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 September 3, 2019 between SunOpta Inc., a Canadian corporation (the
“Company”), and Scott Huckins (the “Recipient”). 

            On
September 3, 2019 (the “Award Date”) the Company’s 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 August
30, 2019 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 346,638
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 through the date
the applicable PSUs vest as described in Section 2 (a “Vesting Event”).


2.       
Performance Conditions. 

            2.1       
The vesting of 173,319 of the PSUs, if vesting occurs at all, is dependent on
the Common Shares achieving a volume weighted average trading price set forth
below in each case for 20 consecutive trading days (the “Stock Price
Hurdles”) during the period commencing on the Award Date and ending on
December 31, 2022 (the “Performance Period”) as provided herein;
provided, however, that a Stock Price Hurdle shall also be met with respect to
any previously unmet hurdles 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 with a value equal to or greater than such Stock Price Hurdle.


            During
the Performance Period, except as otherwise provided in Section 2.3 below in the
event of a Change of Control (as defined in the Employment Agreement), PSUs
shall vest on the achievement of each of the three Stock Price Hurdles (with
each hurdle only being able to be achieved once for purposes of vesting), as
follows, subject to Recipient’s continued employment through the date a given
Stock Price Hurdle is achieved:






	Stock Price Hurdle 
	Number of PSUs 
That Will
      Vest 
	US$5.00 
	50% of target shares = 
57,773 
	US$9.00 
	100% of target shares = 
115,546 
	US$14.00 
	150% of target shares = 
173,319 shares
  
	Total Vested Shares 	173,319 



            The
Stock Price Hurdles will be subject to appropriate adjustment in the event of
any share dividend, share split, combination or other similar recapitalization
or any other event described in Section 6.1. If none of the Stock Price Hurdles
are met, none of the PSUs dependent on Stock Price Hurdles will vest. If only
the US$5.00 Stock Price Hurdle is met, only 57,773 PSUs dependent upon Stock
Price Hurdles will vest. If the US$5.00 and US$9.00 Stock Price Hurdles are met,
115,546 PSUs dependent upon Stock Price Hurdles will vest. If all three Stock
Price Hurdles are met, 173,319 PSUs will vest. The maximum aggregate number of
PSUs that can vest under the Stock Price Hurdles is 173,319. Except as otherwise
provided in Section 3, all vested PSUs shall be settled by the Company within 60
days of the date they vest, subject to continued employment through the
applicable date of vesting, and all unvested PSUs shall be forfeited and
cancelled. In the event of an unusual, extraordinary, non-recurring or similar
event as referred to in Section 2.2, the Board will consider, in its sole
discretion, making adjustments to the Stock Price Hurdles. 

            2.2       
The vesting of 173,319 of the PSUs, if vesting occurs at all, is dependent on
the Company achieving annual Adjusted EBITDA during fiscal years 2019 through
2022 (the “EBITDA Hurdles”) as provided herein. 

            During
the Performance Period, except as otherwise provided in Section 2.3 below in the
event of a Change of Control (as defined in the Employment Agreement), PSUs
dependent upon EBITDA Hurdles shall vest at the end of the fiscal year in which
each of the three EBITDA Hurdles is achieved (with each hurdle only being able
to be achieved once for purposes of vesting), as follows, subject to Recipient’s
continued employment through the end of the fiscal year in which the applicable
EBITDA Hurdle is achieved:


	EBITDA Hurdle 
	Number of PSUs
      
That Will Vest 
	US$80,000,000 	50% of EBITDA Target Shares =
      57,773 
	US$110,000,000 	100% of EBITDA Target Shares =
      115,546 
	US$140,000,000 	150% of EBITDA Target Shares =
      173,319 
	Total Vested Shares 	173,319




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            If
none of the EBITDA Hurdles are met, none of the PSUs dependent upon EBITDA
Hurdles will vest. If only the US$80,000,000 EBITDA Hurdle is met, only 57,773
PSUs dependent upon EBITDA Hurdles will vest. If the US$80,000,000 and
US$110,000,000 EBITDA Hurdles are met, 115,546 PSUs dependent upon EBITDA
Hurdles will vest. If all three EBITDA Hurdles are met, 173,319 PSUs will vest.
Except as otherwise provided in Section 3, all vested PSUs shall be settled by
the Company within 90 days following the delivery to the Company and acceptance
by the Board of Directors of the Company’s audited financial statements for each
fiscal year during the Performance Period in which a EBITDA Hurdle is achieved,
subject to continued employment through the end of the fiscal year in which the
applicable EBITDA Hurdle is achieved, and all unvested PSUs shall be forfeited
and cancelled. 

