HAUSER CHEMICAL RESEARCH, INC.
5555 Airport Boulevard
Boulder, CO 80301
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held November 8, 1995
To Our Shareholders:
The Annual Meeting of Shareholders of Hauser Chemical
Research, Inc., a Delaware corporation (the "Company"), will be
held at 3:00 p.m., Mountain Time, on November 8, 1995, at The
Ramada Hotel Denver/Boulder, 8773 Yates Drive, Boulder, Colorado,
80030-3678, for the following purposes, all of which are more
completely set forth in the accompanying Proxy Statement.
1. To elect nine (9) Directors;
2. To transact such other business as may properly come
before the meeting, or any adjournment thereof.
All shareholders are cordially invited to attend the meeting,
although only shareholders of record at the close of business on
October 3, 1995, will be entitled to notice of, and to vote at, the
meeting or any and all adjournments thereof.
BY ORDER OF THE BOARD OF DIRECTORS
Dean P. Stull, Chairman
October 9, 1995
PLEASE COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY
CARD IN THE ENCLOSED POSTAGE PREPAID ENVELOPE, WHETHER OR
NOT YOU PLAN TO ATTEND THE MEETING. YOUR PROMPT RETURN
OF THE PROXY WILL HELP TO ASSURE A QUORUM AT THE MEETING
AND AVOID ADDITIONAL COMPANY EXPENSE FOR FURTHER
SOLICITATION. YOUR PROXY MAY BE REVOKED AT ANY TIME
BEFORE IT IS VOTED.
HAUSER CHEMICAL RESEARCH, INC.
SOLICITED BY THE BOARD OF DIRECTORS FOR THE ANNUAL
MEETING OF SHAREHOLDERS TO BE HELD NOVEMBER 8, 1995
The undersigned hereby constitutes, appoints and authorizes
Dean P. Stull and Randall J. Daughenbaugh, and each of them, the
true and lawful attorneys and Proxies of the undersigned with full
power of substitution and appointment, for and in the name, place
and stead of the undersigned to act for and vote as designated
below, all of the undersigned's shares of the $.001 par value
common stock of Hauser Chemical Research, Inc., a Delaware corp-
oration, at the Annual Meeting of Shareholders to be held at The
Ramada Hotel Denver/Boulder, 8773 Yates Drive, Westminster CO
80030-3678, at 3:00 p.m. Mountain Time, on November 8, 1995, and at
any and all adjournments thereof, for the following purposes:
1. To elect nine (9) Directors:
/__/ For all nominees listed below (except as
marked to the contrary):
/__/ Withhold authority to vote for the nominees
listed below:
Dean P. Stull, Randall J.
Daughenbaugh, Stanley J.
Cristol, Ray L. Hauser,
Bert M. Tolbert, William
E. Coleman, Christopher
W. Roser, Robert F.
Saydah and Willem A. Maas
(INSTRUCTION: To withhold authority to vote for any
individual nominee, draw a line through or otherwise strike out his
name. If authority to vote for the election of any nominee is not
withheld, the execution of this Proxy shall be deemed to grant such
authority.)
2. To transact such other business as may properly come
before the meeting, or any adjournment thereof.
/__/ FOR /__/ AGAINST /__/ ABSTAIN
The undersigned hereby revokes any Proxies as to said shares
heretofore given by the undersigned, and ratifies and confirms all
that said attorneys and Proxies may lawfully do by virtue hereof.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE
MANNER DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER.
IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR ALL
PROPOSALS. THIS PROXY CONFERS DISCRETIONARY AUTHORITY IN
RESPECT TO MATTERS NOT KNOWN OR DETERMINED AT THE TIME OF
THE MAILING OF THE NOTICE OF THE ANNUAL MEETING OF SHARE-
HOLDERS TO THE UNDERSIGNED.
The undersigned hereby acknowledges receipt of the Notice of
Annual Meeting of Shareholders and Proxy Statement furnished
herewith.
DATED: _____________, 199_.
Signature(s) of Shareholder(s)
Signature(s) of Shareholder(s)
Signature(s) should agree with the name(s) shown hereon.
Executors, administrators, trustees, guardians and attorneys should
indicate their capacity when signing. Attorneys should submit
powers of attorney.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF
DIRECTORS OF HAUSER CHEMICAL RESEARCH, INC. PLEASE SIGN
AND RETURN THIS PROXY TO AMERICAN SECURITIES TRANSFER,
INCORPORATED, 938 QUAIL STREET, SUITE 101, LAKEWOOD, CO
80215. THE GIVING OF A PROXY WILL NOT AFFECT YOUR RIGHT
TO VOTE IN PERSON IF YOU ATTEND THE MEETING.
HAUSER CHEMICAL RESEARCH, INC
5555 Airport Boulevard
Boulder, CO 80301
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
To Be Held November 8, 1995
SOLICITATION OF PROXIES
This Proxy Statement is furnished in connection with the
solicitation of proxies by the Board of Directors of Hauser
Chemical Research, Inc., a Delaware corporation (the "Company"),
for use at the Annual Meeting of Shareholders of the Company to be
held at 3:00 p.m. Mountain Time, on November 8, 1995, at The Ramada
Hotel Denver/Boulder, 8773 Yates Drive, Westminster CO 80030-3678,
and at any and all adjournments of such meeting.
If the enclosed Proxy Card is properly executed and returned
in time to be voted at the meeting, the shares of Common Stock
represented will be voted in accordance with the instructions
contained therein. Executed proxies that contain no instructions
will be voted for each of the nominees for director indicated
herein. It is anticipated that this Proxy Statement and the
accompanying Proxy Card and Proxy Notice will be mailed to the
Company's shareholders on or about October 9, 1995.
Shareholders who execute proxies for the Annual Meeting may
revoke their proxies at any time prior to their exercise by
delivering written notice of revocation to the Company, by deliv-
ering a duly executed Proxy Card bearing a later date, or by
attending the meeting and voting in person.
The costs of the meeting, including the costs of preparing and
mailing the Proxy Statement, Proxy Notice and Proxy Card, will be
borne by the Company. The Company may, in addition, use the
services of its directors, officers and employees to solicit
proxies, personally or by telephone, but at no additional salary or
compensation. The Company will also request banks, brokers, and
others who hold shares of Common Stock of the Company in nominee
names to distribute annual reports and proxy soliciting materials
to beneficial owners, and will reimburse such banks and brokers for
reasonable out-of-pocket expenses which they may incur in so doing.
VOTING SECURITIES AND PRINCIPAL SHAREHOLDERS
Only shareholders of record at the close of business on
October 3, 1995, will be entitled to vote at the Annual Meeting.
