Severance and Consulting Agreement - Hansen Beverage Co., Hansen Natural Corp. and Harold C. Taber Jr.
SEVERANCE AND CONSULTING AGREEMENT
AGREEMENT dated as of June 20, 1997 (this "Agreement") by and
among Hansen Beverage Company, a Delaware corporation (the "Company"), Hansen
Natural Corporation, a Delaware corporation and the parent of the Company
("HNC"), and Harold C. Taber, Jr., an individual residing at 1421 Brighton
Street, La Habra, California 90631 ("Taber").
W I T N E S S E T H:
WHEREAS, Taber is the President and Chief Executive Officer of
the Company and is employed pursuant to that certain Employment Agreement dated
July 27, 1992 between the Company and Taber (the "Employment Agreement");
WHEREAS, HNC has granted to Taber an incentive stock option to
purchase shares of HNC's common stock pursuant to HNC's Stock Option Plan and
that certain Stock Option Agreement between HNC and Taber dated June 30, 1995
(the "Option Agreement");
WHEREAS, Taber desires to retire from his employment with the
Company and the Company desires to assure itself of the continued availability
of the consulting services of Taber, and to that end desires to enter into a
severance and consulting agreement with him, upon the terms and conditions
herein set forth; and
WHEREAS, Taber is desirous of entering into such a severance
and consulting agreement; NOW, THEREFORE, in consideration of the mutual
covenants herein contained and for other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the parties
hereby agree as follows:
1. Termination of Employment.
(a) Taber's employment with the Company shall be
terminated effective as of the close of business on June 30,
1997 and the Employment Agreement and the Option Agreement
will each be deemed to be terminated as of such date.
Simultaneously with the execution of this Agreement, HNC and
Taber shall enter into a Stock Option Agreement in the form
of Exhibit A hereto.
(b) Taber hereby fully and forever releases, acquits
and discharges the Company and HNC and their respective
employees, agents, attorneys, officers, directors,
successors and assigns (collectively the "Company
Releasees"), from all manner of action and causes of action,
suits, choses in action, contacts, covenants, claims, bonds,
bills, debts, dues, sums of money, rentals, commissions,
compensation for purported personal services rendered,
judgments, executions, damages, demands and rights
whatsoever, in law or in equity, now existing or which may
hereafter accrue in favor of Taber pursuant to the
Employment Agreement and the Option Agreement other than the
Company's obligations under the Employment Agreement which
by the terms of the Employment Agreement the Company is
required to fulfill between the date hereof and June 30,
1997, which obligations are specified on Schedule A hereto.
Taber covenants that he will refrain from commencing any
action or suit or participating or assisting in any manner
in the commencement or prosecution of any action or suit, in
law or equity, against the Company Releasees, or any of them
jointly or severally, on account of any action or cause of
action released hereby. In addition to any other liability
which shall accrue upon the breach of this covenant, Taber
shall indemnify the Company Releasees and hold them harmless
from any such action or suit, and shall be liable to pay all
reasonable attorney's fees and costs incurred by the Company
Releasees in defense of such action or suit.
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(c) each of the Company and HNC fully and forever
releases, acquits and discharges Taber and his successors
and assigns (collectively, the "Taber Releasees"), from all
manner of action and causes of action, suits, choses in
action, contracts, covenants, claims, bonds, bills, debts,
dues, sums of money, rentals, commissions, compensation for
purported personal services rendered, judgments, executions,
damages, demands and rights whatsoever, in law or in equity,
now existing or which may hereafter accrue in favor of the
Company or HNC pursuant to the Employment Agreement other
than Taber's obligations (i) under the Employment Agreement
which by the terms of the Employment Agreement Taber is
required to fulfill between the date hereof and June 30,
1997 and (ii) arising under Sections 9, 10, 11.1, 11.2,
11.4(c) and 11.4(d) of the Employment Agreement which Taber
and the Company agree shall survive until the fifth
anniversary of the date of this Agreement. Each of the
Company and HNC covenants that it will refrain from
commencing any action or suit or participating or assisting
in any manner in the commencement of or prosecution of any
action or suit, in law or in equity, against the Taber
Releasees, or any of them jointly or severally, on account
of any action or cause of action released hereby. In
addition to any other liability which shall accrue upon the
breach of this covenant, the Company and HNC shall indemnify
to Taber Releasees and hold them harmless from any such
action or suit, and shall be liable to pay all reasonable
attorney's fees and costs incurred by the Taber Releasees in
defense of such action or suit.
