<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
AMENDMENT NO. 2 TO FORM 10-K
FOR ANNUAL AND TRANSITIONAL REPORTS
PURSUANT TO SECTIONS 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the Fiscal Year Ended December 31, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission File Number 0-21003
TWINLAB CORPORATION
(Exact name of Registrant as specified in its certificate of incorporation)
Delaware 11-3317986
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
150 Motor Parkway
Hauppauge, New York 11788
(Address of principal executive offices) (Zip Code)
(516) 467-3140
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act: NONE
Securities registered pursuant to Section 12(g) of the Act: Common Stock, $1.00
par value
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes |X| No |_|
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
The aggregate market value of shares of Common Stock of the registrant held by
non-affiliates based on the closing sale price of the Common Stock on April 27,
1998 as reported on the Nasdaq National Market was $687,801,750.
As of April 27, 1998, the registrant had 31,551,049 shares of Common Stock
outstanding.
Documents Incorporated by Reference: None.
<PAGE> 2
TWINLAB CORPORATION
FORM 10-K/A
INDEX
Page
----
PART III
Item 10. Directors and Executive Officers of the Registrant.................3
Item 11. Executive Compensation.............................................8
Item 12. Security Ownership of Certain Beneficial Owners and Management....14
Item 13. Certain Relationships and Related Transactions....................16
Signatures
2
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Amendment No. 2
to the Form 10-K filed by
Twinlab Corporation on March 20, 1998
The following Items were omitted from the Form 10-K filed by Twinlab
Corporation on March 20, 1998, and such Form 10-K is hereby amended to include
Part III as hereinafter set forth.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
INFORMATION CONCERNING DIRECTORS AND EXECUTIVE OFFICERS
The following table provides certain information as of March 31,
1998 about each of the Company's directors and executive officers. Brian
Blechman, Dean Blechman, Neil Blechman, Ross Blechman and Steve Blechman (the
"Blechman Brothers") are brothers.
<TABLE>
<CAPTION>
Positions with Director
Name Age the Company Since
- ---- --- ----------- -----
<S> <C> <C> <C>
Ross Blechman(1) 44 Chairman of the Board, Chief 1996
Executive Officer, President and
Director
Brian Blechman(2) 47 Executive Vice President, Treasurer 1996
and Director
Dean Blechman 40 Executive Vice President and 1996
Director
Neil Blechman 47 Executive Vice President, Secretary 1996
and Director
Steve Blechman 44 Executive Vice President and 1996
Director; Chairman of the Board,
Chief Executive Officer, Director
and President of Advanced
Research Press
John McCusker 58 Chief Financial Officer 1997
</TABLE>
3
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<TABLE>
<S> <C> <C> <C>
Stephen L. Welling 43 President of Nature's Herbs 1997
Division of Twin and Director
John G. Danhakl(1)(2) 41 Director 1996
Jennifer Holden
Dunbar(1)(2) 35 Director 1996
Jonathan D. Sokoloff(1) 40 Director 1996
</TABLE>
- ----------
(1) Member of the Compensation Committee.
(2) Member of the Audit Committee.
The business experience, principal occupation, employment and
certain other information concerning each director and executive officer is set
forth below.
Ross Blechman became Chairman of the Board, Chief Executive Officer,
President and Director of the Company on May 7, 1996. Mr. Blechman joined Twin
Laboratories, Inc. in 1974 and served as Vice President, Operations of the
Company prior to May 7, 1996. Mr. Blechman is Chairman of the Board, President,
Chief Executive Officer and Director of Twin, an Executive Vice President and
Director of ARP and a Vice President and Director of Changes International.
Brian Blechman became an Executive Vice President, Treasurer and
Director of the Company on May 7, 1996. Mr. Blechman joined Twin Laboratories,
Inc. in 1972 and served as Vice President, Purchasing & Quality Control of the
Company prior to May 7, 1996. He is responsible for purchasing, plant
operations, quality control and management. Mr. Blechman is an Executive Vice
President and Director of Twin and ARP, and a Vice President, Treasurer and a
Director of Changes International.
Dean Blechman became an Executive Vice President and Director of the
Company on May 7, 1996. Mr. Blechman joined Twin Laboratories, Inc. in 1979 and
served as Vice President, Sales of the Company prior to May 7, 1996. He is
responsible for sales and distribution. Mr. Blechman is an Executive Vice
President and Director of Twin and ARP and a Vice President and Director of
Changes International.
