SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
____________________
Date of Report
(Date of earliest
event reported): July 1, 1998
NORTHLAND CRANBERRIES, INC.
(Exact name of registrant as specified in its charter)
Wisconsin 0-16130 39-1583759
(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification No.)
incorporation)
800 First Avenue South, P.O. Box 8020,
Wisconsin Rapids, Wisconsin 54495-8020
(Address of principal executive offices, including zip code)
(715) 424-4444
(Registrant's telephone number)
<PAGE>
Item 2. Acquisition or Disposition of Assets
On July 1, 1998, Northland Cranberries, Inc. ("Northland")
consummated the acquisition through a subsidiary ("Acquisition Sub") of
the business and substantially all of the assets and certain liabilities
("the Acquisition") of Minot Food Packers, Inc. a New Jersey corporation
("Minot"). The Acquisition was effected pursuant to an Asset Purchase
Agreement, dated May 20, 1998 ("Asset Purchase Agreement") by and among
Northland, Minot and Michael A. Morello, the sole shareholder of Minot
("Morello"). The Asset Purchase Agreement is filed as an exhibit to this
Current Report on Form 8-K and incorporated by reference herein. Minot,
located in Bridgeton, New Jersey, produces, markets, sells and distributes
primarily cranberry private label products, including cranberry sauce, as
well as a wide variety of non-cranberry private label juice products.
Pursuant to the Asset Purchase Agreement, (i) Acquisition Sub acquired
Minot's real property, inventory, personal property, trade rights,
contracts, computer software, licenses, notes and accounts receivables and
other assets for a purchase price consisting of (a) $35.375 million in
cash (with $3 million thereof paid into an indemnity escrow fund and
approximately $12.5 million thereof (subject to adjustment) used to pay
certain bank debt of Minot at the closing), (b) 136,986 shares of
Northland unregistered Class A Common Stock (all of which will also be
deposited in the indemnity escrow fund), and (c) the assumption by
Acquisition Sub of certain liabilities of Minot; (ii) Minot and Morello
agreed to a five-year covenant not to compete in the private label juice
and cranberry sauce business; and (iii) Minot and Morello agreed to
indemnify Northland and Acquisition Sub for any breach by Minot of Minot's
representations and warranties contained therein and for liabilities
specifically retained by Minot under the Asset Purchase Agreement. The
purchase price paid by Northland in the Acquisition was determined on the
basis of arm's length negotiations between the parties. Northland has no
present plans to make significant changes to Minot's business and plans to
continue the business in its present form while integrating Minot's
operations with and into Northland.
The obligations of Minot and Morello to indemnify Northland and
Acquisition Sub under the Asset Purchase Agreement for breaches of
representations and warranties are subject to (i) a time limitation
expiring November 20, 1999 for most representations and warranties; (ii) a
$400,000 aggregate minimum threshold for damages subject to the
indemnification; and (iii) an aggregate maximum amount of indemnification
claims equal to the indemnity escrow funds. Minot and Morello also agreed
to retain responsibility for, and to indemnify Northland and Acquisition
Sub against, the cleanup and remediation of certain existing environmental
contamination at Minot's production facility and to pay all costs and
expenses related thereto pursuant to an environmental indemnity agreement
entered into by and among Northland, Acquisition Sub, Minot and Morello.
Additionally, at closing, the following events took place:
(i) an Employment Agreement was entered into by and between Morello, Minot
and Northland pursuant to which Morello will be employed as President of
Minot for a period of three years at an annual salary of $190,000 plus
participation in Northland's incentive bonus plan; and (ii) a Registration
Rights Agreement was entered into by and between Morello and Northland
pursuant to which Morello will have the "piggy back" right to register his
Northland Class A Common Stock as part of certain future registrations
initiated by Northland under the Securities Act of 1933.
Pursuant to a registration statement on Form S-3 filed with the
Securities and Exchange Commission on May 20, 1998 (Reg. No. 333-53173)
and the related final prospectus dated June 25, 1998, Northland sold
5,000,000 shares of its Class A Common Stock at $14.00 per share in an
underwritten public offering (the "Offering") to provide financing for the
Acquisition on June 30, 1998. Northland used $35.375 million of the net
proceeds of the Offering to pay the cash portion of the purchase price of
the Acquisition.
Item 7. Financial Statements and Exhibits.
(a) Financial statements of Minot and pro forma financial
information required by this Item 7 will be filed by amendment within
sixty (60) days of the date hereof.
(c) Exhibits
(2) Asset Purchase Agreement, dated as of
May 20, 1998, by and among Northland Cranberries,
Inc., Minot Food Packers, Inc. and Michael A. Morello
[Incorporated by reference to Exhibit 2.0 to
Northland's Registration Statement on Form S-3 (Reg.
No. 333-53173)]. 1
(10.1) Registration Rights Agreement, dated as
of July 1, 1998 by and between Northland Cranberries,
Inc. and Michael A. Morello.
(10.2) Employment Agreement dated as of July 1,
1998, by and among Northland Cranberries, Inc.,
Minot Food Packers, Inc. and Michael A. Morello.
--------------
1 The schedules and exhibits to this document are not being filed
herewith. The registrant agrees to furnish supplementally a copy of any
such schedule or exhibit to the Securities and Exchange Commission upon
request.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
NORTHLAND CRANBERRIES, INC.
Date: July 14, 1998 By: /s/ John A. Pazurek
John A. Pazurek
Vice President-Finance, Treasurer and
Chief Financial Officer
<PAGE>
NORTHLAND CRANBERRIES, INC.
EXHIBIT INDEX TO FORM 8-K
Report Dated July 1, 1998
Exhibit
(2) Asset Purchase Agreement, dated as of May 20, 1998, by
and among Northland Cranberries, Inc., Minot Food
Packers, Inc. and Michael A. Morello [Incorporated by
reference to Exhibit 2.0 to Northland's Registration
Statement on Form S-3 (Reg. No. 333-53173)]. 1
(10.1) Registration Rights Agreement, dated as of July 1, 1998
by and between Northland Cranberries, Inc. and Michael
A. Morello.
(10.2) Employment Agreement dated as of July 1, 1998, by and
among Northland Cranberries, Inc., Minot Food Packers,
Inc. and Michael A. Morello.
--------------
1 The schedules and exhibits to this document are not being filed
herewith. The registrant agrees to furnish supplementally a copy of any
such schedule or exhibit to the Securities and Exchange Commission upon
request.
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated as of July 1, 1998, by and
among NORTHLAND CRANBERRIES, INC., a Wisconsin corporation ("Northland"),
and Fargo Acquisition Corporation, a New Jersey corporation ("Company")
and Michael A. Morello, the sole shareholder of Company ("Morello").
RECITALS:
A. Pursuant to the Asset Purchase Agreement dated as of May 20,
1998 (the "Purchase Agreement") by and among Northland, Company and the
Shareholder, substantially all the assets and certain liabilities of
Company are being acquired by a wholly-owned subsidiary of Northland.
Capitalized defined terms used herein and not otherwise defined shall have
the meaning ascribed thereto in the Purchase Agreement.
