Document:

EMPLOYMENT AGREEMENT

Exhibit 10.29

EMPLOYMENT AGREEMENT

EMPLOYMENT AGREEMENT entered into on December 22, 2005.

BETWEEN:

GREGORY N. BAKEMAN, domiciled and residing at Ada, Michigan;

(hereinafter referred to as the "Employee")

AND:

McKENZIE BAY INTERNATIONAL, LTD. (hereinafter referred to as "MKBY"), a corporation duly incorporated under the laws of the State of Delaware, United States of America, having its principal office at 37899 Twelve Mile Road, Suite 300, Farmington Hills, Michigan, U.S.A., 48331, represented herein by Donald C. Harms, Secretary, duly authorized as he so declares;

WHEREAS MKBY wishes to retain the Employee;

WHEREAS the Employee and MKBY are desirous of entering into an agreement for the Employee's employment, all subject to the terms and conditions set forth in this Agreement;

NOW IT IS HEREBY AGREED:

1.

INTERPRETATION

1.1

Definitions

In this Agreement, the following words and expressions have the respective meanings ascribed to them below:

(a)                                                                                                                                                

"Affiliate" with respect to a Person means a Person that controls, is controlled by or under common control with such Person.  For purposes of this definition, “control” when used with respect to any Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise, and the terms “controlling” and “controlled” have meaning collative to the foregoing;

(b)                                                                                                                                                

"Agreement" means this employment agreement;

(c)                                                                                                                                                

"Board of Directors" means the board of directors of MKBY

(d)                                                                                                                                                

"Cause" shall mean  

1.

The Employee has committed a wilful, serious act such as fraud, embezzlement or theft, committed any act against the Employer intending to enrich himself at the expense of the Employer or made an unauthorized use or disclosure of secret or confidential information pertaining to the business of the Employer;

2.

The Employee has been convicted of a felony or commits an act constituting a felony;

3.

The Employee has engaged in conduct which has caused demonstrable and serious injury, monetary or otherwise, to the Employer;

4.

The Employee, in carrying out his duties hereunder, has been guilty of wilful, gross neglect or wilful misconduct, or

5.

The Employee has materially breached this Agreement (including without limitation any failure to perform the duties assigned to him in accordance with this Agreement; provided, however, that the mere failure to reach established financial performance targets shall not in itself constitute a failure to perform if Employee has otherwise performed such actions as have been requested or assigned to him in connection with such financial performance targets) and has not remedied such breach within 30 days after receipt of written notice from the Employer specifying in reasonable detail, the nature of the breach.  

(e)                                                                                                                                                

"Commencement Date" means April 1, 2006;

(f)                                                                                                                                                

"Disability" shall mean the inability or incapacity (by reason of a medically-determinable physical or mental impairment) of the Employee to perform the duties and responsibilities related to the job or position with the Employer described in Section 3 of this Agreement for a period that lasts or that can be reasonably expected to last more than 180 days.  Such inability or incapacity shall be documented to the reasonable satisfaction of the Employer by appropriate correspondence from registered physicians reasonably satisfactory to Employer.

(g)                                                                                                                                                

"Discoveries and Works" includes by way of example but without limitation, intellectual property, trade secrets and other confidential information, patents and patent applications, trademarks and trademark registrations and applications, service marks and service mark 

2

registrations and applications, trade names, copyrights and copyright registrations and applications;

(h)                                                                                                                                                

"Parties" means MKBY and the Employee and "Party" means one or the other as the case may be;

(i)                                                                                                                                                

"Person" means any individual, corporation, proprietorship, firm, partnership, limited partnership, limited liability company, trust, association or other entity;

(j)                                                                                                                                                

"Restriction Period" means the period of time covering the Term plus a period equivalent to twenty-four (24) months following Employee's Termination Date;

(k)                                                                                                                                                

"Subsidiary" means a corporation controlled by MKBY, or by another subsidiary of MKBY;

(l)                                                                                                                                                

"Term", "Initial Term", and "Additional Term" shall have the meaning set forth in Section 4;

(m)                                                                                                                                                

"Termination Date" means the effective date of the Employee's termination of employment with MKBY, regardless of the reason;

2.

EMPLOYMENT

The Employer hereby employs the Employee and the Employee hereby accepts employment with the Employer upon the terms and subject to the conditions set forth herein.  

3.

DUTIES AND RESPONSIBILITIES

3.1

During the Term of this Agreement, the Employee shall initially be employed as President and CEO of McKenzie Bay International, Ltd. as well as Chief Financial Officer and shall perform the services and functions relating to the office or offices in which he is from time to time elected or otherwise reasonably incident to such office or offices, all in accordance with the job description which is attached hereto and which is incorporated herein by reference and made a part hereof, and such amendments or modifications to said job description as shall be directed by the Board of Directors.  The Employee shall be subject to the direction of the Board of Directors of the Employer. 

