EXHIBIT 10.6.2
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT, made and entered into as of the ____ day of
February, 1999 (the "EFFECTIVE DATE"), by and between Synagro Technologies,
Inc., a Delaware corporation (hereafter "COMPANY") and ▇▇▇▇ ▇. Rome (hereafter
"EXECUTIVE"), an individual;
W I T N E S S E T H:
WHEREAS, Company wishes to secure the services of the Executive subject
to the terms and conditions hereafter set forth; and
WHEREAS, the Executive is willing to enter into this Agreement upon the
terms and conditions hereafter set forth,
NOW, THEREFORE, in consideration of the mutual promises and agreements set
forth herein, the parties hereto agree as follows:
1. EMPLOYMENT. During the Employment Period (as defined in SECTION 4
hereof), the Company shall employ Executive, and Executive shall serve, as
Executive Vice President and Chief Development Officer of the Company.
Executive's principal place of employment shall be at the Company's principal
corporate offices in Houston, Texas during the Employment Period.
2. COMPENSATION. The Company shall pay or cause to be paid to Executive
during the Employment Period an annual base salary for his services under this
Agreement of not less than $120,000, payable in equal monthly or semi-monthly
installments in accordance with the Company's normal payroll procedures.
Executive's base salary shall be subject to annual review and may be increased,
depending upon the performance of the Company and Executive, upon the
recommendation of the Chairman or the Board of Directors of the Company
(hereafter "BOARD OF DIRECTORS"). Executive shall be entitled to participate in
the bonus "pool" or other structure established for the Company's top level of
management. Nothing contained herein shall preclude the payment of a bonus,
supplemental or incentive compensation to Executive provided that the Board of
Directors authorizes any such compensation payment. As additional compensation
to Executive for the services previously rendered by him, the services to be
rendered by him pursuant to, and Executive's other duties and obligations
arising under this Agreement, including, without limitation, his obligations
under Sections 12 and 14 hereof, the Company has granted to Executive options to
purchase 240,000 shares of common stock of the Company, par value $.002 per
share, between the Company and Executive.
3. DUTIES AND RESPONSIBILITIES OF EXECUTIVE. During the Employment Period,
Executive shall devote his services full time to the business of the Company and
perform the duties and responsibilities assigned to him by ▇▇▇▇ ▇. ▇▇▇▇▇▇ or the
Board of Directors to the best of his ability and with reasonable diligence. In
determining Executive's duties and responsibilities, ▇▇▇▇ ▇. ▇▇▇▇▇▇ and the
Board of Directors shall act in good faith and shall not assign duties and
responsibilities to Executive that are not appropriate or customary with respect
to the position of Executive hereunder. This SECTION 3 shall not be construed as
preventing Executive from engaging in reasonable volunteer services for
charitable, educational or civic organizations, or from investing his assets in
such form or manner as will not require a material amount of his services in the
operations of the companies or businesses in which such investments are made.
4. TERM OF EMPLOYMENT. Executive's term of employment with the Company
under this Agreement shall be for 24 consecutive months beginning on the
Effective Date, unless Notice of Termination pursuant to SECTION 7 is given by
either the Company or Executive to the other party. The Company and Executive
shall each have the right to give Notice of Termination at will, with or without
cause, at any time, subject to the terms of this Agreement regarding rights and
duties of the parties upon termination of employment. This 24-month employment
period hereunder shall be referred to herein as the "TERM OF EMPLOYMENT." The
period from the Effective Date through the date of Executive's termination of
employment for whatever reason shall be referred to herein as the "EMPLOYMENT
PERIOD."
5. BENEFITS. Subject to the terms and conditions of this Agreement, during
the Employment Period, Executive shall be entitled to the following:
(a) REIMBURSEMENT OF EXPENSES. The Company shall pay or reimburse
Executive for all reasonable travel, entertainment and other reasonable
expenses paid or incurred by Executive in performing his business
obligations hereunder. The Company shall also provide Executive with
suitable office space and secretarial help. Executive shall provide
substantiating documentation for expense reimbursement requests as
reasonably required by the Company for its tax and other business records.
(b) EXPENSE ALLOWANCES. Executive shall be entitled to: (i) a car
allowance of $500 per month, and (ii) family medical and dental insurance
coverage paid for 100% by Company and which allows Executive to choose
among all options for medical and dental insurance provided to other
Company employees in the same area.
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(c) OTHER BENEFITS. Executive shall be entitled to participate in
any pension, profit-sharing, stock option, deferred compensation, or
similar plan or program of the Company established by the Company, to the
extent that he is eligible under the provisions thereof. Executive shall
also be entitled to participate in any group insurance, hospitalization,
medical, health and accident, disability or similar plan or program
established by the Company, to the extent that he is eligible under the
provisions thereof.
(d) PAID VACATION. Executive shall initially be entitled to three
(3) weeks of paid vacation during each 12-month period of employment with
the Company (which shall accrue monthly on a PRO RATA basis). Executive
shall thereafter be entitled to the number of days of paid vacation each
year that is accorded under the Company's vacation policy as in effect
from time to time or three (3) weeks, whichever is greater. Unused
vacation days up to a maximum of two (2) weeks in one year shall be
carried forward for a period not to exceed 12 months in accordance with
Company's vacation policy as in effect from time to time.
