Document:

Exhibit 10.1

 

WAIVER, CONSENT AND FOURTH AMENDMENT

to

Loan and security agreement

 

This
WAIVER, CONSENT AND FOURTH Amendment to Loan and Security Agreement (this “Agreement”) is entered
into this 30th day of October, 2020, by and between SILICON VALLEY BANK, a California corporation (“Bank”),
and LIVONGO HEALTH, INC., a Delaware corporation (“Borrower”).

 

Recitals

 

A.           
Bank and Borrower have entered into that certain Loan and Security Agreement dated as of July 12, 2019, as amended by that
certain First Amendment to Loan and Security Agreement dated as of October 2, 2019 by and between Bank and Borrower, as further
amended by that certain Second Amendment to Loan and Security Agreement dated as of June 1, 2020 by and between Bank and Borrower,
and as further amended by that certain Third Amendment to Loan and Security Agreement dated as of June 1, 2020 by and between Bank
and Borrower (as the same may from time to time be further amended, modified, supplemented or restated, the “Loan Agreement”).

 

B.            
Bank has extended credit to Borrower for the purposes permitted in the Loan Agreement.

 

C.             Borrower
has advised Bank that it has entered into that certain Agreement and Plan of Merger dated as of August 5, 2020 (the
 “Merger Agreement”), by and among Borrower, Teladoc Health, Inc., a Delaware corporation (the
 “Teladoc”) and Tempranillo Merger Sub, Inc., a Delaware corporation (the “Merger Sub”)
and a wholly-owned subsidiary of Teladoc, pursuant to which upon the Closing (as defined in the Merger Agreement), among
other things, (i) the Merger (as defined in the Merger Agreement, the “Merger”) shall be consummated,
whereby Merger Sub shall merge with and into the Borrower, with Borrower being the surviving corporation and following which
Borrower shall become a wholly-owned Subsidiary of Teladoc, (ii) the Special Dividend (as defined in the Merger
Agreement) shall have been declared, and (iii) the other Transactions (as defined in the Merger Agreement) to be
consummated at such time shall be consummated, in each case, upon the terms and subject to the conditions set forth in the
Merger Agreement (collectively, the “Merger Transactions”).

 

D.           
Borrower acknowledges that the consummation of the Merger Transactions without the Bank’s prior written consent thereto
would result in Borrower being in default of some or all of Sections 7.1, 7.2, 7.3, and/or 7.7 (the “Anticipated
Default”).

 

E.            
Borrower has requested that Bank (a) waive the Anticipated Default, (b) consent to the Merger Transactions, and
(c) amend the Loan Agreement to make certain other revisions to the Loan Agreement as more fully set forth herein.

 

F.            
Although Bank is under no obligation to do so, Bank is willing to (i) waive the Anticipated Default, (ii) consent
to the Merger Transactions, and (iii) make certain modifications to the Loan Agreement as more fully set forth herein, but
only to the extent and in accordance with the terms and subject to the conditions described below and in reliance upon the representations
and warranties set forth below.

 

     

     

    

 

Agreement

 

Now,
Therefore, in consideration of the foregoing recitals and other good and valuable consideration, the receipt and adequacy
of which is hereby acknowledged, and intending to be legally bound, the parties hereto agree as follows:

 

1.             
Definitions. Capitalized terms used but not defined in this Agreement, including its preamble and recitals, shall have
the meanings given to them in the Loan Agreement.

 

2.             
Reaffirmation of Obligations. Borrower (a) ratifies, confirms, and reaffirms the Obligations and (b) acknowledges
and agrees that (i) the Loan Agreement and each of the other Loan Documents remain in full force and effect in accordance
with the original terms, except as expressly modified hereby and (ii) the Loan Agreement and the other Loan Documents shall
continue to secure all Obligations as stated therein.