B. Pursuant to the Purchase Agreement, as part of the consideration
for the assets of Company, the Company is entitled to receive, 136,986
shares ("Northland Shares") of Northland Class A Common Stock, $.0l par
value (collectively, "Northland Class A Common Stock"), delivered to the
Escrow Agent under the Escrow Agreement ("Escrow Stock").
C. It is contemplated that the Company may liquidate and dissolve
and may distribute to Morello the shares of Northland Stock received under
the Purchase Agreement (and its interests in the Northland Class A Common
Stock deposited in the escrow pursuant to the Escrow Agreement), all in
connection with the complete liquidation and dissolution of the Company.
The term "Shareholder" as used in this Agreement shall mean Company prior
to the distribution of the Northland Class A Common Stock to Morello and
shall mean Morello following such distribution by the Company.
D. Northland and the Shareholder desire to allow the Shareholder to
publicly sell the Northland Shares pursuant to certain registration
statements which may be filed by Northland under the Securities Act of
1933, as amended ("Act"), pursuant to the terms and conditions hereinafter
set forth.
NOW, THEREFORE, in consideration of the mutual covenants and
promises herein made and mutual benefits to be derived from this
Agreement, it is hereby agreed as follows:
1. Piggy Back Registration Rights.
(a) If, at any time during the period commencing on the
first anniversary date hereof and evidencing on the second anniversary
date hereof ("Second Anniversary Date"), Northland shall determine to
register shares of Northland Class A Common Stock under the Act for the
purpose of effecting an underwritten public offering thereof for cash,
Northland shall give written notice thereof to the Shareholder; provided,
however, that Northland shall not be required to give such notice to the
Shareholder if the proposed registration (i) is not to be made on
Securities and Exchange Commission ("Commission") Forms S-1, S-2 or S-3
(or the successors to such forms); and (ii) is (A) a registration of
securities other than Northland Class A Common Stock; (B) a registration
of a stock option, incentive compensation, profit sharing or other
employee benefit plan or of securities issued or issuable pursuant to any
such plan; or (C) a registration of securities proposed to be issued in
exchange for securities or assets of, or in connection with a merger,
share exchange, consolidation or other business combination involving,
another corporation or entity.
(b) Subject to paragraph (c) of this Section 1, upon
receiving any notice required under paragraph (a) of Section 1, if the
Shareholder desires to participate in a registration statement, then the
Shareholder shall provide written notice of such desire to Northland on
the form attached as Exhibit A ("Piggy Back Registration Request") within
10 days after the date of Northland's notice. Such Piggy Back Registration
Request shall be accompanied by (i) the Power of Attorney attached as
Exhibit B, duly executed by the Shareholder; (ii) the Letter of
Transmittal and Custody Agreement attached as Exhibit C, duly executed by
such Shareholder; (iii) the stock certificates representing the Northland
Shares requested to be registered by the Shareholder, accompanied by stock
powers duly executed in blank by or on behalf of the Shareholder; and (iv)
any other documents necessary to facilitate the Shareholder's
participation in such registration (collectively, "Registration
Documents"). Northland will use its best efforts to register all of the
Northland Shares requested to be registered by the Shareholder on such
Piggy Back Registration Request concurrently with the registration of
Northland Class A Common Stock by Northland on its own behalf and on the
same terms and conditions of offering and sale as contemplated and agreed
to by Northland ("Piggy Back Registration"). In the event the Shareholder
requests to participate in any Piggy Back Registration, the Shareholder
must sell the Northland Shares subject thereto on the same terms and
conditions of offering and sale (including, without limitation, purchase
price and underwriting discount per share, but excluding any differing
allocation agreed to by Northland with respect to any over-allotment
option granted) as agreed to by Northland in connection with its sale of
Northland Class A Common Stock thereunder.
(c) Northland shall not be required to include any
Northland Shares which have been requested to be registered by the
Shareholder in any Piggy Back Registration under this Section 1 if
Northland believes that, in its discretionary reasonable judgment, the
inclusion of Northland Shares proposed to be included by the Shareholder
would materially interfere with the timing, pricing or marketing of the
Northland Class A Common Stock being offered by Northland. Northland may,
in its discretionary judgment for any reason whatsoever and without the
consent the Shareholder, withdraw any such registration statement and
abandon any proposed Piggy Back Registration in which the Shareholder has
requested to participate.
2. Expenses. If the Shareholder participates in any Piggy Back
Registration the Shareholder shall pay (a) the expenses of any attorneys,
accountants or other advisors or professionals which the Shareholder
engages in connection with a sale of Northland Shares pursuant to any
Piggy Back Registration and (b) all underwriting or brokerage commissions
and discounts, if any, associated with the Northland Shares being sold by
the Shareholder pursuant to any Piggy Back Registration. Northland shall
pay all other costs and expenses incurred by it associated with any Piggy
Back Registration (including, without limitation, all legal and accounting
fees and expenses, printing costs and filing fees incurred by Northland).
3. Holdback Agreement: Further Cooperation; Confidentiality.
(a) By execution of this Agreement, the Shareholder hereby
agrees that, prior to the Second Anniversary Date, he will not offer, sell
or otherwise dispose of any Northland Shares owned by the Shareholder, in
the open market, during the period when he has knowledge that a Northland
registration statement (other than those, such as Form S-8 and Form S-4,
as to which notice need not be given to the Shareholder by Northland under
Section 1(a) hereof or nonunderwritten shelf offerings under Rule 415
under the Act and pursuant to which the Shareholder is not selling
Northland Shares) is contemplated or pending or within 90 days after the
effective date with the Commission of any such Northland registration
statement relating to a public offering or distribution of Northland Class
A Common Stock, other than as allowed under this Agreement.
(b) In connection with any Piggy Back Registration, the
Shareholder will furnish or cause to be furnished such further information
with respect thereto, and render such further cooperation, to Northland,
any underwriter and any broker-dealer as Northland, such underwriter or
broker-dealer may request. The Shareholder hereby agrees to execute and
enter into customary underwriting documents in connection therewith as are
requested by the managing underwriter of such offering or by Northland;
provided, however, that the Shareholder's obligations to indemnify any
persons in connection with such registration statement shall be limited to
the matters set forth in Section 4 of this Agreement, and, provided,
further that such documents shall include the indemnification of the
Shareholder by Northland provided for in Section 4 of this Agreement.
(c) Upon receiving any notice from Northland hereunder
respecting any contemplated or pending registration statement of Northland
and until public disclosures by Northland thereof, the Shareholder shall
strictly maintain the confidentiality of such contemplated or pending
registration statement and shall make no public disclosures or comments
with respect thereto.