Neil Blechman became an Executive Vice President, Secretary and
Director of the Company on May 7, 1996. Mr. Blechman joined Twin Laboratories,
Inc. in 1972 and served as Vice President, Marketing & Advertising of the
Company prior to May 7, 1996. He is responsible for marketing and advertising
activities, promotional programs, merchandising strategies, packaging, trade
shows and public relations. Mr. Blechman is an Executive Vice President and
Director of Twin and ARP and a Vice President, Secretary and a Director of
Changes International.
Steve Blechman became an Executive Vice President and Director of
the Company and Chairman of the Board, Chief Executive Officer, Director and
President of
4
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ARP on May 7, 1996. Mr. Blechman joined Twin Laboratories, Inc. in 1974 and
served as Vice President, Product Development & Marketing of the Company prior
to May 7, 1996. He is involved in marketing, product development, customer
service, public relations and the operations of ARP. Mr. Blechman is an
Executive Vice President and Director of Twin and a Vice President and Director
of Changes International.
Stephen L. Welling became the President of Nature's Herbs division
of Twin on May 7, 1996, and was elected to the Board of Directors of the Company
on September 16, 1997. Mr. Welling joined Natur-Pharma Inc. in 1977 as the
controller and served as President of Natur-Pharma Inc. prior to May 7, 1996.
Prior to his promotion to President, Mr. Welling served as Vice President of
Operations of Natur-Pharma Inc. with responsibility for manufacturing,
personnel, quality management, legal affairs and finance. Mr. Welling is on the
board of directors of the National Nutritional Foods Association, a leading
trade organization of the industry's retailers, distributors, suppliers and
manufacturers.
John G. Danhakl became a director of the Company on May 7, 1996. He
has been an executive officer and an equity owner of Leonard Green & Partners,
L.P. ("LGP"), a merchant banking firm which manages Green Equity Investors II,
L.P. ("GEI"), since 1995. Mr. Danhakl had previously been a Managing Director at
Donaldson, Lufkin & Jenrette Securities Corporation ("DLJ") and had been with
DLJ since 1990. Prior to joining DLJ, Mr. Danhakl was a Vice President at Drexel
Burnham Lambert Incorporated ("Drexel"). Mr. Danhakl is also a director of Big 5
Corp., Communications & Power Industries, Inc., Leslie's Poolmart, Inc.,
Hechinger Company, The Arden Group, Inc. and Liberty Group Publishing. Mr.
Danhakl also serves as a director of Twin and ARP.
Jennifer Holden Dunbar has been a director of the Company since its
formation in February, 1996. She joined Leonard Green & Associates, L.P.
("LGA"), a merchant banking firm, as an associate in 1989, became a principal in
1993, and through a corporation became a partner in 1994. Since 1994, Ms. Holden
Dunbar has also been an executive officer and equity owner of LGP. Ms. Holden
Dunbar previously was an associate with the merchant banking firm of Gibbons,
Green, van Amerongen and a financial analyst in mergers and acquisitions with
Morgan Stanley & Co. Ms. Holden Dunbar is also a director of Gart Sports
Company. Ms. Holden Dunbar also serves as a director of Twin and ARP.
Jonathan D. Sokoloff became a director of the Company on May 7,
1996. He has been a partner of LGA since 1990 and has been an executive officer
and equity owner of LGP since its formation in 1994. Mr. Sokoloff had previously
been a Managing Director at Drexel. Mr. Sokoloff is a director of Carr-Gottstein
Foods Co., Gart Sports Company and Hechinger Company. Mr. Sokoloff also serves
as a Director of Twin and ARP.
5
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Committees and Meetings of the Board of Directors
The Board of Directors of the Company has an Audit Committee and a
Compensation Committee. In 1997, the Board of Directors met four times and acted
by unanimous written consent on three occasions, the Compensation Committee met
one time and the Audit Committee met one time.
The Audit Committee reviews the adequacy of internal controls, the
results and scope of annual audits and other services provided by the Company's
independent auditors. In 1997, the Audit Committee was comprised of Brian
Blechman, John Danhakl and Jennifer Holden Dunbar.
