ARTICLES OF AMENDMENT
relating to
SERIES B PREFERRED STOCK
of
NORTHLAND CRANBERRIES, INC.
---------------------------------------------------------
Pursuant to Sections 180.0602 and 180.1002
of the Wisconsin Business Corporation Law
---------------------------------------------------------
I, John Swendrowski, Chairman of the Board and Chief Executive Officer of
Northland Cranberries, Inc., a corporation organized and existing under the
Wisconsin Business Corporation Law (the "Corporation"), in accordance with the
provisions of Sections 180.0602 and 180.1002 thereof, DO HEREBY CERTIFY THAT:
A. Pursuant to the authority conferred upon the Board of Directors of the
Corporation by its Articles of Incorporation, as amended, and in accordance with
Sections 180.0602 and 180.1002 of the Wisconsin Business Corporation Law, said
Board of Directors adopted resolutions on November 1, 2001, creating a series of
Preferred Stock, $.01 par value per share, of the Corporation, designated as
Series B Preferred Stock.
B. Said resolutions of the Board of Directors of the Corporation creating
the series designated as Series B Preferred Stock provide that said series shall
have such designation and number of shares and such preferences, limitations and
relative rights as are set forth in the paragraphs below:
Series B Preferred Stock
1. Designation and Amount. The Corporation is authorized to issue a
series of Preferred Stock, which is hereby designated as "Series B Preferred
Stock". The number of shares of Series B Preferred Stock shall be limited to 100
shares. The par value of the Series B Preferred Stock shall be $.01 per share.
2. Dividends. The corporation will not pay dividends to the holders of
the Series B Preferred Stock.
3. Liquidation, Dissolution or Winding Up. In the event of any voluntary
or involuntary liquidation, dissolution or winding up of the Corporation, the
holders of shares of Series B Preferred Stock then outstanding shall be entitled
to receive out of the assets of the Corporation available for distribution to
its shareholders, in money or money's worth, after and subject to the payment in
full of all amounts required to be distributed to the holders of any other
Preferred Stock of the Corporation ranking on liquidation prior and in
preference to the Series B Preferred Stock (including, without limitation, the
Series A Preferred Stock), upon such
liquidation, dissolution or winding up, an amount equal to the Liquidation Value
of each such Series B Preferred Stock.
4. Voting. Except as otherwise provided herein and as otherwise required
by applicable law, the Series B Preferred Stock shall have no voting rights;
provided that each holder of Series B Preferred Stock shall be entitled to
notice of all stockholders meetings at the same time and in the same manner as
notice is given to all stockholders entitled to vote at such meetings.
5. Redemptions.
(a) Redemption in Connection With Sun Exit Event. If a Sun Exit Event has
occurred, the Corporation will redeem each issued and outstanding share of
Series B Preferred Stock from each holder of the Series B Preferred Stock at a
price per share equal to a fraction, the numerator of which is the Formula
Amount and the denominator of which is one hundred (100).
(b) Redemption Payments. For each share of Series B Preferred Stock which
is to be redeemed hereunder, the Corporation shall be obligated within five days
of the Redemption Date to pay to the holders thereof (upon surrender by such
holders at the Corporation's principal office of the certificate representing
such share of Series B Preferred Stock) an amount in immediately available funds
equal to the amount calculated in accordance with Section 5(a). If the funds of
the Corporation legally available for redemption of Series B Preferred Stock on
the Redemption Date are insufficient to redeem the Series B Preferred Stock,
those funds which are legally available shall be used to redeem the Series B
Preferred Stock, unless such use would result in a breach by Corporation of any
of its financing agreements. At any time thereafter when additional funds of the
Corporation are legally available for the redemption of the Series B Preferred
Stock, and such use would not result in a breach by the Corporation of any of
its financing agreements, such funds shall immediately be used to redeem the
balance of the Series B Preferred Stock which the Corporation has become
obligated to redeem on the Redemption Date but which it has not redeemed and,
until such balance has been so redeemed in full, no Junior Securities of the
Corporation shall be redeemed and no dividends shall be paid thereon. If within
30 days of the Redemption Date the Corporation has not paid the holders of
Series B Preferred Stock the full amount calculated in accordance with Section
5(a), the amount not paid within 30 day period shall accrue simple interest at
the rate of the lesser of 12% per annum or the prime rate (as announced within
Wells Fargo at its principal office in San Francisco as its "prime rate") plus
4% per annum.