3.2

During the Term of this Agreement, the Employee will devote his best efforts and his time and attention to the performance of his duties under this Agreement except for vacation periods and reasonable absences due to injury or illness as 

3

permitted by Employer’s general policies.  The employment relationship between the parties shall be governed by the general employment policies and practices of the Employer, except that when the terms of this Agreement differ from or are in conflict with the Employer’s general employment policies or practices, this Agreement shall control.

3.3

It is contemplated that the Employee will be obliged from time to time and for reasonable periods of time to travel in the performance of his duties and obligations under this Agreement. However, the principal place of employment of the Employee which the Employee shall report for work will be at the Employer’s office in Ada, Michigan as well as Employer’s primary office in Southeastern Michigan.

3.4

It is expressly understood and agreed that during the Term of this Agreement, the Employee shall not engage in any other business or business opportunity whether or not such business activity is pursued for gain, profit or other pecuniary advantage; provided, however, that:

(a)

The Employee may engage in personal, charitable, professional and investment activities to the extent such activities do not conflict or interfere with the Employee’s duties and obligations under this Agreement or with Employee’s ability to perform his duties and responsibilities under this Agreement; and,

(b)

The Employee shall not be prevented from investing his assets in such form or manner as will not require any substantial amount of time or services on the part of the Employee in the operation of the affairs of the enterprises in which such investments are made.  

4.

TERM

Unless sooner terminated as provided for in this Agreement, the terms of the Employee's employment shall commence on April 1, 2006 and shall continue for three (3) years (the "Initial Term"), provided, however, that the Initial Term of the Employee's employment under this Agreement shall automatically be extended for additional periods of twelve (12) months each (an "Additional Term") unless and until MKBY shall have given Employee notice, not less than three (3) months prior to the expiration of the Initial Term or any subsequent Additional Term, of the termination by MKBY of the Employee's employment effective as of the next succeeding anniversary date of the expiration of the Initial Term or Additional Term (the Initial Term and any Additional Term(s) are collectively referred to as the "Term" in this Agreement).

5.

COMPENSATION

4

The Employee shall be paid an annual base salary of Two Hundred Thousand ($200,000.00) Dollars (US) payable in accordance with the then-current payroll policies of the Employer.  Employer agrees to review Employee’s compensation annually during the last month of each fiscal year and to grant increases in compensation which will be effective on the first day of the immediately-following calendar year, based upon the Employee’s performance, scope of responsibility assumed, compensation paid to similar employees in similar companies and such other factors as may guide the Employer in setting reasonable compensation.  

6.

EXPENSES

MKBY shall reimburse the Employee for all necessary and reasonable expenses incurred by him in the performance of his duties under this Agreement. The Employee shall, on being so required, provide MKBY with vouchers or other evidence of actual payment of the said expenses in a form satisfactory to MKBY.

7.

BENEFITS  

Subject to the right of the Employer to amend or terminate any employee and/or group or senior executive benefit, bonus and/or stock option plan or program and to the terms and conditions of such plans and programs, the Employee shall be entitled to receive the following employee benefits:

7.1

Employee Plans

The Employee shall have the right to participate in such medical and dental plans as are maintained by the Employer and are available to its exempt, salaried employees generally (including without limitation disability, accident, medical, life insurance and hospitalization plans which are normal and customary).

7.2

Bonus Plans

The Employee shall have the right to participate in all senior executive benefit, bonus and/or stock option plans as are maintained by the Employer and are available to the Employer’s senior executive officers generally, all in accordance with the Employer’s regular practices with respect to senior executive officers.  

7.3

Vacation

The Employee shall be entitled to vacation days and holiday pay in accordance with the policies applicable to the Employer’s senior executive officers generally.

5

8.

RETURN OF DOCUMENTS AND PROPERTY

Upon the termination of Employee's employment with MKBY, or at anytime upon the request of MKBY, Employee (or his heirs or personal representatives) shall deliver to MKBY (a) all documents and materials (including without limitation, computer files) containing trade secrets or other confidential information relating to the business and affairs of MKBY, and (b) all documents, materials and other property (including, without limitation, computer files) belonging to MKBY, which in either case are in the possession or under the control of Employee (or his heirs or personal representatives).

9.

DISCOVERIES AND WORKS

All Discoveries and Works made or conceived by Employee during his employment by MKBY, jointly or with others, that relate to the present or anticipated activities of MKBY, or are used or usable by MKBY shall be owned by MKBY. Employee shall (a) promptly notify, make full disclosure to, and execute and deliver any documents requested by MKBY to evidence or better assure title to Discoveries and Works in MKBY, as so requested, (b) renounce any and all claims, including but not limited to claims of ownership and royalty, with respect to all Discoveries and Works and all other property owned or licensed by MKBY, (c) assist MKBY in obtaining or maintaining for itself at its own expense American and foreign patents, copyrights, trade secret protection or other protection of any and all Discoveries and Works, and (d) promptly execute, whether during his employment with MKBY or thereafter, all applications or other endorsements necessary or appropriate to maintain patents and other rights for MKBY and to protect the title of MKBY thereto, including but not limited to assignments of such patents and other rights. Any Discoveries and Works which, within six (6) months after the Termination Date, are made, disclosed, reduced to a tangible or written form or description, or are reduced to practice by Employee and which pertain to the business carried on or products or services being sold or developed by MKBY at the time of such termination shall, as between Employee and MKBY be presumed to have been made during Employee's employment by MKBY.