The Compensation Committee establishes salaries, bonuses and other
forms of compensation for executives of the Company and such other employees of
the Company as assigned thereto by the Board. In 1997, the Compensation
Committee was comprised of Ross Blechman, John G. Danhakl, Jennifer Holden
Dunbar and Jonathan D. Sokoloff.
The Company does not have a nominating committee. The functions
customarily performed by a nominating committee are performed by the Board of
Directors as a whole. Any stockholder who wishes to make a nomination at an
annual or special meeting for the election of directors must do so in compliance
with the applicable procedures set forth in the Company's By-laws. The Company
will furnish copies of such By-law provisions upon written request to the
General Counsel's Office at the Company's principal executive offices, 150 Motor
Parkway, Hauppauge, New York 11788.
During the period in which each person served as a director, each
director attended at least 75% of the aggregate number of meetings of the Board
of Directors and the committees of the Board on which such person served.
Director Compensation
Directors who are employees of the Company receive no compensation
for serving on the Board of Directors. Non-employee directors are reimbursed for
their out-of-pocket expenses in attending Board meetings. See "Certain
Relationships and Related Transactions--Transactions with LGP" for a description
of the Management Services Agreement that existed between LGP, the Company and
Twin.
Compensation Committee Interlocks and Insider Participation
The Company's Compensation Committee consists of Ross Blechman, John
Danhakl, Jennifer Holden Dunbar and Jonathan Sokoloff. In addition to being a
director and executive officer of the Company, Mr. Blechman is also Chairman of
the Board, President, Chief Executive Officer and Director of Twin, an Executive
Vice President and Director of ARP and a Vice President and Director of Changes
International. Messrs. Sokoloff and
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Danhakl and Ms. Holden Dunbar are also directors of Twin and ARP. See "Certain
Relationships and Related Transactions" for a description of certain
transactions involving the Company and the members of the Compensation Committee
or entities controlled by such individuals.
Compliance with Section 16(a) of the Securities Exchange Act of 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Company's directors and executive officers and persons who
beneficially own more than ten percent of the Company's Common Stock to report
their ownership of and transactions in the Company's Common Stock to the
Securities and Exchange Commission (the "Commission") and the Nasdaq National
Stock Market. Copies of these reports are also required to be supplied to the
Company. The Company believes, based solely on a review of the copies of such
reports received by the Company, that during 1997 all applicable Section 16(a)
reporting requirements were complied with, except for the late filing of a
report on Form 3 for each of Stephen L. Welling and John McCusker.
7
<PAGE> 8
ITEM 11. EXECUTIVE COMPENSATION
Summary Compensation Table. The following table sets forth
compensation earned, whether paid or deferred, by the Company's Chief Executive
Officer and its other four most highly compensated executive officers
(collectively, the "Named Executive Officers") for services rendered in all
capacities to the Company during the years ended December 31, 1995, 1996 and
1997. Prior to May 7, 1996, the Blechman Brothers collectively acted in a
similar capacity to a Chief Executive Officer.
<TABLE>
<CAPTION>
Annual Compensation
-------------------------------------------------
All Other Annual All Other
Name and Principal Occupation Year Salary ($) Bonus ($)(a) Compensation ($)(b) Compensation ($)(c)
- ----------------------------- ---- ---------- ------------ ------------------- -------------------
<S> <C> <C> <C> <C> <C>
Ross Blechman
Chairman of the Board,
President and Chief
Executive Officer 1997 412,869 224,680 32,693 1,365
1996 403,077 324,950 18,650 1,365
1995 402,461 368,145 18,477 1,365
Brian Blechman
Executive Vice President
and Treasurer 1997 412,869 224,680 24,102 1,660
1996 403,077 324,950 19,607 1,660
1995 401,523 368,145 14,944 1,660
Dean Blechman
Executive Vice President 1997 412,869 224,680 23,746 1,073
1996 403,077 324,950 26,531 1,073
1995 402,545 368,145 25,285 1,073
Neil Blechman
Executive Vice President
and Secretary 1997 412,869 224,680 28,520 1,660
1996 403,077 324,950 23,294 1,660
1995 402,545 368,145 18,458 1,660
Steve Blechman
Executive Vice President 1997 412,869 224,680 25,784 1,365
1996 403,077 324,950 28,653 1,365
1995 402,548 368,145 22,132 1,365
</TABLE>
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(a) A description of the Company's bonus arrangements is contained below under
"--Employment Agreements."
