NORTHLAND CRANBERRIES, INC.
2001 STOCK OPTION PLAN
ARTICLE I
Purpose of Plan
The 2001 Stock Option Plan (the "Plan") of Northland Cranberries, Inc. (the
"Company"), adopted by the Board of Directors of the Company on November 6,
2001, for executive and other key employees and consultants of the Company, is
intended to advance the best interests of the Company by providing those persons
who have a substantial responsibility for its management and growth with
additional incentives by allowing them to acquire an ownership interest in the
Company and thereby encouraging them to contribute to the success of the Company
and to remain in its employ. The availability and offering of stock options
under the Plan also increases the Company's ability to attract and retain
individuals of exceptional managerial talent upon whom, in large measure, the
sustained progress, growth and profitability of the Company depends.
ARTICLE II
Definitions
For purposes of the Plan, except where the context clearly indicates
otherwise, the following terms shall have the meanings set forth below:
"Board" shall mean the Board of Directors of the Company.
"Cause" shall mean with respect to a Participant (i) conviction of a
felony, (ii) acts of moral turpitude, (iii) willful action taken for the purpose
of harming the Company, (iv) the engaging in an act or acts of substantial
dishonesty or unethical business conduct, in any case materially harming the
Company, (v) gross negligence or reckless activity in the conduct of the
business of the Company (including, without limitation, a material breach of any
Company employee manual now existing or hereinafter instituted), or (vi)
material abandonment of duties with respect to the Company.
"Change of Control" shall mean the occurrence of any of the following
events:
(a) the acquisition, other than solely from the Company, by any individual,
entity or group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of
the Securities Exchange Act of 1934, as amended), other than the Company or an
employee benefit plan of the Company, of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Securities Exchange Act of 1934, as
amended) of more than 50% of the combined voting power of the then outstanding
voting securities of the Company entitled to vote generally in the election of
directors (the "Voting Securities"); or
(b) a reorganization, merger, consolidation or recapitalization of the
Company (a "Business Combination"), other than a Business Combination in which
more than 50% of the combined voting power of the outstanding voting securities
of the surviving or resulting entity immediately following the Business
Combination is held by the persons who, immediately prior to the Business
Combination, were the holders of the Voting Securities; or
(c) a complete liquidation or dissolution of the Company, or a sale of all
or substantially all of the Company's assets.
"Code" shall mean the Internal Revenue Code of 1986, as amended, and any
successor statute.
"Committee" shall mean the committee of the Board which may be designated
by the Board to administer the Plan. The Committee shall be composed of two or
more directors as appointed from time to time to serve by the Board.
"Common Stock" shall mean the Company's Class A Common Stock, par value
$.01 per share, or if the outstanding Common Stock is hereafter changed into or
exchanged for different stock or securities of the Company, such other stock or
securities.
"Company" shall mean Northland Cranberries, Inc., a Wisconsin corporation,
and (except to the extent the context requires otherwise) any subsidiary
corporation of Northland Cranberries, Inc. as such term is defined in Section
425(f) of the Code.
"Disability" shall mean the inability, due to illness, accident, injury,
physical or mental incapacity or other disability, of any Participant to carry
out effectively his duties and obligations to the Company or to participate
effectively and actively in the management of the Company for a period of at
least 90 consecutive days or for shorter periods aggregating at least 120 days
(whether or not consecutive) during any twelve-month period, as determined in
the reasonable judgment of the Board.
"Fair Market Value" shall mean, as of any applicable date: (i) if the
principal securities market on which the Common Stock is traded is a national
securities exchange or The Nasdaq National Market ("NNM"), the closing price of
the Common Stock on such exchange or NNM, as the case may be, or if no sale of
the Common Stock shall have occurred on such date, on the next preceding date on
which there was a reported sale; (ii) if the Common Stock is not traded on a
national securities exchange or NNM, the closing price on such date as reported
by The Nasdaq SmallCap Market, or if no sale of the Common Stock shall have
occurred on such date, on the next preceding date on which there was a reported
sale; (iii) if the principal securities market on which the Common Stock is
traded is not a national securities exchange, NNM or The Nasdaq SmallCap Market,
the average of the bid and asked prices reported by the National Quotation
Bureau, Inc.; (iv) if not reported by the National Quotation Board, the closing
price of a share of Common Stock on the date of grant as reported on the OTC
Bulletin Board; or (v) if the price of the Common Stock is
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not so reported, the Fair Market Value of the Common Stock as determined in good
faith by the Committee or the Board.
"Options" shall have the meaning set forth in Article IV.