Each issued share of Common Stock entitles its record owner to one
vote on each matter to be voted upon at the meeting. As of July
31, 1995, there were 10,539,668 shares of the Company's $0.001 par
value Common Stock outstanding. The Company has authorized 800,000
shares of Preferred Stock, $1.00 par value, none of which were
outstanding as of the record date. The presence in person or by
proxy of the holders of forty percent (40%) of the total issued and
outstanding shares of Common Stock of the Company which are
entitled to be voted at the Annual Meeting is necessary in order to
constitute a quorum for the meeting. If a quorum is present,
directors will be elected by a plurality of the votes present in
person or by proxy.
ELECTION OF DIRECTORS
(Proxy Item #1)
The Company's Board of Directors has nominated the nine
persons listed below for election as directors for the ensuing
year, each to hold office until the 1996 Annual Meeting of
Shareholders and until their successors are duly elected and
qualified, or until their death, resignation or removal. Each of
the nominees is a member of the present Board of Directors of the
Company and has served in that capacity since originally elected
except Willem A. Maas. A shareholder using the enclosed proxy form
can vote for all or any of the nominees of the Board of Directors
or such shareholder may withhold his or her vote from all or any of
such nominees. If the proxy card is properly executed but not
marked, it will be voted for all of the nominees. Each of the
nominees has agreed to serve as a director if elected; however,
should any nominee become unable or unwilling to accept nomination
or election, the persons named in the proxy will exercise their
voting power in favor of such other person or persons as the Board
of Directors of the Company may recommend. There are no family
relationships among these nominees. The following table sets forth
the directors of the Company, their ages as of April 30, 1995, all
positions and offices held with the Company and the period from
which served:
<TABLE>
Period
All Positions and from
Offices Held with Which
Name Age the Company Served
<S> <C> <C> <C>
Dean P. Stull, Ph.D. 45 Chairman, Chief Executive 11/83
Officer, President and Director
Randall J. Daughenbaugh, Ph.D. 47 Executive Vice President, 11/83
Chief Technical Officer and
Director
William E. Coleman, Ph.D.(1) 61 Director 2/88
Stanley J. Cristol, Ph.D.(1) 79 Director 11/83
Ray L. Hauser, Ph.D.(2) 67 Director 11/83
Willem A. Maas 64 Director Nominee
Christopher W. Roser(2) 37 Director 12/90
Robert F. Saydah(1)(2) 68 Director 1/94
Bert M. Tolbert, Ph.D.(1) 74 Director 11/83
</TABLE>
(1) Member of Compensation Committee.
(2) Member of Audit Committee.
The principal occupation and business experience of each
Director is set forth below:
Dean P. Stull, Ph.D. is one of the founders of the
Company. He has been a Director, Chairman of the Board of
Directors and Chief Executive Officer since November 1983. In
May 1995, he assumed the position of President of the Company.
From 1978 to 1986, Dr. Stull held the position of Chief Chemist,
Chemical Section Manager, of Hauser Laboratories, Inc. Dr.
Stull received a Bachelor of Science Degree in Chemistry from
Colorado State University in 1972, and a Master of Science and
Ph.D. in Physical Organic Chemistry from the University of
Colorado, Boulder, in 1974 and 1976, respectively. Dr. Stull
has presented numerous professional papers at professional
scientific meetings around the country and has published
scientific articles in the Journal of Organic Chemistry, the
Journal of the American Chemical Society, and the Proceedings of
the Colorado-Wyoming Academy of Science and Industry and
Commerce.
Randall J. Daughenbaugh, Ph.D. is one of the founders of
the Company. He has been a Director of the Company since
November 1983, and served as President until November 1992, when
he became Executive Vice President and Chief Technical Officer.
Prior to forming the Company, Dr. Daughenbaugh served as
research chemist for Chemical Exchange Industries, Inc., a
chemical company, from November 1980 and research director from
August 1983 to October 1983. Dr. Daughenbaugh worked for Air
Products & Chemicals, Inc., a diversified chemical company, in
Allentown, Pennsylvania, as a Senior Principal Investigator in
chemical process development from 1975 to 1980. Dr.
Daughenbaugh received a Bachelor of Science Degree from South
Dakota School of Mines and Technology in 1970 and a Ph.D. in
Physical Organic Chemistry from the University of Colorado in
1975. Dr. Daughenbaugh has published numerous articles in such
professional publications as the Journal of Organic Chemistry,
The Journal of the American Chemical Society, Tetrahedron
Letters, Photochemistry, and co-authored portions of the
textbook Organic Photochemical Synthesis with Professor Stanley
J. Cristol. Dr. Daughenbaugh has developed processes to isolate
pure compounds from plant materials and holds several patents in
the area of organic chemical processes.
William E. Coleman, Ph.D. has served as a Director of the
Company since February 1988. Dr. Coleman has served as
President of Colorado Venture Management, Inc., Boulder,
Colorado, an investment and project management firm from 1980 to
1990 and as Chairman since 1990. He also serves as President of
Cogen Technology, Inc., a privately held company developing
cogeneration projects; Chairman of Econalytic Systems, Inc., a
privately held company which markets fuel additive products; and
is a director of B.I., Inc., a publicly-held company which
designs, manufactures, markets and supports electronic
monitoring systems. Dr. Coleman received a Bachelor of Science
Degree in Chemistry in 1956 from the University of Illinois, and
a Ph.D. in Organic Chemistry in 1960 from the University of
California, Berkeley.
Stanley J. Cristol, Ph.D. is one of the founders of the
Company and has been a Director of the Company since November
1983. Dr. Cristol has been on the faculty of the University of
Colorado since 1946 and was appointed the Joseph Sewell
Distinguished Professor of Chemistry in 1979. Dr. Cristol has
held the positions of Chairman of the Department of Chemistry,
Acting Dean of the Graduate School and Acting Associate Vice
Chancellor for Graduate Affairs at the University of Colorado.
Dr. Cristol has also taught at Stanford University, University
of Geneva and University of Lausanne. Dr. Cristol has acted as
consultant to many large U.S. government and industrial
organizations and companies. Dr. Cristol received a Bachelor of
Science Degree in Chemistry from Northwestern University in
1937, and Master of Arts and Ph.D. Degrees in Organic Chemistry
from the University of California at Los Angeles in 1939 and
1943, respectively. Dr. Cristol's honors and awards include
those from U.S. and foreign professional and industrial
organizations. Dr. Cristol is the author of over 220 scientific
papers and texts.
Ray L. Hauser, Ph.D. is one of the founders of the
Company and has been a Director of the Company since November
1983. Dr. Hauser was the owner and sole shareholder of Hauser
Laboratories, Inc. prior to its acquisition by the Company in
1990. Since 1961, Dr. Hauser has worked with the formulation,
development, processing and evaluation of plastics and other
non-metallic materials. Dr. Hauser is an internationally
recognized expert in materials science and technology and, as an
individual or through the performance of his laboratories, has
supplied consulting and contract services to a large number of
U.S. and international organizations and companies. Dr. Hauser
received a Bachelor of Science Degree in Chemical Engineering
from the University of Illinois in 1950, a Master of Science
Degree in Chemical Engineering from Yale University in 1952, and
a Ph.D. in Chemical Engineering from the University of Colorado
in 1957. Dr. Hauser is a widely published author and holder of
several patents in the areas of materials and medical equipment.
