PROSPECTUS SUPPLEMENT
(To Prospectus Dated July 29, 1996)
169,014 Shares
[Northland Logo]
Class A Common Stock
This Prospectus Supplement pertains to the offer and sale of up
to 169,014 shares of Common Stock, par value $0.01 per share (the "Class A
Common Stock"), of Northland Cranberries, Inc. (the "Company") by or for
the account of John E. McFarland & Sons, Inc. ("Selling Shareholder").
This Prospectus Supplement does not contain complete information
regarding the offering of Class A Common Stock by the Selling Shareholder
and should be read only in conjunction with the Prospectus annexed hereto.
As a result of the Company's two-for-one stock split effective September
3, 1996, the number of shares of Class A Common Stock covered by the
Prospectus has increased from 500,000 to 1,000,000.
The Company will not receive any proceeds from the sale of
shares of Class A Common Stock by the Selling Shareholder.
See "Risk Factors" commencing on page 3 of the Prospectus for a
discussion of certain factors that should be considered by investors in
evaluating an investment in the Class A Common Stock offered hereby.
________________________
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.
________________________
The Class A Common Stock may be offered from time to time in
negotiated transactions or otherwise at market prices prevailing at the
time of each sale, subject to the right to reject any order in whole or in
part.
Information with Respect to
Selling Shareholder
Percent of
Number of Class A
Shares of Common
Class A Stock to Percent of
Common Stock Number of be Owned Aggregate
Owned Prior Shares After Voting
Name to Offering Offered Offering Power
John E. McFarland &
Sons, Inc. (1) 169,514 (1) 169,014 * *
______________________
* Denotes Less than 1%.
(1) Number includes 500 shares owned by shareholders of Selling
Shareholder. The Selling Shareholder acquired 169,014 shares of Class A
Common Stock from the Company as consideration paid pursuant to the
Company's acquisition of the McFarland Cranberry Company Marsh in the Town
of Manitowish Waters, Wisconsin and related assets from the Selling
Shareholder on September 27, 1996.
The date of this Prospectus Supplement is October 8, 1996.
<PAGE>
500,000 Shares
[Northland Logo]
Class A Common Stock
________________________
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.
________________________
This Prospectus covers shares of Class A Common Stock, $.01 par
value (the "Class A Common Stock") which may be offered and issued by
Northland Cranberries, Inc. (the "Company") from time to time in
connection with the merger with or acquisition by the Company, directly or
indirectly, of businesses or properties. It is expected that the terms of
acquisitions involving the issuance of securities covered by this
Prospectus will be determined by direct negotiations with the owners or
controlling persons of the businesses or properties to be merged with or
acquired by the Company, and that the shares of Class A Common Stock
issued will be valued at prices reasonably related to market prices
current either at the time a merger or acquisition is agreed upon or at or
about the time of delivery of shares. No underwriting discounts or
commissions will be paid, although finder's fees may be paid from time to
time with respect to specific mergers or acquisitions. Any person
receiving any such fees may be deemed to be an Underwriter within the
meaning of the Securities Act of 1933, as amended (the "Securities Act").
With the written consent of the Company, this Prospectus, as
amended or supplemented if appropriate, has also been prepared for use by
persons who have received or will receive, from the Company, Class A
Common Stock covered by this Prospectus in connection with mergers or
acquisitions and who may wish to sell such stock under circumstances
requiring or making desirable its use. See "Outstanding Securities
Covered by this Prospectus" for information relating to resales pursuant
to this Prospectus of shares of Class A Common Stock issued under the
Registration Statement.
At July 10, 1996, the Company had 6,367,143 shares of its Class
A Common Stock outstanding. These shares are listed on the Nasdaq
National Market ("NASDAQ"). The shares offered hereby have been approved
for quotation on NASDAQ. On July 26, 1996, the last sale price of the
Class A Common Stock on NASDAQ was $27-1/2 per share.
All expenses of this offering will be paid by the Company.
The date of this Prospectus is July 29, 1996.
THE COMPANY
The Company is the world's largest cranberry grower, with more
planted acres of cranberries owned or leased than any other grower. The
Company owns or leases over 2,300 planted acres of cranberries at numerous
marsh locations in Wisconsin and Massachusetts. In fiscal 1996 the
Company harvested approximately 1,900 acres which produced 287,000
barrels, representing approximately 6% of the total cranberries harvested
in the world. In each of the past three years, the Company sold
substantially all of its crop harvested for processing to two independent
fruit juice and sauce processors for their packaging and resale as private
label cranberry juice and sauce, pursuant to contracts which expired on
March 31, 1996.
In 1993 the Company first implemented its "from marsh to market"
vertical integration business strategy when it began selling its own
Northland/R/ brand fresh cranberries. In August 1995, the Company
announced that it would further this strategy by marketing and selling its
own Northland brand 100% cranberry juice blends, and other processed
consumer branded and private label cranberry products. This initiative
was implemented in October 1995 when the Company introduced its Northland
brand 100% cranberry juice blends into Wisconsin markets. To date, the
Company's premium cranberry juice has penetrated virtually all Wisconsin
markets, a significant portion of the Chicago metropolitan market and 17
other major retail marketing areas located primarily throughout the
Midwest and Great Lakes regions.
In February 1996, the Company entered into a three-year product
supply agreement with Rudolf Wild GmbH & Co. of Heidelberg, Germany
("Wild"), one of Europe's largest suppliers of natural compounds for the
production of soft drinks and other beverages containing fruit, pursuant
to which the Company will supply cranberry concentrate to Wild.