4. Indemnification in Connection with Registration Statements.
In connection with any Piggy Back Registration in which the Shareholder
participates pursuant to this Agreement, the Shareholder shall indemnify
and hold harmless Northland and any underwriters of such offering and
their respective officers, directors and controlling persons from any and
all loss, liability, claims, damages and expenses (including reasonable
attorneys fees and disbursements) incurred by them insofar as such losses,
liabilities, claims, damages and expenses arise out of or are based upon
any untrue statement or alleged untrue statement of a material fact
contained in the registration statement or prospectus covering the
Northland Shares to be sold or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; provided,
however, that the Shareholder shall only be liable in any such case to the
extent that any such loss arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged omission made
therein in reliance upon and in conformity with information relating to
the Shareholder as furnished to Northland or any underwriter by or on
behalf of the Shareholder expressly for use in the registration statement
or prospectus covering the Northland Shares to be sold. Except to the
extent set forth in the foregoing sentence, Northland shall indemnify and
hold the Shareholder harmless from any and all loss, liability, claims,
damages and expenses (including reasonable attorneys fees and
disbursements) incurred by Shareholder in connection with any Piggy Back
Registration, insofar as such losses, liabilities, claims, damages and
expenses arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact furnished by Northland or the
underwriters for use in such registration statement or prospectus related
thereto or arise out of or are based upon the omission or alleged omission
to state therein a material fact pertaining to Northland or the
underwriters and required to be stated therein or necessary to make the
statements made therein, in light of the circumstances in which they were
made, not misleading.
5. Additional Matters.
(a) This Agreement shall be governed by and construed and
interpreted in accordance with the internal laws of the State of Wisconsin
applicable to contracts made and performed in Wisconsin, regardless of the
fact that individuals who are a party hereto may be or become a resident
of a state or jurisdiction other than Wisconsin.
(b) Except as otherwise provided in this Agreement, all
notices, requests, demands and other communications hereunder shall be
deemed to be duly given if delivered by hand or if mailed by certified or
registered mail with postage prepaid:
(i) If to Northland: to Northland Cranberries, Inc.,
800 First Avenue South, P.O. Box 8020, Wisconsin Rapids, Wisconsin
54495-8020, Attention: David J. Lukas (with a copy to: Steven R.
Barth, Esq., Foley & Lardner, 777 East Wisconsin Avenue, Milwaukee,
Wisconsin 53202).
(ii) If to the Shareholder: to Michael A. Morello,
3161 Silverwood Lane, Vineland, New Jersey 08361 (with a copy to:
John F. Bales III, Morgan, Lewis & Bockius LLP, 2000 One Logan
Square, Philadelphia, PA 19103-6993.
(iii) Any person entitled to receive notice
hereunder may change his address at which notice is to be received or
designated another person to receive notice by giving notice to all
other parties and persons entitled to receive notice in the manner
provided in this Section.
(c) Along with the Purchase Agreement and the Exhibits
thereto and the Escrow Agreement, this instrument embodies the entire
agreement between the parties hereto with respect to the transactions
contemplated herein, and supersedes all prior agreements and
understandings between the parties.
(d) This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute but one and the same instrument. Executed
signature pages may be removed from counterpart agreements and attached to
one or more fully executed copies of this Agreement.
(e) Except as set forth below, this Agreement shall not be
assigned by the Shareholder without the written consent of Northland and
any attempted assignment without such consent shall be null and void and
without legal effect. This Agreement shall be binding upon and inure to
the benefit of the respective parties hereto, any successor and assign of
Northland and, if the consent required by this Section is properly
secured, the successors and assigns of the Shareholder. Upon any
assignment hereunder, the assignee shall become a "Shareholder" for all
purposes under this Agreement. Any assignment in violation of this Section
5(e) shall be null and void for all purposes and the party attempting to
effect such an assignment shall be jointly and severally liable for any
claims against or incurred by the nonassigning parties as a result of such
attempted assignment.
(f) Until the second anniversary hereof, provided Minot is
no longer an affiliate (as defined in Rule 144 of the Act) of Northland,
Northland will make available to Shareholder such information in its
possession as shall be necessary to enable Shareholder to make sales of
Northland Class A Common Stock under Rule 144. Northland will, at the
request of Shareholder, upon receipt therefrom of a certificate certifying
(a) that Shareholder has held such Northland Class A Common Stock for a
period of not less than two consecutive years and (b) that Minot has not
been an affiliate of Northland for more than 90 preceding days, remove
from the certificates representing such Northland Class A Common Stock
that portion of any restrictive legend which related to the registration
provision of the Act.
(g) The headings used in this Agreement are for
convenience only and shall not constitute a part of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly as of the day and year first above written.
NORTHLAND CRANBERRIES, INC.
("Northland")
By: /s/ John Swendrowski
John Swendrowski
Chairman of the Board and
Chief Executive Officer
MICHAEL A. MORELLO
("Shareholder")
By: /s/ Michael A. Morello
Michael A. Morello
<PAGE>
Exhibit A
to
Registration Rights Agreement
PIGGY BACK REGISTRATION REQUEST FORM
CERTIFIED MAIL
RETURN RECEIPT REQUESTED
Northland Cranberries, Inc.
800 First Avenue South
P.O. Box 8020
Wisconsin Rapids, WI 54495-8020
Attention: David J. Lukas
Gentlemen and/or Ladies:
Reference is made to that certain Registration Rights Agreement,
dated as of July 1, 1998 ("Registration Rights Agreement"), by and among
Northland Cranberries, Inc. ("Company"), the undersigned and Minot Food
Packers, Inc. and to the notice dated ___________ of the Company to the
undersigned, receipt of which is hereby acknowledged, regarding the
proposed registration and public offering of shares of the Company's Class
A Common Stock (the registration, together with the related offering, the
"Offering"). The undersigned agrees to keep all mailers relating to the
offering strictly confidential.
The undersigned hereby (indicate choice by checking one box
only):
1. [ ] Requests, pursuant to Section l(b) of the Registration
Rights Agreement, the inclusion in the Offering of up to
__________ (fill in appropriate number of shares of Company
Class A Common Stock so requested for inclusion) shares of
Company Class A Common Stock held by the undersigned.
Accompanying the request are (i) the Power of Attorney
attached as Exhibit B to the Registration Rights Agreement,
duly executed by the undersigned; (ii) the Letter of
Transmittal and Custody Agreement attached as Exhibit C to
the Registration Rights Agreement, duly executed by the
undersigned (including the attached stock power) duly
executed by the undersigned; and (iii) the undersigned's
stock certificate(s) representing the shares of Company
Class A Common Stock requested to be included in the
Offering.
2. [ ] Does not request inclusion of the undersigned's shares of
Company Class A Common Stock in the offering.
Very truly yours,
Sign: ________________________
Name:_______________________
Date:________________________
Business Phone:________________
Home Phone:__________________
cc: Steven R. Barth
Foley & Lardner
777 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
<PAGE>
NORTHLAND CRANBERRIES, INC.
STOCK POWER
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto __________________ (________) shares of the Class A Common
Stock of Northland Cranberries, Inc., standing in my (our) name(s) on the
books of said Corporation represented by Certificate(s) No(s). ____
herewith, and does hereby irrevocably constitute and appoint Harris Trust
& Savings Bank attorney to transfer the said stock on the books of said
Corporation and full power of substitution in the premises.
Dated: ____________
Signature:
Name:
<PAGE>
Exhibit B
to
Registration Rights Agreement
NORTHLAND CRANBERRIES, INC.