6. No Sinking Fund. Shares of Series B Preferred Stock shall not be
entitled to any sinking fund.
7. Other Terms. Shares of Series B Preferred Stock shall be subject to
the other terms, provisions and restrictions set forth in the Articles of
Incorporation with respect to the shares of Preferred Stock of the Corporation.
8. Definitions. The following terms shall have the meanings specified:
2
"Formula Amount" means:
(a) if Sun's IRR is less than or equal to forty percent (40%), zero.
(b) If Sun's IRR is greater than forty percent (40%) but less than or
equal to fifty percent (50%), ten percent (10%) of the difference
between the aggregate amount of Sun Proceeds minus what the
aggregate amount of Sun Proceeds would have been had Sun's IRR
been forty percent (40%);
(c) If Sun's IRR is greater than fifty percent (50%) but less than or
equal to sixty percent (60%), the sum of (i) fifteen percent
(15%) of the difference between the aggregate amount of Sun
Proceeds minus what the aggregate amount of Sun Proceeds would
have been had Sun's IRR been fifty percent (50%), plus (ii) ten
percent (10%) of the difference between what the aggregate amount
of Sun Proceeds would have been had Sun's IRR been fifty percent
(50%) minus what the aggregate amount of Sun Proceeds would have
been had Sun's IRR been forty percent (40%);
(d) If Sun's IRR is greater than sixty percent (60%) but less than or
equal to seventy percent (70%), the sum of (i) twenty percent
(20%) of the difference between the aggregate amount of Sun
Proceeds minus what the aggregate amount of Sun Proceeds would
have been had Sun's IRR been sixty percent (60%), plus (ii)
fifteen percent (15%) of the difference between what the
aggregate amount of Sun Proceeds would have been had Sun's IRR
been sixty percent (60%) minus what the aggregate amount of Sun
Proceeds would have been had Sun's IRR been fifty percent (50%),
plus (iii) ten percent (10%) of the difference between what the
aggregate amount of Sun Proceeds would have been had Sun's IRR
been fifty percent (50%) minus what the aggregate amount of Sun
Proceeds would have been had Sun's IRR been forty percent (40%);
(e) If Sun's IRR is greater than seventy percent (70%) but less than
or equal to eighty percent (80%), the sum of (i) twenty five
percent (25%) of the difference between the aggregate amount of
Sun Proceeds minus what the aggregate amount of Sun Proceeds
would have been had Sun's IRR been seventy percent (70%), plus
(ii) twenty percent (20%) of the difference between what the
aggregate amount of Sun Proceeds would have been had Sun's IRR
been seventy percent (70%) minus what the aggregate amount of Sun
Proceeds would have been had Sun's IRR been sixty percent (60%),
plus (iii) fifteen percent (15%) of the difference between what
the aggregate amount of Sun Proceeds would have been had Sun's
IRR been sixty percent (60%) minus what the aggregate amount of
Sun Proceeds would have been had Sun's IRR been fifty percent
(50%), plus (iv) ten percent (10%) of the difference between what
the aggregate amount of Sun Proceeds would have
3
been had Sun's IRR been fifty percent (50%) minus what the
aggregate amount of Sun Proceeds would have been had Sun's IRR
been forty percent (40%); and
(f) If Sun's IRR is greater than eighty percent (80%), the sum of (i)
thirty percent (30%) of the difference between the aggregate
amount of Sun Proceeds minus what the aggregate amount of Sun
Proceeds would have been had Sun's IRR been eighty percent (80%),
plus (ii) twenty five percent (25%) of the difference between
what the aggregate amount of Sun Proceeds would have been had
Sun's IRR been eighty percent (80%) minus what the aggregate
amount of Sun Proceeds would have been had Sun's IRR been seventy
percent (70%), plus (iii) twenty percent (20%) of the difference
between what the aggregate amount of Sun Proceeds would have been
had Sun's IRR been seventy percent (70%) minus what the aggregate
amount of Sun Proceeds would have been had Sun's IRR been sixty
percent (60%), plus (iv) fifteen percent (15%) of the difference
between what the aggregate amount of Sun Proceeds would have been
had Sun's IRR been sixty percent (60%) minus what the aggregate
amount of Sun Proceeds would have been had Sun's IRR been fifty
percent (50%), plus (v) ten percent (10%) of the difference
between what the aggregate amount of Sun Proceeds would have been
had Sun's IRR been fifty percent (50%) minus what the aggregate
amount of Sun Proceeds would have been had Sun's IRR been forty
percent (40%).