6. RIGHTS AND PAYMENTS UPON TERMINATION. The Executive's right to
compensation and benefits for periods after the date on which his employment
with the Company terminates for whatever reason (the "TERMINATION DATE") shall
be determined in accordance with this SECTION 6,
(a) MINIMUM PAYMENTS. Executive shall be entitled to the following
payments, in addition to any payments or benefits to which the Executive
is entitled under the terms of any employee benefit plan or the following
provisions of this SECTION 6:
(1) his unpaid salary for the full month in which his
Termination Date occurred; provided, however, if Executive is
terminated for Cause pursuant to SECTION 6(B) below, he shall only
be entitled to receive his accrued but unpaid salary through his
Termination Date; and
(2) his accrued but unpaid vacation pay for the period ending
on his Termination Date in accordance with the Company's vacation
pay policy as in effect at such time.
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(b) SEVERANCE PAYMENT. Notwithstanding any other provision of this
Agreement to the contrary, in the event that: (i) Executive's employment
hereunder is terminated by the Company at any time for any reason EXCEPT
(A) for Cause (as defined below) or (B) Executive's death or Disability
(as defined below) or (ii) Executive terminates his own employment
hereunder at any time for Good Reason (as defined below), then, in either
such event, Executive shall be entitled to receive, and the Company shall
be obligated to pay, a lump sum cash payment equal to one hundred percent
(100%) the present value of Executive's annual salary pursuant to SECTION
2 or the annual salary then being paid to him, whichever is greater. For
purposes of the immediately preceding sentence, the "present value" of
such annual salary shall be determined in accordance with the regulations
under Section 280G of the Code (as defined below). Also, except as
otherwise specifically provided in this SECTION 6(B), such severance
payment shall be in addition to, and shall not reduce or offset, any other
payments that are due to Executive from the Company or any other source or
under any other agreements, except any severance pay plan or program
maintained by the Company that covers employees generally. The provisions
of this SECTION 6(B) shall supersede any conflicting provisions of this
Agreement but shall not be construed to curtail, offset or limit
Executive's rights to any other payments, whether contingent upon a Change
in Control (as defined below) or otherwise, under the Agreement or any
other agreement, contract, plan or other source of payment except as
specifically provided herein. In addition, in the event of a Change in
Control, Executive shall be entitled to receive the bonus payment
described in SECTION 9 hereof, if applicable.
Notwithstanding any provision of this SECTION 6(B) to the contrary,
the Executive must first execute an appropriate release and waiver
agreement whereby Executive agrees to release and waive, in return for the
severance payment described in this SECTION 6(B), any claims that he may
have against the Company for (1) unlawful discrimination (including,
without limitation, age discrimination) and (2) severance pay under any
other severance pay plan or program maintained by the Company that covers
Executive; provided, however, such agreement shall not release or waive
any claims that may be brought by Executive for payments that may be due
under this Agreement, without Executive's express written consent. Any
severance payment required under this SECTION 6(B) shall be paid to
Executive within twenty (20) days after Executive executes such release
and waiver agreement, unless the parties agree in writing before then to
another payment date or method of payment, e.g., installment payments.
Executive shall not be required to mitigate any damages under this SECTION
6(B) or any other provision of this Agreement.
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A "CHANGE IN CONTROL" of the Company shall be deemed to have
occurred if any of the following shall have taken place: (1) a change in
control is reported by the Company in response to either Item 6(e) of
Schedule 14A of Regulation 14A promulgated under the Securities Exchange
Act of 1934 (the "EXCHANGE ACT") or Item 1 of Form 8-K promulgated under
the Exchange Act, or any successor provisions thereto; (2) any "person"
(as such term is used in Sections 13(d) and 14(d)(2) of the Exchange Act)
is or becomes the "beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act), or any successor provisions thereto, directly or
indirectly, of securities of the Company representing twenty-five (25%) or
more of the combined voting power of the Company's then-outstanding
securities; (3) the approval by the stockholders of the Company of a
reorganization, merger, or consolidation, in each case with respect to
which persons who were stockholders of the Company immediately prior to
such reorganization, merger, or consolidation do not, immediately
thereafter, own or control more than fifty percent (50%) of the combined
voting power entitled to vote generally in the election of directors of
the reorganized, merged or consolidated Company's then outstanding
securities, or a liquidation or dissolution of the Company or of the sale
of all or substantially all of the Company's assets; (4) in the event any
person shall be elected by the stockholders of the Company to the Board of
Directors who shall have not been nominated for election by a majority of
the Board of Directors or any duly appointed committee thereof; or (5)
following the election or removal of directors, a majority of the Board of
Directors consists of individuals who were not members of the Board of
Directors two (2) years before such election or removal, unless the
election of each director who is not a director at the beginning of such
two-year period has been approved in advance by directors representing at
least a majority of the directors then in office who were directors at the
beginning of the two-year period.
"DISABILITY" means a "permanent and total disability" as defined in
Section 22(e)(3) of the Code and the Treasury regulations thereunder.
Evidence of such Disability shall be certified by a physician acceptable
to both the Company and Executive. In the event that the parties are not
able to agree on the choice of a physician, each shall select a physician
who, in turn, shall select a third physician to render such certification.
All costs relating to the determination of whether Executive has incurred
a Disability shall be paid by the Company.
"CODE" means the Internal Revenue Code of 1986, as amended.
References in this Agreement to any Section of the Code shall include any
"Successor Provisions" as defined in SECTION 9(E).
