Exhibit 10.1

 

AMENDED AND RESTATED ENGAGEMENT AGREEMENT

 

 

THIS AGREEMENT is made the 29th day of March 2017.

 

 

BETWEEN:CONSOLIDATED WATER CO. LTD.,

a Cayman Islands company having its registered office at

Windward Three, 4th Floor

Regatta Office Park, West Bay Road

P.O. Box 1114, Grand Cayman, KY1-1102,

Cayman Islands

(“the Company”)

 

AND:JOHN TONNER

of 10070 Cameilla St

Parkland, FL 33076-4484 USA

(“the Executive”)

 

 

IT IS AGREED:-

 

Engagement

 

1.The Executive is engaged as Executive Vice President and Chief Commercial
Officer commencing on the 1st day of December, 2016 subject to the termination
provisions set out in Clauses 18 and 19.

 

Remuneration

 

2.The Executive’s Base Salary will be US$292,025 per annum payable semi-monthly
in arrears.

 

3.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 Executive.

 

4.In addition, during the Term of this Agreement, the Company will make all
statutory payroll contributions required of employers in the United States,
including but not limited to FICA, Medicare, SUI, and WC in respect of the
Executive to the appropriate United States regulatory agencies as mandated by
applicable United States laws.

 

a.Non-statutory contributions, such as to 401(k) retirement plans, shall be made
in accordance with general Company policies which are subject to review and
could be changed for regulatory or commercial reasons.

 

5.The Executive’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 Executive’s salary below the level set out in Clause 2 or in
the immediately preceding year, whichever is applicable.

 

 

 

 

6.In addition to his Base Salary, the Executive shall be entitled to additional
compensation each fiscal year pursuant to the Company’s short term and long term
incentive compensation plans as follows:

 

Short Term Incentive Compensation

 

The Executive shall be entitled to receive an annual cash bonus. The bonus
amount payable to the Executive shall be based upon (i) the performance of the
Company as compared to the financial performance targets for the Company, as
established by the Board for the fiscal year; and (ii) the achievement of the
individual goals set by the Company’s Chief Executive Officer (the “CEO”) for
the fiscal year.

 

The performance measures, the Executive’s individual goals and the bonus amounts
potentially payable to the Executive based upon the Company and/or the Executive
achieving such performance measures and individual goals shall be communicated
to the Executive by the CEO in writing by no later than March 1 of the fiscal
year.

 

Any annual cash bonus earned by the Executive pursuant to this section shall be
paid by the Company no later than March 31 of the following fiscal year.

 

Long Term Incentive Compensation

 

The Executive shall be entitled to receive restricted stock units (each an
“RSU”) granted under to the Company’s 2008 Equity Incentive Plan at the
beginning of each fiscal year, commencing with the 2015 fiscal year. Each RSU
shall entitle the Executive to receive one share of the Company’s common stock
upon the vesting of the RSU. Of the RSUs granted at the beginning of each fiscal
year, one-sixth (1/6) of such RSUs shall vest at the end of that fiscal year,
one-sixth (1/6) of such RSUs shall vest at the end of the second (2nd) fiscal
year following the grant date, and one-sixth (1/6) of such RSUs shall vest at
the end of the third (3rd) fiscal year following the grant date. The remaining
one-half (1/2) of the RSUs granted (i.e. those that do not vest with time over
three (3) years) shall vest based upon the performance of the Company as
compared to the financial performance targets for the Company established by the
Board for the three (3) year fiscal period beginning with fiscal year in which
the RSUs are first granted.

 

The number of RSUs that may potentially vest to the Executive with time over the
three (3) year period and the number of RSUs that may potentially vest to the
Executive based upon the performance of the Company over the three (3) year
period (as well as the financial targets by which the Company’s performance will
be measured) shall be communicated to the Executive by the CEO in writing by no
later than March 1 of the fiscal year. Vesting of the RSUs shall be contingent
on the Executive’s engagement with the Company on each vesting date. Therefore,
any unvested shares shall be automatically forfeited upon cessation of service
to the Company resulting from the Executive’s resignation or termination for
cause.

 

 2 

 

 

7.During the first calendar year of this Agreement, the Company will provide the
Executive with a monthly automobile expense allowance of US$1,150. This monthly
automobile allowance will increase on January 1 of each subsequent calendar year
by US$50 per month (or US$600 per year) during the term of this Agreement.

