Item 1.01. Entry into a Material Definitive Agreement
The disclosures in Item 5.02 of this Current Report on Form 8-K are incorporated
by reference into this Item 1.01.
Item 3.02 Unregistered Sales of Equity Securities.
The disclosures in Item 5.02 of this Current Report on Form 8-K are incorporated
by reference into this Item 3.02. The issuances described in Item 5.02 are
exempt from registration under Section 4(a)(2) of the Securities Act of 1933, as
amended (the "Act"), in reliance upon exemptions from the registration
requirements of the Act in transactions not involving a public offering.
Item. 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Equity Compensation Plan
On April 2, 2021, the Board of Directors (the "Board") of CEN Biotech, Inc., an
Ontario, Canada corporation (the "Company") adopted the 2021 Equity Compensation
Plan (the "2021 Plan") providing for the granting of options to purchase shares
of common stock, restricted stock awards and other stock-based awards to
directors, officers, employees, advisors and consultants of the Company and
reserved 20,000,000 shares of the Company's common stock for issuance under the
2021 Plan. The foregoing description of the 2021 Plan does not purport to be
complete and is qualified in its entirety by the full text of the 2021 Plan, a
copy of which is attached hereto as Exhibit 10.1 and incorporated by reference
herein.
In connection with the 2021 Plan, the Board also approved the use of restricted
stock agreements under the 2021 Plan, one being for U.S. persons (the "U.S.
RSA") and one being for Canadian persons (the "Canadian RSA"). The foregoing
description of the U.S. RSA and the Canadian RSA, does not purport to be
complete and is qualified in its entirety by the full text of the form of the
U.S. RSA and the form of the Canadian RSA, copies of which are attached hereto
as Exhibit 10.2 and 10.3, respectively, and are incorporated by reference
herein.
November 29, 2017, the Board adopted the 2017 Equity Compensation Plan (the
"2017 Plan") providing for the granting of options to purchase shares of common
stock, restricted stock awards and other stock-based awards to directors,
officers, employees, advisors and consultants. The Company reserved 20,000,000
shares of common stock for issuance under the 2017 Plan and has to date issued
19,674,9875 shares of common stock under the 2017 Plan.
Restricted Stock Agreements
On April 2, 2021, the Company entered into an RSA (the "Boswell RSA") with
Richard Boswell. Pursuant to the Boswell RSA, the Company granted Mr. Boswell
2,185,679 restricted shares of the Company's common stock under the 2021 Plan to
vest immediately on the grant date. The description of the Boswell RSA does not
purport to be complete and is qualified in its entirety by the full text of the
Boswell RSA, a copy of which is filed as Exhibit 10.4 hereto and is incorporated
by reference herein.
On April 2, 2021, the Company entered into an RSA (the "Chaaban RSA") with
Bahige Chaaban. Pursuant to the Chaaban RSA, the Company granted Mr. Chaaban
3,106,122 shares of the Company's common stock under the 2021 Plan to vest
immediately on the grant date. The description of the Chaaban RSA does not
purport to be complete and is qualified in its entirety by the full text of the
Chaaban RSA, a copy of which is filed as Exhibit 10.5 hereto and is incorporated
by reference herein.
On April 2, 2021, the Company entered into an RSA (the "Ferris RSA") with Ameen
Ferris. Pursuant to the Ferris RSA, the Company granted Mr. Ferris 1,000,000
shares of the Company's common stock under the 2021 Plan to vest immediately on
the grant date. The description of the Ferris RSA does not purport to be
complete and is qualified in its entirety by the full text of the Ferris RSA, a
copy of which is filed as Exhibit 10.6 hereto and is incorporated by reference
herein.
On April 2, 2021, the Company entered into an RSA (the "Lavenu RSA") with Harold
D. Lavenu. Pursuant to the Lavenu RSA, the Company granted Mr. Lavenu 1,041,250
shares of the Company's common stock under the 2021 Plan to vest immediately on
the grant date. The description of the Lavenu RSA does not purport to be
complete and is qualified in its entirety by the full text of the Lavenu RSA, a
copy of which is filed as Exhibit 10.7 hereto and is incorporated by reference
herein.
On April 2, 2021, the Company entered into an RSA (the "Payne RSA") with Brian
Payne. Pursuant to the Payne RSA, the Company granted Mr. Payne 1,435,000 shares
of the Company's common stock under the 2021 Plan to vest immediately on the
grant date. The description of the Payne RSA does not purport to be complete and
is qualified in its entirety by the full text of the Payne RSA, a copy of which
is filed as Exhibit 10.8 hereto and is incorporated by reference herein.
On April 2, 2021, the Company entered into an RSA (the "Saadikh RSA") with
Usamakh Saadikh. Pursuant to the Saadikh RSA, the Company granted Mr. Saadikh
1,000,000 shares of the Company's common stock under the 2021 Plan to vest
immediately on the grant date. The description of the Saadikh RSA does not
purport to be complete and is qualified in its entirety by the full text of the
Saadikh RSA, a copy of which is filed as Exhibit 10.9 hereto and is incorporated
by reference herein.