10.

DEATH

The Employee's employment under this Agreement shall terminate upon his death. In the event of the termination of the Employee's employment as a result of his death, MKBY shall promptly pay to any one or more beneficiaries designated by the Employee pursuant to a notice to MKBY or, failing such designation, to the Employee's estate, the annual base salary provided for in this Agreement through the conclusion of the month in which such termination occurs.  All other benefits the Employee may have under the Employee and/or Group or senior executive benefit bonus and/or stock option plans and 

6

programs of the Employer shall be determined in accordance with the terms and conditions of such plans and programs.  

11.

DISABILITY

The Employee's employment under this Agreement may be terminated as a result of Disability at the option of MKBY by notice to the Employee.  Such termination shall be effective upon the receipt by the Employee of such notice. In the event of the termination of the Employee's employment as a result of Disability, MKBY shall pay the Employee one (1) times his full annual base salary less any credit for sick pay or other benefits received by the Employee deriving from any private medical insurance or other similar arrangements entered into by MKBY.  All other benefits the Employee may have under the Employee and/or Group or senior executive benefit bonus and/or stock option plans and programs of the Employer shall be determined in accordance with the terms and conditions of such plans and programs.  

12.

TERMINATION FOR CAUSE BY MKBY

The Employee's employment under this Agreement may be terminated by MKBY for Cause. In the event that the Employee's employment under this Agreement shall validly be terminated by MKBY for Cause pursuant to this Section 12, MKBY shall promptly pay accrued but unpaid salary and reimburse or pay any other accrued but unpaid amounts due under this Agreement as of the date of termination, and thereafter MKBY shall have no further obligations under this Agreement.  All other benefits the Employee may have under the Employee and/or Group or senior executive benefit bonus and/or stock option plans and programs of the Employer shall be determined in accordance with the terms and conditions of such plans and programs.  

13.

VOLUNTARY EARLY TERMINATION

The Employee may voluntarily terminate his employment under this Agreement at any time by providing at least 30 days prior written notice to the Employer.  In such event, the Employee shall be entitled to receive his base salary until the date his employment terminates, and all other benefits the Employee may have under the Employee and/or Group or senior executive benefit bonus and/or stock option plans and programs of the Employer shall be determined in accordance with the terms and conditions of such plans and programs.  

14.

TERMINATION RESULTING FROM SALE OF BUSINESS

If there should be (a) a sale of substantially all the assets of MKBY to another Person; (b) a merger, amalgamation or consolidation of MKBY with another Person to form a 

7

new entity; or (c) a change in control of MKBY and as a result the Employee’s employment hereunder is terminated but the acquirer or the new entity, as the case may be, offers the Employee employment on terms and conditions that are essentially the same or better than those provided under this Agreement, then in the event the Employee refuses that offer of employment, Employee will not be entitled to any compensation hereunder.  However, if there should be (a) a sale of substantially all the assets of MKBY to another Person; (b) a merger, amalgamation or consolidation of MKBY with another Person to form a new entity; or (c) a change in control of MKBY and as a result the Employee’s employment hereunder is terminated and the Employee is not offered employment by the acquirer or new entity, then the Employee shall be entitled to receive his annual salary for a period of three years from and after the Effective Date of termination and any accrued but unpaid vacation pay payable in a lump sum (but discounted by a factor equal to the applicable federal rate for short-term obligations) or in accordance with the then-payroll policies of the Employer at the option of the Employer.  All other benefits the Employee may have under the Employee and/or Group or senior executive benefit bonus and/or stock option plans and programs of the Employer shall be determined in accordance with the terms and conditions of such plans and programs.  

15.

