AMENDED AND RESTATED
KEY EXECUTIVE EMPLOYMENT AND SEVERANCE AGREEMENT
THIS AGREEMENT, made and entered into as of the 14th day of April,
2000, by and between NORTHLAND CRANBERRIES, INC., a Wisconsin corporation
("Company"), and John Swendrowski ("Executive").
WITNESSETH:
WHEREAS, the Executive is employed by the Company as its Chairman and
Chief Executive Officer, and the Executive's services in such capacities are
critical to the continued successful conduct of the business of the Company; and
WHEREAS, the Company recognizes that circumstances in which a change
in control of the Company occurs, through acquisition or otherwise, are highly
disruptive and will cause uncertainty about the Executive's future employment
with the Company without regard to the Executive's competence or past
contributions and that such uncertainty may materially adversely affect the
Company; and
WHEREAS, the Company and the Executive are desirous that any proposal
for a change in control or acquisition of the Company will be considered by the
Executive objectively, with reference only to the best interests of the Company
and its shareholders and without undue regard for the Executive's personal
interests; and
WHEREAS, the Executive will be in a better position to consider the
Company's and its shareholders' best interests if the Executive is afforded
reasonable security, as provided in this Agreement, against altered conditions
of employment which could result from any such change in control or acquisition;
and
WHEREAS, in light of the foregoing, the Executive and the Company
entered into that certain Key Executive Employment and Severance Agreement,
dated as of May 8, 1992 (the "Original KEESA"), to provide the Executive with
the reasonable security and other considerations discussed above; and
WHEREAS, the Company believes it to be in the best interests of its
shareholders to amend and restate the Original KEESA in its entirety as provided
herein.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements hereinafter set forth, the parties hereto mutually
covenant and agree as follows:
1. Definitions.
(a) Act. For purposes of this Agreement, the term "Act" means the
Securities Exchange Act of 1934, as amended.
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(b) Affiliate and Associate. For purposes of this Agreement, the
terms "Affiliate" and "Associate" shall have the respective meanings ascribed to
such terms in Rule 12b-2 of the General Rules and Regulations of the Act.
(c) Beneficial Owner. For purposes of this Agreement, a Person
shall be deemed to be the "Beneficial Owner" of any securities:
(i) which such Person or any of such Person's Affiliates or
Associates has the right to acquire (whether such right is exercisable
immediately or only after the passage of time) pursuant to any agreement,
arrangement or understanding, or upon the exercise of conversion rights,
exchange rights, rights, warrants or options, or otherwise; provided,
however, that a Person shall not be deemed the Beneficial Owner of, or to
beneficially own, securities tendered pursuant to a tender or exchange
offer made by or on behalf of such Person or any of such Person's
Affiliates or Associates until such tendered securities are accepted for
purchase.
(ii) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to vote or dispose of or
has "beneficial ownership" of (as determined pursuant to Rule 13d-3 of the
General Rules and Regulations under the Act), including pursuant to any
agreement, arrangement or understanding; provided, however, that a Person
shall not be deemed the Beneficial Owner of, or to beneficially own, any
security under this subparagraph (ii) as a result of an agreement,
arrangement or understanding to vote such security if the agreement,
arrangement or understanding: (A) arises solely from a revocable proxy or
consent given to such Person in response to a public proxy or consent
solicitation made pursuant to, and in accordance with, the applicable rules
and regulations under the Act and (B) is not also then reportable on a
Schedule 13D under the Act (or any comparable or successor report); or
(iii) which are beneficially owned, directly or indirectly,
by any other Person with which such Person or any of such Person's
Affiliates or Associates has any agreement, arrangement or understanding
for the purpose of acquiring, holding, voting (except pursuant to a
revocable proxy as described in Subsection 1(c)(ii) above) or disposing of
any voting securities of the Company.
(d) Cause. "Cause" for termination by the Company of the
Executive's employment after a Change in Control of the Company, for purposes of
this Agreement, shall mean the following and only the following: the Executive's
final and nonappealable conviction of, and sentencing for, a felony offense for
a crime involving an act by the Executive of conduct on behalf of the Company
that results in the Executive being physically imprisoned in a federal or state
penitentiary; provided, that "Cause" for termination shall only be determined by
a vote of two-thirds of the Board of Directors of the Company after (i)
reasonable written notice to the Executive, setting forth the basis for "Cause,"
specifying the particulars thereof in detail; and (ii) an opportunity for the
Executive, together with his counsel, to be heard before the Board.
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(e) Change in Control of the Company. For purposes of this
Agreement, a "Change in Control of the Company" shall be deemed to have occurred
if:
(i) any Person (other than any employee benefit plan of the
Company, any subsidiary of the Company or any Person organized, appointed
or established pursuant to the terms of any such benefit plan or any Person
who currently owns, or is the Beneficial Owner of, 25% or more of the
combined voting power of the Company's currently outstanding securities) is
or becomes the Beneficial Owner of securities of the Company representing
at least 25% of the combined voting power of the Company's then outstanding
securities;
(ii) there shall be consummated (A) any consolidation,
merger, share exchange or other business combination of the Company in
which the Company is not the continuing or surviving corporation or
pursuant to which shares of the Company's capital stock would be converted
into cash, securities or other property, other than a merger of the Company
in which the holders of the Company's capital stock immediately prior to
the merger have the same proportionate ownership of capital stock of the
surviving corporation immediately after the merger, or (B) any sale, lease,
exchange or other transfer (in one transaction or a series of related
transactions) of all, or substantially all, of the consolidated assets of
the Company; or
(iii) the shareholders of the Company approve any plan or
proposal for the liquidation or dissolution of the Company.