 

3.             
Reaffirmation of Security Interest in the Collateral. Borrower acknowledges and agrees that (i) the security interests
and Liens in the Collateral granted by Borrower under the Loan Agreement and the other Loan Documents shall remain in place, unimpaired
by the transactions contemplated by this Agreement, and Bank’s priority with respect thereto shall not be affected hereby
or thereby and (ii) the Loan Agreement and the other Loan Documents shall continue to secure all Obligations as set forth
therein. Nothing in this Agreement is intended to impair or limit the validity, priority or extent of Bank’s security interests
in and Liens upon the Collateral.

 

4.             
Waiver of the Anticipated Default. Borrower acknowledges and agrees that unless the Anticipated Default is waived by
Bank, such Anticipated Default would constitute an Event of Default under the Loan Documents. Bank hereby waives the Anticipated
Default, subject to the satisfaction of each of the conditions precedent set forth in Section 11 of this Agreement. Bank’s
agreement to waive the Anticipated Default shall in no way obligate Bank to make any other modifications to the Loan Agreement
or to waive Borrower’s compliance with any other terms of the Loan Documents, and shall not limit or impair Bank’s
right to demand strict performance of all other terms and covenants as of any date. The waiver set forth above shall not be deemed
or otherwise construed to constitute a waiver of any other provision of this Agreement, the Loan Agreement or the other Loan Documents
in connection with any other transaction.

 

5.             
Consent to the Merger Transactions.

 

5.1              
Consent. Subject to satisfaction of the terms and conditions of this Agreement, Bank hereby (a)  consents to the
Merger Transactions and (b) agrees that the Merger Transactions shall not, in and of itself, constitute a breach of Sections 7.1,
7.2, 7.3 or 7.7 of the Loan Agreement. The consent set forth in this Section 5 shall not be deemed or otherwise construed
to constitute a consent or waiver of any provisions of the Loan Agreement or any other Loan Document in connection with any other
transaction.

 

5.2              
Notification after Consummation of Merger Transaction. Borrower hereby acknowledges and agrees that it shall notify
Bank in writing within two (2) Business Days of the consummation of the Merger Transactions (or of the Borrower having knowledge
that the Merger Transactions will not occur or be consummated), and Borrower shall provide Bank along with such notification of
the consummation of the Merger Transactions, all true, correct and complete copies of Borrower’s merger certificate, Borrower’s
most current Operating Documents after the consummation of the Merger Transaction, and any other documents or materials relating
to Borrower that are filed with the Secretary of State of Delaware or the SEC as a result of the consummation of the Merger Transaction.

 

    2

     

    

 

6.             
Amendment to Loan Agreement. 

 

6.1               Section
6.7 (Accounts).  Notwithstanding anything to the contrary in Section 6.7 of the Loan Agreement, solely for the
period commencing on October 30, 2020 and continuing through and including November 4, 2020, the aggregate balance of cash
and Cash Equivalents in Borrower’s and all of its Subsidiaries’ (including Domestic Subsidiaries and Foreign
Subsidiaries) operating and deposit accounts with Bank and Bank’s Affiliates may be less than Sixty Million
Dollars ($60,000,000).

 

7.            
Limitation of Waiver, Consent and Amendments.

 

7.1              
The waiver, consent and amendments set forth in Section 4, 5 and 6 above, respectively, are effective for the purposes
set forth herein and shall be limited precisely as written and shall not be deemed to (a) be a consent to any amendment, waiver
or modification of any other term or condition of any Loan Document, or (b) otherwise prejudice any right or remedy which
Bank may now have or may have in the future under or in connection with any Loan Document.

 

7.2              
This Agreement shall be construed in connection with and as part of the Loan Documents, and all terms, conditions, representations,
warranties, covenants and agreements set forth in the Loan Documents, except as herein amended, are hereby ratified and confirmed
and shall remain in full force and effect.