CONSTRUCTIVE TERMINATION PRIOR TO EXPIRATION OF EMPLOYMENT TERM

15.1

Constructive Termination

If prior to the expiration of the Term of this Agreement, the Employer:

(a)

terminates the employment of the Employee other than for Due Cause as a result of the death of the Employee or because of a Disability;

(b)

demotes the Employee to a lesser position than as provided in Section 3 of this Agreement (including a material diminution in the nature or status of the Employee’s responsibilities, authorities, powers or duties);

(c)

decreases the Employee’s Base Salary and benefits below the levels provided for by the terms of Sections 5, 6 and 7 of this Agreement (other than as a result of any amendment or termination of any employee and/or group or senior executive benefit, bonus and/or stock option plan which amendment or termination is applicable to all employees or executives of the Employer, as the case may be, eligible to participate in such plan prior to its termination);

(d)

assigns to the Employee any duties materially inconsistent with the status and responsibilities of the position provided for in Section 2 

8

of this Agreement and such action is not cured by the Employer within 15 days after receipt of written notice from the Employee specifying in reasonable detail the nature of such inconsistency; or

(e)

materially breaches any provision of this Agreement and such breach is not cured by the Employer within 15 days after receipt of written notice from the Employee specifying in reasonable detail the nature of the breach,

then such action by the Employer, unless consented to in writing by the Employee, shall be deemed to be a Constructive Termination by the Employer of the Employee’s employment (“Constructive Termination”); provided, however, that except in the case of clause (a) above, no Constructive Termination shall be deemed to have occurred unless the Employee notifies the Employer of the Employee’s election to treat such event as a Constructive Termination within 90 days of the occurrence of such event.  

15.2

Result of Constructive Termination

In the event of a Constructive Termination:

(a)

the Employee shall be entitled to receive his base salary for a period of three years from and after the effective date of Constructive Termination, payable in a lump sum (but discounted by a reasonable factor as mutually determined by the Employer and the Employee) or in accordance with the then payroll policies of the Employer at the option of the Employer;

(b)

the provisions of Sections 17 and 18 shall apply for the balance of the Employment Term but shall not apply for the period after the Employment Term. 

(c)

all other rights and benefits the Employee may have under the employee and/or group or senior executive benefit, bonus and/or stock option plans and programs of the Employer shall be determined in accordance with the terms and conditions of such plans and programs.

15.3

In the event of the death or disability of the Employee following a Constructive Termination, the amounts set forth in Section 15.2 of this Agreement shall continue to be owing and shall be paid to the estate of the Employee or the Employee as applicable.  

15.4

The Employer agrees that in the event of a Constructive Termination, the Employee shall not be required to seek other employment or to attempt in 

9

any way to reduce any amount payable to the Employee by the Employer pursuant to this Agreement and that any amounts due to the Employee hereunder shall not be reduced by any compensation earned by the Employee as a result of employment by another employer or by any retirement benefits paid to the Employee.  

16.

CONFLICT OF INTEREST

During the Term of this Agreement, the Employee shall not, either directly or in conjunction with any person, firm, association, syndicate, company or corporation as principal, agent, shareholder, or in any other manner whatsoever, carry on or be engaged in, or advise, lend money to, guarantee the debts or obligations of, or permit his name or any part of it to be used or employed by any person, firm, association, syndicate, company or corporation engaged in any business in competition with the business then carried on by MKBY or a Subsidiary, provided that the holding of not more than two per cent (2%) of the issued shares of a public company listed on any recognized stock exchange in the United States or Canada or traded in the United States or Canadian over-the-counter market, shall not be deemed a breach of this covenant.

17.

CONFIDENTIALITY

During the Term of this Agreement and for a period of two (2) years thereafter, the Employee shall keep secret and retain in strictest confidence, and shall not use for his benefit or for the benefit or others, directly or indirectly, any and all confidential information relating to MKBY and its Subsidiaries of which the Employee shall obtain knowledge by reason of his employment under this Agreement, including, without limitation, trade and business secrets or any other non-public or proprietary information concerning the business, customer lists, financial plans or projections, pricing policies, marketing plans or strategies, business acquisition or divestiture plans, new personnel acquisition plans, technical processes, inventions and other research projects, and except in connection with the performance of his duties under this Agreement, he shall not disclose any such information to anyone outside MKBY and any of its Subsidiaries, except as required by law (provided prior written notice is given by the Employee to MKBY) or except with the prior written consent of MKBY, unless such information is known generally to the public or the trade through sources other than the unauthorized disclosure by the Employee. 

18.

NON-COMPETITION AND NON-SOLICITATION

18.1

The Employee acknowledges and understands that (i) he has access to MKBY’s and MKBY's customers, channels for developing customers and recruiting executives for employment, and other confidential information of 

10

MKBY, (ii) he has direct substantial responsibility to maintain MKBY’s business relationship with customers of MKBY whose affairs he handles, (iii) the non-competition and non-solicitation provisions set forth in this Section 18 constitute a material part of the consideration received by MKBY under this Agreement, (iv) it would be unfair to MKBY if the Employee were to appropriate for himself or for others the benefits of MKBY’s many years of developing such business relationships, especially when the Employee enjoys a relationship with customers of MKBY as a result of his being introduced to the customer's personnel as the representative of MKBY, (v) it would be unfair to MKBY if the Employee were to appropriate for himself or for others the benefits of the business, technical processes, personnel, goodwill, business plan and other confidential information which MKBY has developed in the conduct of its business, and (vi) it is therefore fair that reasonable restrictions as set forth below should be placed on certain activities of the Employee after his employment with MKBY terminates.