On April 2, 2021, the Company entered into an RSA (the "Strilchuck RSA") with
Donald Strilchuck. Pursuant to the Strilchuck RSA, the Company granted Mr.
Strilchuck 341,250 shares of the Company's common stock under the 2021 Plan to
vest immediately on the grant date. The description of the Strilchuck RSA does
not purport to be complete and is qualified in its entirety by the full text of
the Strilchuck RSA, a copy of which is filed as Exhibit 10.10 hereto and is
incorporated by reference herein.
On April 2, 2021, the Company entered into an RSA (the "Tarrabain RSA") with
Alex Tarrabain. Pursuant to the Tarrabain RSA, the Company granted Mr. Tarrabain
300,000 shares of the Company's common stock under the 2021 Plan to vest
immediately on the grant date. The description of the Tarrabain RSA does not
purport to be complete and is qualified in its entirety by the full text of the
Tarrabain RSA, a copy of which is filed as Exhibit 10.11 hereto and is
incorporated by reference herein.
--------------------------------------------------------------------------------
New Executive Appointments
On April 2, 2021, the Board appointed Ameen Ferris to serve as a Vice President
of the Company effective as of April 2, 2021. Mr. Ferriss has served as a member
of Board since July 2017 and continues to serve in such capacity. Mr. Ferris is
a successful entrepreneur who has founded numerous retail/wholesale companies,
and brands. In 1991, Mr. Ferris founded the retail chain, Healthy's Nutrition
("Healthy's"), a specialty retail company focusing on quality health
supplements. Mr. Ferris built a multi-million-dollar company with limited
resources, and established a thriving Canadian retail chain with warehousing, a
full line of private label supplements including, sports nutrition, ailment
specific herbal supplements and vitamins. He also co-branded the Healthy's
concept in department stores such as The Hudson Bay Company, Eatons and in
select grocery chains. Healthy's was acquired in 2006 by the publicly traded
corporation, Planet Organic. In 2005, Mr. Ferris also established the Low Carb
Store, one of Canada's premier specialty food locations. Mr. Ferris founded
Natural Choice Distribution, developing and distributing leading natural
supplements, diet products, sports nutrition and therapeutic herbal health
supplements. Specializing in brand development, Mr. Ferris entered into an
exclusive contract through his own company, Brandrouse, in 2008 through May 2017
by the biotechnology company LivCorp Inc. (a division of Delivra Inc.) with the
task of developing their OTC topical product on a start-up budget. From a white
label, he established the market orientation and strategy for the brand
LivRelief™. His contributions included, strategy, segmentation, targeting and
positioning of the brand, involvement and guidance with product development,
refinements and extensions, package design of all LivRelief consumer products in
Canada, development of LivRelief's image as a customer-centric brand, marketing
and advertising of LivRelief products In May 2017, Mr. Ferris founded the brand
consulting firm Brand Rouse.
On April 2, 2021, the Board appointed Harold Aubrey De Lavenu to serve as a Vice
President of the Company effective as of April 2, 2021. Mr. Lavenu has served as
a member of Board since July 2017 and continues to serve in such capacity. Mr.
Lavenu is a successful businessman with military background, currently based in
the South of Portugal. Mr. Lavenu has been the director of his company, Hammers
'n' Blades, since September 2002. After joining the British Royal Navy in 1983,
pursuing a vocation as a Mine Clearance Diver (Navy Seal), Mr. Lavenu was
trained to work as an Explosive Ordinance Disposal Specialist.
Executive Agreements
On April 2, 2021, the Company entered into an Executive Employment Agreement
with Ameen Ferris (the "Ferris EA"). Pursuant to the Ferris EA, during the term
of the Ferris EA, the Company agreed to employ, and Mr. Ferris agreed to accept
employment with the Company as a Vice President. Pursuant to the Ferris EA, the
Company agreed to issue Mr. Ferris 1,000,000 shares of the Company's common
stock subject to the provisions of an RSA under the 2021 Plan. Additionally,
pursuant to the Ferris EA, the Company agreed to pay Mr. Ferris a base salary of
$31,200. The term of the Ferris EA is for an indefinite period subject to
termination in accordance with the terms of the Ferris EA. The Ferris EA can be
terminated by Mr. Ferris for "Good Reason" as such term is defined in the Ferris
EA or without "Good Reason" by giving a minimum of thirty (30) days' prior
written notice to advise the Company that he is resigning his employment. In the
event of termination of the Ferris EA by Mr. Ferris by resignation without "Good
Reason," then no sums will be payable by the Company except for: (i) any unpaid
base salary through the effective date of resignation and (ii) reimbursement for
any expenses for which Mr. Ferris had not been reimbursed. In the event of a
termination of the Ferris EA by Mr. Ferris for "Good Reason," then the Company
would have a period of thirty (30) days following receipt of such notice from
Mr. Ferris to cure or revoke the event constituting "Good Reason. The Company
can also terminate the Ferris EA for "Cause" as such term is defined in the
Ferris EA, and if that occurs, no sums will be payable by the Company except
for: (i) any unpaid base salary through the date of termination, (ii)
reimbursement for any expenses for which the Mr. Ferris had not been reimbursed
and (iii) only if the act of "Cause" does not constitute willful misconduct,
disobedience or willful neglect of duty that is not trivial and has not been
condoned by the Company, any other amount due under the Ferris EA for
termination pay or severance pay. The Company can also terminate the Ferris EA
without "Cause" at any time. Pursuant to the Ferris EA, in connection with the
sale of the Company or any other transaction constituting a "Change in Control"
as such term is defined in the Ferris EA or a strategic transaction, the Company
may, but will not be obligated, to provide Mr. Ferris with additional
compensation (including, but not limited to additional stock options or
restricted stock) for services outside of general scope of duties and
responsibilities of Mr. Ferris.