Willem A. Maas has served as a President and a Director
of Hauser Northwest, Inc., since May 1994. From February 1990
to May 1994, he was President of Ironwood Evergreens, Inc., an
Oregon corporation engaged in the floral greens business. From
December 1990 to the present, he has also been the Chairman of
Ark Interface Inc., a software development company. From July
1984 to the present, he has also been the President of Ironwood
Strategy for Marketing, a consulting company. From August 1980
until July 1989, he was the Chief Executive Officer and
Executive Vice President for Florist Transworld Delivery
Association ("FTD").
Christopher W. Roser has served as a Director of the
Company since December 1990. Mr. Roser is a general partner of
The Roser Partnership, Ltd., and The Roser Partnership II, Ltd.,
privately held venture capital funds, and is a Director on the
Board of Directors of Tactilitics, Inc., a privately held
medical instruments company and WG Inc., a privately-held
distribution company. From 1984 to 1987, Mr. Roser was employed
as a technology research analyst and an associate in corporate
finance for Ladenburg Thalmann & Co., Inc., an investment
banking firm. From 1981 to 1984, Mr. Roser was a staff public
accountant for Main Hurdman KMG in New York City. Mr. Roser
received a Bachelor of Arts Degree in Economics from The
University of Colorado in 1981 and an M.B.A. in Finance from New
York University Graduate School of Business Administration in
1985.
Robert F. Saydah has served as a Director of the Company
since January 1994. Mr. Saydah has been Managing Partner and a
Director of Heidrick & Struggles, a privately-held international
executive search consulting firm, since May 1992. Heidrick &
Struggles is the oldest of four major executive search firms in
the United States. Before joining Heidrick & Struggles in 1988,
Mr. Saydah worked for the Lederle Laboratories Division of
American Cyanamid Company for 39 years. He held general
management positions responsible for strategic planning and
marketing and sales, culminating as Vice President in charge of
ethical, generic, and consumer health products businesses. He
also had operational responsibility for pharmaceutical divisions
in Latin America and Europe. Mr. Saydah received a Bachelors of
Science Degree in Biology from Lehigh University in 1948, and a
Masters of Science Degree in Bacteriology from Lehigh University
in 1949.
Bert M. Tolbert, Ph.D. is one of the founders of the
Company and has been a Director of the Company since November
1983. From 1957 to 1989, Dr. Tolbert served as Professor,
Department of Chemistry and Biochemistry at the University of
Colorado at Boulder, and from 1945 to 1957 he served as
Associate Director of BioOrganic Chemistry at the University of
California at Berkeley. Dr. Tolbert received a Bachelor of
Science (cum laude) Degree from the University of California at
Berkeley in 1942 and a Ph.D. in Physical-Organic Chemistry from
the University of California at Berkeley in 1945. Dr. Tolbert
has published over 190 papers in Chemistry and Biochemistry.
Compensation Committee Interlocks and Insider Participation
Directors Coleman, Cristol, Saydah and Tolbert comprise
the Company's Compensation Committee. All are nonemployee
directors. None of the members of the Compensation Committee
have ever been officers of the Company.
Director Compensation
During fiscal 1995, the Company's non-employee directors
were granted options to purchase a total of 15,450 shares of
Common Stock for services rendered to the Company at an average
price of $5.3623 per share (100% of fair market value on the
date of grant). Directors receive an option to purchase 300
shares for Board service and options to purchase 150 shares for
attendance at each meeting of the Board or each committee
thereof. The options are exercisable for a five-year period.
In May 1992, the Board of Directors approved a two-step
plan to compensate outside Directors. The plan includes options
for Board and committee service as discussed above, and an
annual cash payment of $10,000 per outside Director plus an
annual payment of $2,500 for committee chairman. During fiscal
1995, the Company's five outside directors received cash
compensation of $53,625 in the aggregate pursuant to this plan
plus reimbursement of travel expenses.
During the fiscal year ended April 30, 1995, the
Company's Board of Directors held ten meetings. The
Compensation Committee, consisting of directors Coleman,
Cristol, Saydah and Tolbert held twelve meetings during the
fiscal year. The function of the Compensation Committee is to
recommend raises and bonuses, if any, for the Company's officers
and to grant stock option awards to Company employees. The
Audit Committee consisting of Directors Hauser, Saydah and Roser
held five meetings during the fiscal year.
Compliance With Section 16(a)
Section 16(a) of the Securities Exchange Act of 1934, as
amended, requires the Company's directors, executive officers
and holders of more than 10% of the Company's Common Stock to
file with the Securities and Exchange Commission initial reports
of ownership and reports of changes in ownership of Common Stock
of the Company. Based solely upon a review of Forms 3 and 4 and
amendments thereto furnished to the Company during the fiscal
year ended April 30, 1995 and Forms 5 and amendments thereto
furnished to the Company with respect to the fiscal year ended
April 30, 1995, to the best of the Company's knowledge, the
Company's directors, officers and holders of more than 10% of
its Common Stock complied with all Section 16(a) filing
requirements.
EXECUTIVE OFFICERS
The following sets forth the names of the executive
officers of the Company not named previously, their respective
positions with the Company and business experience and
background.
William E. Paukert became Chief Financial Officer of the
Company in August 1986 and Treasurer in December 1987. He also
serves as Corporate Treasurer for the Company's wholly-owned
subsidiaries, Hauser Northwest, Inc. d/b/a Ironwood, and Herbert
V. Shuster, Inc. Prior to joining the Company, Mr. Paukert was
a senior financial officer for several high technology, service
and processing companies. Mr. Paukert received a Bachelor of
Arts Degree in Economics and Business Administration from
Hamline University in 1953 and an M.B.A. in Finance and
Accounting from the University of Minnesota in 1955.
Patricia A. Roberts was elected Corporate Secretary for
the Company effective April 30, 1995. She has been employed by
Hauser since its founding, serving as manager of Corporate
Affairs and Secretary to the Board of Directors. She also
serves as Corporate Secretary for the Company's wholly-owned
subsidiaries, Hauser Northwest, Inc. d/b/a Ironwood, and Herbert
V. Shuster, Inc. Ms. Roberts is an alumnus of the University of
Colorado at Boulder.
Timothy D. Ziebarth, Ph.D. is Senior Vice
President/Director of Technical Services and President and a
director of Herbert V. Shuster, Inc., a wholly-owned subsidiary
of the Company. Dr. Ziebarth became Vice President, Research
and Development, and Director of Chemical Services for the
Company in January 1990 as a result of the Company's acquisition
of Hauser Laboratories, Inc. Prior to joining the Company, he
served as Chief Chemist, General Manager and President of Hauser
Laboratories, Inc. from 1974 to 1978 and again from 1987 to
1990. In 1978, he founded and served as Vice President of
Hotline Energy Reports, Inc., which was acquired in 1984 by
Dwight's Energydata, Inc. and for which he served as Executive
Vice President until returning to Hauser. Dr. Ziebarth received
a Bachelor of Science Degree in Chemistry from Montana State
University in 1969 and a Ph.D. in Organic Chemistry from Oregon
State University in 1973.