"Participant" shall mean any executive or other key employee of the Company
or consultant to the Company who has been selected to participate in the Plan by
the Committee or the Board.
"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.
ARTICLE III
Administration
The Plan shall be administered by the Committee; provided that if for any
reason the Committee shall not have been appointed by the Board, all authority
and duties of the Committee under the Plan shall be vested in and exercised by
the Board. Subject to the limitations of the Plan, the Committee shall have the
sole and complete authority to: (i) select Participants, (ii) grant Options (as
defined in Article IV below) to Participants in such forms and amounts as it
shall determine, (iii) impose such limitations, restrictions and conditions upon
such Options as it shall deem appropriate, (iv) interpret the Plan and adopt,
amend and rescind administrative guidelines and other rules and regulations
relating to the Plan, (v) correct any defect or omission or reconcile any
inconsistency in the Plan or in any Option granted hereunder and (vi) make all
other determinations and take all other actions necessary or advisable for the
implementation and administration of the Plan. The Committee's determinations on
matters within its authority shall be conclusive and binding upon the
Participants, the Company and all other Persons. All expenses associated with
the administration of the Plan shall be borne by the Company. The Committee may,
as approved by the Board and to the extent permissible by law, delegate any of
its authority hereunder to such persons as it deems appropriate.
ARTICLE IV
Limitation on Aggregate Shares
The number of shares of Common Stock with respect to which options may be
granted under the Plan (the "Options") and which may be issued upon the exercise
thereof shall not exceed, in the aggregate, 4,889,081(1) shares; provided that
the type and the aggregate number of
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(1) Represents the difference between 5,084,606 (5% of the number of
fully-diluted post-closing shares) and 195,525 (the number of options issued and
outstanding as of the closing, taking into account to 1 for 4 reverse stock
split).
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shares which may be subject to Options shall be subject to adjustment in
accordance with the provisions of paragraph 6.8 below, and further provided that
to the extent any Options expire unexercised or are canceled, terminated or
forfeited in any manner without the issuance of Common Stock thereunder, such
shares shall again be available under the Plan. The 4,889,081 shares of Common
Stock available under the Plan may be either authorized and unissued shares,
treasury shares or a combination thereof, as the Committee shall determine.
ARTICLE V
Awards
5.1 Options. The Committee may grant Options to Participants in accordance
with this Article V.
5.2 Form of Option. Options granted under this Plan shall be nonqualified
stock options and are not intended to be "incentive stock options" within the
meaning of Section 422A of the Code or any successor provision.
5.3 Exercise Price. The option exercise price per share of Common Stock
shall be fixed by the Committee at not less than 100% of the Fair Market Value
of a share of Common Stock on the date of grant.
5.4 Exercisability. Options shall be exercisable at such time or times as
the Committee shall determine at or subsequent to grant.
5.5 Payment of Exercise Price. Options shall be exercised in whole or in
part by written notice to the Company (to the attention of the Company's
Secretary) accompanied by payment in full of the option exercise price. Payment
of the option exercise price shall be made in cash (including check, bank draft
or money order) or, in the discretion of the Committee, by delivery of a
promissory note (if in accordance with policies approved by the Board).
5.6 Terms of Options. The Committee shall determine the term of each
Option, which term shall in no event exceed ten years from the date of grant.
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ARTICLE VI
General Provisions
6.1 Conditions and Limitations on Exercise. Options may be made exercisable
in one or more installments, upon the happening of certain events, upon the
passage of a specified period of time, upon the fulfillment of certain
conditions or upon the achievement by the Company of certain performance goals,
as the Committee shall decide in each case when the Options are granted.
6.2 Consequences of a Change of Control.
(a) Unless otherwise determined by the Board, immediately prior to a Change
of Control that is, in the Board's determination, primarily for cash, all
outstanding Options which have been granted under the Plan and which are not
exercisable as of the effective date of the Change of Control shall
automatically accelerate and become exercisable upon the effective date of the
Change of Control; provided, that any exercise of such accelerated Options shall
be contingent upon the actual consummation of the Change of Control.
(b) Unless otherwise determined by the Board, upon a Change of Control that
the Board determines is not primarily for cash as described in subsection (a)
above, each outstanding Option shall be assumed by the Acquiring Corporation (as
defined below) or parent thereof or replaced with a comparable option or right
to purchase shares of the capital stock, or equity equivalent instrument, of the
Acquiring Corporation or parent thereof, or other comparable rights (such
assumed and comparable options and rights, together, the "Replacement Options");
provided, however, that if the Acquiring Corporation or parent thereof does not
intend to grant Replacement Options, then unless otherwise determined by the
Board all outstanding Options which have been granted under the Plan and which
are not exercisable as of the effective date of the Change of Control shall
automatically accelerate and become exercisable immediately prior to the
effective date of the Change of Control; provided, that any exercise of such
accelerated Options shall be contingent upon the actual consummation of the
Change of Control. The term "Acquiring Corporation" means the surviving,
continuing, successor or purchasing corporation, as the case may be.