Common Stock
(par value $.01 per share)
POWER OF ATTORNEY OF SELLING SHAREHOLDER
The undersigned shareholder ("Shareholder") of Northland
Cranberries, Inc., a Wisconsin corporation (the "Company"), is a party to
a Registration Rights Agreement with the Company dated as of July 1, 1998
("Agreement") pursuant to which the Company has provided certain rights to
the Shareholder to publicly sell his shares of Class A Common Stock of the
Company received in connection with that certain Purchase Agreement by and
among the Company, Minot Food Packers, Inc., a New Jersey corporation, and
the Shareholder pursuant to certain registration statements which may be
filed by the Company under the Securities Act of 1993, as amended ("Act"),
subject to the terms of the Agreement. In order to facilitate the sale of
his Class A Common Stock under the terms of the Agreement, the Shareholder
is executing this Power of Attorney and is concurrently executing and
delivering a Letter of Transmittal and Custody Agreement ("Custody
Agreement") pursuant to which certificates for at least the number of
shares of Class A Common Stock set forth opposite the name of the
Shareholder on the signature page hereof are initially being deposited
with Harris Trust & Savings Bank to hold such certificates as custodian
("Custodian").
1. In connection with the foregoing, the Shareholder hereby
appoints [__________] and [__________], acting together and not alone, the
attorneys-in-fact (collectively, the "Attorneys-in-Fact" and individually,
an "Attorney-in-Fact") of the Shareholder with full power and authority in
the name of, and for and on behalf of, the Shareholder:
(a) to do all things necessary under the Agreement to sell
up to the number ("Maximum Number") of shares ("Shares") of Class A Common
Stock set forth opposite the name of the Shareholder on the signature page
hereof and represented by the certificates being deposited herewith by or
on behalf of the Shareholder with the Custodian;
(b) for the purpose of effecting such sales, to negotiate,
execute and deliver any underwriting agreement (and any amendment or
supplement thereto), among the Company, the Shareholder and any
underwriters which are a party thereto; provided, however, that the
Shareholder must sell Class A Common Stock included in any Piggy Back
Registration (as defined in the Agreement) on the same terms and
conditions of offering and sale (including, without limitation, purchase
price and underwriting discount per share, but excluding any differing
allocation agreed to by the Company with respect to any over allotment
option granted) as agreed to by the Company in connection with its sale of
common stock thereunder.
(c) to give such orders and instruments to Northland, any
underwriter, any broker-dealer or the Custodian or any other person as the
Attorneys-in-Fact, acting together and not alone, may determine,
including, without limitation, orders or instructions for the following:
(i) the transfer on the books of the Company of the Shares in order to
effect their sale (including the names in which new certificates for the
Shares are to be issued and the denominations thereof); (ii) the delivery
of the certificates for the Shares against receipt of the purchase price
therefor; (iii) the payment out of the proceeds of any sale of the Shares
to Northland or any underwriters of all commissions, fees and expenses as
are to be borne by the Shareholder in accordance with the terms of the
Agreement; (iv) the remittance of the net balance of the proceeds from any
sale of the Shares to be sold in accordance with such payment instructions
as the Attorneys-in-Fact may have received from the Shareholder; and (v)
the return to the Shareholder of new certificates representing the number
of shares of Class A Common Stock, if any, represented by certificates
deposited with the Custodian which are in excess of the number of Shares
actually sold;
(d) to join the Company, if necessary, in withdrawing any
registration statement if the Company should desire to withdraw such
registration;
(e) to retain legal counsel, accountants or other advisors
in connection with any and all matters referred to herein;
(f) to make, execute, acknowledge and deliver all other
contracts, orders, receipts, notices, requests, instructions,
certificates, letters and other writings, including communications to the
Commission (including a request or requests for acceleration of the
effective date of any registration statement) and state securities law
authorities, any amendments to any underwriting agreement, and any
certificates and other documents required to be delivered by or on behalf
of the Shareholder pursuant to the Agreement or any underwriting agreement
or the Custody Agreement, and specifically to execute on behalf of the
undersigned stock powers and transfer instructions relating to the Shares
to be sold by the undersigned Shareholder, and in general to do any and
all things and to take any and all actions which the Attorneys-in-Fact,
acting together and not alone, may consider necessary or proper in
connection with, or to carry out and comply with, all terms and conditions
of the Agreement or any underwriting agreement and the Custody Agreement
with respect to the aforesaid sale of Shares.
2. This Power of Attorney and all authority conferred hereby
are granted and conferred subject to the interests of the Company, any
underwriters, and any broker-dealer; and, in consideration of those
interests and for the purpose of completing the transactions contemplated
by the Agreement and this Power of Attorney, this Power of Attorney and
all authority conferred hereby, to the extent enforceable by law, shall be
deemed coupled with an interest and be irrevocable and not subject to
termination by the Shareholder or by operation of law, whether by the
death or incapacity of the Shareholder, or by the occurrence of any other
event, and the obligations of the Shareholder under the Agreement
similarly are not to be subject to termination. If the Shareholder should
die or become incapacitated or if any other such event should occur before
the delivery of the Shares to be sold by the Shareholder under the
Agreement, then the certificates representing such Shares shall be
delivered by or on behalf of the Shareholder in accordance with the terms
and conditions of the Agreement and any underwriting agreement and of the
Custody Agreement, and actions taken by the Attorneys-in-Fact, acting
together and not alone, pursuant to this Power of Attorney and by the
Custodian under the Custody Agreement shall be as valid as if such death,
incapacity, or other event had not occurred, regardless of whether or not
the Custodian, the Attorneys-in-Fact, acting together and not alone, shall
have received notice of such death or incapacity or other event.
3. The Shareholder ratifies all that the Attorneys-in-Fact
shall do by virtue of his Power of Attorney. All actions must be taken by
the Attorneys-in-Fact acting together and not alone.
4. The Shareholder agrees to hold the Attorneys-in-Fact,
jointly and severally, free and harmless from any and all loss, damage,
liability or expense incurred in connection herewith, including reasonable
attorney's fees and costs, which they, or either of them acting alone, may
sustain as a result of any action or inaction taken or not taken in good
faith hereunder.
Dated: ____________
Very truly yours,
Signature of Seller 1
Michael A. Morello
No. of Shares Requested
For Registration:
___________________
---------------
1 You should sign in exactly the same manner as the shares of Class A
Common Stock of the Company owned by you are registered and execute a
separate Agreement for each different form in which shares are registered.
<PAGE>
Exhibit C
to
Registration Rights Agreement
NORTHLAND CRANBERRIES, INC.
