SunOpta Inc.: Exhibit 10.1 - Filed by newsfilecorp.com
Exhibit 10.1
EXECUTIVE EMPLOYMENT AGREEMENT
THIS AGREEMENT made as of
February 2, 2017 between David J. Colo (the "Executive") and SunOpta
Inc., a corporation existing under the laws of Canada (the "Company"):
AND WHEREAS effective as of
February 6, 2017 (the "Effective Date"), the Company wishes to employ the
Executive as the Chief Executive Officer of the Company pursuant to the terms
and conditions set forth in this Agreement and the Executive wishes to be
employed by the Company on such terms and conditions;
NOW, THEREFORE, in consideration
of the mutual covenants, promises and obligations set forth herein, the parties
agree as follows:
ARTICLE 1
TERM
The Executive's employment
hereunder shall be effective as of the Effective Date and, subject to Article 5,
shall be for an indefinite term ending on the Termination Date (the
"Employment Term").
ARTICLE 2
POSITION AND
DUTIES
2.1 Position.
The Executive shall serve as the
Chief Executive Officer of the Company, at all times reporting to the board of
directors of the Company (the "Board"). In such position, the Executive
shall have such duties, authority and responsibility as shall be determined from
time to time by the Board, which duties, authority and responsibility are
consistent with the Executive's position. The Executive shall be an officer of
the Company and serve as a director of the Company for no additional
compensation and, if requested, also serve as an officer or director of any
affiliate of the Company. The Company shall provide, at its cost, directors and
officers liability insurance coverage for the Executive with a coverage limit
that is consistent with what is provided to other officers and directors of the
Company.
2.2 Duties.
During the Employment Term, the
Executive shall devote his full business time and attention to the performance
of the Executive's duties hereunder and will not engage in any other business,
profession or occupation for compensation or otherwise. Notwithstanding the
foregoing, the Executive will be permitted to, with the prior written consent of
the Board, which consent will not be unreasonably withheld or delayed, act or
serve as a director, trustee or committee member of any type of business, civic
or charitable organization as long as such activities are disclosed in writing
to the Company in accordance with the Company's Code of Conduct, and do not
interfere with the performance of the Executive's duties and responsibilities to the Company. The Company hereby consents to the Executive
serving as a director of MGP Ingredients, Inc.
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In the event that a Change of
Control (as defined below) occurs such that the Executive is entitled to
payments pursuant to Section 5.6(a) below, the Executive shall, in addition to
his fulfilling his responsibilities described in Section 2.1 above, supervise
and manage such transition (“Transition Services”).
ARTICLE 3
PLACE OF
PERFORMANCE
The principal place of the
Executive's employment shall be the Company's U.S. head office currently located
in Edina, Minnesota; provided that, the Executive may be required to travel on
Company business during the Employment Term.
ARTICLE 4
COMPENSATION
4.1 Base Salary.
Commencing as of the Effective
Date, the Company shall pay the Executive an annual rate of base salary of at
least US$650,000, in periodic installments in accordance with the Company's
customary U.S. payroll practices, but no less frequently than monthly. The
Executive's base salary shall be reviewed annually by the Board and the Board
may, but shall not be required to, increase the base salary during the
Employment Term. The Executive's annual base salary, as in effect from time to
time, is hereinafter referred to as "Base Salary".
4.2 Annual Bonus.
(a) The Executive shall have the
opportunity to earn an annual bonus (the amount actually earned, the "Annual
Bonus") equal to at least 125% of Base Salary (the amount available to be
earned, the "Target Bonus"), based on the achievement of annual
performance goals established by the Board or the Compensation Committee of the
Board (the "Compensation Committee"). The Compensation Committee does not
have discretion to award the Executive an Annual Bonus that would result in the
payment to the Executive of an amount that is greater than 250% of Base Salary.
(b) Except as otherwise provided
in Article 5, (i) the Annual Bonus and Target Bonus will be subject to the terms
of the Company annual bonus plan under which it is granted, as such plan may be
adopted and revised prospectively from time to time by the Board or Compensation
Committee, and (ii) in order to be eligible to receive an Annual Bonus, the
Executive must be employed by the Company on the date that Annual Bonuses are
paid to other similarly situated executives of the Company. For this purpose,
the Executive's employment is deemed to cease on the Termination Date (as
defined in Section 5.7) .
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4.3 Equity Compensation.
(a) On the Effective Date, the
Executive shall be granted special one-time awards of (i) 50,000 restricted
stock units pursuant to and subject to the terms of the Restricted Stock Award
Agreement substantially in the form attached as Appendix A of this Agreement
(the "Special RSUs"), (ii) 473,940 stock options subject to the terms of
the Stock Option Award Agreement substantially in the form attached as Appendix
B of this Agreement (the "Special Options"), and (iii) 277,780
performance stock units subject to the terms of the Performance Share Unit Award
Agreement substantially in the form attached as Appendix C of this Agreement
(the "Special PSUs"). The Company shall issue an additional 50,000
Special RSUs promptly following the Executive’s purchase, after the Effective
Date, in the open market Common Shares of the Company with an aggregate value at
the time of purchase (disregarding any broker commissions or fees paid by the
Executive) of US$1,000,000 (the “Stock Purchase Condition”). All stock
purchases by the Executive shall be in accordance with the Company’s insider
trading policy. The Company shall have no obligation to issue the additional
50,000 Special RSUs if the Executive does not satisfy the Stock Purchase
Condition by the later of (a) March 17, 2017 or (b) the date that is the 10th
stock trading date after the Effective Date that the Executive was eligible to
purchase Common Shares under the Company’s insider trading policy.
