-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, F8b1AvvF9XKkjvyd8cA8E44etLcLq9AM65B+/9PwVf7Ekn+hALlZCvnGMkxq15tZ /X8dc2QXNUhAkTHfISN2/w== 0000950123-99-004003.txt : 19990503 0000950123-99-004003.hdr.sgml : 19990503 ACCESSION NUMBER: 0000950123-99-004003 CONFORMED SUBMISSION TYPE: 10-K405/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19981231 FILED AS OF DATE: 19990430 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TWINLAB CORP CENTRAL INDEX KEY: 0001015868 STANDARD INDUSTRIAL CLASSIFICATION: MEDICINAL CHEMICALS & BOTANICAL PRODUCTS [2833] IRS NUMBER: 113317986 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K405/A SEC ACT: SEC FILE NUMBER: 000-21003 FILM NUMBER: 99607419 BUSINESS ADDRESS: STREET 1: 150 MOTOR PARKWAY CITY: HAUPPAUGE STATE: NY ZIP: 11778 BUSINESS PHONE: 5164673140 MAIL ADDRESS: STREET 1: 150 MOTOR PARKWAY CITY: HAUPPAUGE STATE: NY ZIP: 11778 FORMER COMPANY: FORMER CONFORMED NAME: TLG LABORATORIES HOLDING CORP DATE OF NAME CHANGE: 19960603 10-K405/A 1 TWINLAB CORPORATION 1 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------------ FORM 10-K/A AMENDMENT NO. 1 TO FORM 10-K ------------------------ FOR ANNUAL AND TRANSITIONAL REPORTS PURSUANT TO SECTIONS 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 1998 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE ACT OF 1934 COMMISSION FILE NUMBER 0-21003 ------------------------ TWINLAB CORPORATION (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CERTIFICATE OF INCORPORATION) DELAWARE 11-3317986 (STATE OR OTHER JURISDICTION OF INCORPORATION OR (I.R.S. EMPLOYER IDENTIFICATION NUMBER) ORGANIZATION) 150 MOTOR PARKWAY HAUPPAUGE, NEW YORK 11788 (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
(516) 467-3140 (REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE) SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT: NONE SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT: COMMON STOCK, $1.00 PAR VALUE
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ] Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in part III of this Form 10-K or any amendment to this Form 10-K. [X] The aggregate market value of shares of Common Stock of the registrant held by non-affiliates based on the closing sale price of the Common Stock on April 27, 1999 as reported on the Nasdaq National Market was $165,702,230. As of April 27, 1999, the registrant had 32,705,049 shares of Common Stock outstanding. DOCUMENTS INCORPORATED BY REFERENCE: None. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 2 TWINLAB CORPORATION FORM 10-K/A INDEX PART III
PAGE ---- Item 10. Directors and Executive Officers of the Registrant................................................ 3 Item 11. Executive Compensation............................ 6 Item 12. Security Ownership of Certain Beneficial Owners and Management............................................ 11 Item 13. Certain Relationships and Related Transactions.... 12 Signatures
2 3 AMENDMENT NO. 1 TO THE FORM 10-K FILED BY TWINLAB CORPORATION ON MARCH 31, 1999 The following Items were omitted from the Form 10-K filed by Twinlab Corporation on March 31, 1999, and such Form 10-K is hereby amended to include Part III as hereinafter set forth. PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT INFORMATION CONCERNING DIRECTORS AND EXECUTIVE OFFICERS The following table provides certain information as of March 31, 1999 about each of the Company's directors and executive officers. Each director serves a one year term, until his successor is duly elected and qualified. Brian Blechman, Dean Blechman, Neil Blechman, Ross Blechman and Steve Blechman (the "Blechman Brothers") are brothers.
