ENGAGEMENT AGREEMENT
THIS AGREEMENT is made
the 11 day of January 2008
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BETWEEN:
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CONSOLIDATED
WATER CO. LTD.,
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a Cayman
Islands company having its registered office at
Windward
Three, 4th
Floor
Regatta
Office Park, Xxxx Xxx Xxxx
X.X. Xxx 0000, Xxxxx Xxxxxx,
XX0-0000,
Cayman
Islands
(“the Company”)
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AND:
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XXXXXXX
X. XxXXXXXXX
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of P. O. Xxx _00000, Xxxxx Xxxxxx,
XX0-0000,
Xxxxxx
Xxxxxxx
(“the Vice-President”)
IT
IS AGREED:-
Engagement
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1.
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The
Vice-President is engaged as Vice-President of Cayman Operations
commencing on the 1st
day of January, 2008 subject to the termination provisions set out in
Clauses 18 and 19.
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Remuneration
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2.
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The
Vice-President’s Base Salary will be US$132,750 per annum payable
semi-monthly in arrears.
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3.
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In
addition, during the term of this Agreement, the Company will pay the full
cost of providing medical insurance, as
generally provided for the Company’s employees from time to time, for the
Vice-President and his wife and
dependants.
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4.
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Subject
to approval of the members of the Company at the Company’s next Annual
General Meeting and of the Committee to be set up to administer the
Company’s Equity Incentive Plan (“the Plan”), the Vice President will
participate in the Plan and will be granted as at November 30, 2007 (“the
Grant Date”) an option to purchase 17,700 ordinary shares of the Company
(subject to adjustment in accordance with the Plan) at the closing price
of the Company’s ordinary shares on the primary listing exchange on the
Grant Date. The option will vest in tranches of 5,900 shares
each on January 1, 2009, January 1, 2010, and January 1, 2011 (“the
Vesting Dates”), and each may be exercised by the Vice President in
accordance with the Plan and subject to Clause 19(d), no more than three
years from the relevant Vesting Date, after which the option in respect of
that tranche will expire. If the Company’s shareholders do not
approve the Plan or the Committee does not approve the grant to the
Vice-President, then the Company must within thirty days of the Annual
General Meeting pay the Vice President a lump sum equal to 25% of his Base
Salary.
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5.
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In
addition, during the term of this Agreement, the Company will make
contributions to a pension scheme of the Vice-President’s choice but which
must be approved under the National Pensions Law, in the same manner and
on the same basis as it makes contributions from time to time, in respect
of its other employees pursuant to the National Pensions Law on a maximum
salary base of CI$60,000.00 per annum or such other base as is required by
that Law from time to time.
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6.
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The
Vice-President’s Base Salary will be reviewed as of January 1st
each year by the Company’s Chief Executive Officer (“the CEO”) who may
grant an increase but must not reduce the Vice-President’s salary below
the level set out in Clause 2 or in the immediately preceding year,
whichever is applicable.
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7.
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If
by not later than January 31st
in each calendar year commencing with the year 2008, the Vice-President
and the CEO have agreed to Performance Goals for the Vice-President for
that calendar year, and if those Performance Goals are met for that year,
then the Company must pay to the Vice-President a Performance Bonus for
that year in an amount not less than 25% of the Vice-President’s Base
Salary for that calendar year, as adjusted by Clause 6. The
Board of Directors, in its sole and absolute discretion, and taking into
consideration the recommendations of the CEO, if any, may determine to pay
a larger Performance Bonus. In any calendar year that all of
the Performance Goals are not met, the Board of Directors, in its sole and
absolute discretion, and taking into consideration the recommendations of
the CEO, if any, may, but is not obligated to, pay the Vice-President a
Performance Bonus in an amount determined by the Board of Directors. The
Performance Bonus must be paid entirely in
cash.
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8.
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The
Company will provide the Vice-President with a motor vehicle which, in the
sole opinion of the Company, is suitable for the discharge of the
Vice-President’s duties hereunder.
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Responsibilities
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9.
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The
Vice-President’s work will be performed mainly in West Bay, Grand
Cayman.
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The
Company reserves the right to transfer the Vice-President to any other place of
business which it may establish in the Cayman Islands.
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10.
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The
Vice-President must devote the whole of his time to the Company's business
and must use his best endeavours to promote the Company's interest and
welfare.
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The
Vice-President must provide strategic and operational direction to the water
production and supply operations in the Cayman Islands of the Company’s
wholly-owned subsidiaries in the Cayman Islands and any other operations that
may be assigned to him by the CEO from time to time (“the Subsidiaries”), which
includes but is not limited to, (i) establishing strategic objectives, operating
policies and procedures to attain Corporate Objectives, (ii) evaluating
performance of the Subsidiaries to determine if operational and financial
objectives are being met, (iii) establishing and co-ordinating responsibilities
and procedures among subordinate departments, (iv) ensuring that accurate and
timely information is available for management and/or Board use and (v) any
further duties reasonably required of and assigned to him by the CEO which he
must discharge in accordance with directions of the CEO.
