHORIZED TO VOTE UPON SUCH OTHER BUSINESS AS MAY
PROPERLY COME BEFORE THE MEETING.
PLEASE MARK, SIGN, DATE AND RETURN IMMEDIATELY.
SIGNATURE______________________________ DATE_____________________
TITLE
SIGNATURE______________________________ DATE_____________________
TITLE
Important: Sign Exactly as your name appears above hereof. Give full title
of executor, administrator, trustee, guardian, etc. Joint owners should
each sign personally.