(f) Code. For purposes of this Agreement, the term "Code" means
the Internal Revenue Code of 1986, including any amendments thereto or successor
tax codes thereof.
(g) Covered Termination. For purposes of this Agreement, the term
"Covered Termination" means any termination of the Executive's employment where
the Termination Date is any date on or prior to the end of the Employment
Period.
(h) Discretionary Termination. For purposes of this Agreement,
"Discretionary Termination" means the determination by the Executive, or his
estate or personal representative in the event of the Executive's death or
disability, at any time during the twelve (12) month period commencing on the
occurrence of a Change in Control of the Company, as evidenced by the delivery
to the Company, by the Executive or by his estate or personal representative in
the case of the Executive's death or disability, of a Notice of Termination
during such period, to terminate this Agreement and his employment hereunder for
any reason whatsoever in his sole discretion, with or without good faith, even
if the Company has previously terminated the Executive for death, disability,
Cause or otherwise during such twelve (12) month period following a Change in
Control of the Company.
(i) Employment Period. For purposes of this Agreement, the term
"Employment Period" means a Period commencing on the date of a Change in Control
of the Company and ending at 11:59 p.m. Milwaukee time on the third anniversary
of such date.
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(j) Good Reason. For purposes of this Agreement, the Executive
shall have a "Good Reason" for termination of employment after a Change in
Control of the Company in the event of:
(i) any breach of this Agreement by the Company, including
specifically any breach by the Company of its agreements contained in
Sections 4, 5 or 6 hereof;
(ii) the removal of the Executive from, or any failure to
reelect the Executive to, any of the positions held with the Company and
its subsidiaries on the date of the Change in Control of the Company or any
other positions with the Company and its subsidiaries to which the
Executive shall thereafter be elected or assigned, except in the event that
such removal or failure to reelect relates to the termination by the
Company of the Executive's employment for Cause or by reason of disability
pursuant to Section 12 hereof;
(iii) a good faith determination by the Executive that there
has been a significant adverse change, without the Executive's written
consent (which may be withheld at Executive's discretion), in the
Executive's working conditions or status with the Company or its
subsidiaries from such working conditions or status in effect immediately
prior to the Change in Control of the Company, including but not limited to
(A) a significant change in the nature or scope of the Executive's
authority, powers, functions, duties or responsibilities, or (B) a
reduction in the level of support services, staff, secretarial and other
assistance, office space and accoutrements; or
(iv) failure by the Company to timely obtain the agreement
referred to in Section 17(a) hereof as provided therein.
(k) Person. For purposes of this Agreement, the term "Person"
shall mean any individual, firm, partnership, corporation or other entity,
including any successor (by merger or otherwise) of such entity, or a group of
any of the foregoing acting in concert.
(l) Securities Act. For purposes of this Agreement, the term
"Securities Act" means the Securities Act of 1933, as amended.
(m) Termination Date. For purposes of this Agreement, except as
otherwise provided in Section 10(b) and Section 17(a) hereof or as set forth
below, the term "Termination Date" means (i) if the Executive's employment is
terminated by the Executive's death, the date of death; (ii) if the Executive's
employment is terminated by reason of voluntary early retirement, as agreed in
writing by the Company and the Executive, the date of such early retirement as
set forth in such written agreement; (iii) if the Executive's employment is
terminated by reason of disability pursuant to Section 12 hereof, the earlier of
thirty (30) days after the Notice of Termination is given or one day prior to
the end of the Employment Period; (iv) if the Executive's employment is
terminated by the Executive voluntarily (other than for Good Reason), the date
the Notice of Termination is given; (v) if the Executive's employment is
terminated by the Executive voluntarily pursuant to a
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Discretionary Termination, the Termination Date for the purposes of the payment
of a Termination Payment shall be the date the Notice of Termination is given to
the Company; and (vi) if the Executive's employment is terminated by the Company
(other than by reason of disability pursuant to Section 12 hereof) or by the
Executive for Good Reason, the earlier of thirty (30) days after the Notice of
Termination is given or one day prior to the end of the Employment Period.
Notwithstanding the foregoing,
(A) If termination is by the Company for Cause pursuant to
Section 1(d)(iii) of this Agreement and if the Executive has cured the
conduct constituting such Cause as described by the Company in its Notice
of Termination within such thirty (30) day or shorter period, then the
Executive's employment hereunder shall continue as if the Company had not
delivered its Notice of Termination.
(B) If the Company shall give a Notice of Termination for
Cause or by reason of disability and the Executive in good faith notifies
the Company that a dispute exists concerning the termination within the
fifteen (15) day period following receipt thereof, then the Executive may
elect to continue his employment during such dispute and the Termination
Date shall be determined under this paragraph. If the Executive so elects
and it is thereafter determined that Cause or disability (as the case may
be) did exist, the Termination Date shall be the earlier of (1) the date on
which the dispute is finally determined, either (x) by mutual written
agreement of the parties or (y) in accordance with Section 22 hereof, (2)
the date of the Executive's death, or (3) one day prior to the end of the
Employment Period. If the Executive so elects and it is thereafter
determined that Cause or disability (as the case may be) did not exist,
then the employment of the Executive hereunder shall continue after such
determination as if the Company had not delivered its Notice of Termination
and there shall be no Termination Date rising out of such Notice. In either
case, this Agreement continues, until the Termination Date, if any, as if
the Company had not delivered the Notice of Termination except that, if it
is finally determined that the Company properly terminated the Executive
for the reason asserted in the Notice of Termination, the Executive shall
in no case be entitled to a Termination Payment (as hereinafter defined)
arising out of events occurring after the Company delivered its Notice of
Termination.
