Filed Pursuant to Rule 424(b)(3)
File No. 333-65618
PROSPECTUS
THE HAIN CELESTIAL GROUP, INC.
61,500 Shares of Common Stock
This prospectus relates to the offer and sale of an aggregate of 61,500
shares of the common stock of The Hain Celestial Group, Inc. by the selling
stockholder listed under the heading "Selling Stockholder." We issued these
shares to the selling stockholder in connection with our acquisition of Yves
Veggie Cuisine Inc. on June 8, 2001.
Our common stock is traded on the Nasdaq National Market under the symbol
HAIN. The last reported sales price of our common stock as reported by the
Nasdaq National Market System on July 27, 2001 was $24.42 per share.
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See "Risk Factors" for a discussion of certain factors which should be
considered in an investment of securities offered hereby.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
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The date of this prospectus is July 30, 2001.
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TABLE OF CONTENTS
Page
RISK FACTORS.................................................................1
USE OF PROCEEDS..............................................................9
SELLING STOCKHOLDER.........................................................10
PLAN OF DISTRIBUTION........................................................11
DESCRIPTION OF CAPITAL STOCK................................................12
LEGAL MATTERS...............................................................15
EXPERTS.....................................................................15
WHERE YOU CAN FIND MORE INFORMATION.........................................16
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You should rely only on the information contained or incorporated by
reference in this prospectus or to which we have referred you. We have not
authorized anyone to provide you with information that is different. This
prospectus may be used only where it is legal to sell these securities. The
information contained or incorporated by reference in this prospectus may be
accurate only on the date of this prospectus.
This prospectus contains certain forward-looking statements regarding our
future financial condition and results of operations and our business
operations. These statements involve risks, uncertainties and assumptions,
including industry and economic conditions and customer actions and the other
factors discussed in this prospectus (including under the caption "Risk
Factors") and in our filings with the Securities and Exchange Commission. If one
or more of these risks or uncertainties materialize, or if the underlying
assumptions prove incorrect, actual outcomes may vary materially from those
indicated. The words "expect," "estimate," "anticipate," "predict" and similar
expressions are intended to identify forward-looking statements.
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RISK FACTORS
Prospective investors should carefully consider the following factors and
the other information contained in this prospectus before purchasing any shares
of our common stock.
Our Acquisition Strategy Exposes The Company To Risk
We intend to continue to grow our business in part through the acquisition
of new brands and businesses. Our acquisition strategy is based on identifying
and acquiring businesses with products and/or brands that complement our
existing product mix. We cannot be certain that we will be able to:
o successfully identify suitable acquisition candidates;
o negotiate identified acquisitions on terms acceptable to us; or
o obtain the necessary financing to complete such acquisition.
We may encounter increased competition for acquisitions in the future,
which could result in acquisition prices we do not consider acceptable. We are
unable to predict whether or when any prospective acquisition candidate will
become available or the likelihood that any acquisition will be completed.
Our Future Success May Be Dependent On Our Ability To Integrate Companies That
We Acquire
Our future success may be dependent upon our ability to effectively
integrate businesses that we acquire and their brands, including our ability to
realize potentially available marketing opportunities and cost savings, some of
which may involve operational changes. We cannot be certain:
o as to the timing or number of marketing opportunities or amount of
cost savings that may be realized as the result of our integration of
an acquired company and its brands;
o that a business combination will enhance our competitive position and
business prospects; or
o that we will not experience difficulties with customers, personnel or
other parties as a result of a business combination.
In addition, we cannot be certain that we will be successful in:
o integrating an acquired company's distribution channels with those of
Hain;
o coordinating sales force activities of an acquired company or in
selling the products of an acquired company to our customer base; or
o integrating an acquired company into our management information
systems or in integrating an acquired company's products into our
product mix.
Additionally, integrating an acquired company into Hain's existing
operations will require management resources and may divert our management from
our day-to-day operations. If we are not successful in integrating the
operations of acquired companies, our business could be harmed.
Consumer Preferences For Specialty Food Products And Teas Are Difficult to
Predict And May Change
A significant shift in consumer demand away from our products or our
failure to maintain our current market position could reduce our sales or the
prestige of our brands in our markets, which could harm our business. While we
continue to diversify our product offerings, we cannot be certain that demand
for our products will continue at current levels or increase in the future.
Our business is limited to natural and specialty food products in markets
geared to consumers of natural foods, specialty teas, non-dairy beverages,
cereals, breakfast bars, canned soups and vegetables, snacks and cooking oils,
which, if consumer demand for such categories were to decrease, could harm our
business. Consumer trends change based on a number of possible factors,
including:
o nutritional values, such as a change in preference from fat free to
reduced fat to no reduction in fat; and
o a shift in preference from organic to non-organic and from natural
products to non-natural products.
