-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, U+zBcqyXiutoi6wc9Dd4Q/AZISu7c/rFMIBFpdBJUo3KKcJVwuSSELqOH0kaALiz yNIElBcMEOCD+7zCifR1VQ== 0000897069-96-000347.txt : 19961029 0000897069-96-000347.hdr.sgml : 19961029 ACCESSION NUMBER: 0000897069-96-000347 CONFORMED SUBMISSION TYPE: PRE 14A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19970108 FILED AS OF DATE: 19961028 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: NORTHLAND CRANBERRIES INC /WI/ CENTRAL INDEX KEY: 0000818010 STANDARD INDUSTRIAL CLASSIFICATION: AGRICULTURE PRODUCTION - CROPS [0100] IRS NUMBER: 391583759 STATE OF INCORPORATION: WI FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: PRE 14A SEC ACT: 1934 Act SEC FILE NUMBER: 000-16130 FILM NUMBER: 96648804 BUSINESS ADDRESS: STREET 1: 800 FIRST AVE SO STREET 2: P O BOX 8020 CITY: WISCONSIN RAPIDS STATE: WI ZIP: 54494 BUSINESS PHONE: 7154244444 PRE 14A 1 NORTHLAND CRANBERRIES, INC. SCHEDULE 14A INFORMATION Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 (Amendment No. ____) Filed by the Registrant [X] Filed by a Party other than the Registrant [ ] Check the appropriate box: [X ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission Only (as permitted by Rule 14a- 6(e)(2)) [ ] Definitive Proxy Statement [ ] Definitive Additional Materials [ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12 Northland Cranberries, Inc. (Name of Registrant as Specified in its Charter) (Name of Person(s) Filing Proxy Statement, if other than the Registrant) Payment of Filing Fee (Check the appropriate box): [X ] No fee required. [ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0- 11. 1) Title of each class of securities to which transaction applies: 2) Aggregate number of securities to which transaction applies: 3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is calculated and state how it was determined): 4) Proposed maximum aggregate value of transaction: 5) Total fee paid: [ ] Fee paid previously with preliminary materials. [ ] Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. 1) Amount Previously Paid: 2) Form, Schedule or Registration Statement No.: 3) Filing Party: 4) Date Filed: PRELIMINARY DRAFT [PRINTER TO INSERT LOGO] NORTHLAND CRANBERRIES, INC. 800 First Avenue South Wisconsin Rapids, Wisconsin 54494 ____________________ NOTICE OF 1997 ANNUAL MEETING OF SHAREHOLDERS TO BE HELD JANUARY 8, 1997 ____________________ TO THE SHAREHOLDERS OF NORTHLAND CRANBERRIES, INC.: NOTICE IS HEREBY GIVEN that the 1997 annual meeting of shareholders of NORTHLAND CRANBERRIES, INC., a Wisconsin corporation ("Company"), is scheduled to be held on Wednesday, January 8, 1997 at 3:00 p.m. at Cranberries Ballroom, 2321 West Grand Avenue, Wisconsin Rapids, Wisconsin for the following purposes, as more fully described in the accompanying Proxy Statement: 1. To elect seven directors, each for a one-year term. 2. To approve the proposed amendment to the Company's Articles of Incorporation to increase the number of authorized shares of Class A Common Stock, $.01 par value, from 20,000,000 to 60,000,000, and to increase the number of authorized shares of Class B Common Stock, $.01 par value, from 2,000,000 to 4,000,000. 3. To consider and act upon such other business as may properly come before the annual meeting or any adjournment thereof. Only holders of record of the Class A and Class B Common Stock as of the close of business on November 25, 1996 will be entitled to notice of, and to vote at, the annual meeting and at any adjournment thereof. Shareholders may vote in person or by proxy. The holders of Class A Common Stock will be entitled to one vote per share and the holders of Class B Common Stock will be entitled to three votes per share on each matter submitted for shareholder consideration at the annual meeting. Even if you plan to attend the annual meeting, please complete, date and sign the enclosed proxy and mail it promptly in the envelope provided. If you attend the annual meeting, you may revoke your proxy and vote your shares in person. Your attention is directed to the attached Proxy Statement and the accompanying proxy. NORTHLAND CRANBERRIES, INC. [PRINTER TO INSERT SIGNATURE] David J. Lukas Vice President Administration Corporate Counsel and Secretary Wisconsin Rapids, Wisconsin November 27, 1996 YOUR VOTE IS IMPORTANT NO MATTER HOW LARGE OR SMALL YOUR HOLDINGS MAY BE. TO ASSURE YOUR REPRESENTATION AT THE MEETING, PLEASE DATE THE ENCLOSED PROXY, WHICH IS SOLICITED BY THE BOARD OF DIRECTORS, SIGN EXACTLY AS YOUR NAME APPEARS THEREON AND RETURN IMMEDIATELY IN THE ENVELOPE PROVIDED. PRELIMINARY DRAFT NORTHLAND CRANBERRIES, INC. [PRINTER TO INSERT LOGO] ____________________ PROXY STATEMENT For 1997 Annual Meeting of Shareholders To Be Held January 8, 1997 ____________________ GENERAL INFORMATION All of the share amounts and prices (e.g., such as option exercise prices) set forth in this Proxy Statement have been adjusted to reflect the Company's two-for-one stock split effected on September 3, 1996 in the form of a 100% dividend on both its Class A Common Stock and Class B Common Stock. This Proxy Statement and accompanying proxy are being furnished to the shareholders of Northland Cranberries, Inc., a Wisconsin corporation ("Company"), beginning on or about November 27, 1996 in connection with the solicitation by the Board of Directors of the Company ("Board") of proxies for use at the Company's 1997 annual meeting of shareholders scheduled to be held on Wednesday, January 8, 1997 at 3:00 p.m. at Cranberries Ballroom, 2321 West Grand Avenue, Wisconsin Rapids, Wisconsin, and at any adjournment thereof ("Meeting"), for the purposes set forth in the preceding Notice of Annual Meeting of Shareholders and in this Proxy Statement. Only record holders of outstanding shares of Class A Common Stock ("Class A Shares") and outstanding shares of Class B Common Stock ("Class B Shares" and, together with the Class A Shares, "Common Shares") as of the close of business on November 25, 1996 ("Record Date") are entitled to notice of, and to vote at, the Meeting. As of the Record Date, the Company's outstanding voting securities consisted of 12,903,300 Class A Shares and 636,202 Class B Shares. Each record holder of any outstanding Class A Shares as of the Record Date is entitled to one vote per share for each proposal submitted for consideration at the Meeting. Each record holder of any outstanding Class B Shares as of the Record Date is entitled to three votes per share for each such proposal. As of the Record Date, the total number of votes represented by the outstanding shares of both classes of the Company's Common Shares was 14,811,906, consisting of 12,903,300 votes represented by outstanding Class A Shares and 1,908,606 votes represented by outstanding Class B Shares. A proxy, in the enclosed form, which is properly executed, duly returned to the Company and not revoked will be voted in accordance with the instructions contained therein. If no specification is indicated on the proxy, the Common Shares represented thereby will be voted FOR the Board's seven director nominees set forth below, FOR approval of the proposed amendment to the Company's Articles of Incorporation to increase the number of authorized Class A Shares from 20,000,000 to 60,000,000 and to increase the number of authorized Class B Shares from 2,000,000 to 4,000,000 (the "Authorized Shares Amendment"), and in accordance with the best judgment of the proxies named in the proxy on such other business or matters which may properly come before the Meeting. Execution of a proxy given in response to this solicitation will not affect a shareholder's right to attend the Meeting and to vote in person. Presence at the Meeting of a shareholder who has signed a proxy does not in itself revoke a proxy. Each proxy granted may be revoked by the person giving it at any time before the exercise thereof by giving written notice to such effect to the Secretary of the Company, by execution and delivery of a subsequent proxy