"CAUSE" means a termination of employment directly resulting from:
(1) the Executive having engaged in intentional misconduct that caused or
would have caused, if the Company did not intervene, a serious violation
by the Company of any state or federal laws, (2) the Executive having
engaged in a theft of corporate funds or corporate assets or in a material
act of fraud upon the Company, (3) an intentional act of personal
dishonesty taken by the Executive that was intended to result in personal
enrichment of the Executive at the expense of the Company, (4) repeated
violations by the Executive of Executive's primary or regular obligations
under this Agreement or under written policies of the Company which are
demonstrably willful on the Executive's part, and for which Executive has
received more than two written warnings that specify each area of
Executive's violations, (5) Executive's use of illegal drugs as evidenced
by a drug test authorized by Company, (6) Executive's final conviction (or
the entry of a plea of nolo contendere or equivalent plea) in a court of
competent jurisdiction of a felony or other crime involving dishonesty,
and (7) a breach by the Executive during the Employment Period of the
provisions of SECTIONS 11, 12, 13 OR 14 below, if such breach results in a
material injury to the Company.
"GOOD REASON" means the occurrence of any of the following events
without Executive's express written consent:
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(1) A ten percent (10%) or greater reduction in Executive's
annual base salary; or
(2) Any breach by the Company or its successors of any
material provision of this Agreement; or
(3) A substantial and adverse change in the Executive's
duties, control, authority, status or position, or the assignment to
the Executive of any duties or responsibilities which are materially
inconsistent with such status or position, or a material reduction
in the duties and responsibilities previously exercised by the
Executive, or a loss of title, loss of office, loss of significant
authority, power or control, or any removal of Executive from, or
any failure to reappoint or reelect him to, such positions, except
in connection with the termination of his employment for Cause,
Disability or death; or
(4) Following a Change in Control (as defined in SECTION 6(B))
any of the following events:
(A) the failure by the Company or its successor to
expressly assume and agree to continue and perform this
Agreement in the same manner and to the same extent that the
Company would be required to perform if such Change in Control
had not occurred;
(B) a relocation of more than twenty-five (25) miles of
Executive's principal office from the location of such office
immediately prior to the Change in Control date;
(C) a substantial increase in the business travel
required of Executive by the Company or its successor; or
(D) the Company or its successor fails to continue in
effect any pension plan, health-and-accident plan, or
disability income plan in which Executive was participating at
the time of the Change in Control (or plans providing
Executive with substantially equal and similar benefits), or
the taking of any action by the Company or its successor which
would adversely affect Executive's participation in or
materially reduce his benefits under any such plan that was
enjoyed by him immediately prior to the Change in Control.
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(c) STOCK OPTIONS. In the event of a Change in Control, Executive's
resignation for Good Reason or Executive's termination without Cause, all
unvested stock options previously granted to Executive shall immediately
vest and be exercisable as set forth below. In the event that there is a
termination of Executive's employment hereunder for any reason, Executive
shall be entitled to exercise any and all stock options that were
previously granted to him by the Company, and are outstanding, vested and
unexercised as of his Termination Date, during the exercise period ending
on the shorter of (i) two (2) years from his Termination Date or (ii) the
expiration date of the stock option as specified in the stock option plan
or stock option agreement, as applicable, notwithstanding any provision in
such plan or agreement that provides for a more limited time period to
exercise stock options following termination of employment; provided
however, if said stock option plan or stock option agreement provides
therein for a longer period of time to exercise such outstanding, vested
and unexercised stock options following his Termination Date, then such
stock option plan or agreement shall control and the remaining provisions
of this SECTION 6(C) shall be inapplicable and without further force or
effect. In the event that there is a termination of Executive's employment
hereunder for Cause or Executive voluntarily resigns without Good Reason
within two years for the date of this Agreement, Executive shall forfeit
any and all stock options that were previously granted to him by the
Company, and are unvested and unexercised as of his Termination Date.
During the extension period specified in the previous paragraph, if
applicable, the Executive shall be considered an employee of the Company
who shall make himself available to provide consulting services to the
Company in consideration for such extension of the option exercise period
and any post-termination payments provided to Executive under SECTION 6(A)
OR (B) of this Agreement. In this regard, Executive agrees to be
classified as an employee of the Company solely for the limited purpose of
making himself available to provide consulting services on an as-needed
basis; provided, however, Executive hereby specifically waives any right,
entitlement, claim or demand to (i) any additional compensation for such
consulting services and (ii) coverage or benefits under any of the
Company's employee benefit plans or programs, or other perquisites, terms
and conditions of employment, except as expressly specified in other
provisions of this Agreement. Except as expressly provided in this SECTION
6(C), the provision of consulting services by Executive shall not expand
his rights or duties under this Agreement. Executive hereby agrees to
provide, upon request of the Company, consulting services to the Company
on the following terms and conditions:
(1) Executive will make himself available, on an as-needed basis,
to provide consulting services to the Company for up to three
(3) days per month during the period beginning on the day
after his Termination Date and ending on the last day of the
extension period for exercising stock options as provided in
the first paragraph of SECTION 6(C) above, subject to the
following conditions:
(A) At least five (5) days written advance notice to
Executive is provided by the Company;
(B) There is no concurrent illness of Executive or his
spouse;
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(C) There is no prior commitment of Executive including,
without limitation, vacation or attention to personal
affairs; and
(D) No travel is required of Executive in excess of 200
miles round-trip.
Executive, in any particular instance, may waive any or all of
the conditions set forth in clauses (A), (B), (C) or (D) above
in his complete discretion. Any such waiver shall not be a
continuing waiver and shall not release Executive of any of
his rights hereunder.