The term "Company" refers to Northland Cranberries, Inc., a
Wisconsin corporation and its subsidiaries, affiliates and predecessors,
unless the context requires otherwise. The executive offices of the
Company are located at 800 First Avenue South, Wisconsin Rapids, Wisconsin
54494. The telephone number is (715) 424-4444.
RISK FACTORS
In addition to the other information contained or incorporated
by reference in this Prospectus, prospective investors should carefully
consider the following risk factors in evaluating the Company and its
business before determining whether to accept as consideration shares of
the Class A Common Stock offered hereby. Certain matters discussed in
this Prospectus or incorporated herein by reference are forward-looking
statements that involve risks and uncertainties, including particularly
sentences which include words such as the Company "believes,"
"anticipates," "expects" or words of similar import. With respect to such
statements, the Company claims the protection of the disclosure liability
safe harbor for forward-looking statements contained in the Private
Securities Litigation Reform Act of 1995. Such statements are subject to
certain risks and uncertainties, including particularly those important
factors set forth below, that could cause actual results to differ
materially from those projected. Potential investors are cautioned not to
place undue reliance on such forward looking statements, which are made
only as of the date hereof. The Company undertakes no obligations to
publicly update or release the results of any revision to such forward
looking statements that may be made to reflect events or circumstances
after the date hereof or to reflect the occurrence of subsequent events.
Readers are cautioned that the following important Risk Factors, in
addition to those discussed elsewhere or incorporated by reference herein,
could affect the future results of the Company and cause those results to
differ materially from those expressed in such forward-looking statements.
Untested Business Strategy
The Company's experience in the business of marketing and
selling value-added processed consumer cranberry products began, on a
limited basis, in 1993 when it first marketed its own Northland brand
fresh cranberries and was furthered during the Company's 1996 fiscal year
through the sale of its Northland brand 100% cranberry juice blends. The
business of marketing and selling consumer cranberry products involves
substantial risk and there can be no assurance that the Company will be
able to manage or sustain its very limited success in this field to date.
Important to the success of Northland's strategy is its belief that the
demand for cranberry products will exceed the available supply of raw
cranberries for at least the next several years and that the redirection
of its own internal supply of raw cranberries (and the raw cranberries it
purchases from other growers) into its own cranberry products will not
increase the overall supply of consumer cranberry products. If the
Company's assessment of the cranberry market is incorrect, the Company's
internal cranberry supply may not create the benefits and competitive
advantages currently anticipated by the Company, which could have a
material adverse effect on its results of operations and financial
condition. See " -- Cranberry Market; Supply and Demand" below.
While the Company has key employees who have experienced the
product introduction and sale of its Northland brand fresh cranberries and
Northland brand premium cranberry juice blends, the Company's management
and employees have limited experience and expertise in the consumer
beverage and fruit products businesses. Although the Company has a
Director of Sales with juice and beverage industry experience, there can
be no assurance that the Company will be able to successfully hire
additional qualified personnel or, if hired, retain and integrate such
personnel into the Company's operations.
Cranberry Market; Supply and Demand
An oversupply of cranberries could have a depressing effect on
the pricing of raw cranberries and consumer cranberry products. The
supply of raw cranberries increased over the last several years,
principally due to the maturation of new acreage planted in the United
States as a result of growers obtaining permits prior to the enactment in
1990 of the current regulations restricting the further new development of
wetland acreage. However, apart from this general trend toward increasing
supply, annual cranberry production can fluctuate significantly from year
to year depending on agricultural conditions, which can cause dramatic
increases or decreases in the overall annual supply of raw cranberries.
After 1996, the Company anticipates that additional maturing acreage in
the United States will decrease due to the impact of current regulations
which became effective in 1990 and restricted the issuance of new permits
to allow the further commercial development of wetland acreage. However,
there can be no assurance that future federal or state legislation easing
the current regulatory restrictions on wetland development will not be
enacted. Moreover, although the Company believes that new commercial
development of cranberry acreage has been limited in Canada because of its
federal "no net loss of wetlands" policy (which has also been adopted by
most provinces), there is no available data on the extent of new cranberry
acreage development in Canada. Such development could be substantial.
Additionally, to date, substantially all of the world's raw cranberries
have been grown in North America. In recent years, however, increased
attention has been directed at attempts to grow cranberries in locations
outside North America and on non-wetland properties. Over the longer-
term, there can be no assurance that cranberry production outside North
America or on non-wetland properties will not become significant.
The Company believes that the demand for cranberry products has
also increased substantially over recent years and has generally exceeded
the supply of raw cranberries. While the Company believes that the demand
for cranberry products at current market prices will continue to exceed
the supply of raw cranberries for the next several years, there can be no
assurance that the supply of raw cranberries will not increase to meet or
exceed market demand or that demand will not decline. Increasing demand
for cranberry products, however, may depend on continued heavy advertising
expenditures and expanded new cranberry product introductions by Ocean
Spray and other branded juice product companies. Additionally, changes in
consumer perceptions of the relative healthfulness or safety of
cranberries generally could have a material adverse effect on the demand
for consumer cranberry products and result in significant changes in
cranberry prices.
Competition
General
The markets in which the Company has competed and will compete
are large and very competitive. Many of the Company's current and
prospective competitors have substantially greater financial, marketing,
production and/or distribution resources than the Company and, except in
the areas of cranberry growing and fresh fruit sales, substantially more
experience in the production, marketing, distribution and sale of
cranberry and other consumer products. The Company is subject to
substantial competition with respect to the sale of consumer cranberry
products, the sale of fresh cranberries and, to a lesser extent, the
purchase of raw cranberries. Moreover, the competitive success of the
Company's products will depend on consumers' perceptions of their quality
and appearance as compared to competitive products.