 

Responsibilities

 

8.The Executive’s work will be performed mainly in Coral Springs, Florida, USA.

 

9.The Executive must devote the whole of his professional time to the Company's
business and must use his best endeavours to promote the Company's interest and
welfare.

 

a.The Executive will retain his ownership and investment in Water Consultants
International, Inc. but will not be active in its day-to-day management or
operations.

b.The Executive may, from time to time, engage in other activities, with the
approval of the CEO so long as; (i) the nature of such activities are fully
disclosed to the Company, (ii) the Executive participates in such activities in
his capacity as an employee of the Company and (iii) such activities enhance the
Company’s interests and reputation, and/or maintain or enhance the reputation of
the Executive within the water industry. This could include, among other things,
participating in Industry Forums or Panels, or leading seminars.

 

The Executive will be responsible for the Company’s (i) commercial and
technological strategies and execution, including business development, sales
and marketing, manufacturing, product and technology development, and customer
service and (ii) the Company’s engineering and project management functions,
both in order to achieve the Corporate Objectives.

 

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, (v) achieving technological advantage over competitors, (vi)
increasing the Company’s market share in its present market areas, (vii)
expanding the Company’s business into new and profitable markets and services,
and (viii) such other duties as are assigned from time to time to the Executive
by the CEO. .

 

The Executive’s powers and responsibilities include the following:-

 

(a)Ensure that Company resources (qualified staff, materials and technology), as
mandated by the CEO and Board of Directors, are properly allocated and fully
aligned through the parts of the Company he is responsible for in order to
achieve the Corporate Objectives;

(b)Assist the CEO and the Board of Directors to develop and update the Company’s
Strategic Plan, and specifically to prepare the overarching commercial and
technological strategies required to achieve the Corporate Objectives including
selection and management of sales and marketing channels and development of
strategic alliances;

(c)Assist the CEO and the Board of Directors to develop and update the Company’s
Marketing and Communications Plan in relation to business partners and customers
(the “MarComm Plan”).

 

 3 

 

 

(d)Represent the Company and present the public face of the Strategic and
MarComm Plans to current and potential business partners and customers.

(e)Assist the CEO as needed with the Company’s investor relations activities,
including attending investor meetings and conferences;

(f)Implement and monitor the Strategic Plan and report the results to the CEO;

(g)Implement and monitor the MarComm Plan and report the results to the CEO;

(h)Ensure that the Company identifies and implements viable new technologies in
order to achieve then maintain technological advantage over competitors;

(i)Identify and evaluate new business opportunities consistent with the
Strategic Plan and make recommendations to the CEO;

(j)Ensure that the Company’s engineering and project management functions
deliver projects and other services within budgeted costs and on schedule;

(k)Supervise subordinate personnel, including work allocation, training, and
problem resolution, evaluating performance; making recommendations for personnel
actions and motivating employees to achieve peak productivity and performance;

(l)Prepare the annual budget for the Company’s business development, sales and
marketing, manufacturing, product and technological development, customer
service, engineering and project management functions, as well as any new
projects. Update as required by the CEO;

(m)Carry out any other duties assigned by the CEO from time to time.

 

The Executive 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
may, from time to time, require work to be undertaken on Saturdays, Sundays and
public holidays.

 

The Executive 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.

 

Holidays and Paid Time Off (“PTO”)

 

10.The Executive is entitled, during every calendar year to the following PTO
during which his remuneration will continue to be payable:-

 

(a)all public holidays in the United States of America, and

 

(b)Twenty six PTO days to be taken at a time to be approved by the CEO.

 

(c)In case of inability to work due to illness or injury, the Executive must
notify the Company immediately and produce a medical certificate or other
pertinent information in accordance with prevailing company PTO policy.

 

 4 

 

 

Reimbursement of Expenses/Fees Earned

 

13.(a) All expenses for which the Executive 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 Executive for the costs incurred by the Executive in his
performance of his duties on production of the necessary vouchers or, if he is
unable to produce vouchers, on the Executive’s proving, to the CEO’s
satisfaction, the amount he has spent for those purposes.

 

(b)Any fees and payments received by the Executive 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 Executive must account to the Company for it.

 

Non-Competition

 

14.The Executive 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).

 

Company Information, Documents, Confidentiality, and Non-Solicitation

 

15.(a)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 Executive 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 ;

 

(b)If this Agreement is terminated for any reason, or if the Company at any time
requests, the Executive 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
Executive afterwards require access to copies of those documents for any
reasonable purpose, the Company must provide them on his request;

 

(c)The Executive 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.