In addition, we have other product categories, such as medically-directed
and weight management food products, kosher foods and other specialty food
items. We are subject to evolving consumer preferences for these products.
Our tea business, which we operate through our wholly-owned subsidiary,
Celestial Seasonings, Inc., is substantially dependent on the specialty teas
market, which consists of herb tea, green tea, wellness tea and specialty black
teas. Recently the specialty tea market, including our specialty teas, has
experienced a reduction in consumer demand. If consumer demand for our specialty
teas were to further decrease, our business could be harmed.
Our Markets Are Highly Competitive
We operate in highly competitive geographic and product markets, and some
of our markets are dominated by competitors with greater resources. We cannot be
certain that we could successfully compete for sales to distributors or stores
that purchase from larger, more established companies that have greater
financial, managerial, sales and technical resources. In addition, we compete
for limited retailer shelf space for our products. Larger competitors, such as
mainstream food companies including General Mills, Nestle S.A., Kraft Foods,
Groupe Danone and Kellogg Company also may be able to benefit from economies of
scale, pricing advantages or the introduction of new products
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that compete with our products. Retailers also market competitive products under
their own private labels.
The beverage market is large and highly competitive. The tea portion of the
beverage market is also highly competitive. Competitive factors in the tea
industry include product quality and taste, brand awareness among consumers,
variety of specialty tea flavors, interesting or unique product names, product
packaging and package design, supermarket and grocery store shelf space,
alternative distribution channels, reputation, price, advertising and promotion.
We currently compete in the specialty tea market segment which consists of herb
tea, green tea, wellness tea and specialty black tea. Our specialty herb tea
products, like other specialty tea products, are priced higher than most
commodity black tea products. Our principal competitors on a national basis in
the specialty teas market segment are Thomas J. Lipton Company, a division of
Unilever PLC and R.C. Bigelow, Inc. Unilever has substantially greater financial
resources than our tea business. Additional competitors include a number of
regional specialty tea companies. Private Label competition in the specialty tea
category is currently minimal.
In the future our competitors may introduce other products that compete
with our products and these competitive products may have an adverse effect on
our business.
We Are Dependent Upon The Services Of Our Chief Executive Officer
We are highly dependent upon the services of Irwin D. Simon, our chairman
of the board, president and chief executive officer. We believe Mr. Simon's
reputation as our founder and his expertise and knowledge in the natural and
specialty foods market are critical factors in our continuing growth. The loss
of the services of Mr. Simon would harm our business.
We Rely On Independent Brokers And Distributors For A Substantial Portion Of Our
Sales
We rely upon sales efforts made by or through non-affiliated food brokers
to distributors and other customers. The loss of, or business disruption at, one
or more of these distributors or brokers may harm our business. If we were
required to obtain additional or alternative distribution and food brokerage
agreements or arrangements in the future, we cannot be certain that we will be
able to do so on satisfactory terms or in a timely manner. Two of our
distributors, United Natural Foods and Tree of Life, accounted for approximately
18% and 17%, respectively, of our net sales for the fiscal year ended June 30,
2001 and 17% and 18%, respectively, for the year ended June 30, 2000. Our
inability to enter into satisfactory brokerage agreements may inhibit our
ability to implement our business plan or to establish markets necessary to
develop our products successfully. Food brokers act as selling agents
representing specific brands on a non-exclusive basis under oral or written
agreements generally terminable at any time on 30 days notice and receive a
percentage of net sales as compensation. Distributors purchase directly for
their own account for resale. In addition, the success of our business depends,
in large part, upon the establishment and maintenance of a strong distribution
network.
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Manufacturing Facilities
We manage and operate five manufacturing facilities located throughout the
United States. These facilities are located and produce the following product
lines: Celestial Seasonings(R), in Boulder, Colorado, produces specialty teas,
Terra Chips(R), in Brooklyn, New York, produces vegetable chips; Arrowhead
Mills(R), in Hereford, Texas, produces hot and cold cereals, baked goods and
meal cups; Deboles(R) pasta, in Shreveport, Louisiana, produces organic pasta;
and Health Valley(R) in Irwindale, California, produces hot and cold cereals,
baked goods, granola, granola bars, dry soups and other products under the
Health Valley(R), Breadshop(R) and Casbah(R) labels. Outside the United States,
we have one manufacturing facility in The Netherlands (that we acquired in
January 2001) that produces snack foods and one manufacturing facility in
Vancouver, Canada (that we acquired in connection with our acquisition of Yves
Veggie Cuisine, Inc.) that produces soy-based meat substitute products.
The facilities in Brooklyn, New York and Irwindale, California are under
operating leases through 2004. We own the manufacturing facilities in Boulder,
Colorado, Hereford, Texas, Shreveport, Louisiana, The Netherlands and Vancouver,
Canada. For the years ended June 30, 2001 and 2000, approximately 51% and 55%,
respectively, of our revenue was derived from products manufactured at our
then-owned manufacturing facilities.