Class A Common Stock
(par value $.0l per share)
LETTER OF TRANSMITTAL AND CUSTODY AGREEMENT
Harris Trust and Savings Bank
111 W. Monroe St.
P.O. Box 755
Chicago, IL 60690
Gentlemen:
Pursuant to the terms of the Registration Rights Agreement dated
as of July 1, 1998 ("Agreement"), the undersigned is concurrently herewith
requesting registration under the Securities Act of 1993, as amended
("Act"), of issued and outstanding shares of Class A Common Stock, par
value $.01 per share ("Class A Common Stock"), of Northland Cranberries,
Inc., a Wisconsin corporation ("Company"), owned by the undersigned
shareholder ("Seller") in the amount set forth on the signature page
hereto. In connection herewith, there are being delivered to you stock
certificates ("Certificates"), in negotiable form (together with stock
powers executed in blank in the form attached), representing such shares
of Class A Common Stock. These certificates are to be held by you as
Custodian for the account of the Seller and are to be disposed of by you
solely in accordance with this Letter of Transmittal and Custody Agreement
("Custody Agreement").
Concurrently with the execution and delivery of the Agreement,
the Seller executed a power of attorney ("Power of Attorney"), the form of
which has been furnished to you, to [__________] (individually an
"Attorney-in-Fact" and together the "Attorneys-in-Fact"), authorizing such
Attorneys-in-Fact, acting together and not alone, to sell from the number
of shares represented by the Certificates that number of shares ("Shares")
of the Class A Common Stock indicated below the signature of the Seller at
the end of this letter, or such lesser number as the Attorneys-in-Fact,
acting together and not alone, may determine, and for that purpose to
enter into any underwriting agreement ("Underwriting Agreement"), among
the Company, the underwriters named therein and the Seller.
You are hereby authorized and directed to hold the Certificates
deposited in your custody, and prior to any sale or other required time of
delivery for sale (each, a "Time of Delivery") of which you shall have
been given prior notice by or on behalf of the Company, any underwriter or
any broker-dealer, and upon the instructions of the Attorneys-in-Fact,
acting together and not alone, you are to instruct the transfer agent and
registrar for the Class A Common Stock to prepare and countersign a
certificate or certificates representing the Shares which are to be sold
by the Seller at such Time of Delivery registered in such names and
denominations as the Company, the underwriters or any broker-dealer shall
have instructed you. At each Time of Delivery you are, upon the
instructions of the Attorneys-in-Fact, acting together and not alone, (i)
to instruct the transfer agent and registrar for the Class A Common Stock
(A) to cause the Shares that are to be sold at such Time of Delivery to be
transferred upon the books of the Company into such names and in such
denominations as the Company, the underwriters or any broker-dealer shall
have instructed you, and (B) to deliver the Certificates against receipt
by such transfer agent and registrar from you of the Certificates (or a
portion thereof) deposited with you pursuant to this Custody Agreement;
(ii) to purchase all transfer tax stamps (if any) necessary in connection
with the transfer of such Shares as aforesaid; (iii) to deliver to such
transfer agent and registrar the Certificates (or a portion thereof)
against receipt of payment for such Shares; (iv) to give receipt for such
payment and to (a) remit to the Company, any underwriter or broker-dealer
a portion thereof equal to the amount payable by the Seller; and (b)
deposit the remainder of such payment to your account as Custodian; and
(v) after deducting such fees and expenses from the amount received by you
as payment for the Shares sold at such Time of Delivery to distribute the
balance in accordance with the payment instructions set forth below the
name of the Seller at the end of this Custody Agreement or such other
instructions you shall have received prior to such Time of Delivery by the
Attorneys-in-Fact. Upon instructions from the Attorneys-in-Fact you shall
return to the Seller new certificates (which you shall have obtained from
the transfer agent and which shall be accompanied by appropriate stock
powers), representing the number of shares of Class A Common Stock, if
any, represented by the Certificates deposited with you on behalf of the
Seller, which are in excess of the total number of Shares sold by the
Seller.
Under the terms of the Power of Attorney, the authority
conferred thereby is granted and conferred subject to the interests of the
Company, any underwriters, and any broker-dealer and, is, to the extent
enforceable by law, irrevocable and not subject to termination by the
Seller or by operation of law, whether by the death or incapacity of the
Seller, or by the occurrence of any other event, and the obligations of
the Seller under the Agreement similarly are not to be subject to
termination. Accordingly, the Shares represented by the certificates
deposited with you pursuant to this Custody Agreement and your authority
are subject to the interests of the Company, any underwriters, and any
broker-dealers, and this Custody Agreement and your authority hereunder
shall be, to the extent enforceable by law, irrevocable and not subject to
termination by the Seller or by operation of law, whether by the death or
incapacity of the Seller or by the occurrence of any other event. If the
Seller should die or become incapacitated or if any other such event
should occur, before the delivery of the Shares to be sold by the Seller
hereunder, then the certificates representing the Shares shall be
delivered by or on behalf of the Seller in accordance with the terms and
conditions of the Agreement and this Custody Agreement, and actions taken
by you hereunder or by the Attorneys-in-Fact, acting together and not
alone, pursuant to the Power of Attorney shall be as valid as if such
death, incapacity, or other event had not occurred, regardless of whether
or not you or the Attorneys-in-Fact, acting together and not alone, shall
have received notice of such death, incapacity, or other event.
Until delivery of the Shares to be sold by the Seller has been
made as herein and in the Agreement provided, the Seller shall, except as
otherwise specifically provided herein, have all the rights of ownership
of such Shares and all other shares, if any, represented by the
Certificates deposited on behalf of the Seller.
You shall be entitled to act and rely upon any statement,
request, notice or instruction respecting this Custody Agreement given to
you by the Attorneys-in-Fact, acting together and not alone.
It is understood that you assume no responsibility or liability
to any person other than to deal with the Certificates deposited and the
proceeds from the sale of the Shares represented thereby, all in
accordance with the provisions of this Custody Agreement, and the Seller
agrees to indemnify and hold you harmless with respect to anything done by
you in good faith in accordance with the foregoing instructions. It is
understood that your reasonable fees and expenses in acting hereunder will
be paid by the Company.
Please acknowledge your acceptance hereof as Custodian and
receipt of the Certificates deposited by executing and returning one of
the enclosed copies hereof to the undersigned.
Dated: ____________
Very truly yours,
Signature of Seller 1
Michael A. Morello
No. of Shares Requested
For Registration:
___________________
---------
1 You should sign in exactly the same manner as the shares of Class A
Common Stock of the Company owned by you are registered and execute a
separate Agreement for each different form in which shares are registered.
<PAGE>
ACKNOWLEDGEMENT AND RECEIPT
Harris Trust and Savings Bank, as Custodian, acknowledges
acceptance of the duties of Custodian under the foregoing Letter of
Transmittal and Custody Agreement and receipt of the Certificates
representing the shares referred to therein.
Dated: ___________
HARRIS TRUST AND SAVINGS BANK
By:
Title:
Attest:
Title:
<PAGE>
PAYMENT INSTRUCTIONS
The balance of funds held by the Custodian representing net
proceeds (after payment of expense) received upon the sale of Shares are
to be remitted in accordance with the provisions of this Letter of
Transmittal and Custody Agreement as follows (select one):
(a) Deposit to an account of Seller with the Custodian:
Account No._________________________________
Account Name________________________________
(b) Wire transfer to an account of Seller at another bank:
Bank Name Bank Address_______________________
_____________________________________________
(Attention of _________________________________)
Account No.__________________________________
Account Name_________________________________
(c) Mail official bank check available to the order of the
Seller) to:
Name _____________________________________
Address _____________________________________
(d) Other instructions:
EXHIBIT B
EMPLOYMENT AGREEMENT
THIS AGREEMENT by and among NORTHLAND CRANBERRIES, INC., a
Wisconsin corporation ("Northland"), FARGO ACQUISITION CO., a New Jersey
corporation and a wholly-owned subsidiary of Northland ("Company") and
MICHAEL A. MORELLO ("Executive"), dated as of July 1, 1998.