(b) For fiscal year 1995, includes (i) payment of premiums for executive
medical insurance policies; (ii) payments under TLI's Profit Sharing Plan;
(iii) automobile allowances; and (iv) payment of premiums for TLI's
cafeteria benefits program, for each of the Blechman Brothers. For fiscal
year 1996, includes (i) payment of premiums for executive medical
insurance policies; (ii) matching contributions under Twin's 401(k) plan;
(iii) automobile allowances; and (iv) payment of premiums for TLI's
cafeteria benefits program and Twin's successor cafeteria benefits
program, for each of the Blechman Brothers. For fiscal year 1997, includes
(i) payment of premiums for executive medical insurance policies; (ii)
matching contributions under Twin's 401(k) plan; (iii) automobile
allowances; and (iv) payment of premiums for Twin's cafeteria benefits
program and Twin's successor cafeteria benefits program, for each of the
Blechman Brothers.
(c) For fiscal years 1995, 1996 and 1997, represents the payment of premiums
for term life insurance policies for each of the Blechman Brothers.
Director Compensation
Directors who are employees of the Company receive no compensation for
serving on the Board of Directors. Non-employee directors are reimbursed for
their out-of-pocket expenses in attending Board meetings. See "Certain
Relationships and Related Transactions--Transactions with LGP" for a description
of the Management Services Agreement between LGP, the Company and Twin.
Employment Agreements
On May 7, 1996, Twin entered into employment agreements with each of the
Blechman Brothers (each an "Employment Agreement"). Pursuant to the terms of the
Employment Agreement, the relevant individual will be employed as an executive
of the Company, Twin and ARP until November 15, 1999, renewable for terms of one
year thereafter. The Employment Agreement provides for a base salary of $400,000
(as adjusted annually for inflation), in addition to other customary perquisites
and benefits. In addition to receiving a base salary, the executive is also
eligible to participate in Twin's Bonus Plan, which entitles such individual to
a bonus payment of up to 128% of his base salary for the relevant calendar year
based on annual increases in EBITDA (as defined therein) realized by the Company
for each year of the employment term. The Employment Agreement also provides,
subject to certain exceptions, that upon a termination of the individual's
employment during the term thereof (other than for "cause" as defined therein),
Twin is generally obligated to pay the individual an amount equal to his base
salary for the remaining term under the Employment Agreement (which, for this
purpose, will be a three year period).
On May 7, 1996, Twin entered into an employment agreement with Stephen
Welling to serve as President of Nature's Herbs Division of Twin (the
"Division") (as amended, the "Welling Employment Agreement"). The Welling
Employment Agreement provides that Mr. Welling will be employed as an executive
of the Company for a term of three years, renewable for terms of one year
thereafter. The Welling Employment Agreement provides for a base salary of
$200,000 (as adjusted annually for inflation), in addition to other customary
perquisites and benefits. In addition to receiving a base salary, Mr. Welling is
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also eligible to participate in the Division Bonus Plan, which entitles him to a
bonus payment of up to 202.5% of his base salary for the relevant calendar year
based on annual increases in EBITDA (as defined therein) realized by the
Division for each year of the employment term. The Welling Employment Agreement
also provides, subject to certain exceptions, that upon a termination of Mr.
Welling's employment during the term thereof (other than for "cause" as defined
therein), Twin is generally obligated to pay Mr. Welling an amount equal to his
base salary for the remaining term under the Welling Employment Agreement.
On May 7, 1996, Twin entered into consulting agreements with each of David
and Jean Blechman, the parents of the Blechman Brothers and the founders of TLI
(together, the "Consultants") (each a "Consulting Agreement"). The Consulting
Agreement provides that the relevant individual be engaged as an independent
consultant to the Company, Twin and ARP for a term of five years. As
consideration for such consulting services, Twin is obligated to pay the
individual an annual consulting fee of $100,000, in addition to certain limited
perquisites and benefits.
The Company and Twin entered into non-competition agreements with each of
the Senior Executive Officers and the Consultants (each a "Non-Competition
Agreement"). The term of the Non-Competition Agreement of each of the Blechman
Brothers and of each of the Consultants and Stephen Welling is five years and
three years, respectively. The Non-Competition Agreement generally prevents the
individual from participating in any manner in the management, operation and/or
ownership of any entity which is engaged in similar lines of business to those
of the Company.
