NORTHLAND CRANBERRIES, INC.
1999 INCENTIVE BONUS PLAN
1. PURPOSE. The purpose of the Northland Cranberries, Inc. 1999
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, 1999 (the "1999 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 1999 Fiscal
Year ("Cash Bonus Award") based on a calculated percentage ("Bonus Percentage")
of such Participant's base salary earned during the 1999 Fiscal Year (excluding
benefits and bonuses).
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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
1999 Fiscal Year, bears to the "Target Earnings" for the 1999 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 1999 Fiscal Year
shall be Net Income Per Common Share of $0.77.
5. PAYMENT OF CASH BONUSES. The Cash Bonus Awards, if any, determined
under Section 4 for the 1999 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, 1999.
6. NET INCOME PER COMMON SHARE. For purposes of the Plan, the Company's
"Net Income Per Common Share" for the 1999 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 1999 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 1999 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, 1999, 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 transferred 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
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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 24, 1998 and the Plan shall apply to and cover the Company's
1999 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.
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NORTHLAND CRANBERRIES, INC.
1999 INCENTIVE BONUS PLAN
SCHEDULE B
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BONUS LEVEL CRITERIA BONUS PERCENTAGE
Sum of:
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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 Earnings 1% for Each Percentage
Point over Target
Earnings up to
10% Maximum
Criteria adopted by Committee Based Discretionary from
on Executive's contribution towards 0 to 10%
enhancement Of Company's long-term
outlook
-------------------
Maximum Bonus 70% of Base Salary
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VI Company's Net Income Per Common
Share Equals--
90% of 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
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BONUS LEVEL CRITERIA BONUS PERCENTAGE
Sum of:
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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
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IV Company's Net Income Per Common
Share Equals--
100% or more of Target arnings 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
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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
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BONUS LEVEL CRITERIA BONUS PERCENTAGE
Sum of:
- --------------------------------------------------------------------------------
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
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I Discretionary Bonuses
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