18.2

The Employee shall not, without the prior written consent of MKBY, at any time during the Restriction Period, either individually or in partnership or jointly or in connection with any Person, as principal, agent, consultant, lender, contractor, employer, employee, investor or shareholder, or in any other manner, directly or indirectly:

(a)                                                                                                                                                

advise, manage, carry on, establish, acquire control of, work for, perform, render, or engage in, any business or service or activity that utilizes technical processes, goodwill, the business plan or strategic planning of MKBY; or,

(b)                                                                                                                                                

invest in or lend money to, or guarantee the debts or obligations of, any business or service or activity, or any Person engaged in any business or service or activity, that utilizes technical processes, goodwill, the business plan or strategic planning of MKBY; or 

(c)                                                                                                                                                

permit the Employee's name or any part thereof to be used or employed by any Person that operates, is engaged in or has an interest in any business or service or activity that utilizes technical processes, goodwill, the business plan or strategic planning of MKBY.

(d)                                                                                                                                                

The Employee shall not during the Restriction Period, without the written consent of MKBY, directly or indirectly (as owner, principal, agent, partner, officer, employee, independent contractor, consultant, stockholder, or otherwise), (i) cause or attempt to cause any person or entity to divert, terminate, limit, modify or fail to enter into any existing or potential business relationship with MKBY, or (ii) induce or attempt to induce any employee, consultant or advisor of MKBY to leave his or her position with MKBY or accept employment or an affiliation with a 

11

business which is competitive with any business in which MKBY or its subsidiaries is engaged at the time of Employee’s termination or which is, on that date, set forth in MKBY’s strategic plan as approved by the Board of Directors.

18.3

Upon the termination of the Employee's employment for whatever reason, the Employee shall deliver to MKBY all documents, papers, records, accounts of all and any description relating to the affairs of MKBY and its Affiliates within his possession or under his control, it being the intention of the Employee and MKBY that all such notes or memoranda made by the Employee during the course of his employment under this Agreement shall be the property of MKBY and its Affiliates and shall be left at its registered office or principal place of business upon the termination of the Employee's employment.

18.4

The Employee acknowledges that the provisions of this Section 18 of this Agreement are expressly for the benefit of the Employer, that the Employer would be irreparably injured by a violation of the provisions of this Section and that the Employer would have no adequate remedy at law in the event of such violation.  Therefore, the Employee acknowledges and agrees that in addition to any other remedies available, injunctive relief, specific performance or any other appropriate equitable remedy (without any bond or other security being required) are appropriate remedies to enforce compliance by the Employee with the provisions of this Section 18.  

19.

WITHHOLDING

MKBY shall be entitled to withhold from any and all amounts payable to the Employee under this Agreement such amounts as from time to time be required to be withheld pursuant to applicable tax laws and regulations.

20.

GENERAL PROVISIONS

20.1

Further Assurances

Each of the parties upon the request of any other party, whether before or after the date hereof, shall do, execute, acknowledge and deliver or cause to be done, executed, acknowledged or delivered all such further acts, deeds, documents, assignments, transfers, conveyances, powers of attorney and assurances as may be reasonably necessary or desirable to effect complete consummation of the transactions contemplated by this Agreement.

  

12

20.2

Successors in Interest

This Agreement and the provisions hereof shall inure to the benefit of and be binding upon the Parties and their respective successors and assigns.

20.3

Notices

Any notice, direction or other instrument required or permitted to be given hereunder shall be in writing and given by delivery or sent by (i) registered or certified mail, (ii) reputable overnight courier, (iii) personal delivery, (iv) telecopier or similar telecommunication device and addressed:

(a)                                                                                                                                                

in the case of MKBY at:

McKenzie Bay International, Ltd.

37899 Twelve Mile Road, Suite 300

Farmington Hills, MI

U.S.A., 48331

Telecopier: 248-489-4163

with a copy to:

Donald C. Harms

General Counsel

McKenzie Bay International, Ltd.

37899 Twelve Mile Road, Suite 300

Farmington Hills, MI 

U.S.A., 48331

(b)                                                                                                                                                

in the case of the Employee at:

4815 Greenhill Court

Grand Rapids, MI 49546

Any notice, direction or other instrument given as aforesaid shall be deemed to have been effectively given and received, if sent by mail on the fourth (4th) business day following such mailing, if sent by telecopier or similar telecommunications device on the next business day following such transmission or, if delivered, to have been given and received on the date of such delivery. Any party may change its address for service by written notice given as aforesaid.

20.4

Amendments

13

This agreement may not be amended except by written instrument duly executed by or on behalf of all parties hereto.

20.5

Governing Laws

This Agreement shall be governed by and construed in accordance with the laws of the State of Michigan, United States of America.