            “Adjusted
EBITDA” for a given fiscal year will be calculated in the same manner, using the
same adjustments, as adjusted EBITDA is publicly reported by the Company in its
Form 10-K for such fiscal year and will be based on the Company’s audited
financial statements. If the Company ceases reporting adjusted EBITDA in its
Form 10-K, then adjusted EBITDA will be calculated in the same manner, using the
same adjustments, as calculated in the most recent Form 10-K containing adjusted
EBITDA. Notwithstanding the foregoing, adjustments to Adjusted EBITDA may be
made by the Board of Directors, at its sole discretion, in the event of the
occurrence of unusual, extraordinary, non-recurring or other circumstances that,
in the judgment of the Board of Directors, would cause the application of the
existing performance goals or measures to fail to fairly reflect the performance
of the Company. These circumstances may include acquisitions, divestitures,
joint ventures, regulatory developments, tax law changes, accounting changes,
restructuring or other special charges, and other occurrences. 

            2.3       
In the event of a Change of Control (as defined in the Employment Agreement),
unvested PSUs as of the date of the Change of Control will be interpolated as
follows: if the actual performance of the performance conditions described above
as of the end of the fiscal year immediately prior to the Change of Control date
is between (a) first and second vesting levels, or (b) second and third vesting
levels for the applicable Stock Price Hurdle or EBITDA Hurdle, the number of
earned PSUs shall be equal to the product of: (i) the number of PSUs subject to
the performance requirement; and (ii) the actual performance achievement,
determined using straight line interpolation between the first vesting level and
the second vesting level (or second vesting level and third vesting level, as
applicable) rounded down to a whole number, less any PSUs previously earned
based on achievement of a lower vesting level. Except as otherwise provided in
Section 3, all vested PSUs shall be settled by the Company within 60 days of the
date they vest, subject to continued employment through the applicable date of
vesting, 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 continuously from the Award Date until
the Vesting Event applicable to the underlying PSUs, 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”). 

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            3.2       
Total Disability. If Recipient’s employment with the Company is
terminated at any time prior to a Vesting Event 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), 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 a Vesting Event because of death, any PSUs that are vested as of
the Termination Date (as defined in the Employment Agreement), shall be settled
in accordance with the terms of this Agreement. 

            3.4       
Other Terminations. If Recipient’s employment by the Company is
terminated at any time prior to a Vesting Event and neither Section 3.2 nor
Section 3.3 applies to such termination, Recipient shall not be entitled to
receive any shares under this Agreement that have not vested prior to the date
of termination. 

4.       
Payment. As soon as practicable following a Vesting
Event, 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 Vesting Event.
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
either Section 3.2 or 3.3 requires an earlier award payout, a similar process
shall be followed in accordance with the timing identified therein. 

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.


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            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. 


            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 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 (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 the Performance Period, 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, and the performance measures adjusted to reflect the circumstances of the Company or any acquiring or surviving corporation as conclusively determined by the Board of
Directors;


                         (b)        The remaining PSUs shall be cancelled effective immediately prior to the consummation of the Transaction, and, in full consideration of the cancellation, the surviving corporation shall pay to Recipient ), with
payment subject to continued employment of Recipient by the Company or any acquiring or surviving corporation through the Performance Period (unless otherwise accelerated pursuant to Section 3 or the terms of the
Employment Agreement), an amount in cash, for each remaining PSU assuming
vesting at the 100% level, equal to the value, as determined by the Board of
Directors, of the common shares subject to the unvested PSUs at the time of the
closing of the Transaction, 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


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                          (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. 

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

7.       
Section 409A. The awards granted pursuant to this
Agreement are 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. 

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            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/ Jeff Gough 	/s/ Scott Huckins 
	Name: Jeff Gough 	Scott Huckins 
	Title: CHRO 	  


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