(d) It is understood that Taber may raise with the
Company the issue of the possible payment of up to $20,000
to him in connection with the voluntary reduction of his
Base Pay (as such term is defined in the Employment
Agreement) for the year ended December 31, 1996. The Company
agrees to consider such a request, but is not obligated to
pay any portion of that amount.
2. Consulting Term
The Company hereby agrees to retain Taber as a
consultant to the management of the Company and Taber hereby
accepts and agrees to serve in such capacity, for a period
of two (2) years commencing on July 1, 1997 and ending on
June 30, 1999 unless sooner terminated as herein provided
(the "Consulting Term").
3. Consulting Duties
Taber shall make himself available for up to six hours
per month (i) for consultation with the Company concerning
the manufacture, distribution, sale and promotion of the
products sold by the Company or its licensees or
sublicensees, together with consultation and advice with
respect to such other matters as the Company may request and
(ii) to attend meetings with or to contact customers and
suppliers of the Company as requested by the Company. In
addition, during the Consulting Term, Taber agrees to
continue to serve without additional compensation, if
elected, as a director of HNC.
4. Consulting Compensation
(a) For and in consideration of the services to be
rendered by Taber to the Company during the Consulting Term,
the Company agrees to pay Taber a consulting fee of $5,000
per month payable monthly or in such other installments as
the parties may mutually agree upon.
(b) During the period commencing on July 1, 1997 and
ending on December 31, 1997, the Company shall provide
medical and dental benefits to Taber comparable to the
medical and dental benefits provided to him under the
Employment Agreement.
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5. Repayment of Note.
Taber and the Company agree that Taber owes $62,246 in
principal and accrued interest as of June 30, 1997 under
Taber's Amended and Restated Promissory Note dated May 31,
1994 in the original principal amount of $82,170 (the
"Note"), and that the Note shall be repaid by setting off
(a) $4,000 in accrued but unpaid Base Pay (as such term is
defined in the Employment Agreement) through June 30, 1997
and (b) a portion of the consulting fees payable by the
Company to Taber pursuant to paragraph 4(a) hereof
commencing with the fees payable in respect of the month of
January, 1998 and continuing with each successive month
thereafter until the entire principal amount of the Note,
together with all interest accrued thereon, has been paid in
full. The portion of the consulting fees to be set off for
payment of the Note shall be calculated to fully amortize
the Note over eighteen months, in equal monthly amounts,
beginning with January, 1998. In the event of the
termination of this Agreement for any reason prior to the
repayment in full of the Note, then Taber shall pay to the
Company on the date of termination the entire principal
balance due and payable under the Note, together with all
interest accrued thereon through the date of such
termination.
6. Independent Contractor
It is understood and agreed that Taber shall at all
times during the Consulting Term be deemed to be an
independent contractor, and nothing in this Agreement shall
in any way be deemed or construed to constitute Taber as an
agent or employee of the Company nor shall Taber have the
right or authority to act as, incur, assume or create any
obligation, responsibility or liability, express or implied,
in the name of or on behalf of the Company or HNC or to bind
the Company or HNC in any manner whatsoever or sign any
documents on their behalf.
7. Withholding Tax
The Company shall not be responsible for withholding
from any payments made to Taber hereunder any contributions
levied by any state or federal statutes relating to social
security or similar benefits.