Notwithstanding anything in the Plan to the contrary, the Board shall have
discretion, in the applicable Option Agreement (as defined below) or an
amendment thereof, to provide for the acceleration of Options upon a Change of
Control. The Board may determine in its discretion (but shall not be obligated
to do so) that in lieu of the issuance of Replacement Options, all holders of
outstanding Options which are exercisable immediately prior to a Change of
Control (including those that become exercisable under Section 6.2(a) or this
Section 6.2(b)) will be required to surrender them in exchange for a payment, in
cash or Common Stock as determined by the Board, of an amount equal to the
amount (if any) by which the then Fair Market Value of Common Stock subject to
unexercised Options exceeds the exercise price of those Options, with such
payment to take place as of the date of the Change of Control or such other date
as the Board may prescribe.
(c) Any Options that are not assumed or replaced by Replacement Options,
exercised or cashed out prior to or concurrent with a Change of Control will
terminate effective upon the Change of Control or at such other time as the
Board deems appropriate.
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(d) Notwithstanding anything in the Plan to the contrary, in the event of a
Change of Control, no action described in the Plan shall be taken (including,
without limitation, actions described in subsections (a), (b) and (c) above) if
such actions would make the Change of Control ineligible for desired accounting
or tax treatment and if, in the absence of such actions, the Change of Control
would qualify for such treatment and the Company intends to use such treatment
with respect to such Change of Control.
6.3 Written Agreement. Each Option granted hereunder to a Participant shall
be embodied in a written agreement (an "Option Agreement") which shall be signed
by the Participant and by the Chairman or the President of the Company for and
in the name and on behalf of the Company and shall be subject to the terms and
conditions of the Plan prescribed in the Agreement (including, but not limited
to, (i) the right of the Company and such other Persons as the Committee shall
designate ("Designees") to repurchase from each Participant, and such
Participant's transferees, all shares of Common Stock issued or issuable to such
Participant on the exercise of an Option in the event of such Participant's
termination of employment, (ii) rights of first refusal granted to the Company
and Designees, (iii) holdback and other registration right restrictions in the
event of a public registration of any equity securities of the Company and (iv)
any other terms and conditions which the Committee shall deem necessary and
desirable).
6.4 Listing, Registration and Compliance with Laws and Regulations. Options
shall be subject to the requirement that if at any time the Committee shall
determine, in its discretion, that the listing, registration or qualification of
the shares subject to the Options upon any securities exchange or under any
state or federal securities or other law or regulation, or the consent or
approval of any governmental regulatory body, is necessary or desirable as a
condition to or in connection with the granting of the Options or the issuance
or purchase of shares thereunder, no Options may be granted or exercised, in
whole or in part, unless such listing, registration, qualification, consent or
approval shall have been effected or obtained free of any conditions not
acceptable to the Committee. The holders of such Options shall supply the
Company with such certificates, representations and information as the Company
shall request and shall otherwise cooperate with the Company in obtaining such
listing, registration, qualification, consent or approval. In the case of
officers and other Persons subject to Section 16(b) of the Securities Exchange
Act of 1934, as amended, the Committee may at any time impose any limitations
upon the exercise of an Option that, in the Committee's discretion, are
necessary or desirable in order to comply with such Section 16(b) and the rules
and regulations thereunder. If the Company, as part of an offering of securities
or otherwise, finds it desirable because of federal or state regulatory
requirements to reduce the period during which any Options may be exercised, the
Committee, may, in its discretion and without the Participant's consent, so
reduce such period on not less than 15 days written notice to the holders
thereof.
6.5 Nontransferability. Options may not be transferred other than by will
or the laws of descent and distribution and, during the lifetime of the
Participant, may be exercised only by such Participant (or his legal guardian or
legal representative). In the event of the death of a Participant, exercise of
Options granted hereunder shall be made only:
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(i) by the executor or administrator of the estate of the deceased
Participant or the Person or Persons to whom the deceased Participant's
rights under the Option shall pass by will or the laws of descent and
distribution; and
(ii) to the extent that the deceased Participant was entitled thereto
at the date of his death, unless otherwise provided by the Committee in
such Participant's Option Agreement.