DIRECTOR NAME AGE POSITIONS WITH THE COMPANY SINCE ---- --- -------------------------- -------- Ross Blechman(1) 45 Chairman of the Board, Chief Executive Of- 1996 ficer, President and Director Brian Blechman(2) 48 Executive Vice President, Treasurer and 1996 Director Dean Blechman 41 Executive Vice President and Director 1996 Neil Blechman 48 Executive Vice President, Secretary and 1996 Director Steve Blechman 45 Executive Vice President and Director; 1996 Chairman of the Board, Chief Executive Officer, Director and President of Advanced Research Press Stephen L. Welling 44 President -- Health and Natural Food Store 1997 Division and Director John G. Danhakl(1)(2) 42 Director 1996 Jonathan D. Sokoloff(1)(2) 41 Director 1996 John McCusker 59 Chief Financial Officer
- --------------- (1) Member of the Compensation Committee. (2) Member of the Audit Committee. The business experience, principal occupation, employment and certain other information concerning each director and executive officer is set forth below. Ross Blechman became Chairman of the Board, Chief Executive Officer, President and Director of the Company on May 7, 1996. Mr. Blechman joined Twin Laboratories, Inc. in 1974 and served as Vice President, Operations of the Company prior to May 7, 1996. Mr. Blechman is Chairman of the Board, President, Chief Executive Officer and Director of Twin, an Executive Vice President and Director of Advanced Research Press, Inc. ("ARP") and a Vice President and Director of Changes International. 3 4 Brian Blechman became an Executive Vice President, Treasurer and Director of the Company on May 7, 1996. Mr. Blechman joined Twin Laboratories, Inc. in 1972 and served as Vice President, Purchasing & Quality Control of the Company prior to May 7, 1996. He is responsible for purchasing, plant operations, quality control and management. Mr. Blechman is an Executive Vice President and Director of Twin and ARP, and a Vice President, Treasurer and a Director of Changes International. Dean Blechman became an Executive Vice President and Director of the Company on May 7, 1996. Mr. Blechman joined Twin Laboratories, Inc. in 1979 and served as Vice President, Sales of the Company prior to May 7, 1996. He is responsible for sales and distribution. Mr. Blechman is an Executive Vice President and Director of Twin and ARP and a Vice President and Director of Changes International. Neil Blechman became an Executive Vice President, Secretary and Director of the Company on May 7, 1996. Mr. Blechman joined Twin Laboratories, Inc. in 1972 and served as Vice President, Marketing & Advertising of the Company prior to May 7, 1996. He is responsible for marketing and advertising activities, promotional programs, merchandising strategies, packaging, trade shows and public relations. Mr. Blechman is an Executive Vice President and Director of Twin and ARP and a Vice President, Secretary and a Director of Changes International. Steve Blechman became an Executive Vice President and Director of the Company and Chairman of the Board, Chief Executive Officer, Director and President of ARP on May 7, 1996. Mr. Blechman joined Twin Laboratories, Inc. in 1974 and served as Vice President, Product Development & Marketing of the Company prior to May 7, 1996. He is involved in marketing, product development, customer service, public relations and the operations of ARP. Mr. Blechman is an Executive Vice President and Director of Twin and a Vice President and Director of Changes International. Stephen L. Welling was elected to the Board of Directors of the Company on September 16, 1997 and became President-Health and Natural Food Store Division on March 3, 1999. Mr. Welling previously was the President of Nature's Herbs Division of Twin since May 7, 1996. Mr. Welling joined Natur-Pharma Inc. in 1977 as the controller and served as President of Natur-Pharma Inc. prior to May 7, 1996. Prior to his promotion to President, Mr. Welling served as Vice President of Operations of Natur-Pharma Inc. with responsibility for manufacturing, personnel, quality management, legal affairs and finance. Mr. Welling is on the board of directors of the National Nutritional Foods Association, a leading trade organization of the industry's retailers, distributors, suppliers and manufacturers. John G. Danhakl became a director of the Company on May 7, 1996. He has been an executive officer and an equity owner of Leonard Green & Partners, L.P. ("LGP"), a merchant banking firm which manages Green Equity Investors II, L.P. ("GEI"), since 1995. Mr. Danhakl had previously been a Managing Director at Donaldson, Lufkin & Jenrette Securities Corporation ("DLJ") and had been with DLJ since 1990. Prior to joining DLJ, Mr. Danhakl was a Vice President at Drexel Burnham Lambert Incorporated ("Drexel"). Mr. Danhakl is also a director of Big 5 Corp., Communications & Power Industries, Inc., Leslie's Poolmart, Inc., Hechinger Company, The Arden Group, Inc. and Liberty Group Publishing. Mr. Danhakl also serves as a director of Twin and ARP. Jonathan D. Sokoloff became a director of the Company on May 7, 1996. He has been a partner of LGA since 1990 and has been an executive officer and equity owner of LGP since its formation in 1994. Mr. Sokoloff had previously been a Managing Director at Drexel. Mr. Sokoloff is a director of Carr-Gottstein Foods Co., Gart Sports Company and Hechinger Company. Mr. Sokoloff also serves as a Director of Twin and ARP. John McCusker became the Chief Financial Officer of the Company on November 3, 1997. He is responsible for financial management and the Company's Management Information Systems department. He was previously an independent financial consultant. From 1987 to 1996, Mr. McCusker was Chief Financial Officer for Geraghty & Miller, Inc. Upon its 1995 merger with Arcadis NV, he was appointed to the additional position of Senior Vice President. 4 5 COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS The Board of Directors of the Company has an Audit Committee and a Compensation Committee. In 1998, the Board of Directors met three times and acted by unanimous written consent on two occasions, the Compensation Committee met once and the Audit Committee met once. The Audit Committee reviews the adequacy of internal controls, the results and scope of annual audits and other services provided by the Company's independent auditors. In 1998, the Audit Committee was comprised of Brian Blechman, John Danhakl and Jennifer Holden Dunbar (until Ms. Holden Dunbar's resignation in July 1998 as a director of the Company and as a member of the Audit Committee). Jonathan Sokoloff became a member of the Audit Committee on February 25, 1999. The Compensation Committee establishes salaries, bonuses and other forms of compensation for executives of the Company and such other employees of the Company as assigned thereto by the Board. In 1998, the Compensation Committee was comprised of Ross Blechman, John Danhakl, Jennifer Holden Dunbar (until Ms. Holden Dunbar's resignation in July 1998 as a director of the Company and as a member of the Compensation Committee) and Jonathan Sokoloff. The Company does not have a nominating committee. The functions customarily performed by a nominating committee are performed by the Board of Directors as a whole. Any stockholder who wishes to make a nomination at an annual or special meeting for the election of directors must do so in compliance with the applicable procedures set forth in the Company's By-laws. The Company will furnish copies of such By-law provisions upon written request to the General Counsel's Office at the Company's principal executive offices, 150 Motor Parkway, Hauppauge, New York 11788. During the period in which each person served as a director, each director attended at least 75% of the aggregate number of meetings of the Board of Directors and the committees of the Board on which such person served. COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934 Section 16(a) of the Securities Exchange Act of 1934, as amended, requires the Company's directors and executive officers and persons who beneficially own more than ten percent of the Company's Common Stock to report their ownership of and transactions in the Company's Common Stock to the Securities and Exchange Commission and The Nasdaq National Stock Market. Copies of these reports are also required to be supplied to the Company. The Company believes, based solely on a review of the copies of such reports received by the Company, that all applicable Section 16(a) reporting requirements were complied with during 1998. 5 6 ITEM 11. EXECUTIVE COMPENSATION Summary Compensation Table. The following table sets forth compensation earned, whether paid or deferred, by the Company's Chief Executive Officer and its other four most highly compensated executive officers (collectively, the "Named Executive Officers") for services rendered in all capacities to the Company during the years ended December 31, 1996, 1997 and 1998. Prior to May 7, 1996, the Blechman Brothers collectively acted in a similar capacity to a Chief Executive Officer.
ANNUAL COMPENSATION ---------------------------------------------------------------------------------- ALL OTHER ANNUAL ALL OTHER NAME AND PRINCIPAL OCCUPATION YEAR SALARY($) BONUS($)(A) COMPENSATION($)(B) COMPENSATION($)(C) - ----------------------------- ---- --------- ----------- ------------------ ------------------ Ross Blechman Chairman of the Board, President and Chief Executive Officer............ 1998 $ 428,305 $ 300,200 $ 31,462 $ 1,365 1997 412,869 224,680 32,693 1,365 1996 403,077 324,950 18,650 1,365 Brian Blechman Executive Vice President and Treasurer................ 1998 428,305 300,200 22,275 1,660 1997 412,869 224,680 24,102 1,660 1996 403,077 324,950 19,607 1,660 Dean Blechman Executive Vice President..... 1998 428,305 300,200 23,162 1,073 1997 412,869 224,680 23,746 1,073 1996 403,077 324,950 26,531 1,073 Neil Blechman Executive Vice President and Secretary................ 1998 428,305 300,200 25,709 1,660 1997 412,869 224,680 28,520 1,660 1996 403,077 324,950 23,294 1,660 Steve Blechman Executive Vice President..... 1998 428,305 300,200 22,714 1,365 1997 412,869 224,680 25,784 1,365 1996 403,077 324,950 28,653 1,365
