Exhibit 10.15
HQ SUSTAINABLE MARITIME INDUSTRIES, INC.
00 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
April 11, 2005
Xxxxxxx Xxxx
000 Xxxxxx Xxxx
Xxxxx 00X
Xxx Xxxx, XX 00000
Re: Amendment No. 1 to Employment Agreement
Dear Xx. Xxxx:
This letter is in reference to that certain Employment Agreement
effective as of April 1, 2004 (the "Agreement"), between HQ Sustainable Maritime
Industries, Inc., a Delaware corporation (the "Company") and you, a resident of
the State of New York. Capitalized terms used herein, unless otherwise defined
or unless the context otherwise indicates, shall have the same meanings as set
forth in the Agreement. The Agreement is hereby amended as follows:
1. Section 5.
Section 5 is hereby amended to read in its entirety as follows:
"Section 5. Location. The locus of the Executive's employment with the
Company shall be the Company's office located at 00 Xxxx Xxxxxx, Xxxxx 0000, Xxx
Xxxx, Xxx Xxxx 10005."
2. Section 10(b)(v).
Section 10(b)(v) is hereby amended to read in its entirety as follows:
"(v) The Company shall purchase a directors and officers liability
insurance policy or otherwise obtain directors and officers liability insurance
coverage, in the amount of Five Million Dollars (US$5,000,000.00) for the
Executive as soon as practicable, but in no event later than the end of the
Company's first fiscal year following the Effective Date."
3. Section 11.
Section 11 is hereby amended to read in its entirety as follows:
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"a. Death. In the event that, during the term of this Agreement, the
Executive dies, this Agreement and the Executive's employment with the Company
shall automatically terminate and the Company shall have no further obligations
or liability to the Executive or his heirs, administrators or executors with
respect to compensation and benefits accruing thereafter, except for the
obligation to pay the Executive's heirs, administrators or executors any earned
but unpaid base salary, unpaid pro rata annual bonus and unused vacation days
accrued through the date of death. The Company shall deduct, from all payments
made hereunder, all applicable taxes, including income tax, FICA and FUTA, and
other appropriate deductions.
b. Disability. In the event that, during the term of this Agreement,
the Executive shall be prevented from performing his duties and responsibilities
hereunder to the full extent required by the Company by reason of "Disability,"
as defined hereinbelow, this Agreement and the Executive's employment with the
Company shall automatically terminate and the Company shall have no further
obligations or liability to the Executive or his heirs, administrators or
executors with respect to compensation and benefits accruing thereafter, except
for the obligation to pay the Executive's heirs, administrators or executors any
earned but unpaid base salary, unpaid pro rata annual bonus and unused vacation
days accrued through the date of Disability. The Company shall deduct, from all
payments made hereunder, all applicable taxes, including income tax, FICA and
FUTA, and other appropriate deductions through the last date of the Executive's
employment with the Company. For purposes of this Agreement, "Disability" shall
mean a physical or mental disability that prevents the performance by the
Executive, with or without reasonable accommodation, of his duties and
responsibilities hereunder for a continuous period of not less than four
consecutive months, or not less than an aggregate of four months during any
one-year period.
c. "Cause."
(i) At any time during the term of this Agreement, the Company
may terminate this Agreement and the Executive's employment hereunder for
"Cause." For purposes of this Agreement, "Cause" shall mean: (a) the willful and
continued failure of the Executive to perform substantially his duties and
responsibilities for the Company (other than any such failure resulting from a
Disability) after a written demand for substantial performance is delivered to
the Executive by the Company, which specifically identifies the manner in which
the Company believes that the Executive has not substantially performed his
duties and responsibilities, which willful and continued failure is not cured by
the Executive within thirty (30) days of his receipt of said written demand; (b)
the conviction of, or plea of guilty or nolo contendre to, a felony, after the
exhaustion of all available appeals; or (c) the willful engaging by the
Executive in gross misconduct which is materially and demonstratively injurious
to the Company, after a written demand to cease or cure such gross misconduct is
delivered to the Executive by the Company, which specifically identifies the
manner in which the Company believes that the Executive has committed gross
misconduct that is materially and demonstratively injurious to the Company,
which gross misconduct does not cease or is not cured by the Executive within
thirty (30) days of his receipt of said written demand.
(ii) Termination of the Executive for "Cause" pursuant to
paragraphs 11(c)(i)(a) and (c) shall be made by delivery to the Executive of a
copy of the written demand referred to in paragraphs 11(c)(i)(a) and (c), or
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pursuant to paragraphs 11(c)(i)(b) by a written notice, either of which shall
specify the basis of such termination and the particulars thereof and finding
that in the reasonable judgment of the Company, the conduct set forth in
paragraph 11(c)(i)(a), 11(c)(i)(b) or 11(c)(i)(c), as applicable, has occurred
and that such occurrence warrants the Executive's termination.