(2) Executive agrees to provide such information, services, advice
and recollection of events as may from time to time be
reasonably requested by, or on behalf of, the Company
regarding corporate, regulatory or business matters of which
Executive may have knowledge, information or understanding,
including testifying truthfully in any litigation or other
proceedings involving the Employer, provided that (i)
Executive first determines that his interests are not adverse,
or potentially adverse, to those of the Company, and (ii) the
Company has indemnified Executive to his satisfaction
including, without limitation, for reasonable attorney's fees
and costs. The parties hereto agree that it is the quality,
and not the quantity, of the consulting services to be
provided by Executive that is important to the Company.
(3) The Company will reimburse Executive for all reasonable
out-of-pocket expenses incurred by Executive in the course of
his performance of consulting services, including, without
limitation, supplies, mileage and travel expenses. Executive
agrees not to incur any expense, obligation, or liability on
behalf of the Company without its prior written consent.
(4) The provision of consulting services by Executive for the
Company is non-exclusive and shall not, in any way, limit the
rights of Executive to seek and maintain other employment or
to perform compensatory services on behalf of any other person
or entity.
(5) The consulting services contemplated under this SECTION 6(c)
shall not be considered part of Executive's Employment Period
pursuant to SECTION 4, nor affect his Termination Date.
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7. NOTICE OF TERMINATION. Any termination by the Company or the Executive
shall be communicated by Notice of Termination to the other party hereto. For
purposes of this Agreement, the term "NOTICE OF TERMINATION" means a written
notice which indicates the specific termination provision of this Agreement
relied upon and sets forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of the Executive's employment under
the provision so indicated.
8. NO MITIGATION REQUIRED. Executive shall not be required to mitigate the
amount of any payment provided for under this Agreement by seeking other
employment or in any other manner.
9. CHANGE IN CONTROL: REQUIREMENT OF BONUS PAYMENT IN CERTAIN
CIRCUMSTANCES.
(a) In the event that Executive is deemed to have received an
"excess parachute payment" (as such term is defined in Section 280G(b) of
the Code) which is subject to the excise taxes (the "EXCISE TAXES")
imposed by Section 4999 of the Code in respect of any payment pursuant to
this Agreement, or any other agreement, plan, instrument or obligation, in
whatever form, the Company shall make the Bonus Payment (defined below) to
Executive promptly after the date on which Executive received or is deemed
to have received any excess parachute payment notwithstanding any contrary
provision herein.
(b) The term "BONUS PAYMENT" means a cash payment in an amount equal
to the sum of (i) all Excise Taxes payable by Executive, plus (ii) all
additional Excise Taxes and federal or state income taxes to the extent
such taxes are imposed in respect of the Bonus Payment, such that
Executive shall be in the same after-tax position and shall have received
the same benefits that he would have received if the Excise Taxes had not
been imposed. For purposes of calculating any income taxes attributable to
the Bonus Payment, Executive shall be deemed for all purposes to be paying
income taxes at the highest marginal federal income tax rate, taking into
account any applicable surtaxes and other generally applicable taxes which
have the effect of increasing the marginal federal income tax rate and, if
applicable, at the highest marginal state income tax rate, to which the
Bonus Payment and Executive are subject. An example of the calculation of
the Bonus Payment is set forth below: Assume that the Excise Tax rate is
20%, the highest federal marginal income tax rate is 40% and Executive is
not subject to state income taxes. Further assume that Executive has
received an excess parachute payment in the amount of $200,000, on which
$40,000 in Excise Taxes are payable. The amount of the required Bonus
Payment is thus $100,000. The Bonus Payment of $100,000, less additional
Excise Taxes on the Bonus Payment of $20,000 (i.e., 20% x $100,000) and
income taxes of $40,000 (i.e., 40% x $100,000), yields $40,000, the amount
of the Excise Taxes payable in respect of the original excess parachute
payment.
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(c) Executive agrees to reasonably cooperate with the Company to
minimize the amount of the excess parachute payments, including, without
limitation, assisting the Company in establishing that some or all of the
payments received by Executive that are "contingent on a change", as
described in Section 280G(b)(2)(A)(i) of the Code, are reasonable
compensation for personal services actually rendered by Executive before
the date of such change or to be rendered by Executive on or after the
date of such change. In the event that the Company is able to establish
that the amount of the excess parachute payments is less than originally
anticipated by Executive, Executive shall refund to the Company any excess
Bonus Payment to the extent not required to pay Excise Taxes or income
taxes (including those incurred in respect of receipt of the Bonus
Payment). Notwithstanding the foregoing, Executive shall not be required
to take any action which his attorney or tax advisor advises him in
writing (i) is improper or (ii) exposes Executive to material personal
liability. Executive may require the Company to deliver to Executive an
indemnification agreement in form and substance satisfactory to Executive
as a condition to taking any action required by this subsection (c).
(d) The Company shall make any payment required to be made under
this SECTION 9 in cash and on demand. Any payment required to be paid by
the Company under this SECTION 9 which is not paid within 30 days of
receipt by the Company of Executive's written demand therefor shall
thereafter be deemed delinquent, and the Company shall pay to Executive
immediately upon demand interest at the highest nonusurious rate per annum
allowed by applicable law from the date such payment becomes delinquent to
the date of payment of such delinquent sum with interest.
(e) In the event that there is any change to the Code which results
in the recodification of Section 280G or Section 4999 of the Code, or in
the event that either such section of the Code is amended, replaced or
supplemented by other provisions of the Code of similar import ("SUCCESSOR
PROVISIONS"), then this Agreement shall be applied and enforced with
respect to such new Code provisions in a manner consistent with the intent
of the parties as expressed herein, which is to assure that Employee is in
the same after-tax position and has received the same benefits that he
would have been in and received if any taxes imposed by Section 4999 or
any Successor Provisions had not been imposed.