(b) On the Effective Date, the
Company and the Executive shall execute the award agreements substantially in
the forms attached as Appendix A (with respect to 50,000 Special RSUs), B and C
(the “Special Award Agreements”), and with the exercise price of the
Special Options equal to the closing price of the common stock of the Company as
reported on Nasdaq on the Effective Date, or if there has been no sale on that
date, on the last preceding date on which a sale occurred. Promptly following
satisfaction of the Stock Purchase Condition, the Company and the Executive
shall execute the Special Award Agreement substantially in the form attached as
Appendix A with respect to 50,000 Special RSUs and with the same vesting
schedule applicable to the initial grant of 50,000 Special RSUs.
Any future restricted stock units
(“RSUs”), stock options (“Options”), performance share units
(“PSUs”) or other form of equity compensation award granted to the
Executive shall be determined by the Board or the Compensation Committee, in its
discretion, and subject to terms and conditions of such award grants.
4.4 Compensation for Transition
Services.
In the event the Executive
performs Transition Services noted in Section 2.2 above, the Executive shall
receive as compensation for the performance of Transition Services an amount
equal to two times the Executive's Target Bonus for the fiscal year in which the
Change of Control occurs. Such payment to the Executive, conditional upon the
Executive's compliance with Article 6 of this Agreement and his execution of a
Release (defined hereafter), shall be made on a date determined by the Company
within 60 days following the Termination Date.
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4.5 Fringe Benefits and
Perquisites.
Subject to the terms and
conditions of the applicable programs, as amended from time to time, during the
Employment Term, the Executive shall be entitled to fringe benefits and
perquisites consistent with the practices of the Company for the Chief Executive
Officer. The Company reserves the right to amend or cancel any fringe benefits
and perquisites programs at any time in its sole discretion, subject to the
terms of such programs.
4.6 Employee Benefits.
Subject to the terms and
conditions of the applicable plans and policies, each as amended from time to
time, during the Employment Term, the Executive shall be entitled to participate
in all employee pension, retirement savings and group benefit plans, practices
and programs maintained by the Company, as in effect from time to time
(collectively, "Employee Benefit Plans"). The Company reserves the right
to amend or cancel any Employee Benefit Plan at any time in its sole discretion,
subject to the terms of such Employee Benefit Plan.
4.7 Paid Time-off.
During each fiscal year (prorated
for partial years) of the Employment Term, the Executive shall be entitled to
five (5) weeks of paid time-off in accordance with the Company's paid time-off
policies, as in effect from time to time.
4.8 Business Expenses.
The Executive shall be entitled
to reimbursement for all reasonable and necessary out-of-pocket business,
entertainment and travel expenses incurred by the Executive in connection with
the performance of the Executive's duties hereunder in accordance with the
Company's expense reimbursement policy, as in effect from time to time.
4.9 Relocation Allowance
The Company shall pay, or
reimburse the Executive for, all reasonable relocation expenses incurred by the
Executive relating to his relocation from Omaha, Nebraska to Edina, Minnesota
not to exceed USD$50,000. If the Executive terminates his employment without
Good Reason or is terminated by the Company for Cause prior to February 1, 2018,
the Executive shall be required to repay the Company the gross amount of any
relocation expenses paid or reimbursed pursuant to this Section 4.8.
4.10 Clawback Provisions.
Notwithstanding any provision in this Agreement to the
contrary, all compensation paid to the Executive pursuant to this Agreement
(including but limited to Annual Bonuses, the Special RSUs, the Special Options
and the Special PSUs) or any other agreement or arrangement with the Company
which is subject to recovery under the Clawback Policy (whether in existence as
of the Effective Date or later adopted) or any applicable law, government
regulation or stock exchange listing requirement (the “Clawback Laws”)
will be subject to such deductions and clawback as may be required to be made
pursuant to the Clawback Policy and Clawback Laws. For purposes of this Agreement, the "Clawback
Policy" shall mean any policy adopted by the Company designed to comply with
Clawback Laws and good corporate governance principles as recommended by
Institutional Shareholder Services or other advisory services and such policy
limits recoveries of compensation necessary to comply with Clawback Laws and
such principles.
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ARTICLE 5
TERMINATION OF
EMPLOYMENT
5.1 Notice.
The Executive's employment
hereunder may be terminated by either the Company or the Executive at any time
during the Employment Term and for any, or no, reason by providing written
notice of the termination of the Executive's employment (the "Termination
Notice") . Upon termination of the Executive's employment, the Executive
shall be entitled to the compensation and benefits described in, and subject to,
this Article 5 and shall have no further rights to any compensation or any other
benefits from the Company or any of its affiliates.
5.2 Termination for Cause or Without Good
Reason.