(iii) Upon termination of this Agreement for "Cause," the
Company shall have no further obligations or liability to the Executive or his
heirs, administrators or executors with respect to compensation and benefits
thereafter, except for the obligation to pay the Executive any earned but unpaid
base salary, unpaid pro rata annual bonus and unused vacation days accrued
through the Executive's last day of employment with the Company. The Company
shall deduct, from all payments made hereunder, all applicable taxes, including
income tax, FICA and FUTA, and other appropriate deductions.
d. "Good Reason."
(i) At any time during the term of this Agreement, subject to
the conditions set forth in paragraph 11(d)(iii) hereinbelow, the Executive may
terminate this Agreement and the Executive's employment with the Company for
"Good Reason." For purposes of this Agreement, "Good Reason" shall mean the
occurrence, without the Executive's consent, of any of the following events: (a)
the assignment to the Executive of duties that are significantly different from,
and that result in a substantial diminution of, the duties that he assumed on
the Inception Date; (b) the assignment to the Executive of a title that is
different from and subordinate to the title specified in paragraph 2
hereinabove, or (c) a Change of Control (as defined in paragraph 11(d)(ii)
hereinbelow).
(ii) For purposes of this Agreement, "Change of Control" means
the Company's Board votes to approve: (a) any consolidation or merger of the
Company pursuant to which fifty percent (50%) or less of the outstanding voting
securities of the surviving or resulting company are not owned collectively by
the common share and warrant holders of Sino-Xxxx Canada (S.S.C.) Limited and
Red Coral Group Limited, Inc. as of September 1, 2004 (the "Current Control
Group"); (b) any sale, lease, exchange or other transfer (in one transaction or
a series of related transactions) of all, or substantially all, of the assets of
the Company other than any sale, lease, exchange or other transfer to any
company where the Company owns, directly or indirectly, 100 percent of the
outstanding voting securities of such company after any such transfer; (c) any
person or persons (as such term is used in Section 13(d) of the Exchange Act of
1934, as amended), other than the Current Control Group, shall acquire or become
the beneficial owner (within the meaning of Rule 13d-3 under the Exchange Act)
whether directly, indirectly, beneficially or of record, of 50 percent or more
of outstanding voting securities of the Company; or (d) commencement by any
entity, person, or group (including any affiliate thereof, other than the
Company) of a tender offer or exchange offer where the offeree acquires more
than 50 percent of the then outstanding voting securities of the Company.
(iii) The Executive shall not be entitled to terminate his
employment with the Company and this Agreement for "Good Reason" unless and
until (a) he shall have received written notice from the Company of the
occurrence of an event constituting "Good Reason" as that term is defined in
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paragraph 11(d)(i) and (ii) hereinabove, which written notice the Company shall
deliver to the Executive within five (5) business days of the occurrence of any
such event; (b) he shall have delivered written notice to the Company of his
intention to terminate this Agreement or his employment with the Company for
"Good Reason," which notice specifies in reasonable detail the circumstances
claimed to provide the basis for such termination for "Good Reason," within 30
days of his receipt from the Company of the written notice described in
paragraph 11(d)(iii)(a) hereinabove, the Executive's having obtained actual
knowledge of a "Good Reason;" and (c) the Company shall not have eliminated the
circumstances constituting "Good Reason" within 30 days of its receipt from the
Executive of the written notice described in paragraph 11(d)(iii)(b)
hereinabove."
(iv) In the event that the Executive terminates this Agreement
and his employment with the Company for "Good Reason," the Company shall pay or
provide to the Executive (or, following his death, to the Executive's heirs,
administrators or executors): (a) any earned but unpaid base salary, unpaid pro
rata annual bonus and unused vacation days accrued through the Executive's last
day of employment with the Company; (b) the Executive's full base salary
(including guaranteed annual ten percent (10%) increases) through the Scheduled
Termination Date; (c) the Executive's guaranteed annual bonuses in the amount of
US$50,000.00 that he would have been awarded through the Scheduled Termination
Date; (d) the value of vacation days that the Executive would have accrued
through the Scheduled Termination Date; (e) continued coverage, at the Company's
expense, under all Benefits Plans in which the Executive was a participant
immediately prior to his last date of employment with the Company, or, in the
event that any such Benefit Plans do not permit coverage of the Executive
following his last date of employment with the Company, under benefit plans that
provide no less coverage than such Benefit Plans, through the Scheduled
Termination Date ("Continued Benefits"); and (f) severance in an amount equal to
the sum of the Executive's annual base salary in effect immediately prior to his
last date of employment with the Company. The Company shall deduct, from all
payments made hereunder, all applicable taxes, including income tax, FICA and
FUTA, and other appropriate deductions.
(v) The Executive, at his option, shall be entitled to receive
the amounts described in paragraphs 11(d)(iv)(b) and (c) hereinabove in a lump
sum within forty-five (45) days of his last date of employment with the Company.