20.6

Gender

Any reference in this Agreement to any gender shall include all genders and words used herein importing the singular number only shall include the plural and vice versa.

20.7

Headings

The division of this Agreement into articles, sections, subsections and other subdivisions and the insertion of headings are for convenience of reference only and shall not affect or be utilized in the construction or interpretation hereof.

20.8

Severability

Any article, section, subsection or other subdivision of this Agreement or any other provision of this Agreement which is, or becomes, illegal, invalid or unenforceable shall be severed here from and shall be ineffective to the extent of such illegality, invalidity or unenforceability and shall not affect or impair the remaining provisions hereof, which provisions shall be severed from any illegal, invalid or unenforceable article, section, subsection or other subdivision of this Agreement or any other provision of this Agreement.

20.9

Waiver

No waiver of any of the provisions of this Agreement shall be deemed to constitute a waiver of any other provision (whether or not similar) nor shall such waiver constitute a continuing waiver unless otherwise expressly provided in a written document duly executed by the party to be bound thereby.

20.10

Attorney’s Fees

14

 

If any legal proceeding is necessary to enforce or interpret the terms of this Agreement or to recover damages for breach hereof, the prevailing party shall be entitled to reasonable attorney’s fees as well as costs and disbursements in addition to any other relief to which he or it may be entitled.  

20.11

Waiver of Jury Trial

TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE PARTIES HEREBY IRREVOCABLY WAIVE ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE RELATIONSHIP CONTEMPLATED HEREBY.

20.12

Previous Arrearage

The parties understand and agree that there is an arrearage owed to Employee under the terms of the previous Employment Agreement between the parties.  Employee agrees that, given current and anticipated near term business conditions, the previous arrearage and any further arrearage under this Employment Agreement will not be considered a breach of the agreement, provided, however, Employer agrees to make up and pay such arrearage as soon as reasonably possible.           

IN WITNESS WHEREOF, this Agreement has been executed as of the day and year first above written.

			
	 	 	McKENZIE BAY INTERNATIONAL, LTD.

	 	 	 
	 	 	 
	 	per:

	 
	 	 	DONALD C. HARMS, SECRETARY

	 	 	 
	 	 	 
	 	 	 
	Witness

	 	GREGORY N. BAKEMAN, EMPLOYEE

GREGORY N. BAKEMAN

JOB DESCRIPTION

DECEMBER 21, 2005

 

Reports to the Board of Directors 

·

Corporate wide responsibility

·

Establishing and communicating corporate vision/mission

·

Primary liaison with the board

·

MKBY representative at policy making levels with agencies and governments

·

Executive Committee lead

·

Leads corporate financial strategy;

·

Manages corporate liquidity; development and oversight of corporate budgets

·

Leads development and procurement of project financial structures, capital coordination and funding sources

·

Leads development and management of financial relationships

·

Oversees accounting function and SEC requirements, SOX lead – primary liaison with the board and audit committee

·

Oversees investor relations

·

Risk management and insuranceExhibit
10.18

RESTRICTED STOCK AGREEMENT

THIS RESTRICTED STOCK AGREEMENT
(this “Agreement”) is made as of the        day of                 ,
    , between PARTICLE DRILLING
TECHNOLOGIES, INC., a Nevada corporation (the “Company”), and                              
(“Employee”).

1.   Award.   Pursuant to the PARTICLE DRILLING
TECHNOLOGIES, INC. 2005 STOCK INCENTIVE PLAN, as amended (the “Plan”),
as of the date of this Agreement,                 
shares (the “Restricted Shares”) of the Company’s common stock shall be issued
as hereinafter provided in Employee’s name subject to certain restrictions
thereon. The Restricted Shares shall be issued upon acceptance hereof by
Employee and upon satisfaction of the conditions of this Agreement. Employee
acknowledges receipt of a copy of the Plan, and agrees that this award of
Restricted Shares shall be subject to all of the terms and provisions of the
Plan, including future amendments thereto, if any, pursuant to the terms
thereof. In the event of any conflict between the terms of this Agreement and
the Plan, the Plan shall control. Capitalized terms used but not defined in
this Agreement shall have the meaning attributed to such terms under the Plan,
unless the context requires otherwise.

2.   Restricted Shares.   Employee hereby accepts the Restricted Shares when
issued and agrees with respect thereto as follows:

(a)   Forfeiture
Restrictions.   The
Restricted Shares may not be sold, assigned, pledged, exchanged, hypothecated
or otherwise transferred, encumbered or disposed of to the extent then subject
to the Forfeiture Restrictions (as hereinafter defined), and in the event of
termination of Employee’s employment with the Company for any reason other than
death or disability (within the meaning of section 22(e)(3) of the Code),
Employee shall, for no consideration, forfeit to the Company all Restricted
Shares to the extent then subject to the Forfeiture Restrictions. The
prohibition against transfer and the obligation to forfeit and surrender
Restricted Shares to the Company upon termination of employment are herein
referred to as the “Forfeiture Restrictions.” 
The Forfeiture Restrictions shall be binding upon and enforceable
against any transferee of Restricted Shares.

