NORTHLAND CRANBERRIES, INC.
1998 INCENTIVE BONUS PLAN
1. PURPOSE. The purpose of the Northland Cranberries, Inc.
1998 Incentive Bonus Plan (the "Plan") is to provide cash bonuses to
officers and employees of Northland Cranberries, Inc. or any current or
future subsidiaries thereof (collectively, unless the context indicates
otherwise, the "Company") if the Company attains certain objectives for
earnings per share and other corporate or department objectives and
personal goals during the Company's fiscal year ending August 31, 1998
(the "1998 Fiscal Year"). The Board of Directors of the Company (the
"Board") believes the Plan will further the interests of the Company and
its shareholders by increasing the incentives and personal interest in the
financial performance of the Company by those officers and employees who
contribute to the Company's continued growth and financial success.
2. ADMINISTRATION. The Plan shall be administered by the
Stock Option and Compensation Committee (the "Committee") of the Board.
In accordance with the provision of the Plan, the Committee shall have
complete authority to approve the employees of the Company who shall be
eligible to participate in the Plan for the fiscal year and the amounts of
bonuses paid thereto. The Committee shall also have the authority to
adopt such rules and regulations for carrying out the Plan, which are not
inconsistent with the terms hereof, as it may deem proper and in the best
interests of the Company and shall have complete authority and discretion
to resolve all questions regarding eligibility, interpretation,
administration and application of this Plan and any related agreements of
instruments. All such determinations by the Committee shall be final.
The existence of the plan or the grant of any bonuses hereunder shall not
restrict the ability of the Committee or the Board to grant any other
discretionary bonuses to any executive officers, employees or others
outside of the Plan.
A majority of the members of the Committee shall constitute a
quorum. All determinations of the Committee shall be made by at least a
majority of a quorum. Any decision or determination reduced to writing
and signed by all of the members of the Committee shall be fully as
effective as if it had been made by a unanimous vote at a meeting duly
called and held.
3. ELIGIBILITY. Each eligible employee of the company who is
selected by Management for participation in the Plan, subject to approval
by the Committee, shall be a Participant and shall be assigned to the
Bonus Level for his or her position according to the schedule attached as
Schedule A. A Participant shall have no rights to be selected for further
participation in the Plan or any renewal or replacement thereof in any
subsequent fiscal year. Written notice of selection for participation in
the Plan shall be given to each Participant as soon as practicable
following date of selection.
4. AWARDS TO PARTICIPANTS. Participants shall be entitled to
receive from the Company an annual incentive cash compensation award for
the 1998 Fiscal Year ("Cash Bonus Award") based on a calculated percentage
("Bonus Percentage") of such Participant's base salary earned during the
1998 Fiscal Year (excluding benefits and bonuses). Such Bonus Percentage
shall be determined pursuant to a formula based primarily on the
percentage that the "Net Income Per Common Share" of the Company for the
1998 Fiscal Year, bears to the "Target Earnings" for the 1998 Fiscal Year,
and other specified criteria. The formula and criteria for determining
the Bonus Percentage for each Bonus Level are set forth on Schedule B.
Management shall establish department and individual goals for Bonus
Levels II through VI and shall set the discretionary bonuses for Bonus
Level I seasonal employees, all subject to review by the Committee. The
Target Earnings for the 1998 Fiscal Year shall be Net Income Per Common
Share of $0.90.
5. PAYMENT OF CASH BONUSES. The Cash Bonus Awards, if any,
determined under Section 4 for the 1998 Fiscal Year shall be distributed
by the Company to such Participants in cash, or to his or her estate in
the event of death of the Participant, no later than November 15, 1998.
6. NET INCOME PER COMMON SHARE. For purposes of the Plan, the
Company's "Net Income Per Common Share" for the 1998 Fiscal Year shall be
equal to the Company's net income per common share reflected on the
Company's audited consolidated financial statement for such fiscal year
(excluding extraordinary items, but not the issuance of additional shares
of capital stock or rights with respect thereto, other than as set forth
in Section 10 below).
7. TERMINATION OF EMPLOYMENT. No Cash Bonus Award shall be
made under the Plan for a Participant whose employment with the Company
(or subsidiary) is terminated during the 1998 Fiscal Year for reasons
other than retirement due to age in accordance with the Company's
policies, total or permanent disability, or death, unless approved by the
Committee after considering the cause of termination.
8. NEW EMPLOYEES, TRANSFERS BETWEEN BONUS LEVELS.
(a) It is contemplated that employees may be approved for
participation during a portion of the 1998 Fiscal Year and may be eligible
to receive an award for the year based on the number of full months as a
Participant. A person newly hired or promoted on or before March 1, 1998,
into a position covered by a Bonus Level shall be eligible for
participation in the Plan and, if selected by Management, shall have his
or her participation in the Plan prorated for the fiscal year.
(b) Participants who are promoted or otherwise transfered to a
position covered by a different Bonus Level will receive Cash Bonus Awards
prorated to months served in each eligible position.