To exercise such option, the Executive shall deliver to the Company written
notice therefore within ten (10) business days after his last date of employment
with the Company. If the Executive fails to deliver such written notice within
ten (10) business days after his last date of employment with the Company, the
amounts described in paragraphs 11(d)(iv)(b) and (c) hereinabove shall be paid
to the Executive in the same manner as they would have been paid, in accordance
with the provisions of paragraphs 6(a) and (b), had the Executive remained
employed by the Company. The amount described in paragraph 11(d)(iv)(f) shall be
paid to the Executive within forty-five (45) days of the Executive's last date
of employment with the Company.
(vi) The Executive shall have no duty to mitigate his damages,
except that Continued Benefits shall be canceled or reduced to the extent of any
comparable benefit coverage offered to the Executive during the period prior to
the Scheduled Termination Date by a subsequent employer or other person or
entity for which the Executive performs services, including but not limited to
consulting services.
e. Without "Good Reason" Or "Cause"
(i) By The Executive. At any time during the term of this
Agreement, the Executive shall be entitled to terminate this Agreement and the
Executive's employment with the Company without "Good Reason," as that term is
defined in paragraph 11(d)(i) and (ii) hereinabove, by providing prior written
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notice of at least thirty (30) days to the Company. Upon termination by the
Executive of this Agreement and the Executive's employment with the Company
without "Good Reason," the Company shall have no further obligations or
liability to the Executive or his heirs, administrators or executors with
respect to compensation and benefits thereafter, except for the obligation to
pay the Executive any earned but unpaid base salary, pro rata annual bonus and
unused vacation days accrued through the Executive's last day of employment with
the Company. The Company shall deduct, from all payments made hereunder, all
applicable taxes, including income tax, FICA and FUTA, and other appropriate
deductions."
(ii) By The Company. At any time during the term of this
Agreement, the Company shall be entitled to terminate this Agreement and the
Executive's employment with the Company without "Cause," as that term is defined
in paragraph 11(c)(i) hereinabove, by providing prior written notice of at least
ninety (90) days to the Executive. Upon termination by the Company of this
Agreement and the Executive's employment with the Company without Cause, the
Company shall pay or provide to the Executive (or, following his death, to the
Executive's heirs, administrators or executors): (a) any earned but unpaid base
salary, unpaid pro rata annual bonus and unused vacation days accrued through
the Executive's last day of employment with the Company; (b) the Executive's
full base salary (including guaranteed annual ten percent (10%) increases)
through the Scheduled Termination Date; (c) the Executive's guaranteed annual
bonuses in the amount of US$50,000.00 that he would have been awarded through
the Scheduled Termination Date; (d) the value of vacation days that the
Executive would have accrued through the Scheduled Termination Date; (e)
continued coverage, at the Company's expense, under all Benefits Plans in which
the Executive was a participant immediately prior to his last date of employment
with the Company, or, in the event that any such Benefit Plans do not permit
coverage of the Executive following his last date of employment with the
Company, under benefit plans that provide no less coverage than such Benefit
Plans, through the Scheduled Termination Date ("Continued Benefits"); and (f)
severance in an amount equal to the sum of the Executive's annual base salary in
effect immediately prior to his last date of employment with the Company. The
Company shall deduct, from all payments made hereunder, all applicable taxes,
including income tax, FICA and FUTA, and other appropriate deductions.
(iii) The Executive, at his option, shall be entitled to
receive the amounts described in paragraphs 11(e)(ii)(b) and (c) hereinabove in
a lump sum within forty-five (45) days of his last date of employment with the
Company. To exercise such option, the Executive shall deliver to the Company
written notice therefore within ten (10) business days after his last date of
employment with the Company. If the Executive fails to deliver such written
notice within ten (10) business days after his last date of employment with the
Company, the amounts described in paragraphs 11(e)(ii)(b) and (c) hereinabove
shall be paid to the Executive in the same manner as they would have been paid,
in accordance with the provisions of paragraphs 6(a) and (b), had the Executive
remained employed by the Company. The amount described in paragraph 11(e)(ii)(f)
shall be paid to the Executive within forty-five (45) days of the Executive's
last date of employment with the Company."
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Except for the aforementioned amendments to Sections 5, 10(b)(v) and 11
of the Agreement set forth in this letter, no other terms or provisions of the
Agreement are being or have been amended, and all other terms and provisions of
the Agreement shall remain in full force and effect.
Very truly yours,
HQ SUSTAINABLE MARITIME
INDUSTRIES, INC.
/s/ Xxxxxxx Sporns
----------------------------
By: Xxxxxxx Sporns
Its: Chief Executive Officer
Agreed To And Accepted By:
XXXXXXX XXXX
/s/ Xxxxxxx Xxxx
--------------------------
Date: April 11, 2005
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