(C) If the Executive shall in good faith give a Notice of
Termination for Good Reason and the Company in good faith notifies the
Executive that a dispute exists concerning the termination within the
fifteen (15) day period following receipt thereof, then the Executive may
elect to continue his employment during such dispute and the Termination
Date shall be determined under this paragraph. If the Executive so elects
and it is thereafter determined that Good Reason did exist, the Termination
Date shall be the earlier of (1) the date on which the dispute is finally
determined, either (x) by mutual written agreement of the parties or (y) in
accordance with Section 22 hereof, (2) the date of the Executive's death or
(3) one day prior to the end of the Employment Period. If the Executive so
elects and it is thereafter determined that Good Reason did not exist, then
the employment of the Executive hereunder shall continue after such
determination as if the Executive had not delivered
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the Notice of Termination asserting Good Reason and there shall be no
Termination Date arising out of such Notice. In either case, this Agreement
continues, until the Termination Date, if any, as if the Executive had not
delivered the Notice of Termination except that, if it is finally
determined that Good Reason did exist, the Executive shall in no case be
denied the benefits described in Sections 8(b) and 9 hereof (including a
Termination Payment) based on events occurring after the Executive
delivered his Notice of Termination.
(D) If an opinion is required to be delivered pursuant to
Section 9(b) hereof and such opinion shall not have been delivered, the
Termination Date shall be the earlier of the date on which such opinion is
delivered or one day prior to the end of the Employment Period.
(E) Except as provided in Paragraphs (B) and (C) above and
other than a Discretionary Termination (which cannot be subject to dispute
by the Company), if the party receiving the Notice of Termination in good
faith notifies the other party that a dispute exists concerning the
termination within the fifteen (15) day period following receipt thereof
and it is finally determined that the reason asserted in such Notice of
Termination did not exist, then (1) if such Notice was delivered by the
Executive, the Executive will be deemed to have voluntarily terminated his
employment and (2) if delivered by the Company, the Company will be deemed
to have terminated the Executive other than by reason of death, disability
or Cause.
2. Termination or Cancellation Prior to Change in Control. The Company
shall retain the right to terminate the employment of the Executive at any time
prior to a Change in Control of the Company in accordance with and subject to
the terms and conditions of any other then exiting employment arrangement
between the Executive and the Company; provided, however, that if the
Executive's employment is terminated by the Company, other than by reason of (i)
death, (ii) disability in accordance with Section 12 hereof, or (iii) Cause, at
any time after negotiations are commenced between the Company and another Person
which ultimately lead to a Change in Control of the Company, then the Executive
shall be entitled to receive at the earlier to occur of the closing or the
effective date of such Change in Control of the Company all Accrued Benefits and
a Termination Payment, including benefits under Section 8(b) hereof, as if such
termination of employment was a Covered Termination under Section 8 hereof.
Other than as set forth above or as provided in Section 17 hereof, in the event
the Executive's employment is terminated prior to a Change in Control of the
Company, this Agreement shall be terminated and canceled and of no further force
and effect and any and all rights and obligations of the parties hereunder shall
cease.
3. Employment Period. If a Change in Control of the Company occurs
when the Executive is employed by the Company, the Company will continue
thereafter to employ the Executive during the Employment Period, and the
Executive will remain in the employ of the Company, in accordance with and
subject to the terms and provisions of this Agreement (including, without
limitation, the Executive's right to exercise a Discretionary Termination), and
the terms of this Agreement shall expressly supersede the terms and conditions
of any
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other then existing employment arrangement or agreement between the Company and
the Executive.
4. Duties. During the Employment Period, the Executive shall, in the
same capacities and positions held by the Executive at the time immediately
prior to the Change in Control of the Company or in such other capacities and
positions as may be agreed to by the Company and the Executive in writing,
devote the Executive's best efforts and all of the Executive's business time,
attention and skill to the business and affairs of the Company, as such business
and affairs now exist and as they may hereafter be conducted. The services which
are to be performed by the Executive hereunder are to be rendered in the same
metropolitan area in which the Executive was employed immediately prior to the
time of such Change in Control of the Company, or in such other place or places
as shall be mutually agreed upon in writing by the Executive and the Company
from time to time. Without the Executive's consent (which may be withheld in the
Executive's discretion), the Executive shall not be required to be absent from
such metropolitan area more than forty-five (45) days in any twelve (12) month
period or for more than fourteen (14) consecutive days.
5. Compensation. During the Employment Period, the Executive shall be
compensated as follows:
(a) The Executive shall receive, at such intervals and in
accordance with such standard policies of the Company as may be in effect
immediately prior to the Change in Control of the Company, an annual base salary
in cash of not less than the Executive's annual base salary plus any annualized
bonus amounts received or receivable as in effect immediately prior to the
Change in Control of the Company and all other compensation otherwise reportable
on a Form W-2 (which base salary, bonus and other compensation shall, unless
otherwise agreed in writing by the Executive, include the current receipt by the
Executive of any amounts which, prior to the Change in Control of the Company,
the Executive had elected to defer, whether such compensation is deferred under
Section 401(k) of the Code or otherwise), subject to adjustment as hereinafter
provided.