(a) If the Executive's employment
is terminated by the Company for Cause or by the Executive without Good Reason,
the Executive shall be entitled to the following:
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(i) |
any accrued but unpaid Base Salary and accrued but unused
paid time-off which shall be paid on the pay date immediately following
the Termination Date (as defined below) in accordance with the Company's
customary payroll procedures; |
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reimbursement for unreimbursed business expenses properly
incurred by the Executive, which shall be subject to and paid in
accordance with the Company's expense reimbursement policy, as in effect
from time to time; |
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(iii) |
any Special RSUs and Special PSUs that are vested as of
the Termination Date but have not yet been settled shall be settled in
accordance with the terms of the applicable Special Award Agreement, and
any Special Options that are vested as of the Termination Date shall be
exercisable thereafter only in accordance with the terms of the applicable
Special Award Agreements; and |
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all unvested Special RSUs, unvested Special Options and
unvested Special PSUs shall be immediately forfeited and
cancelled. |
Paragraphs (i), (ii) and (iii) of this Section 5.2(a) are
referred to herein collectively as the "Accrued Amounts".
(b) For purposes of this
Agreement, "Cause" shall mean:
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(i) |
the Executive's engagement in dishonesty, illegal conduct
or gross misconduct, which, in each case, the Board has determined is or
is likely to be injurious to the Company or its affiliates; |
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(ii) |
the Executive's embezzlement, misappropriation or fraud,
whether or not related to the Executive's employment with the
Company; |
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(iii) |
the Executive's conviction of or plea of guilty or
nolo contendere to a crime that constitutes a felony (or state law
equivalent) or a crime that constitutes a misdemeanor involving moral
turpitude; |
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(iv) |
the Executive's material violation of a material policy
of the Company where such violation is not cured within ten (10) days of
written notice by the Company of such violation; |
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(v) |
the Executive's willful unauthorized disclosure of
Confidential Information (as defined below); or |
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(vi) |
the Executive's material breach of any material
obligation under this Agreement (including but not limited to the
obligations under Section 6.3 and Section 6.4) or any other written
agreement between the Executive and the Company where such breach is not
cured within ten (10) days of written notice by the Company of such
breach. |
(c) For purposes of this
Agreement, "Good Reason" shall mean the occurrence of any of the
following, in each case during the Employment Term without the Executive's
written consent:
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(i) |
a material reduction in the Executive's Base Salary other
than a general reduction in Base Salary that affects all similarly
situated executives in substantially the same proportions; |
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(ii) |
a material reduction in the Executive's Target Bonus
opportunity; |
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(iii) |
any material breach by the Company of any material
provision of this Agreement; |
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(iv) |
the Company's failure to obtain an agreement from any
successor to the Company to assume and agree to perform this Agreement in
the same manner and to the same extent that the Company would be required
to perform if no succession had taken place, except where such assumption
occurs by operation of law; |
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(v) |
a material, adverse change in the Executive's title,
authority, duties or responsibilities (other than temporarily while the
Executive is physically or mentally incapacitated or as required by
applicable law) taking into account the Company's size, status as a public
company and capitalization as of the date of this Agreement;
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(vi) |
a material adverse change in the reporting structure
applicable to the Executive. |
The Executive cannot terminate his employment for Good Reason
unless he has provided written notice to the Company of the existence of the
circumstances providing grounds for termination for Good Reason within 30 days
of the Executive’s actual knowledge of the initial existence of such grounds and
the Company has had at least 30 days from the date on which such notice is
provided to cure such circumstances. If the Executive has not provided such
written notice of the initial existence of the applicable grounds, then the
Executive will be deemed to have waived his right to terminate for Good Reason
with respect to such grounds.
5.3 Termination Without Cause or for Good
Reason.
If the Executive's employment
hereunder is terminated by the Company without Cause or by the Executive for
Good Reason during the Employment Term, the Executive shall be entitled to
receive the Accrued Amounts and, conditional upon the Executive's compliance
with Article 6 of this Agreement and his execution of a release of claims in
favor of the Company, its affiliates and their respective officers and directors
in a form provided by the Company as provided below (the "Release"), the
Executive shall also be entitled to the following, with such payments to be made
on a date determined by the Company within 60 days following the Termination
Date except as otherwise provided:
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in the event the employment of the Executive is
terminated prior to the 18-month anniversary of the Effective Date, the
Executive shall be entitled to receive a lump sum payment equal to the
Executive's Base Salary, and in the event the employment of the Executive
is terminated on or following the 18-month anniversary of the Effective
Date, the Executive shall be entitled to receive a lump sum payment equal
to the sum of (i) one and a half (1.5) times the Executive's Base Salary
and (ii) the lesser of the Annual Bonus paid to the Executive in the
fiscal year immediately prior to the Termination Date and the Target Bonus
for the fiscal year in which the Termination Date occurs; |
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(b) |
any amount of Annual Bonus earned, but not yet paid, in
the fiscal year prior to the fiscal year in which the Termination Date
occurs; |
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(c) |
a pro-rated Annual Bonus equal to the product of (i) the
Annual Bonus that would have been payable to the Executive for the fiscal
year in which the Termination Date occurs if the termination of employment
had not occurred (as determined by the Compensation Committee in good
faith at the same time the annual bonuses of other similarly situated
executives are determined) and (ii) a fraction, the numerator of which is
the number of days the Executive was employed by the Company during the