10. POST-TERMINATION MEDICAL COVERAGE. If the employment of Executive is
terminated for any reason except for Cause (as defined in SECTION 6(B)), death
or voluntary resignation without Good Reason, then the Company shall provide
post-employment medical coverage in accordance with the terms and conditions of
this SECTION 10. The Company shall continue to cover Executive and his spouse
(hereinafter referred to as "SPOUSE") and his eligible dependent children, if
any, from the Termination Date until two (2) years following the Termination
Date, under the group health care plan maintained by the Company to provide
major medical insurance coverage for employees and their dependents (such group
medical plan or its successor shall be hereinafter referred to as the "HEALTH
CARE PLAN").
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Executive, on behalf of himself and his Spouse and other dependents, if
any, shall be required to pay premiums for their coverage under the Health Care
Plan at the rates, if any, charged by the Company to active employees who are
senior officers of the Company at the time the premium is charged. Any
post-employment coverage under the Health Care Plan provided under this SECTION
10 shall run concurrently with COBRA continuation coverage under the Health Care
Plan and, therefore, Executive and the other qualifying beneficiaries shall
elect any COBRA continuation coverage offered to them under the Health Care Plan
following the Termination Date. The Company shall not be responsible for the
payment of any income or other taxes which may be imposed on Executive, or on
his Spouse or dependents, as the result of receiving coverage under the Health
Care Plan pursuant to this SECTION 10.
Executive, on behalf of himself and his Spouse and dependents, hereby
agrees and consents to acquire and maintain any coverage that of any them are
entitled to at any time during the two year period (as specified above in this
SECTION 10) under the Medicare program or any similar or succeeding plan or
program that is sponsored or maintained by the United States Government or any
agency thereof (hereinafter referred to as "MEDICARE"). The coverage described
in the immediately preceding sentence includes, without limitation, parts A and
B of Medicare and any additional or successor parts of Medicare. Executive, on
behalf of himself and his Spouse, further agrees and consents to pay all
required premiums and other costs for Medicare coverage from their personal
funds. Medicare coverage shall be primary payor to the coverage provided under
the Health Care Plan to the extent permitted by applicable federal law.
11. CONFLICTS OF INTEREST. In keeping with his fiduciary duties to
Company, Executive hereby agrees that he shall not become involved in a conflict
of interest, or upon discovery thereof, allow such a conflict to continue at any
time during the Employment Period. Moreover, Executive agrees that he shall
immediately disclose to the Board of Directors any facts that might involve a
conflict of interest that has not been approved by the Board of Directors.
Executive and Company recognize and acknowledge that it is not possible to
provide an exhaustive list of actions or interests that may constitute a
"conflict of interest." Moreover, Company and Executive recognize there are many
borderline situations. In some instances, full disclosure of facts by the
Executive to the Board of Directors may be all that is necessary to enable
Company to protect its interests. In others, if no improper motivation appears
to exist and Company's interests have not demonstrably suffered, prompt
elimination of the outside interest may suffice. In other egregious instances,
it may be necessary for Company to terminate Executive's employment for Cause
pursuant to SECTION 6(B) hereof. The Board of Directors reserves the right to
take such action as, in its good faith judgment, will resolve the conflict of
interest.
Executive hereby agrees that any direct or indirect interest in,
connection with, or benefit from any outside activities, particularly commercial
activities, which interest might adversely affect the Company or any of its
affiliated entities, involves a possible conflict of interest. Circumstances in
which a conflict of interest on the part of Executive would or might arise, and
which should be reported immediately to the Board of Directors, include, but are
not limited to, any of the following:
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(a) Ownership of more than a DE MINIMIS interest in any lender,
supplier, contractor, customer or other entity with which Company or any
of its affiliated entities does business;
(b) Misuse of information, property or facilities to which Executive
has access in a manner which is demonstrably injurious to the interests of
Company or any of its affiliated entities, including its business,
reputation or goodwill; or
(c) Materially trading in products or services connected with
products or services designed or marketed by or for the Company or any of
its affiliated entities.
For purposes of this Agreement, "AFFILIATED ENTITY" means any entity which
owns or controls, is owned or controlled by, or is under common ownership or
control with, the Company.
12. CONFIDENTIAL INFORMATION. (a) CONFIDENTIAL INFORMATION DEFINED.
Executive hereby acknowledges that in his senior management position, he will
create, acquire and have access to confidential information and trade secrets
pertaining to the business of Company (hereafter "Confidential Information" as
defined below). Executive hereby acknowledges that such Confidential Information
is unique and valuable to Company's business and that Company would suffer
irreparable injury if Confidential Information was divulged to the public or to
persons or entities in competition with Company. Therefore, Executive hereby
covenants and agrees to keep in strict secrecy and confidence, both during and
after the Employment Period, any Confidential Information. Executive
specifically agrees that he will not at any time disclose to others, use, copy
or permit to be copied, except in pursuance of his duties on behalf of Company
or with the prior consent of Company, Confidential Information relating to the
Company or any of its affiliated entities. For purposes of this Agreement,
"CONFIDENTIAL INFORMATION" shall mean and include, without limitation,
information related to the business affairs, property, methods of operation,
future plans, financial information, customer or client information, or other
data which relates to the business or operations of Company or any of its
affiliated entities, and all other information obtained by Executive from and
during the Employment Period which concerns the affairs of Company or any of its
affiliated entities and which Company has requested be held in confidence or
could reasonably be expected to desire be held in confidence, or the disclosure
of which would likely be embarrassing, detrimental or disadvantageous to the
Company or any of its affiliated entities, or its and their directors, officers,
employees or shareholders. Confidential Information, however, shall not include
information that is at the time of receipt by Executive in the public domain or
is otherwise generally known in the industry or subsequently enters the public
domain or becomes generally known in the industry through no fault of Executive
or breach of his duty under this SECTION 12.