(b) The Executive shall, at such intervals and in accordance with
such standard policies as may be in effect immediately prior to the Change in
Control of the Company, be reimbursed for any and all monies advanced in
connection with the Executive's employment for reasonable and necessary expenses
incurred by the Executive on behalf of the Company, including travel and
entertainment expenses.
(c) From the date of a Change in Control of the Company
(regardless of whether the Executive has ceased to be employed by the Company
for any reason) until he reaches age 85, the Executive and the Executive's wife,
and each of their children until they reach the age of 21, shall each be
entitled to receive, without cost, premium, co-pay or deductible charges, full
health and medical, dental and vision care as provided by the Company to its
senior executive employees; provided, that the Executive and his wife shall not
be limited to their choice(s) of doctor or the location(s) at which such care is
provided. In the event that the Executive dies prior to reaching age 85, his
wife shall continue to receive such health care
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benefits on the same terms and conditions, until the date when the Executive
would have otherwise reached age 85 but for his death, and each of their
children shall continue to receive such health care benefits on the same terms
and conditions until they reach age 21. From the date of a Change in Control of
the Company (regardless of whether the Executive has ceased to be employed by
the Company for any reason) until he reaches age 65, the Executive will also be
entitled to the benefit of a long-term and short-term disability insurance
policy with a premium amount of no less than $3,000 per month, and in the event
that the Executive dies prior to reaching age 65, his wife shall receive the
benefits or continued coverage of such policies (as the case may be). From the
date of a Change in Control of the Company (regardless of whether the Executive
has ceased to be employed by the Company for any reason), the Company will not,
without the Executive's consent, make any changes in the foregoing benefits that
would adversely affect in any material respect the rights or benefits of the
Executive or his wife or children thereunder. During the Employment Period, the
Executive shall also be entitled to receive any other perquisites generally made
available, from time to time or at any time, to the Company's key management
personnel. Any payments under this Section 5(c) shall be in addition to any
other payments or benefits to be received by the Executive under this Agreement
or otherwise.
(d) The Executive shall annually be entitled to not less than the
amount of paid vacation and not fewer than the number of paid holidays to which
the Executive was entitled annually immediately prior to the Change in Control
of the Company or such greater amount of paid vacation and number of paid
holidays as may be made available annually to other executives of the Company of
comparable status and position to the Executive.
(e) The Executive shall be included in all plans providing
additional benefits to executives of the Company of comparable status and
position to the Executive, including but not limited to deferred compensation,
split-dollar life insurance, supplemental retirement, stock option, stock
appreciation, stock bonus, cash bonus and similar or comparable plans; provided,
that, in no event shall the aggregate level of benefits under such plans be less
than the aggregate level of benefits under plans of the Company of the type
referred to in this Section 5(e) in which the Executive was participating
immediately prior to the Change in Control of the Company.
(f) Immediately upon a Change in Control of the Company, all
unexercised awards granted to the Executive and then outstanding under the
Company's stock option plans ("Executive Awards") that are not then exercisable
by their terms automatically will become immediately exercisable and fully
vested for the remainder of their stated terms. In addition, for a period of
thirty (30) days following such Change in Control of the Company, the Executive
shall have the right to terminate the Executive Awards and to receive a lump-sum
payment, in cash, equal to the product of (a) the excess of (x) the per-unit
fair market value of the securities underlying the Executive Awards, over (y)
the per-unit exercise price of such Executive Awards, and (b) the number of
units of such securities covered by the Executive Awards. For purposes of the
preceding sentence, the "fair market value" of securities shall be based on the
highest of (i) the per-unit closing sale price of the securities underlying the
Executive Awards, as reported on a national securities exchange or by the
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Nasdaq Stock Market, on the execution date of the agreement pursuant to which
the Change in Control of the Company is effected, (ii) the per-unit closing sale
price of the securities underlying the Executive Awards, as reported on a
national securities exchange or by the Nasdaq Stock Market, on the effective
date of the transaction constituting a Change in Control of the Company, and
(iii) the highest per-unit price for such securities actually paid in connection
with such Change in Control of the Company. Notwithstanding the foregoing, if
the exercise of any right granted pursuant to this Section 5(f) would make a
transaction constituting a Change in Control of the Company ineligible for
pooling of interests accounting under APB No. 16 which, but for this Section
5(f), would otherwise be eligible for such accounting treatment, the Board of
Directors of the Company shall have the ability to substitute for the cash
payable pursuant to this Section 5(f) securities of the Company (or of the other
entity surviving the transaction constituting the Change in Control of the
Company, or its parent corporation, if applicable) having a fair market value
equal to the cash that would otherwise be payable hereunder. For purposes of the
preceding sentence, the "fair market value" of securities shall be based on the
lower of (i) the average closing bid price of such securities for the ten (10)
trading days prior to the execution date of the agreement pursuant to which the
Change in Control of the Company is effected, and (ii) the average of the
closing bid price of such securities for the ten (10) trading days prior to the
effective date of the transaction constituting a Change in Control of the
Company, in each case as such closing bid prices are reported on a national
securities exchange or by the Nasdaq Stock Market.