6.6 Expiration of Options.
(a) Normal Expiration. In no event shall any part of any Option be
exercisable after the date of expiration thereof (the "Expiration Date"), as
determined by the Committee pursuant to paragraph 5.6 above.
(b) Early Expiration Upon Termination of Employment. Except as otherwise
provided by the Committee in the Option Agreement, any portion of a
Participant's Option that was not vested and exercisable on the date of the
termination of such Participant's employment shall expire and be forfeited as of
such date, and any portion of a Participant's Option that was vested and
exercisable on the date of the termination of such Participant's employment
shall expire and be forfeited as of such date, except that: (i) if any
Participant dies or becomes subject to any Disability, such Participant's Option
shall expire 180 days after the date of his death or Disability, but in no event
after the Expiration Date, (ii) if any Participant retires (with the approval of
the Board), his Option shall expire 90 days after the date of his retirement,
but in no event after the Expiration Date, and (iii) if any Participant is
discharged other than for Cause, such Participant's Option shall expire 30 days
after the date of his discharge, but in no event after the Expiration Date.
6.7 Withholding of Taxes. The Company shall be entitled, if necessary or
desirable, to withhold from any Participant from any amounts due and payable by
the Company to such Participant (or secure payment from such Participant in lieu
of withholding) the amount of any withholding or other tax due from the Company
with respect to any shares issuable under the Options, and the Company may defer
such issuance unless indemnified to its satisfaction.
6.8 Adjustments. In the event of a reorganization, recapitalization, stock
dividend or stock split, or combination or other change in the shares of Common
Stock, the Board or the Committee may, in order to prevent the dilution or
enlargement of rights under outstanding Options, make such adjustments in the
number and type of shares authorized by the Plan, the number and type of shares
covered by outstanding Options and the exercise prices specified therein as may
be determined to be appropriate and equitable.
6.9 Rights of Participants. Nothing in this Plan or in any Option Agreement
shall interfere with or limit in any way the right of the Company to terminate
any Participant's employment at any time (with or without Cause), nor confer
upon any Participant any right to continue in the employ of the Company for any
period of time or to continue his present (or any other) rate of compensation,
and except as otherwise provided under this Plan or by the Committee
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in the Option Agreement, in the event of any Participant's termination of
employment (including, but not limited to, the termination by the Company
without Cause) any portion of such Participant's Option that was not previously
vested and exercisable shall expire and be forfeited as of the date of such
termination. No employee shall have a right to be selected as a Participant or,
having been so selected, to be selected again as a Participant.
6.10 Amendment, Suspension and Termination of Plan. The Board or the
Committee may suspend or terminate the Plan or any portion thereof at any time
and may amend it from time to time in such respects as the Board or the
Committee may deem advisable; provided that no such amendment shall be made
without stockholder approval to the extent such approval is required by law,
agreement or the rules of any exchange upon which the Common Stock is listed,
and no such amendment, suspension or termination shall impair the rights of
Participants under outstanding Options without the consent of the Participants
affected thereby. No Options shall be granted hereunder after the tenth
anniversary of the adoption of the Plan.
6.11 Amendment, Modification and Cancellation of Outstanding Options. The
Committee may amend or modify any Option in any manner to the extent that the
Committee would have had the authority under the Plan initially to grant such
Option; provided that no such amendment or modification shall impair the rights
of any Participant under any Option without the consent of such Participant.
With the Participant's consent, the Committee may cancel any Option and issue a
new Option to such Participant.
6.12 Indemnification. In addition to such other rights of indemnification
as they may have as members of the Board or the Committee, the members of the
Committee shall be indemnified by the Company against all costs and expenses
reasonably incurred by them in connection with any action, suit or proceeding to
which they or any of them may be party by reason of any action taken or failure
to act under or in connection with the Plan or any Option granted thereunder,
and against all amounts paid by them in settlement thereof (provided such
settlement is approved by independent legal counsel selected by the Company) or
paid by them in satisfaction of a judgment in any such action, suit or
proceeding; provided that any such Committee member shall be entitled to the
indemnification rights set forth in this paragraph 6.12 only if such member has
acted in good faith and in a manner that such member reasonably believed to be
in or not opposed to the best interests of the Company and, with respect to any
criminal action or proceeding, had no reasonable cause to believe that such
conduct was unlawful, and further provided that upon the institution of any such
action, suit or proceeding a Committee member shall give the Company written
notice thereof and an opportunity, at its own expense, to handle and defend the
same before such Committee member undertakes to handle and defend it on his own
behalf.
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