Document:

Exhibit 10.4

 

AMENDMENT TO AMENDED AND RESTATED INDEPENDENT
DIRECTOR AGREEMENT

 

THIS AMENDMENT TO AMENDED
AND RESTATED INDEPENDENT DIRECTOR AGREEMENT (this “Amendment”) is entered into on July 19, 2021 (the “Amendment
Effective Date”), by and between Kaival Brands Innovations Group, a Delaware corporation (the “Company”),
and Paul Reuter (the “Director”).

 

WHEREAS, the Company
and the Director entered into an Independent Director Agreement on March 17, 2021 as amended and restated by the Amended and Restated
Independent Director Agreement entered into on March 29, 2021 (the “Original Agreement”); and

 

WHEREAS, the Company
and the Director each desire to modify the term of the Original Agreement, compensation, and such other aspects of the Original
Agreement as specifically set forth in this Amendment.

 

NOW, THEREFORE,
in consideration of the mutual agreements and promises contained herein, and other good and valuable consideration, the adequacy
and sufficiency of which are hereby acknowledged, the Company and the Director hereby agree as follows:

 

1.    
Construction. 

 

a.    
Except as expressly amended hereby, all terms and conditions of the Original Agreement shall
remain in full force and effect. 

 

b.    
All capitalized terms not defined herein shall have the meanings ascribed to those terms in
the Original Agreement. 

 

c.    
The Original Agreement, as amended by this Amendment, is hereafter referred to as the “Agreement”.

 

2.    
Amendments.

 

a.    
Sections 1(a) and 1(b) of the Original Agreement are replaced in their entirety by the following:

 

	 	1.	Service to the Board. 

 

(a)      Subject
to the terms and provisions of this Agreement, the term of service as a director under this Agreement
shall begin on the Effective Date and shall continue until the earliest of the following to occur (the “Term”):
(i) the second anniversary of the Effective Date; (ii) the death or disability of the Director; (iii)
the termination of the Director from membership on the Board by the mutual agreement of the Company and the Director; (iv) the
removal of the Director from the Board by the stockholders of the Company in accordance with the Delaware General Corporation Law,
the Company’s Restated Certificate of Incorporation, as amended, and the Company’s Bylaws; and (v) the resignation
by the Director from the Board. For purposes of this Section, “disability” shall mean the inability of the Director
to perform the Services for a period of at least fifteen (15) consecutive days.

 

    	 

    	 

    

 

(b)      During
the Term of this Agreement, the Director will serve on the following Board committees (each a “Committee”) and
in the capacities stated (which may be changed from time to time in accordance with the Company’s Bylaws):

 

	 	Member	Chairperson
	 	 	 
	Audit
Committee	☒	 
	 	 	 
	Governance
and Nominating Committee	☒	☒
	 	 	 
	Finance Committee	☒	   
 
	 	 	 
	Compensation Committee	☒	 

 

In addition, the Director hereby agrees
that he also will serve as the Chairperson of the Board (which may be changed from time to time in accordance with the Company’s
Bylaws).

 

b.    
Section 3 of the Original Agreement is amended by replacing the entire Section 3(a) of the
Original Agreement with the following:

 

(a)      Board
Compensation; Committee Compensation. For Services provided to the Company hereunder, the Director will be entitled to receive
compensation as follows: (i) during the first year of the Term of this Agreement, the Director shall be paid annual compensation
equal to $100,000, which shall be paid in four equal quarterly payments of $25,000; and (ii) during the second year of the Term
of this Agreement, the Director shall be paid annual compensation equal to $50,000, which shall be paid in four equal quarterly
payments of $12,500. For the avoidance of doubt, beginning on the quarter ending July 31, 2021, the Company shall pay the Director
$25,000 per quarter and shall be entitled to deduct any payments previously paid for the quarter ending July 31, 2021 pursuant
to the terms of the Original Agreement so that the Company solely pays the Director a total of $25,000 for the Services provided
during the quarter ending July 31, 2021. Further, at the end of the first year of the Term of this Agreement, the Company shall
pay the Director an additional $12,500 in order for the Director to receive total annual compensation of $100,000 for the first
year of the Term of this Agreement.

