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Sample Business Contracts

Stock Option Agreement - Hansen Natural Corp. and Tim M. Welch

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                             STOCK OPTION AGREEMENT


     This Stock Option Agreement ("Agreement") is made as of February 1, 1999,
by and between Hansen Natural Corporation, a Delaware corporation (the
"Company"), and Tim M. Welch ("Holder").


                              Preliminary Recitals

     A.  Holder is an  employee  of the  Company or one of its  subsidiaries  or
affiliates.
     B.  Pursuant  to the Hansen  Natural  Corporation  Stock  Option  Plan (the
"Plan"),  the  Company  desires to grant  Holder an  incentive  stock  option to
purchase  shares of the Company's  common stock,  par value $.005 per share (the
"Common Stock").

     NOW, THEREFORE, the Company and Holder agree as follows:
     1. Grant of Incentive  Stock Option.  The Company  hereby grants to Holder,
subject to the terms and conditions set forth herein, the incentive stock option
("ISO") to purchase up to 72,000 shares of Common Stock,  at the purchase  price
of $4.44 per share,  such ISO to be  exercisable  and  exercised as  hereinafter
provided.
     2. Exercise Period. The ISO shall expire three months after the termination
of the Holder's  employment with the Company and its subsidiaries and affiliates
(the "Hansen  Natural Group") unless the employment is terminated by a member of
the Hansen  Natural Group for Cause (as defined  below) or unless the employment
is terminated by reason of the death or Total  Disability  (as defined below) of
Holder.  If the  Holder's  employment  is  terminated  by a member of the Hansen
Natural  Group  for  Cause,  the ISO  shall  expire  as of the  date  employment
terminates.  If the  Holder's  employment  terminates  due to his death or Total
Disability,  then the ISO may be exercised by Holder or the person or persons to
which  Holder's  rights under this  Agreement pass by will, or if no such person
has such right, by his executors or administrators,  within six months after the
date of death or  Total  Disability,  but no  later  than  the  expiration  date
specified  in Section  3(c) below.  "Cause"  means the  Holder's act of fraud or
dishonesty,  knowing  and  material  failure to comply with  applicable  laws or
regulations or satisfactorily perform his duties of employment,  insubordination
or drug or alcohol  abuse,  as determined by the Committee of the Hansen Natural
Corporation Stock Option Plan (the  "Committee").  "Total  Disability" means the
complete  and  permanent  inability  of Holder to  perform  all of his duties of
employment  with the Company,  as determined by the Committee  upon the basis of
such evidence,  including independent medical reports and data, as the Committee
deems appropriate or necessary.
<PAGE>

     3. Exercise of Option
     (a)  Subject  to  the  other  terms  of  this   Agreement   regarding   the
exercisability  of the ISO, and provided  that Holder is employed by a member of
the Hansen  Natural Group on the relevant date, the ISO may only be exercised in
respect of the number of shares  listed in column A from and after the  exercise
dates listed in column B,

                    Column "A"                            Column "B"
                 Number of Shares                       Exercise Date

                      14,400                           February 2, 2000
                      14,400                           February 2, 2001
                      14,400                           February 2, 2002
                      14,400                           February 2, 2003
                      14,400                           February 2, 2004

     (b) This ISO may be exercised, to the extent exercisable by its terms, from
time to time in whole or in part at any time  prior to the  expiration  thereof.
Any exercise shall be accompanied by a written notice to the Company  specifying
the  number of  shares  as to which  this ISO is being  exercised  (the  "Option
Shares").  Notations of any partial exercise or installment  exercise,  shall be
made by the Company on Schedule A hereto.
     (c)  Notwithstanding  anything else herein to the contrary,  this ISO shall
expire six years from the date indicated above.
     (d) The Holder  hereby agrees to notify the Company in writing in the event
shares acquired pursuant to the exercise of this ISO are transferred, other than
by will or by the laws of descent and  distribution,  within two years after the
date  indicated  above or within  one year  after the  issuance  of such  shares
pursuant to such exercise.
     4. Payment of Purchase Price Upon Exercise.  At the time of any exercise of
the ISO the  purchase  price of the ISO shall be paid in full to the  Company in
either of the following ways or in any combination of the following ways:

     (a)  By check or other immediately available funds.