Raw Cranberry Market
Ocean Spray dominates the raw cranberry market. Ocean Spray is
an agricultural marketing cooperative that enjoys limited protection under
the United States anti-trust laws. Northland competes in the market for
purchasing raw cranberries with other independent cranberry product
handlers and processors for the raw cranberries of other independent
growers. The Company could also experience competition for the purchase
of raw cranberries from Ocean Spray to the extent Ocean Spray accepts new
member growers. The Company believes that competition for the purchase of
raw cranberries in the independent market may increase as a result of the
Company's current business strategy.
Branded Products Market
Ocean Spray also dominates the branded consumer cranberry
products market. Ocean Spray has significantly more experience in the
fruit juice and branded processed cranberry products markets,
substantially greater brand name recognition and substantially greater
marketing, distribution and financial resources than the Company. There
can be no assurance that the Company will be successful in competing
against Ocean Spray.
Private Label Cranberry Products Market
The market for private label cranberry juice, sauce and other
processed cranberry products has been supplied primarily by two
independent processors, as well as a limited number of other independent
raw cranberry brokers and private label juice processors and marketers.
These processors have significant experience in the private label fruit
juice and processed cranberry products markets and have well established
co-packing and bottling operations, distributor networks and customer
bases that may be greater than those of the Company or other co-packers
that may enter into an alliance with Northland. There can be no assurance
that the Company will be successful in competing directly or indirectly
against these processors. Moreover, private label cranberry products in
general compete against branded cranberry products and, in particular, the
branded cranberry products of Ocean Spray. There can be no assurance that
any private label processed cranberry products of the Company or its
allied co-packers will be able to successfully compete against the similar
branded products of Ocean Spray or others.
Fresh Cranberry Market
The Company already experiences significant direct competition
from Ocean Spray in the fresh cranberry market. Ocean Spray has
significantly greater marketing, distribution and financial resources than
the Company and there can be no assurance that the Company will be able to
continue to compete successfully against Ocean Spray in the fresh fruit
market.
Seasonality
While the Company believes that the implementation of its
current business strategy has reduced the extreme seasonality of its
previous business, there can be no assurance that this will continue and,
in any event, it is expected that the Company's results of operations will
continue to experience significant seasonality as a result of the
traditionally heavier consumer demand for juice products during the summer
months and the increased Thanksgiving and Christmas season holiday demand
for fresh cranberries and other processed cranberry products.
Agricultural Factors; Crop Insurance
Northland's cranberry production and current results of
operations are subject to the variable effects of weather, crop disease,
insect infestation, animal damage, hail and storm damage and water
adequacy. These factors can also affect the storage and selling quality
of Northland's crop, as well as the quantity and quality of raw
cranberries to be purchased by the Company from other growers.
Significant reductions in annual per acre yields can result from any of
these factors being unfavorable on the Company's marshes and such
reductions can have, and have had, a material adverse effect on the
Company's results of operations. As a result, the Company's crop yields
and production on its individual marshes and on an aggregate basis can and
do fluctuate widely from year to year. Additionally, weather conditions
and the other agricultural factors described above have delayed by
approximately one growing season the development and maturation of
Northland's cranberry vines planted within the last five years.
While the Company's present federal multi-peril crop insurance
coverage provides protection against reduced harvests resulting from
adverse growing conditions and hail and storm damage, such policies insure
only up to 75% of the previous 10 years' average historical yield from the
affected marsh and will reimburse the Company at an effective rate of $52
per barrel of insured lost production this crop year (substantially below
the price which could have been received by actually harvesting and
delivering or selling such barrel). These reimbursement rates do not and
will not take into account or cover the increasing yields expected from
newly maturing acreage or the anticipated higher per barrel proceeds which
the Company may otherwise achieve by selling its cranberries as fresh
fruit or as branded or private label consumer products. These insurance
policies also do not cover destruction or spoilage of the Company's crop
after its harvest.
Dependence on Key Personnel
The Company is dependent on certain key management personnel,
particularly its President and Chief Executive Officer, John Swendrowski.
The Company does not maintain key man life insurance on, or have
employment agreements for current employment with, any of its management
personnel. The Company's future success will depend, in part, on its
ability to retain its management personnel and integrate new management
personnel into the Company's operations.
Processing and Delivery
The Company's principal processing and storage facility and its
concentrating facility are located in Wisconsin Rapids, Wisconsin. The
Company also operates a smaller processing facility in Hanson,
Massachusetts for its Massachusetts-grown cranberry crop. In the event of
a fire or other natural disaster, regulatory actions or other causes,
particularly if such incidents occurred during or shortly after the annual
fall cranberry harvest, the Company's inventory of cranberries at such
affected facility would be subject to loss and the Company might be unable
to receive and process harvested berries at such facility, supply
concentrate (if the event affected the Wisconsin Rapids facility) or
process or ship fresh cranberries from such facility. Although the
Company has business interruption insurance believed to cover most such
circumstances, such an interruption of business could materially and
adversely affect the Company's results of operations.
The Company intends to enter into contractual arrangements with
various providers of materials and services required to produce, package,
market and distribute the Company's processed cranberry products, such as
co-packers, food and beverage brokers and transportation companies.
Accordingly, the Company will rely on a limited number of providers and as
a result, poor performance by or the loss of any such provider could have
a material adverse effect on the Company's results of operations,
especially in the short-term.