 

c.   Section 3 of the
Original Agreement is amended by replacing the entire Section 3(b) of the Original Agreement with the following:

 

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(b)      Stock
Compensation. As additional compensation for the Services provided
to the Company hereunder, the Director received from the Company on the Effective Date, a non-qualified
stock option (the “Stock Option”) to purchase 300,000 shares of the Company’s common stock, with the exercise
price determined by using the closing bid price of the Company’s common stock on the Effective Date. Pursuant to the terms
of this Agreement, the vesting of the Stock Option shall be amended as follows: (i) 90,000 of the shares underlying the Stock Option
vested on the Effective Date; (ii) 105,000 of the shares underlying the Stock Option shall vest on the first anniversary of the
Effective Date; and (iii) 105,000 of the shares underlying the Stock Option shall vest on the second anniversary of the Effective
Date; however, if a change of control event occurs (as defined in the Amended Award Agreement (as defined below)), all unvested
shares shall vest immediately. Any and all equity awards shall be granted under and shall be subject to the terms and provisions
of the 2020 Stock and Incentive Compensation Plan, as the same may be amended from time to time (the “Incentive Plan”),
and shall be granted subject to the execution and delivery of an amended stock option award agreement, as approved by the Board,
in substantially the same form as attached hereto as Exhibit A (the “Amended Award Agreement”). The parties
hereby agree that to the extent permitted by the Incentive Plan, in event the Company effects one or more reverse stock splits
of its common stock, the number of shares underlying the Stock Option and the exercise price per share of the Stock Option shall
be adjusted in proportion to the reverse stock split ratio.

 

d.  Section 3 of the
Original Agreement is amended by adding Section 3(f) to the Agreement as follows:

 

(f)       Additional
Stock Compensation. As additional compensation for the Services provided to the Company hereunder,
the Director is also entitled to receive from the Company on the Amendment Effective Date, a
non-qualified stock option (the “Additional Stock Option”) to purchase 200,000 shares of the Company’s
common stock, with the exercise price determined by using the closing bid price of the Company’s common stock on the Amendment
Effective Date. Pursuant to the terms of the Agreement, vesting shall be as follows: (i) 100,000 of the shares underlying the Additional
Stock Option shall vest on the first anniversary of the Effective Date; and (ii) 100,000 of the shares underlying the Additional
Stock Option shall vest on the second anniversary of the Effective Date; however, if a change of control event occurs (as
defined in the New Award Agreement (as defined below)), all unvested shares shall vest immediately. Any and all equity awards shall
be granted under and shall be subject to the terms and provisions of the Incentive Plan, and shall be granted subject to the execution
and delivery of a stock option award agreement, as previously approved by the Board in substantially the form attached hereto as
Exhibit B (the “New Award Agreement”). The parties hereby agree that to the extent permitted by the Incentive
Plan, in the event the Company effects one or more reverse stock splits of its common stock, the number of shares underlying the
Additional Stock Option and the exercise price of the Additional Stock Option shall be adjusted in proportion to the reverse stock
split ratio.

 

3.    
Counterparts. This Amendment may be executed
in two or more counterparts, each of which shall be deemed to be an original but all of which together shall constitute one and
the same instrument. Facsimile execution and delivery of this Amendment is legal, valid, and binding for all purposes.

 

Signatures on Following Page

 

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IN WITNESS WHEREOF,
the parties hereto have caused this Amendment to Amended and Restated Independent Director Agreement to be duly executed and signed
as of the effective date above written.

 

	 	COMPANY:
	 	 
	 	KAIVAL
BRANDS INNOVATIONS
	 	GROUP,
INC., a Delaware corporation
	 	 
	 	By:
	/s/
Eric Mosser
	 	Name:
	Eric
Mosser
	 	Title:	Chief
Operating Officer
	 	 
	 	DIRECTOR:
	 	 
	 	/s/
Paul Reuter
	 	Paul
Reuter

 

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EXHIBIT A

 

Form of Amendment No. 1 to

Stock Option Award Agreement

 

KAIVAL BRANDS INNOVATIONS GROUP, INC.

