EX-10.1 Amended and Restated Engagement Agreement



 






Exhibit 10.1




AMENDED AND RESTATED ENGAGEMENT AGREEMENT




THIS AGREEMENT is made the 29th day of March 2007.



	 	 	 
	BETWEEN:
	 	CONSOLIDATED WATER CO. LTD.,

	 	 	a Cayman Islands company having its registered office at

	 	 	Regatta Office Park, Windward 3, 4th Floor, West Bay Road

	 	 	P.O. Box 1114, Grand Cayman KY1-1102, B.W.I.

	 	 	(“the Company”)

	 
	 	 

	AND:
	 	DAVID W. SASNETT

	 	 	of 16254 SW 67th Court, Ft. Lauderdale, Florida 33331

	 	 	(the “CFO”)







IT IS HEREBY AGREED:




Engagement





	1.	 	Subject to satisfaction of the condition precedent in Clause 14, the CFO is hereby engaged as
Executive Vice President and Chief Financial Officer of the Company from the 3rd day of June,
2006 to the 31st day of December, 2007 (the “Term”) subject to the termination
provisions set out in Clauses 20 and 21 hereof and to the extension provisions set out in
Clause 23 hereof.
	 
	2.	 	The CFO is a Director of the Company and, subject to re-election by the shareholders from
time to time, shall remain so, for the duration of this Agreement, upon the same terms as
other Executive Directors of the Company.





Remuneration





	3.	 	The CFO’s remuneration will be US$155,000.00 per annum, payable monthly in arrears (the “Base
Salary”).
	 
	4.	 	In addition, during the Term of this Agreement, the Company will pay the cost of providing
medical insurance in the United States, with coverage reasonably equivalent to that
generally provided for the Company’s Cayman Islands employees from time to time, for the CFO
and his immediate family.
	 
	5.	 	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 CFO to the appropriate United States regulatory
agencies as mandated by applicable United States laws.




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	6.	 	As of January 1st each year, the CFO’s Base Salary will be reviewed by the Chief
Executive Officer (“CEO”) who may grant an increase but shall not reduce the CFO’s Base Salary
below the level set out in Clause 3 hereof.
	 
	7.	 	If, within 90 days of the 6th day of May 2006 in respect of the year 2006, and by
not later than March 31st in each calendar year commencing with the year 2007, the
CFO and the CEO have agreed to Performance Goals for that calendar year, and if such
Performance Goals are met for that year, then the Company shall pay to the CFO a Performance
Bonus for that year in an amount not less than 25% of the sum of (i) the CFO’s Base Salary for
that calendar year as adjusted by Clause 6 and (ii) an amount equal to in value to the
compensation to which the CFO is entitled (in ordinary shares or cash) under clause 8 for that
calendar year. The Board of Directors, in its sole and absolute discretion 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, may, but shall not be
obligated to, pay the CFO a Performance Bonus in an amount determined by the Board of
Directors. The Performance Bonus shall be paid entirely in cash.
	 
	 	 	The Performance Bonus, if any, calculated as aforesaid for a calendar year shall be paid not
later than the following 28th February or within 14 days of the first directors’
meeting of the Company for that following year, whichever is later.
	 
	8.	 	Subject to the approval by the stockholders of the Company, the Company will agree to issue
for the purposes of this clause as of the date hereof and on each subsequent anniversary of
that date the number of ordinary shares of the Company which is equivalent in value to
US$40,000. Each such tranche of shares will be registered in the CFO’s name quarterly in
increments of 12.5% over respective two year periods beginning on the date hereof and on each
anniversary of that date. If the stockholders of the Company do not approve the issuance of
ordinary shares for the purposes of this clause by the date of the Company’s Annual General
Meeting in 2007 or if no such meeting is held in 2007, then, and until such time (if at all)
as the stockholders approve the issuance of ordinary shares for the purposes of this clause,
the Company will pay in cash to the CFO US$40,000 for each year of the CFO’s employment and
pro rata for part of a year (each such payment to be made in arrear on an anniversary of the
date hereof or on the date on which he leaves the Company’s employment).
	 
	 	 	For purposes of this clause, the average of the closing bid and asked prices of the ordinary shares on the principal market on which such ordinary shares are traded for the five
business days prior to 3rd June 2006 and each subsequent anniversary of that date shall
respectively be used to determine the number of ordinary shares equivalent in value to
US$40,000.
	 