2
Corporate
Objectives include but are not limited to; (i) meeting or exceeding budgeted
earnings targets, (ii) improving operating profit margins, (iii) achieving
excellent customer service, (iv) achieving excellent employee relations, and (v)
improving the maintenance and reliability of plant and equipment.
The
Vice-President’s powers and responsibilities include the
following:-
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(a)
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Directing
and managing the day-to-day activities of the Subsidiaries’ water
production and supply operations, including plant operation and
maintenance, collection of billing data, plant expenditures and the
safeguarding of plant assets;
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(b)
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Preparing
the Subsidiaries’ operating and capital expenditure
budgets;
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(c)
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Preparing
and implementing a fixed asset maintenance and retirement
schedule;
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(d)
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Liaising
with the Government regulator on all matters related to the Subsidiaries’
water production and supply
licences;
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(e)
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Providing
technical support to the Subsidiaries’ Customer Service department when
required;
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(f)
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Overseeing
the supervision of subordinate personnel, including work allocation,
training, and problem resolution, evaluating performance and making
recommendations for Subsidiaries personnel actions and motivating its
employees to achieve peak productivity and
performance;
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(g)
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Preparing
and presenting the monthly operations reports of each of the Subsidiaries
to management and the Board;
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(h)
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Carrying
out any special projects which may be assigned to the Vice President from
time to time.
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The
Vice-President must perform his duties under this Agreement during normal
business hours from Monday to Friday inclusive (except on public holidays) but
he accepts that his duties, which include travelling on the Company’s business
both within the Cayman Islands and abroad, may, from time to time, require work
to be undertaken on Saturdays, Sundays and public holidays.
The
Vice-President must not directly or indirectly engage in any activities or work
which the Board deems to be detrimental to the best interests of the
Company.
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11.
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In
case of inability to work due to illness or injury, the Vice-President
must notify the Company immediately and produce a medical certificate for
any absence longer than three working
days.
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12.
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The
Vice-President is entitled to up to ten (10) days sick leave per year (but
not more than three consecutive days at any time) without a medical
certificate.
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3
Holidays
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13.
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The
Vice-President is entitled, during every calendar year to the following
holidays during which his remuneration will continue to be
payable:-
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(a)
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all
public holidays in the Cayman Islands,
and
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(b)
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four
(4) weeks vacation to be taken at a time to be approved by the
CEO.
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Reimbursement of
Expenses/Fees Earned
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14.
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(a)
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All
expenses for which the Vice-President claims reimbursement must be in
accordance with any policies established by the Board from time to time
and must be within the operating budgets approved by the
Board. The Company must reimburse the Vice-President for the
costs incurred by the Vice-President in his performance of his duties on
production of the necessary vouchers or, if he is unable to produce
vouchers, on the Vice-President’s proving, to the CEO’s satisfaction, the
amount he has spent for those
purposes.
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(b)
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Any
fees and payments received by the Vice-President for or in relation to
acting as director or officer of a subsidiary or affiliate of the Company
will be the property of the Company and the Vice-President must account to
the Company for it.
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Non-Competition
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15.
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The
Vice-President agrees, as a separate and independent agreement, that he
will not during any period for which he is entitled to remuneration under
this Agreement, whether for his own account or for the account of any
other person, firm or body corporate, either alone or jointly with or as
director, manager, agent or employee of or as consultant to any person,
firm or body corporate, directly or indirectly, carry on or be engaged or
concerned or interested in any person firm or body corporate which
conducts business identical to or similar to that conducted by the Company
in any jurisdiction in which the Company carries on business (whether
directly or indirectly).
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Company Information,
Documents, Confidentiality, and Non-Solicitation
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16.
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(a)
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All
information, documents, books, records, notes, files, memoranda, reports,
customer lists and other documents, and all copies of them, relating to
the Company’s business or opportunities which the Vice-President keeps,
prepares or conceives or which become known to him or which are delivered
or disclosed to him or which, by any means come into his possession, and
all the Company’s property and equipment are and will remain the Company’s
sole and exclusive property both during the term of this Agreement and
after its termination or expiration
;
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(b)
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If
this Agreement is terminated for any reason, or if the Company at any time
requests, the Vice-President must promptly deliver to the Company the
originals and all copies of all relevant documents that are in his
possession, custody or control together with any other property belonging
to the Company. Should the Vice-President afterwards require
access to copies of those documents for any reasonable purpose, the
Company must provide them on his
request;
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4
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(c)
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The
Vice-President must not, at any time during the term of this Agreement or
within one year after its termination or expiration, either for his own
account or for the account of any other person, firm or company, solicit,
interfere with or endeavour to entice away from the Company any person,
firm or company who or which, at any time during the currency of this
Agreement was an employee, customer or supplier of or was in the habit of
dealing with the Company.
