SUPPLEMENT TO PROXY STATEMENT FOR THE
ANNUAL AND SPECIAL
MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 24, 2017
April 25, 2017
On
April 13, 2017, SunOpta Inc. (the “
Company
”) filed a definitive proxy
statement (the “
Proxy Statement
”) relating to SunOpta’s 2017 Annual and
Special Meeting of Shareholders (the “
Meeting
”). The Company has set May
24, 2017 as the date for the Meeting. The Meeting will be held at the Company’s
corporate offices located at 2233 Argentia Road, Suite 401, West Tower,
Mississauga, Ontario, Canada at 4:00 P.M. Eastern Daylight Time. As previously
disclosed, the record date for determining the Company’s shareholders entitled
to vote at the Meeting has been fixed as the close of business on March 27,
2017. This Supplement supplements the Proxy Statement to add information
regarding Proposal 5, a resolution to:
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(a)
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remove the Beneficial Ownership Exchange Cap, which, in
order to comply with NASDAQ Listing Rule 5635(b), currently limits the
number of shares of Preferred Stock any holder may exchange for common
shares of the Company (“
Common Shares
”) such that such holder's
beneficial ownership of Common Shares may not exceed 19.99%;
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(b)
|
remove the Voting Cap, which currently restricts the
Investor (as defined below) from casting voting rights associated with the
Preferred Stock in excess of 17,130,757 votes, being 19.99% of the
outstanding Common Shares on the date of the Preferred Stock Transaction;
and
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(c)
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waive the application of the Company’s Shareholder Rights
Plan, which currently applies to prevent the Investor from increasing its
beneficial ownership to 20% or more of the outstanding Voting Shares (as
defined in the Shareholder Rights Plan), to allow the Investor to increase
its beneficial ownership of outstanding Voting Shares to or above 20%
where such increase results from the payment of In-Kind Dividends on the
Preferred Stock
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(collectively, the “
Preferred Stock Resolution
”). Any
capitalized terms used but not defined in this Supplement have the meaning given
thereto in the Proxy Statement.
All
of the Preferred Stock is held by funds managed by Oaktree Capital Management,
L.P. (collectively, the “
Investor
”). The Investor is currently seeking
the Company's consent to a waiver of the Standstill (as defined below) (the
"
Waiver Request
"). The Investor requested the waiver to acquire up to
5,125,036 Common Shares, being the number of shares that would increase the
Investor's beneficial ownership to 19.99% of the Common Shares currently
outstanding on a partially-diluted basis, assuming the exchange of all shares of
Preferred Stock outstanding for Common Shares.
- 2 -
In
connection with the Preferred Stock Transaction, the Investor entered into an
Investor Rights Agreement (the "
Investor Rights Agreement
") that included
a standstill provision that restricts the Investor from acquiring additional
securities of the Company (the "
Standstill
"). The Standstill is subject
to certain exceptions, including (a) acquisitions with the consent of the
Company, (b) acquisitions in accordance with the terms of the Preferred Stock or
participation rights provided to the Investor in connection with the Preferred
Stock Transaction, (c) participation in rights offerings conducted by the
Company, (d) pursuant to an agreement with the Company and the consent of the
Board, acquiring Common Shares pursuant to a formal tender offer or take-over
bid, which when aggregated with the existing Common Shares beneficially owned or
controlled by the Investor, on an as-exchanged basis, does not exceed 27% of the
outstanding Common Shares, on a partially-diluted basis, and (e) acquiring up to
3,000,000 Common Shares by way of market or private purchases on or before
October 7, 2017. The Standstill continues until the later of (a) October 7, 2018
and (b) 12 months following the later of the date on which (i) no nominee of the
Investor serves on the Board and (ii) the governance rights granted to the
Investor under the Investor Rights Agreement are terminated.
As
previously announced, the Investor relied on exemption (e) from the Standstill,
as described above, to purchase 3,000,000 Common Shares in open market
transactions between March 3 and March 6, 2017, thereby exhausting such
exemption and increasing its ownership on an as-exchanged basis to 14,333,333
Common Shares, or 14.7% of the Common Shares currently outstanding on a
partially-diluted basis.
The
Board is currently considering the Waiver Request. As the Investor is a related
party of the Company and has two nominees on the Board, the Board has
established a process to have the disinterested directors of the Board consider
the Waiver Request and negotiate the terms thereof.
Assuming
that all dividends required to be paid on the Preferred Stock for the quarterly
periods after January 1, 2017 and prior to the end of the third fiscal quarter
of 2025 are In-Kind Dividends, and assuming no anti-dilution or other
adjustments, the number of Common Shares deliverable on exchange of all shares
of Preferred Stock would be 22,665,414, which together with the 3,000,000 Common
Shares currently held by the Investor, would represent (as a percentage of the
outstanding Common Shares as of the date of record date of the Proxy Statement
on a partially-diluted basis, assuming the exchange of all shares of Preferred
Stock outstanding for Common Shares) approximately:
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(a)
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23.6%, if the Company refuses the Waiver Request
entirely; and
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(b)
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28.3%, if the Company consents to the Waiver Request in
full and the Investor acquires 5,125,036 Common
Shares.
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The
Voting Cap applies only to the voting rights associated with the Preferred Stock
and would not apply to limit the Investor's ability to vote any Common Shares,
including the 3,000,000 Common Shares currently held by the Investor, or any
Common Shares that would be acquired if the Board consents to the Waiver
Request. Currently, the Preferred Stock entitles the Investor to 11,333,333
votes (11.64%), which, together with the 3,000,000 Common Shares currently held by the Investor and the maximum 5,125,036 Common
Shares that could be acquired if the Waiver Request were granted in full, would
entitle the Investor to a total of 19,485,370 votes representing 19.99% .
- 3 -
If
you have already voted, you do not need to take any action unless you wish to
change your vote. A shareholder may revoke his or her vote at any time before it
is voted at the Meeting by: (1) voting again by telephone or by Internet prior
to 4:00 P.M. Eastern Daylight Time on May 22, 2017; (2) requesting, completing
and mailing or delivering by facsimile a proper proxy card, as set forth in the
Proxy Statement under “Questions and Answers about the Meeting and Voting–How
can I vote?”; (3) sending written notice of revocation, signed by you (or your
duly authorized attorney), to the Company at the corporate office of the Company
at 2233 Argentia Road, Suite 401, West Tower, Mississauga, ON L5N 2X7, at any
time prior to the last business day preceding the date of the Meeting; or (4)
attending the Meeting (or any adjournment thereof) and delivering written notice
of revocation prior to any vote to the Chair of the Meeting.
Any previously submitted proxy votes that are not
revoked will continue to count as votes for or against the Preferred Stock
Resolution. If any shareholder would like a new proxy or has any questions,
please call Kingsdale Advisors at 1-877-659-1822 or email
contactus@kingsdaleadvisors.com.
The
Board recommends that the shareholders vote FOR the Preferred Stock Resolution.