Regulation
As a result of the significant regulatory restrictions in the
United States governing the development of wetlands (the preferred growing
habitat for cranberries), it is unlikely the Company, or any other
cranberry growers or developers in the United States, in the near future
will be able to cost-effectively secure additional permits for further
significant cranberry marsh expansion on wetland properties. While a
recent legislative proposal adopted by the United States House of
Representatives attempts to ease these restrictions in certain respects,
in its current form such legislation does not preempt state regulation of
wetlands development and, therefore, may not significantly affect current
restrictions in the United States. The Company is unable to predict the
likelihood of enactment of such legislation, what form the proposed
legislation may finally take or what impact any such enacted legislation
will have on the ability to develop new cranberry marshes. If the current
proposal is enacted in a manner which would materially ease restrictions
on the development of cranberry marshes, it could lead to an increase in
long-term supply which, if not exceeded by demand, could have a depressing
effect on the pricing of cranberries and cranberry products. While the
Government of Canada and most of Canada's provinces have "no net loss"
policies restricting the development of wetlands, the impact of such
policies on development of wetlands for cranberry production is uncertain.
See " -- Cranberry Market; Supply and Demand" above.
The production, packaging, labeling, marketing and distribution
of the Company's fresh cranberries and planned processed consumer
cranberry products are and will be subject to the rules and regulations of
various federal, state and local food and health agencies, including the
United States Food and Drug Administration, the United States Department
of Agriculture, the Federal Trade Commission and the Environmental
Protection Agency ("EPA"). The Company believes it has and will be able
to comply in all material respects with such rules, regulations and laws.
However, there can be no assurance that future compliance with such rules,
regulations and laws will not have a material adverse effect on the
Company's results of operations and financial condition.
Under the provision of the Agricultural Marketing Agreement Act,
a Cranberry Marketing Order was adopted in 1974. This order established
the Cranberry Marketing Committee of the United States Department of
Agriculture ("CMC"), which is charged with developing a domestic marketing
policy by March 1 of each year and making recommendations concerning the
allowable supply of cranberries for such year. If the CMC determines that
the supply and demand of cranberries will result in unstable market
conditions for the forthcoming crop year, the CMC can recommend that the
United States Secretary of Agriculture implement a grower allocation
program pursuant to the Cranberry Marketing Order. The provisions
available for such implementation permit the Secretary to regulate the
amount of cranberries which "handlers," such as Ocean Spray and the
Company, can accept from growers for domestic marketing. The CMC's
jurisdiction is limited to areas within the United States. Therefore, the
Company believes that any such order would not affect international
allocations or sales. The CMC has never recommended that the Secretary
implement an allocation program. However, similar provisions in effect
prior to 1974 enabling the Secretary to limit the marketing of cranberries
were implemented on three occasions, most recently in 1971. There can be
no assurance that the CMC will not determine that the relative supply and
demand characteristics require such a grower allocation program in the
future, and that, therefore, limitations on the amount of cranberries
produced and allotments on growers would be imposed. If such limitations
or allotments are imposed on growers, they could have a material adverse
effect on the Company's results of operations and financial condition.
In January 1996, the EPA granted "treatment as a state" status
to the Lac du Flambeau Band of Lake Superior Chippewa Indians pursuant to
Section 518 of the federal Clean Water Act, 42 U.S.C. Section 1377.
This status allows the Lac du Flambeau Band to set water quality standards
within its reservation boundaries and to administer certain other
provisions of the Clean Water Act. The EPA has taken the position that
off-reservation dischargers must ensure that any discharges entering
reservation waters comply with tribal standards. Although the Company
owns no marshes within the exterior boundaries of the Lac du Flambeau
reservation and thus is not subject to direct tribal regulation, one of
its marshes is located near the reservation and thus its operations could
be impacted adversely by future tribal water quality standards. Any
proposed water quality standards developed by the Lac du Flambeau under
the Clean Water Act will require EPA approval. No such standards have
been adopted or approved as of the date of this Prospectus, and the
Company cannot predict the timing, content, or impact of any potential
future standards. It is possible that the Company could be required to
incur significantly increased costs in ensuring that its operation located
near the reservation does not violate applicable tribal water quality
standards.
Concentration of Ownership; Anti-takeover Considerations
As of July 10, 1996, the current directors and executive
officers of the Company in the aggregate controlled 20.7% of the combined
voting power of the Class A and Class B Common Stock, including all of the
outstanding shares of Class B Common Stock. The shares of Class B Common
Stock are entitled to three votes per share on all matters submitted to a
vote of shareholders and the shares of Class A Common Stock are entitled
to one vote per share on all such matters. As of July 10, 1996, John
Swendrowski, the President and Chief Executive Officer of the Company,
controlled 15.6% of the combined voting power of the Class A and Class B
Common Stock. See "Description of Capital Stock".
The voting power of the Company's Class A and Class B Common
Stock controlled by the Company's directors and officers in the aggregate,
along with the existence of the Class B Common Stock, the voting trust and
the shareholders agreement, as well as the Board of Directors' ability to
issue, without shareholder approval, Preferred Stock upon such terms and
conditions as it may determine and additional Class A Common Stock, could
preclude, or make it more difficult to effect, an acquisition of the
Company which is not on terms acceptable to the Company's Board of
Directors and management. Additionally, the foregoing could also have the
effect of enhancing the ability of the Board of Directors and management
to maintain their positions with the Company. See "Description of Capital
Stock."