6. Annual Compensation Adjustments. During the Employment Period, the
Board of Directors of the Company (or an appropriate committee thereof) will
consider and appraise, at least annually, the contributions of the Executive to
the Company's operating and/or administrative efficiency, growth, cash flow from
operations, operating profits and other contributions, and, in accordance with
the Company's practice prior to the Change in Control of the Company, due and
good faith consideration shall be given to the upward adjustment of the
Executive's base compensation rate, at least annually, commensurate with (i)
increases generally given to other executives of the Company of comparable
status and position to the Executive, and (ii) as the scope of the Company's
operations or the Executive's duties expand.
7. Termination For Cause or Without Good Reason. If there is a Covered
Termination for Cause or due to the Executive's voluntarily terminating his
employment other than for Good Reason or a Discretionary Termination (any such
terminations to be subject to the procedures set forth in Section 13 hereof),
then the Executive shall be entitled to receive only Accrued Benefits pursuant
to Section 9(a) hereof.
8. Termination Giving Rise to a Termination Payment.
(a) If there is a Covered Termination by the Executive for Good
Reason or a Discretionary Termination, or by the Company other than by reason of
(i) death, (ii) disability pursuant to Section 12 hereof, or (iii) Cause, then
the Executive shall be entitled to receive, and the Company shall promptly pay,
Accrued Benefits pursuant to Section 9(a) hereof and, in lieu of further base
salary for periods following the Termination Date, as
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liquidated damages and severance pay, the Termination Payment pursuant to
Section 9(b) hereof.
(b) If there is a Covered Termination and the Executive is
entitled to Accrued Benefits and the Termination Payment, then the Executive
shall be entitled to the following additional benefits:
(i) The Executive shall receive, at the expense of the
Company, outplacement services on an individual basis provided by a
nationally recognized executive placement firm selected by the Company and
acceptable to Executive until the earlier of the third anniversary of the
Termination Date or such time as the Executive has obtained new full-time
employment comparable to his position at the Company.
(ii) Until the earlier of the third anniversary of the
Termination Date or such time as the Executive has obtained new employment
and is covered by benefits which in the aggregate are at least equal in
value to the following benefits the Executive shall continue to be covered,
at the expense of the Company, by the same or equivalent life insurance as
was required hereunder with respect to the Executive immediately prior to
the date the Notice of Termination is given.
9. Payments Upon Termination.
(a) Accrued Benefits. For purposes of this Agreement, the
Executive's "Accrued Benefits" shall include the following amounts, payable as
described herein:
(i) all base salary for the time period ending with the
Termination Date;
(ii) reimbursement for any and all monies advanced in
connection with the Executive's employment for reasonable and necessary
expenses incurred by the Executive on behalf of the Company for the time
period ending with the Termination Date;
(iii) any and all other cash earned though the Termination
Date and deferred at the election of the Executive or pursuant to any
deferred compensation plan then in effect;
(iv) a lump sum payment of the bonus, incentive compensation
and other compensation reportable on Form W-2 otherwise payable to the
Executive with respect to the year in which termination occurs under all
bonus or incentive compensation plan or plans of the Company in which the
Executive is a participant; and
(v) all other payments and benefits to which the Executive
may be entitled as compensatory fringe benefits or under the terms of any
benefit plan of the Company, including severance payments under the
Company's severance policies and practices as in effect immediately prior
to the Change in Control of the Company.
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Payment of Accrued Benefits shall be made promptly in accordance with the
Company's prevailing practice with respect to Subsections (i) and (ii) or,
with respect to Subsections (iii), (iv) and (v), pursuant to the terms of
the benefit plan or practice establishing such benefits.
(b) Termination Payment. The Termination Payment shall be an
amount equal to three (3) times the sum of (i) the Executive's annual base
salary in effect on the Termination Date plus (ii) fifty percent (50%) of the
maximum bonus the Executive would have been entitled to receive under the
Company's bonus plan applicable to the Executive for the fiscal year in which
the Termination Date takes place. Except as otherwise provided herein, the
Termination Payment shall be paid to the Executive in cash no later than ten
(10) business days after the Termination Date; provided, however, the
Termination Payment shall be paid to the Executive immediately upon receipt by
the Company of a Notice of Termination relating to a Discretionary Termination
(regardless of any differing effective date of the Executive's employment
termination). The Executive shall not be required to mitigate the amount of the
Termination Payment by securing other employment or otherwise, nor will such
Termination Payment be reduced by reason of the Executive securing other
employment or for any other reason.