Neil A. Jans is currently Vice President and General
Manager of Nutraceuticals for the Company. He formed Hauser
Northwest, Inc., a wholly-owned subsidiary of the Company in
November 1993 and served as its President until May 1994. He
joined the Company as Director, Business Development, in May
1988 and President of Hauser Northwest, Inc., a subsidiary of
the Company, in November 1990. Mr. Jans was a consultant and
project manager for Western Consulting Corporation, The Meyer
Group, a management consulting group specializing in business
planning and strategy from 1985 to 1988. From 1984 to 1985 he
was the President and co-founder of Telemetry Designs, Inc., a
company which designed and manufactured low power, radio
telemetry systems. Mr. Jans received a Bachelor of Science
Degree in Chemistry in 1973 from Rutgers University and an
M.B.A. from the University of Colorado in 1984.
Simon G. Maas has served as Executive Vice President and
General Manager of Hauser Northwest, Inc., since May 1994. From
February 1990 to May 1994, he was the Vice President and General
Manager of Ironwood Evergreens, Inc. From June 1987 to February
1990, he was a partner in Pyramid Construction. From 1992 to
the present, he has also been President of Nahanni River Trading
Co., Inc. Mr. Maas received a Bachelors of Arts Degree in Art
History from Trent University in 1985 and attended Oxford
University in 1986.
The following table sets forth as of April 30, 1995, the
number of shares of the Company's Common Stock owned by any
person who is known by the Company to be the beneficial owner of
more than 5% of the Company's voting securities, by all
individual Directors, by all individual executive officers and
by all Officers and Directors as a group:
<TABLE>
Number
Name and Title of Shares Percent
Address of Class Owned(1)(2) of Class
<S> <C> <C> <C>
Dean P. Stull Common 266,510 2.6%
5555 Airport Boulevard
Boulder, CO 80301
Thomas A. Scales Common 105,677 1.0%
5555 Airport Boulevard
Boulder, CO 80301
Randall J. Daughenbaugh Common 131,304 1.3%
5555 Airport Boulevard
Boulder, CO 80301
William E. Coleman Common 33,305(3) *
2995 Wilderness Place
Suite 103
Boulder, CO 80301
Stanley J. Cristol Common 124,093 1.2%
2918 - 3rd Street
Boulder, CO 80304
Ray L. Hauser Common 380,080 3.7%
5555 Airport Boulevard
Boulder, CO 80301
Bert M. Tolbert Common 91,427 *
444 Kalmia Avenue
Boulder, CO 80304
Christopher W. Roser Common 68,070 *
2033 Eleventh Street
Boulder, CO 80302
Robert F. Saydah Common 8,600 *
2493 Biltmore Drive
Alamo, CA 94507
William E. Paukert Common 43,060 *
5555 Airport Blvd.
Boulder, CO 80301
Patricia A. Roberts Common 6,584 *
5555 Airport Blvd.
Boulder, CO 80301
Timothy D. Ziebarth Common 64,913 *
5555 Airport Blvd.
Boulder, CO 80301
Neil A. Jans Common 28,729 *
4161 Specialty Pl.
Longmont, CO 80504
All Officers and Common 1,355,350 12.7%
Directors as a Group
(15 persons)
Fidelity Management Common 913,500 8.8%
& Research Company
82 Devonshire Street
Boston, MA 02109
Dent D.F. & Company, Inc. Common 543,650 5.3%
2 East Read Street, 6th Floor
Baltimore, MD 21202
</TABLE>
* Less than one percent.
(1) Includes the following number of shares which could be
acquired within 60 days through the exercise of stock
options: Dr. Stull, 87,484 shares; Dr. Daughenbaugh,
31,366 shares; Dr. Cristol, 8,100 shares; Dr. Hauser,
5,400 shares; Mr. Saydah, 5,100 shares; Dr. Tolbert,
8,250 shares; Mr. Paukert 19,820 shares; Ms. Roberts
2,046 shares; Mr. Roser 9,900 shares; Dr. Ziebarth 14,139
shares; Mr. Jans 11,376 shares; and all directors and
officers as a group, 316,457 shares.
(2) Includes the following number of shares which could be
acquired within 60 days through the exercise of warrants:
Dr. Cristol, 667 shares and Dr. Tolbert, 667 shares.
(3) Includes 14,359 shares owned by Dr. Coleman directly, 1
share owned by CVM Equity Fund II, Ltd., of which Dr.
Coleman is a general partner; 4,695 shares owned by
Colorado Venture Management, Inc., of which Dr. Coleman
is Chairman; and shares which could be acquired within 60
days through the exercise of options to purchase 14,250
shares held by CVM, Inc.
Arrangements Affecting Control of the Company
As of April 30, 1995, the Officers and Directors of the
Company beneficially owned 1,355,350 shares of Common Stock
(approximately 12.7%) of the Company's Common Stock (assuming
exercise of all warrants and options deemed to be beneficially
owned by these persons).
EXECUTIVE COMPENSATION
COMPENSATION COMMITTEE REPORT ON COMPENSATION OF EXECUTIVE
OFFICERS OF THE COMPANY
The Compensation Committee of the Board of Directors and the
Company's Chief Executive Officer have furnished the following
joint report on executive compensation. The specific
responsibility of the Chief Executive Officer to furnish
information to the Compensation Committee has been outlined
below.
Executive Officer Compensation
The Committee has responsibility for making recommendations
for compensation and compensation policy. In carrying out this
responsibility, the Committee's first objective is to provide a
strong and direct link among shareholder value, Company
performance and executive compensation. The second objective is
to structure compensation programs that will promote long-term
stable growth and development within the Company. The Committee
believes that corporate development at Hauser, an innovative
technology company, is dependent on its ability to attract and
retain high quality people and operates to ensure that goal.
The Chief Executive Officer's responsibility is to evaluate for
the Compensation Committee the individual performance of the
executive officers, other than himself, and their contribution
to the Company's business goals and objectives. He is also
asked to report on the performance reviews of these officers to
the Compensation Committee and make suggestions of the
percentage of discretionary cash and discretionary stock bonuses
to be awarded.
The Company's compensation program for executive officers
consists of four key elements: a base salary, discretionary
cash and stock bonuses, discretionary incentive stock option
awards and annual grants of non-qualified stock options. The
Committee believes that this approach serves the interests of
shareholders by ensuring that executive officers are compensated
in a manner that advances both the short- and long-term
interests of the shareholders. Thus, compensation for the
Company's executive officers involves a high proportion of pay
which is at risk, a variable bonus based on individual
performance, and stock options, which directly relate a portion
of the officer's compensation to the long-term stock price
appreciation realized by the Company's shareholders. To further
these objectives, the Committee regularly meets to evaluate the
Company's compensation and benefits programs. The executive
officers also participate in a 401(k) retirement plan, a medical
plan, and the non-qualified stock option plan available to
employees generally.
