Exhibit 10.3
15 September 2003
PRIVATE AND CONFIDENTIAL
Mr Xxxx Xxxxxxxxx
CEO and Director
Aqua Dyne Inc.
3rd Floor, 000 Xxxx Xxxxxx
Xxxxxxx Xxxxx, Xxxxxxxxxx 0000 XXX
Dear Xxxx
X XXXXXX - EMPLOYMENT CONTRACT
As you are aware, we have instructions to act for Xxx Xxxxxx ("JW").
JW will agree to enter into an employment contract with Aqua Dyne Australia Pty
Ltd ACN 103 011 696 ("ADA") on the following terms and conditions:
1. PARTIES
1.1 EMPLOYER: ADA
1.2 EMPLOYEE: JW
1.3 GUARANTOR: Aqua Dyne Inc ("ADI")
2. BACKGROUND
2.1 ADI has developed technologies known as the Jet Water System for
treatment of contaminated or salt water ("the Technologies").
2.2 ADI has protected its intellectual property relating to the
Technologies.
2.3 ADA is a wholly owned subsidiary of ADI.
2.4 ADI will give ADA a license to use the Technologies to develop its
business in Australia. The business is the commercial application of
the Technologies for profit after development and marketing activities
("the Proposed Business").
3. POSITION OF JW
3.1 Managing Director of ADA
3.2 Director of ADI, with appointment term, conditions, compensation,
reimbursements and entitlements on the same basis as the proposed new
directors, viz Messrs Symms and Xxxxxx. In the event that Messrs Symms
and Xxxxxx or other parties acceptable to JW do not become Board
Members, then at his option, JW may resign from the Board of ADI
without any penalty whatsoever.
3.3 Director of Liquatech Pty Ltd in due course on terms and conditions to
be agreed with the Board of ADI, should that company remain an entity
separate from the Aqua Dyne Group.
4. REPORTING
4.1 JW to report to the CEO of ADI.
5. DUTIES OF JW
5.1 Determining technical capabilities of the technologies with assistance
from independent consultants.
5.2 Determining feasibility of commercial manufacture and sales of the
technologies, with the assistance from independent consultants.
5.3 Employing the technical, sales and administrative staff as appropriate
for preparation of a business and marketing plan and thereafter
development of the proposed business in Australia, South Pacific and
Asian markets.
5.4 Negotiations with high volume water users such as companies (industrial
and mining ) and government bodies and agencies which have currently
expressed an interest in commercial use of the technologies.
6. TERM
6.1 The initial contract is for three (3) years. JW has one (1) option to
renew the initial contract for a further period of three (3) years,
making a total employment period of up to 6 (six) years. The option to
renew must be exercised by JW between months twenty-five (25) and
thirty (30) after commencement of the initial contract. The option is
to be exercisable by JW on the same terms and conditions as the initial
contract save as to salary for the first year of the second three-year
period, which shall not be less than the annual salary applicable in
the third year of the initial contract. ADI and ADA, in good faith,
hereby xxxxx XX the right of first refusal to negotiate his
continuation in the Position for a further period 6 (six) years ie for
years seven (7)- twelve (12) on the basis of an initial contract of 3
(three) years, with an option to JW for renewal for a further period of
3 (three) years.
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6.2 JW can terminate the contract at any time by giving three (3) months
notice ("JW Termination"). Upon JW Termination ADA must make a payment
immediately to JW of all entitlements which might be outstanding
according to law.
6.3 Termination by ADA other than in circumstances set out in Clause 17
herein: ADA can terminate the contract at any time by giving one (1)
months notice ("ADA Termination"). Upon ADA Termination, ADA must make
payment to JW of the greater of all remaining amounts that would have
been paid to JW as remuneration had the relevant three year term of the
contract been completed by both parties, or one (1) years remuneration
(based on remuneration at the time of ADA Termination), such payments
to be in Eligible Termination Payment form. If JW exercises the option
to renew for a further three (3) years and ADA fails to enter the
relevant three (3) year contract, within 30 days of JW so exercising
his option, this will be deemed to be an ADA Termination. If ADA
breaches Clause 7 of this contract or if ADI breaches Clause 15.1 of
this contract this will be deemed to be an ADA Termination.
7. PACKAGE
7.1 SALARY AS MANAGING DIRECTOR OF ADA
Commencing salary to be AUD$250,000.00 per annum inclusive of Federal
Superannuation Guarantee Levy (such that the amount of $250,000.00 per
annum is the total cost to the Company) paid monthly in advance no
later than the 7th day of the month.
Fringe Benefits and other similar taxes on all other benefits payable
to JW under the contract is to be to the account of ADA.
7.2 CAR PARK
ADA must provide a car park to JW at the business premises where JW is
working at no cost to JW.
7.3 EXPENSES ( AS MD OF ADA AND DIRECTOR OF ADI)
Reimbursement of all usual work related expenses for this type of
position including, but not limited to, telephone, entertainment and
parking. No car will be provided but reasonable motor vehicle running
expenses on a per klm basis are to be paid for any commute to and from
ADA's place of business, in excess of 20 klms per day.