8. Termination
Taber's consulting services hereunder may be terminated
by the Company only under the following circumstances:
(a) Death. In the event Taber dies during the
Consulting Term, the Consulting Term shall terminate upon
his death.
(b) Cause. The Company may, at any time, terminate this
Agreement for Cause upon thirty (30) days' written notice of
termination to Taber. "Cause" shall mean the occurrence of
one or more of the following during the Consulting Term: (i)
the commission of embezzlement, theft or other dishonest or
fraudulent acts, effecting the Company, (ii) conviction of a
felony involving moral turpitude (from which, through lapse
of time or otherwise, no successful appeal shall have been
made) or (iii) material breach by Taber of his obligations
under Sections 9, 10, 11.1, 11.2, 11.4(c) or 11.4(d) of the
Employment Agreement or under paragraph 9 of this Agreement.
If the Agreement shall be terminated for Cause, the
Company shall have no further obligations to Taber as of the
date of termination.
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9. Restrictive Covenants
(a) Taber agrees that during the period commencing on
July 1, 1997 and ending on June 30, 1999 that he shall not
directly or indirectly (i) own, manage, operate, control,
participate in, or be connected in any manner with the
ownership, management, operation or control of any business
engaged in the manufacture, marketing, sale and/or
distribution of "New Age Beverages" (as defined in Section
11.4(a) of the Employment Agreement), juices, juice drinks
or Smoothies, functional beverages or apple juice
(collectively, "Competing Beverages") which is competitive
with the business of the Company (except that mere ownership
as an investor of not more then 5% of the publicly-traded
securities of a corporation shall not be deemed an
association with such corporation) or become employed by any
such business or (ii) provide or offer or attempt to provide
such products or services to any business, person, or
enterprise (or successor(s) to any of the same), wherever
located, who or which is or was a customer of the Company on
or within two years prior to the date of this Agreement, as
conclusively evidenced by the accounts receivable, invoices
and other records of the Company, where such products or
services are similar to or competitive with any products or
services offered or provided by the Company on or within two
years prior to the date of this Agreement. In recognition of
the geographic extent of the Company's operations, the
restrictive covenant contained in this paragraph 9(a) shall
apply throughout the mainland United States. For purposes of
this paragraph 9(a) and paragraph 9(b) only, the term
"Competing Beverages" shall be deemed to exclude cold filled
teas and coffees in cans.
(b)Subject to the provisions of Section 11.4(c) of the
Employment Agreement and to the last sentence of this
paragraph 9(b), nothing in paragraph 9(a) above shall
prohibit or restrict Taber's right or ability to be employed
by any business which is not substantially engaged in the
manufacture, marketing, sale and/or distribution
(collectively, "sale") of Competing Beverages, and to
fulfill the responsibilities of such employment. For
purposes of this paragraph 9(b), a firm or entity shall be
deemed to be "substantially engaged in the sale of Competing
Beverages" only if more than 25% of its gross revenues from
the sale of all types of beverages are attributable to the
sale of Competing Beverages. It is understood that, during
the period referred to in paragraph 9(a), Taber may not be
employed by any business in a position in which he has
direct management responsibility, on a regular, continuing
and day-to-day basis for or within any division or
department engaged substantially in the sale of Competing
Beverages, regardless of whether or not the business, taken
as a whole is deemed to be "substantially engaged in the
sale of Competing Beverages" pursuant to this paragraph
9(b).
(c) Notwithstanding anything to the contrary contained
in this Agreement, Taber agrees that during the period
commencing on July 1, 1997 and ending on June 30, 1999 that
under no circumstances shall he own, operate, control,
participate in, or be connected in any manner with the
ownership, management, operation or control of any business
which supplies Competing Beverages to Trader Joe's or which
procures Competing Beverages for Trader Joe's. Taber's
employment by or acting as a consultant for any business
which supplies Competing Beverages to Trader Joe's or which
procures Competing Beverages for Trader Joe's shall not
constitute a breach of this paragraph 9(c) if Taber has no
involvement whatsoever, directly or indirectly, in any such
activity.