As described under "Description of Capital Stock -- Certain
Statutory Provisions," the Wisconsin Business Corporation Law contains
several statutory provisions which could also have the effect of
discouraging non-negotiated takeover proposals for the Company or impeding
a business combination between the Company and a major shareholder of the
Company. Such provisions include (i) limiting the voting power of certain
shares of certain public corporations which are held by a person in excess
of 20% of the corporations' voting power to 10% of the full voting power
of such excess shares; (ii) requiring a super-majority vote of
shareholders, in addition to any vote otherwise required, to approve
certain business combinations not meeting certain adequacy of price
standards; and (iii) prohibiting certain business combinations between a
corporation and a major shareholder for a period of three years, unless
such acquisition has been approved by the corporation's board of directors
prior to the time such major shareholder became a 10% beneficial owner of
shares or under certain other circumstances.
Possible Stock Price Volatility
The Company believes that factors such as regulatory changes
allowing the further commercial development of wetland acreage,
significant changes in the relative supply and demand for cranberries, the
Company's fall harvest results, the Company's limited experience in the
processed consumer cranberry products market, significant quarterly
fluctuations in the Company's financial results and sales of a significant
number of shares of Class A Common Stock into the market by existing
shareholders or the Company, together with general stock market or
economic conditions, could adversely affect or cause significant
volatility in the market price of the Class A Common Stock.
PRICE RANGE OF CLASS A COMMON STOCK AND DIVIDENDS
The Company's Class A Common Stock is traded on the Nasdaq
National Market under the symbol "CBRYA". The following table sets forth,
for the periods indicated, the high and low last sale price of the Class A
Common Stock and the cash dividends declared thereon. See the cover page
of this Prospectus for the last sale price of the Class A Common Stock on
the date prior to the date of this Prospectus. On June 26, 1996, the
Company's Board of Directors declared a two-for-one stock split to be
effected in the form of a 100% stock dividend to be distributed on
September 3, 1996 to shareholders of record at the close of business on
August 15, 1996. On the date of such distribution, the number of shares
of Class A Common Stock covered by this Prospectus will increase from
500,000 to 1,000,000.
Cash
High Low Dividends
Fiscal 1996
November 30, 1995 . . . . . . . . . $20 $14-1/2 $0.07
February 28, 1996 . . . . . . . . . $22 $17 $0.07
May 31, 1996 . . . . . . . . . . . . $29-1/4 $19-3/4 $0.07
August 31, 1996 (through July 26,
1996) . . . . . . . . . . . . . .
$31 $26-3/4 (1)
______________________________
(1) On June 26, 1996, the Company's Board of Directors announced an
increase in the quarterly cash dividend to $.08 per share, first
payable on August 15, 1996 to shareholders of record as of the close
of business on August 15, 1996.
The Company's Articles of Incorporation provide that the Company
must pay cash dividends on its outstanding Class A Common Stock at least
equal to 110% of any cash dividends declared on its Class B Common Stock.
See "Description of Capital Stock".
DESCRIPTION OF CAPITAL STOCK
Relative Rights and Limitations
The Company's authorized capital stock currently consists of
20,000,000 shares of Class A Common Stock, $.01 par value, 2,000,000
shares of Class B Common Stock, $.01 par value, and 5,000,000 shares of
Preferred Stock, $.01 par value. A total of 6,367,143 shares of Class A
Common Stock and 318,101 shares of Class B Common Stock were outstanding
at July 10, 1996. None of the Preferred Stock has been issued.
The outstanding shares of Class A and Class B Common Stock are,
and the shares of Class A Common Stock to be issued and sold by the
Company in this offering will be, fully paid and nonassessable, except as
provided in Section 180.0622(2)(b) of the Wisconsin Business Corporation
Law ("WBCL"), which in general provides for personal liability on the part
of shareholders in an amount up to the par value of shares owned for the
unpaid wages of employees, but not exceeding six months' service in any
one case. A Wisconsin trial court decision interpreted this statute to
extend liability up to the original issue price, rather than the stated
par value, of shares purchased. While this decision was affirmed by the
Wisconsin Supreme Court, the precedential value of such affirmation is
uncertain due to an equally divided court.
Harris Trust and Savings Bank, Chicago, Illinois, is the
transfer agent for the Class A Common Stock. As of July 1, 1996 there
were 688 holders of record of Class A Common Stock and approximately 3,817
beneficial owners of Class A shares, including shares held by brokers and
nominees.
The principal relative rights, privileges and limitations of the
Company's shares of Class A and Class B Common Stock and Preferred Stock
are summarized below. The following description of the Company's classes
of capital stock does not purport to be complete and is subject to, and
qualified in its entirety by, reference to the Company's Articles of
Incorporation, as amended.
Class A and Class B Common Stock
The following discussion of the characteristics of the shares of
Class A and Class B Common Stock is qualified in its entirety by reference
to the description below of the Company's authorized but unissued
Preferred Stock, which could be issued with certain preferential rights
over the shares of Class A and Class B Common Stock.
The Class A shares are entitled to one vote per share and the
Class B shares are entitled to three votes per share on all matters
presented to the Company's shareholders. The holders of the Class A and
Class B Common Stock will vote together as a single class on all such
matters presented to shareholders, except that the Class A and Class B
Common Stock will also each vote separately as a class when required by
the WBCL. See "Certain Statutory Provisions" below. A total of 161,231
of the Class B shares owned beneficially by Messrs. Swendrowski and Miles,
respectively, are subject to the terms of the Voting Trust which provides
Mr. Swendrowski with discretionary power to vote such shares.