fiscal year in which the Termination Date occurs and the denominator of
which is the number of days in such fiscal year (the "Pro Rata
Bonus"), which amount is payable to the Executive at the same time the
annual bonuses of similarly situated executives are
payable; |
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(d) |
all unvested Special RSUs shall immediately vest on the
Termination Date and be settled in accordance with the terms of the
applicable Special Award Agreement; |
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(e) |
in the event the Executive’s employment is terminated by
the Executive for Good Reason any unvested Special PSUs and Special
Options as to which the stock price hurdle vesting requirements (as set
forth in the applicable Special Award Agreement) have been satisfied as of
the Termination Date shall immediately vest on the Termination Date, any
such Special PSUs that vest in accordance with this Section 5.3(e) shall
be settled as soon as reasonably practicable following the Termination
Date in accordance with the terms of the applicable Special Award
Agreement and any such Special Options that vest in accordance with this
Section 5.3(e) may be exercised in accordance with the applicable Special
Award Agreement; however, in the event the Executive’s employment is
terminated by the Company without Cause a pro rata number of unvested
Special Options and unvested Special PSUs shall vest at the Termination
Date equal to the product of (i) the number, if any, of Special PSUs and
Special Options as to which the stock price hurdle vesting requirements
(as set forth in the applicable Special Award Agreement) have been
satisfied as of the Termination Date and (ii) a fraction, the numerator of
which is the number of days the Executive was employed by the Company
during the Performance Period and the denominator of which is the number
of days in the Performance Period, any such Special PSUs that vest in
accordance with this Section 5.3(e) shall be settled as soon as reasonably
practicable following the Termination Date in accordance with the terms of
the applicable Special Award Agreement and any such Special Options that
vest in accordance with this Section 5.3(e) may be exercised in accordance
with the applicable Special Award Agreement; and |
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(f) |
any other Special Options or Special PSUs which have not
vested as of the Termination Date in accordance with Section 5.3(e) above
shall be forfeited and cancelled. |
The Company’s obligations to make
any payments under this Section 5.3 shall be conditioned on the Executive
executing and delivering to the Company the Release within twenty-one (21) days
following the date the Company delivers the form of Release to the Executive
after the date the Termination Notice is received by the Executive and the
Release becoming effective by virtue of the Executive not revoking the Release
during the period the Executive is allowed by law to revoke.
5.4 Death.
(a) The Executive's employment
hereunder shall terminate automatically upon the Executive's death during the
Employment Term.
(b) If the Executive's employment
is terminated during the Employment Term on account of the Executive's death,
the Executive's estate shall be entitled to the following, with such payments to
be made on a date determined by the Company within 60 days following death
except as otherwise provided below:
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(i) |
the Accrued Amounts; |
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(ii) |
any amount of Annual Bonus earned, but not yet paid, in
the fiscal year prior to the fiscal year in which the Termination Date
occurs; |
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(iii) |
a lump sum payment equal to the Pro Rata Bonus, which
amount is payable at the same time the annual bonuses of similarly
situated executives are payable; |
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(iv) |
all unvested Special RSUs shall immediately vest on the
Termination Date and be settled in accordance with the terms of the
applicable Special Award Agreements; |
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(v) |
any unvested Special PSUs and Special Options as to which
the stock price hurdle vesting requirements (as set forth in the
applicable Special Award Agreement) have been satisfied as of the
Termination Date shall immediately vest on the Termination Date, any such
Special PSUs that vest in accordance with this Section 5.4(b)(v) shall be
settled as soon as reasonably practicable following the Termination Date
in accordance with the terms of the applicable Special Award Agreement and
any such Special Options that vest in accordance with this Section
5.4(b)(v) may be exercised in accordance with the applicable Special Award
Agreement; and |
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(vi) |
any Special Options or Special PSUs which have not vested
as of the Termination Date in accordance with Section 5.4(b)(v) above
shall be forfeited and cancelled. |
5.5 Total Disability.
(a) The Company may terminate the
Executive's employment on account of the Executive's Total Disability.
(b) If the Executive's employment
is terminated during the Employment Term on account of the Executive's Total
Disability, the Executive shall be entitled to the following, with such payments
to be made on a date determined by the Company within 60 days following the
termination due to the Executive's Total Disability except as otherwise provided
below:
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(i) |
the Accrued Amounts; |
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(ii) |
any amount of Annual Bonus earned, but not yet paid, in
the fiscal year prior to the fiscal year in which the Termination Date
occurs; |
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(iii) |
a lump sum payment equal to the Pro Rata Bonus, which
amount is payable at the same time the annual bonuses of similarly
situated executives are payable; and |
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(iv) |
all unvested Special RSUs shall immediately vest on the
Termination Date and be settled in accordance with the terms of the
applicable Special Award Agreements; |
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(v) |
any unvested Special PSUs and Special Options as to which
the stock price hurdle vesting requirements (as set forth in the
applicable Special Award Agreement) have been satisfied as of the
Termination Date shall immediately vest on the Termination Date, any such
Special PSUs that vest in accordance with this Section 5.5(b)(v) shall be
settled as soon as reasonably practicable following the Termination Date
in accordance with the terms of the applicable Special Award Agreement and
any such Special Options that vest in accordance with this Section
5.5(b)(v) may be exercised in accordance with the applicable Special Award
Agreement; and |
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(vi) |
any Special Options or Special PSUs which have not vested
as of the Termination Date in accordance with Section 5.5(b)(v) above
shall be forfeited and cancelled. |
(c) For purposes of this
Agreement, "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 Executive to be unable,
in the reasonable opinion of the Company, to perform his duties as an employee
of the Company.
5.6 Change of Control
Termination.
