Item 1.01 Entry into a Material Definitive Agreement.
On February 12, 2018, Canbiola, Inc. (the Company) entered into an Executive Services Agreement (the Posel Agreement) with David Posel (Posel). Pursuant to the Posel Agreement, Posel has agreed to serve as the Companys Chief Operating Officer. The initial term of the Posel Agreement began on February 12, 2018 and will continue for a period of four (4) years, unless earlier terminated in accordance with the terms and conditions of the Posel Agreement. Unless otherwise terminated by either party, the Posel Agreement will automatically renew for additional four (4) year terms after the initial term. As compensation for his services, the Company has agreed to pay Posel a base salary of $5,000.00 per month, which additional compensation offered if certain milestones are achieved (the Salary Milestones). The Salary Milestones are as follows:
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If corporate annual sales in a calendar year exceed $1,500,000, Posels income shall increase by 20%;
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If corporate annual sales in a calendar year exceed $3,000,000, Posels income shall increase by 10%; and
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If corporate annual sales in a calendar year exceed $5,000,000, Posels incomes shall increase by 20%.
Any increase in Posels salary will be based on the previous salary amount being earned. In addition, Posel shall be issued one (1) share of Series A Preferred Stock which shall vest and be considered fully earned upon the expiration of the initial four-year term of the Posel Agreement. Posel shall also receive five percent (5%) of net revenues from the sale of the Companys products by U.S.A. Wholesale Exchange, LLC.
Pursuant to the Posel Agreement, the Company agreed to hold harmless and indemnify Posel to the fullest extent permitted, except for acts constituting negligence or willful misconducts by Posel. The Posel Agreement otherwise contains standard representations and warranties.
On February 6, 2018, the Company entered into an Amendment to Consulting Agreement with Lawrence F. Davis (Davis) to amend that certain Consulting Agreement dated June 13, 2017 (the Consulting Agreement). Pursuant to the Consulting Agreement, as amended, Davis agreed to provide consulting services related to the Companys management, strategic planning, and marketing for a term beginning on June 13, 2017 and ending on June 13, 2019, unless earlier terminated pursuant to the Consulting Agreement. As compensation for his services, the Company agreed to issue Davis a total of 1,000,000 shares of common stock (the Davis Shares) in tranches of 250,000 shares each on June 13, 2017, August 13, 2017, November 13, 2017, and February 13, 2017, respectively. The Davis Shares shall vest and be considered fully earned at the end of the term of the amended Consulting Agreement.
On February 14, 2018, the Company entered into an Executive Services Agreement (the Holtmeyer Agreement) with Andrew W. Holtmeyer (Holtmeyer). Pursuant to the Holtmeyer Agreement, Holtmeyer agreed to serve as the Executive Vice President of Business Development. The initial term of the Holtmeyer Agreement began on February 14, 2018 and continues for a period of three years, unless earlier terminated in accordance with the terms and conditions of the Holtmeyer Agreement. Unless otherwise terminated by either party, the Holtmeyer Agreement will automatically renew for additional three year terms after the initial term. As compensation for his services, the Company agreed to pay Holtmeyer a base salary of $10,000.00 per month.
As additional compensation, Holtmeyer shall be issued six shares of the Companys Series A Preferred Stock (Shares), which shall be issued according to the following vesting schedule:
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Three Shares will be issued and considered fully vested upon the one year anniversary of this Agreement.
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Two Shares will be issued and considered fully vested upon the two year anniversary of this Agreement.
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One Share will be issued and considered fully vested upon the three year anniversary of this Agreement.
All Shares will be considered fully earned upon issuance. Executive shall forfeit all unvested Shares should Holtmeyers engagement with the Company terminate, for any reason, prior to the expiration of its term.
Pursuant to the Holtmeyer Agreement, the Company agreed to hold harmless and indemnify Holtmeyer to the fullest extent permitted, except for acts constituting negligence or willful misconducts by Holtmeyer. The Holtmeyer Agreement otherwise contains standard representations and warranties.