Holders of shares of Class A Common Stock are entitled to
receive cash dividends equal to at least 110% of any cash dividends paid
on the shares of Class B Common Stock. Holders of Class B shares are
entitled to receive cash dividends when and as declared by the Board of
Directors from funds legally available therefor under the WBCL. Cash
dividends may be paid on the Class A shares without a concurrent cash
dividend being paid on the Class B shares. Pursuant to the Company's
Articles of Incorporation, the Board of Directors must pay a dividend or
distribution other than in cash on the Class A shares in the same amount
as any such noncash dividend or distribution paid on the Class B shares.
Each class of Common Stock is entitled to receive shares of the same
respective class issued pursuant to stock dividends, stock splits and
combinations in the same per share proportion as that distributed on the
other class of Common Stock.
The shares of Class A Common Stock have no conversion
privileges. The shares of Class B Common Stock are convertible at the
option of the holder thereof, at any time, into shares of Class A Common
Stock on a share-for-share basis. Additionally, the outstanding shares of
Class B Common Stock will be automatically converted into Class A shares
on a share-for-share basis if, at any time, the outstanding shares of
Class B shares fall below 2% of the outstanding Class A shares.
Upon liquidation, dissolution or winding up of the Company,
after payment of all liabilities due creditors of the Company, the holders
of the shares of Class A Common Stock are entitled to receive $1.00 per
share (subject to equitable adjustment in the event of stock splits and
other similar events) before any payment or distribution may be made to
holders of the shares of Class B Common Stock. Thereafter, holders of the
shares of Class B Common Stock are entitled to receive $1.00 per share
(subject to similar adjustment) before any further payment or distribution
is made to the holders of the Class A Common Stock. Thereafter, holders
of the Class A shares and Class B shares share on a pro rata basis in all
payments or distributions made upon liquidation, dissolution or winding up
of the Company.
There are no restrictions contained in the Articles of
Incorporation on additional issuances of shares of Class A Common Stock by
the Company. However, the Company may not issue any additional shares of
shares of Class B Common Stock (other than pursuant to stock dividends and
stock splits as described above) without the approval of a majority of the
votes represented by the outstanding shares of Class A and Class B Common
Stock voting together as a single class.
The holders of Class A and Class B Common Stock have no
redemption privileges or preemptive rights. All of the outstanding shares
of Class A and Class B Common Stock are, and the shares of Class A Common
Stock offered by the Company hereby when issued and paid for will be,
validly issued, fully paid and nonassessable, except as provided in
Section 180.0622(2)(b) of the WBCL.
Preferred Stock
There are 5,000,000 shares of Preferred Stock authorized by the
Company's Articles of Incorporation, none of which have been issued. The
Company's Board of Directors is authorized to issue from time to time,
without shareholder authorization, in one or more designated series,
Preferred Stock with such redemption, exchange, conversion, dividend,
liquidation and voting rights as may be specified in the particular
series. Dividends on any series of Preferred Stock are to be cumulative
from the date of issuance, payable at such rate and at such times as
designated by the Board of Directors for that series. No dividends or
other distributions are to be payable on the shares of Class A and Class B
Common Stock unless dividends are paid in full on the Preferred Stock and
all sinking fund obligations for the Preferred Stock, if any, are fully
funded. In the event of a liquidation or dissolution of the Company, the
issued shares of Preferred Stock would have priority over the shares of
Class A and Class B Common Stock to receive the amount specified in each
particular series out of the remaining assets of the Company.
Additionally, the Board of Directors has authority, to the maximum extent
permitted by the WBCL, to fix and determine the relative rights and
preferences of each series of Preferred Stock. The issuance of one or
more series of Preferred Stock could have an adverse effect on certain
rights, including voting rights, of the holders of shares of Class A and
Class B Common Stock. The Company has no current plans or intention to
issue shares of Preferred Stock.
Certain Statutory Provisions
Under the WBCL, a separate class vote would generally be
required to approve an amendment to the Company's Articles of
Incorporation (including an amendment made as part of a proposed merger or
other reorganization) if the amendment would change in a manner
prejudicial to the outstanding holders of a class, the designations,
preferences, limitations or other rights of the shares of the class, and
in certain other circumstances.
Section 180.1150 of the WBCL provides that, unless otherwise
provided in a corporation's articles of incorporation, the voting power of
shares of an "issuing public corporation" (which is defined as a Wisconsin
corporation having more than 500 shareholders of record, at least 100 of
whom are residents of the State of Wisconsin), which are held by any
person in excess of 20% of the voting power of the issuing public
corporation's shares, shall be limited to 10% of the full voting power of
such excess shares. This statutory voting restriction is not applicable
to shares acquired (i) directly from the Company; (ii) pursuant to an
agreement entered into prior to the time that the Company was an issuing
public corporation; (iii) in a transaction incident to which shareholders
of the Company vote to restore the full voting power of such shares; and
(iv) under certain other circumstances. The Company's Articles of
Incorporation provide that the shares of Class B Common Stock will not be
subject to the voting restrictions of Section 180.1150.