 

 5 

 

 

16.Except where such information is a matter of public record or when required
to do so by law, the Executive 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 Executive.

 

Termination

 

17.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:-

 

(a)The Executive dies.

 

(b)The Executive is convicted of any felony (whether or not relating to the
Company or its subsidiaries or affiliates).

 

18.(a)The Company may terminate this Agreement forthwith if the Executive
knowingly commits any act or omission that could reasonably be expected to
result in material harm to the business or reputation of the Company or any of
its subsidiaries or affiliates, which failure and/or conduct continues
un-remedied for ten (10) days after written notice from the CEO to the Executive
setting forth in reasonable detail a description of such conduct, or otherwise
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.

 

(b)If through physical or mental illness, the Executive 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

 

(i)the Executive will be relieved of his duties, his salary reduced to
US$1,000.00 per annum and his bonus entitlement suspended, but

 

(ii)the Company will continue to pay the full cost of providing medical
insurance for the Executive and his wife and minor children together with
pension contributions (such contributions to be equal to the pension
contribution made on behalf of the Executive for the previous financial year of
the Company),

 

until the Executive 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 Executive’s employment will be deemed to have been
terminated by mutual consent at the expiration of that period.

 

(c)The Executive may give six (6) months written notice of termination to the
Company and if he does so, this Agreement will terminate at the expiration of
that period and, except to the extent previously accrued, all rights and
obligations of both parties under it will cease.

 

 6 

 

 

(d)If there is a Change of Control of the Company, then the Executive, at his
option, may terminate this Agreement upon one-hundred and twenty (120) days’
prior written notice (the “Notice Period”) to the Company after the Change in
Control. In that event, the Company must pay the Executive on the last business
day of the Notice Period in cash in one lump sum an amount equal to the
Executive’s then-current Base Salary.

 

For the purposes of this Agreement, a “Change of Control” will be deemed to have
taken place if: (i) any person, including a “group” as defined in Section
13(d)(3) of the Securities Exchange Act of 1934, as amended, publicly announces
that such person or group has become the beneficial owner of more than 30% of
the combined voting power (“Controlling Voting Power”) of the then outstanding
securities of the Company that may be cast for the election of directors of the
Company and (ii) the persons who were directors of the Company before such event
cease to constitute a majority of the Board of Directors of the Company, or any
successor to the Company, as the direct or indirect result of any person or
group acquiring Controlling Voting Power.

 

Notices

 

19.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 Executive 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.

 

Previous Agreements Superseded

 

20.(a)This Agreement supersedes 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.

 

Waiver

 

21.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.

 

Severability of Provisions

 

22.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.

 

 7 

 

 

Headings

 

23.The headings in this Agreement are included for convenience only and have no
legal effect.

 

Applicable Law, Venue and Jurisdiction

 

24.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. The Executive appoints Alan
Roffey (“the Process Agent”) whose address at the date of this Agreement is
Calico Quay, Grand Cayman his agent in the Cayman Islands to receive on his
behalf service of copies of the summons and complaint and any other process
which may be served in any action or proceeding under this Agreement. Service
may be made by personally serving the Process Agent at the Process Agent’s above
address, with a copy to the Executive at his address above, and the Executive
irrevocably authorises and directs the Process Agent to accept such service on
his behalf Any dispute between the parties relating to, or in any way connected
with, this Agreement must be brought exclusively in the courts of Broward or
Palm Beach County, Florida or the courts located in the Cayman Islands. Any and
all appeals of any court decision in a Florida or Cayman Islands court must also
be brought in the same jurisdiction as the decision of the trial court. The
parties hereby waive any right to dispute the choice of a party to bring an
action in either of such courts on the grounds that such venue is inconvenient
in any respect.

 

EXECUTED for and on behalf of     CONSOLIDATED WATER CO LTD.   CONSOLIDATED
WATER CO LTD.         by: Frederick W. McTaggart         in the presence of:    
                        /s/ David W. Sasnett     /s/ Frederick W. McTaggart  
Witness     FREDERICK W. MCTAGGART           DIRECTOR             EXECUTED by
JOHN TONNER         in the presence of:                             /s/ David W.
Sasnett     /s/ John Tonner   Witness     JOHN TONNER  

 

 8