- --------------- (a) A description of the Company's bonus arrangements is contained below under "-- Employment Agreements." (b) For fiscal year 1996, includes (i) payment of premiums for executive medical insurance policies; (ii) matching contributions under Twin's 401(k) plan; (iii) automobile allowances; and (iv) payment of premiums for TLI's cafeteria benefits program and Twin's successor cafeteria benefits program, for each of the Blechman Brothers. For fiscal years 1997 and 1998, includes (i) payment of premiums for executive medical insurance policies; (ii) matching contributions under Twin's 401(k) plan; (iii) automobile allowances; and (iv) payment of premiums for Twin's cafeteria benefits program and Twin's successor cafeteria benefits program, for each of the Blechman Brothers. (c) For fiscal years 1996, 1997 and 1998, represents the payment of premiums for term life insurance policies for each of the Blechman Brothers. DIRECTOR COMPENSATION Directors who are employees of the Company receive no compensation for serving on the Board of Directors. Non-employee directors are reimbursed for their out-of-pocket expenses in attending Board meetings. See "Certain Relationships and Related Transactions -- Transactions with LGP" for a description of the Management Services Agreement between LGP, the Company and Twin. 6 7 EMPLOYMENT AGREEMENTS On May 7, 1996, Twin entered into employment agreements with each of the Blechman Brothers (each an "Employment Agreement"). Pursuant to the terms of the Employment Agreement, the relevant individual will be employed as an executive of the Company, Twin and ARP until November 15, 1999, renewable for terms of one year thereafter. The Employment Agreement provides for a base salary of $400,000 (as adjusted annually for inflation), in addition to other customary perquisites and benefits. In addition to receiving a base salary, the executive is also eligible to participate in Twin's Bonus Plan, which entitles such individual to a bonus payment of up to 128% of his base salary for the relevant calendar year based on annual increases in EBITDA (as defined therein) realized by the Company for each year of the employment term. The Employment Agreement also provides, subject to certain exceptions, that upon a termination of the individual's employment during the term thereof (other than for "cause" as defined therein), Twin is generally obligated to pay the individual an amount equal to his base salary for the remaining term under the Employment Agreement (which, for this purpose, will be a three year period). On May 7, 1996, Twin entered into an employment agreement with Stephen Welling to serve as President of Nature's Herbs Division of Twin (the "Division") (as amended, the "Welling Employment Agreement"). The Welling Employment Agreement provides that Mr. Welling will be employed as an executive of the Company for a term of three years, renewable for terms of one year thereafter. The Welling Employment Agreement provides for a base salary of $200,000 (as adjusted annually for inflation), in addition to other customary perquisites and benefits. In addition to receiving a base salary, Mr. Welling is also eligible to participate in the Division Bonus Plan, which entitles him to a bonus payment of up to 202.5% of his base salary for the relevant calendar year based on annual increases in EBITDA (as defined therein) realized by the Division for each year of the employment term. The Welling Employment Agreement also provides, subject to certain exceptions, that upon a termination of Mr. Welling's employment during the term thereof (other than for "cause" as defined therein), Twin is generally obligated to pay Mr. Welling an amount equal to his base salary for the remaining term under the Welling Employment Agreement. On May 7, 1996, Twin entered into consulting agreements with each of David and Jean Blechman, the parents of the Blechman Brothers and the founders of TLI (together, the "Consultants") (each a "Consulting Agreement"). The Consulting Agreement provides that the relevant individual be engaged as an independent consultant to the Company, Twin and ARP for a term of five years. As consideration for such consulting services, Twin is obligated to pay the individual an annual consulting fee of $100,000, in