 

7.3              
In addition to those Events of Default specifically enumerated in the Loan Documents, the failure to comply with the
terms of any covenant or agreement contained herein shall constitute an Event of Default and shall entitle the Bank to exercise
all rights and remedies provided to the Bank under the terms of any of the other Loan Documents as a result of the occurrence of
the same.

 

8.            
Representations and Warranties. To induce Bank to enter into this Agreement, Borrower hereby represents and warrants
to Bank as follows:

 

8.1              
Attached hereto as EXHIBIT A are true, correct and complete copies of the Merger Agreement and all documents
attached as exhibits, schedules or annexes to the Merger Agreement, and all amendments, waivers and supplements to the foregoing
through the date hereof (collectively, the “Merger Transaction Documents”). As of the date hereof, the Merger
Transaction Documents attached hereto have not been modified, changed, supplemented, canceled, amended or otherwise altered or
affected. The Merger Transactions and the transactions contemplated by the Merger Transaction Documents will be effected, closed
and consummated pursuant to, and in accordance with, the terms and conditions of the Merger Transaction Documents and with all
applicable laws;

 

    3

     

    

 

8.2              
Immediately after giving effect to this Agreement (a) the representations and warranties contained in the Loan
Documents are true, accurate and complete in all material respects as of the date hereof (except to the extent such representations
and warranties relate to an earlier date, in which case they are true and correct in all material respects as of such earlier date),
and (b) no Event of Default has occurred and is continuing;

 

8.3              
Borrower has the power and authority to execute and deliver this Agreement and to perform its obligations under the
Loan Agreement, as amended by this Agreement;

 

8.4              
The organizational documents of Borrower previously delivered to Bank remain true, accurate and complete and have not
been amended, supplemented or restated and are and continue to be in full force and effect;

 

8.5              
The execution and delivery by Borrower of this Agreement and the performance by Borrower of its obligations under the
Loan Agreement, as amended by this Agreement, have been duly authorized;

 

8.6              
The execution and delivery by Borrower of this Agreement and the performance by Borrower of its obligations under the
Loan Agreement, as amended by this Agreement, do not and will not contravene (a) any law or regulation binding on or affecting
Borrower, (b) any contractual restriction with a Person binding on Borrower, (c) any order, judgment or decree of any
court or other governmental or public body or authority, or subdivision thereof, binding on Borrower, or (d) the organizational
documents of Borrower;

 

8.7              
The execution and delivery by Borrower of this Agreement and the performance by Borrower of its obligations under the
Loan Agreement, as amended by this Agreement, do not require any order, consent, approval, license, authorization or validation
of, or filing, recording or registration with, or exemption by any governmental or public body or authority, or subdivision thereof,
binding on Borrower, except as already has been obtained or made; and

 

8.8              
This Agreement has been duly executed and delivered by Borrower and is the binding obligation of Borrower, enforceable
against Borrower in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization,
liquidation, moratorium or other similar laws of general application and equitable principles relating to or affecting creditors’
rights.

 

9.            
Integration. This Agreement and the Loan Documents represent the entire agreement about this subject matter and supersede
prior negotiations or agreements. All prior agreements, understandings, representations, warranties, and negotiations between the
parties about the subject matter of this Agreement and the Loan Documents merge into this Agreement and the Loan Documents.

 

10.         
Counterparts. This Agreement may be executed in any number of counterparts and all of such counterparts taken together
shall be deemed to constitute one and the same instrument.

 

    

     

    

 

11.         
Conditions to Effectiveness. This Agreement shall be deemed effective upon (a) the due execution and delivery to
Bank of this Agreement by each party hereto, (b) Bank’s receipt of the Merger Transaction Documents, and (c) payment of Bank’s legal fees and expenses in connection
with the negotiation and preparation of this Agreement and review of the Merger Transaction Documents.

