<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to 240.14a - 11(c) or 240.14a - 12
Hansen Natural Corporation
- -------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- -------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregrate value of transaction:
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(5) Total fee paid:
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/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(4) Date Filed:
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<PAGE>
HANSEN NATURAL CORPORATION
2380 Railroad Street, Suite 101
Corona, California 92880-5471
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD SEPTEMBER 24, 1999
August 24, 1999
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders of Hansen
Natural Corporation to be held on Friday, September 24, 1999 at 3:00 p.m., at
the Board Room, Suite 101, 2380 Railroad Street, Corona, California 92880-5471.
In addition to the specific matters to be voted on at the meeting, there will be
a report on the Company's business and an opportunity for stockholders of the
Company to ask questions. I hope that you will be able to join us. If you are
unable to attend, I strongly urge you to complete your enclosed proxy. Your vote
is very important.
Sincerely,
/s/ Rodney C. Sacks
Rodney C. Sacks
Chairman of the Board
<PAGE>
HANSEN NATURAL CORPORATION
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD SEPTEMBER 24, 1999
TO THE STOCKHOLDERS OF THE COMPANY:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of
Hansen Natural Corporation ("Hansen" or the "Company") will be held on Friday,
September 24, 1999 at 3:00 p.m., at the Board Room, Suite 101, 2380 Railroad
Street, Corona, California 92880-5471, for the following purposes:
1. To elect six directors to hold office until the next annual meeting of
stockholders of the Company.
2. To ratify the appointment of Deloitte & Touche as independent auditors
of the Company for the year ending December 31, 1999.
3. To approve and adopt an amendment to the Company's Stock Option Plan.
4. To transact such other business as may properly come before the meeting
or any adjournment thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
Only stockholders of the Company of record at the close of business on
July 28, 1999 are entitled to notice of and to vote at the meeting and any
adjournment thereof.
All stockholders of the Company are cordially invited to attend the
meeting in person. However, to assure your representation at the meeting, you
are urged to mark, sign, date and return the enclosed proxy card as promptly as
possible in the postage-prepaid envelope enclosed for that purpose. You may
revoke your voted proxy at any time prior to the meeting or vote in person if
you attend the meeting.
A copy of the Company's Annual Report to Stockholders of the Company is
enclosed.
Sincerely,
/s/ Rodney C. Sacks
Rodney C. Sacks
Chairman of the Board
Corona, California
August 24, 1999
IMPORTANT: WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, YOU ARE REQUESTED
TO COMPLETE AND PROMPTLY RETURN THE ENCLOSED PROXY IN THE ENVELOPE
PROVIDED.
<PAGE>
HANSEN NATURAL CORPORATION
PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS
INFORMATION CONCERNING SOLICITATION AND VOTING
General
The enclosed Proxy is solicited on behalf of Hansen Natural Corporation
("Hansen" or the "Company") for use at the Annual Meeting of Stockholders of the
Company to be held Friday, September 24, 1999 at 3:00 p.m. local time, or at any
adjournment thereof, for the purposes set forth herein and in the accompanying
Notice of Annual Meeting of Stockholders of the Company. The Annual Meeting of
Stockholders of the Company will be held at the Board Room, Suite 101, 2380
Railroad Street, Corona, California 92880-5471.
These proxy solicitation materials are being mailed on or about August
24, 1999, together with the Company's 1998 Annual Report to Stockholders of the
Company, to all stockholders of the Company entitled to vote at the meeting.
Record Date and Principal Stockholders
Holders of record of Common Stock at the close of business on July 28,
1999 are entitled to notice of and to vote at the meeting. There are no other
outstanding voting securities of the Company. At the record date, 9,970,845
shares of the Company's common stock were issued and outstanding. The following
table sets forth, as of the most recent practical date (July 28, 1999), those
persons known to the Company to be the beneficial owners of more than 5% of the
Company's common stock:
Name and Address Amount and Nature of Percent
of Beneficial Owner Beneficial Ownership of Class
Brandon Limited Partnership No.1(1) 680,899 6.8%
Brandon Limited Partnership No.2(2) 2,831,667 28.4%
Rodney C. Sacks(3) 3,947,066(4) 39.4%
Hilton H. Schlosberg(5) 3,906,163(6) 39.0%
(1) The mailing address of Brandon Limited Partnership No. 1 ("Brandon
No. 1") is P.O. Box 30749, Seven Mile Beach, Grand Cayman, British West
Indies. The general partners of Brandon No. 1 are Rodney C. Sacks and
Hilton H. Schlosberg.
1
<PAGE>
(2) The mailing address of Brandon Limited Partnership No. 2 ("Brandon
No. 2") is P.O. Box 30749, Seven Mile Beach, Grand Cayman, British West
Indies. The general partners of Brandon No. 2 are Rodney C. Sacks and
Hilton H. Schlosberg.
(3) The mailing address of Mr. Sacks is 2380 Railroad Street, Suite 101,
Corona, California 92880-5471.