addition to certain limited perquisites and benefits. In May 1996, the Company and Twin entered into non-competition agreements with each of the Blechman Brothers and Stephen Welling (collectively, the "Senior Executive Officers") and the Consultants (each a "Non-Competition Agreement"). The term of the Non-Competition Agreement of each of the Blechman Brothers and of each of the Consultants and Stephen Welling is five years and three years, respectively. The Non-Competition Agreement generally prevents the individual from participating in any manner in the management, operation and/or ownership of any entity which is engaged in similar lines of business to those of the Company. COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION In 1998, the Company's Compensation Committee consisted of Ross Blechman, John Danhakl, Jennifer Holden Dunbar (until Ms. Holden Dunbar's resignation in July 1998 as a director of the Company and as a member of the Compensation Committee) and Jonathan Sokoloff. In addition to being a director and executive officer of the Company, Mr. Blechman is also Chairman of the Board, President, Chief Executive Officer and Director of Twin and an Executive Vice President and Director of ARP. Messrs. Sokoloff and Danhakl are also directors of Twin and ARP. Ms. Holden Dunbar was a director of Twin and ARP until her resignation in July 1998. See "Certain Relationships and Related Transactions" for a description of certain transactions involving the Company and the members of the Compensation Committee or entities controlled by such individuals. 7 8 REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS ON EXECUTIVE COMPENSATION The Compensation Committee, reviews and approves the compensation of executives of the Company and such other employees of the Company as assigned thereto by the Board and makes recommendations to the Board with respect to standards for setting compensation levels. In 1998, the Company's Compensation Committee consisted of Ross Blechman, John Danhakl, Jennifer Holden Dunbar (until Ms. Holden Dunbar's resignation in July 1998 as a director of the Company and as a member of the Compensation Committee) and Jonathan Sokoloff. The Compensation Committee adopted the Report on Executive Compensation set forth below. The Company does not presently have a stock option committee. The functions customarily performed by a stock option committee are performed by the Board of Directors as a whole. REPORT ON EXECUTIVE COMPENSATION The Company's executive compensation for fiscal 1998 consisted of two primary components: base salary and bonus. The level of each executive officer's base salary and bonus is established in such officer's employment agreement, which agreements were entered into in May, 1996. See " -- Employment Agreements." The salary and bonus components of the Company's executive compensation are together designed to facilitate fulfillment of the following compensation objectives: (i) retaining competent management; (ii) rewarding management for the attainment of short and long term accomplishments; (iii) aligning the interests of management with those of the Company's stockholders; and (iv) relating executive compensation to the achievement of Company goals and the Company's financial performance. Base Salary. The base salary of each of the Senior Executive Officers in fiscal 1998 was paid in accordance with the terms of their respective employment agreements. Such base salary is subject to annual adjustment for inflation. Bonuses. The Compensation Committee believes that the awarding of annual bonuses provides an incentive and reward for short-term financial success and long-term Company growth. The bonus component of the long-term employment agreements of each of the Senior Executive Officers is intended to link compensation in significant part to the Company's financial performance and the attainment of Company goals. The bonus earned by each of the Senior Executive Officers was calculated in accordance with a formula set forth in the relevant officer's employment agreement and entitles such individual to a bonus calculated as a percentage of base salary based on annual increases in EBITDA realized by Twin or the Division, as applicable, for each fiscal year. See " -- Employment Agreements." Stock Incentive Plans. The Twinlab Corporation 1996 Stock Incentive Plan (the "1996 Plan") provides for the issuance of a total of up to 400,000 authorized and unissued shares of Common Stock as awards in the form of (i) incentive stock options, (ii) nonqualified stock options, (iii) stock appreciation rights, (iv) restricted stock and (v) performance shares. No individuals who are directors of the Company (including the Blechman Brothers) are eligible to receive awards under the 1996 Plan. Prior to the consummation of the Company's initial public offering