2020 STOCK AND INCENTIVE COMPENSATION PLAN

 

Nonqualified Stock Option

 

1. Amendment. With reference to that
certain Stock Option Award Agreement dated March 17, 2021 (the “Award Agreement”) between Paul Reuter (“Awardee”)
and Kaival Brands Innovation Group, Inc. (the “Company”), the parties hereto agree to amend the vesting schedule
as follows (this “Amendment”):

 

Vesting of Option. The Option
will become vested and exercisable with respect to the number of shares set forth in the vesting schedule below until the Option
is 100% vested, except as otherwise provided in the Plan:

 

	DATE
    VESTED AND EXERCISABLE	 	NUMBER
    OF SHARES EXERCISABLE
	March
    17, 2021	 	 	90,000	 
	March 17, 2022	 	 	105,000	 
	March
    17, 2023	 	 	105,000	 

 

2. Construction.

 

a.    
Except as expressly amended hereby, all terms and conditions of the Award Agreement shall
remain in full force and effect. 

 

b.    
All capitalized terms not defined herein shall have the meanings ascribed to those terms in
the Award Agreement. 

 

c.    
The Award Agreement, as amended by this Amendment, is hereafter referred to as the “Agreement”.

 

	KAIVAL BRANDS INNOVATIONS GROUP,
INC.	 
	 	 
	By:	 	 	Date:	 
	 	 
	Title:	 	 	 

 

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The Awardee acknowledges
receipt of a copy of the Plan, represents that he or she is familiar with the terms and provisions thereof, and hereby accepts
the Option evidenced hereby subject to all the terms, provisions, conditions and restrictions of the Plan. The Awardee also understands
that this Option is not intended to qualify as an Incentive Stock Option as defined in Section 422 of the Code. Accordingly,
the Awardee understands that he or she will recognize taxable income upon exercise of the Option based on the difference between
the Option exercise price and the Fair Market Value of the shares at the time of exercise.

 

	Signature:_______________________________________	 
	 
	Printed Name:__________________________________________	 
	 
	Date:__________________________________________________	 

 

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EXHIBIT B

 

Form of Stock Option Award Agreement

 

KAIVAL BRANDS INNOVATIONS GROUP, INC.

2020 STOCK AND INCENTIVE COMPENSATION PLAN

 

Nonqualified Stock Option

 

Grant of Option.
KAIVAL BRANDS INNOVATIONS GROUP, INC., a Delaware corporation (the “Company”), hereby grants to the Awardee named below
a Nonqualified Stock Option for the purchase of up to but not exceeding the number of shares of the Company’s Common Stock,
$.001 par value per share (the “Option”), exercisable at the price and upon the terms and conditions set forth below,
and subject to any adjustments made pursuant to Section 14 of the Company’s 2020 Stock and Incentive Compensation Plan (“Plan”):

 

	Awardee:	 	Paul Reuter
	 
	Number of Shares:	 	 	200,000
	 	 	 	 
	Grant Date:	 	 	July
                                                                                                                                            19,
                                                                                                                                            2021
	 	 	 	 
	Exercise Price/Share:	 	$	0.8801
	 	 	 	 
	Expiration Date:	 	 	July
                                                                                                                                            19,
                                                                                                                                            2031

 

Approval of Counsel
Required for Issuance of Common Stock. No shares of Common Stock shall be issued pursuant to the exercise of the Option unless
counsel for the Company shall be satisfied that such issuance will be in compliance with applicable Federal and state securities
laws.

 

Option Subject to Plan.
The Option is granted as a Nonqualified Stock Option as defined in Section 2(w) of the Plan that is not intended to qualify
as an incentive stock option within the meaning of Section 422 of the Internal Revenue Code, is issued pursuant to the Plan, and
is in all respects subject to the terms, provisions, conditions and restrictions of the Plan. In the event of any conflict between
this instrument and the Plan, the Plan shall control.

 

Defined Terms. Except
as otherwise defined herein, capitalized terms used in this instrument shall have the meanings ascribed to such terms in the Plan.

 

Exercise Price.
The Option exercise price set forth above for each related Common Share is not less than the Fair Market Value of each Common Share
calculated as of the date of grant in accordance with Section 2(t) of the Plan. The exercise price is subject to adjustment pursuant
to Section 14 of the Plan.

 

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Vesting of Option.
The Option will become vested and exercisable with respect to the number of shares set forth in the vesting schedule below until
the Option is 100% vested, except as otherwise provided in the Plan:

 

	DATE VESTED AND EXERCISABLE	 	NUMBER OF SHARES EXERCISABLE
	March 17, 2022	 	 	100,000	 
	March 17, 2023	 	 	100,000	 

 

All unvested shares underlying
the Option shall vest immediately upon a Change of Control (as that term is defined in the Plan).