(4) Includes 387,500 shares of the Company's common stock owned by Mr. Sacks;
680,899 shares beneficially held by Brandon No. 1 because Mr. Sacks is one
of Brandon No. 1's general partners; and 2,831,667 shares beneficially
held by Brandon No. 2 because Mr. Sacks is one of Brandon No. 2's general
partners. Also includes options to purchase 37,500 shares of the Company's
common stock exercisable at $1.59 per share granted pursuant to a Stock
Option Agreement dated January 30, 1998; and options presently exercisable
to purchase 9,500 shares of the Company's common stock, out of options to
purchase a total of 100,000 shares, exercisable at $4.25 per share,
granted pursuant to a Stock Option Agreement dated February 2, 1999
between the Company and Mr.
Sacks.
Mr. Sacks disclaims beneficial ownership of all shares deemed beneficially
owned by him hereunder except (i) 387,500 shares of the Company's common
stock, (ii) the 137,500 shares presently issuable under the Plan and (iii)
his proportionate interest as a shareholder in the following shares
beneficially owned by Hazelwood Investments Limited, a company controlled
by Mr. Sacks and his family ("Hazelwood"): (a) the 243,546 shares held by
Brandon No. 1 allocable to Hazelwood's limited partnership interest in
Brandon No. 1 and (b) the 250,000 shares held by Brandon No. 2 allocable to
Hazelwood's limited partnership interest in Brandon No. 2.
(5) The mailing address of Mr. Schlosberg is 2380 Railroad Street, Suite 101,
Corona, California 92880-5471.
(6) Includes 346,597 shares of the Company's common stock owned by Mr.
Schlosberg; 680,899 shares beneficially held by Brandon No. 1 because Mr.
Schlosberg is one of Brandon No. 1's general partners; and 2,831,667
shares beneficially held by Brandon No. 2 because Mr. Schlosberg is one of
Brandon No. 2's general partners. Also includes options to purchase 37,500
shares of the Company's common stock exercisable at $1.59 per share
granted pursuant to a Stock Option Agreement dated January 30, 1998
between the Company and Mr. Schlosberg; and options presently exercisable
to purchase 9,500 shares of the Company's common stock, out of options to
purchase a total of 100,000 shares, exercisable at $4.25 per share,
granted pursuant to a Stock Option Agreement dated February 2, 1999
between the Company and Mr. Schlosberg.
Mr. Schlosberg disclaims beneficial ownership of all shares deemed
beneficially owned by him hereunder except (i) 346,597 shares of the
Company's common stock, (ii) the 137,500 shares presently issuable under
the Plan and (iii) his proportionate interest as a shareholder in the
following shares beneficially owned by Brandon Securities Limited, a
company controlled by Mr. Schlosberg and his family: (a) the 247,911
shares held by Brandon No. 1 allocable to Brandon Securities Limited's
limited partnership interest in Brandon No 1 and (b) the 250,000 shares
held by Brandon No. 2 allocable to Brandon Securities Limited's limited
partnership interest in Brandon No. 2.
Section 16(a) Reports
Section 16(a) of the Exchange Act requires the Company's directors and
executive officers, and persons who own more than 10% of a registered class of
the Company's equity securities, to file by specific dates with the Securities
and Exchange Commission (the "SEC"), initial reports of ownership and reports of
changes in ownership of equity securities of the Company, Officers, directors
and greater than 10% stockholders of the Company are required by SEC regulation
to furnish the Company with copies of all Section 16(a) forms that they file.
To the Company's knowledge, based solely on review of copies of such
reports furnished to the Company during the two fiscal years ended December 31,
1998, all Section 16(a) filing requirements applicable to the Company's
officers, directors and greater than 10% stockholders of the Company were
complied with.
2
<PAGE>
Revocability of Proxies
Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time before its use by delivering to the Company a written
notice of revocation or duly executed proxy bearing a later date or by attending
the meeting and voting in person.
Voting and Solicitation
In accordance with the Company's by-laws, directors shall be elected by the
affirmative vote of a plurality of the votes cast in person or by proxy by the
holders of shares entitled to vote in the election at the Annual Meeting of
Stockholders of the Company, and the adoption of the amendment to the Company's
Stock Option Plan (the "Plan") and the ratification of Deloitte & Touche as
independent auditors shall be by the affirmative vote of the majority of the
shares voting on the proposal in person or by proxy at the Annual Meeting of
Stockholders of the Company, in each case, provided a quorum is present. Thus,
abstentions and broker non-votes will not be included in vote totals and will
have no effect on the outcome of the vote. No stockholder shall be entitled to
cumulate votes.
The cost of soliciting proxies will be borne by the Company. The Company may
reimburse brokerage firms and other persons representing beneficial owners of
shares for their expenses in forwarding solicitation material to such beneficial
owners. Proxies may also be solicited by certain of the Company's directors,
officers and regular employees, without additional compensation, personally or
by telephone, telegram or letter.
Deadline for Receipt of Stockholder Proposals
It is presently intended that next year's Annual Meeting of Stockholders of
the Company will be held in June of 2000. Accordingly, proposals of stockholders
of the Company which are intended to be presented by such stockholders of the
Company at next year's Annual Meeting of Stockholders must be received by the
Company by no later than February 28, 2000 in order that they may be considered
for inclusion in the proxy statement and form of proxy relating to that meeting.