or by attendance and voting in person at the Meeting, except as to any matter upon which, prior to such revocation, a vote shall have been cast pursuant to the authority conferred by such proxy. ELECTION OF DIRECTORS Director Nominees At the Meeting, the shareholders will elect seven directors, constituting the entire Board, to hold office until the Company's next annual meeting of shareholders and until their successors are duly qualified and elected. It is intended that the persons named as proxies in the accompanying proxy will vote FOR the election of all of the Board's nominees. All nominees are currently serving as shareholder-elected Board members. If any nominee should become unable to serve as a director prior to the Meeting, the Common Shares represented by proxies otherwise voted in favor of the Board's nominees or which do not contain any instructions will be voted FOR the election of such other person as the Board may recommend in place of such nominee. Under Wisconsin law, directors are elected by a plurality of the votes cast by the Common Shares entitled to vote in the election, assuming a quorum is present. For this purpose, "plurality" means that the individuals receiving the largest number of votes are elected as directors, up to the maximum number of directors to be elected at the Meeting. Therefore, any Common Shares which are not voted on this matter at the Meeting, whether by abstention, broker nonvote or otherwise, will have no effect on the election of directors at the Meeting. The Board's nominees are set forth below along with certain related information as of the Record Date. Unless otherwise indicated, positions listed are, or were, held with the Company. Name and Age Director of Nominee Since Current Principal Employment John Swendrowski 1987 President and Chief Executive Officer 48 LeRoy J. Miles 1987 Retired Executive Vice President 61 and Retired Corporate Secretary Robert E. Hawk 1989 Executive Vice President and 41 President of Wildhawk, Inc. (Company subsidiary which serves as an agri- supplier to cranberry growers) Patrick F. Brennan 1989 President and Chief Executive Officer 64 of Consolidated Papers, Inc. (manufacturer of coated printing papers) Jeffrey J. Jones 1987 Partner in the law firm of Foley & 43 Lardner John C. Seramur 1987 President and Chief Executive Officer 54 of First Financial Corporation (savings bank holding company) and its principal subsidiary First Financial Bank Jerold D. Kaminski 1994 Vice President, Director of Marketing 40 for the Gold Medal Division of General Mills Corporation (manufacturer and marketer of dry packaged goods). Business Experience Mr. Swendrowski originally founded the Company and assumed his current positions in May 1987. Prior to forming the Company, Mr. Swendrowski was the organizer and syndicator of investment interests, and a general partner, in each of the five limited partnerships ("Limited Partnerships") which were combined into the Company as part of its initial public stock offering in August 1987. Mr. Miles retired as Corporate Secretary on August 18, 1995 and as Executive Vice President of the Company on December 31, 1994, although he still remains an employee of the Company. Mr. Miles had held such executive positions with the Company since May 1987. Mr. Hawk was appointed Executive Vice President in October 1996. Prior to that, Mr. Hawk served as the Company's Vice President - Sales, Marketing and Special Projects since January 1993, and prior thereto he served as Vice President - Operations since January 1989. Mr. Brennan was elected President and Chief Executive Officer of Consolidated Papers, Inc., Wisconsin Rapids, Wisconsin in October 1993. Prior thereto, he served as President and Chief Operating Officer for five years, Executive Vice President for over one year and Corporate Vice President for three years. He has served as a director of Consolidated Papers, Inc. since February 1987. Mr. Brennan is also a director of Betz Laboratories, Inc., Trevose, Pennsylvania, a manufacturer of specialty chemicals. Mr. Jones has been a partner in the law firm of Foley & Lardner, Milwaukee, Wisconsin, since January 1987, and has been associated with such firm since 1978. Foley & Lardner has been the Company's general outside legal counsel since the Company's formation and served as general legal counsel to the Limited Partnerships. Mr. Seramur has been President and Chief Executive Officer of First Financial Bank, Stevens Point, Wisconsin, since 1977 and a director thereof since 1966. He has also been the President and a director of First Financial Corporation since its formation in 1983. Mr. Kaminski has been the Director of Marketing for the Food Service Division of General Mills Corporation since September 1993. Prior thereto, Mr. Kaminski served as Marketing Director of the Gold Medal Division of General Mills Corporation from September 1991 to September 1993 and as Marketing Manager of the Gold Medal Division of General Mills Corporation from February 1989 to September 1991. Board Meetings and Committees The Board met four times during fiscal 1996. It also met three times during the Company's five-month transitional period from April 1, 1995 to August 31, 1995 associated with the Company's change in fiscal year end from March 31 to August 31 ("Transitional Period"). The Board currently has standing Executive, Audit, and Compensation and Stock Option Committees. The Executive Committee did not meet in fiscal 1996 or in the Transitional Period. The Executive Committee's principal function is to act on behalf of the Board between meetings, except with respect to matters which may not be delegated to a committee under Wisconsin corporate law. Present members of the Executive Committee are Messrs. Swendrowski (Chairman), Miles and Hawk. The Audit Committee met once in fiscal 1996. It also met twice during the Transitional Period. The Audit Committee's principal functions are to recommend annually a firm of independent public accountants to serve as the Company's independent auditors for the forthcoming fiscal year, to meet with and review reports of the Company's independent accountants and auditors, to oversee the Company's quarterly and annual financial reporting process and to conduct a post-audit review of various items relating to the Company's annual financial reporting and audit process. The Audit Committee presently consists of Messrs. Kaminski (Chairman), Seramur, Brennan and Jones. The Compensation Committee met twice in fiscal 1996. It also met twice during the Transitional Period. It has authority to administer the Company's 1987, 1989 and 1995 Stock Option Plans, including the grant of options thereunder to key employees of the Company, and to approve the compensation, bonuses and benefits of officers and key employees of the Company. The Compensation and Stock Option Committee presently consists of Messrs. Seramur (Chairman), Kaminski and Brennan. See "Executive Compensation-Report on Executive Compensation." The Board does not have a nominating committee. Shareholders who wish to propose director nominees for consideration at the Meeting may do so under the Company's By-laws only by giving written notice of an intent to make such a nomination to the Secretary of the Company not less than 30 days in advance of the Meeting. Such notice must specify, among other things, the nominee's name, biographical data and qualifications. STOCK OWNERSHIP OF MANAGEMENT AND OTHERS Share Ownership The following table sets forth certain information as of the Record Date regarding the beneficial ownership of each class of Common Shares held by (i) each current director and executive officer of the Company who is named in the Summary Compensation Table set forth below under "Executive Compensation-Summary Compensation;" (ii) all current directors and executive officers of the Company as a group; and (iii) each person or entity known to the Company to be the beneficial owner of more than 5% of either class of Common