 

12.          
Miscellaneous.

 

12.1          
This Agreement shall constitute a Loan Document under the Loan Agreement; the failure to comply with the covenants contained
herein shall constitute an Event of Default under the Loan Agreement; and all obligations included in this Agreement (including,
without limitation, all obligations for the payment of principal, interest, fees, and other amounts and expenses) shall constitute
obligations under the Loan Agreement and secured by the Collateral.

 

12.2          
Each provision of this Agreement is severable from every other provision in determining the enforceability of any provision.

 

13.          
Governing Law. This Agreement and the rights and obligations of the parties hereto shall be governed by and construed
in accordance with the laws of the State of California.

 

[Signature page follows.]

 

    7

     

    

 

In
Witness Whereof, the parties hereto have caused this Agreement to be duly executed and delivered as of the date first
written above.

 

	BANK:	 	BORROWER:
	 	 	 
	 	 	 
	SILICON VALLEY BANK 	 	LIVONGO HEALTH, INC.
	 	 	 
	By:	/s/ Mark Davis	 	By:
    	/s/ Lee Shapiro        
	Name:
    	Mark Davis	 	Name:
    	Lee Shapiro
	Title:	Vice President	 	Title:
    	Chief Financial Officer

 

[Signature
Page to Waiver, Consent and Fourth Amendment to Loan and Security Agreement]

 

     

     

    

 

EXHIBIT A

 

Merger Transaction Documents

 

[See attached]

 

    Exhibit ASunOpta Inc.: Exhibit 10.1 - Filed by newsfilecorp.com

    

    

    2020 

    Short Term Incentive Plan 

    

    

    2020 SHORT TERM INCENTIVE PLAN

    The following are the terms of the SunOpta Inc. (the "Company") 2020 Short Term Incentive Plan (the "STIP" or "Plan") for certain employees of the Company and its subsidiaries and affiliates. References to the "Company" shall be deemed to refer instead to a subsidiary or affiliate as the context requires for a particular employee, employed by such subsidiary or affiliate.

    1. Purpose.

    The purpose of the STIP is to establish goal alignment across the Company and recognize individual impact on organizational performance. The STIP is designed to focus employees on desired behaviors and link the short-term incentive with demonstrated results.

    2. Eligibility.

    Participation of the Company's employees in the STIP will be determined by the Company in its sole discretion, and employment by the Company does not automatically entitle an employee to participate. Eligibility for the STIP is limited to regular full-time employees of the Company and its subsidiaries and affiliates who are part of the office job grade structure as determined by the Company (collectively, the "Employees" or "Participants"). Newly hired Employees who meet the criteria for participation are eligible to earn a pro-rated bonus based on their date of hire through the end of the applicable fiscal year, except that employees hired after October 31st of fiscal year 2020 will not be eligible to participate in the STIP until the following fiscal year.

    For 2020, the STIP program will consist of three different plans:  a CPG plan, a C-Suite plan, and a Tradin plan (as further described in Section 5).  The results of the CPG and Tradin plans are independent of each other.  The results of the C-Suite plan are based on the combined financial performance of the CPG and Tradin business units.  The results for all plans are based on the tables provided in Section 5.

    Participants in the CPG plan will be assigned into one of two groups.  Participants with a job grade of 17-25 will be assigned to an equity group that will be granted Performance Share Units (PSUs) in April of 2020, with a 1-year vesting period.  The percentage of shares that vest will be determined by 2020 CPG Adjusted EBITDA, noted in the payout tables below.  Participants in job grades 11-16 will be assigned to a cash group.  The cash group will receive their STIP payout (if earned) via a cash payment made through payroll, in April of 2021.  For the Tradin plan, all Tradin Employees will be eligible for quarterly cash payouts as part of the 2020 Plan and based on achievement in the payout tables below. All C-Suite Participants will be granted PSUs for the C-suite plan, and the shares will vest in April 2021, depending on Company Adjusted EBITDA for the fiscal year 2020.  For all plans, Participants must be employed at the time of the bonus payout or share vesting to receive it, except as provided in Section 11 or as otherwise required by law.