3
<PAGE>
PROPOSAL ONE
ELECTION OF DIRECTORS
Nominees
A Board of six directors is to be elected at the meeting. Unless otherwise
instructed, the proxy holders will vote the proxies received by them for the
Company's six nominees named below, all of whom are presently directors of the
Company. In the event that any nominee of the Company is unable or declines to
serve as a director at the time of the Annual Meeting of Stockholders, the
proxies will be voted for any nominee who shall be designated by the present
Board of directors of the Company to fill the vacancy. The Company is not aware
of any nominee who will be unable or will decline to serve as a director. The
term of office of each person elected as a director will continue until the next
Annual Meeting of Stockholders or until a successor has been elected and
qualified.
The names of the nominees, and certain information about them, are set forth
below.
Name of Nominee Age Director Since
Rodney C. Sacks...........................49 1990
Hilton H. Schlosberg......................46 1990
Benjamin M. Polk..........................48 1990
Norman C. Epstein.........................58 1992
Harold C. Taber, Jr.......................60 1992
Mark S. Vidergauz.........................46 1998
Set forth below is a description of each nominee's principal occupation and
business background during the past five years.
Rodney C. Sacks has been Chairman, Chief Executive Officer and director of
the Company from November 1990 to the present. Member of the Executive Committee
of the Board of Directors of the Company since October 1992. Chairman and a
director of Hansen Beverage Company ("HBC") from June 1992 to the present. Chief
Financial Officer of the Company from November 1990 to July 1996.
Hilton H. Schlosberg has been Vice Chairman, President, Chief Operating
Officer, Secretary, and a director of the Company from November 1990 to the
present. Chief Financial Officer of the Company since July 1996. Member of the
Executive Committee of the Board of Directors of the Company since October 1992.
Member of the Audit Committee of the Board of Directors of the Company since
September 1997. Vice Chairman and a director of HBC from July 1992 to the
present. Director and/or Deputy Chairman of AAF Industries PLC, a United Kingdom
publicly quoted industrial group, from June 1990 until April 1995.
4
<PAGE>
Benjamin M. Polk has been a director of the Company from November 1990 to the
present. Assistant Secretary of HBC since October 1992 and a director of HBC
since July 1992. Member of the Audit Committee of the Board of Directors of the
Company since September 1997. Member of the Compensation Committee of the Board
of Directors of the Company from April 1991 until September 1997. Partner with
Whitman Breed Abbott & Morgan LLP (New York, New York) where Mr. Polk has
practiced law with that firm and its predecessor, Whitman & Ransom, from August
1976 to the present.
Norman C. Epstein has been a director of the Company and member of the
Compensation Committee of the Board of Directors of the Company since June 1992.
Member and Chairman of the Audit Committee of the Board of Directors of the
Company since September 1997. Director of HBC since July 1992. Director of
Integrated Asset Management Limited, a company listed on the London Stock
Exchange since June 1998. Managing Director of Cheval Acceptances, a mortgage
finance company based in London, England. Partner with Moore Stephens, an
international accounting firm, from 1974 to December 1996 (senior partner
beginning 1989 and the managing partner of Moore Stephens, New York from 1993
until 1995).
Harold C. Taber, Jr. has been a director of the Company since July 1992.
Consultant to the Company from July 1, 1997 to the present. Consultant to The
Joseph Company from September 1997 to the present. President and Chief Executive
Officer and a director of HBC from July 1992 to June 1997. On June 30, 1997, Mr.
Taber resigned from his employment as well as director, President and Chief
Executive Officer of HBC. In addition, effective June 30, 1997, Mr. Taber
resigned as a member of the Executive Committee on which he served since October
1992.
Mark S. Vidergauz has been a director of the Company and member of the
Compensation Committee of the Board of Directors of the Company since June 1998.
Managing director and head of the Los Angeles office of ING Baring Furman Selz
LLC, a diversified financial services institution headquartered in the
Netherlands. Prior to joining ING Baring Furman Selz LLC in April 1995, Mr.
Vidergauz was a managing director at Wedbush Morgan Securities, an investment
banking firm in Los Angeles, from 1991 to 1995. Prior to joining Wedbush, Mr.
Vidergauz was a corporate finance attorney in the Los Angeles office of
O'Melveny & Meyers.
5
<PAGE>
Security Ownership of Management
The following table sets forth information as to the beneficial ownership of
shares of Common Stock as at July 28, 1999 held by persons who are directors of
the Company naming them, and as to directors and officers of the Company as a
group, without naming them.
Name of Amount and Nature Percent
Beneficial Owner of Beneficial Owner of Class
Rodney C. Sacks 3,947,066(1) 39.4%
Hilton H. Schlosberg 3,906,163(2) 39.0%
Harold C. Taber, Jr. 106,419(3) 1.1%
Benjamin M. Polk 25,600(4) *%
Norman C. Epstein 13,149(5) *%
Mark S. Vidergauz 4,000(6) *%
Officers and Directors as a group (6 members:
4,489,831 shares or 45.5% in aggregate)(7)
- -------------
*Less than 1%
THE BOARD OF DIRECTORS URGES STOCKHOLDERS TO VOTE "FOR" EACH OF THE
NOMINEES FOR DIRECTOR SET FORTH ABOVE.