Shares. All of the persons or entities listed below are believed by the Company to have sole voting and investment power over the Common Shares identified as beneficially owned, except as indicated otherwise in the footnotes to the table. Class A Class B Shares Shares Beneficially Beneficially Percentage Owned and Owned and of Aggregate Name of Individual or Entity Percentage Percentage of Voting or Number in Group of Class(1) Class(1) Power Directors and Executive Officers John Swendrowski(2) 464,362(3) 601,738(4) 15.0% (3.5%) (94.6%) LeRoy J. Miles 102,346(5) 322,462(6) 1.4% * (50.7%) Robert E. Hawk 459,710(7) __ 3.1% (3.5%) John A. Pazurek 98,034(8) __ * * John C. Seramur 72,080(9) __ * * Jeffrey J. Jones 22,752(10) __ * * Patrick F. Brennan 7,910(11) __ * * Jerold D. Kaminski 516(12) __ * * David J. Lukas 66,574(13) __ * * John S. Wilson 24,000(14) __ * * All directors and executive 1,428,284 636,202 21.3% officers as a group (13 (10.4%) (100%) persons)(15) Other Five Percent Holders State of Wisconsin Investment 1,078,000 __ 7.3% Board ("SWIB")(16) (8.4%) Wellington Management Co. 910,400 __ 6.1% ("Wellington")(17) (7.1%) David L. Babson & Co. 1,029,000 __ 6.9% ("Babson")(18) (8.0%) ________________________________ * Denotes less than 1%. (1) The outstanding Class B Shares are convertible on a share-for-share basis into Class A Shares at any time at the discretion of each holder. As a result, a holder of Class B Shares is deemed to beneficially own an equal number of Class A Shares. However, in order to avoid overstatement of the aggregate beneficial ownership of shares of both classes of the Company's Common Shares, the Class A Shares reported in the table do not include Class A Shares which may be acquired upon the conversion of Class B Shares. Similarly, the respective percentages of outstanding Class A Shares reported in the table have been determined with respect to the total number of Class A Shares outstanding on the Record Date, excluding Class A Shares which may be issued upon conversion of Class B Shares. (2) The address of Mr. Swendrowski is 800 First Avenue South, Wisconsin Rapids, Wisconsin 54494. (3) The Class A Shares listed include (i) 120,362 shares owned directly by Mr. Swendrowski or members of his immediate family; and (ii) 344,000 shares which Mr. Swendrowski has the right to acquire upon the exercise of vested stock options. (4) The Class B Shares listed include (i) 313,740 shares owned directly by Mr. Swendrowski; and (ii) 287,998 shares held by Cranberries Limited, Inc. ("CLI"), a corporation owned by Messrs. Swendrowski and Miles and controlled by Mr. Swendrowski. (5) The Class A Shares listed include (i) 21,352 shares owned directly by Mr. Miles; (ii) 78,000 shares which Mr. Miles has the right to acquire upon the exercise of vested stock options; and (iii) 2,994 shares held for the account of Mr. Miles' wife. (6) The Class B Shares listed include the 287,998 shares currently held by CLI, which are deemed to be beneficially owned by Mr. Miles as an officer and shareholder of CLI. Such shares are also included under the number of Class B Shares deemed to be beneficially owned by Mr. Swendrowski. See note (5) above. (7) The Class A Shares listed include (i) 288,200 shares owned directly by Mr. Hawk; (ii) 22 shares owned by his wife; (iii) 19,546 shares held in his IRA account; (iv) 9,942 held in his wife's IRA account; and (v) 142,000 shares which Mr. Hawk has the right to acquire upon the exercise of vested stock options. (8) Includes 96,000 Class A Shares which Mr. Pazurek has the right to acquire upon the exercise of vested stock options. (9) Includes 4,120 Class A Shares which Mr. Seramur has the right to acquire upon the exercise of vested stock options. (10) Includes 4,146 Class A Shares which Mr. Jones has the right to acquire upon the exercise of vested stock options. (11) Includes 4,010 Class A Shares which Mr. Brennan has the right to acquire upon the exercise of vested stock options. (12) Includes 516 Class A Shares which Mr. Kaminski has the right to acquire upon the exercise of vested stock options. (13) Includes 48,000 Class A Shares which Mr. Lukas has the right to acquire upon the exercise of vested stock options. (14) Includes 24,000 Class A Shares which Mr. Wilson has the right to acquire upon the exercise of vested stock options. (15) In determining the aggregate beneficial ownership of Class A Shares and Class B Shares, respectively, for all directors and executive officers as a group, Common Shares which are deemed to be beneficially owned by more than one person have been counted only once to avoid overstatement. The number of Class A Shares listed includes 842,992 Class A Shares which certain executive officers and directors have the right to acquire upon the exercise of vested stock options. (16) Except to the extent information is believed to be otherwise known by the Company, the information given is as of or about February 5, 1996 as reported by SWIB in its Amendment Number 5 to Schedule 13G filed with the Securities and Exchange Commission ("SEC") and the Company. The address for SWIB is P.O. Box 7842, Madison, Wisconsin 53707. (17) Except to the extent information is believed to be otherwise known by the Company, the information given is as of or about January 31, 1996 as reported by Wellington in its Schedule 13G filed with the SEC and the Company. The address of Wellington is 75 State Street, Boston, Massachusetts 02109. (18) Except to the extent information is believed to be otherwise known by the Company, the information given is as of or about February 12, 1996 as reported by Babson in its Schedule 13G filed with the SEC and the Company. The address of Babson is One Memorial Drive, Cambridge, Massachusetts 02142-1300. EXECUTIVE COMPENSATION Report on Executive Compensation The Compensation and Stock Option Committee of the Board ("Committee") evaluates and approves the compensation of the Company's executive officers. The Committee's executive compensation policies and practices generally reflect the Company's efforts to attract, motivate and retain the Company's executive officers by providing a total compensation package based on relative corporate and personal performance. Executive officers' compensation is currently comprised of base salary, annual bonus payments and stock option grants. The Company also provides its employees, including its executive officers, with the opportunity to participate in a 401(k) plan. The Committee establishes each executive officer's base salary, including the salary of John Swendrowski, the President and Chief Executive Officer of the Company, at the beginning of each fiscal year for the forthcoming fiscal year. In determining the compensation of executives other than the Chief Executive Officer, the Committee principally considers the recommendations of the Chief Executive Officer. Each executive officer's base salary is generally based on the Committee's evaluation of the Company's and each individual's relative performance and achievements for the fiscal year then ended. In particular, in determining annual salary increases or decreases, the Committee reviews and evaluates the Company's revenues, earnings, harvest results, cost and expense levels and balance sheet strength for the prior fiscal year and each executive officer's individual contributions to the Company's results of operations and financial condition. The Company's performance with respect to these criteria, in particular its earnings per share, is compared to the Company's historical results and the Company's expectations for the fiscal year then ended. The Committee also considers the extent to which the Company otherwise attained its strategic and operating plans and goals established during the fiscal year and each officer's role in connection therewith, together with each officer's interpersonal relationships with other Company personnel. Although the Committee reviews a great deal of objective performance criteria, the Committee