(d) During the Consulting Term (i) Taber agrees not to
make any public announcement concerning the Company or HNC
without the prior written consent of the Company or HNC, as
the case may be, (ii) Taber agrees not to make any
derogatory statements or comments of any nature whatsoever
to any third party concerning the Company or HNC or any of
the officers, directors, employees, agents or other
representatives of the Company or HNC and (iii) the Company
and HNC agree not to make any derogatory statements or
comments of any nature whatsoever to any third party
concerning Taber.
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10. Specific Performance
Taber acknowledges and agrees that the services to be
rendered under this Agreement are of a special, unique and
extraordinary character, and by reason thereof, Taber
consents and agrees that in the event of the breach of any
of the covenants given in paragraph 9 hereof (or any of its
parts) by Taber, the Company, in addition, to any other
rights and remedies available under this Agreement or
otherwise, shall be entitled to an injunction to be issued
by any tribunal of competent jurisdiction, which shall
restrain and prohibit Taber from committing or continuing to
commit any such breach of this Agreement.
11. Entire Agreement
This Agreement constitutes the entire agreement among
the parties with respect to the subject matter hereof and
there is no other agreement between the parties with respect
to the subject matter hereof, written or oral, other than as
provided hereby. This Agreement may not be amended,
modified, supplemented or discharged except by a writing
duly executed by the parties hereto.
12. Notices
Notices required or permitted hereunder shall be in
writing directed as follows: If to the Company or HNC:
Hansen Beverage Company
2401 East Katella Avenue, Suite 650
Anaheim, California 92806
Attention: Mr. Rodney C. Sacks
If to Taber:
Mr. Harold C. Taber, Jr.
1421 Brighton Street
La Habra, California 90631
The above-named persons may designate by notice to each other any new address to
which notice may be made pursuant to this Agreement. All notices, requests,
demands and other communications which are required or permitted hereunder shall
be in writing and shall be deemed to have been duly given upon the delivery or
making thereof, as the case may be, if delivered personally or by registered or
certified mail, postage prepaid, return receipt requested, or by a reputable
overnight messenger service.
13. Waiver
The waiver by any party hereto of the breach of any
provision of this Agreement by the other party or parties
hereto shall not operate or be construed as a waiver of any
other provision hereof or of any subsequent breach by such
other party.
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14. Severability
If any provision of this Agreement shall be held to be
invalid or unenforceable, the other provisions of this
Agreement shall not be affected thereby and this Agreement
shall be construed as if the provision held to be invalid or
unenforceable had never been contained herein and such
provision shall be reformed and redrawn only to the extent
necessary so as to be valid and enforceable under applicable
law.
15. Assignability
Taber shall not have the right to assign, commute,
encumber or dispose of this Agreement or any rights,
interests, benefits or payments hereunder, which contract
rights, interests, benefits or payments are expressly
declared non-assignable and non-transferable and any
attempted assignment or other disposition of this Agreement
or any rights, interests, benefits or payments hereunder
contrary to the foregoing provisions, or the levy or
attachment or similar process thereupon, shall be null and
void and without effect. This Agreement shall be binding
upon and shall inure to the benefit of the Company and HNC
and any successor of the Company and HNC, and any such
successor shall be deemed substituted for the Company or
HNC, as the case may be, under the provisions of this
Agreement. As used herein, the term "successor" shall mean
any person, firm, corporation or other business entity which
at any time, whether by merger, purchase, liquidation or
otherwise, acquires all or substantially all of the assets
or business at the Company or HNC, as the case may be.
16. Governing Law
This Agreement shall be governed by and construed in
accordance with the laws of the State of California. IN
WITNESS WHEREOF, the parties hereto have executed this
Agreement on the date first above written.
HANSEN BEVERAGE COMPANY
By:________________________________
HANSEN NATURAL CORPORATION
By:_______________________________
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Harold C. Taber, Jr.
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