An interruption in or the loss of operations at one or more of these
facilities or failure to maintain our labor force at one or more of these
facilities could delay or postpone production of our products, which could have
a material adverse effect on our business, results of operations and financial
condition until we could secure an alternate source of supply.
We believe we have sufficient capacity in all of our facilities except for
the Brooklyn, New York facility, which is currently at capacity. Since the
fourth quarter of fiscal 2000, the demand for Terra Chips products has exceeded
the production capacity of our Brooklyn, New York facility. We are pursuing
additional sources of supply to alleviate these ongoing capacity restraints,
including the addition of a new co-packer that began producing our products in
October 2000, the expected opening of a new production facility in the fall of
2001 and the production of certain Terra products at our Netherlands facility.
We cannot assure you that any such alternate source of supply could be obtained
on reasonable terms, or at all.
Furthermore, there can be no assurance that the current power situation in
California, or similar situations which may arise in other states, would not
adversely affect our business. Also, any work stoppage or disruption at that
facility or any of our other facilities could materially harm our business.
We Rely On Independent Co-Packers To Produce Some Or Most Of Our Products
Currently, independent food manufacturers, who are referred to in our
industry as co-packers, manufacture many of our product lines. These product
lines include our Alba(R), Estee(R), Garden of Eatin'(R), Hain Pure Foods(R),
Kineret(R), Little Bear Organic Foods(R), Terra Chips(R), Westbrae(R), and
Westsoy(R) product lines. For the fiscal years ended June 30, 2001 and 2000,
products manufactured for us by co-packers represented approximately 49% and
45%, respectively, of our sales.
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We presently obtain:
o all of our requirements for non-dairy beverages from five co-packers,
four of which are under contract;
o all of our requirements for rice cakes from two co-packers;
o all of our cooking oils from one co-packer, which is under contract;
o principally all of our tortilla chips from two suppliers, one of which
is under contract;
o all of our requirements for Terra's Yukon Gold line from one supplier,
which is under contract; and
o the requirements for our canned soups from two suppliers.
In addition, H.J. Heinz manufactures the Earth's Best baby food products
for Hain under contract. The loss of one or more co-packers, or our failure to
retain co-packers for newly acquired products or brands, could delay or postpone
production of our products, which could harm our business until such time as an
alternate source could be secured, which may be on less favorable terms.
Our Tea Ingredients Are Subject To Import Risk
Our tea business purchases its ingredients from numerous foreign and
domestic manufacturers, importers and growers, with the majority of those
purchases occurring outside of the United States. We maintain long-term
relationships with most of our suppliers. Purchase arrangements with ingredient
suppliers are generally made annually and in U.S. currency. Purchases are made
through purchase orders or contracts, and price, delivery terms and product
specifications vary.
Our botanical purchasers visit major suppliers around the world annually to
procure ingredients and to assure quality by observing production methods and
providing product specifications. Many ingredients are presently grown in
countries where labor-intensive cultivation is possible, and where we often must
educate the growers about product standards. We perform laboratory analysis on
incoming ingredient shipments for the purpose of assuring that they meet our
quality standards and those of the U.S. Food and Drug Administration.
Our ability to ensure a continuing supply of ingredients at competitive
prices depends on many factors beyond our control, such as foreign political
situations, embargoes, changes in international and world economic conditions,
currency fluctuations and unfavorable climatic conditions. We take steps and
will continue to take steps intended to lessen the risk of an interruption of
botanical supplies, including identification of alternative sources and
maintenance of appropriate inventory levels. We have, in the past, maintained
sufficient supplies for its ongoing operations.
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Our failure to maintain its relationships with its existing suppliers or
find new suppliers, observe production standards for its foreign procured
products or continue its supply of botanicals from foreign sources could harm
our business.
Our Inability To Use Our Trademarks Could Have A Material Adverse Effect On Our
Business
Our inability to use our trademarks could have a material adverse effect on
our business, results of operations and financial condition.
We own the trademarks for our principal products, including the Arrowhead
Mills(R), Bearitos(R), Breadshop's(R), Casbah(R), DeBoles(R), Earth's Best(R),
Estee(R), Garden of Eatin'(R), Hain Pure Foods(R), Health Valley(R), Kineret(R),
Little Bear Organic Foods(R), Nile Spice(R), Terra(R), Westbrae(R), Westsoy(R)
and Yves Veggie Cuisine(TM) brands.
Our tea business has trademarks for most of its best-selling brands,
including Sleepytime(R), Lemon Zinger(R), Mandarin Orange Spice(R), Red
Zinger(R), Wild Berry Zinger(R), Tension Tamer(R), Country Peach Passion(R), and
Raspberry Zinger(R). Our tea business has made various federal and international
filings with respect to its material trademarks, and intends to keep these
filings current and seek protection for new trademarks to the extent consistent
with business needs. Our tea business also copyrights certain of its artwork and
package designs.