6
<PAGE>
(1) Includes 387,500 shares of the Company's common stock owned by Mr. Sacks;
680,899 shares beneficially held by Brandon No. 1 because Mr. Sacks is one
of Brandon No. 1's general partners; and 2,831,667 shares beneficially held
by Brandon No. 2 because Mr. Sacks is one of Brandon No. 2's general
partners. Also includes options to purchase 37,500 shares of the Company's
common stock exercisable at $1.59 per share granted pursuant to a Stock
Option Agreement dated January 30, 1998; and options presently exercisable
to purchase 9,500 shares of the Company's common stock, out of options to
purchase a total of 100,000 shares, exercisable at $4.25 per share, granted
pursuant to a Stock Option Agreement dated February 2, 1999 between the
Company and Mr. Sacks.
Mr. Sacks disclaims beneficial ownership of all shares deemed beneficially
owned by him hereunder except (i) 387,500 shares of the Company's common
stock, (ii) the 137,500 shares presently issuable under the Plan and (iii)
his proportionate interest as a shareholder in the following shares
beneficially owned by Hazelwood Investments Limited, a company controlled
by Mr. Sacks and his family ("Hazelwood"): (a) the 243,546 shares held by
Brandon No. 1 allocable to Hazelwood's limited partnership interest in
Brandon No. 1 and (b) the 250,000 shares held by Brandon No. 2 allocable to
Hazelwood's limited partnership interest in Brandon No. 2.
(2) Includes 346,597 shares of the Company's common stock owned by Mr.
Schlosberg; 680,899 shares beneficially held by Brandon No. 1 because Mr.
Schlosberg is one of Brandon No. 1's general partners; and 2,831,667 shares
beneficially held by Brandon No. 2 because Mr. Schlosberg is one of Brandon
No. 2's general partners. Also includes options to purchase 37,500 shares
of the Company's common stock exercisable at $1.59 per share granted
pursuant to a Stock Option Agreement dated January 30, 1998 between the
Company and Mr. Schlosberg; and options presently exercisable to purchase
9,500 shares of the Company's common stock, out of options to purchase a
total of 100,000 shares, exercisable at $4.25 per share, granted pursuant
to a Stock Option Agreement dated February 2, 1999 between the Company and
Mr. Schlosberg.
Mr. Schlosberg disclaims beneficial ownership of all shares deemed
beneficially owned by him hereunder except (i) 346,597 shares of the
Company's common stock, (ii) the 137,500 shares presently issuable under
the Plan and (iii) his proportionate interest as a shareholder in the
following shares beneficially owned by Brandon Securities Limited, a
company controlled by Mr. Schlosberg and his family: (a) the 247,911 shares
held by Brandon No. 1 allocable to Brandon Securities Limited's limited
partnership interest in Brandon No 1 and (b) the 250,000 shares held by
Brandon No. 2 allocable to Brandon Securities Limited's limited partnership
interest in Brandon No. 2.
(3) Includes 71,137 shares of the Company's common stock owned by Mr. Taber;
and 35,281.7 shares of the Company's common stock owned by the Taber Family
Trust of which Mr. Taber and his wife are trustees.
(4) Includes 13,600 shares of the Company's common stock jointly owned by Mr.
Polk and his wife. Also includes options to purchase 12,000 shares of the
Company's common stock exercisable at $1.38 per share, granted pursuant to
a Stock Option Agreement dated June 30, 1995 between the Company and Mr.
Polk.
(5) Includes 13,149 shares of the Company's common stock owned by Mr. Epstein.
(6) Includes options presently exercisable to purchase 4,000 shares of the
Company's common stock, out of options to purchase a total of 12,000
shares, exercisable at $3.27 per share, granted pursuant to a Stock Option
Agreement dated June 18, 1998 between the company and Mr. Vidergauz..
(7) Shares are held indirectly to the extent indicated.
Change of Control
There are no arrangements known to the Company, the operation of which may at a
subsequent date, result in a change of control of the Company.
7
<PAGE>
PROPOSAL TWO
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors of the Company has selected Deloitte & Touche,
independent auditors, to audit the financial statements of the Company for the
year ending December 31, 1999. In the event of a negative vote on such
ratification, the Board of Directors of the Company will reconsider its
selection.
Representatives of Deloitte & Touche are expected to be present at the
meeting with the opportunity to make a statement if they desire to do so, and
are expected to be available to respond to appropriate questions from
stockholders of the Company.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" RATIFICATION
OF DELOITTE & TOUCHE AS THE COMPANY'S INDEPENDENT AUDITORS.
PROPOSAL THREE
AMENDMENT TO THE HANSEN NATURAL CORPORATION
STOCK OPTION PLAN
The Board of Directors of the Company adopted a resolution to amend the
Plan to provide that the aggregate number of shares of common stock issuable
upon the exercise of options granted under the Plan shall be increased from
2,000,000 shares to 3,000,000 shares, subject to approval by the stockholders of
the Company at the Annual Meeting of Stockholders. The amendment, if approved by
the stockholders of the Company, would be effective as of January 4, 1999, the
date such resolution was adopted by the Board of Directors of the Company.