     (b)  With property  consisting  of shares of Common  Stock.  (The shares of
          Common  Stock to be used as payment  shall be valued as of the date of
          exercise  of the  ISO at the  Closing  Price  as  defined  below.  For
          example,  if Holder  exercises  the option for 4,000 shares at a total
          Exercise Price of $8,000,  assuming exercise price of $2.00 per share,
          and the Closing Price is $5.00, he may pay for the 4,000 Option Shares
          by transferring 1,600 shares of Common Stock to the Company.)
<PAGE>

     (c)  For purposes of this Agreement,  the term "Closing Price" means,  with
          respect to the Company's Common Stock, the last sale price regular-way
          or, in case no such sale takes place on such date,  the average of the
          closing bid and asked prices  regular-way  on the  principal  national
          securities  exchange on which the securities are listed or admitted to
          trading;  or, if they are not  listed or  admitted  to  trading on any
          national securities exchange, the last sale price of the securities on
          the  consolidated   transaction   reporting  system  of  the  National
          Association  of  Securities  Dealers  ("NASD"),   if  such  last  sale
          information  is reported on such  system or, if not so  reported,  the
          average of the closing bid and asked prices of the  securities  on the
          National  Association of Securities Dealers Automatic Quotation System
          ("NASDAQ")  or any  comparable  system or, if the  securities  are not
          listed on NASDAQ or a  comparable  system,  the average of the closing
          bid and asked prices as furnished by two members of the NASD  selected
          from time to time by the Company for that purpose.

     5.  Purchase for  Investment;  Resale  Restrictions.  Unless at the time of
exercise of the ISO there shall be a valid and effective  registration statement
under the Securities Act of 1933 ("'33 Act") and appropriate  qualification  and
registration  under  applicable  state  securities  laws  relating to the Option
Shares  being   acquired,   Holder  shall  upon  exercise  of  the  ISO  give  a
representation  that  he is  acquiring  such  shares  for his  own  account  for
investment and not with a view to, or for sale in connection with, the resale or
distribution of any such shares. In the absence of such registration  statement,
Holder shall execute a written affirmation, in a form reasonably satisfactory to
the Company,  of such investment intent.  Holder further agrees that he will not
sell or transfer any Option  Shares until he requests and receives an opinion of
the Company's counsel or other counsel reasonably satisfactory to the Company to
the effect that such proposed sale or transfer will not result in a violation of
the '33 Act, or a  registration  statement  covering the sale or transfer of the
shares has been declared effective by the Securities and Exchange Commission, or
he obtains a no-action  letter from the Securities and Exchange  Commission with
respect to the proposed transfer.
     6. Nontransferability.This ISO shall not be transferable other than by will
or by the laws of descent and distribution.  During the lifetime of Holder, this
ISO shall be exercisable only by Holder.
<PAGE>