(a) In addition to the payments
and benefits provided in Section 5.3 (with any unvested Special PSUs and Special
Options under Section 5.3(e) treated as if the Executive terminated for Good
Reason), if the Executive's employment hereunder is terminated by the Executive
for Good Reason or by the Company without Cause (other than on account of the
Executive's death or Total Disability) during the Employment Term, in each case
during the Change of Control Period, the Executive, conditional upon the
Executive's compliance with Article 6 of this Agreement and his execution of a
Release, shall be entitled, on a date determined by the Company within 60 days
following the Termination Date, to a lump sum payment equal to the difference
of:
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The sum of: |
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(A) |
two times the Executive's Base Salary for the fiscal year
in which the Termination Date occurs; and |
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(B) |
the product of (i) the Executive's Target Bonus for the
fiscal year in which the Termination Date occurs and (ii) a fraction, the
numerator of which is the number of days the Executive was employed by the
Company during the fiscal year in which the Termination Date occurs and
the denominator of which is the number of days in such fiscal year;
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(ii) |
The sum of the amounts described in Section 5.3 (a) and
(c) above. |
The Company’s obligations to make any payments under this
Section 5.6(a) shall be conditioned on the Executive executing and delivering to
the Company the Release within twenty-one (21) days following the date the
Company delivers the form of Release to the Executive after the date the
Termination Notice is received by the Executive and the Release becoming
effective by virtue of the Executive not revoking the Release during the period
the Executive is allowed by law to revoke.
(b) For purposes of this
Agreement, "Change of Control" shall mean the occurrence of any of the
following after the Effective Date:
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(i) |
the acquisition of ownership, directly or indirectly,
beneficially or of record, by any person or combination of persons acting
jointly or in concert with each other, of the common shares of the Company
representing more than 50% of the aggregate ordinary voting power
represented by the issued and outstanding common shares; |
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(ii) |
the sale, lease, exchange or other disposition, in a
single transaction or a series of related transactions, of assets, rights
or properties of the Company and/or any of its subsidiaries which have an
aggregate book value greater than 50% of the book value of the assets,
rights and properties of the Company and its subsidiaries on a
consolidated basis to any other person or entity, other than a disposition
to a wholly owned subsidiary of the Company in the course of a
reorganization of the assets of the Company and its
subsidiaries; |
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(iii) |
a resolution is adopted to wind-up, dissolve or liquidate
the Company; |
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at any time during a period of two consecutive years,
individuals who at the beginning of such period constituted the Board of
Directors of the Company (“Incumbent Directors”) shall cease for
any reason to constitute at least a majority thereof; provided, however,
that the term “Incumbent Director” shall also include each new
director elected during such two-year period whose nomination or election
was approved by two- thirds of the Incumbent Directors then in office;
or |
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(v) |
any consolidation, merger, amalgamation, or plan of
exchange involving the Company as a result of which the holders of
outstanding common shares of the Company immediately prior to the
transaction do not continue to hold at least 50% or more of the
outstanding voting securities of the surviving company or a parent of the
surviving company immediately after the transaction, disregarding any
voting securities issued to or retained by such holders in respect of
securities of any other party to the transaction; or |
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(vi) |
the Board adopts a resolution to the effect that a Change
of Control as defined herein has occurred or is
imminent. |
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(c) For purposes of this
Agreement, "Change of Control Period" shall mean any of the following:
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(i) |
within 12 months following a Change of Control; |
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(ii) |
if the Executive is required to give advanced notice of
termination within 12 months following a Change of Control pursuant to
Section 5.7(e) below, then within 12 months plus the period of such
advanced notice given following a Change of Control; or |
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(iii) |
within two (2) months prior to a Change of Control if (a)
the Executive is terminated by the Company without Cause; and (b) it is
reasonably demonstrated by the Executive that such termination of
employment arose in connection with, or anticipation of, a Change of
Control. |
5.7 Termination Date.
The Executive's Termination Date
shall be:
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(a) |
If the Executive's employment hereunder terminates on
account of the Executive's death, the date of the Executive's
death; |
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(b) |
If the Executive's employment hereunder is terminated on
account of the Executive's Total Disability, the date that it is
determined that the Executive has a Total Disability; |
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(c) |
If the Company terminates the Executive's employment
hereunder for Cause, the date the Termination Notice is delivered to the
Executive; |
| |
|
|
| |
(d) |
If the Company terminates the Executive's employment
hereunder without Cause, the date which is the later of the date specified
in the Termination Notice or the date the Termination Notice is received
by the Executive; |
| |
|
|
| |
(e) |
If the Executive terminates his employment hereunder with
or without Good Reason, the date specified in the Termination Notice,
which shall be not less than 90 days following the date on which the
Termination Notice is delivered; and |
| |
|
|
| |
(f) |
Any other date mutually agreed upon by the Company and
the Executive. |
5.8 Other Equity Compensation and Employee
Benefits.
Upon the termination of the
Executive's employment hereunder for any reason, (i) the treatment of all RSUs,
Options, PSUs or other form of equity compensation award other than Special
RSUs, Special Options and Special PSUs granted to the Executive shall be
governed by the terms of any applicable plan or any successor or replacement
plan and the applicable award agreements, and (ii) subject to any requirements
of applicable law regarding continuation of employee benefits following
termination of employment, the treatment of all benefits provided to the Executive pursuant to the Employee Benefit Plans shall be
governed by the terms of the respective plans.
- 13 -
5.9 Resignation of All Other
Positions.
