SunOpta Inc.: Exhibit 10.3 - Filed by newsfilecorp.com






Exhibit 10.3 

STOCK OPTION AWARD AGREEMENT 

This Stock Option Award Agreement (this “Agreement”) is
entered into as of February 6, 2017 (the “Award Date”) by and between
SunOpta Inc., a Canadian corporation (the “Company”), and David Colo (the
“Optionee”). 

The Company and the Optionee agree as follows: 

1. Grant. The Company hereby grants to the Optionee an
option to purchase 473,940 common shares of the Company on the terms and
conditions as set forth herein (the “Options”). The Options will not be
treated as Incentive Stock Options as defined in Section 422 of the Internal
Revenue Code of 1986, as amended, and are therefore Non-Statutory Stock Options.
The Options are not, and shall not be deemed to be, granted under or subject to
the Company’s Amended 2013 Stock Incentive Plan or any other plan. The Options
are granted pursuant to the terms of the Executive Employment Agreement dated
February 2, 2017 between the Company and the Optionee (the “Employment
Agreement”) and in the event of any inconsistency between this Agreement and
the Employment Agreement as to timing of vesting or any other provision, the
terms of the Employment Agreement shall control and apply. 

2. Exercise Price. The exercise price of the Option is
$7.00 per share (the “Exercise Price”). 

3. Performance Conditions; Vesting. Vesting of the
Options is subject to (a) satisfaction of the performance conditions as set
forth in this Section 3 and (b) the Optionee’s continued employment during the
entire Performance Period (as defined below), except as otherwise provided in
Section 6 or the Employment Agreement. Vesting of the Options, if vesting occurs
at all, is dependent on the common shares of the Company achieving a closing
trading price of at least US$11.00, US$14.00 and US$18.00 in each case for 20
consecutive trading days (the “Stock Price Hurdles”) during the
three-year period commencing on the Award Date (the “Performance
Period”), as provided herein; provided, however, that a Stock Price Hurdle
shall also be met if the Company’s Common Shares cease trading as a result of a
Change of Control (as defined in the Employment Agreement) transaction in which
holders of the Company’s Common Shares receive per-share consideration equal to
or greater than such Stock Price Hurdle. 

On the last day of the Performance Period, one-third of the
Options shall vest on the achievement of each of the three Stock Price Hurdles,
as follows, subject to Optionee’s employment during the entire Performance
Period: 


	Stock Price Hurdle 
	Number of Options That 
Will
      Vest 
	US$11.00 	157,980 = Incremental/Total 
	US$14.00 
	157,980 = Incremental; 
315,960 = Total
  









	US$18.00 
	157,980 = Incremental; 
473,940 = Total
  
	Total Vested 	473,940 



If none of the Stock Price Hurdles are met, none of the Options
will vest. If only the US$11.00 Stock Price Hurdle is met, only one-third of the
Options (i.e., as to 157,980 common shares of the Company) will vest. If the
US$11.00 and US$14.00 Stock Price Hurdles are met, only two-thirds of the
Options (i.e., as to 315,960 common shares of the Company) will vest. If all
three Stock Price Hurdles are met, all of the Options (i.e., as to all 473,940
common shares of the Company) will vest. 

4. Time of Exercise of Option. Except as provided in
Section 6, the Options may not be exercised, in whole or in part, before the
completion of the Performance Period. Until they expire or are terminated as
provided in Sections 6 or 11, the Options may be exercised with respect to
vested Options from time to time after the completion of the Performance Period
to purchase whole shares.

5. Expiration Date. The Options shall expire on February
6, 2027 unless earlier terminated pursuant to the provisions hereof (the
“Expiration Date”). On the last day of the Performance Period, any
Options that have not become vested under the Stock Price Hurdles vesting
requirements pursuant to Section 3 shall be forfeited and cancelled.

6. Termination of Employment. 

     6.1 General Rule.
Except as provided in this Section 6 or the Employment Agreement, the Options
may not be exercised unless at the time of exercise the Optionee is employed by
the Company and shall have been so employed continuously from the Award Date
through the end of the Performance Period. For purposes of this Agreement, the
Optionee is considered to be employed by the Company if the Optionee is employed
by the Company or any parent or subsidiary of the Company (an
“Employer”). 

     6.2 Termination Generally.
If the Optionee’s employment by the Company terminates for any reason other than
as provided in Sections 6.3, 6.4 or 6.5 below, the Options may be exercised at
any time before the Expiration Date or the expiration of 30 days after the date
of termination, whichever is the shorter period, but only if and to the extent
the Optionee was entitled to exercise the Option at the date of termination, and
all unvested Options shall be forfeited and canceled. 

     6.3 Total Disability. If
the Optionee’s employment with the Company is terminated at any time because of
Total Disability (as defined in the Employment Agreement), the Options may be
exercised at any time before the Expiration Date or the expiration of 60 days
after the date of termination, whichever is the shorter period, but only if, and
to the extent, the Optionee was entitled to exercise the Option at the date of
termination, including any Options that became vested in accordance with Section
5.5 of the Employment Agreement, and all unvested Options shall be forfeited and
canceled.

