|
EXHIBIT 10.1
First Amendment
to
Executive Employment Agreement
This First Amendment (the “First
Amendment”) to Executive Employment Agreement is made
this 24 th day of March, 2008, by and between The
Quantum Group, Inc., a Nevada corporation (the
“Company”), on the one hand, and Noel J. Guillama,
Chairman of the Board of Directors and Chief Executive Officer of
the Company, on the other hand (the “Executive”).
WHEREAS , the Company and the Executive
entered into an Executive Employment Agreement dated as of
September 7, 2007 (the “Employment Agreement”); and
WHEREAS , the Executive continues to perform
valuable services for the Company and the Company desires to assure
itself of the continuing services of Executive; and
WHEREAS , in consideration of the foregoing
and in order to amend the terms of the Agreement and to provide for
certain additional compensation to the Executive in accordance with
the present intent of the Company and the Executive.
NOW THEREFORE , in consideration of the
foregoing and for other good and valuable consideration, receipt of
which is hereby acknowledged, and in further consideration of the
mutual covenants contained in the Employment Agreement, the parties
do hereby agree that the Employment Agreement is hereby amended as
follows:
1.
Section “4. Compensation and
Benefits . a. Salary.” to be amended and restated to
read in its entirety as follows:
“ Salary . The Executive shall
be paid a base salary (the “Base Salary”), payable
monthly, at an annual rate of no less than Two Hundred Fifty
Thousand Dollars ($250,000) for the first year effective as of
January 1, 2008. The Base Salary shall be subject to review,
on an annual basis, for subsequent increases by the Compensation
Committee of the Board of Directors of the Company in accordance
with such policies as the Company may hereafter adopt from time to
time. All such subsequent annual increases in the
Executive’s then current salary shall be in the amount of no
less than five percent (5%) increments over his salary for the
prior period. The Base Salary will be payable in accordance
with the customary payroll practices of the Company.”
2.
Section “4. Compensation and
Benefits . b. Annual Bonus.” to be amended and
restated to read in its entirety as follows:
“ Bonus . As additional
compensation, the Executive shall be entitled to receive a bonus
(“Earnings Bonus”) for each fiscal year during the
initial term of Executive’s employment with the Company in
the amount of two percent (2%) of Earnings Before Income Taxes of
the Company earned during the fiscal year for which the Earnings
Bonus for that period is determined, as well as any additional
compensation, principally additional stock options or grants of
restricted stock, which the Company’s Compensation Committee
may determine appropriate for Executive and other executives of the
Company.
In addition, the Executive shall be entitled to
receive a bonus (“Revenue Bonus”) for each fiscal year
during the initial term of Executive’s employment with the
Company in the
amount of one half of a percent (0.5%) of an increase in
the Company’s revenues for the fiscal year for which the
Revenue Bonus is determined as compared with the Company’s
revenue for its prior fiscal year.
The respective payments for the Earnings Bonus and
the Revenue Bonus will made on or before March 15th of the year
following the end of the fiscal year in which such bonuses were
earned. Notwithstanding the foregoing, if any payment to
Executive hereunder is determined to constitute a payment of
nonqualified deferred compensation for purposes of Section 409A of
the Internal Revenue Code, such payment shall be delayed until the
date that is six months after the date of Executive’s
separation from service with the Company, so as to comply with the
special rule for certain “specified employees” set
forth in Code Section 409A(a)(2)(B)(i) unless it is determined that
immediate distribution is permissible (and does not trigger any
additional tax liability pursuant to Code Section 409A(a)(l))
pursuant to Code Section 409A(a)(2)(A)(v) by reason of being
payable in connection with a change in the ownership or effective
control of the Company or in the ownership of a substantial
position of the assets of the Company.”
Under no circumstances will the sum of the Earnings
and Revenue bonuses exceed 200% of the Executive’s base pay
for that year. In view of the fact that the compensation of
the key members of management is of major importance to the Company
and the Executive, it is further agreed that a review of all
compensation for top executives will be undertaken by the
Compensation Committee in the near future and that the bonus plans
may be superceded and replaced by a comprehensive executive
compensation plan to be submiited to the Board of Directors for
consideration in due time.
3.
Section “4. Compensation and
Benefits. i. Stock Options” to be amended and
restated to read in its entirety as follows:
“ Stock Options . The Company
will submit to shareholders for their approval a plan that will
provide inter alia for the issuance of options to Company
executives (including those options that are the subject of this
Section 4) at the 2008 Annual Meeting of Shareholders. All options
issued pursuant to this Section 4 to Executive will be issued under
that plan and will be subject to shareholder approval of the
plan.
i.
Longevity Options .
The Executive shall be entitled to receive
additional longevity options (“Longevity Options”) at
the rate of options to purchase 20,000 shares of the common
stock of the Company on the date of the execution of this First
Amendment at then current Volume Weighted Average Price
(“VWAP”) of the Company’s stock for the 30 days
preceding the grant date ($2.06 for this first grant), plus
an additional 10,000 options shares for each year of employment
counting from January 1, 2008, as adjusted for any future stocks
splits and other combinations, on the anniversary of the Secondary
Public Offering at then current Volume Weighted Average Price
(“VWAP”) of the Company’s stock for the 30 days
preceding the grant date. All such Longevity Options shall
expire ten years from the date of vesting. The first 25% of any
such Longevity Options shall vest o
| 