in 1996 (the "IPO"), Stephen L. Welling was awarded 8,000 nonqualified stock options under the 1996 Plan, such options having an exercise price equal to $12.00, the IPO price. In 1998, certain employees of the Company were awarded an aggregate of 214,000 nonqualified stock options with exercise prices of $29.375 per share. Such options become exercisable over five years from the date of grant at the rate of 20% of the grant each year. The Twinlab Corporation 1998 Stock Incentive Plan provides for the issuance of a total of up to 1,000,000 authorized and unissued shares of Common Stock in the form of: (i) incentive stock options, (ii) non-qualified stock options, (iii) stock appreciation rights, (iv) restricted stock, (v) restricted stock units, (vi) dividend equivalent rights and (vii) other stock based awards. Awards may be made to such officers and other employees of the Company and its subsidiaries (including employees who are directors and prospective employees who become employees), and to such consultants to the Company and its subsidiaries as the Compensation Committee shall in its discretion select. In 1998, an employee of the Company was awarded a 8 9 nonqualified stock option to purchase 50,000 shares of Common Stock at an exercise price of $25.00 per share. Such option becomes exercisable over five years from the date of grant at the rate of 20% of the grant each year. Profit Sharing Plan. Prior to July 1, 1996, Twin sponsored an employee profit sharing and savings plan (the "Twin Plan") and Natur-Pharma Inc. sponsored an Employee Savings and Investment Plan (the "NP Plan"), which covered all of Twin's and Natur-Pharma Inc.'s eligible employees, respectively. Executive officers of Twin and Natur-Pharma Inc. participated in the Twin Plan and NP Plan, respectively, on the same terms as other employees. Effective July 1, 1996, the Twin Plan was amended and restated and merged with the NP Plan to form the Twin Laboratories Inc. 401(k) Plan (the "401(k) Plan"). Eligible employees, including executive officers of the Company and Twin, may contribute up to 15% of their annual compensation to the 401(k) Plan, subject to certain limitations, and Twin will match 50% of such contributions. Compensation of the Chief Executive Officer. The compensation package of Mr. Ross Blechman, the Company's President and Chief Executive Officer, like that of the other Senior Executive Officers, primarily consists of base salary and bonus components. The levels of base salary and bonus, as well as the factors considered in determining such levels, are established by Mr. Blechman's Employment Agreement and are identical to those of the other Blechman Brothers. In 1998, Ross Blechman earned a base salary of $428,305 and a bonus of $300,200. In addition, pursuant to his employment agreement, Mr. Blechman receives certain other customary perquisites and benefits. As of April 27, 1999, Ross Blechman beneficially owned 1,660,497 shares, or 5.1%, of the Company's Common Stock. See " -- Security Ownership of Certain Beneficial Owners and Management." Ross Blechman John G. Danhakl Jonathan D. Sokoloff 9 10 STOCK PERFORMANCE GRAPH The following graph depicts the cumulative total return on the Company's Common Stock compared to the cumulative total return for the Nasdaq Composite -- U.S. and the Nasdaq Health Index. The graph assumes an investment of $100 on November 15, 1996, when the Company's stock was first traded in a public market. Reinvestment of dividends is assumed in all cases.
TWINLAB CORPORATION NASDAQ HEALTH INDEX NASDAQ COMPOSITE - U.S. ------------------- ------------------- ----------------------- 'Nov 15 96' 100.00 100.00 100.00 'Dec 96' 101.06 102.79 102.32 'Mar 97' 112.50 95.97 90.97 'Jun 97' 200.00 107.12 114.74 'Sept 97' 170.63 110.55 134.48 'Dec 97' 206.25 104.75 125.84 'Mar 98' 337.50 114.89 146.97 'Jun 98' 364.06 104.27 150.98 'Sept 98' 213.54 78.36 136.38 'Dec 98' 109.38 88.75 176.96
The comparisons in the table and on the graph above are required by the Securities and Exchange Commission and are not intended to forecast or be indicative of possible future performance of the Company's Common Stock. 10 11 ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The following table sets forth information, as of April 27, 1999, concerning the Common Stock of the Company beneficially owned (i) by each director of the Company, (ii) by the Named Executive Officers and all executive officers and directors as a group, and (iii) by each stockholder known by the Company to be the beneficial owner of more than 5% of the outstanding Common Stock. Unless otherwise indicated in the footnotes to the table, the beneficial owners named have, to the knowledge of the Company, sole voting and dispositive power with respect to the shares beneficially owned, subject to community property laws where applicable.