We believe that brand awareness is a significant component in a consumer's
decision to purchase one product over another in the highly competitive food and
beverage industry. Our failure to continue to sell our products under our
established brand names could harm our business.
Our Products Must Comply With Government Regulation
We and our manufacturers, brokers, distributors and co-packers are subject
to extensive regulation by federal, state and local authorities that affect our
business. The federal agencies governing our business include the Federal Trade
Commission, or FTC, The Food and Drug Administration, or FDA, the United States
Department of Agriculture, or USDA and the Occupational Safety and Health
Administration. These agencies regulate, among other things, the production,
sale, safety, advertising, labeling of and ingredients used in our products.
Under various statutes these agencies prescribe the requirements and establish
the standards for quality, purity and labeling. Among other requirements, the
USDA, in certain circumstances must approve our products, including a review of
the manufacturing processes and facilities used to produce these products before
these products can be marketed in the United States. In addition advertising of
our business is subject to regulation by the FTC. Our activities are also
regulated by state agencies as well as county and municipal authorities. We are
also subject to the laws of the foreign jurisdictions in which we sell our
products.
The USDA has adopted regulations with respect to organic labeling and
certification which became effective February 28, 2001 (with an 18-month
compliance period for existing products). We are in the process of evaluating
our level of compliance with these regulations. In addition, on January 19,
2001, the FDA proposed new policy guidelines regarding the labeling of
genetically modified foods. The FDA's proposal is in a comment period. These
rules, if adopted, could require us
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to modify the labeling of our products, which could effect the sales of our
products and thus harm our business.
Furthermore, new government laws and regulations may be introduced in the
future that could result in additional compliance costs, seizures, confiscation,
recall or monetary fines, any of which could prevent or inhibit the development,
distribution and sale of our products. If we fail to comply with applicable laws
and regulations, we may be subject to civil remedies, including fines,
injunctions, recalls or seizures, as well as potential criminal sanctions, which
could have a material adverse effect on our business, results of operations and
financial condition.
In addition, we manufacture and sell dietary supplements through our
Celestial subsidiary which are subject to the Dietary Supplement Health and
Education Act of 1994 or DSHEA, which went into effect in March 1999. DSHEA
defines dietary supplements as a new category of food, separate from
conventional food. DSHEA requires specific nutritional labeling requirements for
dietary supplements and permits substantiated, truthful and non-misleading
statements of nutritional support to be made in labeling, such as statements
describing general well-being resulting from consumption of a dietary
ingredient, or the role of a nutrient or dietary ingredient in affecting or
maintaining a structure or function of the body.
Product Recalls Could Have A Material Adverse Effect On Our Business
Manufacturers and distributors of products in the food industry are
sometimes subject to the recall of their products for a variety of reasons,
including for product defects, such as ingredient contamination, packaging
safety and inadequate labeling disclosure. If any of our products are recalled
due to a product defect or for any other reason, we could be required to incur
the expense of the recall or the expense of any resulting legal proceeding.
Additionally, if one of our significant brands were subject to recall, the image
of that brand could be harmed, which could have a material adverse effect on our
business.
Product Liability Suits, If Brought, Could Have A Material Adverse Effect On Our
Business
If a product liability claim exceeding our insurance coverage were to be
successfully asserted against us, it could harm our business. We cannot assure
you that such coverage will be sufficient to insure against claims which may be
brought against us, or that we will be able to maintain such insurance or obtain
additional insurance covering existing or new products. As a marketer of food
products, we are subject to the risk of claims for product liability. We
maintain product liability insurance and generally require that our co-packers
maintain product liability insurance with us as a co-insured.
We Rely On Independent Certification For A Number Of Our Natural And Specialty
Food Products
We rely on independent certificates, such as certifications of our products
as "organic" or "kosher," to differentiate our products in natural and specialty
food categories. The loss of any independent certifications could adversely
affect our market position as a natural and specialty food company, which could
harm our business.
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We must comply with the requirements of independent organizations or
certification authorities in order to label our product as certified. For
example, we can lose our "organic" certification if a plant becomes contaminated
with non-organic materials, or if not properly cleaned after a production run.
In addition, all raw materials must be certified organic. Similarly, we can lose
our "kosher" certification if a plant and raw materials do not meet the
requirements of the appropriate kosher supervision organization, such as The
Union of Orthodox Jewish Congregations, The Organized Kashruth Laboratories,
"KOF-K" Kosher Supervision, Kosher Overseers Associated of America and Upper
Midwest Kashruth.