It is the intention of the Company and the Executive that no portion
of the Termination Payment, Accrued Benefits or any other payment or benefit
under this Agreement, or payments to or for the benefit of the Executive under
any other agreement or plan of the Company, regardless of whether such payment
or benefit was paid or provided for prior to the Covered Termination (herein all
collectively referred to as the "Total Payments"), be deemed to be an "excess
parachute payment" as defined in Section 280G of the Code. It is agreed that the
present value of the Total Payments and any other payments to or for the benefit
of the Executive in the nature of compensation, receipt of which are contingent
on the change of control of the Company and to which Section 280G of the Code or
any successor provision thereto applies (in the aggregate "Total Benefits")
shall not exceed an amount equal to one dollar less than the maximum amount
which the Executive may receive without becoming subject to the tax imposed by
Section 4999 of the Code or any successor provision (the "Excise Tax") or which
the Company may pay without loss of deduction under Section 280G(a) of the Code
or any successor provision thereto. Present value for purposes of this Agreement
shall be calculated in accordance with Section 280G(d)(4) of the Code or any
successor provision thereto. Within forty-five (45) days following a Covered
Termination or notice by either party to the other of its belief that there is a
payment or benefit due the Executive which will result in an excess parachute
payment, the Executive and the Company, at the Company's expense, shall obtain
the opinion of such legal counsel (the opinion of legal counsel need not to be
unqualified), and certified public accountants as the Executive may choose,
which sets forth (a) the amount of the Base Period Income (as defined below) of
the Executive, (b) the present value of Total Benefits, and (c) the amount and
present value of any excess parachute payments. In the event that such opinions
determine that there would be an excess parachute payment, the Termination
Payment or any other payment determined by such counsel to be includible in the
Total Benefits, shall be reduced or eliminated as specified by the Executive in
writing delivered to the Company within thirty (30) days of his receipt of such
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opinions or, if the Executive fails to so notify the Company, then as the
Company shall reasonably determine, so that under the bases of calculation set
forth in such opinions the Total Benefits paid to the Executive shall be an
amount equal to one dollar less than the maximum amount which the Executive may
receive without becoming subject to the Excise Tax (the "Reduced Amount"). For
purposes of this Agreement, the term "Base Period Income" shall be an amount
equal to the Executive's "annualized includible compensation" from the Company
for the "base period" as defined in Sections 280G(d)(1) and (2) of the Code or
any successor provisions thereto. In the event that the provisions of Sections
280G and 4999 of the Code or any successor provision are repealed without
succession this provision shall be of no further force or effect.
As a result of the uncertainty in the application of Section 280G of
the Code at the time of the initial determination by legal counsel and
accountants as provided in this provision, it is possible that amounts will have
been paid or distributed by the Company to or for the benefit of the Executive
pursuant to this Agreement which should not have been so paid or distributed
("Overpayment") or that additional amounts which will have not been paid or
distributed by the Company to or for the benefit of the Executive pursuant to
this Agreement could have been so paid or distributed ("Underpayment"), in each
case, consistent with the calculation of the Reduced Amount hereunder. In the
event that such legal counsel, based upon the assertion of a deficiency by the
Internal Revenue Service against the Company or the Executive which such legal
counsel believes has a high probability of success or other controlling
precedent or substantial authority, determines that an Overpayment has been
made, any such Overpayment paid or distributed by the Company to or for the
benefit of the Executive shall be treated for all purposes as a loan to the
Executive which the Executive shall repay to the Company together with interest
at the applicable federal rate provided for in Section 7872(f)(2) of the Code;
provided, however, that no amount shall be payable by the Executive to the
Company if and to the extent such payment would not reduce the amount which is
subject to the excise tax under Section 4999 of the Code. In the event that such
legal counsel, based upon controlling precedent or other substantial authority,
determines that an Underpayment has occurred, any such Underpayment shall be
promptly paid by the Company to or for the benefit of the Executive together
with interest at the applicable federal rate provided for in Section 7872(f)(2)
of the Code.
10. Death.
(a) Except as provided in Section 10(b) hereof, in the event of a
Covered Termination due to the Executive's death, the Executive's estate, heirs
and beneficiaries shall receive all the Executive's Accrued Benefits through the
Termination Date.
(b) In the event the Executive dies after a Notice of Termination
is given (i) by the Company, other than by reason of disability, or (ii) by the
Executive for Good Reason or a Discretionary Termination, the Executive's
estate, heirs and beneficiaries shall be entitled to the benefits described in
Section 10(a) hereof and, subject to the provisions of this Agreement, to such
Termination Payment as the Executive would have been entitled to had the
Executive lived. For purposes of this Section 10(b), the Termination Date shall
be the earlier
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of thirty (30) days following the giving of the Notice of Termination or one day
prior to the end of the Employment Period, subject to delay pursuant to Section
1(m) hereof.
(c) In the event that (i) the Executive dies after a public
announcement of a pending Change in Control of the Company and before such
Change in Control of the Company is consummated and (ii) such publicly announced
Change in Control of the Company is consummated, the Executive's estate, heirs
and beneficiaries shall be entitled to the Accrued Benefits and Termination
Payment.
11. Retirement. If, during the Employment Period, the Executive and
the Company shall execute an agreement providing for the early retirement of the
Executive from the Company, or the Executive shall otherwise give notice that he
is voluntarily choosing to retire early from the Company, the Executive shall
receive Accrued Benefits through the Termination Date; provided, that if the
Executive's employment is terminated by the Executive for Good Reason or a
Discretionary Termination or by the Company other than by reason of death,
disability or Cause and the Executive also, in connection with such termination,
elects voluntary early retirement, the Executive shall also be entitled to
receive a Termination Payment pursuant to Section 9(b) hereof.
12. Termination for Disability. If, during the Employment Period, as a
result of the Executive's disability due to physical or mental illness or injury
(regardless of whether such illness or injury is job-related), the Executive
shall have been absent from the Executive's duties hereunder on a full-time
basis for twelve (12) consecutive months and, within thirty (30) days after the
Company notifies the Executive in writing that it intends to terminate the
Executive's employment (which notice shall not constitute the Notice of
Termination contemplated below), the Executive shall not have returned to the
performance of the Executive's duties hereunder on a substantially full-time
basis, the Company may terminate the Executive's employment pursuant to a Notice
of Termination given in accordance with Section 13 hereof. In the event the
Executive's employment is terminated on account of the Executive's disability in
accordance with this Section, the Executive shall receive Accrued Benefits in
accordance with Section 9(a) hereof and shall remain eligible for all benefits
provided by any long term disability programs of the Company in effect at the
time of such termination.