still exercises a significant amount of subjective evaluation in making its executive compensation decisions. The Company maintains an Executive Incentive Bonus Plan ("Bonus Plan") to provide incentive compensation opportunities to the Company's executive officers. Under the Bonus Plan as applicable to fiscal 1996, incentive cash bonuses are payable for fiscal 1996 to eligible employees if the Company's fiscal 1996 net income per share exceeded record fiscal 1994 net income per share ($0.33) by more than 10%. Since the Company's actual net income per share for fiscal 1996 was $0.50, almost 52% over fiscal 1994's record earnings, virtually the entire maximum amount of bonuses payable under the Bonus Plan will be paid to eligible employees. Following the awarding of bonuses for fiscal 1996 under the Bonus Plan, the Committee terminated the Bonus Plan and replaced it for fiscal 1997 with a new plan basing the payment of incentive cash bonuses on the achievement of specified objective and subjective goals, principal among them the achievement of certain targeted corporate earnings goals. The new plan, which applies to all Company employees, provides bonus opportunities of up to a specified percentage of base salary which varies by relative position. Regular stock option grants to executive officers under the Company's stock option plans are generally made annually by the Committee and are based principally on each executive officer's relative position at the Company and, in appropriate cases, his individual initiatives and achievements in the performance of his duties during the prior fiscal year and their impact on the Company's performance. The Committee also takes into account the level of regular option grants historically provided each year to each executive officer. On April 1, 1996, the Committe made an extraordinary grant of stock options to certain executive officers, including Mr. Swendrowski, at an exercise price equal to 100% of the fair market value of the Class A Shares on such date. These extraordinary grants, exercisable for an aggregate of 182,000 Class A Shares, were made to compensate such executive officers for their voluntary agreement to limit the amount of tax offset bonuses associated with their prior receipt of certain stock options in 1987 and 1989. Because of the significant increase in the price of the Company's Class A Shares since the grant date of such options, and particularly since the summer of 1995 (see "Stock Price Performance Information"), the Company would have been required by generally accepted accounting principles to recognize a significant accrued compensation expense and a resultant reduction in reported earnings if these tax offset bonuses would not have been voluntarily limited by these executive officers. The Company's stock option plans, including its 1995 Stock Option Plan, are intended to promote the best interests of the Company and its shareholders by providing key employees with the opportunity to acquire or increase their ownership interest in the Company and thereby develop a stronger incentive to put forth maximum effort for the continued success and growth of the Company. Options have historically been granted to selected key employees at 100% of the Class A Shares' fair market value on the date of grant, have a term of not to exceed 10 years and either vest in increments of 20% on each of the first, second, third, fourth and fifth anniversaries of the grant date or are immediately vested upon grant. Since the economic value of stock options is inherently dependent upon the level of future price appreciation of the underlying stock options granted by the Committee will only provide executive officers with value to the extent the price of the Class A Shares increases above the option exercise price on the grant date. Thus, the Committee believes that stock option grants help better align the economic interests of the Company's management with its shareholders. In determining Mr. Swendrowski's 6% base salary increase for fiscal 1997, and his bonus amount based on the Company's fiscal 1996 financial performance, the Committee took into account the Company's outstanding fiscal 1996 financial performance, including record sales, earnings and earnings per share; the Company's 145% increase in stock price from August 31, 1995 to August 31, 1996; its 14% increase in cash dividends per share over the same period; and the Company's 100% stock dividend distributed on September 3, 1996. Also considered by the Committee were Mr. Swendrowski's contributions during fiscal 1996 and the Transitional Period in connection with (i) continuing to expand the business focus of the Company by successfully orchestrating the Company's introduction of its 100% Northland brand of blended cranberry juice products in Wisconsin and other selected markets; (ii) completing the construction of the Company's new concentrating plant on time and within budget; (iii) successfully raising over $30 million in the Company's August 1995 public stock offering; and (iv) acquiring three cranberry marshes aggregating 235 productive acres. The Committee also reviewed chief executive officer compensation information from the companies which comprise the Company's peer group index for purposes of comparing total shareholder return and set his salary in the range commensurate within the range of salaries of such other chief executive officers. See "Stock Price Performance Information." Since the Company believes its stock option plans have been adopted and are being administered in accordance with Internal Revenue Code Section 162(m), the Committee does not intend currently to take any further action to conform its compensation plans to comply with the regulations proposed under Internal Revenue Code Section 162(m) relating to the $1 million cap on executive compensation deductibility imposed by the Omnibus Revenue Reconciliation Act of 1993. By the Compensation and Stock Option Committee: John C. Seramur, Chairman Jerold D. Kaminski Patrick F. Brennan Summary Compensation Information The following table sets forth certain information concerning compensation paid by the Company for its last three fiscal years to the Company's Chief Executive Officer and the four next highest paid executive officers of the Company whose salary and non-extraordinary bonus payments totaled over $100,000 in fiscal 1996. The persons named in the table below are hereinafter sometimes referred to as the "named executive officers." Summary Compensation Table
Regular Stock Name and Principal Fiscal Annual Compensation Option Grants All Other Positions Year(1) Salary(1) Bonus(1) (shares)(1)(2) Compensation(3) John Swendrowski 1996 $315,000 $286,200 16,000 $ 3,365(4) President and Chief 1995 $300,000 $ 0 16,000 $ 0 Executive Officer 1994 $275,000 $135,250 0 $ 0 Robert E. Hawk 1996 $114,000 $ 89,720 8,000 $ 0 Executive Vice 1995 $108,000 $ 0 8,000 $ 0 President 1994 $100,000 $ 31,000 0 $75,000 John A. Pazurek 1996 $ 89,000 $ 63,720 8,000 $ 1,534 Vice President- 1995 $ 83,000 $ 0 8,000 $ 0 Finance, Treasurer 1994 $ 70,000 $ 21,700 0 $ 0 and Chief Financial Officer David J. Lukas 1996 $ 82,000 $ 39,360 8,000 $ 1,300 Vice President- 1995 $ 78,000 $ 0 8,000 $ 0 Administration and 1994 $ 65,000 $ 20,150 0 $ 0 Secretary John S. Wilson 1996 $ 74,000 $ 35,520 6,000 $ 1,236 Vice President-East 1995 $ 70,000 $ 0 2,000 $ 0 Coast 1994 $ 35,000 $ 10,850 10,000 $ 0 __________________________ (1) During the Transitional Period, Messrs. Swendrowski, Hawk, Pazurek, Lukas and Wilson received salary payments of $131,250, $47,500, $37,083, $34,167 and $30,833, respectively; bonus payments of $100,000, $22,800, $17,800, $8,200 and $7,400, respectively; and stock options to purchase 12,000, 6,000, 6,000, 6,000 and 6,000 Class A Shares, respectively. No other compensation was paid to the named executive officers during this Transitional Period. (2) On April 1, 1996, the Committee made an extraordinary grant of stock options to certain executive