Base Salary. The Compensation Committee's policy is to
provide compensation for executive officers competitive within
the Denver/Boulder metropolitan area while giving consideration
to national compensation paid by technology companies. Salaries
paid to the Company's executive officers are based upon an
assessment of the nature of the position, and the contribution,
experience and Company tenure of the executive officer and
salary survey results. The Committee also considers the
recommendations for pay treatment and performance reviews
submitted by the Chief Executive Officer as well as giving
consideration to the needs of the Company for product line
expansion. In evaluating the performance of the executive
officers other than himself, the Chief Executive Officer
measured individual leadership skills, business development
skills, management skills, external relations and communication
skills. The executive officers' individual contribution to
corporate financial results for the fiscal year, including
revenue growth and changes in net income and earnings per share
were also evaluated. In addition, extraordinary management and
supervisory responsibilities assumed during the fiscal year were
taken into consideration.
During fiscal 1993, base salaries were adjusted based upon
Wyatt Data Service's national survey of executive salaries in
Chemical Group Services companies with less than $200 million in
sales and a Company survey of local high technology companies in
the Boulder-Denver area with less than $100 million in sales
which are most likely to compete with the Company for the
services of its executive officers. At that time, the Company's
executive base salaries were adjusted to the 10th to 20th
percentile of the salaries represented by the Wyatt Data
Service's survey. During fiscal 1994, the Committee reviewed
the base salaries of the Chief Executive Officer, President,
Executive Vice President, Secretary and Treasurer and made no
adjustments. During fiscal 1995, the base salaries of the Chief
Executive Officer, President, Executive Vice President, Senior
Vice President, Vice President, and Treasurer were adjusted down
by ten percent (10%), and the Secretary by five percent (5%).
These salary decreases were made because of financial exigencies
within the Company and were not based on inadequate performance.
They were a direct consequence of a loss of revenue due to the
decision by Bristol-Myers Squibb Company ("Bristol") not to
extend the Company's supply contract beyond August 1994.
President Thomas A. Scales resigned effective April 30, 1995
(the last day of the fiscal year). He received, in addition to
regular salary due to that date and accumulated vacation pay, a
cash termination compensation payment of $68,400 (six months'
salary).
During fiscal 1995, the Compensation Committee developed a
series of specific goal oriented compensation awards for the
named executives for fiscal 1996 and future years. On June 30,
1995 the Committee approved the plan for these executives for
fiscal 1996. Fiscal 1996 awards for these executives, with one
exception, are based on achieving budgeted sales goals and to a
lesser extent achieving a positive corporate income. Senior
Vice President Ziebarth's goal oriented compensation will be
based on meeting budgeted operating income for the Company's
combined Technical Services groups (Chemistry Services,
Engineering Services, and Herbert V. Shuster, Inc.). The
Committee expects that for fiscal 1997 and future years, award
goals for all named executives will be directed toward a
combination of increased sales and profitability. In addition,
the base compensation of the named executives will be restored
to competitive levels.
Discretionary Cash Bonuses Paid in Fiscal 1995. After
reviewing the Company's annual report and audited financial
statements for the fiscal year ended April 30, 1995, the
Compensation Committee awarded no cash bonuses for fiscal 1995.
The Compensation Committee believes that it has a
responsibility to the shareholders to see that an annual
performance review of the Company's executive officers is
conducted. In an effort to satisfy this objective, the
Compensation Committee instructs the Chief Executive Officer to
complete performance evaluations for each of the executive
officers. The Chief Executive Officer's evaluation is an
informal, oral report to the Compensation Committee along with
informal suggestions of the percentage stock and cash bonuses to
be awarded. There were no individual bonuses awarded to named
executives during fiscal 1995. In evaluating the performance of
the executive officers other than himself, the Chief Executive
Officer measures leadership, strategic planning, financial
results, business development, management skills, external
relations and communication skills. The Compensation Committee
does not adopt the suggestions of the Chief Executive Officer
but rather adjusts those suggestions to fit the parameters of
their overall knowledge and experience with the executive
officers. The Compensation Committee evaluates these
performance reviews. Factors, other than the report of the
Chief Executive Officer, reviewed by the Compensation Committee
include increased management or supervisory responsibilities and
the direct impact of the departments supervised by those
executive officers on the net sales, income and earnings per
share of the Company.
Stock Options. It is the Compensation Committee's policy
that a significant portion of the total compensation package for
its executive officers will be derived from stock options and
other forms of compensation that are directly related to the
performance of the Company and the value of shareholder
investments. This motivation is extended to all employees and
the Board of Directors through the Company's Non-Qualified Stock
Option Plan approved by shareholders in 1987 and the 1992 Plan
approved by shareholders in 1992. A system of stock option
awards for patentees has been developed for technical
achievement.
During any fiscal year, the named executive officers of the
Company may receive the following types of stock option awards:
1) along with all employees of the Company, non-qualified stock
options awarded on the employee's anniversary date and based
upon a percentage of the employee's salary; 2) incentive stock
options awarded by the Compensation Committee for technical
achievement, usually related to the filing and/or award of a
patent invented by the individual; and 3) incentive stock
options awarded by the Compensation Committee based on
performance. Discretionary stock options distributed to the
named executive officers were determined by the Compensation
Committee and were based upon the same performance review
criteria previously stated. The number of options granted were
based upon the individual executive's performance during the
1994 fiscal year, anticipated future contributions based on that
performance, and the officer's ability to impact corporate
financial results. Additional factors considered by the
Committee included increased management or supervisory
responsibilities and the direct impact of the departments
supervised by those executive officers on the net sales, income
and earnings per share of the Company.
In addition, stock options and share grants may be part of
hiring packages for key executives and professional personnel.
Options typically vest over three to five years and are
exercisable for a five-year period. During fiscal 1995,
executive officers received incentive stock options to purchase
38,000 shares, non-qualified options to purchase 4,570 shares
and incentive stock options (based on technical achievement) to
purchase 400 shares. Discretionary stock option awards granted
to the named executives during fiscal 1995, for fiscal 1994
performance, were determined based upon the Chief Executive
Officer's evaluation report to the Committee of individual
performances plus the Compensation Committee's own knowledge and
experience with these same senior executive officers. The
Committee observes that the executive officers continue to own
a relatively low percentage of total outstanding stock and deems
it beneficial to shareholders as a whole to increase the equity
ownership of the executive officers.