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(b) REQUIRED DISCLOSURE. In the event that Executive is required by
law which cannot be waived to disclose any Confidential Information,
Executive agrees that he will provide prompt notice of such potential
disclosure to Company so that an appropriate protective order may be
sought and/or a waiver of compliance with the provisions of this Agreement
may be granted. In the event that (i) such protection or other remedy is
not obtained or (ii) Company waives in writing the compliance by Executive
with this provision, Executive agrees that he may furnish only that
portion of the Confidential Information which Executive is advised by
written opinion of counsel is legally required to be disclosed, and
Executive shall exercise his best efforts to obtain assurances that
confidential treatment will be accorded such Confidential Information.
(c) DELIVERY OF DOCUMENTS. Executive further agrees to deliver to
Company at the termination of his employment, all correspondence,
memoranda, notes, records, drawings, plans, customer lists or other
documents, and all copies thereof made, composed or received by Executive,
solely or jointly with others, and which are in Executive's possession,
custody or control at such date and which relate in any manner to the
past, present or anticipated business of Company or any of its affiliated
entities.
(d) REMEDIES. In the event of a breach or threatened breach of any
of the provisions of this SECTION 12, Company shall be entitled to an
injunction ordering the return of all such documents, and any and all
copies thereof, and restraining Executive from using or disclosing, for
his benefit or the benefit of others, in whole or in part, any
Confidential Information, including, but not limited to, the Confidential
Information which such documents contain, constitute or embody. Executive
further agrees that any breach or threatened breach of any of the
provisions of this SECTION 12 would cause irreparable injury to Company,
for which it would have no adequate remedy at law. Nothing herein shall be
construed as prohibiting Company from pursuing any other remedies
available to it for any such breach or threatened breach, including the
recovery of damages.
13. PROPERTY RIGHTS. In keeping with his fiduciary duties to Company,
Executive hereby covenants and agrees that during his Employment Period, and for
a period of one (1) year following his Termination Date, Executive shall
promptly disclose in writing to Company any and all information, ideas,
concepts, improvements, discoveries, inventions and other intellectual
properties, whether patentable or not, and whether or not reduced to practice,
which are conceived, developed, made or acquired by Executive, either
individually or jointly with others, and which relate to the business, products
or services of Company or any of its affiliated entities. In consideration for
his employment hereunder, Executive hereby specifically sells, assigns and
transfers to Company all of his worldwide right, title and interest in and to
all such information, ideas, concepts, improvements, discoveries, inventions and
other intellectual properties.
13
If during the Employment Period, Executive creates any original work of
authorship or other property fixed in any tangible medium of expression which
(a) is the subject matter of copyright (including computer programs) and (b)
relates to Company's present or planned business, products, or services, whether
such property is created solely by Executive or jointly with others, such
property shall be deemed a work for hire, with the copyright automatically
vesting in Company. To the extent that any such writing or other property is
determined not to be a work for hire for whatever reason, Executive hereby
consents and agrees to the unconditional waiver of "moral rights" in such
writing or other property, and to assign to Company all of his right, title and
interest, including copyright, in such writing or other property.
Executive hereby agrees to (a) assist Company or its nominee at all times
in the protection of any and all property subject to this SECTION 13, (b) not to
disclose any such property to others without the written consent of Company or
its nominee, except as required by his employment hereunder, and (c) at the
request of Company, to execute such assignments, certificates or other interests
as Company or its nominee may from time to time deem desirable to evidence,
establish, maintain, perfect, protect or enforce its rights, title or interests
in or to any such property.
14. AGREEMENT NOT TO COMPETE. Executive hereby recognizes and acknowledges
that: (a) in his executive capacity with Company he will be given knowledge of,
and access to, the Confidential Information (as described in SECTION 12); (b) in
the event that Executive was to enter into competition with Company, Executive's
knowledge of such Confidential Information would be of invaluable benefit to a
competitor of Company, and could cause irreparable harm to Company's business
interests; and (c) Executive's consent and agreement to enter into the
noncompetition provisions and covenants set forth herein is an integral
condition of this Agreement, without which Company would not have agreed to
provide Confidential Information to Executive, nor to his compensation,
benefits, and other terms of this Agreement. Accordingly, in consideration for
his employment, compensation, benefits, access to and entrustment of
Confidential Information, the goodwill, training and experience provided to
Executive during his Employment Period, Executive hereby covenants, consents and
agrees (regardless of whether or not there has been a Change of Control) that
during the Employment Period, and for a period two (2) years after his
employment is terminated for any reason, Executive shall not, directly or
indirectly, acting alone or in conjunction with others, for his own account or
for the account of others, including, without limitation, as an officer,
director, stockholder, owner, partner, member, manager, joint venturer,
employee, promoter, consultant, agent, lender, guarantor, representative, or
otherwise:
(a) Solicit, canvass, or accept any fees or business from any
customer of Company for himself or any other person or entity engaged in a
"Similar Business to Company" (as defined below);
(b) Engage or participate in any Similar Business to Company within
any states of the United States in which the Company transacts business on
Executive's termination of employment date, or in which, as of such
termination date, the Company has made any plans or proposals to transact
business within one year from such termination date (referred to herein as
the "RESTRICTED AREA");
(c) Request or advise any service provider, supplier, or customer to
reduce or cancel any business that it may transact with Company or any of
its affiliated entities;
(d) Solicit, induce, or otherwise attempt to influence any employee
of the Company or any of its affiliated entities, to terminate his or her
relationship with the Company or any of its affiliated entities; or
(e) Make any statement or perform any act intended to advance an
interest of an existing or prospective competitor of the Company or any of
its affiliated entities in any way that demonstrably injures the
reputation, goodwill or any other business interest of Company or any of
its affiliated entities.