Our Tea Business Is Seasonal And Subject To Quarterly Fluctuations
Our tea business consists primarily of manufacturing and marketing hot tea
products and as a result its quarterly results of operations reflect seasonal
trends resulting from increased demand for its hot tea products in the cooler
months of the year. Quarterly fluctuations in our sales volume and operating
results are due to a number of factors relating to our business, including the
timing of trade promotions, advertising and consumer promotions and other
factors, such as seasonality, inclement weather and unanticipated increases in
labor, commodity, energy, insurance or other operating costs. The impact on
sales volume and operating results, due to the timing and extent of these
factors, can significantly impact our business. For these reasons, you should
not rely on our quarterly operating results as indications of future
performance. In some future periods, our operating results may fall below the
expectations of securities analysts and investors, which could harm our
business.
Our Officers And Directors And An Unaffiliated Stockholder May Be Able To
Control Our Actions
Our officers and directors beneficially own 11.3% of our common stock as of
May 15, 2001. Of these officers and directors, two of our directors currently
serve as a designee and a jointly appointed designee of an affiliate of H.J.
Heinz Company, which owns approximately 18.14% of our common stock as of May 15,
2001. Accordingly, our officers and directors may be in a position to influence
the election of our directors and otherwise influence stockholder action.
Our Ability To Issue Preferred Stock May Deter Takeover Attempts
Our board of directors is empowered to issue, without stockholder approval,
preferred stock with dividends, liquidation, conversion, voting or other rights
which could decrease the amount of earnings and assets available for
distribution to holders of our common stock and adversely affect the relative
voting power or other rights of the holders of our common stock. In the event of
issuance, the preferred stock could be used as a method of discouraging,
delaying or preventing a change in control. Our certificate of incorporation
authorizes the issuance of up to 5,000,000 shares of "blank check" preferred
stock with such designations, rights and preferences as may be determined from
time to time by our board of directors. Although we have no present intention to
issue any shares of our preferred stock, we may do so in the future under
appropriate circumstances.
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USE OF PROCEEDS
We will not receive any of the proceeds from the sale of shares by the
selling stockholder. All of the proceeds from the sale of shares of common stock
by the selling stockholder will be received by the selling stockholder.
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SELLING STOCKHOLDER
The following table shows information regarding ownership of the shares of
common stock held by the selling stockholder. The selling stockholder received
the shares of our common stock being registered in connection with our
acquisition of Yves Veggie Cuisine Inc. on June 8, 2001.
Number of Shares of Number of Shares of
Common Stock Common Stock
Name Beneficially Owned Percent of Class Registered thereby
----------------------- ------------------------- ------------------- ----------------------
934660 Alberta Ltd. 61,500 * 61,500
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* Less than 1%.
The selling stockholder has represented to us that it acquired the shares
of common stock for its own account for investment only and not with a view
towards the public sale or distribution thereof, except pursuant to sales
registered under the Securities Act or exemptions therefrom. In recognition of
the fact that the selling stockholder may wish to be legally permitted to sell
the shares when it deems appropriate, we agreed with the selling stockholder to
file with the Commission under the Securities Act the registration statement
with respect to the sale of the shares from time to time in transactions in the
over-the-counter market, in privately negotiated transactions, or through a
combination of these methods of sale, and have agreed to prepare and file such
amendments and supplements to the registration statement as may be necessary to
keep the registration statement effective until the shares are no longer
required to be registered for the sale thereof by the selling stockholder. The
selling stockholder's address is 4405 West 6th Avenue, Vancouver, British
Columbia, Canada V6R 1V2.
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PLAN OF DISTRIBUTION
All of the shares offered hereby may be sold from time to time by the
selling stockholder or by its registered assigns. The shares offered hereby may
be sold by one or more of the following methods: (a) a block trade in which a
broker or dealer so engaged will attempt to sell the shares as agent but may
purchase and resell a portion of the block as principal to facilitate the
transaction; (b) purchases by a broker or dealer as principal and resale by such
broker or dealer for its account pursuant to this prospectus; (c) ordinary
brokerage transactions and transactions in which the broker solicits purchasers;
(d) privately negotiated transactions; and (e) face-to-face transactions between
sellers and purchasers without a broker-dealer.
The selling stockholder may be deemed to be a statutory underwriter under
the Securities Act. Also any broker-dealers who act in connection with the sale
of the shares hereunder may be deemed to be "underwriters" within the meaning of
Section 2(11) of the Securities Act, and any commissions received by them and
profit on any resale of the shares as principal may be deemed to be underwriting
discounts and commissions under the Securities Act.
In effecting sales, brokers or dealers engaged by the selling stockholder
may arrange for other brokers or dealers to participate. Such brokers or dealers
may receive commissions or discounts from the selling stockholder in amounts to
be negotiated by the selling stockholder. The selling stockholder may enter into
hedging transactions with broker-dealers and the broker-dealers may engage in
short sales of the common stock in the course of hedging the positions they
assume with the selling stockholder (including in connection with the
distribution of the common stock by such broker-dealers). The selling
stockholder may also engage in short sales of the common stock and may enter
into option or other transactions with broker-dealers that involve the delivery
of the common stock to the broker-dealers, who may then resell or otherwise
transfer such common stock. Such broker-dealers and any other participating
broker-dealers may, in connection with such sales, be deemed to be underwriters
within the meaning of the Securities Act. Any discounts or commissions received
by any such broker-dealers may be deemed to be underwriting discounts and
commissions under the Securities Act.