R E C I T A L S
A. Minot Food Packers, Inc., a New Jersey corporation
("Minot") has been engaged in the business of producing, packaging,
marketing, distributing and selling under Minot's brand and customers'
private labels (i) cranberry-based products, cranberry sauces, cranberry
juice cocktails and blended cranberry drinks, (ii) apple juice and cider
products and (iii) other shelf-stable juices and drinks and is engaged in
the co-packing of such products for other branded producers (the
"Business").
B. Northland, Minot and Executive are parties to an Asset
Purchase Agreement ("Purchase Agreement"), dated May 20, 1998, pursuant to
which Northland agreed to purchase substantially all of the assets and
Business of Minot.
C. Pursuant to the Purchase Agreement and an Assignment and
Assumption of Agreement dated June 29, 1998, Company assumed the rights
and obligations of Northland to purchase the assets and Business of Minot.
D. Following the Closing (as such term is defined in the
Purchase Agreement) on the date hereof, the Business will be conducted by
Company.
E. Prior to the Closing Executive has been an executive
officer of Minot and, as a result, possesses an intimate knowledge of the
Business.
F. Northland recognizes that Executive's contribution to the
Business has been substantial and desires to assure Executive's continued
employment with Company in an executive capacity.
G. Executive desires to be employed by Company on the terms
and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements of the parties contained herein, and other good and valuable
consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto covenant and agree as follows:
1. Employment Period. Company shall employ Executive, and
Executive shall serve Company, on the terms and conditions set forth in
this Agreement, for a period commencing at the Closing (as that term is
defined in the Purchase Agreement) and ending on the date immediately
preceding the third anniversary of the Closing (the "Employment Period").
2. Position and Duties. (a) The Executive shall serve as
President of Company, with such duties and responsibilities as are
customarily assigned to such position, and such other duties and
responsibilities not inconsistent therewith as may from time to time be
assigned to him by the Chief Executive Officer of Company and the Board of
Directors of Company (the "Board").
(b) During the Employment Period, and excluding any periods of
vacation and sick leave to which Executive is entitled, Executive shall
devote full business time and effort during normal business hours to the
business and affairs of Company and, to the extent necessary to discharge
the responsibilities assigned to Executive under this Agreement, use
Executive's best efforts to carry out such responsibilities faithfully and
efficiently. It shall not be considered a violation of the foregoing for
Executive to serve on corporate, industry, civic or charitable boards or
committees, so long as such activities do not significantly interfere with
the performance of Executive's responsibilities as an employee of Company
in accordance with this Agreement.
(c) During the Employment Period, Executive shall have the
right to perform his duties under this Agreement in Bridgeton, New Jersey
and shall not be required to relocate to any other geographic area without
his consent.
3. Compensation. (a) Salary. Company shall pay to Executive
an annual salary ("Annual Salary") of $190,000. The amount of the Annual
Salary shall be reviewed not less frequently than once a year during the
Employment Period by the Board and, at the sole discretion of the Board,
shall be subject to upward adjustment consistent with the salary reviews
and salary adjustments of senior executive officers of Northland and the
performance of Executive under this Agreement. The Annual Salary shall be
payable in accordance with Company's regular payroll practice for its
senior executives, as in effect from time to time, but not less frequently
than monthly.
(b) Additional Benefits. During the Employment Period: (A)
Northland shall enable Executive to participate in all applicable
incentive, savings and retirement plans, practices, policies and programs
made available to executives of Northland (including, without limitation,
the Amended 1995 Stock Option Plan, the 401(k) Plan and participation in
Northland's Incentive Bonus Plan ("Bonus Plan") at the 50% level ("50%
Level"), to the same extent and subject to the same terms and conditions
as comparable senior executives of Northland (such additional benefits
hereinafter referred to as "Additional Compensation"), and (B) Northland
shall cause Executive and/or Executive's family, as the case may be, to be
eligible for immediate participation in, and to receive all benefits
under, all applicable welfare benefit plans, practices, policies and
programs made available to executives of Northland, other than severance
plans, practices, policies and programs but including, without limitation,
medical, dental, group life insurance and accidental death and travel
accident insurance plans and programs (the "Benefit Programs"), to the
same extent as eligible executives of Northland. Without limiting the
generality of the foregoing, Executive shall be eligible for an option
grant under the Amended 1995 Stock Option Plan at the time the committee
administering such Plan next grants options generally to senior management
of Northland. The number of shares subject to such an option grant that
will be recommended for award to Executive by such committee shall be
within the range of amounts of shares granted to other employees of
Northland qualifying as participants at the 50% Level under the Bonus Plan
and any such grant shall be at such time and shall be on grant terms
comparable to the terms applicable to such other grantees.
(c) Expense Reimbursement. Company shall reimburse Executive
for all reasonable and documented expenses incurred by Executive in the
performance of Executive's duties under this Agreement in accordance with
the policies and procedures established by the Board for its senior
executive officers.
(d) Automobile Lease. During the Employment Period, Northland
shall provide Executive with the unrestricted use of a new automobile of
the make and model of his choice; provided such automobile is generally
comparable with the make and model currently provided by Northland to
other similarly situated executive officers of Northland as of the date of
this Agreement. All of the direct and indirect operating and maintenance
expenses associated with Executive's use of such automobile shall be paid
by Northland upon the Executive's request.
(e) Holidays and Vacation. Executive shall be entitled to not
fewer than the number of paid holidays as may be made available annually
to other executives of Northland of a comparable status and shall be
entitled to paid vacation of not less than the greater of (i) the amount
of paid vacation made available annually to other executives of Northland
of comparable status or (ii) five weeks.
4. Termination of Employment. (a) Death or Disability.
Executive's employment shall terminate automatically upon Executive's
death during the Employment Period. Company shall be entitled to
terminate Executive's employment because of Executive's Disability during
the Employment Period. "Disability" means that (i) Executive has been
unable, for a period of 60 consecutive business days, to perform
Executive's duties under this Agreement, as a result of physical or mental
illness or injury, and (ii) a physician selected by Company or its
insurers, and acceptable to Executive or Executive's legal representative,
has determined that Executive's incapacity is total and permanent. A
termination of Executive's employment by Company for Disability shall be
communicated to Executive by written notice, and shall be effective on the
10th day after receipt of such notice by Executive (the "Disability
Effective Date"), unless Executive returns to full-time performance of
Executive's duties before the Disability Effective Date.