Upon termination of the
Executive's employment hereunder for any reason, the Executive agrees to resign,
effective on the Termination Date, from all positions that the Executive holds
as an officer or member of the board of directors (or a committee thereof) of
the Company or any of its affiliates.
5.10 Section 280G.
(a) If any of the payments or
benefits received or to be received by the Executive including, without
limitation, any payment or benefits received in connection with a Change in
Control or the Executive's termination of employment, whether pursuant to the
terms of this Agreement or any other plan, arrangement or agreement, or
otherwise (all such payments collectively referred to herein as the “280G
Payments”) constitute “parachute payments” within the meaning of Section
280G of the Internal Revenue Code (the “Code”) and would, but for this
Section 5.10, be subject to the excise tax imposed under Section 4999 of the
Code (the “Excise Tax”), then prior to making the 280G Payments, a
calculation shall be made comparing (i) the Net Benefit (as defined below) to
the Executive of the 280G Payments after payment of the Excise Tax to (ii) the
Net Benefit to the Executive if the 280G Payments are limited to the extent
necessary to avoid being subject to the Excise Tax. If, and only if, the amount
calculated under (i) above is less than the amount under (ii) above, the 280G
Payments will be reduced to the minimum extent necessary so that no portion of
the 280G Payments is subject to the Excise Tax. "Net Benefit" shall mean
the present value of the 280G Payments net of all federal, state, local, foreign
income, payroll, and excise taxes. If multiple amounts are subject to reduction,
the amounts shall be reduced (but not below zero) in a manner determined by the
Company that is consistent with the requirements of Section 409A of the Code
(“Section 409A”) and otherwise so as to maximize the after-tax benefit to
the Executive.
(b) All calculations and
determinations under this Section 5.10 shall be made by an independent
accounting firm or independent tax counsel appointed by the Company (the "Tax
Counsel") whose determinations shall be conclusive and binding on the
Company and the Executive for all purposes. For purposes of making the
calculations and determinations required by this Section 5.10, the Tax Counsel
may rely on reasonable, good faith assumptions and approximations concerning the
application of Section 280G and Section 4999 of the Code. The Company and the
Executive shall furnish the Tax Counsel with such information and documents as
the Tax Counsel may reasonably request in order to make its determinations under
this Section 5.10. The Company shall bear all costs the Tax Counsel may
reasonably incur in connection with its services.
- 14 -
ARTICLE 6
CONFIDENTIALITY,
NON-COMPETITION
AND NON-SOLICITATION
6.1 Confidential Information
Defined.
(a) For purposes of this
Agreement, "Confidential Information" includes, but is not limited to,
all information not known to the public, in spoken, printed, electronic or any
other form or medium, relating directly or indirectly to: business processes,
practices, methods, policies, plans, publications, documents, research,
operations, services, strategies, techniques, agreements, contracts, terms of
agreements, transactions, potential transactions, negotiations, pending
negotiations, know-how, trade secrets, computer programs, computer software,
applications, operating systems, work-in-process, databases, manuals, records,
financial information, results, developments, reports, internal controls and
security procedures. The Executive understands that the above list is not
exhaustive, and that Confidential Information also includes other information
that is marked or otherwise identified as confidential or proprietary, or that
would otherwise appear to a reasonable person to be confidential or proprietary
in the context and circumstances in which the information is known or used.
Confidential Information shall not include information that is generally
available to and known by the public at the time of disclosure to the Executive;
provided that, such disclosure is through no direct or indirect fault of the
Executive or person(s) acting on the Executive's behalf.
6.2 Disclosure and Use Restrictions of
Confidential Information.
The Executive agrees and
covenants: (i) to treat all Confidential Information as strictly confidential;
(ii) not to directly or indirectly disclose, publish, communicate or make
available Confidential Information, or allow it to be disclosed, published,
communicated or made available, in whole or part, to any entity or person
whatsoever (including other employees of the Company) not having a need to know
and authority to know and use the Confidential Information in connection with
the business of the Company and, in any event, not to anyone outside of the
direct employ of the Company except as required in the performance of the
Executive's authorized employment duties to the Company. Nothing stated herein
shall preclude the disclosure of Confidential Information by the Executive in
response to a valid order of a court, governmental agency or other governmental
body of the United States or any political subdivision thereof or as otherwise
required by law, provided that prior to any such disclosure the Executive shall
notify the Company to enable the Company to seek a protective order.
The Executive understands and
acknowledges that his obligations under this Agreement with regard to any
Confidential Information shall commence immediately upon the Executive first
having access to such Confidential Information (whether before or after the
Effective Date) and shall continue during and for four (4) years after his
employment by the Company until such time as such Confidential Information has
become public knowledge other than as a result of the Executive's breach of this
Agreement.
- 15 -
6.3 Non-competition.
(a) During the Employment Term
and during the 18-month period immediately following the Termination Date, the
Executive agrees and covenants not to engage in Prohibited Activity in the
United States or Canada.
(b) For purposes of this
Agreement, "Prohibited Activity" is activity in which the Executive
contributes his knowledge, directly or indirectly, in whole or in part, as an
employee, employer, owner, operator, manager, advisor, consultant, investor,
agent, employee, partner, director, stockholder, officer, volunteer, intern or
any other similar capacity to any entity engaged in the same or similar business
as the Company, including those engaged in any business in the organic,
non-genetically modified and specialty foods sector.