officers, including Messrs. Swendrowski, Hawk and Pazurek (Messrs. Lukas and Wilson did not receive extraordinary grants). These extraordinary grants, which are not reflected in the table above, were made to compensate such executive officers for their voluntary agreement to limit the amount of tax offset bonuses associated with their prior receipt of certain stock options in 1987 and 1989. Because of the significant increase in the price of the Company's Class A Shares since the grant date of these options, and in particular since the summer of 1995, the Company would have been required by generally accepted accounting principles to recognize a significant accrued compensation expense and a resultant reduction in reported earnings if these tax offset bonuses would not have been voluntarily limited by the executive officers. As a result, Messrs. Swendrowski, Hawk and Pazurek received extraordinary grants of stock options exercisable for 100,000, 40,000 and 24,000 Class A Shares, respectively, at an exercise price equal to 100% of the fair market value of the Class A Shares on the grant date. (3) Amounts set forth for fiscal 1996 represent the Company's matching contributions under its 401(k) plan to each respective indicated named executive officers. In fiscal 1994, Mr. Hawk received the indicated payment under his noncompetition agreement with the Company entered into in connection with the Company's January 1989 acquisition of Wildhawk, Inc. Such agreement expired in January 1994. (4) In fiscal 1996 and the Transitional Period, the Company paid approximately $___________ of premiums on a split-dollar insurance policy on the life of Mr. Swendrowski. The foregoing data is excluded from the table above because upon surrender of this policy to the Company or the death of Mr. Swendrowski, these premium payments will be reimbursed in full to the Company. Based on an assumed retirement age of 65, the present value of the excess cash surrender value of all of such policy over the premium payments is estimated to be approximately $__________.
Stock Options The Company currently maintains a 1987, 1989 and 1995 Stock Option Plan. Under the 1989 and 1995 Plans, options to purchase Class A Shares may be granted to key employees, including executive officers, of the Company. The Company's 1987 Stock Option Plan has no remaining available Class A Shares reserved thereunder to accommodate any additional option grants and the 1989 Stock Option Plan has only a very limited number of remaining Class A Shares available to accommodate additional option grants thereunder. The following table sets forth information concerning the grants of regular stock options under the Company's 1995 Stock Option Plan during fiscal 1996 to the named executive officers. Regular Option Grants in 1996 Fiscal Year
Percentage of Total Regular Shares Options Potential Realizable Value Underlying Granted to all At Assumed Annual Rates of Regular Employees in Exercise Stock Price Appreciation Options 1996 Fiscal Price (per Expiration For Option Term(2)(4) Name Granted(1)(2) Year(2) share)(2)(3) Date(2) 5% 10% John Swendrowski 16,000 17.5% $10.88 4/1/2006 $109,477 $277,438 Robert E. Hawk 8,000 8.7% $10.88 4/1/2006 $54,739 $138,719 John A. Pazurek 8,000 8.7% $10.88 4/1/2006 $54,739 $138,719 David J. Lukas 8,000 8.7% $10.88 4/1/2006 $54,739 $138,719 John S. Wilson 6,000 6.5% $10.88 4/1/2006 $41,054 $104,040 All Optionees 91,662 100.0% $10.88 4/1/2006 $627,181 $1,589,409 All Shareholders(5) N/A N/A N/A N/A $91,234,672 $231,207,921 _____________________ (1) The options reflected in the table are nonqualified stock options under the Internal Revenue Code and were granted on April 1, 1996. The options granted to the named executive officers above vested immediately upon grant and must be exercised prior to 10 years after the date of grant. Additionally, during the Transitional Period, Messrs. Swendrowski, Hawk, Pazurek, Lukas and Wilson were granted nonqualified stock options to purchase 12,000, 6,000, 6,000, 6,000 and 6,000 Class A Shares, respectively, which represented 14.1%, 7.1%, 7.1%, 7.1% and 7.1% of total Transitional Period options granted, respectively. The exercise price per share and the expiration date of the Transitional Period options are $7.25 and 5/17/2005, respectively. The potential realizable values of the Transitional Period options granted to Messrs. Swendrowski, Hawk, Pazurek, Lukas and Wilson are $54,714, $27,357, $27,357, $27,357 and $27,357, respectively, at an assumed annual stock price appreciation rate of 5%, respectively, and $138,656, $69,328, $69,328, $69,328 and $69,328, respectively, at an assumed annual stock price appreciation rate of 10%. See footnote (4) below. (2) On April 1, 1996, the Committee made an extraordinary grant of stock options to certain executive officers, including Messrs. Swendrowski, Hawk and Pazurek. These extraordinary grants, which are not reflected in the table above, were made to compensate such executive officers for their voluntary agreement to limit the amount of tax offset bonuses associated with their prior receipt of certain stock options in 1987 and 1989. Because of the significant increase in the price of the Company's Class A Shares since the grant date of such options, and in particular since the summer of 1995, the Company would have been required by generally accepted accounting principles to recognize a significant accrued compensation expense and a resultant reduction in reported earnings if these tax offset bonuses would not have been voluntarily limited by these executive officers. As a result, Messrs. Swendrowski, Hawk and Pazurek received extraordinary stock option grants exercisable for 100,000, 40,000 and 24,000 Class A Shares, respectively, which represented 54.9%, 22.0% and 13.2% of total extraordinary options granted, respectively. The exercise price per share and the expiration date of the extraordinary options are $10.88 and 4/1/2006, respectively. The potential realizable values of the extraordinary options granted to Messrs. Swendrowski, Hawk and Pazurek are $684,237, $273,695 and $164,217, respectively, at an assumed annual stock price appreciation rate of 5% and are $1,733,992, $693,597 and $416,158, respectively, at an assumed annual price appreciation rate of 10%. See Footnote (4) below. (3) The exercise price of options may be paid in cash, by delivering previously issued Class A Shares or any combination thereof. (4) The potential realizable values set forth under the columns or referenced in the footnotes above represent the difference between the stated option exercise price and the market value of the Class A Shares based on certain assumed rates of stock price appreciation and assuming that the options are exercised on their stated expiration date; the potential realizable values set forth do not take into account applicable tax and expense payments which may be associated with such option exercises. Actual realizable value, if any, will be dependent on the future stock price of the Class A Shares on the actual date of exercise, which may be earlier than the stated expiration date. The 5% and 10% assumed rates of stock price appreciation over the ten-year exercise period of the options used in the table above or referenced in the footnotes above are mandated by rules of the SEC and do not represent the Company's estimate or projection of the future price of the Class A Shares on any date. There can be no assurance that the stock price appreciation rates for the Class A Shares assumed for purposes of this table or referenced in the footnotes above will actually be achieved. (5) Represents corresponding gain to all shareholders on 13,333,874 aggregate Common Shares outstanding on April 1, 1996, calculated based on fair market value of Class A Shares on such date, the date on which the options included in the table were granted.