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     6.4 Death. If the
Optionee’s employment with the Company is terminated at any time because of
death, the Options may be exercised at any time before the Expiration Date or
the expiration of 60 days after the date of termination, whichever is the
shorter period, but only if, and to the extent, the Optionee was entitled to
exercise the Option at the date of termination, including any Options that
became vested in accordance with Section 5.4 of the Employment Agreement, and
only by the Optionee’s personal representative or the person or persons to whom
the Optionee’s rights under the Options shall pass by the Optionee’s will or by
the laws of descent and distribution of the state or country of domicile at the
time of death. All unvested Options shall be forfeited and canceled.

     6.5 Termination without Cause
or for Good Reason. If the Optionee’s employment by the Company is
terminated by the Company without Cause or by the Optionee for Good Reason at
any time prior to the end of the Performance Period, Section 5.3 of the
Employment Agreement shall govern the treatment of the Options. Options that
became vested pursuant to Section 5.3 of the Employment Agreement may be
exercised at any time before the Expiration Date or the expiration of 45 days
after the employment termination date, whichever is the shorter period. If a
Release is not executed by the Optionee in accordance with the Employment
Agreement or any other applicable provision of the Employment Agreement is not
complied with by the Optionee, the Options shall be treated in accordance with
Section 6.2. For the purposes of this Agreement, “Cause,” “Good Reason” and
“Release” shall have the meanings set forth in the Employment Agreement.

     6.6 Failure to Exercise
Options. To the extent that following termination of employment, the Options
are not exercised within the applicable periods described above (or the
Employment Agreement, if applicable), all further rights to purchase shares
pursuant to the Options shall cease and terminate. 

7. Leave of Absence. Absence on leave approved by the
Employer or on account of illness or disability shall not be deemed a
termination or interruption of employment. Vesting of the Options shall continue
during a medical, family or military leave of absence, whether paid or unpaid,
and vesting of the Options shall be suspended during any other unpaid leave of
absence. 

8. Method of Exercise of Option; Tax Withholding. The
Options may be exercised by notice from the Optionee to the Company through the
Company’s third-party administrator, which is currently Solium Shareworks, of
the Optionee’s binding commitment to purchase shares, specifying the number of
shares the Optionee desires to purchase under the Options, which may not be more
than 30 days after delivery of the notice, and, if required to comply with the
Securities Act of 1933, containing a representation that it is the Optionee’s
intention to acquire the shares for investment and not with a view to
distribution. On or before the date specified for completion of the purchase,
the Optionee must pay the Company the full purchase price of those shares in
cash or by certified check, or in whole or in part in common shares of the
Company valued at fair market value. The fair market value of common shares
provided in payment of the purchase price shall be the closing price of the
common shares last reported on Nasdaq before the time payment in common shares
are made or, if earlier, committed to be made, if the Common Stock is publicly
traded, or another value of the common shares as specified by the Company. No
shares shall be issued until full payment for the shares has been made,
including all amounts owed for tax withholding. The Optionee shall,
immediately upon notification of the amount due, if any, pay to the Company in
cash or by certified check amounts necessary to satisfy any applicable federal,
state and local tax withholding requirements. If additional withholding is or
becomes required beyond any amount deposited before delivery of the electronic
transfer of the shares, the Optionee shall pay such amount to the Company, in
cash or by certified check, on demand. If the Optionee fails to pay the amount
demanded, the Company or the Employer may withhold that amount from other
amounts payable to the Optionee, including salary, subject to applicable
law.

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9. Nontransferability. Except as provided in this
Section 9 the Options are nonassignable and nontransferable by the Optionee ,
either voluntarily or by operation of law, and during the Optionee’s lifetime,
the Options are exercisable only by the Optionee. The Options may be transferred
by will or by the laws of descent and distribution of the state or country of
the Optionee’s domicile at the time of death. 

10. Stock Splits, Stock Dividends. If the outstanding
common shares of the Company are hereafter increased or decreased or changed
into or exchanged for a different number or kind of shares or other securities
of the Company by reason of any stock split, combination of shares, dividend
payable in shares, recapitalization or reclassification, appropriate adjustment
shall be made by the Company in (i) the number and kind of shares subject to the
Options, or the unexercised portion thereof, and (ii) the Exercise Price per
share, so that the Optionee’s proportionate interest before and after the
occurrence of the event is maintained. Notwithstanding the foregoing, the
Company shall have no obligation to effect any adjustment that would or might
result in the issuance of fractional shares, and any fractional shares resulting
from any adjustment may be disregarded or provided for in any manner determined
by the Company. Any such adjustments made by the Company shall be conclusive.