	9.	 	During the first calendar year of this Agreement, the Company will provide the CFO with a
monthly automobile expense allowance of US$700. 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.




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Responsibilities





	10.	 	The CFO’s work will be performed mainly in South Florida, United States of America.
	 
	11.	 	The CFO shall devote the whole of his business time and attention to perform his duties
hereunder and shall use his best endeavors to promote the Company’s interests and welfare.
These duties include responsibility for certain administrative functions in the U.S and
providing financial advice and assistance to the CEO.
	 
	 	 	As Chief Financial Officer, the CFO will generally provide strategic and operational
direction to the Company’s financial function and assist the Board and senior management in
establishing financial and operating strategic objectives and policies to ensure attainment
of corporate objectives.
	 
	 	 	In this regard, the CFO shall perform the duties commonly performed by a Chief Financial
Officer of a United States publicly listed company which duties include, in conjunction with
reasonable and appropriate subordinate staff to be provided by the Company, the following:






	 	(a)	 	maintaining the accounts of the Company, its wholly-owned subsidiaries and
managed affiliates (collectively “the Group”);
	 
	 	(b)	 	managing subordinate staff in the Group’s accounting and administrative
departments;
	 
	 	(c)	 	preparing all annual and quarterly financial reports to be filed with the U.S.
SEC in a timely manner, including financial statements and disclosures included in
management’s discussion and analysis;
	 
	 	(d)	 	preparing financial information required for U.S. SEC or other regulatory
agency filings relating to the issue by the Company of debt and/or equity, including
historical financial data, pro forma financial statements, financial projections and
other financial data included in the filings;
	 
	 	(e)	 	liaising with the Group’s independent accountants and internal auditors and the
Company’s Audit Committee, and promptly preparing and communicating all information
requested by the independent accountants, internal auditors and the Audit Committee
during the course of the annual audit, quarterly reviews, or any other review;
	 
	 	(f)	 	preparing monthly management accounts and analytical analysis of monthly
performance versus projections and prior periods for presentation to management and the
Board of Directors;
	 
	 	(g)	 	preparing financial and other reports for various government, local government
and regulatory agencies as required in the operating licences of the Group Companies,




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	 	 	 	and communicating that information to the CEO and the applicable regulatory bodies;
	 
	 	(h)	 	monitoring Group compliance with debt security documentation, contracts and
Licenses and preparing bank covenant compliance calculations for the Group, as required
in the Company’s loan agreements, from time to time, and communicating that information
to the CEO and the applicable banks;
	 
	 	(i)	 	preparing and maintaining the consolidated budget for the Group;
	 
	 	(j)	 	assessing, establishing and maintaining the Group’s disclosure controls and
procedures (as defined in Rule 15d-15(e) of the Securities Exchange Act of 1934, as
amended (the “1934 Act”);
	 
	 	(k)	 	assessing, establishing and maintaining the Group’s internal control over
financial reporting procedures (as defined in Rule 15d-15(f) of the 1934 Act;
	 
	 	(l)	 	overseeing the supervision of subordinate accounting and administrative
personnel, including work allocation, training, and problem resolution; evaluating
performance and making recommendations for personnel actions; motivating employees to
achieve peak productivity and performance;
	 
	 	(m)	 	maintaining the Company’s share register, for all classes of shares,
outstanding stock options, and warrants, and liaising with the Company’s stock transfer
agent; and
	 
	 	(n)	 	carrying out all duties reasonably required of and assigned to him by the CEO,
which he shall discharge in accordance with directions of the CEO.






The CFO shall perform his duties under this Agreement during normal business hours from
Monday to Friday inclusive (save on bank holidays) but he accepts that his duties, which
include traveling on the Company’s business both within the United States of America and
abroad, may, from time to time, require work to be undertaken on Saturdays, Sundays and bank
and public holidays.




The CFO shall directly report to the CEO, diligently follow and implement all management
policies and decisions which the CEO communicates to him, prepare and forward in a timely
manner all reports and accountings requested by the CEO, the Board of Directors, or any
statutory body having regulatory authority over the Company and/or its subsidiaries, and
shall generally be responsible for the Company’s financial management and administration
functions.




Except when required to do so by law, the CFO shall not directly or indirectly knowingly
engage in any activities or work which are deemed by the Board to be detrimental to the best
interests of the Company.




The Company and the CFO will enter into an indemnification agreement identical to that
approved at the August 11, 2004 Annual General Meeting of the Company.