    

    3. Target Bonus.

    The Company will assign to each Participant a target bonus expressed as a percentage of the Participant's earnings during the fiscal year as calculated by the Company. For this purpose, earnings refer to the base salary for exempt Employees. For non-exempt Employees earnings are W-2 earnings paid during the year. In the event an Employee experiences a change in position or target percentage during the year, a manual prorated calculation will be administered. The target bonus percentage varies by level of responsibility within the Company. The Human Resources Department maintains the list of Participants and their target bonus percentages. Target bonus percentages for executive officers and other Participants who are members of the "Senior Leadership Team" as identified by the Compensation Committee of the Company's Board of Directors (the "Compensation Committee") will be established by the Compensation Committee. For cash Participants, the target bonus for each Participant (the "Target Bonus") is determined by multiplying the Employee's earnings during the fiscal year by the target bonus percentage.  For equity Participants, the Target Bonus for each Participant is determined by multiplying the Employee's base salary as of the beginning of the fiscal year by the target bonus percentage.  For Equity Participants who receive a STIP target change during the year, due to promotion or other reasoning, their Performance Shares will be pro-rated to account for the change in target.  Similarly, Cash Participants who receive a STIP target change during the year, due to promotion or other reasoning, will have their STIP payout pro-rated based on the time worked while at each STIP target.

    For the CPG and C-Suite plans, an Employees' target bonus payment is comprised of 2 main components. The first component, or corporate component, is dependent on CPG or Company Adjusted EBITDA and is 50% of the target bonus.  An Employee may earn up to 200% payout with regards to the corporate component. The second component, or individual component is dependent on the achievement of the Employee's defined performance objectives for the 2020 year and is 50% of the target bonus. Based on his/her/their individual performance, an Employee may receive anywhere between 0-100% of the individual component payout.  The individual component payout cannot exceed the individual component.  Additionally, if the Employee is recognized as a top performer by the Senior Leadership Team, the Employee may receive a discretionary amount that can bring his/her/their total payout to a maximum of 200% of target.  For the Tradin plan, an Employees' target bonus payment is comprised of 2 main components. The first component, or corporate component, is dependent on Tradin Adjusted EBITDA and is 75% of the target bonus.  An Employee may earn up to 200% payout with regards to the corporate component. The second component, or individual component is dependent on the achievement of the Employee's defined performance objectives for the 2020 year and is 25% of the target bonus.  25% of the quarterly target is carried over to the end of the year, and the Employee will earn the payout if he/she/they achieve the individual performance metric, as determined by management, and the HR department.

    4. Minimum Thresholds and Modifications.

    (a) Minimum Thresholds.  For fiscal 2020, notwithstanding any provision in the Plan, no bonuses (annual or quarterly) will be paid for the respective plan if:

    

    (1) For the CPG plan, Gross CPG Adjusted EBITDA for the 2020 fiscal year is less than $44.98M USD

    (2) For the C-Suite plan, Gross Company Adjusted EBITDA for the 2020 fiscal year is less than 69.80M USD

    (3) For the Tradin plan, no quarterly payment will be paid if quarterly Tradin Adjusted EBITDA is less than:

    a. Q1 - €6.42M

    b. Q2 - €6.73M

    c. Q3 - €6.07M

    d. Q4 - €7.04M

    (b) Modification of Bonus Amounts.

    (1) Modifications due to Bonus Pool.  The STIP is funded through the creation of a bonus pool established by the Compensation Committee based on the Company's performance, and the Company may reduce any bonus payouts under the Plan proportionally in the event the total bonus calculations under the Plan of the Company exceed the bonus pool.  Furthermore, if the total bonus calculations under the Plan are less than the bonus pool, the surplus shall, in the judgment of the Board of Directors, be retained by the Company in full or in part or allocated in a manner determined by the Board of Directors, which may include disproportionate allocations to some Participants in the discretion of the Board of Directors.  In the event of a surplus, the Compensation Committee, with respect to Participants who are members of the Senior Leadership Team, and the Plan Administrator, with respect to other Participants, shall make recommendations to the Board of Directors with respect to bonus payments from the surplus, and the Board of Directors shall make all determinations with respect to any payments from the surplus.     