For purposes of this Agreement, "SIMILAR BUSINESS TO COMPANY" means any
business or other enterprise that is competitive with the current or planned
businesses, products, services or operations of the Company or any of its
affiliated entities at the time of termination of Executive's employment
including, without limitation, municipal biosolids.
14
Executive hereby agrees that the limitations set forth above on his rights
to compete with Company after his termination of employment are reasonable and
necessary for the protection of Company. In this regard, Executive specifically
agrees that such limitations as to the period of time, geographic area and types
and scopes of restriction on his activities, as specified above, are reasonable
and necessary to protect the goodwill and other business interests of Company.
However, should the time period, the geographic area or any other
non-competition provision set forth herein be deemed invalid or unenforceable in
any respect, then Executive acknowledges and agrees that, as set forth in
SECTION 15 hereof, reformation may be made with respect to such time period,
geographic area or other non-competition provision in order to protect Company's
reasonable business interests to the maximum permissible extent.
15. REMEDIES. In the event of any pending, threatened or actual breach of
any of the covenants or provisions of SECTION 11, 12, 13 OR 14, it is understood
and agreed by Executive that the remedy at law for a breach of any of the
covenants or provisions of these Sections may be inadequate, and, therefore,
Company shall be entitled to a restraining order or injunctive relief from any
court of competent jurisdiction, in addition to any other remedies at law and in
equity. In the event that Company seeks to obtain a restraining order or
injunctive relief, Executive hereby agrees that Company shall not be required to
post any bond in connection therewith. Should a court of competent jurisdiction
or an arbitrator (pursuant to SECTION 24) declare any provision of SECTION 11,
12, 13 OR 14 to be unenforceable due to an unreasonable restriction of duration
or geographical area, or for any other reason, such court or arbitrator is
hereby granted the consent of each of Executive and the Company to reform such
provision and/or to grant the Company any relief, at law or in equity,
reasonably necessary to protect the reasonable business interests of Company or
any of its affiliated entities. Executive hereby acknowledges and agrees that
all of the covenants and other provisions of SECTIONS 11, 12, 13 AND 14 are
reasonable and necessary for the protection of the Company's reasonable business
interests. Executive hereby agrees that if the Company prevails in any action,
suit or proceeding with respect to any matter arising out of or in connection
with SECTION 11, 12, 13 OR 14, Company shall be entitled to all equitable and
legal remedies, including, but not limited to, injunctive relief and
compensatory damages.
16. DEFENSE OF CLAIMS. Executive agrees that, during the Employment Period
and for a period of two (2) years after his Termination Date, upon reasonable
request from the Company, he will cooperate with the Company and its affiliated
entities in the defense of any claims or actions that may be made by or against
the Company or any of its affiliated entities that affect his prior areas of
responsibility, except if Executive's reasonable interests are adverse to the
Company (or affiliated entity) in such claim or action. To the extent travel is
required to comply with the requirements of this SECTION 16, the Company shall,
to the extent possible, provide Executive with notice at least 10 days prior to
the date on which such travel would be required. The Company agrees to promptly
pay or reimburse Executive upon demand for all of his reasonable travel and
other direct expenses incurred, or to be reasonably incurred, to comply with his
obligations under this SECTION 16.
17. DETERMINATIONS BY THE BOARD OF DIRECTORS.
(a) TERMINATION OF EMPLOYMENT. Prior to a Change in Control (as
defined in SECTION 6(B)), any question as to whether and when there has
been a termination of Executive's employment, and the cause of such
termination, shall be determined by the Board of Directors in its
discretion.
(b) COMPENSATION. Prior to a Change in Control (as defined in
SECTION 6(B)), any question regarding salary, bonus and other compensation
payable to Executive pursuant to this Agreement shall be determined by the
Board of Directors in its discretion.
15
18 WITHHOLDINGS: RIGHT OF OFFSET. Company may withhold and deduct from any
benefits and payments made or to be made pursuant to this Agreement (a) all
federal, state, local and other taxes as may be required pursuant to any law or
governmental regulation or ruling, (b) all other normal employee deductions made
with respect to Company's employees generally, and (c) any advances made to
Executive and owed to Company.
19 NONALIENATION. The right to receive payments under this Agreement shall
not be subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge or encumbrance by Executive, his dependents or beneficiaries,
or to any other person who is or may become entitled to receive such payments
hereunder. The right to receive payments hereunder shall not be subject to or
liable for the debts, contracts, liabilities, engagements or torts of any person
who is or may become entitled to receive such payments, nor may the same be
subject to attachment or seizure by any creditor of such person under any
circumstances, and any such attempted attachment or seizure shall be void and of
no force and effect.
20 INCOMPETENT OR MINOR PAYEES. Should the Board of Directors determine
that any person to whom any payment is payable under this Agreement has been
determined to be legally incompetent or is a minor, any payment due hereunder
may, notwithstanding any other provision of this Agreement to the contrary, be
made in any one or more of the following ways: (a) directly to such minor or
person; (b) to the legal guardian or other duly appointed personal
representative of the person or estate of such minor or person; or (c) to such
adult or adults as have, in the good faith knowledge of the Board of Directors,
assumed custody and support of such minor or person; and any payment so made
shall constitute full and complete discharge of any liability under this
Agreement in respect to the amount paid.