The selling stockholder may also sell shares in accordance with Rule 144
under the Securities Act, if Rule 144 is then available.
In order to comply with the securities laws of certain states, if
applicable, the shares will be sold in such jurisdictions only through
registered or licensed broker-dealers.
We will pay all of the expenses incident to the filing of this registration
statement, estimated to be $35,000. These expenses include legal and accounting
fees in connection with the preparation of the registration statement of which
this prospectus is a part, legal and other fees in connection with the
qualification of the sale of the shares under the laws of certain states (if
any), registration and filing fees and other expenses. The selling stockholder
will pay all other expenses incident to the offering and sale of the shares to
the public, including commissions and discounts of underwriters, brokers,
dealers or agents, if any. We have agreed to keep the registration of the shares
offered hereby effective until the earlier of the date when all of the shares
offered by the selling stockholder have been sold or one year from the date the
shares were issued.
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DESCRIPTION OF CAPITAL STOCK
General
As of May 15, 2001, our authorized capital stock was 100,000,000 shares of
common stock, $.0l par value per share, of which 33,570,222 shares were
outstanding, and 5,000,000 shares of preferred stock, $.0l par value per share,
none of which had been issued.
The following description is qualified in all respects by reference to our
certificate of incorporation and the bylaws.
Common Stock
Each share of common stock entitles the holder thereof to one vote on all
matters submitted to a vote of the stockholders. Since the holders of common
stock do not have cumulative voting rights, holders of more than 50% of the
outstanding shares can elect all of our directors then being elected and holders
of the remaining shares by themselves cannot elect any directors. The holders of
common stock do not have preemptive rights or rights to convert their common
stock into other securities. Holders of common stock are entitled to receive
ratably such dividends as may be declared by our board of directors out of funds
legally available therefor. In the event of our liquidation, dissolution or
winding up, holders of the common stock have the right to a ratable portion of
the assets remaining after payment of liabilities. All outstanding shares of
common stock are fully paid and nonassessable.
Right To Purchase Shares Of Hain Common Stock By An Affiliate Of H.J. Heinz
Company
Under an agreement that we entered with an affiliate of the H.J. Heinz
Company in September 1999, the affiliate of H.J. Heinz has the right to purchase
shares of our common stock upon certain private issuances of common stock by us,
including the issuance of the 61,500 shares to the selling stockholder to which
this prospectus relates, to maintain its then current interest in our company.
Preferred Stock
We are authorized by our certificate of incorporation to issue a maximum of
5,000,000 shares of preferred stock, in one or more series and containing such
rights, privileges and limitations including voting rights, dividend rates,
conversion privileges, redemption rights and terms, redemption prices and
liquidation preferences, as our board of directors may, from time to time,
determine.
The issuance of shares of preferred stock pursuant to our board of
directors' authority described above could decrease the amount of earnings and
assets available for distribution to holders of common stock, and otherwise
adversely affect the rights and powers, including voting rights, of such holders
and may have the effect of delaying or preventing us from being subject to a
change in control. See Risk Factors -- "Our Ability To Issue Preferred Stock May
Deter Takeover Attempts." We are not required by the Delaware General
Corporation Law, or the DGCL, to seek stockholder approval prior to any issuance
of authorized but unissued stock and our board of directors does not currently
intend to seek stockholder approval prior to any issuance of authorized but
unissued stock, unless otherwise required by law.
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Options
1993 Executive Stock Option Plan
In July 1993, we adopted the 1993 Executive Stock Option Plan under which
we granted to Irwin D. Simon options to purchase 600,000 shares of our common
stock. The exercise price of options designed to qualify as incentive options is
$3.58 per share and the exercise price of non-qualified options is $3.25 per
share. During fiscal 2001, options to purchase 65,000 shares were exercised. At
June 30, 2001, 535,000 options were outstanding under the 1993 Plan. The options
expire in 2003.