(b)   Lapse of Forfeiture Restrictions.   The Forfeiture Restrictions shall lapse as to the
Restricted Shares in accordance with the following schedule, provided that
Employee has been continuously employed by the Company from the date of this
Agreement through the lapse date:

	
  Lapse Date

  	
   

  	
   

  	
   

  	
  Percentage of Total Number

  Of Restricted Shares as to Which

  Forfeiture Restrictions Lapse

  	
   

  
	
              

  	
   

  	
   

  	
  331¤3

  	
  %

  	
   

  
	
              

  	
   

  	
   

  	
  662¤3

  	
  %

  	
   

  
	
              

  	
   

  	
   

  	
  100

  	
  %

  	
   

  

 

Notwithstanding the foregoing, the Forfeiture
Restrictions shall lapse as to all of the Restricted Shares then subject to the
Forfeiture Restrictions on (i) the date of a Corporate Change (as
hereinafter defined) provided that Employee has been continuously employed by
the Company from the date of this Agreement to the date of such Corporate
Change or (ii) the date Employee’s employment with the Company is
terminated by reason of death or disability (within the meaning of section
22(e)(3) of the Code). For purposes of the preceding sentence, the term “Corporate
Change” shall have the same meaning as is assigned to such term in the Plan; provided,
however, that the term “Corporate Change” shall not include any reorganization,
merger, consolidation, or similar transaction or series of transactions
pursuant to which the record holders of the outstanding shares of the Company’s
stock immediately prior to such transaction or series of transactions continue
to hold immediately following such transaction or series of transactions 50% or
more of the outstanding voting securities (based upon voting power) of (a) any
entity which owns (directly or indirectly) the 

stock of the Company, (b) any entity with which
the Company has merged, or (c) any entity that owns an entity with which
the Company has merged. In addition, in no event shall a recapitalization of
the Company, a reclassification of the Company’s capital stock, or other change
in the Company’s capital structure (a “recapitalization”) constitute a
Corporate Change, and the Forfeiture Restrictions shall not lapse upon the
occurrence of any such recapitalization.

(c)   Certificates.   A certificate evidencing the Restricted Shares shall
be issued by the Company in Employee’s name, pursuant to which Employee shall
have all of the rights of a stockholder of the Company with respect to the
Restricted Shares, including, without limitation, voting rights and the right
to receive dividends (provided, however, that dividends paid in shares of the
Company’s stock shall be subject to the Forfeiture Restrictions). Employee may
not sell, transfer, pledge, exchange, hypothecate or otherwise dispose of the
stock until the Forfeiture Restrictions have expired and a breach of the terms
of this Agreement shall cause a forfeiture of the Restricted Shares. The
certificate shall be delivered upon issuance to the Secretary of the Company or
to such other depository as may be designated by the Committee as a depository
for safekeeping until the forfeiture of such Restricted Shares occurs or the
Forfeiture Restrictions lapse pursuant to the terms of the Plan and this award.
Employee agrees to deliver to the Company a stock power, endorsed in blank,
relating to the Restricted Shares. Upon the lapse of the Forfeiture
Restrictions without forfeiture, the Company shall cause a new certificate or
certificates to be issued without legend (except for any legend required
pursuant to applicable securities laws or any other agreement to which Employee
is a party) in the name of Employee in exchange for the certificate evidencing
the Restricted Shares. However, the Company, in its sole discretion, may elect
to deliver the certificate either in certificate form or electronically to a
brokerage account established for Employee’s benefit at a brokerage/financial
institution selected by the Company. Employee agrees to complete and sign any
documents and take additional action that the Company may request to enable it
to deliver the shares on Employee’s behalf.

(d)   Corporate
Acts.   The
existence of the Restricted Shares shall not affect in any way the right or
power of the Board or the stockholders of the Company to make or authorize any
adjustment, recapitalization, reorganization or other change in the Company’s
capital structure or its business, any merger or consolidation of the Company,
any issue of debt or equity securities, the dissolution or liquidation of the
Company or any sale, lease, exchange or other disposition of all or any part of
its assets or business or any other corporate act or proceeding. The
prohibitions of Section 2(a) hereof shall not apply to the transfer
of Restricted Shares pursuant to a plan of reorganization of the Company, but
the stock, securities or other property received in exchange therefor shall
also become subject to the Forfeiture Restrictions and provisions governing the
lapsing of such Forfeiture Restrictions applicable to the original Restricted
Shares for all purposes of this Agreement and the certificates representing
such stock, securities or other property shall be legended to show such
restrictions.