13. Termination Notice and Procedure. Any Covered Termination by the
Company or the Executive shall be communicated by written Notice of Termination
to the Executive, if such Notice is given by the Company, and to the Company, if
such Notice is given by the Executive, all in accordance with the following
procedures and those set forth in Section 23 hereof:
(a) If such termination is for disability, Cause or Good Reason,
the Notice of Termination shall indicate in reasonable detail the facts and
circumstances alleged to provide a basis for such termination. (No such detail
need be provided for in a Discretionary Termination).
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(b) Any Notice of Termination by the Company shall have been
approved, prior to the giving thereof to the Executive, by a resolution duly
adopted in good faith by a majority of the directors of the Company (or any
successor corporation) then in office.
(c) The Executive shall have thirty (30) days, or such longer
period as the Company may determine to be appropriate, to cure any conduct or
act, if curable, alleged to provide grounds for termination of the Executive's
employment for Cause under this Agreement.
(d) The recipient of the Notice of Termination shall personally
deliver or mail in accordance with Section 23 hereof written notice of any
dispute relating to such Notice of Termination to the party giving such Notice
within fifteen (15) days after receipt thereof; provided, however, that a Notice
of Termination relating to a Discretionary Termination shall not be subject to
dispute for any reason by the Company or otherwise. After the expiration of such
fifteen (15) days (or immediately upon receipt of a Notice of Termination
relating to a Discretionary Termination), the contents of the Notice of
Termination shall become final and not subject to dispute.
14. Confidentiality Obligations of the Executive; Noncompetition.
(a) During and following the Executive's employment by the
Company, the Executive shall hold in confidence and not directly or indirectly
disclose or use or copy or make lists of any confidential information or
proprietary data of the Company, except to the extent authorized in writing by
the Board of Directors of the Company or required by any court or administrative
agency, other than to an employee of the Company or a person to whom disclosure
is reasonably necessary or appropriate in connection with the performance by the
Executive of duties as an executive of the Company. Confidential information
shall not include any information known generally to the public or any
information of a type not otherwise considered confidential by persons engaged
in the same business or a business similar to that of the Company. All records,
files, documents and materials, or copies thereof, relating to the business of
the Company which the Executive shall prepare, or use, or come into contact
with, shall be and remain the sole property of the Company and shall be promptly
returned to the Company upon termination of employment with the Company.
(b) The Executive agrees that, in the event of a Covered
Termination in which the Executive has or will receive a Termination Payment,
for a period of two years after the Termination Date or until the end of the
Employment Period, whichever is shorter, the Employee shall not, within a one
hundred (100) mile radius of any office or facility of the Company, except as
permitted by the Company's prior written consent (which shall not be
unreasonably withheld), participate in the management of any business which is a
direct and substantial competitor of the Company. The ownership of less than one
percent of any class of securities of any corporation listed on a national
securities exchange or regularly traded over the counter even though such
corporation may be a competitor of the Company as specified above, shall not be
deemed as constituting a financial interest in such competitor.
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15. Expenses and Interest. If, after a Change in Control of the
Company, a good faith dispute arises with respect to the enforcement of the
Executive's rights under this Agreement or if any legal or arbitration
proceeding shall be brought in good faith to enforce or interpret any provision
contained herein, or to recover damages for breach hereof, the Executive shall
recover from the Company any reasonable attorneys' fees and necessary costs and
disbursements incurred as a result of such dispute, legal or arbitration
proceeding ("Expenses"), and prejudgment interest on any money judgment or
arbitration award obtained by the Executive calculated at the rate of interest
announced by Firstar Bank, N.A. from time to time as its prime or base lending
rate from the date that payments to him should have been made under this
Agreement. Within ten (10) days after the Executive's written request therefor,
the Company shall pay in cash to the Executive, or such other person or entity
as the Executive may designate in writing to the Company, the Executive's
reasonable Expenses in advance of the final disposition or conclusion of any
such dispute, legal or arbitration proceeding.
16. Payment Obligations Absolute. The Company's obligation during and
after the Employment Period to pay the Executive the amounts and to make the
benefit and other arrangements provided herein shall be absolute and
unconditional and shall not be affected by any circumstances, including, without
limitation, any set off, counterclaim, recoupment, defense or other right which
the Company may have against him or anyone else. Except as provided in Section
15 of this Agreement, all amounts payable by the Company hereunder shall be paid
without notice or demand. Except as provided in Section 9(b) of this Agreement,
each and every payment made hereunder by the Company shall be final, and the
Company will not seek to recover all or any part of such payment from the
Executive, or from whomsoever may be entitled thereto, for any reason
whatsoever.