Compensation Committee Interlocks and Insider Participation
The Company's Compensation Committee consists of Ross Blechman, Jonathan
Sokoloff, John Danhakl and Jennifer Holden Dunbar. In addition to being a
director and executive officer of the Company, Mr. Blechman is also Chairman of
the Board, President, Chief Executive Officer and Director of Twin and an
Executive Vice President and Director of ARP. Messrs. Sokoloff and Danhakl and
Ms. Holden Dunbar are also directors of Twin and ARP. See "Certain Relationships
and Related Transactions" for a description of certain transactions involving
the Company and the members of the Compensation Committee or entities controlled
by such individuals.
Report of the Compensation Committee of the Board of Directors on Executive
Compensation
The Compensation Committee was formed in November, 1996 and is composed of
Messrs. R. Blechman, Sokoloff, Danhakl and Ms. Holden Dunbar. The Compensation
Committee reviews and approves the compensation of executives of the Company and
such other employees of the Company as assigned thereto by the Board and makes
recommendations to the Board with respect to standards for setting compensation
levels. The
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Compensation Committee held its first meeting on March 20, 1997, and adopted the
Report on Executive Compensation set forth below.
The Company does not presently have a stock option committee. The
functions customarily performed by a stock option committee are performed by the
Board of Directors as a whole.
Report on Executive Compensation
The Company's executive compensation for fiscal 1997 consisted of two
primary components: base salary and bonus. The level of each executive officer's
base salary and bonus is established in such officer's employment agreement,
which agreements were entered into in May, 1996. See "--Employment Agreements."
The salary and bonus components of Company's executive compensation are
together designed to facilitate fulfillment of the following compensation
objectives: (i) retaining competent management; (ii) rewarding management for
the attainment of short and long term accomplishments; (iii) aligning the
interests of management with those of the Company's stockholders; and (iv)
relating executive compensation to the achievement of Company goals and the
Company's financial performance.
Base Salary. The base salary of each of the Senior Executive Officers in
fiscal 1997 was paid in accordance with the terms of their respective employment
agreements. Such base salary is subject to annual adjustment for inflation.
Bonuses. The Compensation Committee believes that the awarding of annual
bonuses provides an incentive and reward for short-term financial success and
long-term Company growth. The bonus component of the long-term employment
agreements of each of the Senior Executive Officers is intended to link
compensation in significant part to the Company's financial performance and the
attainment of Company goals. The bonus earned by each of the Senior Executive
Officers was calculated in accordance with a formula set forth in the relevant
officer's employment agreement and entitles such individual to a bonus
calculated as a percentage of base salary based on annual increases in EBITDA
realized by Twin or the Division, as applicable, for each fiscal year. See
"--Employment Agreements."
Stock Incentive Plan. The Twinlab Corporation 1996 Stock Incentive Plan
(the "1996 Plan"), which provides for the issuance of a total of up to 400,000
authorized and unissued shares of Common Stock as awards under the 1996 Plan in
the form of (i) incentive stock options, (ii) nonqualified stock options, (iii)
stock appreciation rights, (iv) restricted stock and (v) performance shares. No
individuals who are directors of the Company (including the Blechman Brothers)
are eligible to receive awards under the Plan. Prior to the consummation of the
Company's initial public offering in 1996 (the "IPO"), Stephen L. Welling was
awarded 8,000 nonqualified stock options under the Plan, such options having an
exercise price equal to $12.00, the IPO price. In 1997, certain key employees of
the Company, including John McCusker, were awarded an aggregate of 56,000
nonqualified stock options with a weighted average exercise price of $19.24 per
share. Such options
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become exercisable over five years from the date of grant at the rate of 20% of
the grant each year.
The Twinlab Corporation 1998 Stock Incentive Plan, if approved by the
Stockholders at the Annual Meeting, will also initially be administered by the
Board of Directors.
Profit Sharing Plan. Prior to July 1, 1996, Twin sponsored an employee
profit sharing and savings plan (the "Twin Plan") and Natur-Pharma Inc.
sponsored an Employee Savings and Investment Plan (the "NP Plan"), which covered
all of Twin's and Natur-Pharma Inc.'s eligible employees, respectively.