The following table sets forth certain information with respect to the named executive officers concerning their unexercised stock options held as of the end of fiscal 1996. No options were exercised by the named executive officers in fiscal 1996 or during the Transitional Period. Aggregated Option 1996 Fiscal Year-End Value Table Number of Shares Value of Unexercised Underlying Options In-the-Money Options at End of Fiscal 1996(1) at End of Fiscal 1996(2) Name Exercisable Unexercisable Exercisable Unexercisable John Swendrowski 344,000 --- $ 3,819,520 --- Robert E. Hawk 142,000 --- $ 1,578,660 --- John A. Pazurek 96,000 --- $ 1,052,880 --- David J. Lukas 48,000 4,000 $ 521,660 $50,000 John S. Wilson 24,000 --- $ 211,920 --- All Optionees 988,692 80,462 $11,303,692 $781,516 __________________________ (1) The options reflected in the table are nonqualified stock options under the Internal Revenue Code. The exercise price of each option granted was equal to 100% of the fair market value (last bid price) of the Class A Shares on the date prior to the date of grant. The options granted to Messrs. Swendrowski, Hawk and Wilson vested immediately upon grant and must be exercised prior to 10 years after the date of grant and are currently exercisable. Messrs. Pazurek and Lukas have received some options which vest immediately and others which vest over time. All of Mr. Pazurek's options are now vested. All of Mr. Lukas' option will become fully vested in April 1997. (2) The dollar values were calculated by determining the difference between the fair market value of the underlying Class A Shares and the various applicable exercise prices of the named executive officers' outstanding options at the end of fiscal 1996. The last reported sale price of the Company's Class A Shares on the Nasdaq National Market on August 30, 1996 was $18.00 per share. Director Compensation Commencing in fiscal 1997, directors who are not also Company employees will receive an annual retainer fee of $12,000, together with $500 for each Board and committee meeting attended, and will also be entitled to receive an annual automatic grant of nonqualified stock options under the Company's 1995 Stock Option Plan. Committee chairmen receive an additional $250 for attending each meeting of their committee. Directors who are also Company employees receive no additional compensation for their services as directors. All directors are entitled to reimbursement for their transportation, lodging and meal expenses incurred in attending meetings. Commencing in fiscal 1997, option grants to non-employee directors occur automatically on each August 31 and will be exercisable for 1,000 Class A Shares at an exercise price equal to 100% of the fair market value of the Class A Shares on the date of such grant. Options granted to non-employee directors vest in full one year after the grant date with respect to all shares covered thereby; provided, however, that, if the non-employee director ceases to be a director of the Company by reason of death, disability, or retirement after attaining age 65, prior to the date the option becomes exercisable, the option shall then become immediately exercisable in full. Prior to fiscal 1997, non- employee directors' option grants covered the number of Class A Shares equal to each non-employee director's fees earned as a director of the Company for the fiscal year in which such options were granted divided by the fair market value of the Class A Shares on the date before the grant date. In fiscal 1996, Messrs. Seramur, Brennan, Jones and Kaminski were automatically granted options under the 1995 Stock Option Plan at an exercise price of $17.75 per share to acquire 690, 648, 648 and 676 Class A Shares, respectively. Change in Control Arrangements The Company has a severance agreement with John Swendrowski which provides that, following a "change in control" of the Company (as defined in the severance agreement), Mr. Swendrowski will be employed for three years in the same position, performing equivalent duties, and at the same location as in effect immediately prior to the change of control. During the employment period, Mr. Swendrowski is entitled to receive a salary based upon his compensation rate in effect at the date of change of control (subject to increase) and to be included in the Company's benefit plans available to other key employees. If during the employment period (i) Mr. Swendrowski's employment is terminated by the Company, other than for "cause" (as defined in the severance agreement) or his disability or (ii) his duties are changed substantially without his written consent and Mr. Swendrowski terminates his employment as a result, then he will be entitled to receive a lump sum severance payment equal to three times his average base salary over the five years prior thereto, plus the other benefits due under the agreement. STOCK PERFORMANCE INFORMATION Set forth below is a line graph comparing the annual percentage change during the last five fiscal years (assuming for this purpose that each such fiscal year ended on August 31 in order to allow for a more meaningful comparison) in the Company's cumulative total shareholder return on the Class A Shares, compared to the cumulative total return of companies included within the Nasdaq Total Return Index and companies in a peer group selected in good faith by the Company. The companies comprising the peer group index include: Alico, Inc., Chalone Wine Group, LTD., J & J Snack Foods Corp., Mauna Loa Macadamia Nut Corp., Orange-Co., Inc., John B. Sanfilippo & Son, Inc., Seneca Foods Corp., Stokely USA, Inc., Sylvan Food Holdings, Inc. and Todhunter International, Inc. The shareholder returns of each of these companies have been weighted based on each such company's relative market capitalization as of the beginning of each period. COMPARISON OF FIVE-YEAR TOTAL SHAREHOLDER RETURNS (on a dividend reinvested basis) [STOCK PERFORMANCE GRAPH]
08/31/91 08/31/92 08/31/93 08/31/94 08/31/95 08/31/96 Northland Cranberries, Inc. $100 $159 $233 $260 $203 $508 Peer Group Index $100 $ 89 $ 95 $ 88 $ 86 $ 83 Nasdaq Total Return Index $100 $109 $143 $149 $201 $226
AUTHORIZED SHARES AMENDMENT General The Board has unanimously approved and recommends that the shareholders approve the Authorized Shares Amendment which would increase the number of authorized Class A Shares from 20,000,000 to 60,000,000 and the number of authorized Class B Shares from 2,000,000 to 4,000,000. The provisions of Article 4 of the Company's Articles of Incorporation, as proposed to be amended by the Authorized Shares Amendment, are set forth in Appendix A to this Proxy Statement. Approval of the Authorized Shares Amendment is desired by the Board to ensure that a sufficient number of authorized Class A Shares are readily available for issuance by the Company if appropriate corporate opportunities or purposes should arise. As of the Record Date, out of the 20,000,000 Class A Shares presently authorized, only approximately 3,961,910 are available for subsequent issuance and are not otherwise reserved for specific purposes. By approving an increase in the available authorized number of Common Shares at the Meeting in advance of any specific need, the Board believes that the Company will be able to avoid the delay and expense of obtaining shareholder approval for a similar amendment at a later shareholder meeting in response to a specific need. On September 3, 1996, the Company effected a two-for-one stock split in the form of a 100% stock dividend, thereby doubling the number of Class A Shares issued and outstanding. In addition, as of the Record Date, approximately 1,609,602 Class A Shares were reserved for issuance pursuant to existing or potential stock options under the Company's current stock option plans, an additional 50,000 Class A Shares are reserved for distribution pursuant to the Company's 401(k) savings plan which became effective January 1, 1996; and 830,986 Class A Shares remain reserved for issuance under the Company's July 22, 1996 shelf registration statement originally covering up to 1,000,000 Class A Shares which