    5. Performance Targets; Payout.

    For Participants who support multiple business units or provide general Company support as determined by the Company (the "C-Suite Plan"), payouts under the STIP will be based on the level of achievement of Company Adjusted EBITDA determined in accordance with Section 5(a). The annual bonus amount paid under the STIP to a C-Suite plan Participant shall be equal to the Participant's Target Bonus multiplied by the Company Adjusted EBITDA Payout Factor, all as calculated in accordance with (including definitions set forth in) this Section 5 and subject to any adjustment pursuant to the terms of the Plan.

    For Participants who support the CPG business unit as determined by the Company (the "CPG Plan") payouts under the STIP will be based on the level of achievement of Company Adjusted EBITDA in accordance with Section 5(b). 

    (a) Company Adjusted EBITDA. The "Company Adjusted EBITDA Payout Factor" shall be determined under the table below based on Company Adjusted EBITDA for the fiscal year as a percentage of Company Adjusted EBITDA as set forth in the base budget approved by the Board of Directors for the fiscal year:

    

    	
                Company Adjusted 
EBITDA

            	
                Corporate Component

                Payout Factor

            
	
                less than 69.80M

            	
                0%

            
	
                69.80M

            	
                50%

            
	
                76.26M

            	
                75%

            
	
                $82.72M

            	
                100%

            

    If Company Adjusted EBITDA is between any two adjacent data points set forth in the first column of the above table, the Company Adjusted EBITDA Payout Factor shall be determined by interpolation between the corresponding data points in the second column of the table as follows: the difference between Company Adjusted EBITDA and the next lower data point in the first column shall be divided by the difference between the next higher data point and the next lower data point in the first column, the resulting fraction shall be multiplied by the difference between the two corresponding data points in the second column of the table, and the resulting product shall be added to the lower corresponding data point in the second column of the table, with the resulting sum being the Company Adjusted EBITDA Payout Factor.

    "Company Adjusted EBITDA" for a fiscal year shall be operating income plus depreciation, amortization and stock-based compensation, as calculated by the Company based on the Company's audited financials and consistent with the Company's calculation of Adjusted EBITDA as a non-GAAP financial measure reported to its shareholders, subject to adjustment in accordance with this Section 5(a). Adjustments to Adjusted EBITDA may be made by the Board of Directors 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.

    (b) CPG and Tradin Adjusted EBITDA.  The CPG Adjusted EBITDA Performance Payout Factor shall be determined under the applicable table below based on CPG Adjusted EBITDA for the fiscal year.  The Tradin Adjusted EBITDA Performance Payout Factor shall be determined by the quarterly Tradin adjusted EBITDA targets below.  The payout factor is paid out if the target is achieved.  If the target is not achieved, no quarterly payout is made.

    CPG Adjusted EBITDA:

    	
                CPG Adjusted

                EBITDA

            	
                CPG Adjusted EBITDA

                Payout Factor

            
	
                less than 44.98M

            	
                0%

            
	
                44.98M

            	
                50%

            
	
                49.14M

            	
                75%

            
	
                53.3M

            	
                100%

            

    

    

    Tradin Adjusted EBITDA:

    	
                2020 Fiscal Period

            	
                Tradin Adjusted 
EBITDA

                Payout Target

            
	
                Q1

            	
                €6.419M

            
	
                Q2

            	
                €6.732M

            
	
                Q3

            	
                €6.070M

            
	
                Q4

            	
                €7.042M

            
	
                 

            

    For the CPG plan, the table listed is a sample of potential results. The corporate component payout percentage can range anywhere from 50-200% based on CPG Adjusted EBITDA.