3.   Withholding
of Tax/Tax Election.   To the extent that the receipt of the
Restricted Shares or the lapse of any Forfeiture Restrictions results in
compensation income or wages to Employee for federal, state or local tax
purposes, Employee shall deliver to the Company at the time of such receipt or
lapse such amount of money as the Company may require to meet its minimum
obligation under applicable tax laws or regulations or make such other
arrangements to satisfy such withholding obligation as the Company or the
Committee may approve. In addition, the Company may withhold unrestricted
shares of stock of the Company (valued at their fair market value on the date
of withholding of such shares) otherwise to be issued upon the lapse of the
Forfeiture Restrictions to satisfy its withholding obligations. If Employee
makes the election authorized by section 83(b) of the Code in connection
with the award of the Restricted Shares, Employee shall submit to the Company a
copy of the statement filed by Employee to make such election.

 2
 

4.   Status
of Stock.   Employee
agrees that the Restricted Shares issued under this Agreement will not be sold
or otherwise disposed of in any manner which would constitute a violation of
any applicable securities laws, whether federal or state. Employee also agrees
that (a) the certificates representing the Restricted Shares may bear such
legend or legends as the Committee deems appropriate in order to reflect the
Forfeiture Restrictions and to assure compliance with applicable securities
laws, (b) the Company may refuse to register the transfer of the
Restricted Shares on the stock transfer records of the Company if such proposed
transfer would constitute a violation of the Forfeiture Restrictions or, in the
opinion of counsel satisfactory to the Company, of any applicable securities
law, and (c) the Company may give related instructions to its transfer
agent, if any, to stop registration of the transfer of the Restricted Shares.

5.   Employment Relationship.   For purposes of this Agreement,
Employee shall be considered to be in the employment of the Company as long as
Employee remains an employee of either the Company, an Affiliate, or any
successor corporation. Without
limiting the scope of the preceding sentence, it is expressly provided that
Employee shall be considered to have terminated employment with the Company at
the time of the termination of the “Affiliate” status under the Plan of the
entity or other organization that employs Employee. Any question as to
whether and when there has been a termination of such employment, and the cause
of such termination, shall be determined by the Committee and its determination
shall be final.

6.   Notices.   Any
notices or other communications provided for in this Agreement shall be
sufficient if in writing. In the case of Employee, such notices or
communications shall be effectively delivered if hand delivered to Employee at
his principal place of employment or if sent by registered or certified mail to
Employee at the last address Employee has filed with the Company. In the case
of the Company, such notices or communications shall be effectively delivered
if sent by registered or certified mail to the Company at its principal
executive offices.

7.   Entire
Agreement; Amendment.   This Agreement replaces and merges
all previous agreements and discussions relating to the same or similar subject
matters between Employee and the Company and constitutes the entire agreement
between Employee and the Company with respect to the subject matter of this
Agreement. Without limiting the scope of the preceding sentence, all prior
understandings and agreements, if any, among the parties hereto relating to the
subject matter hereof are hereby null and void and of no further force and
effect. Any modification of this Agreement shall be effective only if it is in
writing and signed by both Employee and an authorized officer of the Company.

8.   Binding
Effect.   This Agreement shall be binding upon and inure to
the benefit of any successors to the Company and all persons lawfully claiming
under Employee.

9.   Governing
Law.   This
Agreement shall be governed by, and construed in accordance with, the laws of
the State of Nevada, without regard to conflicts of laws principles thereof.

10.   Jurisdiction.   Each
of the Company and Employee hereby irrevocably (i) submits and consents to
the personal jurisdiction of the state and federal courts sitting in Harris
County, Texas with respect to any suit, action, or proceeding arising out of or
based upon this Agreement or the transactions contemplated hereby and (ii) waives
the right to contend in any such action that venue is improperly laid in any
such court or that it is an improper or inconvenient forum or lacks personal
jurisdiction. If Employee now or hereafter resides outside the State of Texas,
Employee hereby irrevocably appoints the General Counsel of the Company as
Employee’s authorized agent upon whom process may be served at such General
Counsel’s Company office for notices under this Agreement in any suit, action,
or proceeding arising out of or based upon this Agreement or the transactions
contemplated hereby that may be instituted in any state or federal court in the
State of Texas by the Company, and Employee hereby agrees to so act. Employee
agrees to take any and all action, including the filing of any and all
documents and instruments, that may be necessary to continue such appointment
in full force and effect as aforesaid. Service of process upon the authorized
agent of Employee and written notice of such service to Employee 

 3
 

shall be deemed, in every
respect, effective service of process as to Employee for purposes of any such
suit, action, or proceeding instituted in any state or federal court in the
State of Texas.

IN WITNESS
WHEREOF, the Company has caused this Agreement to be duly
executed by its officer thereunto duly authorized, and Employee has executed
this Agreement, all effective as of the day and year first above written.

	
  

  	
  PARTICLE DRILLING TECHNOLOGIES,
  INC.

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Employee

  

 

 4

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00096-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00096-of-00352.parquet"}]]