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17.
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Except
where such information is a matter of public record or when required to do
so by law, the Vice-President must not, either before or after this
Agreement ends, disclose to any person any information relating to the
Company or its customers of which he becomes possessed while acting as
Vice-President.
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Termination
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18.
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This
Agreement will terminate and, except to the extent previously accrued, all
rights and obligations of both parties under it will cease if either of
the following events occurs:-
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(a)
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The
Vice-President dies.
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(b)
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The
Vice-President gives three (3) months written notice of termination to the
Company.
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19.
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(a)
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The
Company may, by written notice, terminate this Agreement with immediate
effect if the Vice-President conducts himself in a manner that would
justify immediate dismissal of an employee in accordance with Section
51(1)(a)1 of
the Labour Law and, except to the extent previously accrued, all rights
and obligations of both parties under this Agreement will
cease.
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(b)
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If
through physical or mental illness, the Vice-President is unable to
discharge his duties for sixty (60) successive days, as to which a
certificate by any doctor appointed by the Company will be conclusive,
then
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(i)
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the
Vice-President will be relieved of his duties, his salary reduced to
US$1,000.00 per annum and his bonus entitlement suspended,
but
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(ii)
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the
Company will continue to pay the full cost of providing medical insurance
for the Vice-President and his wife and dependants together with pension
contributions (such contributions to be equal to the pension contribution
made on behalf of the Vice-President for the previous financial year of
the Company),
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until the
Vice-President is able once again to resume his duties in full.
If this
incapacity continues for a period of two years (including the 60-day period
referred to above) the Vice-President’s employment will be deemed to have been
terminated by mutual consent at the expiration of that period.
5
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(c)
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The
Company may terminate this Agreement at any time upon serving three
month’s notice to the Vice-President and paying the Vice-President
severance pay in accordance with the Labour Law or in an amount equal to
six-twelfths of the Base Salary, as adjusted by Clause 6, whichever amount
is greater.
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(b)
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If:-
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(i)
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the
Vice-President terminates this Agreement under Clause 18(b);
or
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(ii)
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the
Company terminates this Agreement under paragraph (a) of this Clause or in
accordance with Sections 51(1)(b)1,
51(1)(c)1 or
51(1)(f)1 of
the Labour Law;
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all
unvested options of the Vice-President under the Plan will be deemed to have
expired as of the date of service of the notice of termination.
Notices
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20.
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Any
notice to be served under this Agreement must be in writing and will be
deemed to be duly served if it is handed personally to the Secretary of
the Company or to the Vice-President as the case may be, or if it is sent
by registered post to the addressee at the relevant address at the head of
this Agreement. A notice sent by post will be deemed to be
served on the third day following the date on which it was
posted.
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Previous Agreements
Superseded
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21.
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(a)
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This
Agreement supersedes as of January 1st
2008 all prior contracts and understandings between the parties relating
to its subject-matter except that benefits earned or accrued under any
such prior contracts are not extinguished or
affected.
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1 Sections
51 – 53 (inclusive) of the Labour Law (2001 Revision) are attached
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(b)
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In
particular, the Participation Agreement dated ___________ between the
Company and the Vice-President relating to the Vice-President’s
participation in the Company’s Share Incentive Plan is terminated by
mutual consent as of December 31st
2007, except that benefits earned or accrued under that Agreement are not
extinguished or affected.
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Waiver
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22.
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No
change or attempted waiver of any of the provisions of this Agreement will
be binding unless in writing and signed by the party against whom it is
sought to be enforced.
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Severability of
Provisions
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23.
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Whenever
possible, each provision of this Agreement must be interpreted in such
manner as to be effective and valid. If any provision of this
Agreement or the application of it is prohibited or is held to be invalid,
that prohibition or invalidity will not affect any other provision, or the
application of any other provision which can be given effect without the
invalid provision or prohibited application and, to this end, the
provisions of this Agreement are declared to be
severable.
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6
Headings
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24.
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The
headings in this Agreement are included for convenience only and have no
legal effect.
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Applicable Law and
Jurisdiction
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25.
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This
Agreement must be construed and the legal relations between the parties
determined in accordance with the laws of the Cayman Islands to the
jurisdiction of the courts of which the parties agree to
submit.
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EXECUTED for and on
behalf of
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CONSOLIDATED
WATER CO. LTD.
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by:
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In
the presence of:
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Witness
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Director
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EXECUTED by XXXXXXX
X.
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XxXXXXXXX in the
presence of:
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Witness
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XXXXXXX
X. XxXXXXXXX
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7
