Exhibit 10.4


 


KAIVAL BRANDS INNOVATIONS GROUP, INC.


2020 Stock and Incentive Compensation
Plan (“Plan”)


Restricted Stock Unit Agreement


 


This RESTRICTED
STOCK UNIT AGREEMENT is entered into as of the Grant Date specified on Exhibit A by and between KAIVAL BRANDS INNOVATIONS
GROUP, INC., a Delaware corporation (the “Company”), and the UNDERSIGNED EMPLOYEE (“Employee”).


 


1.Award of
Restricted Stock Units.


 


(a) Number
of Restricted Stock Units. The number of units set forth on Exhibit A, each being equivalent to one Common Share
as provided in Section 12(a)(i) of the 2020 Stock and Incentive Compensation Plan (“Stock Units”), will be granted
to the Employee as of the Grant Date subject to the terms of the Plan and this Agreement. The grant of the Stock Units is made
in consideration of the services to be rendered by the Employee to the Company.


 


(b) Grant
of Stock Units. The Stock Units will be granted upon acceptance of this Agreement by the Employee and the Common Shares
underlying this Award shall be issued upon satisfaction of the conditions of this Agreement. The Stock Units shall be credited
to a separate account maintained for the Employee on the books and records of the Company. All amounts so credited shall continue
for all purposes to be part of the general assets of the Company. The number of Stock Units is subject to adjustment and modification
as provided in the Plan. Accordingly, the total number of Stock Units granted pursuant to this Agreement means, at any relevant
time, the number of Stock Units set forth in (a), above, as such number shall then have been adjusted pursuant to the Plan.


 


(c) Plan
Incorporated. The Employee acknowledges receipt of a copy of the Plan and agrees that this award of Stock Units is subject
to the terms and conditions set forth in the Plan, including future amendments thereto, if any, which Plan is incorporated herein
by reference as a part of this Agreement. Unless defined in this Agreement, capitalized terms shall be as defined in the Plan.
In the event of any conflict between the terms of this Agreement and the terms of the Plan, the terms of the Plan shall prevail
and control.


 


2. Vesting
and Payment. The Employee hereby accepts the Stock Units when granted and agrees with respect thereto as follows:


 


(a) Forfeiture
Restrictions. The Stock Units may not be sold, assigned, pledged, exchanged, hypothecated or otherwise transferred, encumbered
or disposed of to the extent then subject to the Forfeiture Restrictions (as defined below). Any purported sale, assignment, pledge,
exchange transfer or other disposition or encumbrance of the Stock Units in violation of this Agreement shall be null and void.
Further, in the event of the Employee’s Termination of Employment by the Company or a Subsidiary for any reason, or in the
event of the Employee’s death or Disability, or the occurrence of a Change of Control of the Company, the Employee shall
forfeit all Stock Units to the extent then subject to the Forfeiture Restrictions, except as otherwise provided herein or in Sections
13(c) and 15(b) of the Plan. The prohibition against transfer and the obligation to forfeit Stock Units upon Termination of Employment
before the Stock Units vest are herein referred to as “Forfeiture Restrictions.” The Forfeiture Restrictions shall
be binding upon and enforceable against any transferee of Stock Units.


 


(b) Lapse
of Forfeiture Restrictions. The Forfeiture Restrictions shall lapse as to the Stock Units over the period or periods from
the Grant Date, as set forth on Exhibit A, provided that the Employee has been in continuous active service to the Company
from the Grant Date through the applicable lapse date. Notwithstanding the foregoing, a portion of the Stock Units may be vested
immediately (if so provided on Exhibit A) and the Forfeiture Restrictions shall lapse as to a ratable portion of the unvested
Stock Units, which shall thereupon vest, on the date the Employee’s employment with the Company is terminated by reason of
death or Disability. The ratable portion that vests shall be based upon the full months of the applicable vesting period elapsed
as of the end of the month in which the Termination of Employment due to Disability or death occurs over the total number of months
in such period, and the balance of the Stock Units not vesting under this provision shall be forfeited. In addition, in the event
the Employee has a Termination of Employment for any other reason, all unvested Stock Units subject to such Forfeiture Restrictions
shall be forfeited and the Company shall have no further obligations to the Employee under this Agreement.


 






    


     


    

 


(c) Payment.
A certificate evidencing the Common Shares underlying each vested Stock Unit shall be issued by the Company in the Employee’s
name on the date the Employee’s Forfeiture Restrictions lapse with respect to such Stock Units, or as soon as administratively
practicable thereafter and within the same calendar year. Until the Common Shares is issued to the Employee, the Employee shall
have no voting rights and no right to receive dividends or dividend equivalents with respect to the Common Shares. Notwithstanding
any provision of this Agreement to the contrary, the issuance or delivery of any Common Shares may be postponed for such period
as may be required to comply with applicable requirements of any national securities exchange or any requirements under any law
or regulation applicable to the issuance or delivery of such shares. The Company shall not be obligated to issue or deliver any
Common Shares if the issuance or delivery thereof constitutes a violation of any provision of any law or of any regulation of any
governmental authority or any national securities exchange on which the Common Shares are listed.