17. Assignment; Successors.
(a) If the Company proposes to sell, assign or transfer all or
substantially all of its business and assets to any Person, or if the Company
proposes to merge into or consolidate or otherwise combine with any Person,
then, at least thirty (30) days in advance of the closing of such event, the
Company shall, subject only to consummation of such Change in Control of the
Company, assign all of its right, title and interest in this Agreement effective
as of the closing date of such event to such Person, and the Company shall cause
such Person, at least thirty (30) days in advance of the closing of such event,
by written agreement in form and substance reasonably satisfactory to the
Executive and with written notice thereof to Executive, to expressly assume and
agree to perform, subject only to consummation of such Change in Control of the
Company, from and after the effective date of such event all of the terms,
conditions and provisions imposed by this Agreement upon the Company. If such
Change in Control of the Company is consummated, failure of the Company to
obtain such an assumption agreement at least thirty (30) days in advance of the
closing of such event shall be a breach of this Agreement constituting "Good
Reason" hereunder, except that for purposes of implementing the foregoing, the
date upon which such transfer or other succession becomes effective shall be
deemed the Termination Date. In case of an effective assignment by the Company
and of assumption and agreement by such Person, "Company" shall thereafter mean
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such Person which executes and delivers the agreement provided for in this
Section 17 or which otherwise becomes bound by all the terms and provisions of
this Agreement by operation of law, and this Agreement shall inure to the
benefit of and be enforceable by such Person. The Executive shall, in his
discretion, be entitled to proceed against any or all of such Persons, any
Person which theretofore was such a successor to the Company (as defined in the
first paragraph of this Agreement) and the Company (as so defined) in any action
to enforce any rights of the Executive hereunder. Except as provided in this
Subsection, this Agreement shall not be assignable by the Company. This
Agreement shall not be terminated by the voluntary or involuntary dissolution of
the Company.
(b) This Agreement and all rights of the Executive shall inure to
the benefit of and be enforceable by the Executive's personal or legal
representatives, executors, administrators, heirs and beneficiaries. All amounts
payable to the Executive under Sections 7, 8, 9, 10, 11 and 12 hereof if the
Executive had lived shall be paid, in the event of the Executive's death, to the
Executive's estate, heirs and representatives.
18. Severability. The provisions of this Agreement shall be regarded
as divisible, and if any of said provisions or any part hereof are declared
invalid or unenforceable by a court of competent jurisdiction, the validity and
enforceability of the remainder of such provisions or parts hereof and the
applicability thereof shall not be affected thereby.
19. Amendment. This Agreement may not be amended or modified at any
time except by written instrument executed by the Company and the Executive.
20. Withholding. The Company shall be entitled to withhold from
amounts to be paid to the Executive hereunder any federal, state or local
withholding or other taxes or charges which it is from time to time required to
withhold; provided, that the amount so withheld shall not exceed the minimum
amount required to be withheld by law. The Company shall be entitled to rely on
an opinion of nationally recognized tax counsel if any question as to the amount
or requirement of any such withholding shall arise.
21. Certain Rules of Construction. No party shall be considered as
being responsible for the drafting of this Agreement 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. Any
provision of this Agreement which requires an agreement in writing shall be
deemed to require that the writing in question be signed by the Executive and an
authorized representative of the Company.
22. Governing Law: Resolution of Disputes. This Agreement and the
rights and obligations hereunder shall be governed by and construed in
accordance with the laws of the State of Wisconsin. Any dispute arising out of
this Agreement shall, at the Executive's election, be determined by arbitration
under the rules of the American Arbitration Association then in effect or by
litigation. Whether the dispute is to be settled by arbitration or litigation,
the venue for the arbitration or litigation shall be Milwaukee, Wisconsin or, at
the Executive's election, in the judicial district encompassing the city in
which the Executive resides. The parties consent to personal jurisdiction in
each trial court in the selected venue having subject
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matter jurisdiction notwithstanding their residence or situs, and each party
irrevocably consents to service of process in the manner provided hereunder for
the giving of notices.
23. Notice. Notices given pursuant to this Agreement shall be in
writing and, except as otherwise provided by Section 13(d) hereof, shall be
deemed given when actually received by the Executive or actually received by the
Company's Secretary or any officer of the Company other than the Executive. If
mailed, such notices shall be mailed by United States registered or certified
mail, return receipt requested, addressee only, postage prepaid, if to the
Company, to Northland Cranberries, Inc., Attention: Secretary, 800 First Avenue
South, P.O. Box 8020, Wisconsin Rapids, Wisconsin 54495-8020, or if to the
Executive, at the address set forth below the Executive's signature to this
Agreement, or to such other address as the party to be notified shall have
theretofore given to the other party in writing. A copy of any notice provided
hereunder by either party shall be provided to Steven R. Barth, Foley & Lardner,
777 East Wisconsin Avenue, Milwaukee, Wisconsin 53202.
24. No Waiver. No waiver by either party at any time of any breach by
the other party of, or compliance with, any condition or provision of this
Agreement to be performed by the other party shall be deemed a waiver of similar
or dissimilar provisions or conditions at the same time or any prior or
subsequent time.
25. Headings. The headings herein contained are for reference only and
shall not affect the meaning or interpretation of any provision of this
Agreement.Robert E. HawkRobert E. Hawk
26. Effect on Other Agreements. No provision of this Agreement shall
limit the Company's obligation to make payments and provide benefits otherwise
receivable by the Executive under the any other agreement, regardless of whether
or not the Executive exercises his right to a Discretionary Termination
hereunder; provided, however, that this Agreement supersedes the Original KEESA
in its entirety, and the Original KEESA is and all obligations of the Executive
and the Company thereunder are hereby terminated and no longer of any force or
effect.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first written above.
EXECUTIVE NORTHLAND CRANBERRIES, INC.
/s/ John Swendrowski By: /s/ Robert E. Hawk
-------------------------------------- ---------------------------------
John Swendrowski Robert E. Hawk
Executive Vice President
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