(b) By Company. (i) Company may terminate Executive's
employment during the Employment Period with or without Cause. "Cause"
means:
A. the willful and continued failure of Executive
substantially to perform Executive's duties under this Agreement
(other than as a result of physical or mental illness or
injury).
B. illegal conduct or gross misconduct by Executive, in
either case that is willful and results in material and
demonstrable damage to the business or reputation of Company or
Northland.
(c) By Executive. Executive may terminate his employment
hereunder at any time for any reason upon giving the Company written
notice ("Executive Notice of Termination"). The Executive Notice of
Termination shall become effective as specified by the Executive in such
Notice, but not earlier than 30 days after delivery of such Notice to
Company, except in the case of notice for reasons set forth in Section
5(d) below in which case termination of employment may be effective upon
the giving of Notice pursuant to this Section 4(c).
(d) Notice to Executive. Any termination by Company under
Section 4(b) hereof shall be communicated by a written notice which shall
indicate the specific termination provision in this Agreement relied upon
and shall set forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of Executive's employment under
the provision so indicated or shall state that the termination is without
Cause ("Company Notice of Termination"). The Company Notice of
Termination shall become effective on the date such Notice is given unless
otherwise specified by Company in such Notice; provided, however, that no
such Notice shall be given for Cause under clause (A) of Section 4(b)
until Company has notified Executive in writing of the facts and
circumstances upon which such Notice is to be given and Executive has not
satisfactorily addressed the concerns set forth in such Notice within a
period of 30 days after its receipt.
(e) Date of Termination. The "Date of Termination" means the
date of Executive's death, the Disability Effective Date, or the date on
which an Executive Notice of Termination or Company Notice of Termination
becomes effective as provided in Section 4(c) and Section 4(d),
respectively, is given.
5. Obligations of Company upon Termination. (a) Death and
Disability. If Executive's employment is terminated by reason of
Executive's death or Disability during the Employment Period, Company
shall pay to Executive or, in the case of Executive's death, to
Executive's designated beneficiaries (or, if there is no such beneficiary,
to Executive's estate or legal representative), in a lump sum in cash
within 30 days after the Date of Termination, the sum of the following
amounts (the "Accrued Obligations"): (1) any portion of Executive's
Annual Salary through the Date of Termination that has not yet been paid;
(2) an amount representing the Additional Compensation for the period that
includes the Date of Termination, computed by assuming that the amount of
all such Additional Compensation would be equal to the maximum amount of
such Additional Compensation that Executive would have been eligible to
earn for such period, and multiplying that amount by a fraction, the
numerator of which is the number of days in such period through the Date
of Termination, and the denominator of which is the total number of days
in the relevant period; and (3) any accrued but unpaid Additional
Compensation and vacation pay. In addition, Company at its expense will
continue to provide for a period of not less than 180 days all Benefit
Programs in which Executive and his dependents are then participating for
the continued benefit of Executive and his dependents, in the case of the
Disability of Executive, or the dependents of Executive, in the case of
the death of Executive.
(b) By Company With Cause; By Executive Without Justification.
If Executive's employment is terminated by Company with Cause during the
Employment Period, Company shall pay Executive the Annual Salary through
the Date of Termination to the extent not yet paid, and Company shall have
no further obligations under this Agreement. If Executive voluntarily
terminates employment during the Employment Period for reasons other than
as provided in Section 5(d), the Company shall pay the Accrued Obligations
to Executive in a lump sum in cash within 30 days of the Date of
Termination, and Company shall have no further obligations under this
Agreement.
(c) By Company Without Cause. If Company shall terminate
Executive's employment without Cause, Company shall pay to Executive the
Accrued Obligations to the extent not yet paid plus, in lieu of any
further salary payments to Executive for periods subsequent to the Date of
Termination, Company shall pay as liquidated damages, or severance pay, or
both to Executive on or prior to the fifth day following the Date of
Termination, a lump-sum amount equal to the Annual Salary in effect as of
the Date of Termination multiplied by the number of years remaining in the
Employment Period, with each remaining month or portion thereof being
1/12th of one year (the "Termination Payment"). For purposes of
calculating the lump-sum payment due Executive pursuant to this paragraph,
any partial month remaining in the term of employment shall be deemed a
full month. In addition, Company at its expense will continue to provide
to Executive and his dependents all Benefit Programs in which Executive
and his dependents are then participating for a period equal to the
greater of (i) the number of days remaining in the Employment Period or
(ii) 180 days.
(d) By Executive with Justification. If Executive voluntarily
terminates employment during the Employment Period as a result of a
decision by Company to terminate the Business or as a result of a material
breach by Company or Northland of its obligations under this Agreement,
then Executive shall be entitled to the payments and benefits provided in
Section 5(c) above.
6. Limitation on Payments. (a) Notwithstanding any other
provision of this Agreement, if any portion of the Termination Payment, or
any other payment under this Agreement, or under any other agreement with
or plan of Company or its affiliates (in the aggregate "Total Payments"),
would constitute an "excess parachute payment," then the Total Payments to
be made to Executive shall be reduced such that the value of the aggregate
Total Payments that Executive is entitled to receive shall be one dollar
less than the maximum amount which Executive may receive without becoming
subject to the tax imposed by Section 4999 (or any successor provision) of
the Internal Revenue Code of 1986, as amended (the "Code") or which
Company may pay without loss of deduction under Section 280G(a) of the
Code (or any successor provision). For purposes of this Agreement, the
terms "excess parachute payment" and "parachute payments" shall have the
meanings assigned to them in Section 280G of the Code (or any successor
provision), and such "parachute payments" shall be valued as provided
therein. Present value for purposes of this Agreement shall be calculated
in accordance with Section 1274(b)(2) of the Code (or any successor
provision). Within fifteen days following the Date of Termination or
notice by Company to Executive of its belief that there is a payment or
benefit due Executive which will result in an excess parachute payment as
defined in Section 280G of the Code (or any successor provision),
Executive and Company, at Company's expense, shall obtain the opinion
(which need not be unqualified) of nationally recognized tax counsel
selected by Company's independent auditors and acceptable to Executive in
his sole discretion (which may be regular outside counsel to Company),
which opinion sets forth (i) the amount of the Base Period Income, (ii)
the amount and present value of Total Payments and (iii) the amount and
present value of any excess parachute payments determined without regard
to the limitations of this paragraph (a) of Section 6. As used in this
Agreement, the term "Base Period Income" means an amount equal to
Executive's "annualized includible compensation for the base period" as
defined in Section 280G(d)(1) of the Code (or any successor provision).