The purpose of increasing the number of shares that may be issued pursuant
to options granted under the Plan from 2,000,000 (approximately 20.1% of the
currently issued shares) to 3,000,000 (approximately 30.1% of the currently
issued shares) is to permit the grant of a greater number of stock options to
the employees of the Company. Management of the Company believes that awards of
stock options are an essential ingredient of compensation for key employees.
A copy of the resolution to be voted upon for adoption by the stockholders
of the Company and the proposed amendment to the Plan are set forth in Appendix
A to this proxy statement.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" APPROVAL OF
THE AMENDMENT TO THE HANSEN NATURAL CORPORATION STOCK OPTION PLAN.
MANAGEMENT
Board Meetings and Committees
The Board of Directors of the Company held two meetings during the period
January 1, 1998 to December 31, 1998. Each of the then incumbent directors
attended such meetings, other than Norman C. Epstein and Benjamin M. Polk who
did not attend one of the meetings, but was available telephonically, and Harold
C. Taber who did not attend the other meeting, but was available telephonically.
8
<PAGE>
In April 1991, the Board of Directors of the Company established a
Compensation Committee consisting of non-employee directors to administer the
Company's Stock Option Plan ("the Plan"). The Compensation Committee presently
has two members, Norman C. Epstein and Mark S. Vidergauz. The Compensation
Committee did not hold any meetings during the year ended December 31, 1998.
Awards granted to date by the Committee have been authorized by written consent.
In October 1992, the Board of Directors of the Company established an
Executive Committee comprised of Rodney C. Sacks, Hilton H. Schlosberg and
Harold C. Taber, Jr. Following the resignation of Mr. Taber in June 1997, the
Executive Committee presently has two members. The Executive Committee did not
hold any meetings during the year ended December 31, 1998. Decisions made by the
Executive Committee during the year ended December 31, 1998 were authorized by
written consent.
On September 10, 1997, the Board of Directors of the Company established an
Audit Committee consisting of Hilton H. Schlosberg and two independent
directors, Norman C. Epstein (Chairman) and Benjamin M. Polk. The Audit
Committee did not hold any meetings during the year ended December 31, 1998.
Employment Agreements
The Company entered into an employment agreement dated as of January 1,
1999, with Rodney C. Sacks pursuant to which Mr. Sacks renders services to the
Company as its Chairman and Chief Executive Officer for an annual base salary of
$180,000, for the twelve-month period ending December 31, 1999, increasing by a
minimum of 8% for each subsequent twelve-month period during the employment
period, plus an annual bonus in an amount determined at the discretion of the
Board of Directors of the Company and certain fringe benefits. The employment
period commenced on January 1, 1999 and ends on December 31, 2003.
The Company also entered into an employment agreement dated as of January
1, 1999, with Hilton H. Schlosberg pursuant to which Mr. Schlosberg renders
services to the Company as its Vice Chairman, President and Chief Financial
Officer, for an annual base salary of $180,000, for the twelve-month period
ending December 31, 1999, increasing by a minimum of 8% for each subsequent
twelve-month period during the employment period, plus an annual bonus in an
amount determined at the discretion of the Board of Directors of the Company and
certain fringe benefits. The employment period commenced on January 1, 1999 and
ends on December 31, 2003.
Effective June 30, 1997, Mr. Taber elected to retire and terminated his
employment agreement with HBC and entered into a Severance and Consulting
Agreement with the Company and HBC (the "Consulting Agreement") pursuant to
which, among other matters, HBC agreed to retain Mr. Taber as a consultant for a
period of two years at a fixed monthly fee of $5,000 and Mr. Taber's Stock
Option Agreement with the Company dated as of June 30, 1995 was terminated and
replaced with a new Stock Option Agreement with the Company dated as of June 20,
1997 (the "Replacement Stock Option Agreement"). Under the terms of the
Replacement Stock Option Agreement, Mr. Taber was granted options to purchase
100,000 shares of the Company's common stock exercisable until June 30, 1999 at
$1.38 per share. Mr. Taber remains a director of the Company. In addition, Mr.
9
<PAGE>
Taber agreed to repay amounts owed by him to HBC under a certain promissory note
by offsetting amounts owed under the note against accrued and unpaid base pay
payable under Mr. Taber's employment agreement and amounts payable under the
Consulting Agreement. See "Certain Relationships and Related Transactions"
below.
The preceding descriptions of the employment agreements for Messrs. Sacks
and Schlosberg and the Consulting Agreement and Replacement Stock Option
Agreement with Mr. Taber are qualified in their entirety by reference to such
agreements which have previously been filed or incorporated by reference as
exhibits to the Company's annual report on Form 10-K for the year ended December
31, 1998 and the Company's quarterly report on Form 10-Q for the period ended
September 30, 1997.