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	12.	 	In case of inability to work due to illness or injury, the CFO shall notify the Company
immediately and produce a medical certificate for any absence longer than ten working days.
	 
	13.	 	The CFO is entitled to up to ten (10) days sick leave per year without a medical certificate.
	 
	14.	 	This Agreement is conditional upon the CFO undergoing a medical examination in such form as
is usual and customary in the Cayman Islands or the United States, the results of which must
demonstrate to the CEO’s satisfaction that the CFO is capable of performing the
responsibilities set forth in Clauses 10 and 11. The Company will meet the cost of such
medical examination, or any amounts not covered by the CFO’s health insurance plan.





Holidays





	15.	 	The CFO is entitled, during every calendar year to the following holidays during which his
remuneration will continue to be payable:






	 	(a)	 	all public holidays in the United States of America but not in the Cayman
Islands unless the CFO is in the Islands on Company business over a Cayman public
holiday, and
	 
	 	(b)	 	four (4) weeks vacation to be taken at a time to be approved by the CEO.





Reimbursement of Expenses/Fees Earned





	16. 	(a)	 	All expenses for which the CFO claims reimbursement shall be in accordance
with any policies established by the Company from time to time and shall be within the
operating budgets approved by the Board of Directors. The Company shall reimburse the
CFO for the costs incurred by the CFO in his performance of his duties and
responsibilities under this Agreement upon production of the necessary vouchers or, if
he is unable to produce vouchers, on the CFO proving, to the CEO’s satisfaction, the
amount he has spent for those purposes.






	 	(b)	 	All fees and payments received by the CFO for or in relation to
acting as director or officer of a subsidiary or affiliate of the Company shall
be the property of the Company and the CFO shall account to the Company for the
same.





Non-Competition





	17.	 	The CFO agrees, as a separate and independent agreement, that he will not during any period
for which he has been remunerated hereunder, whether for his own account or for the account of
any other person, firm or company, either alone or jointly with or as




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	 	 	manager, agent for or employee of or as consultant to any person, company or firm, directly
or indirectly, carry on or be engaged or concerned or interested in any person firm or
entity who conducts business identical to or similar to that conducted by the Group in any
jurisdiction in which the Group carries on business (whether directly or indirectly).





Company Information, Documents, Confidentiality, and Non-Solicitation





	18.	(a)	 	All information, documents, books, records, notes, files, memoranda, reports, customer
lists and other documents, and all copies of them, relating to the Group’s business or
opportunities which the CFO 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
Group’s property and equipment are and will remain the Group’s sole and exclusive property
both during the term of this Agreement and after the termination or expiration thereof;






	 	(b)	 	If this Agreement is terminated for any reason, or if the Company at any time
requests, the CFO 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 Group, provided, however, that should the CFO require
access to copies of such documents for any reasonable purpose, the Company shall
provide the same at his request;
	 
	 	(c)	 	The CFO shall 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 endeavor to entice
away from the Group any person, firm or company who, at any time during the currency of
this Agreement were employees, customers or suppliers of or were in the habit of
dealing with the Group.






	19.	 	Except where such information is a matter of public record or when required to do so by law,
the CFO must not, either before or after this Agreement ends, disclose to any person any
information relating to the Group or its customers of which he becomes possessed while acting
as the CFO.





Termination





	20.	 	At the option of the Company, this Agreement shall terminate and, except to the extent
previously accrued, all rights and obligations of both parties under it shall cease if the
CFO:






	 	(a)	 	dies; or
	 
	 	(b)	 	is adjudicated bankrupt or makes any arrangement or composition with his
creditors; or
	 
	 	(c)	 	is convicted of any felony (whether or not relating to the Company or its
subsidiaries or affiliates).




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	21.	(a)	 	The Company may terminate this Agreement forthwith if the CFO 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 CFO
setting forth in reasonable detail a description of such conduct, and, except to the extent
previously accrued, all rights and obligations of both parties under this Agreement shall
cease.






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






	 	1.	 	the CFO will be relieved of his duties, his salary reduced to
US$1,000.00 per annum and his bonus entitlement suspended, but
	 
	 	2.	 	the Company will continue to pay the full cost of providing
medical insurance for the CFO and his wife and minor children,






	 	 	 	until the CFO is able once again to resume his duties in full.
	 
	 	 	 	If this incapacity continues for a period of one year (including the 60-day period
referred to above) the CFO’s employment will be deemed to have been terminated by
mutual consent at the expiration of that period.
	 