may be issued by the Company from time to time in connection with completing potential future acquisitions of other businesses or properties. Of the 2,000,000 Class B Shares presently authorized, 636,202 were issued and outstanding as of the Record Date. Each Class B Share is convertible at the election of the holder thereof into one Class A Share. Accordingly, 636,202 Class A Shares are currently reserved in the event of the conversion of all issued and outstanding Class B Shares. As of the Record Date, and except as outlined above, the Board has not approved any transactions which would require the issuance of additional Common Shares, nor as of the Record Date were there any understandings, agreements, plans or commitments legally obligating the Company to issue additional Shares (although the Company frequently engages in discussions to acquire other cranberry marshes, consideration for which potential acquisitions often involves the potential issuance of additional Class A Shares). The proposed increase in the number of authorized Common Shares effected by the Authorized Shares Amendment is intended to allow the Company flexibility to issue additional Common Shares for, among other purposes, possible future stock splits and stock dividends, issuances from time to time in connection with the acquisition of other companies or product lines, possible future employee stock option or benefit plans, other financing requirements or other general corporate purposes. If the Authorized Shares Amendment is not approved, the Company could not effect another two-for-one stock split as it did in September 1996. The proposed increase in the number of Class B Shares is intended to allow the issuance of additional Class B Shares in connection with the stock splits and stock dividends to maintain proportionality with a concurrent increased number of Class A Shares. If the increase in authorized Common Shares is approved, additional Class A Shares could be issued without further shareholder action (unless otherwise required in connection with certain statutory mergers and share exchanges or as may be required by policies of the stock market or exchange on which the Company's securities are then traded) at such time or times and for such consideration as the Board in its discretion determines. However, the Company may not issue any additional Class B Shares, other than pursuant to stock dividends and stock splits as described above, without the approval of a majority of the votes represented by the outstanding Common Shares voting together as a single class. Because the Company's Articles of Incorporation do not provide preemptive rights, shareholders will not have a preferential right to subscribe for their proportionate share of any new issue of Class A Shares unless so provided by the Board. Issuance of any of the proposed Class A Shares, other than as a pro rata distribution to existing shareholders, will dilute the proportionate voting power of existing shareholders. Potential Anti-Takeover Effects The Company does not view the Authorized Shares Amendment as part of any "anti-takeover" strategy. The Authorized Shares Amendment is not being advanced as the result of any known effort by any party to accumulate Class A Shares or to obtain control of the Company. Issuing additional Class A Shares could, nonetheless, impede or defeat a non- negotiated acquisition of the Company by diluting the ownership interests of a substantial shareholder and thereby increasing the total amount of consideration necessary for a person to obtain control of the Company or increasing the voting power of friendly third parties. The aggregate voting power of the Company's Common Shares controlled by the Company's directors and officers in the aggregate could also preclude, or make it more difficult to effect, an acquisition of the Company which is not on terms acceptable to the Company's Board of Directors and management. Additionally, the foregoing could also have the effect of enhancing the ability of the Board and management to maintain their positions with the Company. Certain other provisions of the Company's Articles of Incorporation and By-Laws (as well as certain provisions of Wisconsin corporate law) also have or may have an anti-takeover effect. These provisions in the Company's Articles of Incorporation and By-Laws include but are not limited to: (a) the Board's ability, without shareholder approval, to issue shares of preferred stock upon such terms and conditions as it may determine; (b) the three votes per Class B Share; and (c) By-Law requirements governing the nomination of directors, the calling of special shareholder meetings and the raising of matters for consideration at shareholder meetings. Vote Required The affirmative vote of the holders of a majority of the votes represented by the Common Shares represented and voted at the Meeting, voting together as a single class, is required to approve the Authorized Shares Amendment. Any Common Shares not voted at the Meeting, whether due to abstentions, broker non-votes or otherwise, will have no impact regarding the proposal to approve the Authorized Shares Amendment. THE BOARD UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE AUTHORIZED SHARES AMENDMENT. COMMON SHARES REPRESENTED AT THE MEETING BY EXECUTED BUT UNMARKED PROXIES WILL BE VOTED "FOR" THE AUTHORIZED SHARES AMENDMENT. CERTAIN TRANSACTIONS Mr. Swendrowski is a general partner in Cranberry Hills Partnership, a Wisconsin general partnership ("Cranberry Hills"). In fiscal 1996, the Company accrued $64,079 in payment obligations to Cranberry Hills in consideration for certain lease rights and a right of first refusal assigned to the Company. The Company believes the terms of the foregoing transactions are no less favorable to the Company than could have been obtained from an unaffiliated third party. Section 16(a) Beneficial Ownership Reporting Compliance Section 16(a) of the Securities Exchange Act of 1934 requires the Company's executive officers and directors, and persons who beneficially own more than 10% of the Company's Common Shares, to file initial reports of ownership and reports of changes in ownership with the SEC. Executive officers, directors and greater than 10% beneficial owners are required by SEC regulations to furnish the Company with copies of all Section 16(a) forms they file. To the Company's knowledge, based solely on a review of the copies of such reports furnished to the Company or written representations from the Company's executive officers, directors and greater than 10% beneficial owners, other than as set forth below, such persons complied with all Section 16(a) filing requirements in fiscal 1996. However, in the Transitional Period, John S. Wilson, Vice President-East Coast, did not timely file one Form 4 covering one transaction for his purchase of 200 Class A Shares. OTHER MATTERS The Board has reappointed Deloitte & Touche LLP to serve as the Company's independent auditors for fiscal 1997. Representatives of Deloitte & Touche LLP are expected to be present at the Meeting and will have an opportunity to make a statement if they desire to do so. They will also be available to respond to appropriate questions. The election of directors and approval of the Authorized Shares Amendment are the only matters known to the Board which will be presented for shareholder consideration at the Meeting. For other business to be properly brought before the Meeting by a shareholder, such shareholder must give written notice of such proposed business complying with the Company's By-laws to the Secretary of the Company not less than 30 days in advance of the Meeting. If any other business or matters should properly come before the Meeting, the proxies named in the accompanying proxy will vote on such business or matters in accordance with their best judgment. The cost of soliciting proxies will be borne by the Company. The Company expects to solicit proxies primarily by mail. Proxies may also be