Except as may otherwise be provided by law, the requisite
affirmative vote of shareholders to approve certain significant corporate
actions, including a merger or share exchange with another corporation,
sale of all or substantially all of the corporate property and assets, or
voluntary liquidation of the Company, is a majority of all the votes
entitled to be cast on the transaction by each voting group of outstanding
shares entitled to vote thereon. Sections 180.1130 through 180.1134 of
the WBCL provide generally that, in addition to the vote otherwise
required by the WBCL or the articles of incorporation of an "issuing
public corporation," certain business combinations not meeting certain
adequacy-of-price standards specified in the statute must be approved by
(i) the holders of at least 80% of the votes entitled to be cast and (ii)
two-thirds of the votes entitled to be cast by the corporation's
outstanding voting shares owned by persons other than a "significant
shareholder" who is a party to the transaction or an affiliate or
associate thereof. Section 180.1130 defines "business combination" to
include, subject to certain exceptions, a merger or share exchange of the
issuing public corporation (or any subsidiary thereof) with, or the sale
or other disposition of substantially all assets of the issuing public
corporation to, any significant shareholder or affiliate thereof.
"Significant shareholder" is defined generally to mean a person that is
the beneficial owner of 10% or more of the voting power of the outstanding
voting shares of the issuing public corporation.
Sections 180.1140 through 180.1145 of the WBCL prohibit certain
"business combinations" between a "resident domestic corporation," such as
the Company, and a person beneficially owning 10% or more of the
outstanding voting stock of such corporation (an "interested shareholder")
within three years after the date such person became a 10% beneficial
owner, unless the business combination or the acquisition of such stock
has been approved before the stock acquisition date by the corporation's
board of directors. After such three-year period, a business combination
with the interested shareholder may be consummated only with the approval
of the holders of a majority of the voting stock not beneficially owned by
the interested shareholder, unless the combination satisfies certain
adequacy-of-price standards intended to provide a fair price for shares
held by non-interested shareholders.
The above sections of the WBCL, along with the certain
exceptions therefrom contained in the Company's Articles of Incorporation
and the ability to issue additional shares of Class A Common Stock or
Preferred Stock without further shareholder approval (subject to any
requirements necessary to maintain the quotation of the Class A shares on
NASDAQ) could have the effect, among others, of discouraging takeover
proposals for the Company or impeding a business combination between the
Company and a major shareholder of the Company.
OUTSTANDING SECURITIES COVERED BY THIS PROSPECTUS
This Prospectus, as appropriately amended or supplemented, may
be used from time to time by persons who have received shares of Class A
Common Stock covered by the Registration Statement in acquisitions of
businesses or properties by the Company, or their transferees, and who
wish to offer and sell such shares (such persons are herein referred to as
the "Selling Stockholder" or "Selling Stockholders") in transactions in
which they and any broker-dealer through whom such shares are sold may be
deemed to be underwriters within the meaning of the Act.
The Company will receive none of the proceeds from any such
sales. Any commissions paid or concessions allowed to any broker-dealer,
and, if any broker-dealer purchases such shares as principal, any profits
received on the resale of such shares, may be deemed to be underwriting
discounts and commissions under the Act. Printing, certain legal, filing
and other similar expenses of this offering will be paid by the Company.
Selling Stockholders will bear all other expenses of this offering,
including any brokerage fees, underwriting discounts or commissions.
There presently are no arrangements or understandings, formal or
informal, pertaining to the distribution of the shares as described
herein. Upon the Company's being notified by a Selling Stockholder that
any material arrangement has been entered into with a broker-dealer for
the sale of shares through a block trade, special offering, exchange
distribution or secondary distribution, a supplemental Prospectus will be
filed, pursuant to Rule 424(b) under the Act, setting forth (i) the name
of each Selling Stockholder and of the participating broker-dealer(s),
(ii) the number of shares involved, (iii) the price at which such shares
were sold, (iv) the commissions paid or discounts or concessions allowed
to such broker-dealer(s), where applicable, (v) that such broker-dealer(s)
did not conduct any investigation to verify the information set out in
this Prospectus, and (vi) other facts material to the transaction.
Selling Stockholders may sell the shares being offered hereby
from time to time in transactions (which may involve crosses and block
transactions) on NASDAQ or such other securities exchange on which the
Company's Class A Common Stock may be listed, in negotiated transactions
or otherwise, at market prices prevailing at the time of sale or at
negotiated prices. Selling Stockholders may sell some or all of the
shares in transactions involving broker-dealers, who may act solely as
agent and/or may acquire shares as principal. Broker-dealers
participating in such transactions as agent may receive commissions from
Selling Stockholders (and, if they act as agent for the purchaser of such
shares, from such purchaser). Participating broker-dealers may agree with
Selling Stockholders to sell a specified number of shares at a stipulated
price per share and, to the extent such broker-dealer is unable to do so
acting as agent for Selling Stockholders, to purchase as principal any
unsold shares at the price required to fulfill the broker-dealer's
commitment to Selling Stockholders.
In addition or alternatively, Shares may be sold by Selling
Stockholders and/or by or through other broker-dealers in special
offerings, exchange distributions or secondary distributions pursuant to
and in compliance with the governing rules of NASDAQ or such other
securities exchange on which the Company's Class A Common Stock may be
listed, and in connection therewith, commissions in excess of the
customary commission prescribed by the rules of such securities exchange
may be paid to participating broker-dealers, or, in the case of certain
secondary distributions, a discount or concession from the offering price
may be allowed to participating broker-dealers in excess of such customary
commission. Broker-dealers who acquire shares as principal thereafter may
resell such shares from time to time in transactions (which may involve
crosses and block transactions and which may involve sales to and through
other broker-dealers, including transactions of the nature described in
the preceding two sentences) on NASDAQ or such other securities exchange
on which the Company's Class A Common Stock may be listed, in negotiated
transactions or otherwise, at market prices prevailing at the time of sale
or at negotiated prices, and, in connection with such resales, may pay to
or receive commissions from the purchasers of such shares.