    For the Tradin plan, the table listed is a summary of the quarterly Tradin Adjusted EBITDA targets, which must be obtained for a payout to occur.

    "Adjusted EBITDA" for each of the business units equals operating income (excluding management fees for all purposes of the calculation) plus depreciation, amortization and stock based compensation, as calculated by the Company based on audited financials and consistent with the Company's calculation of EBITDA as a non-GAAP financial measure reported to its shareholders, subject to adjustment in accordance with this Section 5(b).  Adjustments to the Adjusted EBITDA may be made by the Board of Directors 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 business unit. These circumstances may include acquisitions, divestitures, joint ventures, regulatory developments, tax law changes, accounting changes, restructuring or other special charges, and other occurrences.

    In addition to the corporate component adjusted EBITDA metric, STIP payout is dependent upon an individual component.  A Participant can receive 0-100% of this component based on the achievement of the Participant's established goals for the year, as well as his/her/their overall individual performance.  The individual component payout cannot exceed the corporate component payout.  Together, the components cannot exceed a payout of more than 150% of a Participant's target payout. 

    A Participant can receive an additional, discretionary amount, if the Participant is determined to be a top performer by the Senior Leadership Team.  If the Participant receives the discretionary portion, the total payout of the Participant's bonus cannot exceed 200% of the Participant's target.  For equity Participants, the maximum payout would be 100% vesting of the PSUs and a 100% of target cash payout. 

    

    6. Determination of Achievement of Performance Targets.

    Following completion of the Company's audited financial statements, the Compensation Committee will review the level of achievement of Company Adjusted EBITDA, the Company Adjusted EBITDA Payout Factor, Business Unit Adjusted EBITDA and Business Unit Adjusted EBITDA Payout Factor for CPG.  The Tradin financial statements will be reviewed quarterly for their quarterly payout.  The Board of Directors shall make the final determination of all bonus payments.

    7. Payment Date.

    The payment of annual bonuses, or in the case of Tradin, quarterly bonuses, under the STIP will be made in cash (net of withholding) on a date selected by the Company after the Company's financial statement audits are completed (each a "Payment Date") to Participants who remain employed by the Company on the Payment Date, except as provided in Section 11(a) or as otherwise required by law.  The payment of quarterly bonuses under the Tradin plan are made after the release of the Company's quarterly financial statements.  Employees must be employed at the time of the bonus payout in order to receive the payout.  The vesting of the Performance Shares for Participants on the equity plan will occur 1 year after the grant date of the award, except for equity awards granted in June 2020 will vest in April 2020.  SunOpta will withhold Performance Shares at vesting to cover any taxes due, and Employees will be able to sell or held the net shares at their discretion.

    8. Administration and Interpretations of the STIP.

    The STIP shall be administered by the Company's Chief Executive Officer (the "Plan Administrator") except to the extent that the STIP provides that certain actions shall be taken by the Compensation Committee.  The Compensation Committee shall have full authority to interpret the STIP. The STIP may be amended in whole or in part from time to time, or terminated in its entirety at any time, by the Compensation Committee.

    9. New Hires; Promotions; Leaves of Absence.

    An individual who is hired into a position that participates in the STIP may be eligible for a bonus award provided that (a) he or she has been employed full-time since October 31 of that fiscal year as provided in Section 2 and (b) any annual bonus will reflect earnings during the portion of the fiscal year the Participant was employed.  Unless otherwise adjusted by the Plan Administrator or, in the case of the Company's executive officers and other members of the Senior Leadership Team, by the Compensation Committee, mid-year promotions that change a Participant's Target Bonus will be weighted based on the number of days at each Target Bonus level.  Except as required by law, if a Participant is on an approved leave of absence, no annual bonus will be paid to the Participant unless and until the Participant returns to work and any annual bonus will be reduced to reflect a prorated amount by multiplying the annual bonus that would otherwise be paid by a ratio with the numerator equal to the number of dates in the fiscal year the Participant was employed and not on leave and the denominator equal to 365. 