For purposes of such opinion, the value of any noncash benefits or any
deferred payment or benefit shall be determined by Company's independent
auditors in accordance with the principles of Sections 280G(d)(3) and (4)
of the Code (or any successor provisions), which determination shall be
evidenced in a certificate of such auditors addressed to Company and
Executive. Such opinion shall be dated as of the Date of Termination and
addressed to Company and Executive and shall be binding upon Company and
Executive. If such opinion determines that there would be an excess
parachute payment, any payment or benefit determined by such counsel to be
includible in Total Payments shall be reduced or eliminated as specified
by Executive in writing delivered to Company within thirty days of his
receipt of such opinion or, if Executive fails to so notify the Company,
then as Company shall reasonably determine, so that under the bases of
calculations set forth in such opinion there will be no excess parachute
payment. If such legal counsel so requests in connection with the opinion
required by this paragraph (a) of Section 6, Executive and Company shall
obtain, at Company's expense, and the legal counsel may rely on in
providing the opinion, the advice of a firm of recognized executive
compensation consultants as to the reasonableness of any item of
compensation to be received by Executive. If the provisions of Sections
280G and 4999 of the Code (or any successor provisions) are repealed
without succession, then this paragraph (a) of Section 6 shall be of no
further force or effect.
(b) If, notwithstanding the provisions of paragraph (a) of
Section 6, it is ultimately determined by a court or pursuant to a final
determination by the Internal Revenue Service that any portion of Total
Payments is subject to the tax (the "Excise Tax") imposed by Section 4999
of the Code (or any successor provision), Company shall pay to Executive
an additional amount (the "Gross-Up Payment") such that the net amount
retained by Executive after deduction of any Excise Tax and any interest
charges or penalties in respect of the imposition of such Excise Tax (but
not any federal, state or local income tax) on the Total Payments, and any
federal, state and local income tax and Excise Tax upon the payment
provided for by this paragraph (b) of Section 6, shall be equal to the
Total Payments. For purposes of determining the amount of the Gross-Up
Payment, Executive shall be deemed to pay federal income taxes at the
highest marginal rate of federal income taxation in the calendar year in
which the Gross-Up Payment is to be made and state and local income taxes
at the highest marginal rates of taxation in the state and locality of
Executive's domicile for income tax purposes on the date the Gross-Up
Payment is made, net of the maximum reduction in federal income taxes
which could be obtained from deduction of such state and local taxes.
7. Successors. (a) This Agreement is personal to Executive
and, without the prior written consent of Company, shall not be assignable
by Executive. This Agreement shall inure to the benefit of and be
enforceable by Executive's legal representatives.
(b) This Agreement shall inure to the benefit of and be binding
upon the Company and its successors and assigns.
(c) Company shall require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of Company expressly to
assume and agree to perform this Agreement in the same manner and to the
same extent that Company would have been required to perform it if no such
succession had taken place. As used in this Agreement, "Company" shall
mean both Company as defined above and any such successor that assumes and
agrees to perform this Agreement, by operation of law or otherwise.
8. Miscellaneous. (a) This Agreement shall be governed by,
and construed in accordance with, the laws of the State of New Jersey,
without reference to principles of conflict of laws. The captions of this
Agreement are not part of the provisions hereof and shall have no force or
effect. This Agreement may not be amended or modified except by a written
agreement executed by the parties hereto or their respective successors
and legal representatives.
(b) All notices and other communications under this Agreement
shall be in writing and shall be given by hand delivery to the other party
or by registered or certified mail, return receipt requested, postage
prepaid, addressed as follows:
If to Executive:
Michael A. Morello
3161 Silverwood Lane
Vineland, New Jersey 08361
Facsimile: (609) 690-0751
With a copy to:
John F. Bales, III, Esq.
Morgan, Lewis and Bockius LLP
2000 One Logan Square
Philadelphia, Pennsylvania 10103-6093
Facsimile: (215) 963-5299
If to Northland or Company:
Northland Cranberries, Inc.
800 First Avenue South
P.O. Box 8020
Wisconsin Rapids, Wisconsin 54495-8020
Attention: John Swendrowski
Facsimile: (715) 422-6844
With a copy to:
Jeffrey J. Jones
c/o Foley & Lardner
777 East Wisconsin Avenue
Milwaukee, WI 53202-5367
Facsimile: (414) 297-5900
or to such other address as either party furnishes to the other in writing
in accordance with this paragraph (b) of Section 8. Notices and
communications shall be effective when actually received by the addressee.
(c) The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other
provision of this Agreement. If any provision of this Agreement shall be
held invalid or unenforceable in part, the remaining portion of such
provision, together with all other provisions of this Agreement, shall
remain valid and enforceable and continue in full force and effect to the
fullest extent consistent with law.
(d) Notwithstanding any other provisions of this Agreement,
Company may withhold from amounts payable under this Agreement all
federal, state, local and foreign taxes that are required to be withheld
by applicable laws or regulations.
(e) Executive's or Company's failure to insist upon strict
compliance with any provisions of, or to assert any right under, this
Agreement shall not be deemed to be a waiver of such provision or right or
of any other provision of or right under this Agreement.
(f) The rights and benefits of Executive under this Agreement
may not be anticipated, assigned, alienated or subject to attachment,
garnishment, levy, execution or other legal or equitable process except as
required by law. Any attempt by Executive to anticipate, alienate,
assign, sell, transfer, pledge, encumber or charge the same shall be void.
Payments hereunder shall not be considered assets of Executive in the
event of insolvency or bankruptcy.
(g) This Agreement may be executed in several counterparts,
each of which shall be deemed an original, and said counterparts shall
constitute but one and the same instrument.
(h) This Agreement has been jointly drafted by the respective
representatives of Company and Executive and no party shall be considered
as being responsible for such drafting for the purpose of applying any
rule construing ambiguities against the drafter or otherwise. No draft of
this Agreement shall be taken into account in construing this Agreement.
(i) If Company fails to pay any amount due to Executive under
the terms of this Agreement within the time periods provided herein for
such payment, Company will pay to Executive, in addition to any other sums
required to be paid under this Agreement, (i) interest on any amount
remaining unpaid from the date payment is required under this Agreement
until payment is received by Executive at the prime rate published daily
in The Wall Street Journal and (ii) the amount necessary to reimburse
Executive for all reasonable expenses incurred by Executive in enforcing
any of the obligations of Company under this Agreement, it being the
intent of the parties that Executive not incur any expenses associated
with enforcing his rights under this Agreement because the cost and
expense thereof would substantially detract from the benefits intended to
be extended to Executive hereunder.
9. Effectiveness of Agreement. The effectiveness of this
Agreement is subject to Closing (as defined in the Purchase Agreement).
If for any reason the Closing does not take place, this Agreement shall be
null and void, ab initio.
10. Northland Guaranty. This Agreement shall inure to the
benefit of, and be binding upon, Northland; and Northland hereby
guarantees the full and prompt payment and performance by Company of its
obligations to Executive under this Agreement.
11. Enforcement. Venue for enforcement of the terms and
conditions of this Agreement shall be the federal or state courts of the
State of New Jersey with service of process by notice as provided herein.
IN WITNESS WHEREOF, Executive, Company and Northland have duly
executed this Agreement under seal as of the date first above written.
EXECUTIVE
/s/ Michael A. Morello
Michael A. Morello
FARGO ACQUISITION CO.
("COMPANY")
By /s/ John Swendrowski
John Swendrowski
Chairman of the Board and
Chief Executive Officer
NORTHLAND CRANBERRIES, INC.
("NORTHLAND")
By /s/ John Swendrowski
John Swendrowski
Chairman of the Board and
Chief Executive Officer