Executive Compensation
The following tables set forth certain information regarding the total
remuneration earned and grants of options/SARs made to the chief executive
officer and each of the four most highly compensated executive officers of the
Company and its subsidiaries who earned total cash compensation in excess of
$100,000 during the year ended December 31, 1998. These amounts reflect total
cash compensation earned by the Company and its subsidiaries to these
individuals during the fiscal years December 31, 1996 through 1998.
SUMMARY COMPENSATION TABLE
<TABLE>
<S> <C> <C> <C> <C> <C>
- ----------------------------------------- ---------------------------------------------- ------------------
Annual Compensation(1) Long Term
Compensation(4)
Awards(5)
- ----------------------------------------- ---------------------------------------------- ------------------
Other Securities
Annual underlying
Name and Principal Positions Salary Bonus(2) Compensation($)(3) Options/SARs (#)
Year ($) ($)
- ----------------------------- ----------- --------------- ----------- ------------------ ------------------
Rodney C. Sacks 1998 160,000 34,000 5,806 75,000
Chairman, CEO 1997 160,000 - 12,302 -
and Director 1996 135,000 - 10,293 -
- ----------------------------- ----------- --------------- ----------- ------------------ ------------------
Hilton H. Schlosberg 1998 160,000 34,000 5,847 75,000
Vice-Chairman, CFO 1997 158,030 - 5,572 -
President, Secretary and 1996 127,500 - 5,358 -
Director
- ----------------------------- ----------- --------------- ----------- ------------------ ------------------
Mark J. Hall 1998 136,250 65,000 1,322 30,000
Sr. Vice President 1997 116,250 40,000 6,327 120,000
Distributor Division 1996 - - - -
- ----------------------------- ----------- --------------- ----------- ------------------ ------------------
Kirk S. Blower 1998 111,250 16,800 1,400 -
Sr. Vice President 1997 102,850 10,000 7,468 -
Juice Division 1996 96,121 9,836 4,513 -
- ----------------------------- ----------- --------------- ----------- ------------------ ------------------
John R. Brooks 1998 99,658 9,340 15,894 -
Sr. Vice President 1997 59,723 5,137 14,922 60,000
Soda Division 1996 - - - -
- ----------------------------- ----------- --------------- ----------- ------------------ ------------------
</TABLE>
(1) SALARY - Pursuant to his employment agreement, Mr. Sacks is entitled to an
annual base salary of $170,000. For 1998 and 1997, Mr. Sacks agreed to a
temporary reduction of his annual base salary to $160,000. For 1996, Mr.
Sacks agreed to a temporary reduction of his annual base salary to
$135,000.
Pursuant to his employment agreement, Mr. Schlosberg is entitled to an
annual base salary of $170,000 starting when he commenced full-time
employment, during July 1995. For 1998, Mr. Schlosberg agreed to a
temporary reduction of his annual base salary to $160,000. For 1997, Mr.
Schlosberg agreed to a temporary reduction of his annual base salary to
$158,030. For 1996, Mr. Schlosberg agreed to a temporary reduction of his
annual base salary to $127,500.
(2) BONUS-Payments made in 1999 and 1998 for bonuses accrued in 1998 and 1997.
(3) OTHER ANNUAL COMPENSATION - The cash value of perquisites of the named
persons did not total $50,000 or 10% of payments of salary and bonus for
each of the years shown, except for Mr. Brooks in 1998 and 1997.
10
<PAGE>
For 1998, Mr. Brooks' perquisites include $15,000 for housing allowances
and $894 for automobile related expenses. For 1997, Mr. Brooks' perquisites
include $11,500 for housing allowances and $3,422 for relocation and
automobile related expenses.
(4) LTIP PAYOUTS - None paid. No plan in place.
(5) RESTRICTED STOCK AWARDS - The Company does not have a plan for restricted
stock awards.
ALL OTHER COMPENSATION - none paid
OPTION/SAR GRANTS FOR THE YEAR ENDED DECEMBER 31, 1998
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Potential realizable
value at assumed
annual rates of stock
price appreciate for
Individual Grants option term
- --------------------------- ------------------ ----------------- ------------ -------------- ---------- -------------
Percent of
Number of total
Securities Options/SARs Exercise
underlying granted to or base
Options/SARs employees in price Expiration 5% 10%
Name granted (#) 1998 ($/Share) Date ($) ($)
- --------------------------- ------------------ ----------------- ------------ -------------- ---------- -------------
Rodney C. Sacks 75,000(1) 26.3% $1.59 1/30/08 75,000 189,750
- --------------------------- ------------------ ----------------- ------------ -------------- ---------- -------------
Hilton H. Schlosberg 75,000(1) 26.3% $1.59 1/30/08 75,000 189,750
- --------------------------- ------------------ ----------------- ------------ -------------- ---------- -------------
Mark J. Hall 30,000(2) 10.5% $1.59 1/30/04 30,000 75,900
- --------------------------- ------------------ ----------------- ------------ -------------- ---------- -------------
</TABLE>
1 37,500 options to purchase the Company's common stock are exercisable on
January 30, 1998; and 37,500 are exercisable on January 30, 1999.
2 10,000 options to purchase the Company's common stock are exercisable on
January 30, 1998; 10,000 are exercisable on January 30, 1999; and 10,000
are exercisable on January 30, 2000.