     7. (a)  Adjustments.In  the event of any change in the  outstanding  Common
Stock  of  the  Company  by  reason  of  any  stock  recapitalization,   merger,
consolidation,  combination or exchange of shares, the kind of shares subject to
the ISO and their  purchase price per share (but not the number of shares) shall
be  appropriately  adjusted  consistent  with such  change in such manner as the
Board of  Directors of the Company may deem  equitable.  In the event of a stock
dividend or stock split the kind of shares,  their  purchase price per share and
the  number of shares  shall be  appropriately  adjusted,  consistent  with such
change  in such  manner  as the  Board  of  Directors  may deem  equitable.  Any
adjustment so made shall be final and binding on Holder. No adjustments shall be
made that would have the effect of modifying an ISO under Internal  Revenue Code
ss.ss. 422 and 424.
     (b)  Notwithstanding  anything  else herein to the  contrary  if,  within a
period of two (2) years after the  occurrence of a change in control (as defined
in (c) below), the Holder's employment by the Hansen Natural group is terminated
(unless his  employment is terminated by the Hansen  Natural group for cause (as
defined  above) or unless his  employment is terminated  voluntarily by Holder),
the option or any portion thereof not theretofore exercisable, shall immediately
become  exercisable in its entirety and the option (being the option to purchase
shares of Common  Stock  subject to the  applicable  provisions  of the Plan and
awarded in  accordance  with the Plan in terms of Section 1 above) may, with the
consent of Holder,  be purchased by the Company for cash at a price equal to the
fair market value (as defined in 7(ii) below) less the purchase price payable by
Holder to  exercise  the  option as set out in  Article 1 above for one share of
Common Stock of the Company  multiplied  by the number of shares of Common Stock
which Holder has the option to purchase in terms of Article 1 above.
     (c) For the purposes of this Agreement (i) "Change in Control"  means;  (A)
the  acquisition  of  "Beneficial  Ownership"  by any person (as defined in rule
13(d) - 3 under the Securities  Exchange Act 1934),  corporation or other entity
other than the  Company or a wholly  owned  subsidiary  of the Company of 20% or
more of the outstanding  Stock,  (B)the sale or disposition of substantially all
of the assets of the  Company,  or (C)the  merger of the  Company  with  another
corporation  in which the Common  Stock of the Company is no longer  outstanding
after such merger.  (ii) "Fair Market Value" means,  as of any date, the Closing
Price for one share of the common Stock of the company on such date.

     8. No Rights as  Stockholder.Holder  shall have no rights as a  stockholder
with respect to any shares of Common Stock subject to this ISO prior to the date
of issuance to him of a certificate or certificates for such shares.
     9. No Right to Continue  Employment.  This Agreement  shall not confer upon
Holder any right with respect to  continuance  of employment  with any member of
the Hansen Natural Group nor shall it interfere in any way with the right of any
such member to terminate his employment at any time.
<PAGE>

     10. Compliance With Law and Regulation.This Agreement and the obligation of
the  Company  to sell and  deliver  shares of Common  Stock  hereunder  shall be
subject to all applicable  federal and state laws,  rules and regulations and to
such approvals by any government or regulatory agency as may be required.  If at
any time the Board of  Directors  of the Company  shall  determine  that (i) the
listing,  registration or qualification of the shares of Common Stock subject or
related thereto upon any securities  exchange or under any state or federal law,
or (ii) the consent or approval of any government  regulatory body, is necessary
or desirable as a condition  of or in  connection  with the issue or purchase of
shares of Common Stock  hereunder,  this ISO may not be exercised in whole or in
part unless such  listing,  registration,  qualification,  consent,  approval or
agreement  shall have been  effected  or  obtained  free of any  conditions  not
acceptable to the Board of Directors.
     11.  Tax  Withholding  Requirements.  The  Company  shall have the right to
require  Holder to remit to the  Company an amount  sufficient  to  satisfy  any
federal,  state or local  withholding tax requirements  prior to the delivery of
any certificate or certificates for Common Stock.
     12.  Fractional  Shares.   Notwithstanding  any  other  provision  of  this
Agreement,  no  fractional  shares of stock shall be issued upon the exercise of
this ISO and the Company shall not be under any obligation to compensate  Holder
in any way for such fractional shares.
     13. Notices.  Any notice  hereunder to the Company shall be addressed to it
at its office at 2380 Railroad  Street,  Suite 101,  Corona,  California  91720,
Attention:  Rodney C. Sacks with a copy to Benjamin Polk, Whitman Breed Abbott &
Morgan,  200 Park Avenue,  New York, New York 10166, and any notice hereunder to
Holder shall be addressed to him at  __________,  subject to the right of either
party to designate at any time hereafter in writing some other address.
     14.  Amendment.  No  modification,  amendment  or  waiver  of  any  of  the
provisions of this Agreement shall be effective  unless in writing  specifically
referring hereto, and signed by both parties.
     15. Governing Law. This Agreement shall be construed  according to the laws
of the  State of  Delaware  and all  provisions  hereof  shall  be  administered
according to and its validity shall be determined under, the laws of such State,
except where preempted by federal laws.
<PAGE>

     16.   Counterparts.   This  Agreement  may  be  executed  in  one  or  more
counterparts, each of which shall constitute one and the same instrument.