solicited personally and by telephone by certain officers and regular employees of the Company. It is not anticipated that anyone will be specially engaged to solicit proxies or that special compensation will be paid for that purpose. The Company will reimburse brokers and other nominees for their reasonable expenses in communicating with the persons for whom they hold Class A Shares. UPON THE WRITTEN REQUEST OF ANY COMPANY SHAREHOLDER, ADDRESSED TO THE SECRETARY OF THE COMPANY, 800 FIRST AVENUE SOUTH, P. O. BOX 8020, WISCONSIN RAPIDS, WISCONSIN 54495-8020, THE COMPANY WILL PROVIDE TO SUCH SHAREHOLDER WITHOUT CHARGE A COPY OF ITS FISCAL 1996 ANNUAL REPORT ON FORM 10-K (WITHOUT EXHIBITS) AS FILED WITH THE SEC. Any shareholder proposal intended for consideration at next year's annual meeting of shareholders must be received by the Company no later than July 30, 1997 in order to be considered for inclusion in the Company's Proxy Statement and proxy for that meeting. A shareholder that otherwise intends to present business at the Company's 1998 annual meeting of shareholders must comply with the requirements set forth in the Company's By-laws, as described above. NORTHLAND CRANBERRIES, INC. [PRINTER TO INSERT SIGNATURE] David J. Lukas Vice President Administration, Corporate Counsel and Secretary Wisconsin Rapids, Wisconsin November 27, 1996 APPENDIX A Proposed Amendment to the Articles of Incorporation Increasing the Number of Authorized Class A and Class B Shares The proposed additions to the first sentence of Article 4 of the Company's current Articles of Incorporation that would be effected if the Authorized Shares Amendment is approved are underlined and the proposed deletions have been indicated by overstriking: [EDGAR only: Additions set off between forward slashes and deletions are between brackets.] Article 4 The total number of shares of all classes of capital stock which the Corporation shall have authority to issue is /Sixty-Nine Million (69,000,000)/ [Twenty-Seven Million (27,000,000)] shares, consisting of: (i) /Sixty Million (60,000,000)/ [Twenty Million (20,000,000)] shares of a class designated as "Class A Common Stock," with a par value of one cent ($.01) per share; (ii) /Four Million (4,000,000)/ [Two Million (2,000,000)] shares of a class designated as "Class B Common Stock," with a par value of one cent ($.01) per share; and (iii) Five Million (5,000,000) shares of a class designated as "Preferred Stock," with a par value of one cent ($.01) per share. [WHITE] PRELIMINARY COPY NORTHLAND CRANBERRIES, INC. ANNUAL MEETING OF SHAREHOLDERS - JANUARY 8, 1997 P R O X Y FOR CLASS A COMMON STOCK PLEASE MARK, The undersigned hereby appoints John Swendrowski and LeRoy J. SIGN, DATE Miles, and each or either of them, as proxies, each with the AND RETURN power to appoint his substitute, and hereby authorizes each THIS PROXY or either of them to represent and to vote, as designated CARD below, all the shares of Class A Common Stock of Northland IMMEDIATELY Cranberries, Inc., held of record by the undersigned on USING THE November 25, 1996 at the annual meeting of shareholders ENCLOSED scheduled to be held on January 8, 1997 and at any ENVELOPE adjournment thereof. PLEASE DO 1. Election of Directors. NOT FOLD [_] FOR all seven nominees [_] WITHHOLD AUTHORITY listed below (except to vote for all as marked to the contrary seven nominees below) listed below THIS PROXY IS PATRICK F. BRENNAN, ROBERT E. HAWK, JEFFREY J. JONES, JEROLD SOLICITED ON D. KAMINSKI, LEROY J. MILES, JOHN C. SERAMUR AND JOHN BEHALF OF THE SWENDROWSKI BOARD OF DIRECTORS (INSTRUCTION: To withhold authority to vote for any individual nominee, write that nominee's name on the space provided below.) 2. Approval of the proposed amendment to the Articles of Incorporation to increase the number of authorized shares of Class A Common Stock, $.01 par value, from 20,000,000 to 60,000,000, and to increase the number of authorized shares of Class B Common Stock, $.01 par value, from 2,000,000 to 4,000,000. [_] FOR [_] AGAINST [_] ABSTAIN (continued on reverse side) (continued from reverse side) 3. In their discretion, upon such other business as may properly come before the meeting and at any adjournment thereof. The undersigned acknowledges receipt of the Notice of the Annual Meeting, the Proxy Statement and the 1996 Annual Report to Shareholders and hereby revokes any other proxy heretofore executed by the undersigned for such meeting. This proxy when properly executed will be voted in the manner directed herein by the undersigned shareholder. If no direction is made, this proxy will be voted FOR the seven director nominees indicated above, FOR Item 2 and on such other business as may properly come before the meeting in accordance with the best judgment of the proxies named herein. Dated: , 199__ Signature(s) of Shareholder(s) PLEASE SIGN EXACTLY AS YOUR NAME APPEARS HEREON. When shares are held by joint tenants, both should sign. When signing as attorney, executor, administrator, trustee or guardian, please give your full title as such. If a corporation, please sign in full corporate name by the president or other authorized officer. If a partnership, please sign in partnership name by authorized person. [WHITE] PRELIMINARY COPY NORTHLAND CRANBERRIES, INC. ANNUAL MEETING OF SHAREHOLDERS - JANUARY 8, 1997 P R O X Y FOR CLASS B COMMON STOCK PLEASE MARK, The undersigned hereby appoints John Swendrowski and LeRoy SIGN, DATE AND J. Miles, and each or either of them, as proxies, each with RETURN THIS the power to appoint his substitute, and hereby authorizes PROXY CARD each or either of them to represent and to vote, as IMMEDIATELY designated below, all the shares of Class B Common Stock USING THE of Northland Cranberries, Inc., held of record by the ENCLOSED undersigned on November 25, 1996 at the annual meeting ENVELOPE of shareholders scheduled to be held on January 8, 1997 and at any adjournment thereof. PLEASE DO 1. Election of Directors. NOT FOLD [_] FOR all seven nominees [_] WITHHOLD AUTHORITY to listed below (except as vote for all seven marked to the contrary nominees listed below below) THIS PROXY IS PATRICK F. BRENNAN, ROBERT E. HAWK, JEFFREY J. JONES, SOLICITED ON JEROLD D. KAMINSKI, LEROY J. MILES, JOHN C. SERAMUR BEHALF OF THE AND JOHN SWENDROWSKI BOARD OF DIRECTORS (INSTRUCTION: To withhold authority to vote for any individual nominee, write that nominee's name on the space provided below.) 2. Approval of the proposed amendment to the Articles of Incorporation to increase the number of authorized shares of Class A Common Stock, $.01 par value, from 20,000,000 to 60,000,000, and to increase the number of authorized shares of Class B Common Stock, $.01 par value, from 2,000,000 to 4,000,000. [_] FOR [_] AGAINST [_] ABSTAIN (continued on reverse side) (continued from reverse side) 3. In their discretion, upon such other business as may properly come before the meeting and at any adjournment thereof. The undersigned acknowledges receipt of the Notice of the Annual Meeting, the Proxy Statement and the 1996 Annual Report to Shareholders and hereby revokes any other proxy heretofore executed by the undersigned for such meeting. This proxy when properly executed will be voted in the manner directed herein by the undersigned shareholder. If no direction is made, this proxy will be voted FOR the seven director nominees indicated above, FOR Item 2 and on such other business as may properly come before the meeting in accordance with the best judgment of the proxies named herein. Dated: , 199__ Signature(s) of Shareholder(s) PLEASE SIGN EXACTLY AS YOUR NAME APPEARS HEREON. When shares are held by joint tenants, both should sign. When signing as attorney, executor, administrator, trustee or guardian, please give your full title as such. If a corporation, please sign in full corporate name by the president or other authorized officer. If a partnership, please sign in partnership name by authorized person. -----END PRIVACY-ENHANCED MESSAGE-----