11
<PAGE>
OPTION/SAR VALUES AT DECEMBER 31, 1998
<TABLE>
<S> <C> <C> <C> <C>
- ------------------------------- --------------------- -------------------- ---------------------- ----------------------
Number of underlying Value of
unexercised unexercised
options/SARs at in-the-money
Name December 31, 1998 options/SARs at
(#) December 31, 1998
($)
---------------------- ----------------------
Shares acquired on Value Exercisable/ Exercisable/
exercise (#) Realized ($) Unexercisable Unexercisable
- ------------------------------- --------------------- -------------------- ---------------------- ----------------------
Rodney C. Sacks 387,500 $1,921,625 0 / 0 /
37,500 (1) 141,938
- ------------------------------- --------------------- -------------------- ---------------------- ---------------------
Hilton H. Schlosberg 337,500 $1,684,125 0 / 0 /
37,500 (2) 141,938
- ------------------------------- --------------------- -------------------- ---------------------- ---------------------
Mark J. Hall 34,000 $ 179,660 0 / 0 /
116,000 (3) 489,940
- ------------------------------- --------------------- -------------------- ---------------------- ---------------------
Kirk S. Blower 84,000 $ 362,040 0 / 0
0 / 0
- ------------------------------- --------------------- -------------------- ---------------------- ---------------------
John R. Brooks - - 12,000 / 50,940
48,000 (4) / 203,760
- ------------------------------- --------------------- -------------------- ---------------------- ---------------------
</TABLE>
1 Includes options to purchase 37,500 shares of the Company's common stock
at $1.59 per share of which none are exercisable at December 31, 1998,
granted pursuant to a Stock Option Agreement dated January 30, 1998
between the Company and Mr. Sacks.
2 Includes options to purchase 37,500 shares of the Company's common stock
at $1.59 per share of which none are exercisable at December 31, 1998,
granted pursuant to a Stock Option Agreement dated January 30, 1998
between the Company and Mr. Schlosberg.
3 Includes options to purchase 96,000 shares of the Company's common stock
at $1.06 per share of which none are exercisable at December 31, 1998,
granted pursuant to a Stock Option Agreement dated February 10, 1997
between the Company and Mr. Hall; and options to purchase 20,000 shares of
the Company's common stock at $1.59 per share of which none are
exercisable at December 31, 1998, granted pursuant to a Stock Option
Agreement dated January 30, 1998 between the Company and Mr. Hall.
4 Includes options to purchase 60,000 share of the Company's common stock at
$1.59 per share of which 12,000 are exercisable at December 31, 1998,
granted pursuant to a Stock Option Agreement dated February 24, 1997
between the Company and Mr. Brooks.
12
<PAGE>
Performance Graph
The following graph shows a five-year comparison of cumulative total returns.(1)
[GRAPH OMITTED]
TOTAL SHAREHOLDER RETURNS
ANNUAL RETURN PERCENTAGE
Years Ending
COMPANY NAME/INDEX DEC94 DEC95 DEC96 DEC97 DEC98
- ------------------- ------ ----- ----- ----- -----
HANSEN NATURAL CORP (28.57) (63.36) 54.59 70.62 196.63
S & P SMALLCAP 600 INDEX ( 4.77) 29.96 21.32 25.58 ( 1.31)
PEER GROUP (54.85) (25.29) 52.16 33.97 ( 42.80)
INDEXED RETURNS
Years Ending
Base
Period
COMPANY NAME/INDEX DEC93 DEC94 DEC95 DEC96 DEC97 DEC98
- ------------------ ----- ----- ----- ----- ----- -----
HANSEN NATURAL CORP 100 71.43 26.17 40.46 69.03 204.76
S & P SMALLCAP 600 INDEX 100 95.23 123.76 150.14 188.56 186.10
PEER GROUP 100 45.15 33.73 51.33 68.77 39.33
(1)Annual return assumes reinvestment of dividends. Cumulative total return
assumes an initial investment of $100 on December 31, 1993. The Company's
self-selected peer group is comprised of Atlantic Premium Brands, Ltd. (which
began trading in November 1993); Great Pines Water, Inc. (which began trading in
August 1993); Saratoga Beverage Group (which began trading in June 1993); Cable
Car Beverage Corporation (which was acquired by Triarc Companies, Inc. in
December 1997); and Cott Corporation, National Beverage Corporation, Clearly
Canadian Beverage Company, Triarc Companies, Inc. and Northland Cranberries,
which are also members of the peer group, traded during the entire five-year
period.
13
<PAGE>
Compensation of Directors
The Company's current policy is to pay outside directors (non-executive
officers) who are not contractually entitled to be nominated to serve as
directors, annual fees of $7,000 plus $500 for each meeting attended of the
Board of Directors of the Company or any committee thereof. Benjamin Polk earned
directors fees of $8,000 and Norman Epstein earned directors fees of $7,500 for
the one-year period ended December 31, 1998. Mark S. Vidergauz earned directors
fees of $4,500 for the seven-month period ended December 31, 1998. See "Certain
Relationships And Related Transactions" below for description of contractual
obligations to nominate certain outside directors. Under the terms of his
Consulting Agreement, Harold C. Taber, Jr. did not receive any additional
compensation for serving as a director of the Company for the year ended
December 31, 1998.