"Junior Securities" means, collectively, the Corporation's Class A
Common Stock, par value $.01 per share, and any capital stock of any class
of the Corporation hereafter authorized which is not limited to a fixed sum
or percentage of par or stated value in respect to the rights of the
holders thereof to participate in dividends or in the distribution of
assets upon any liquidation, dissolution or winding up of the Corporation;
the Corporation's Series A Preferred Stock are not Junior Securities, and
rank senior in preference to the Series B Preferred Stock.
"Liquidation Value" means the par value.
"Person" means an individual, a partnership, a corporation, a limited
liability company, an association, a joint stock company, a trust, a joint
venture, an unincorporated organization and a governmental entity or any
department, agency or political subdivision thereof.
"Redemption Date" means the date of the Sun Exit Event.
"Sun" means Sun Northland, LLC.
"Sun Exit Event" means the consummation of a transaction the result of
which is (a) that immediately following such transaction neither Sun nor
its affiliates owns or controls
4
securities possessing at least 10% of the voting power of the Corporation
or (b) the distribution of assets to holders of the Corporation's capital
stock upon the sale of all or substantially all of the assets of the
Corporation.
"Sun's IRR" means, as of any measurement date, the interest rate
(compounded annually) which, when used as the discount rate to calculate
the net present value as of the date hereof of the sum of (i) the aggregate
amount of all Sun Proceeds and (ii) the aggregate amount of all Sun
Investments, causes such net present value to equal zero. For purposes of
the net present value calculation, (A) Sun Proceeds shall be positive
numbers, (B) Sun Investments shall be negative numbers, (C) the Sun
Proceeds and Sun Investments shall be deemed to have been received or made
on the first day of the month nearest to the actual date of such receipt or
payment, and (D) "the aggregate amount of all Sun Proceeds" shall be net of
all fees and expenses of any kind whatsoever, including without limitation
investment banking fees or management service fees paid or payable to, or
reimbursement of expenses of, Sun or any of its affiliates.
"Sun Investments" means, as of any measurement date, the total amount
of cash, cash equivalents, promissory obligations, or the fair market value
of any other property (as determined by the Board of Directors of the
Corporation in the exercise of their good faith judgement) invested by Sun
or its affiliates in the securities of the Corporation; provided that the
amount of the Sun Investment on the date hereof is $7,000,000.
"Sun Proceeds" means, as of any measurement date, total amount of cash
received by Sun or its affiliates in connection with a sale of securities
of the Corporation or dividend, interest or other distribution made by the
Corporation with respect to securities of the Corporation; provided that in
the event Sun or its affiliates receives property other than cash in
connection with any of the foregoing, such property shall become Sun
Proceeds on the date that it is sold, exchanged, transferred or otherwise
converted into cash.
C. No shares of Series B Preferred Stock have been issued as of the date
hereof.
D. The amendment creating the Series B Preferred Stock was adopted by the
Board of Directors of the Corporation in accordance with Section 180.1002 of the
Wisconsin Business Corporation Law and shareholder action was not required.
5
IN WITNESS WHEREOF, the undersigned has executed and subscribed these
Articles of Amendment on behalf of the Corporation and does affirm the foregoing
as true this 2nd day of November, 2001.
NORTHLAND CRANBERRIES, INC.
By: /s/ John Swendrowski
--------------------------------
John Swendrowski
Chairman of the Board and
Chief Executive Officer
- - -------------------
This instrument was drafted by and should be returned to Peter C. Underwood
of the firm of Foley & Lardner, 777 East Wisconsin Avenue, Milwaukee, Wisconsin
53202.
6