7.4 TRAVEL (AS MD OF ADA AND DIRECTOR OF ADI)
Business Class were flight time is longer than 1.5 hours.
Road travel for business purposes will be by hire car at the cost of
the company.
7.5 SALARY REVIEW
During the 11th month of each year of the contract, JW's performance
will be reviewed ("Performance Review").
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The Performance Review will be based on an objective assessment of how
diligently JW has applied himself overall to the discharge of his
duties during the year in question, including Board positions.
During the term of the contract, the CEO of ADI will immediately
discuss with JW any concerns he might have in respect to JW's
performance from time to time, with the objective of enabling JW to
undertake personal corrective action, if such proves to be necessary.
On the basis that JW's performance is assessed as acceptable (ie. he
has diligently applied himself overall to his duties), he shall be
entitled to a salary review.
The salary review will determine JW's salary for the next year of the
contract ("the New Salary").The New Salary will be at least equal to
the old salary adjusted upwards for the effect of the Consumer Price
Index increase over the previous (12) twelve months.
The New Salary shall be determined by way of benchmarking JW's current
salary against those paid to persons in JW's position in companies of
similar size, performance and prospects.
8. COMMENCEMENT
8.1 The parties acknowledge that JW must give up to 2 months notice of his
intention to terminate employment with his current employer ("Current
Employer Notice").
8.2 JW will not give the current employer notice until this contract is
signed and ADA and ADI have satisfied Clause 12.1 (a) of the Conditions
Precedent, which ADI and ADA irrevocably agree to do no later than 30
September 2003.
8.3 Should ADI and ADA not have satisfied Clause 12.1 (a) of the Conditions
Precedent by 30 September 2003, then JW shall grant ADI and ADA an
extension for a further period not exceeding fourteen (14) days.
8.4 JW will commence employment under this contract no later than 1 week
after termination of his current employment.
9. HOURS OF WORK
9.1. 8.30 am -5.30 pm Monday to Friday and such other hours as may be
reasonably required.
10. HOLIDAYS
10.1 In the first year of the contract, seven (7) weeks, with 2 weeks in
January 2004; and thereafter five (5) weeks per annum, subject to no
greater than three (3) weeks consecutively, without permission of the
Board of ADI.
11. SICK LEAVE
11.1 Ten (10) days per annum.
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11.2 JW, along with all other employees, shall be covered under Work Cover
Queensland
12. CONDITIONS PRECEDENT
12.1 This contract is subject to the following Conditions Precedent being
satisfied by 30 September 2003 ("the Satisfaction Date"):
(a) ADI must deposit AUD$100,000.00 ("the Security Deposit") in
the Trust Account of Xxxxxxxxx Xxxxxxxx XxXxxxx, solicitors
who must hold the Security Deposit on trust for JW on the
following terms:
(i) The Security Deposit must be paid to JW (in the form
of an Eligible Termination Payment if possible) if JW
informs Xxxxxxxxx Xxxxxxxx XxXxxxx that there has
been a breach of Clause 7 or Clause 15.1 or this
employment contract by ADI or ADA;
(ii) The Security Deposit will be repaid to ADI if the
Conditions Precedent have not been satisfied by the
Satisfaction Date;
(iii) The Security Deposit will be repaid to ADI if it has
not been paid to JW under sub-clause 12.1(b)(i) above
within nineteen (19) months of the commencement of
payment of JW's salary hereunder;
(iv) Xxxxxxxxx Xxxxxxxx XxXxxxx may invest the Security
Deposit with a bank selected by Xxxxxxxxx Xxxxxxxx
XxXxxxx whereupon any interest earned on the Security
Deposit will become part of the Security Deposit.
(b) A payment of the Security Deposit to JW under Clause
12.1(b)(i) will be a credit against any amount payable to JW
under this contract and that the rights of JW under Clause 6.2
and 6.3 will not be otherwise affected.
(c) ADI must arrange for 100,000 ADI stock options to be issued to
JW in accordance with the company's registered stock option
plan and SEC legal requirements;
(d) In addition to the stock options in 12.1 (c), ADI must arrange
for JW to be issued with such further stock options as the
Board of ADI determines appropriate pursuant to its planned
review of the entitlements of directors and executives;
(e) The exercise price for the stock options in (c) and (d) above
shall be as determined by the Board of ADI;
(f) Directors Liability Indemnity Insurance to cover JW in his
positions with ADA and ADI;
(g) Due Diligence being completed to the satisfaction of JW;
(h) Messrs Symms and Xxxxxx becoming Board members of ADI
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12.2 JW may terminate this contract if the Conditions Precedent have not
been met by the Satisfaction Date.
13. GUARANTEE AND INDEMNITY
13.1 ADI guarantees that ADA will perform its obligations under this
employment contract including ADA's obligations under Clauses 6.2 and
6.3 after termination.
13.2 ADI and ADA hereby indemnify JW against any loss or damage whatsoever
or howsoever caused arising from the performance of his duties under
this contract.