Company Stock Option Plan
Pursuant to the Plan, Messrs. Sacks and Schlosberg have each been granted
options to purchase 37,500 shares of Common Stock pursuant to individual stock
option agreements each dated January 30, 1998 exercisable for a ten-year period
at an exercise price of $1.59 per share.
In addition, pursuant to the Plan, Messrs. Sacks and Schlosberg have each
been granted options to purchase 100,000 shares of Common Stock, each of which
vest 9,500 on February 2, 1999, 23,500 on February 2, 2000, 23,500 on February
2, 2001, 23,500 on February 2, 2002 and 20,000 on February 2, 2003, pursuant to
individual stock option agreements each dated February 2, 1999 exercisable for a
ten-year period at an exercise price of $4.25 per share.
Outside Directors Stock Option Plan
Mr. Polk has been granted options to purchase 12,000 shares of the
Company's common stock, pursuant to an individual stock option agreement, dated
as of June 30, 1995, exercisable for a ten-year period at an exercise price of
$1.38 per share, under an option plan that the Company has for its outside
directors (the "Directors Plan").
Mr. Vidergauz has been granted options to purchase 12,000 shares of the
Company's common stock, pursuant to an individual stock option agreement, dated
as of June 18, 1998, exercisable for a ten-year period at an exercise price of
$3.27 per share, under an option plan that the Company has for its outside
directors (the "Directors Plan").
14
<PAGE>
Certain Relationships and Related Transactions
The description of the agreements and relationships set forth below is
qualified by reference to the specific terms of such agreements and the
description of such relationships set forth in reports and registration
statements and exhibits thereto filed or to be filed by the Company with the SEC
under the 34 Act and the Securities Act of 1933, including any post-effective
amendments to the Company's registration statement on Form S-3 (No. 33-35796)
and on Form S-8 (No. 333-41333). Copies of any such reports and registration
statement or exhibits thereto will be provided upon written request directed to
the Chairman, Hansen Natural Corporation, 2380 Railroad Street, Suite 101,
Corona, California 92880-5471 and payment of a fee in the amount of the
Company's reasonable expenses in furnishing such documents.
Pursuant to the terms of a certain Assignment Agreement dated July 27, 1992
between Hansen Juices, Inc., now known as the Fresh Juice Company of California,
Inc. ("FJC") and Hansen, the Company has agreed to nominate and solicit proxies
for the election to the Company's Board of Directors of one of the trustees
designated by the trustees of a certain trust (the "Trust") formed pursuant to
an Agreement of Trust dated July 27, 1992 for so long as the Trust shall be in
existence for the benefit of Hansen and FJC. The initial designee of the Trust
nominated to the Board was Anthony F. Kane who resigned from the Board on June
21, 1993 due to personal time constraints. No other designee has been nominated
by the Trust.
Rodney C. Sacks is currently acting as the sole trustee of the Trust, as
FJC has failed to designate any person to act as Trustee. The Company and HBC
have agreed to indemnify Mr. Sacks and hold him harmless from any claims, loss,
liability or expense arising out of his acting as Trustee.
Benjamin M. Polk is a partner of Whitman Breed Abbott & Morgan LLP, a law
firm retained by the Company since 1992 and in the current fiscal year.
OTHER MATTERS
The Company knows of no other matters to be submitted to the meeting. If
any other matters properly come before the meeting, it is the intention of the
persons named in the enclosed proxy to vote the shares they represent as the
Board of Directors of the Company may recommend.
It is important that your shares be represented at the meeting, regardless
of the number of shares which you hold. You are, therefore, urged to execute and
return, at your earliest convenience, the accompanying proxy card in the
stamped, self-addressed envelope which has been enclosed.
BY ORDER OF THE BOARD OF DIRECTORS
Dated: August 24, 1999
15
<PAGE>
APPENDIX A
Resolution Proposed for Adoption by Stockholders of the Company in connection
with the Amendment of the Hansen Natural Corporation Stock Option Plan.
RESOLVED, that the Hansen Natural Corporation Stock Option Plan
(the "Plan") be and it hereby is amended and restated to provide that
the number of shares of common stock issuable upon exercise of options
granted under the Plan shall be increased from 2,000,000 to 3,000,000.
and be it
FURTHER RESOLVED, that the Corporation shall reserve a total
3,000,000 shares of Stock for issuance pursuant to the Plan;
and be it
FURTHER RESOLVED, that the appropriate officers of the Corporation
be and each of them hereby are, authorized, empowered and directed in
the name and on behalf of the Corporation to take all actions necessary
or appropriate to give effect to the intent of the foregoing
resolutions.
Proposed Amendment to Hansen Natural Corporation Stock Option Plan.
1. Amending the first sentence of Section 3 of the Plan:
3. Shares Subject to the Plan
The aggregate number of shares of Stock which may be awarded
under the Plan or subject to purchase by exercising Options is
3,000,000 shares.
16
<PAGE>