On October 27, 1994 the Compensation Committee directed the
reprice of options currently priced above the October 27th fair
market value of $6.00 per share. On this date, options
currently on the corporate books that had an exercise period of
less than five years were given a five year exercise period with
most grants vesting 100% as of the reprice date, October 27,
1994. In the Committee's opinion, the many options that had
been issued at higher prices were not serving the purpose that
these options were issued to serve, namely to provide incentive
compensation for employees at all levels. This action reflects
the Committee's evaluation that the Company's future lies in
long-term development of new products and product lines,
retention of high quality people, and promotion of long-term
growth within the Company.
<TABLE>
TEN-YEAR OPTION REPRICINGS
5/1/94 to 4/30/95
Length of
Original
Securities Market Option
Underlying Price of Exercise Term
Number of Stock at Price at Remaining
Options/SARs Time of Time of at Date
Repriced or Repricing or Repricing or New of Repricing
Amended Amendment Amendment Exercise or
Name Date (#) ($) ($) Price ($) Amendment
<S> <C> <C> <C> <C> <C> <C>
Dean P. Stull 10/27/94 10,050 $6.00 $ 6.8150 $6.00 4 years
Chief Executive Officer 254 days
Dean P. Stull 10/27/94 10,500 6.00 13.50 6.00 6 years
139 days
Dean P. Stull 10/27/94 12,000 6.00 8.9375 6.00 4 years
264 days
Thomas A. Scales 10/27/94 22,419 6.00 13.438 6.00 4 years
President 310 days
Thomas A. Scales 10/27/94 7,581 6.00 12.00 6.00 5 years
35 days
Thomas A. Scales 10/27/94 9,500 6.00 13.50 6.00 6 years
140 days
Thomas A. Scales 10/27/94 10,000 6.00 8.9375 6.00 4 years
264 days
Randall J. Daughenbaugh 10/27/94 9,950 6.00 6.8150 6.00 4 years
Executive Vice President 254 days
Randall J. Daughenbaugh 10/27/94 9,500 6.00 13.50 6.00 6 years
139 days
Randall J. Daughenbaugh 10/27/94 8,000 6.00 8.9375 6.00 4 years
264 days
William E. Paukert 10/27/94 5,000 6.00 13.5000 6.00 6 years
Chief Financial Officer 139 days
William E. Paukert 10/27/94 5,000 6.00 8.9375 6.00 4 years
264 days
Timothy D. Ziebarth 10/27/94 1,000 6.00 8.9375 6.00 4 years
Senior Vice President/ 264 days
Director of Technical Services
Timothy D. Ziebarth 10/27/94 400 6.00 7.5000 6.00 5 years
79 days
</TABLE>
The Compensation Committee regularly reviews other possible
forms of incentive compensation and modifies or supplements the
existing programs when appropriate. The stock awards continue
the Committee's policy that officers of the Company should have
a strong motivation to develop performance of the Company and
enhance the Company's stock value. At present and in future
years, successful development of current and diversified
projects and further growth will be important considerations in
discretionary bonuses, both cash and stock.
Chief Executive Officer Compensation
As Chief Executive Officer, Dr. Stull is compensated based on
a review of his performance by the Compensation Committee. The
key factors measured by the Committee in determining Dr. Stull's
compensation package was its assessment of his ability and
dedication to enhancing the long-term value of the Company by
continuing to provide the leadership and vision that he has
provided throughout his tenure as Chief Executive Officer. The
base salary paid to the Chief Executive Officer is based upon an
assessment of the nature of the position, the leadership
exercised by, and the contribution, experience and Company
tenure of, Dr. Stull.
During fiscal 1993, Dr. Stull's base salary was reviewed and
compared with Wyatt Data Service's national survey of executive
salaries in Chemical Group Services companies with less than
$200 million in sales and a Company survey of local high
technology companies in the Boulder-Denver area with less than
$100 million in sales which are most likely to compete with the
Company for the services of Dr. Stull. At that time, Dr.
Stull's base salary was adjusted to the 10th to 20th percentile
of the salaries represented by the Wyatt Data Service's survey.
During fiscal 1994, the Committee reviewed the base salary of
the Chief Executive Officer and made no adjustment. During
fiscal 1995, the Committee reviewed the base salary of the Chief
Executive Officer and adjusted the base salary downward by ten
percent (10%). As stated previously, decreases in salaries were
made by the Committee because of financial exigencies within the
Company and were not based on inadequate performance.
Dr. Stull's compensation is substantially related to the
Company's performance because his compensation package includes
a discretionary cash bonus determination and discretionary
incentive stock options which are granted at 100% of fair market
value, based upon the Committee's review of Dr. Stull's
individual performance during the prior year in the following
areas: leadership, strategic planning, business development,
management skills, external relations and communication skills.
During fiscal 1995, Dr. Stull received incentive stock options
to purchase 39,953 shares and non-qualified options to purchase
2,063 shares. In granting the fiscal 1995 incentive stock option
awards to Dr. Stull, the Compensation Committee measured the
Company's financial performance during fiscal 1994 with respect
to revenue growth, net income, and earnings per share as
compared to fiscal 1993.
During fiscal 1995, the Compensation Committee developed a
series of specific goal oriented compensation awards for the
Chief Executive Officer for fiscal 1996 and future years. On
June 16, 1995 the Committee approved the plan for the Chief
Executive for fiscal 1996. Fiscal 1996 awards for the Chief
Executive Officer are based on achieving budgeted sales goals
and to a lesser extent achieving a positive corporate income.
The Committee expects that for fiscal 1997 and future years,
award goals will be directed toward a combination of increased
sales and profitability. In addition, the base compensation of
the Chief Executive Officer will be restored to competitive
levels.
SUMMARY
The Compensation Committee will continue to review the
Company's executive compensation programs to assure that such
programs are consistent with the objective of providing a strong
and direct link among shareholder value, Company performance,
and executive compensation.
By the Compensation Committee
Dr. Bert M. Tolbert, Chairman
Dr. William E. Coleman, Director
Dr. Stanley J. Cristol, Director
Mr. Robert F. Saydah, Director
and by Dr. Dean P. Stull, Chief Executive Officer
for the limited purposes stated above
The following table sets forth the cash compensation paid by
the Company for services to the Chief Executive Officer and to
each of the four most highly compensated executive officers of
the Company whose cash compensation exceeded $100,000 during the
fiscal year ended April 30, 1995:
<TABLE>
SUMMARY COMPENSATION TABLE
Long Term Compensation
Annual Compensation Awards
Name Restricted Securities All
and Stock Underlying Other
Principal Fiscal Award(s) Options/ Compensation
Positions Year Salary($)(1) Bonus($) ($) (#) ($)(2)
<S> <C> <C> <C> <C> <C>
Dean P. Stull 1995 $155,798 - - 39,953(4) 4,125
Chief Executive 1994 165,000 50,000 - 13,298 6,738
Officer 1993 156,700 - - 10,982 3,512
Thomas A. Scales 1995 136,550 68,400(3) - 99,742(4) 4,615
President/Chief Operations 1994 152,000 60,000 - 10,823 6,712
Officer 1993 146,800 20,000 26,750 9,780 3,826
Randy J. Daughenbaugh 1995 139,746 - - 23,928(4) 4,440
Executive Vice Pres./ 1994 148,000 30,000 - 9,164 7,099
Chief Technical Officer 1993 142,700 - - 9,932 3,468
Timothy D. Ziebarth 1995 113,308 - - 11,239(4) 3,600
Senior Vice Pres./ 1994 120,000 250 - 2,344 5,886
Director of Technical Services 1993 89,300 - - 1,243 1,972
William E. Paukert 1995 84,981 - - 15,429(4) 675
Chief Financial Officer 1994 90,000 20,000 - 5,341 2,049
and Treasurer 1993 84,400 - - 791 2,106
</TABLE>
_________________________
(1) The salaries did not increase from fiscal 1993 to fiscal
1994. The increase reflected in the table is attributable
to the time of year in which the raise in 1993 was
effective, September 1992. During fiscal 1995, the base
salaries of the five named executives were adjusted down
by ten percent (10%).