"Good Reason" is defined under the Ferris EA as a material diminution in the
base salary, excluding reductions (totaling no more than 20% in the aggregate)
generally applicable to all senior executives provided, however, that such
exclusion does not apply if the material diminution in occurs within 60 days
prior to the consummation of a "Change in Control" that was already under
consideration when the notice of the occurrence of the event alleging "Good
Reason" was made or 12 months thereafter. "Cause" is defined under the Ferris EA
as (i) an intentional tort (excluding any tort relating to a motor vehicle)
which causes substantial loss, damage or injury to the property or reputation of
the Company or its subsidiaries (ii) continued or repeated gross neglect of Mr.
Ferris' reasonable duties (for a reason other than illness or incapacity) which
is not cured within ten (10) days after written notice thereof by the Board
(iii) the disregard of written, material policies of the Company or its
subsidiaries which causes a material loss, damage or injury to the property or
reputation of the Company or its subsidiaries which is not cured within ten (10)
days after written notice thereof by the Board (iv) any material breach of Mr.
Ferris' ongoing obligation not to disclose confidential information and not to
assign intellectual property developed during employment which, if capable of
being cured, is not cured within ten (10) days after written notice thereof is
given by the Board or (v) any substantial willful act which has a material
harmful effect on the Company. The foregoing description of the Ferris EA does
not purport to be complete and is qualified in its entirety by the full text of
the Ferris EA, a copy of which is attached hereto as Exhibit 10.12 and
incorporated by reference herein.
On April 2, 2021, the Company entered into an Executive Employment Agreement
with Harold Aubrey De Lavenu (the "Lavenu EA"). Pursuant to the Lavenu EA,
during the term of the Lavenu EA, the Company agreed to employ, and Mr. Lavenu
agreed to accept employment with the Company as a Vice President. Pursuant to
the Lavenu EA, the Company agreed to issue Mr. Lavenu 1,041,250 shares of the
Company's common stock subject to the provisions of an RSA under the 2021 Plan.
Additionally, pursuant to the Lavenu EA, the Company agreed to pay Mr. Lavenu a
base salary of $31,200. The term of the Lavenu EA is for an indefinite period
subject to termination in accordance with the terms of the Lavenu EA. The Lavenu
EA can be terminated by Mr. Lavenu for "Good Reason" as such term is defined in
the Lavenu EA or without "Good Reason" by giving a minimum of thirty (30) days'
prior written notice to advise the Company that he is resigning his employment.
In the event of termination of the Lavenu EA by Mr. Lavenu by resignation
without "Good Reason," then no sums will be payable by the Company except for:
(i) any unpaid base salary through the effective date of resignation and (ii)
reimbursement for any expenses for which Mr. Lavenu had not been reimbursed. In
the event of a termination of the Lavenu EA by Mr. Lavenu for "Good Reason,"
. . .
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. Description
10.1 CEN Biotech, Inc. 2021 Equity Compensation Plan.
10.2 Form of Restricted Stock Agreement for U.S. persons under 2021 CEN
Biotech, Inc. Equity Compensation Plan.
10.3 Form of Restricted Stock Agreement for Canadian persons under 2021 CEN
Biotech, Inc. Equity Compensation Plan.
10.4 Restricted Stock Agreement between CEN Biotech, Inc. and Richard
Boswell.
10.5 Restricted Stock Agreement between CEN Biotech, Inc. and Bahige
Chaaban.
10.6 Restricted Stock Agreement between CEN Biotech, Inc. and Ameen
Ferris.
10.7 Restricted Stock Agreement between CEN Biotech, Inc. and Harold D.
Lavenu.
10.8 Restricted Stock Agreement between CEN Biotech, Inc. and Brian
Payne.
10.9 Restricted Stock Agreement between CEN Biotech, Inc. and Usamakh
Saadikh.
10.10 Restricted Stock Agreement between CEN Biotech, Inc. and Donald
Strilchuck.
10.11 Restricted Stock Agreement between CEN Biotech, Inc. and Alex
Tarrabain.
10.12 Executive Employment Agreement between CEN Biotech, Inc. and Ameen
Ferris.
10.13 Executive Employment Agreement between CEN Biotech, Inc. and Harold
Aubrey De Lavenu.
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