14. BOARD POSITIONS
14.1 JW must be appointed a Director of ADA upon commencement of employment.
15. FUNDING
15.1 ADI agrees that it will provide appropriate funding for the business
plan of ADA when it is formulated. If funds are needed before the
business plan is formulated, ADI will provide them to cover JW's salary
and other business expenses relating to JW's duties. ADI agrees that
the amount of funding to be provided over the first eighteen (18)
months from commencement of this contract will be at least
AUD$750,000.00 provided in such time as the funds are required by ADA.
15.2 ADI acknowledges that it intends to provide AUD$2,000,000.00 if that is
necessary to maximise the prospects of the proposed business.
15.3 JW is not required to give any Director's Guarantees relating to the
financing or operations of ADI or ADA, including but not limited to
lease of premises or equipment leases by ADA or ADI.
16. CONFIDENTIALITY
16.1 JW is aware that in the course of employment under this Agreement he
will have access to and be entrusted with information in respect of the
business and financing of ADA and its dealings, transactions and
affairs all of which information is or may be confidential.
16.2 JW shall not (except in the proper course of his duties) during or
after the period of his employment under this Agreement divulge to any
person whatever or otherwise make use of (and shall use his best
endeavours to prevent the publication or disclosure of) any trade
secret or any confidential information concerning the business or
finances of ADA or any of its dealings, transactions or affairs or any
trade secret or any other such confidential information concerning ADA
or any of its members, suppliers, agents, distributors or customers.
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16.3 All notes and memoranda of any trade secrets or confidential
information concerning the business of ADA or any of its members,
suppliers, agents, distributors or customers which shall be acquired
received or made by JW during the course of his employment shall be the
property of ADA and shall be surrendered by JW to someone duly
authorised in that behalf at the termination of his employment or at
the request of the Board at any time during the course of his
employment.
17. TERMINATION
17.1 The Company may at its sole discretion terminate the
employment in the manner specified in Clause 17.2 if at any
time JW is or becomes:
17.1.1 Incapacitated by illness or injury from performing
his duties under this Agreement for a period of three
(3) consecutive months or any periods aggregating
three months in any period of twelve (12) calendar
months.
17.1.2 Charged with any criminal offence which in the
reasonable opinion of the Board brings the JW or ADA
into serious disrepute.
17.1.3 Bankrupt or makes a composition or arrangement with
his creditors generally or takes advantage of any
statute for the relief of insolvent debtors.
17.1.4 Of unsound mind, or a person whose personal estate is
liable to be dealt with under any law relating to
mental health.
17.2 Where ADA decides to terminate the employment for a reason
specified in Clause 17.1 it shall do so in the following
manner:
17.2.1 For reasons specified in Clause 17.1.1 by giving not
less than one (1) months previous written notice
expiring on or after the expiry of the three (3)
months period referred to therein or by paying one
(1) months' salary (but not allowances) in lieu
thereof but without prejudice to any rights or
remedies of either party under, or in respect of any
breach of, this Agreement.
17.2.2 For any other reason as specified in Clause 17.1 by
giving notice effective forthwith and without payment
of any salary or allowances (other than any accrued
to the date of termination, but without prejudice to
any rights or remedies of either party under, or in
respect of any breach of this Agreement.
17.2.3 Under termination of the employment, JW will be
entitled to payment in lieu of annual leave to which
he became entitled during the employment (including a
pro rata entitlement for the period after the last
anniversary of the commencement of the employment,
but which he did not take for any reason approved by
the Board).
17.2.4 Subject to an express agreement to the contrary, upon
termination of the employment all sums which are
owing by JW to ADA shall be repaid forthwith whether
such sums are then due to be paid or not.
18. SEVERABILITY
18. If any provision of this Contract is held invalid, unenforceable or
illegal for any reason this Contract shall otherwise remain in full
force apart from such provisions which shall be deemed deleted.
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19. ENTIRE AGREEMENT
19. This Agreement constitutes the entire Agreement of the parties in
respect of the matters dealt with in this Agreement and supersedes all
prior Agreements, understandings and negotiations in respect of the
matters dealt with in this Agreement.
20. VARIATION
20. This Agreement shall not be changed or modified in any way subsequent
to its execution except in writing signed by ADA and JW.
21. NOTICES
Any notice, approval, consent or other communication under this
Agreement shall be in writing and shall be delivered personally or
given by pre-paid registered post, telegram or cable to a party at the
address of the party indicated at the beginning of this Agreement or
such other address as the party may from time to time notify to the
other for the purpose of this claim. Proof of posting by pre-paid
registered post or by dispatch of telegram or cable shall be proof of
receipt, in the case of, on the third day after posting and, in the
case of a telegram or cable, on the day immediately following dispatch.
22. BINDING CONTRACT
22.1 Upon ADA, ADI and JW (either personally or through his solicitors)
signing this letter, the parties agree that a binding employment
contract is formed.
23. PROPER LAW
23.1 This contract is subject to the law of Queensland.
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signed by XXX XXXXXX
00 XXXXXX XXXXXX, XXXXXX XXXX 0000, XXXXXXXXX
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signed on behalf of
AQUA DYNE INC (ADI)
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signed on behalf of
AQUA DYNE AUSTRALIA PTY LTD (ADA)
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