Executive officers of Twin and Natur-Pharma Inc. participated in the Twin Plan
and NP Plan, respectively, on the same terms as other employees. Effective July
1, 1996, the Twin Plan was amended and restated and merged with the NP Plan to
form the Twin Laboratories Inc. 401(k) Plan (the "401(k) Plan"). Eligible
employees, including executive officers of the Company and Twin, may contribute
up to 15 percent of their annual compensation to the 401(k) Plan, subject to
certain limitations, and Twin will match 50 percent of such contributions.
Compensation of the Chief Executive Officer. The compensation package of
Mr. Ross Blechman, the Company's President and Chief Executive Officer, like
that of the other Senior Executive Officers, primarily consists of base salary
and bonus components. The levels of base salary and bonus, as well as the
factors considered in determining such levels, are established by Mr. Blechman's
Employment Agreement and are identical to those of the other Blechman Brothers.
In 1997, Ross Blechman earned a base salary of $412,869 and a bonus of
$224,680. In addition, pursuant to his employment agreement, Mr. Blechman
receives certain other customary perquisites and benefits. As of April 27, 1998,
Ross Blechman beneficially owned 1,660,497 shares, or 5.3%, of the Company's
Common Stock. See "--Security Ownership of Certain Beneficial Owners and
Management."
Ross Blechman
John G. Danhakl
Jennifer Holden Dunbar
Jonathan D. Sokoloff
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STOCK PERFORMANCE GRAPH
The following graph depicts the cumulative total return on the Company's
common stock compared to the cumulative total return for the Nasdaq Composite -
U.S. and the Nasdaq Health Index. The graph assumes an investment of $100 on
November 15, 1996, when the Company's stock was first traded in a public market.
Reinvestment of dividends is assumed in all cases.
[The following table was depicted as a line graph in the printed material.]
<TABLE>
<CAPTION>
November 15, December 31, March 31, June 30, September 30, December 31,
1996 1996 1997 1997 1997 1997
--------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Twinlab
Corporation 100.00 101.04 112.50 200.00 170.83 206.25
Nasdaq
Health Index 100.00 102.79 95.97 107.12 116.55 104.75
Nasdaq
Composite - U.S. 100.00 102.52 96.87 114.74 134.16 125.84
</TABLE>
The comparisons in the table and on the graph above are required by the
Commission and are not intended to forecast or be indicative of possible future
performance of the Company's common stock.
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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information, as of April 27, 1998,
concerning the Common Stock of the Company beneficially owned (i) by each
director and nominee of the Company, (ii) by the Named Executive Officers and
all executive officers and directors as a group, and (iii) by each stockholder
known by the Company to be the beneficial owner of more than 5% of the
outstanding Common Stock. Unless otherwise indicated in the footnotes to the
table, the beneficial owners named have, to the knowledge of the Company, sole
voting and dispositive power with respect to the shares beneficially owned,
subject to community property laws where applicable.
<TABLE>
<CAPTION>
Percent of
Shares
Name and Address of Beneficial Owner Number of Shares(a) Outstanding(a)
- ------------------------------------ ------------------- --------------
<S> <C> <C>
Green Equity Investors II, L.P.
c/o Leonard Green & Partners, L.P.
11111 Santa Monica Boulevard, Suite 2000
Los Angeles, CA 90025 ............................................... 4,879,999 15.5
John G. Danhakl (b) c/o Leonard Green & Partners, L.P.
11111 Santa Monica Boulevard, Suite 2000
Los Angeles, CA 90025................................................ 4,879,999 15.5
Jennifer Holden Dunbar (b)
c/o Leonard Green & Partners, L.P.
11111 Santa Monica Boulevard, Suite 2000
Los Angeles, CA 90025 ............................................... 4,879,999 15.5
Jonathan D. Sokoloff (b)
c/o Leonard Green & Partners, L.P.
11111 Santa Monica Boulevard, Suite 2000
Los Angeles, CA 90025................................................ 4,879,999 15.5
Brian Blechman
c/o Twin Laboratories Inc.
150 Motor Parkway
Hauppauge, NY 11788 ................................................. 1,659,246 5.3
Dean Blechman (c)
c/o Twin Laboratories Inc.