 


3. Tax
Liability and Withholding. The Employee shall be required to pay to the Company, and the Company shall have the right to
deduct from any compensation paid to the Employee pursuant to the Plan or otherwise, the amount of any required withholding taxes
in respect of the Stock Units and to take all such other action as the Committee deems necessary to satisfy all obligations for
the payment of such withholding taxes. The Committee may permit the Employee to satisfy any federal, state or local tax withholding
obligation by any of the following means, or by a combination of such means:


 


(i) tendering
a cash payment or requesting the withholding to be made from other cash compensation due to the Employee;


 


(ii) authorizing
the Company to withhold Common Shares from the shares otherwise issuable or deliverable to the Employee as a result of the vesting
of the Stock Units, provided, however, that no Common Shares shall be withheld with a value exceeding the maximum amount of tax
required to be withheld by law; and


 


(iii) delivering
to the Company previously owned and unencumbered Common Shares.


 


Notwithstanding any action the Company
takes with respect to any or all income tax, social insurance, payroll tax, or other tax-related withholding (“Tax-Related
Items”), the ultimate liability for all Tax-Related Items is and remains the Employee’s responsibility and the Company makes
no representation or undertakings regarding the treatment of any Tax-Related Items in connection with the grant, vesting or settlement
of the Stock Units or the subsequent sale of any shares; and does not commit to structure the Stock Units to reduce or eliminate
the Employee’s liability for Tax-Related Items.


 


4. Status
of Common Shares. The Employee agrees that the Common Shares will not be sold or otherwise disposed of in any manner that
would constitute a violation of any applicable federal or state securities laws. The Employee also agrees (i) that the certificates
representing the Common Shares may bear such legend or legends as the Company deems appropriate in order to assure compliance with
applicable securities laws or Company policies, (ii) that the Company may refuse to register the transfer of Common Shares on the
stock transfer records of the Company if such proposed transfer would, in the opinion of counsel satisfactory to the Company, constitute
a violation of any applicable securities law, and (iii) that the Company may give related instructions to its transfer agent, if
any, to stop registration of the transfer of the Common Shares.


 






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5. Termination
of Employment. For purposes of this Agreement, the Employee shall be considered to be in the active service of the Company
as long as the Employee remains an employee of the Company or a parent or subsidiary corporation (as defined in Section 424 of
the Code) of the Company. Any question as to whether and when there has been a Termination of Employment, and the cause of such
termination, shall be determined by the Committee, or its delegate, as appropriate, and its determination shall be final and binding
on all parties. Neither the Plan nor this Agreement shall confer upon the Employee any right to be retained in any position, as
an Employee or otherwise, of the Company. Further, nothing in the Plan or this Agreement shall be construed to limit the discretion
of the Company to terminate the Employee’s employment at any time, with or without Cause.


 


6. Committee’s
Powers. No provision contained in this Agreement shall in any way terminate, modify or alter, or be construed or interpreted
as terminating, modifying or altering any of the powers, rights or authority vested in the Committee or, to the extent delegated,
in its delegate pursuant to the terms of the Plan or resolutions adopted in furtherance of the Plan, including, without limitation,
the right to make certain determinations and elections with respect to the Stock Units.


 


7. Binding
Effect. This Agreement shall be binding upon and inure to the benefit of any successors to the Company and all persons
lawfully claiming under the Employee.


 


8. Amendment
or Termination. The Employee and the Company may amend this Agreement in writing to the extent permitted under the terms
of the Plan. The Plan is discretionary and may be amended, cancelled or terminated by the Company at any time, in its discretion.
The grant of the Stock Units in this Agreement does not create any contractual right or other right to receive any Stock Units
or other Awards in the future. Future Awards, if any, will be at the sole discretion of the Company. Any amendment, modification,
or termination of the Plan shall not constitute a change or impairment of the terms and conditions of the Employee’s employment
with the Company.


 


9. Governing
Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware. This Agreement
is intended to comply with Section 409A of the Code or an exemption thereunder and shall be construed and interpreted in a manner
that is consistent with the requirements for avoiding additional taxes or penalties under Section 409A of the Code. Notwithstanding
the foregoing, the Company makes no representations that the payments and benefits provided under this Agreement comply with Section
409A of the Code 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 Employee on account of non-compliance with Section 409A of the Code.


 


10. Execution.
This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together
shall constitute one and same instrument. Execution by the Employee is an acceptance and acknowledgement of receipt of a copy of
the Plan and this Agreement. Employee further acknowledges that he has been advised to consult his own tax advisor regarding the
tax consequences of the vesting or settlement of the Stock Units or a disposition of the underlying shares.


 


IN WITNESS WHEREOF,
the Company has caused this Agreement to be duly executed by a duly authorized officer, and Employee has executed this Agreement,
all as of the Grant Date set forth on Exhibit A hereto.


 


	EMPLOYEE:	 	COMPANY: 
	 	 	 
	X	 	X
	 	 	 
	 	 	Title:
	Printed Name	 	


 






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EXHIBIT A


 


Employee Name: Eric Mosser


 


Grant Date: May 28,
2020


 


Restricted Stock Units Granted: 3,000,000


 


Fair Market Value: FMV of the
shares at the vesting date is based on the average closing price of the 3 trading days prior to the vesting date.


 


Forfeiture Restriction Lapse Schedule:


 



	Vesting Date	Percentage or Number of Stock Units as to which Forfeiture Restrictions Lapse
	May 28, 2020	150,000
	August 5, 2020	150,000
	November 5, 2020	150,000
	February 5, 2021	200,000
	May 5, 2021	200,000
	August 5, 2021	200,000
	November 5, 2021	250,000
	February 5, 2022	250,000
	May 5, 2022	250,000
	August 5, 2022	300,000
	November 5, 2022	300,000
	February 5, 2023	300,000
	May 5, 2023	300,000
	 	 
	Total	3,000,000




 






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