SunOpta Inc.: Exhibit 10.4 - Filed by newsfilecorp.com






Exhibit 10.4 

PERFORMANCE SHARE UNIT AWARD AGREEMENT 

     This Performance Share Unit Award
Agreement (the “Agreement”) is entered into as of February 6, 2017
between SunOpta Inc., a Canadian corporation (the “Company”), and David
Colo (the “Recipient”). 

     On February 6, 2017 (the
“Award Date”) the Company’s Board of Directors or the Compensation
Committee of the Board of Directors (the “Board”) authorized the grant of
performance share units to Recipient pursuant to the terms of this Agreement.
Recipient desires to accept the award subject to the terms and conditions of
this Agreement. This award is not, and shall not be deemed to be, granted under
or subject to the terms of the Company’s Amended 2013 Stock Incentive Plan or
any other plan. This award is granted pursuant to the terms of the Executive
Employment Agreement dated February 2, 2017 between the Company and Recipient
(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. 

     NOW, THEREFORE, the parties agree as
follows: 

     1. Award. The Company
grants to Recipient 277,780 performance share units (“PSUs”) with respect
to the Company’s common shares (“Common Shares”). Subject to the terms
and conditions of this Agreement and the Employment Agreement, the Company shall
issue to Recipient the number of Common Shares of the Company corresponding to
the number of PSUs determined under this Agreement based on (a) the performance
of the Company as described in Section 2 and (b) Recipient’s continued
employment as during the entire Performance Period (as defined below) pursuant
to Section 3.

     2. Performance Conditions.
The vesting of the PSUs, if vesting occurs at all, is dependent on the Common
Shares 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
PSUs shall vest on the achievement of each of the three Stock Price Hurdles, as
follows, subject to Recipient’s employment during the entire Performance Period:



	Stock Price Hurdle 
	Number of PSUs 
That Will
      Vest 
	US$11.00 	92,593 = Incremental/Total 
	US$14.00 
	92,593 = Incremental; 
185,186 = Total
  
	US$18.00 
	92,594 = Incremental; 
277,780 = Total
  
	Total Vested 	277,780 







If none of the Stock Price Hurdles are met, none of the PSUs
will vest. If only the US$11.00 Stock Price Hurdle is met, only one-third of the
PSUs (i.e., as to 92,593 PSUs) will vest. If the US$11.00 and US$14.00 Stock
Price Hurdles are met, only two-thirds of the PSUs (i.e., as to 185,186 PSUs)
will vest. If all three Stock Price Hurdles are met, all of the PSUs (i.e., as
to 277,780 PSUs) will vest. 

All vested PSUs shall be settled by the Company as soon as
reasonably practicable following the completion of the Performance Period,
subject to continued employment during the entire Performance Period pursuant to
Section 3, and all unvested PSUs shall be forfeited and cancelled. 

     3. Employment Condition. 

          3.1
Payout. In order to receive a payout of shares under this Agreement,
Recipient must be employed by the Company continuous from the Award Date until
the end of the Performance Period, except as provided in the Employment
Agreement or Sections 3.2, 3.3 or 3.4 below. For purposes of this Agreement,
Recipient is considered to be employed by the Company if Recipient is employed
by the Company or any parent or subsidiary of the Company (an
“Employer”). 

          3.2
Total Disability. If Recipient’s employment with the Company is
terminated at any time prior to the end of the Performance Period because of
Total Disability (as defined in the Employment Agreement), any PSUs that are
vested as of the Termination Date (as defined in the Employment Agreement),
including any PSUs that become vested in accordance with Section 5.5 of the
Employment Agreement, shall be settled in accordance with the terms of this
Agreement.

          3.3
Death. If Recipient’s employment with the Company is terminated at any
time prior to the end of the Performance Period because of death, any PSUs that
are vested as of the Termination Date including any PSUs that become vested in
accordance with Section 5.4 of the Employment Agreement, shall be settled in
accordance with the terms of this Agreement.

          3.4
Termination without Cause or for Good Reason. If Recipient’s employment
by the Company is terminated by the Company without Cause or by Recipient for
Good Reason at any time prior to the end of the Performance Period, the PSUs
shall be treated in accordance with Section 5.3 of the Employment Agreement. If
a Release is not executed by Recipient in accordance with the Employment
Agreement or any other applicable provision of the Employment Agreement is not
complied with by Recipient, Recipient shall not be entitled to receive any
Common Shares that would become vested in accordance with Section 5.3 of the
Employment Agreement. For the purposes of this Agreement, “Cause” and “Good
Reason” shall have the meanings set forth in Employment Agreement. 

          3.5
Other Terminations. If Recipient’s employment by the Company is
terminated at any time prior to the end of the Performance Period and none of
Sections 3.2, 3.3 or 3.4 applies to such termination, Recipient shall not be
entitled to receive any shares under this Agreement. 

     4. Payment. As soon as
practicable following the end of the Performance Period, the Board shall
determine the number, if any, of Common Shares, issuable pursuant to this
Agreement. Subject to applicable tax withholding, such shares shall be issued to
Recipient as soon as practicable following the end of the Performance
Period. No fractional shares shall be issued and the number of shares
deliverable shall be rounded down to the nearest whole share, and any remaining
fractional shares shall be paid in cash. Notwithstanding anything hereinabove to
the contrary, if any of Section 3.2, 3.3 or 3.4 requires an earlier award
payout, a similar process shall be followed in accordance with the timing
identified therein. If Recipient is obligated to deliver a Release in accordance
with Section 3.4 and if Recipient’s Termination Date (as defined and determined
pursuant to the Employment Agreement) occurs during the last 40 days of the
calendar year, the payment shall in no event be made earlier than the first
business day of the succeeding calendar. 