(2) The amounts included in All Other Compensation represent
the cash and stock contribution made by the Company on
behalf of the named executives to the Company's 401(k)
Plan. The Company matches, with a cash contribution, 20%
of the first 6% of the participants contribution, and
effective January 1993, the Company also matched, with a
contribution of its Common Stock, the remaining 80% of the
first 6% of the participant's contribution. The stock
match was discontinued effective November 1, 1994. During
fiscal 1995, the Company contributed an aggregate of 3,274
shares of the Company's Common Stock on behalf of the named
executive officers, as a result of the Company's 80% match
in Common Stock. The fair market value of the shares of
Common Stock contributed was $4.315 per share as of April
30, 1995. Accordingly, the value received by Messrs.
Stull, Scales, Daughenbaugh, Ziebarth and Paukert was
$3,316, $3,279, $3,897, $3,369 and $267, respectively.
During fiscal 1994, the Company contributed an aggregate
of 2,539 shares of the Company's Common Stock on behalf of
the named executive officers, as a result of the Company's
80% match in Common Stock. The fair market value of the
shares of Common Stock contributed was $8.50 per share as
of April 30, 1994. Accordingly, the value received by
Messrs. Stull, Scales, Daughenbaugh, Ziebarth and Paukert
was $5,138, $5,040, $5,323, $4,484 and $1,599,
respectively. During fiscal 1993, the Company contributed
an aggregate of 612 shares of the Company's Common Stock
on behalf of the named executive officers, as a result of
the Company's 80% match in Common Stock. The fair market
value of the shares of Common Stock contributed was $14.13
per share as of April 30, 1993. Accordingly, the value
received by Messrs. Stull, Scales, Daughenbaugh, Ziebarth
and Paukert was $1,951, $2,121, $2,066, $1,261 and $1,256,
respectively.
(3) Mr. Scales received a one-time cash termination payment of
$68,400 in connection with his resignation from the Company
effective April 30, 1995.
(4) Does not include options which were granted in prior years
and which were repriced on October 27, 1994.
Stock Option Plans
1987 Non-Statutory Stock Option Plan
In 1987, the Company adopted a non-statutory stock option
plan (the "Non-Statutory Plan") under which 658,720 shares of
its Common Stock have been reserved for issuance. As of April
30, 1995, there were 603,127 shares of Common Stock committed
under the Non-Statutory Plan. The Non-Statutory Plan provides
for the grant of non-statutory stock options to officers,
directors and key employees of the Company, or to independent
contractors providing services to the Company, as determined by
the Board. The Non-Statutory Plan is administered by the
Compensation Committee of the Board. Subject to the limitations
set forth in the Non-Statutory Plan, the Compensation Committee
of the Board has the authority to select the persons to whom
grants are to be made, to designate the number of shares to be
covered by and the terms of each option, including exercise
price and vesting, and to determine the terms of option
agreements and other agreements relating to each option granted.
Options granted under the Non-Statutory Plan are generally
non-transferrable and expire upon the termination of an
optionee's employment relationship with the Company. In
general, if an optionee is permanently disabled during his or
her employment by or service to the Company, such person's
option may be exercised up to one year following the date of
termination of employment. The Non-Statutory Plan will
terminate in November 1997, unless terminated sooner by the
Board.
During fiscal 1995, the Compensation Committee of the
Board of Directors (consisting of Drs. Tolbert, Coleman, Cristol
and Saydah) recommended the distribution of 151,805 stock
options pursuant to the Non-Statutory Plan to employees and
directors who had been employed over one-half time for one full
year. The options are exercisable for periods ranging from one
to five years after grant, at an exercise price ranging from 80%
- - 100% of market price on the date of grant. The amount of the
award was determined by using a percentage of that employee's
annual salary as of the employee's anniversary date with the
Company. During fiscal 1995, options to purchase 18,607 shares
were exercised and options to purchase 118,250 shares expired.
1992 Incentive Stock Option Plan
The 1992 Plan provides for the granting of incentive
stock options to Executive Officers and key employees of the
Company and its subsidiaries to purchase a maximum of 700,000
shares of the Company's Common Stock. As of April 30, 1995,
251,032 shares were committed under the 1992 Plan. The 1992 Plan
provides for the grant of incentive stock options intended to
qualify as such under Section 422 of the Internal Revenue Code
of 1986, as amended. The exercise price of options granted
under the 1992 Plan may not be less than 100% of the fair market
value of the Common Stock at the time of the grant. Options are
not transferrable and may not be exercised more than 10 years
from the date of grant. The aggregate fair market value of the
stock with respect to which incentive stock options are first
exercisable in any calendar year may not exceed $100,000. The
1992 Plan is administered by the Compensation Committee of the
Company's Board of Directors, which has the authority to
determine the persons to whom options will be granted, the
number of shares to be covered by each option, the time or times
at which options will be granted or exercised, and the term and
provisions of the options. During fiscal 1995, options to
purchase 151,805 shares were granted, options to purchase 18,607
shares were exercised and options to purchase 118,250 shares
expired.
The following table shows with respect to the Company's
Non-Statutory Plan and the 1992 Plan, for each of the Executive
Officers named in the compensation table: (a) the number of
shares subject to options granted from May 1, 1994 to April 30,
1995, (b) the percentage of total options granted to employees
during the same period, (c) the exercise price per share, (d)
the expiration date of the options, and (e) the potential
realizable value of the options.