 

Option Period. The
Option, or any part thereof, may be exercised at any time between the date at which it becomes vested and exercisable and the Expiration
Date set forth above, inclusive of such dates, except that in the event of the Awardee’s death, or his or her Disability
(as defined under Section 2(p) of the Plan), or if the Awardee’s employment by the Company is terminated for any reason,
or if there is a Change of Control of the Company, then the provisions of Sections 12(c) and 14(b) of the Plan, respectively, shall
govern the option period.

 

Method of Exercise.
The Option is exercisable by providing a written notice of exercise in accordance with the procedures adopted by the Committee,
but subject to all conditions and restrictions set forth in the Plan, and the Option consideration shall be payable in one of the
forms permitted under Section 8(f) of the Plan, as determined by the Committee. The exercise price for the number of shares exercised
under the Option shall be payable in full at the time of exercise.

 

Transferability. The
Option is not assignable or transferable except by will or the laws of descent or distribution and is exercisable during the Awardee’s
lifetime only by him or her. No assignment or transfer of the Option, or the rights represented thereby, whether voluntary or involuntary,
by operation of law or otherwise (except to a designated beneficiary, upon death, by will or the laws of descent or distribution)
will vest in the assignee or transferee any interest or right herein whatsoever, but immediately upon such assignment or transfer
the Option will terminate and become of no further effect.

 

Tax Withholding on Exercise.
Awardee shall satisfy the Company’s withholding obligation of any federal, state, local or foreign taxes of any kind required
to be withheld as a result of an exercise of the Option by providing payment of the amount of such withholding: (i) by cash, certified
or cashier’s check, money order or personal check; (ii) by delivery of shares of the Company’s common stock already
owned by Awardee; (iii) by the Company’s withholding from other compensation payable to Awardee by the Company; or (iv) pursuant
to a request by Awardee, by withholding from the shares of common stock to be delivered upon exercise of the Option no more than
the maximum number of shares that is necessary to satisfy the statutory withholding obligation.

 

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	KAIVAL BRANDS INNOVATIONS GROUP,
INC.	 
	 	 
	By:	 	 	Date:	 
	 	 
	Title:	 	 	 

 

The Awardee acknowledges
receipt of a copy of the Plan, represents that he or she is familiar with the terms and provisions thereof, and hereby accepts
the Option evidenced hereby subject to all the terms, provisions, conditions and restrictions of the Plan. The Awardee also understands
that this Option is not intended to qualify as an Incentive Stock Option as defined in Section 422 of the Code. Accordingly,
the Awardee understands that he or she will recognize taxable income upon exercise of the Option based on the difference between
the Option exercise price and the Fair Market Value of the shares at the time of exercise.

 

	Signature:_______________________________________	 
	 
	Printed Name:__________________________________________	 
	 
	Date:___________________________________________	 

 

9Exhibit 10.1

		
			Exhibit 10.1
		

		
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			Chipotle Mexican Grill, Inc.
		

		
			Director Compensation Program and Stock Ownership Guidelines
		

		
			Effective May 18, 2021
		

		
			﻿
		

		
			Set forth below is the compensation program for non-employee directors of Chipotle Mexican Grill, Inc.  Members of Chipotle’s Board of Directors who are employees of Chipotle do not receive compensation for their services as directors. 
		

		
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						﻿Retainer Type

					
					
						Cash

					
					
						Restricted Stock Units (RSUs)

				
	
					
						Annual Director Retainer

					
					
						$110,000

					
					
						$150,000

				
	
					
						Committee Chair Retainers:

					
					
						 

					
					
						 

				
	
					
						Audit

					
					
						$37,500

					
					
						 

				
	
					
						Compensation

					
					
						$37,500

					
					
						 

				
	
					
						Nominating and Corporate Governance

					
					
						$25,000

					
					
						 

				
	
					
						Committee Member Retainers (excluding Committee Chair):

					
					
						 

					
					
						 

				
	
					
						Audit

					
					
						$15,000

					
					
						 

				
	
					
						Compensation

					
					
						$15,000

					
					
						 

				
	