Each Selling Stockholder may indemnify any broker-dealer that
participates in transactions involving sales of the shares against certain
liabilities, including liabilities arising under the Act.
VALIDITY OF SECURITIES
The legality of the Class A Common Stock issuable hereunder will
be passed upon for the Company by Foley & Lardner, Milwaukee, Wisconsin.
Jeffrey J. Jones, a director of the Company and a partner of Foley &
Lardner, beneficially owns 9,303 shares of Class A Common Stock and
options to acquire 2,073 additional shares.
EXPERTS
The financial statements incorporated in this Prospectus by
reference from the Company's Annual Report on Form 10-K for the year ended
March 31, 1995 have been audited by Deloitte & Touche LLP, independent
auditors, as stated in their report, which is incorporated herein 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.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934 ("Exchange Act") and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission ("Commission"). Such reports, proxy
statements and other information filed by the Company can be inspected and
copied at the public reference facilities maintained by the Commission at
450 Fifth Street, N.W., Washington, D.C. 20549 and at its Regional Offices
located at Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois, 60661-2511; and Seven World Trade Center, Suite 1300, New York,
New York, 10048. Copies of such material can be obtained at prescribed
rates from the Public Reference Section of the Commission, 450 Fifth
Street N.W. Plaza, Washington, D.C. 20549. Such reports and proxy
statements can also be inspected at the offices of the Nasdaq National
Market, NASDAQ Reports Section, 1735 K Street, N.W., Washington, D.C.
20006-1506.
In addition, the Commission maintains a Web site that contains
reports, proxy and information statements and other information regarding
registrants that file electronically with the Commission. The address of
such Web site is http://www.sec.gov.
The Company has filed with the Commission a Registration
Statement on Form S-4 (the "Registration Statement") under the Securities
Act of 1933, as amended (the "Securities Act"), with respect to the Class
A Common Stock offered hereby. This Prospectus, which constitutes a part
of the Registration Statement, does not contain all the information set
forth in the Registration Statement and reference is hereby made to the
Registration Statement and the exhibits thereto for further information
with respect to the Company and the Class A Common Stock.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents filed by the Company with the Commission
pursuant to the Exchange Act are incorporated herein by reference:
1. Annual Report on Form 10-K for the year ended March 31,
1995.
2. Quarterly Report on Form 10-Q for the quarter ended June
30, 1995.
3. Transition Report on Form 10-Q for the transition period
from April 1, 1995 to August 31, 1995.
4. Quarterly Reports on Form 10-Q and 10-Q/A for the quarter
ended November 30, 1995.
5. Quarterly Reports on Form 10-Q for the quarters ended
February 29, 1996 and May 31, 1996.
6. Current Report on Form 8-K, dated June 21, 1995.
7. The description of the Company's Class A Common Stock
contained in its Registration Statement on Form S-1 (No.
33-15383), as incorporated by reference into the Company's
Registration Statement on Form 8-A (Exchange Act File No.
0-16130), dated August 13, 1987, and any amendments or
reports filed for the purpose of updating such description.
8. All other reports filed by the Company with the Commission
pursuant to Sections 13(a) or 15(d) of the Exchange Act
subsequent to the date of this Prospectus and prior to the
termination of the offering of the Class A Common Stock
offered hereby shall be deemed to be incorporated herein by
reference.
Any statement contained herein or in a document all or a portion
of which is incorporated or deemed to be incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be incorporated
by reference herein or in the Prospectus Supplement modifies or supersedes
such statement. Any such statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
The Company will furnish without charge to each person,
including any beneficial owner, to whom this Prospectus is delivered, upon
the request of such person, a copy of any of the documents incorporated by
reference herein, except for the exhibits to such documents (unless such
exhibits are specifically incorporated by reference into such documents).
Requests should be directed to Northland Cranberries, Inc., 800 First
Avenue South, Wisconsin Rapids, Wisconsin 54494, Attention: Investor and
Public Relation Manager, telephone number (715) 424-4444.
<PAGE>
No person has been authorized to give information or make any
representation not contained or incorporated by reference in this
Prospectus in connection with the offer made hereby. If given or made,
such information or representation must not be relied upon as having been
authorized by the Company, any Selling Shareholders, or any underwriter,
agent or dealer. This Prospectus does not constitute an offer to sell or
a solicitation of an offer to buy any of the securities offered hereby in
any jurisdiction to any person to whom it is unlawful to make such offer
in such jurisdiction. Neither the delivery of this Prospectus nor any
sale made hereunder shall, under any circumstances, create any
implication that there has been no change in the affairs of the Company
since the date hereof.
TABLE OF CONTENTS
THE COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
PRICE RANGE OF CLASS A COMMON
STOCK AND DIVIDENDS . . . . . . . . . . . . . . . . . . . . . . . . 10
DESCRIPTION OF CAPITAL STOCK . . . . . . . . . . . . . . . . . . . . 10
OUTSTANDING SECURITIES COVERED BY
THIS PROSPECTUS . . . . . . . . . . . . . . . . . . . . . . . . . . 14
VALIDITY OF SECURITIES . . . . . . . . . . . . . . . . . . . . . . . 15
EXPERTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
AVAILABLE INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . 16
INCORPORATION OF CERTAIN
INFORMATION BY REFERENCE . . . . . . . . . . . . . . . . . . . . . . 17
500,000 SHARES
CLASS A COMMON STOCK
PROSPECTUS
July 29, 1996