<TABLE>
Option Grants in Last Fiscal Year
Potential Realizable
Number of Percentage of Value at Assumed
Securities Total Options Market Annual Rates of Stock
Underlying Granted to Price Price Appreciation for
Options Employees in Exercise on Date Expiration Option Term(2)
Granted(#)(1) Fiscal Year Price ($/sh) of Grant Date 5% ($) 10% ($)
<S> <C> <C> <C> <C> <C> <C> <C>
Dean P. Stull 30,000(3) 6.7530 $6.0000 $6.0000 10/26/99 $49,699.97 $109,816.11
9,953(3) 2.2404 6.0000 6.0000 10/26/00 20,309.83 46,076.08
2,063(4) 0.4643 4.8000 6.0000 11/30/99 5,956.77 10,184.02
Thomas A. Scales 7,581(4) 1.7064 6.0000 6.0000 12/01/99 12,839.18 28,442.23
25,000(3) 5.6275 6.0000 6.0000 10/26/99 41,416.65 91,513.43
15,000(3) 3.3765 6.0000 6.0000 10/26/99 24,849.99 54,908.06
9,169(3) 2.0639 6.0000 6.0000 10/26/99 15,189.97 33,563.46
Randall J. Daughenbaugh 8,928(3) 2.0096 6.0000 6.0000 10/26/01 21,797.48 50,793.62
15,000(3) 3.3765 6.0000 6.0000 10/26/02 42,953.22 102,872.62
1,850(4) 0.4164 4.8000 6.0000 11/30/99 5,341.75 9,132.55
William E. Paukert 820(4) 0.1845 5.6040 7.0000 8/31/99 1,144.72 2,760.01
5,429(3) 1.2220 6.0000 6.0000 10/26/00 11,078.28 25,132.83
5,000(3) 1.1255 6.0000 6.0000 3/15/01 10,956.84 25,111.29
Timothy D. Ziebarth 4,000(3) 0.9004 6.0000 6.0000 10/26/99 6,626.66 14,642.15
7,239(3) 1.6295 6.0000 6.0000 10/26/99 11,992.60 26,498.63
1,500(4) 0.3376 4.8000 6.0000 11/30/99 4,331.15 7,404.77
</TABLE>
(1) Does not include options which were repriced on October
27, 1994.
(2) No gain to an executive officer is possible without an
appreciation in stock value, which will benefit all
shareholders commensurately.
(3) Incentive Stock Option grants.
(4) Non-Statutory Stock Option grants which are granted at
80% of the fair market value on the date of grant.
The following table shows with respect to the Company's
Executive Officers, (a) the number of shares exercised during
the fiscal year, (b) the dollar value realized upon exercise (c)
the total number of unexercised stock options and (d) the
aggregate dollar value of in-the-money, unexercised options held
at the end of the fiscal year.
<TABLE>
Aggregated Option Exercised in Last Fiscal Year and Fiscal Year End Value Table
Number of Securities Value of
Underlying Unexercised Unexercised In-the-Money
Shares Acquired Value Options at FY End (#) Options at FY End ($)(1)
on Exercise(#) Realized($)(1) Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C> <C> <C>
Dean P. Stull - - 87,487 7,082 $ 51,300 -
Thomas A. Scales - - 96,892 2,850 - -
Randall J. Daughenbaugh 10,000 40,675 31,366 31,862 16,250 -
William E. Paukert - - 19,820 11,429 12,825 -
Timothy D. Ziebarth - - 14,139 - - -
__________________________
</TABLE>
(1) Represents the difference between the price paid and the
fair market value of the shares underlying options on the
exercise date with respect to options exercised during
the fiscal year or the fair market value of the shares
underlying options on April 30, 1995, ($4.315 per share)
with respect to unexercised options.
Employee Benefit Plan
Effective July 1992, the Company established a 401(k) plan
(the "401(k) Plan") for all employees who have completed six
months of service. Participants may contribute up to 15% of
their annual compensation subject to dollar limitations of
Section 402(g) of the Internal Revenue Code. The Company
matches, with a cash contribution, 20% of the first 6% of the
participants contribution, and effective January 1993, the
Company also matched, with a contribution of its Common Stock,
the remaining 80% of the first 6% of the participants
contribution. The Company has reserved 200,000 shares of Common
Stock for issuance under the 401(k) Plan. The Company's
matching portion vests 20% per year over 5 years. The 401(k)
Plan is subject to the provisions of the Employee Retirement
Income Security Act of 1974. The Company's contribution expense
for the year ended April 30, 1995 totalled $218,010. Pursuant
to the 401(k) Plan, Messrs. Stull, Scales, Daughenbaugh,
Paukert, Ziebarth acquired an aggregate of 3,274 shares of the
Company's Common Stock during fiscal 1995, as a result of the
Company's 80% match in Common Stock.
Certain Transactions
There were no transactions with officers, directors and their
affiliates and the Company.
SHAREHOLDER RETURN
The chart on page 17 compares the cumulative total return to
shareholders over the past five years for a holder of the
Company's Common Stock against the cumulative total return of
the NASDAQ Stock Market-US Index and the S & P Chemicals
(Specialty) Index. The chart depicts the value on April 30,
1995, of a $100 investment made on June 30, 1990.
The value of a stock over time is affected by many factors,
including the Company's earnings. The growth in the Company's
earnings since April 1990 has been substantially due to the
Supply Agreement with Bristol for the production of paclitaxel.
The decline in the stock price in August 1993 occurred after
Bristol failed to renew the Company's contract. A primary
objective of the Company over the past five years has been to
diversify into specialty natural products, evidenced by the
agreement with Tastemaker for the development and marketing of
natural flavors. Although the Company's sales have been heavily
concentrated in the paclitaxel pharmaceuticals market,
Management intends to diversify and evolve into a more balanced
mix, including pharmaceutical, flavors, nutraceuticals, and food
ingredients. This diversification should provide a less
volatile market.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
The table sets forth the cumulative five year total return among
the Company, the NASDAQ Stock Market-U.S. Index and the S & P
Chemicals (Specialty) Index assuming $100 invested on April 30,
1990 in stock or index, including reinvestment of dividends.
Key:
Hauser Chemical Research, Inc. (a black box)
Standard & Poors Chemical (Specialty) Index (a black circle)
NASDAQ Stock Market-US Index (a black triangle)
OTHER MATTERS
Management of the Company knows of no other matter which may
come before the meeting. However, if any additional matters are
properly presented at the meeting, it is intended that the per-
sons named in the enclosed Proxy, or their substitutes, will
vote such Proxy in accordance with their judgment on such
matters.
Shareholder proposals intended for presentation at the
Company's 1996 Annual Meeting of Shareholders must be received
by the Company at its principal offices in Boulder, Colorado,
not later than July 31, 1996.
ANNUAL REPORT TO SHAREHOLDERS
The Annual Report of the Company for the fiscal year ended
April 30, 1995, including audited Financial Statements for the
year then ended, was mailed to Shareholders on October 6, 1995,
and is not incorporated into these proxy materials.
IN ORDER THAT YOUR SHARES MAY BE REPRESENTED IF YOU DO NOT
PLAN TO ATTEND THE MEETING, PLEASE SIGN, DATE AND RETURN
YOUR PROXY PROMPTLY. IN THE EVENT YOU ARE ABLE TO ATTEND,
WE WILL, IF YOU REQUEST, CANCEL THE PROXY.
SIGNATURE
By Order of the Board of Directors
Dean P. Stull, Chairman
Boulder, Colorado
October 9, 1995