					
						Nominating and Corporate Governance

					
					
						$10,000

					
					
						 

				
	
					
						Lead Independent Director

					
					
						$50,000

					
					
						 

				

		
			In addition to the above cash retainers, if a Committee holds more than eight (8) formal meetings during the year, each Committee member (including the Chair) will receive a $2,000/meeting fee for each formal meeting in excess of eight (8) formal meetings in which the Committee member participates.  To qualify as a “formal meeting,” the meeting must have been scheduled in advance, follow a defined agenda circulated in advance, be attended by a quorum of the Committee members, and be documented with minutes.  A Committee member must attend at least 2/3rds of the meeting to qualify for the meeting fee.
		

		
			Compensation Period and Payments
		

		
			Director compensation will be paid based on the directors’ one-year term of service from one annual meeting of shareholders to the next annual meeting of shareholders (i.e., from May to May) (the “compensation year”).  
		

		
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			All cash retainers will be paid in arrears, on a pro rata basis, at the end of November and May.  No director may simultaneously receive a Committee Chair retainer and a Committee Member retainer for service on the Committee for which he or she serves as Chair.
		

		
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			The number of RSU’s granted to a director will be determined by dividing $150,000 by the closing stock price of Chipotle common stock on the grant date.  RSUs are granted to non-
		

		 

 

		employee directors on the date of Chipotle’s annual meeting of shareholders meeting each year and vest 100% on the grant date.    
		

		
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			Changes During a Compensation Year
		

		
			If a director is elected to the Board on a date that is between annual meetings, the newly elected director will receive (i) a prorated RSU award, granted on the date that is three (3) business days after the date of election, and (ii) prorated cash compensation, which will be paid in accordance with the regular director pay schedule.  Both the total grant value of the RSU and the amount of cash compensation will be prorated based on the date of the director’s election to the Board and the number of days elapsed since the annual meeting of shareholders that most recently occurred (e.g., if the annual meeting is on May 31 and a director joins on October 1, that director will receive 243/365th of the annual compensation amount). 
		

		
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			If a director is appointed to or leaves a Committee, or assumes or relinquishes a Chair or Lead Independent Director position, on a date that is between annual meetings, his or her cash compensation will be prorated based on the effective date of the change in service and the number of days elapsed since the annual meeting of shareholders that most recently occurred.
		

		
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			Deferral Election
		

		
			A director may elect to defer the receipt of cash compensation or defer the receipt of shares of common stock that otherwise would be issuable upon vesting of an RSU by submitting to Chipotle a deferral election in the form provided by Chipotle.  The deferral form must be received by Chipotle before the end of the calendar year immediately prior to the compensation year in which the cash compensation or RSU relates (for example, the deferral election is due before December 31, 2019 for director compensation payable for the compensation year May 2020 – May 2021).  
		

		
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			Expense Reimbursement
		

		
			Directors will be reimbursed for reasonable expenses directly incurred in connection with their service as directors, including travel and lodging expenses for meetings.  Reimbursement is subject to a director providing timely substantiation of expenses pursuant to Chipotle’s expense policy.
		

		

		

		 

		

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			Stock Ownership Guidelines
		

		
			Directors are expected to own, within five years after being elected to the Board, shares of Chipotle common stock having a total value of five (5) times the annual cash retainer payable to non-employee directors (excluding Committee, Chair and Lead Independent Director retainers).
		

		
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			The following forms of equity count towards the required stock ownership guidelines:
		

			
	
			
				 ·
			

			
	
			
			shares of Chipotle common stock owned outright (including shares received upon vesting of restricted stock units)

			
	
			
				 ·
			

			
	
			
			unvested restricted stock

			
	
			
				 ·
			

			
	
			
			unvested restricted stock units

			
	
			
				 ·
			

			
	
			
			any cash or restricted stock units that have been deferred

		
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			The following forms of equity do not count towards the required stock ownership guidelines:
		

			
	
			
				 ·
			

			
	
			
			shares of Chipotle common stock transferred to any individual, other than the director’s spouse

			
	
			
				 ·
			

			
	
			
			unvested and vested stock options

			
	
			
				 ·
			

			
	
			
			unvested and vested stock appreciation rights

			
	
			
				 ·
			

			
	
			
			unearned performance shares/units

		 

		

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