	 	(c)	 	The CFO may give six (6) months written notice of termination to the Company
and if he does so, this Agreement shall terminate at the expiration of that period and,
except to the extent previously accrued, all rights and obligations of both parties
under it shall cease.






	22.	 	If this Agreement is terminated by the CFO in accordance with Clause 21(c) or by the Company
in accordance with Clause 21(a) , all unvested ordinary shares issuable to the CFO pursuant to
Clause 8 shall be forfeited by the CFO. If this Agreement is otherwise terminated or in the
event of a Change in Control, as defined below, during the term of this Agreement, all
unvested ordinary shares issuable to the CFO pursuant to Clause 8 shall vest immediately.
	 
	 	 	If there is a Change of Control of the Company, then the CFO, at his option, may terminate
this Agreement upon one-hundred and twenty (120) days’ prior written notice (“Notice
Period”) to the Company after the Change in Control. In such event, the Company shall pay
the CFO on the last business day of the Notice Period in cash in one lump sum an amount
equal to three times the CFO’s then-current Base Salary. The parties agree that this
paragraph is subject to modification if required by the final regulations to be issued under
Section 409A of the United States Internal Revenue Code.




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For the purposes of this Agreement, a “Change of Control” shall 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 50% 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 shall 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.



Extension





	23.	 	On or before August 31st of each year during the Term of this Agreement (or any
extension thereof), the CEO shall determine whether to extend the Term of this Agreement, and
if the CEO so determines, the term of this Agreement shall be extended such that the term
shall continue for two (2) years from January 1st of the next following year.
	 
	 	 	In the event that the CEO determines not to extend the Agreement in any year, the Term of
this Agreement shall expire on December 31st of that year and the Company, on
that latter date, shall pay to the CFO, in cash, a severance payment equal to the CFO’s Base
Salary for that year as adjusted by Clause 6.





Notices





	24.	 	Any notice to be served under this Agreement must be in writing and shall be deemed to be
duly served if it is handed personally to the Secretary of the Company or to the CFO as the
case may be, or if it is sent by registered post to the address at the head of this Agreement.
A notice sent by post shall be deemed to be served on the third day following the date on
which it was posted.





Previous Agreements Superseded





	25.	 	This Agreement supersedes all prior contracts and understandings between the parties save
that benefits earned or accrued under prior contracts shall not be extinguished or affected.





Waiver





	26.	 	No change or attempted waiver of any of the provisions hereof shall be binding unless in
writing and signed by the party against whom it is sought to be enforced.





Severability of Provisions





	27.	 	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




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	 	 	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.





Headings





	28.	 	The headings herein are included for convenience only and have no legal effect.





Applicable Law and Jurisdiction





	29.	 	This Agreement shall 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 hereby agree to submit. The CFO appoints Gerard Pereira (“the Process Agent”) whose
address at the date of this Agreement is The Regatta Office Park, Windward Three, 4th Floor,
West Bay Road, P.O. Box 1114, Grand Cayman KY1-1102, Cayman Islands 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. Such service
may be made by personally serving the Process Agent at the Process Agent’s above address, with
a copy to the CFO at his address above, and the CFO irrevocably authorizes and directs the
Process Agent to accept such service on his behalf.





Amendment and Restatement





	30.	 	This Agreement amends and restates the Agreement between the parties dated the 6th
day of May 2006 relating to the same subject matter.





	 	 	 	 	 	 	 
	EXECUTED for and on behalf of

	 	 	)	 	 	CONSOLIDATED WATER CO. LTD.
	CONSOLIDATED WATER CO. LTD.

	 	 	)	 	 	 
	By:

	 	 	)	 	 	 
	In the presence of:

	 	 	)	 	 	 
	 

	 	 	)	 	 	 
	 

	 	 	)	 	 	 
	/s/ David Sasnett

	 	 	)	 	 	/s/ Frederick W. McTaggart
	 

Witness

	 	 	 	 	 	 

	 
	EXECUTED by DAVID SASNETT

	 	 	)	 	 	 
	In the presence of:

	 	 	)	 	 	 
	 

	 	 	)	 	 	 
	 

	 	 	)	 	 	 
	 

	 	 	)	 	 	 
	/s/ Frederick W. McTaggart

	 	 	)	 	 	/s/ David Sasnett
	 

	 	 	 	 	 	 
	Witness

	 	 	 	 	 	DAVID SASNETT







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