(c) Nothing herein shall prohibit
the Executive from purchasing or owning less than two percent (2%) of the
publicly traded securities of any corporation, provided that such ownership
represents a passive investment and that the Executive is not a controlling
person of, or a member of a group that controls, such corporation.
6.4 Non-solicitation of Customers and
Employees.
(a) The Executive agrees and
covenants not to directly or indirectly solicit or attempt to solicit any
customer or prospective customer of the Company or any affiliate of the Company
(“Customer”) during the 24-month period immediately following the
Termination Date for products or services that are similar to or competitive
with those offered or proposed to be offered by Company as of the Termination
Date. For purposes of this Section 6.4(a), a “Customer” shall be a person
or entity to which the Company, or any affiliate of the Company, sold products
or services or solicited products or services within twelve (12) months prior to
the Termination Date.
(b) The Executive agrees and
covenants not to directly or indirectly solicit, hire, recruit, attempt to hire
or recruit, or induce the termination of employment of any employee of the
Company or any affiliate of the Company during the 24-month period immediately
following the Termination Date. This prohibition shall not apply to general
solicitations or other non-targeted recruiting efforts.
6.5 Acknowledgement.
(a) The Executive acknowledges
and agrees that the services to be rendered by him to the Company are of a
special and unique character; that the Executive will obtain knowledge and skill
relevant to the Company's industry, methods of doing business and marketing
strategies by virtue of the Executive's employment; and that the restrictive
covenants and other terms and conditions of this Agreement are reasonable and
reasonably necessary to protect the legitimate business interest of the
Company.
(b) The Executive further
acknowledges that the amount of his compensation reflects, in part, his
obligations and the Company's rights under Article 6; that he has no expectation
of any additional compensation, royalties or other payment of any kind not
otherwise referenced herein in connection herewith; that he will not be subject to
undue hardship by reason of his full compliance with the terms and conditions of
Article 6 or the Company's enforcement thereof.
- 16 -
6.6 Remedies.
In the event of a breach or
threatened breach by the Executive of Article 6, the Executive hereby consents
and agrees that the Company shall be entitled to seek, in addition to other
available remedies, a temporary or permanent injunction or other equitable
relief against such breach or threatened breach from any court of competent
jurisdiction, without the necessity of showing any actual damages or that
monetary damages would not afford an adequate remedy. The aforementioned
equitable relief shall be in addition to, not in lieu of, legal remedies,
monetary damages or other available forms of relief.
ARTICLE 7
GENERAL
7.1 Governing Law: Jurisdiction and
Venue.
This Agreement, for all purposes,
shall be construed in accordance with the laws of the state of Minnesota without
regard to conflicts of law principles. 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. The parties hereby irrevocably submit
to the exclusive jurisdiction of such courts and waive the defense of
inconvenient forum to the maintenance of any such action or proceeding in such
venue.
7.2 Stock Ownership
Requirements.
The Executive shall be expected
to maintain ownership of Company common stock (which can include vested, but
unexercised, options and stock acquired through the Company’s employee stock
purchase plan) having a value equal to five times his Base Salary in accordance
with guidelines established by the Compensation Committee from time to time. The
Executive will be required to meet this ownership requirement within five years
after the Effective Date.
7.3 Section 409A.
(a) General Compliance. This
Agreement and all payments under this Agreement are intended to comply with
Section 409A or an exemption thereunder and shall be construed and administered
in accordance with Section 409A. Notwithstanding any other section of this
Agreement, any payment under this Agreement may only be made upon an event and
in a manner that complies with Section 409A or an applicable exemption. All
payments under this Agreement that may be excluded from Section 409A either as
separation pay due to an involuntary separation from service or as a short-term
deferral shall be excluded from Section 409A to the maximum extent possible. For
purposes of Section 409A, each installment payment under this Agreement shall be
treated as a separate payment. References in this Agreement to "payments under
this Agreement" shall include all payments pursuant to the Special RSUs, the
Special Options and the Special PSUs. Notwithstanding the foregoing, the Company
makes no representations that the payments and benefits provided under this
Agreement comply with Section 409A, and in no event shall the Company be liable for
all or any portion of any taxes, penalties, interest, or other expenses that may
be incurred by the Executive on account of non-compliance with Section 409A.
- 17 -
(b) Separation from Service. Any
payment under this Agreement that constitutes "nonqualified deferred
compensation" within the meaning of Section 409A and is payable upon a
termination of employment of the Executive shall only be made upon the
Executive’s "separation from service" with the Company within the meaning of
Section 409A, and any reference to Termination Date shall similarly mean the
date on such "separation from service" with the Company.
(c) Specified Employee.
Notwithstanding any other provision of this Agreement, if any payment or benefit
provided to the Executive in connection with his termination of employment is
determined to constitute "nonqualified deferred compensation" within the meaning
of Section 409A and the Executive is determined to be a "specified employee" as
defined in Section 409A(a)(2)(b)(i), then such payment or benefit shall not be
paid until the first payroll date to occur following the six-month anniversary
of the Termination Date or, if earlier, on the Executive's death (the
"Specified Employee Payment Date"). The aggregate of any payments that
would otherwise have been paid before the Specified Employee Payment Date and
interest on such amounts calculated based on the applicable federal rate
published by the Internal Revenue Service for the month in which the Executive's
separation from service occurs shall be paid to the Executive in a lump sum on
the Specified Employee Payment Date and thereafter, any remaining payments shall
be paid without delay in accordance with their original schedule.