150 Motor Parkway
Hauppauge, NY 11788.................................................. 1,660,080 5.3
Neil Blechman (d)
c/o Twin Laboratories Inc.
150 Motor Parkway
Hauppauge, NY 11788.................................................. 1,660,497 5.3
</TABLE>
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<TABLE>
<S> <C> <C>
Ross Blechman (d)
c/o Twin Laboratories Inc.
150 Motor Parkway
Hauppauge, NY 11788.................................................. 1,660,497 5.3
Steve Blechman (c)
c/o Twin Laboratories Inc.
150 Motor Parkway
Hauppauge, NY 11788.................................................. 1,660,080 5.3
John McCusker (e)
c/o Twin Laboratories
150 Motor Parkway
Hauppauge, NY 11788................................................. 500 *
Stephen Welling
c/o Twin Laboratories Inc.
150 Motor Parkway
Hauppauge, NY 11788.................................................. 28,770 *
All executive officers and directors as a group
(10 persons)(f)...................................................... 13,209,669 42.0
</TABLE>
- ----------
(a) Does not include an aggregate of 392,200 shares of Common Stock issuable
upon exercise of outstanding stock options with a weighted average price
of $23.22 per share.
(b) GEI is a Delaware limited partnership managed by LGP, which is an
affiliate of the general partner of GEI. Each of Leonard I. Green,
Jonathan D. Sokoloff, John G. Danhakl, Gregory J. Annick and Jennifer
Holden Dunbar, either directly (whether through ownership interest or
position) or through one or more intermediaries, may be deemed to control
LGP and such general partner. LGP and such general partner may be deemed
to control the voting and disposition of the shares of Common Stock of TLC
owned by GEI. As such, Messrs. Green, Sokoloff, Danhakl and Annick and Ms.
Holden Dunbar may be deemed to have shared voting and investment power
with respect to all shares held by GEI. Messrs. Green, Sokoloff, Danhakl
and Annick and Ms.
Holden Dunbar disclaim beneficial ownership of the shares held by GEI.
(c) The shares shown as beneficially owned by each of Dean Blechman and Steve
Blechman each include 834 shares of common stock beneficially owned by
their respective minor children. Dean Blechman and Steve Blechman disclaim
beneficial ownership of such shares.
(d) The shares shown as beneficially owned by each of Ross Blechman and Neil
Blechman each include 1,251 shares of common stock owned by their
respective minor children. Ross Blechman and Neil Blechman disclaim
beneficial ownership of such shares.
(e) The shares shown as beneficially owned by John McCusker do not include 500
shares of common stock owned by Mr. McCusker's spouse, Brenda McCusker.
Mr. McCusker disclaims beneficial ownership of such shares.
(f) Includes the shares referred to in Notes (a), (b), (c) and (e) above.
* Less than 1%.
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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Employment Agreements
The Company has employment agreements with each of the Senior Executive
Officers.
Transactions with LGP
LGP is the investment advisor to and an affiliate of the general partner
of GEI, which owns 15.5% of the outstanding shares of Common Stock of the
Company. Messrs. Danhakl and Sokoloff and Ms. Holden Dunbar, stockholders and
directors of the general partner of LGP, are directors of the Company and Twin.
The Company and Twin were parties to a Management Services Agreement with
LGP pursuant to which LGP received an annual retainer fee of $400,000 plus
reasonable expenses for providing certain management, consulting and financial
planning services (the "LGP Management Fee"). The Company believes that the
contacts and expertise provided by LGP in these areas enhanced the Company's
opportunities and management's expertise in these matters and that the fees paid
to LGP fairly reflect the value of the services provided by LGP. The specialized
consulting services provided by LGP overlapped to some extent with the role of
Messrs. Danhakl and Sokoloff and Ms. Holden Dunbar as directors of the Company
and Twin, for which they do not receive any additional compensation. See
"Executive Compensation--Director Compensation." The Management Services
Agreement terminated in April 1998.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities and
Exchange Act of 1934, the Registrant has duly caused this Form 10-K/A Amendment
No. 2 to Form 10-K to be signed on its behalf by the undersigned, thereunto duly
authorized.
TWINLAB CORPORATION
Date: April 30, 1998 By: /s/ Ross Blechman
------------------------------------
Ross Blechman, Chairman, Chief
Executive Officer and President
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