1994 Long Term Incentive and Stock Award Plan
In December 1994, we adopted the 1994 Long Term Incentive and Stock Award
Plan, which we refer to in this prospectus as the 1994 Plan. The 1994 Plan, as
amended, provides for the granting of incentive stock options to employees and
directors to purchase up to an aggregate of 6,400,000 shares of our common stock
with a maximum individual limit of 1,000,000 shares in any calendar year. The
1994 Plan is administered by the compensation committee of the board of
directors. All of the options granted to date under the 1994 Plan have been
incentive or non-qualified stock options providing for exercise prices not less
than the fair market price at the date of grant, and expire 10 years after date
of grant. At the discretion of the compensation committee, options are
exercisable upon grant or over an extended vesting period. During fiscal year
1998, options to purchase 299,200 shares were granted at prices from $4.50 to
$14.13 per share, options to purchase 274,400 shares were exercised and options
to purchase 47,800 shares were canceled. During fiscal year 1999, options to
purchase 1,175,600 shares were granted at prices from $12.125 to $21.50 per
share, options to purchase 322,950 shares were exercised and options to purchase
23,750 shares were canceled. During fiscal year 2000, options to purchase
372,550 shares were granted at prices ranging from $21.188 to $33.50 per share,
options to purchase 127,900 shares were exercised and options to purchase 14,750
shares were canceled. During fiscal 2001, options to purchase 1,334,100 shares
was granted at prices ranging from $22.125 to $36.6875 per share, options to
purchase 335,525 shares were exercised and options to purchase 12,475 shares
were cancelled. At June 30, 2001, 2,877,750 options were outstanding under the
1994 Plan and 2,336,475 options were available for grant.
1996 Directors Stock Option Plan
In December 1995, we adopted the 1996 Directors Stock Option Plan, which we
refer to in this prospectus as the Directors Plan. The Directors Plan provides
for the granting of stock options to non-employee directors to purchase up to an
aggregate of 750,000 shares of our common stock. During fiscal year 1998,
options for an aggregate of 67,500 shares were granted at prices of $8.50 and
$19.68 per share, no options were exercised and no options were canceled. During
fiscal year 1999, options for an aggregate of 95,000 shares were granted at a
price of $17.625 per share, options to purchase 90,000 shares were exercised and
no options were canceled. During fiscal year 2000, options for an aggregate of
103,500 shares were granted at prices of $23.25 and $26.063 per share, options
to purchase 80,000 shares were exercised and no options were canceled. During
fiscal year 2001, options for an aggregate 140,000 were granted at prices
ranging from $27.75 to $32.125 per share, options to purchase 51,000 shares were
exercised and no options were cancelled. No options
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may be granted under the Directors Plan after December 2000. At June 30, 2001,
335,000 options were outstanding under the Directors Plan and 186,500 options
were available for grant.
2000 Directors Stock Option Plan
In May 2000, we adopted a new Directors Stock Option Plan, which we refer
to in this prospectus as the 2000 Directors Plan. The 2000 Directors Plan
provides for granting of stock options to non-employee directors to purchase up
to an aggregate of 750,000 shares of our common stock. At June 30, 2001, no
options were outstanding under the 2000 Director Plan and 750,000 options were
available for grant.
Celestial Plans
In connection with our acquisition of Celestial Seasonings, we assumed
Celestial's 1993 Long-Term Incentive Plan and 1994 Non-Employee Director
Compensation Plan, which we refer to in this prospectus collectively as the
Celestial Plans. No future options to purchase shares of common stock will be
granted under the Celestial Plans. As of June 30, 2001 options to purchase
221,516 shares of common stock were outstanding under the Celestial Plans.
Warrants
As of June 30, 2001, warrants to purchase an aggregate of 396,098 shares of
common stock were outstanding. Each warrant entitles the holder to purchase one
share of common stock, subject to anti-dilution adjustments, at an exercise
price ranging from $3.25 to $12.69 per share.
Certificate of Incorporation and Bylaws
Pursuant to the DGCL, the power to adopt, amend and repeal bylaws is
conferred solely upon the stockholders unless the corporation's certificate of
incorporation also confers such power upon the board of directors. Under our
certificate of incorporation, our board of directors is granted the power to
amend our bylaws. Our bylaws provide that each director has one vote on each
matter for which directors are entitled to vote. Our certificate of
incorporation and/or bylaws also provide that (1) from time to time, by
resolution, our board of directors has the power to change the number of
directors, (2) the directors will hold office until the next annual meeting of
stockholders and until their respective successors are elected and qualified,
and (3) special meetings of stockholders may only be called by our board of
directors or our officers. These provisions, in addition to the existence of
authorized but unissued capital stock, may have the effect, either alone or in
combination with each other, of making more difficult or discouraging
unsolicited third parties from an acquisition of us deemed undesirable by our
board of directors. Our board of directors currently has ten members and one
vacancy.