(d) Reimbursements. To the extent
required by Section 409A, each reimbursement or in-kind benefit provided under
this Agreement shall be provided in accordance with the following:
| |
(i) |
the amount of expenses eligible for reimbursement, or
in-kind benefits provided, during each calendar year cannot affect the
expenses eligible for reimbursement, or in-kind benefits to be provided,
in any other calendar year; |
| |
|
|
| |
(ii) |
any reimbursement of an eligible expense shall be paid to
the Executive on or before the last day of the calendar year following the
calendar year in which the expense was incurred; and |
| |
|
|
| |
(iii) |
any right to reimbursements or in-kind benefits under
this Agreement shall not be subject to liquidation or exchange for another
benefit. |
(e) Payments Contingent Upon
Execution and Delivery of Release. If any payment under this Agreement is
contingent upon the execution and delivery of a Release and if the Termination
Date with respect to which such payment is being made 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 year.
- 18 -
7.4 Entire Agreement.
Unless specifically provided
herein, this Agreement, along with the agreements appended hereto, contain all
of the understandings and representations between the Executive and the Company
pertaining to the subject matter hereof and supersedes all prior and
contemporaneous understandings, agreements, representations and warranties, both
written and oral, with respect to such subject matter. The parties mutually
agree that the Agreement can be specifically enforced in court and can be cited
as evidence in legal proceedings alleging breach of the Agreement.
7.5 Modification and Waiver.
No provision of this Agreement
may be amended or modified unless such amendment or modification is agreed to in
writing and signed by the Executive and by the Chair of the Board. No waiver by
either of the parties of any breach by the other party hereto of any condition
or provision of this Agreement to be performed by the other party hereto shall
be deemed a waiver of any similar or dissimilar provision or condition at the
same or any prior or subsequent time, nor shall the failure of or delay by
either of the parties in exercising any right, power or privilege hereunder
operate as a waiver thereof to preclude any other or further exercise thereof or
the exercise of any other such right, power or privilege.
7.6 Severability.
If any portion of this Agreement
shall be held by a court as unenforceable and thus stricken, such holding shall
not affect the validity of the remainder of this Agreement, the balance of which
shall continue to be binding upon the parties.
7.7 Counterparts.
This Agreement may be executed in
separate counterparts, each of which shall be deemed an original, but all of
which taken together shall constitute one and the same instrument.
7.8 Notice.
Notices and all other
communications provided for in this Agreement shall be in writing and shall be
delivered personally or sent by registered or certified mail, return receipt
requested, or by overnight carrier to the parties at the addresses set forth
below (or such other addresses as specified by the parties by like notice):
| |
If to the Company: |
| |
|
| |
SunOpta Inc. |
| |
2233 Argentia Road, Suite 401 |
| |
Mississauga, Ontario L5N 2X7 |
| |
Phone: (905) 821-9669 |
| |
Fax: (905) 819-7971 |
| |
|
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Attention: Chair of the Board
|
- 19 -
| |
With a copy to: General Counsel |
| |
|
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If to the Executive: |
| |
|
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The last known address of the Executive in the
Company's records. |
7.9 Representations of the
Executive.
The Executive represents and
warrants to the Company that:
| |
(a) |
The Executive's acceptance of employment with the Company
and the performance of his duties hereunder will not conflict with or
result in a violation of, a breach of, or a default under any contract,
agreement or understanding to which he is a party or is otherwise
bound. |
| |
|
|
| |
(b) |
The Executive's acceptance of employment with the Company
and the performance of his duties hereunder will not violate any
non-competition, non- solicitation or other similar covenant or agreement
with a prior employer. |
7.10 Withholding.
The Company shall have the right
to withhold from any amount payable hereunder any taxes, contributions, premiums
or other amounts in order for the Company to satisfy any withholding obligation
it may have under any applicable law or regulation.
7.11 Survival.
Upon the expiration or other
termination of this Agreement, the respective rights and obligations of the
parties hereto shall survive such expiration or other termination to the extent
necessary to carry out the intentions of the parties under this Agreement.
7.12 Acknowledgment of Full
Understanding.
THE EXECUTIVE ACKNOWLEDGES AND
AGREES THAT HE HAS FULLY READ, UNDERSTANDS AND VOLUNTARILY ENTERS INTO THIS
AGREEMENT. THE EXECUTIVE ACKNOWLEDGES AND AGREES THAT HE HAS HAD AN OPPORTUNITY
TO ASK QUESTIONS AND CONSULT WITH INDEPENDENT COUNSEL BEFORE SIGNING THIS
AGREEMENT.
[SIGNATURE PAGE FOLLOWS]
- 20 -
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
| |
SUNOPTA INC. |
| |
|
|
| |
|
|
| |
By: |
/s/ R. Dean Hollis |
| |
|
Name: Dean Hollis |
| |
|
Title: Chair of the Board |
DAVID J. COLO
| Signature: |
/s/ David J. Colo |
|
- 21 -
APPENDIX "A"
RESTRICTED STOCK UNIT AWARD AGREEMENT
- 22 -
APPENDIX "B"
STOCK OPTION AWARD AGREEMENT
- 23 -
APPENDIX "C"
PERFORMANCE SHARE UNIT AWARD AGREEMENT