     IN WITNESS WHEREOF, Hansen Natural Corporation has caused this Agreement to
be executed by a duly authorized  officer and Holder has executed this Agreement
both as of the day and year first above written.


                                           HANSEN NATURAL CORPORATION


                                           By:/s/RODNEY SACKS
                                              -----------------------------
                                              Title:  Chairman of the Board

/s/TIM M. WELCH  2/2/99
-----------------------------------
Tim M. Welch

<PAGE>

                         STOCK OPTION ADDENDUM AGREEMENT


     This  Addendum  Agreement is made as of September  25, 2000, by and between
Hansen Natural  Corporation,  a Delaware  corporation (the "Company") and Tim M.
Welch ("Holder").

                              Preliminary Recitals

     A. The Holder and Company entered into a Stock Option Agreement (the "Stock
Option Agreement") as of February 1, 1999.

     B.  Articles  3(a),  3(c),  and 7(b) of the Stock  Option  Agreement do not
correctly  reflect  the  agreement  between the  parties  and  consequently  the
parties,  by mutual  agreement,  wish to amend the  provisions of Articles 3(a),
3(c), and 7(b) on and with effect from February 1, 1999.

         NOW,  THEREFORE,  it is agreed:

     1. Article 3(a) of the Stock Option  Agreement be and is hereby  amended by
the  deletion  of the  entire  columns A and B therein  and by the  substitution
therefor of new columns A and B as follows:

                           "    Column "A"             Column "B"
                           Number of Shares          Exercise Date

                                   12,000                     February 2, 2000
                                   12,000                     February 2, 2001
                                   12,000                     February 2, 2002
                                   12,000                     February 2, 2003
                                   12,000                     February 2, 2004
                                   12,000                     February 2, 2005"

     2. Article 3(c) of the Stock Option  Agreement be and is hereby  amended by
the deletion of the word "six" therein and by the substitution  therefore of the
word "seven".

     3. Article 7(b) of the Stock Option  Agreement be and is hereby  amended by
the deletion of the entire Article 7(b) and by the  substitution  therefore of a
new Article 7(b) as follows: "7. (b) Notwithstanding anything else herein to the
contrary,  if,  after the  occurrence  of a change in control (as defined in (c)
below),  the  Holder's  employment  by the Hansen  Natural  group is  terminated
(unless his  employment is terminated by the Hansen  Natural group for cause (as
defined  above) or unless his  employment is terminated  voluntarily by Holder),
and on the date of termination  less than 36,000 shares out of the 72,000 shares
that are the  subject of this Stock  Option  Agreement  shall  theretofore  have
become exercisable,  then the difference between the number of shares that shall
theretofore  have become  exercisable  and 36,000  shares  ("the  deemed  vested
shares") shall be deemed to be immediately  exercisable  and that portion of the
option  (being  the option to  purchase  shares of Common  Stock  subject to the
applicable  provisions  of the Plan and awarded in  accordance  with the Plan in
terms of Article 1 above) may,  with the consent of Holder,  be purchased by the
Company for cash at a price equal to the fair market  value (as defined in 7(ii)
below)  less the  purchase  price  payable by Holder to  exercise  the option in
respect  of that  number of shares  that  shall at that time be  exercisable  by
Holder  as set out in 1 above  for one  share of  Common  Stock  of the  Company
multiplied by the number of shares of Common Stock which Holder at that time has
the option to purchase and are exercisable,  in terms of Article 1 above as read
together with the provisions of this Article 7(b)."

     4. Save as aforesaid,  the Stock Option  Agreement  shall continue to apply
and be of full force and effect in all other respects.

     IN WITNESS WHEREOF, Hansen Natural Corporation has caused this Agreement to
be executed by a duly authorized  officer and Holder has executed this Agreement
both as of the day and year first above written.


                                      HANSEN  NATURAL  CORPORATION


                                      By:  /s/RODNEY SACKS            10/3/2000
                                      Title:   Chairman of the Board     Date


/s/ TIM WELCH      10/2/2000
Tim M. Welch          Date