9. POWERS OF COMPANY NOT AFFECTED. The existence of the Plan
shall not affect in any way the right or power of the Company or its
shareholders to make or authorize any or all adjustments,
recapitalization, reorganizations or other changes in the Company's
capital structure or its business, or any merger or consolidation of the
Company, or any issuance of bonds, debentures, preferred, or prior
preference stock ahead of or affecting the Company's stock or the rights
thereof, or dissolution or liquidation of the Company, or any sale or
transfer of all or any part of its assets or business or any other
corporate act or proceeding, whether of a similar character or otherwise.
10. CAPITAL ADJUSTMENTS AFFECTING STOCK. In the event of a
capital adjustment resulting from a stock dividend (other than a stock
dividend in lieu of an ordinary cash dividend), stock split,
reorganization, spin-off, split-up or distribution of assets to
shareholders, recapitalization, merger, consolidation, combination or
exchange of shares or the like, the Committee may adjust the determination
of net income per common share as it deems appropriate in its sole
discretion. The determination of the Committee as to any adjustment shall
be final (including any determination that no adjustment is necessary).
11. AMENDMENT. The Board shall have the right to amend the
Plan at any time and for any reason; provided, however, that no amendment
of the Plan shall, without the consent of the Participants, alter or
impair any of the rights or obligations under any bonuses previously
earned and declared.
12. TAX WITHHOLDING. The Company may deduct and withhold from
any amounts payable to a Participant such amount as may be required for
the purpose of satisfying the Company's obligation to withhold federal,
state or local taxes.
13. EFFECTIVE DATE; FISCAL YEARS COVERED. The Effective Date
of this Plan is September 22, 1997 and the Plan shall apply to and cover
the Company's 1998 Fiscal Year. This Plan shall be renewable for
additional one-year periods upon action of the Board.
14. RIGHTS OF PARTICIPANTS.
(a) No Participant shall have any interest in any specific
asset or assets of the Company (or any subsidiary) by reason of any
account under the Plan. It is intended that the Company has merely a
contractual obligation to make payments when due hereunder.
(b) No Participant may assign, pledge, or encumber his or her
interest under the Plan, or any part thereof.
(c) Nothing contained in this Plan shall be construed to:
(i) Give any Participant any right to receive any award
other than in the sole discretion of the Committee;
(ii) Limit in any way the right of the Company or
subsidiary to terminate an Participant's employment at any time; or
(iii) Be evidence of any agreement or understanding,
express or implied, that a Participant will be retained in any
particular position, at any particular rate of remuneration or for
any length of time.
NORTHLAND CRANBERRIES, INC.
1998 INCENTIVE BONUS PLAN
SCHEDULE A
MAXIMUM PERCENTAGE
BONUS LEVEL POSITIONS OF BASE SALARY
VII Chairman and Chief Executive Officer 70%
President and Chief Operating Officer
VI Executive Vice-President 60%
Vice-President - Chief Financial Officer
Vice-President - Corporate Secretary
V Vice-President - Purchasing & Budget 50%
Vice-President - East Coast Operations
Vice-President - Agricultural Operations
Vice-President - Manufacturing
Department Directors
IV Managers 30%
III Assistant Managers 20%
II Other Full-Time Employees 10%
I Seasonal Employees 0%
NORTHLAND CRANBERRIES, INC.
1998 INCENTIVE BONUS PLAN
SCHEDULE B
BONUS CRITERIA BONUS PERCENTAGE
LEVEL
Sum of:
VII Company's Net Income Per Common
Share Equals--
90% or more of Target Earnings 30%
100% or more of Target Earnings 20%
More than 100% of Target 1% for Each Percentage
Earnings Point over Target
Earnings up to 10%
Maximum
Criteria adopted by Committee Discretionary from
Based on Executive's contribution 0 to 10%
towards enhancement of Company's _____________________
long-term outlook
Maximum Bonus 70% of Base Salary
VI Company's Net Income Per Common
Share Equals--
90% or more of Target Earnings 20%
100% or more of Target Earnings 20%
More than 100% of Target 1% for Each Percentage
Earnings Point over Target
Earnings up to 10%
Maximum
Achievement of Department Goals 10%
_____________________
Maximum Bonus 60% of Base Salary
V Company's Net Income Per Common
Share Equals--
90% or more of Target Earnings 10%
100% or more of Target Earnings 15%
More than 100% of Target 1% for Each Percentage
Earnings Point over Target
Earnings up to 10%
Maximum
Achievement of Department Goals 15%
_____________________
Maximum Bonus 50% of Base Salary
IV Company's Net Income Per Common
Share Equals--
100% or more of Target Earnings 10%
More than 100% of Target 1% for Each Percentage
Earnings Point over Target
Earnings up to 10%
Maximum
Achievement of Individual Goals 10%
_____________________
Maximum Bonus 30% of Base Salary
III Company's Net Income Per Common
Share Equals--
100% or more of Target Earnings 5%
More than 100% of Target 1% for Each Percentage
Earnings Point over Target
Earnings up to 5%
Maximum
Achievement of Individual Goals 10%
_____________________
Maximum Bonus 20% of Base Salary
II Company's Net Income Per Common
Share Equals--
100% or more of Target Earnings 5%
Achievement of Individual Goals 5%
_____________________
Maximum Bonus 10% of Base Salary
I Discretionary Bonuses