PERCENT OF NUMBER OF SHARES NAME AND ADDRESS OF BENEFICIAL OWNER SHARES(A) OUTSTANDING (A) ------------------------------------ --------- --------------- Green Equity Investors II, L.P. c/o Leonard Green & Partners, L.P. 11111 Santa Monica Boulevard, Suite 2000 Los Angeles, CA 90025..................................... 4,879,999 14.9 John G. Danhakl (b) c/o Leonard Green & Partners, L.P. 11111 Santa Monica Boulevard, Suite 2000 Los Angeles, CA 90025..................................... 4,879,999 14.9 Jonathan D. Sokoloff (b) c/o Leonard Green & Partners, L.P. 11111 Santa Monica Boulevard, Suite 2000 Los Angeles, CA 90025..................................... 4,879,999 14.9 Brian Blechman c/o Twin Laboratories Inc. 150 Motor Parkway Hauppauge, NY 11788....................................... 1,659,246 5.1 Dean Blechman (c) c/o Twin Laboratories Inc. 150 Motor Parkway Hauppauge, NY 11788....................................... 1,660,080 5.1 Neil Blechman (d) c/o Twin Laboratories Inc. 150 Motor Parkway Hauppauge, NY 11788....................................... 1,660,497 5.1 Ross Blechman (d) c/o Twin Laboratories Inc. 150 Motor Parkway Hauppauge, NY 11788....................................... 1,660,497 5.1 Steve Blechman (c) c/o Twin Laboratories Inc. 150 Motor Parkway Hauppauge, NY 11788....................................... 1,660,080 5.1 John McCusker (e) c/o Twin Laboratories 150 Motor Parkway Hauppauge, NY 11788....................................... 11,500 * Stephen Welling (f) c/o Twin Laboratories Inc. 150 Motor Parkway Hauppauge, NY 11788....................................... 31,970 * All executive officers and directors as a group (9 persons)(g)............................................... 13,223,869 40.4
11 12 - --------------- (a) Does not include an aggregate of 323,000 shares of Common Stock issuable upon exercise of outstanding stock options with a weighted average price of $23.02 per share. (b) The shares shown as beneficially owned by Messrs. Danhakl and Sokoloff represent 4,879,999 shares owned of record by GEI. GEI is a Delaware limited partnership managed by LGP, which is an affiliate of the general partner of GEI. Each of Leonard I. Green, Jonathan D. Sokoloff, John G. Danhakl, Peter J. Nolan and Gregory J. Annick, either directly (whether through ownership interest or position) or through one or more intermediaries, may be deemed to control LGP and such general partner. LGP and such general partner may be deemed to control the voting and disposition of the shares of Common Stock of TLC owned by GEI. As such, Messrs. Sokoloff and Danhakl may be deemed to have shared voting and investment power with respect to all shares held by GEI. However, such individuals disclaim beneficial ownership of the shares held by GEI. (c) The shares shown as beneficially owned by each of Dean Blechman and Steve Blechman each include 834 shares of Common Stock beneficially owned by their respective minor children. Dean Blechman and Steve Blechman disclaim beneficial ownership of such shares. (d) The shares shown as beneficially owned by each of Ross Blechman and Neil Blechman each include 1,251 shares of Common Stock owned by their respective minor children. Ross Blechman and Neil Blechman disclaim beneficial ownership of such shares. (e) The shares shown as beneficially owned by Mr. McCusker include 10,000 shares subject to options exercisable within 60 days, but do not include 500 shares of Common Stock owned by Mr. McCusker's spouse, Brenda McCusker. Mr. McCusker disclaims beneficial ownership of such shares. (f) The shares shown as beneficially owned by Mr. Welling include 3,200 shares subject to options exercisable within 60 days. (g) Includes the shares referred to in Notes (b), (c), (d), (e) and (f) above. * Less than 1%. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS EMPLOYMENT AGREEMENTS The Company has employment agreements with each of the Senior Executive Officers. TRANSACTIONS WITH LGP LGP is the investment advisor to and an affiliate of the general partner of GEI, which owns 14.9% of the outstanding shares of Common Stock of the Company. Messrs. Danhakl and Sokoloff, stockholders and directors of the general partner of LGP, are directors of the Company and Twin. Ms. Holden Dunbar, a stockholder and general partner of LGP, was a director of the Company and Twin until her resignation in July 1998. The Company and Twin were parties to a Management Services Agreement with LGP pursuant to which LGP received an annual retainer fee of $400,000 plus reasonable expenses for providing certain management, consulting and financial planning services (the "LGP Management Fee"). The Company believes that the contacts and expertise provided by LGP in these areas enhanced the Company's opportunities and management's expertise in these matters and that the fees paid to LGP fairly reflect the value of the services provided by LGP. In 1998, the specialized consulting services provided by LGP overlapped to some extent with the role of Messrs. Danhakl and Sokoloff and Ms. Holden Dunbar as directors of the Company and Twin, for which they did not receive any additional compensation. See "Executive Compensation -- Director Compensation." The Management Services Agreement terminated in April 1998. Ms. Holden Dunbar resigned as a director of the Company in July 1998. 12 13 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities and Exchange Act of 1934, the Registrant has duly caused this Form 10-K/A Amendment No. 1 to Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized. TWINLAB CORPORATION By: /s/ ROSS BLECHMAN ------------------------------------ Ross Blechman Chairman, Chief Executive Officer and President Date: April 30, 1999 -----END PRIVACY-ENHANCED MESSAGE-----