11. Mergers, Etc. If, while any Options are outstanding,
there shall occur a merger, consolidation, amalgamation, plan of exchange or
other transaction, in each case involving the Company pursuant to which
outstanding shares are converted into cash or other stock, securities or
property (each, a “Transaction”), (i) all outstanding Options as to which
the applicable Stock Price Hurdle vesting requirement set forth in Section 3 has
not been satisfied as of the closing of the Transaction shall be forfeited and
cancelled and (ii) the Board of Directors, may, in its sole discretion, provide
that the remaining outstanding Options shall be treated in accordance with any
of the following alternatives:

      (i) The remaining Options shall be converted into
options to purchase stock of the surviving or acquiring corporation in the
Transaction, which Options may not be exercised, in whole or in part, before the
completion of the Performance Period (unless otherwise accelerated as determined
by the Board of Directors in its sole discretion) and shall be subject to
continued employment of the Optionee by the Company or any acquiring or
surviving company through such vesting date, for a total purchase price equal to
the total price applicable to the unexercised portion of the Options, and with
the amount and type of shares subject thereto and exercise price per share
thereof to be conclusively determined by the Board of Directors, taking into
account the relative values of the companies involved in the Transaction and the
exchange rate, if any, used in determining shares of the surviving corporation
to be held by holders of common shares of the Company following the Transaction in accordance with
Treas. Reg. § 1.409A -1(b)(5)(v)(D), and disregarding fractional shares; 

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     (ii) The remaining Options shall be
cancelled effective immediately prior to the consummation of the Transaction,
and, in full consideration of the cancellation, the Company or any acquiring or
surviving company shall pay to the Optionee upon the completion of the
Performance Period (unless otherwise accelerated by the terms of the Employment
Agreement or as determined by the Board of Directors in its sole discretion),
subject to continued employment of the Optionee by the Company or any acquiring
or surviving company through such date, an amount in cash, for each share
subject to the Options, equal to the excess of (A) the value, as determined by
the Board of Directors, of the property (including cash and securities) received
by the holder of a common share of the Company as a result of the transaction
over (B) the Exercise Price; or 

     (iii) The remaining Options shall
become exercisable for 100 percent of the shares subject to the Options
effective as of the consummation of the Transaction, and the Board of Directors
shall approve some arrangement by which the Optionee shall have a reasonable
opportunity to exercise all such Options effective as of the consummation of the
Transaction or otherwise realize the value of the Options, as determined by the
Board of Directors. Any Options that are not exercised in accordance with
procedures approved by the Board of Directors shall terminate.

     (iv) In the event the Board of
Directors opts that the remaining outstanding Options shall be treated in
accordance with (i) above, then the surviving or acquiring corporation in the
Transaction must agree to all relevant provisions of the Employment Agreement
pertaining to the Options. 

12. Conditions on Obligations. The Company shall not be
obligated to issue common shares upon exercise of the Options if the Company is
advised by its legal counsel that such issuance would violate applicable state
or federal laws, including securities laws. The Company will use its reasonable
best efforts to take steps required by state or federal law or applicable
regulations in connection with issuance of shares upon exercise of the
Options.

13. No Right to Employment. Nothing in this Agreement
shall (i) confer upon the Optionee any right to be continued in the employment
of an Employer or interfere in any way with the Employer’s right to terminate
the Optionee’s employment at will at any time, for any reason, with or without
cause, or to decrease the Optionee’s compensation or benefits, or (ii) confer
upon the Optionee any right to be retained or employed by the Employer or to the
continuation, extension, renewal or modification of any compensation, contract
or arrangement with or by the Employer.

14. Successors of Company. This Agreement shall be
binding upon and shall inure to the benefit of any successor of the Company but,
except as provided herein, the Option may not be assigned or otherwise
transferred by the Optionee.

15. Rights as a Shareholder. The Optionee shall have no
rights as a shareholder with respect to any shares of Common Stock until the
date the Optionee becomes the holder or record of those shares. No adjustment shall be made for dividends or other
rights for which the record date occurs before the date the Optionee becomes the
holder of record. 

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16. Amendments. The Company may at any time amend this
Agreement if the amendment does not adversely affect the Optionee and no
amendment that does adversely affect the Optionee shall be valid or binding.
Otherwise, this Agreement may not be amended without the written consent of the
Optionee and the Company. 

17. Governing Law; Jurisdiction and Venue. This
Agreement will be interpreted under the laws of the state of Minnesota,
exclusive of choice of law rules. Any action or proceeding by either of the
parties to enforce this Agreement shall be brought only in a state or federal
court located in the state of Minnesota. 

18. Complete Agreement. This Agreement and the
Employment Agreement constitute the entire agreements between the Optionee and
the Company, both oral and written concerning the matters addressed herein, and
all prior agreements or representations concerning the matters addressed herein,
whether written or oral, express or implied, are terminated and of no further
effect. 

19. Electronic Delivery of Prospectus. The Optionee
consents to the electronic delivery of any prospectus and related documents
relating to the Options in lieu of mailing or other form of delivery. 

	SUNOPTA INC. 	OPTIONEE: 
	  	  
	  	  
	By: /s/ R. Dean Hollis 	/s/ David J. Colo 
	Title: Chair 	David Colo 
		  


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