Section 203 of the Delaware Law
Section 203 of the DGCL prohibits a publicly held Delaware corporation
from engaging in a "business combination" with an "interested stockholder" for a
period of three years after the date of the transaction in which the person
became an interested stockholder, unless (1) prior to the date of the business
combination, the transaction is approved by the board of directors of the
corporation; (2) upon consummation of the transaction which resulted in the
stockholder becoming an interested
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stockholder, the interested stockholder owns at least 85% of the outstanding
voting stock, or (3) on or after such date the business combination is approved
by the board of directors and by the affirmative vote of at least 66-2/3% of the
outstanding voting stock that is not owned by the interested stockholder. A
"business combination" includes mergers, asset sales and other transactions
resulting in a financial benefit to the stockholder. An "interested stockholder"
is a person, who, together with affiliates and associates, owns (or within three
years, did own) 15% or more of the corporation's voting stock. This provision of
law could discourage, prevent or delay a change in management or stockholder
control of us, which could have the effect of discouraging bids and thereby
prevent stockholders from receiving the maximum value for their shares, or a
premium for their shares in a hostile takeover situation.
Transfer Agent and Registrar
The Transfer Agent and Registrar for the common stock is Continental Stock
Transfer & Trust Company, New York, New York.
LEGAL MATTERS
Certain legal matters with respect to the validity of the common stock
offered hereby will be passed upon for us by Cahill Gordon & Reindel, New York,
New York.
EXPERTS
The consolidated financial statements of The Hain Celestial Group, Inc. and
Subsidiaries appearing in The Hain Celestial Group Inc.'s Annual Report (Form
10-K) for the year ended June 30, 2000, have been audited by Ernst & Young LLP,
independent auditors, as set forth in their report thereon included therein and
incorporated herein by reference which, as to the years 1999 and 1998, are based
in part on the report of Deloitte & Touche LLP, independent auditors. Such
consolidated financial statements are incorporated herein by reference in
reliance upon such reports given on the authority of such firms as experts in
accounting and auditing.
The consolidated financial statements and the related financial statement
schedules of Celestial Seasonings, Inc. incorporated in this prospectus by
reference from Celestial Seasonings, Inc.'s Annual Report on Form 10-K/A for the
year ended September 30, 1999 have been audited by Deloitte & Touche LLP,
independent auditors, as stated in their report, which are incorporated by
reference, and have been so incorporated in reliance upon the report of such
firm given upon their authority as experts in accounting and auditing.
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WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the Commission. You can receive copies of such reports, proxy
and information statements, and other information, at prescribed rates, from the
Commission by addressing written requests to the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549.
In addition, you can read such reports, proxy and information statements, and
other information at the public reference facilities and at the regional offices
of the Commission, Washington, D.C., New York, New York and Chicago, Illinois.
Please call the Commission at 1-800-SEC-0330 for further information on the
public reference rooms. The Commission also maintains a web site that contains
reports, proxy and information statements and other information regarding
registrants such as us, that file electronically with the Commission. The
address of the Commission's web site is http://www.sec.gov.
This prospectus is part of a registration statement on Form S-3 that we
filed with the Commission to register the shares that the selling stockholder
will sell in this offering. This prospectus does not include all of the
information contained in the registration statement. For further information
about us and the securities offered in this prospectus, you should review the
registration statement and the information incorporated by reference therein.
You can inspect or copy the registration statement, at prescribed rates, at the
Commission's public reference facilities at the address listed above.
The Commission allows us to "incorporate by reference" information into the
prospectus, which means that we can disclose important information to you by
referring you to those documents filed separately with the Commission. The
information incorporated by reference is considered part of this prospectus, and
information that we file later with the Commission will automatically update and
supersede this information.
This prospectus incorporates by reference the documents listed below that
we previously filed with the Commission. These documents contain important
information about us and our finances:
HAIN'S SEC FILINGS
(FILE NO. 0-22818) PERIOD
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Annual Report on Form 10-K Fiscal year ended June 30, 2000
Quarterly Reports on Form 10-Q Quarters ended September 30, 2000, December
31, 2000 and March 31, 2001
Current Reports on Form 8-K Filed on April 27, 1999, as
amended by Amendment No. 3 dated
June 18, 1999, and September 19, 2000
CELESTIAL'S SEC FILINGS
(FILE NO. 0-22018) PERIOD
------------------------------------------- -------------------------------------------
Annual Report on Form 10-K Fiscal year ended September 30, 1999
Amendment Annual Report on Form 10-K/A Filed on December 31, 1999
Quarterly Report on Form 10-Q Quarter ended December 31, 1999
Current Report on Form 8-K Filed on March 14, 2000
We also incorporate by reference additional documents that we may file with
the Commission between the date of this prospectus and the completion of the
offering. These additional documents
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include periodic reports, such as Annual
Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form
8-K, as well as proxy statements. Upon request, we will provide without charge
to each person to whom a prospectus is delivered, including any beneficial
owner, a copy of any or all of the information that has been incorporated by
reference in this prospectus. If you would like to obtain this information from
us, please direct your request, either in writing or by telephone, to the
President, The Hain Celestial Group, Inc., 50 Charles Lindbergh Boulevard,
Uniondale, New York, 11553, (516) 237-6200.
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The Hain Celestial Group, Inc.
Common Stock
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PROSPECTUS
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July 30, 2001
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