    

    10. Transfers.

    Unless otherwise adjusted by the Plan Administrator or, in the case of the Company's executive officers and other members of the Senior Leadership Team, by the Compensation Committee, a Participant who transfers his/her/their employment within the Company from a position that is not eligible to participate in the STIP to a position that is eligible to participate in the STIP (or vice versa) shall have his/her/their bonus calculated under the STIP based on the time spent in the STIP eligible position, and the Participant's bonus will be based on the STIP full year performance, prorated based upon the period the Participant was employed in the STIP eligible position.

    11. Termination of Employment. 

    (a) Death or Disability.  For a Participant whose employment is terminated due to death or Total Disability, the Participant shall be paid his/her/their bonus based on the Participant's earnings during the portion of the year the Participant was employed.  In the event of death, the payment will be made to the Participant's designated beneficiary or estate. Such bonus payment shall be made on the Payment Date for the Plan year in which the death or disability occurs. The term "Total Disability" means a mental or physical impairment which is expected to result in death or which has lasted or is expected to last for a continuous period of 12 months or more and which causes the Participant to be unable, in the opinion of the Company, to perform his/her/their duties as an employee or officer of the Company.  Total Disability shall be deemed to have occurred on the first day after the Company has made a determination of Total Disability.  For equity Participants, the Participant shall not be entitled to receive any shares with respect to any PSUs as to which the applicable EBITDA hurdle vesting requirements have not been satisfied as of the employment termination date.  Once the STIP components have been confirmed to have met the applicable performance metrics, share vesting will occur.

    (b) Other Terminations. Except as expressly provided in Section 11(a) and as otherwise required by law, termination of employment by a Participant or termination of a Participant's employment by the Company for any reason or no reason shall result in no bonus payment for the fiscal year in which such termination occurs and, if such termination occurs before the Payment Date for the prior plan year, forfeiture of any bonus for such year.

    12. Clawback. 

    Notwithstanding any provision in the Plan to the contrary, all compensation paid to a Participant pursuant to the Plan is subject to recovery under the Company's clawback policy or any law, government regulation or stock exchange listing requirement and will be subject to such deductions and clawback as may be made pursuant to such policy, law, government regulation, or stock exchange listing requirement, all as determined by the Compensation Committee.  The Company's current clawback policy is subject to revision by the Compensation Committee at any time and from time to time.

    

    13. General Provisions.

    (a) Withholding of Taxes; 409A. The Company shall have the right to withhold the amount of taxes, which it determines is required to be withheld under law with respect to any amount payable under this STIP.  For US employees, each bonus under the STIP is intended to be treated as a short-term deferral for purposes of Section 409A of the United States Internal Revenue Code of 1986, as amended, and the STIP shall be interpreted in a manner consistent with such intent.  For employees with vesting Performance Shares, the Company shall withhold shares from each Participant to cover the income tax due at the time of the share vesting.

    (b) No Prior Right or Offer. Except and until expressly granted pursuant to the STIP, nothing in this STIP shall be deemed to give any Employee any contractual or other right to participate in the benefits of the STIP. No award to any such Participant in any Plan period shall be deemed to create a right to receive any award or to participate in the benefits of the STIP in any subsequent year.

    14. Limitations.

    (a) No Continued Employment. Neither the establishment of the STIP nor the grant of an award hereunder shall be deemed to constitute an express or implied contract of employment with any Participant for any period of time, or change an Employee's "at will" status, or in any way abridge the rights of the Company to determine the terms and conditions of employment or to terminate the employment of any Employee with or without cause, at any time.

    (b) Not Part of Other Benefits. The benefits provided in this STIP shall not be deemed a part of any other benefit provided by the Company to its employees. The Company assumes and shall have no obligation to Participants except as expressly provided in this STIP.

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