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     5. Tax Withholding.

         
 5.1 Recipient acknowledges that on the date that shares underlying the
PSUs are issued to Recipient, the fair market value of the Common Shares will be
treated as ordinary compensation income for federal and state and provincial
income tax purposes and employment tax purposes, and that the Company will be
required to withhold taxes on these income amounts pursuant to Section 5.2
below.

           5.2
Prior to any relevant taxable or tax withholding event, as applicable, Recipient
agrees to make adequate arrangements satisfactory to the Company and/or the
Employer to satisfy all federal, state and other tax withholding obligations. In
this regard, Recipient authorizes the Company and/or the Employer, or their
respective agents, at their discretion, to satisfy applicable withholding
obligations by one or a combination of the following: (a) withholding from
Recipient’s or other cash compensation paid by the Company and/or the Employer;
or (b) withholding from proceeds of the sale of Common Shares acquired upon
vesting/settlement of the PSUs either through a voluntary sale or through a
mandatory sale arranged by the Company on Recipient’s behalf pursuant to this
authorization; or (c) withholding in Common Shares to be issued upon
vesting/settlement of the PSUs. 

          5.3 If
the withholding obligation is satisfied by withholding in Common Shares, for tax
purposes, Recipient is deemed to have been issued the full number of Common
Shares subject to the vested PSUs, notwithstanding that a number of the Common
Shares are held back solely for the purpose of paying the withholding. 

          5.4
Recipient agrees to pay to the Company or the Employer any amount the Company or
the Employer may be required to withhold or account for as a result of this
award that cannot be satisfied by the means previously described. The Company
may refuse to issue or deliver the shares or the proceeds of the sale of shares
if Recipient fails to comply with these obligations. 

     6. Stock Splits, Stock Dividend;
Mergers, Etc.

          6.1 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 the
number and kind of shares subject to the PSUs, so that Recipient’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. 

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          6.2
Mergers, Reorganizations, Etc. If, while any unvested PSUs are
outstanding, there shall occur a merger, consolidation, amalgamation or plan of
exchange, in each case involving the Company pursuant to which outstanding
Common Shares are converted into cash or other stock, securities or property
(each, a “Transaction”), (i) all outstanding PSUs as to which the
applicable Stock Price Hurdle vesting requirement set forth in Section 2 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 PSUs shall be treated in accordance with any of the following
alternatives: 

     (a) The remaining PSUs shall be
converted into restricted stock units to acquire stock of the surviving or
acquiring corporation in the Transaction upon 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 Recipient
by the Company or any acquiring or surviving company through such vesting date,
with the amount and type of shares subject thereto 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, and disregarding fractional
shares; 

     (b) The remaining PSUs shall be
cancelled effective immediately prior to the consummation of the Transaction,
and, in full consideration of the cancellation, pay to Recipient 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), with payment subject to continued employment of Recipient by
the Company or any acquiring or surviving company through such date), an amount
in cash, for each remaining PSU, equal to the value, as determined by the Board
of Directors, of the common shares subject to the unvested PSUs, 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
or other consideration paid in the Transaction to holders of common shares of
the Company; or 

     (c) The remaining PSUs shall become
vested in full and all unissued shares subject to the PSUs shall be issued
immediately prior to the consummation of the Transaction. 

     (d) In the event the Board of
Directors opts that the remaining PSUs 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 PSUs.


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     7. Section 409A. The award
granted pursuant to this Agreement is intended to be compliant with Section 409A
of the Internal Revenue Code (“Section 409A”) and shall be interpreted
consistent with such intent. Each of the Section 409A provisions of Section 7.3
of the Employment Agreement shall apply to the award. 

     8. No Right to Employment.
Nothing contained in this Agreement and the Employment Agreement shall confer
upon Recipient any right to be employed by the Company or to interfere in any
way with the right of the Company to terminate Recipient’s employment at any
time for any reason, with or without cause. 

     9. Miscellaneous. 

          9.1
Entire Agreement; Amendment. This Agreement and the Employment Agreement
constitute the entire agreements of the parties with regard to the subjects
hereof and may be amended only by written agreement between the Company and
Recipient. 

          9.2
Notices. Any notice required or permitted under this Agreement shall be
in writing and shall be deemed sufficient when delivered personally to the party
to whom it is addressed or when deposited into the United States or Canadian
mail as registered or certified mail, return receipt requested, postage prepaid,
addressed to the Company, Attention: General Counsel, at its principal executive
offices or to Recipient at the address of Recipient in the Company’s records, or
at such other address as such party may designate by ten (10) days’ advance
written notice to the other party. 

          9.3
Assignment; Rights and Benefits. Recipient shall not assign this
Agreement or any rights hereunder to any other party or parties without the
prior written consent of the Company. The rights and benefits of this Agreement
shall inure to the benefit of and be enforceable by the Company’s successors and
assigns and, subject to the foregoing restriction on assignment, be binding upon
Recipient’s heirs, executors, administrators, successors and assigns. 

          9.4
Further Action. The parties agree to execute such further instruments and
to take such further action as may reasonably be necessary to carry out the
intent of this Agreement. 

          9.5
Applicable Law. The terms and conditions of 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. 

          9.6
Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original. 

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


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