21 SEVERABILITY. It is the desire of the parties hereto that this
Agreement be enforced to the maximum extent permitted by law, and should any
provision contained herein be held unenforceable by a court of competent
jurisdiction or arbitrator (pursuant to SECTION 24), the parties hereby agree
and consent that such provision shall be reformed to create a valid and
enforceable provision to the maximum extent permitted by law; provided, however,
if such provision cannot be reformed, it shall be deemed ineffective and deleted
here from without affecting any other provision of this Agreement.
22 TITLE AND HEADINGS; CONSTRUCTION. Titles and headings to Sections
hereof are for the purpose of reference only and shall in no way limit, define
or otherwise affect the provisions hereof. Any and all Exhibits referred to in
this Agreement are, by such reference, incorporated herein and made a part
hereof for all purposes. The words "herein", "hereof", "hereunder" and other
compounds of the word "here" shall refer to the entire Agreement and not to any
particular provision hereof.
16
23 CHOICE OF LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, WITHOUT REGARD TO THE PRINCIPLES
OF CONFLICTS OF LAW.
24 ARBITRATION.
(a) ARBITRABLE MATTERS. If any dispute or controversy arises between
Executive and the Company as to their respective rights or obligations
under this Agreement, then either party may submit the dispute or
controversy to arbitration under the then-current National Employment
Dispute Resolution Rules of the American Arbitration Association (AAA)
(the "RULES"); provided, however, the Company shall retain its rights to
seek a restraining order or injunctive relief pursuant to SECTION 15. Any
arbitration hereunder shall be conducted before a single arbitrator unless
the parties mutually agree to a panel of three arbitrators. The site for
any arbitration hereunder shall be in ▇▇▇▇▇▇▇▇▇▇ County or ▇▇▇▇▇▇ County,
Texas, unless otherwise mutually agreed by the parties.
(b) SUBMISSION TO ARBITRATION. The party submitting any matter to
arbitration shall do so in accordance with the Rules. Notice to the other
party shall state the question or questions to be submitted for decision
or award by arbitration. Notwithstanding any provision in this SECTION 24,
Executive shall be entitled to seek specific performance of the
Executive's right to be paid during the pendency of any dispute or
controversy arising under this Agreement. In order to prevent irreparable
harm, the arbitrator may grant temporary or permanent injunctive or other
equitable relief for the protection of property rights.
(c) ARBITRATION PROCEDURES. The arbitrator shall set the date, time
and place for each hearing, and shall give the parties advance written
notice in accordance with the Rules. Any party may be represented by
counsel or other authorized representative at any hearing. The arbitration
shall be governed by the Federal Arbitration Act, 9 U.S.C. ▇▇.▇▇. 1 et.
seq. (or its successor). The arbitrator shall apply the substantive law
(and the law of remedies, if applicable) of the State of Texas to the
claims asserted to the extent that the arbitrator determines that federal
law is not controlling.
(d) COMPLIANCE WITH AWARD.
(1) Any award of an arbitrator shall be final and binding upon
the parties to such arbitration, and each party shall immediately
make such changes in its conduct or provide such monetary payment or
other relief as such award requires. The parties agree that the
award of the arbitrator shall be final and binding and shall be
subject only to the judicial review permitted by the Federal
Arbitration Act.
17
(2) The parties hereto agree that the arbitration award may be
entered with any court having jurisdiction and the award may then be
enforced as between the parties, without further evidentiary
proceedings, the same as if entered by the court at the conclusion
of a judicial proceeding in which no appeal was taken. The Company
and the Executive hereby agree that a judgment upon any award
rendered by an arbitrator may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law.
(e) COSTS AND EXPENSES. Each party shall pay any monetary amount
required by the arbitrator's award, and the fees, costs and expenses for
its own counsel, witnesses and exhibits, unless otherwise determined by
the arbitrator in the award. The compensation and costs and expenses
assessed by the arbitrator and AAA shall be paid by the losing party
unless otherwise determined by the arbitrator in the award. If court
proceedings to stay litigation or compel arbitration are necessary, the
party who unsuccessfully opposes such proceedings shall pay all associated
costs, expenses, and attorney's fees which are reasonably incurred by the
other party as determined by the arbitrator.
25 BINDING EFFECT: THIRD PARTY BENEFICIARIES. This Agreement shall be
binding upon and inure to the benefit of the parties hereto, and to their
respective heirs, executors, personal representatives, successors and permitted
assigns hereunder, but otherwise this Agreement shall not be for the benefit of
any third parties.
26 ENTIRE AGREEMENT AND AMENDMENT. This Agreement contains the entire
agreement of the parties with respect to Executive's employment and the other
matters covered herein; moreover, this Agreement supersedes all prior and
contemporaneous agreements and understandings, oral or written, between the
parties hereto concerning the subject matter hereof. This Agreement may be
amended, waived or terminated only by a written instrument executed by both
parties hereto.
27 SURVIVAL OF CERTAIN PROVISIONS. Wherever appropriate to the intention
of the parties hereto, the respective rights and obligations of said parties,
including, but not limited to, the rights and obligations set forth in SECTIONS
6 THROUGH 17 AND 24 hereof, shall survive any termination or expiration of this
Agreement.
28 WAIVER OF BREACH. No waiver by either party hereto of a breach of any
provision of this Agreement by any other party, or of compliance with any
condition or provision of this Agreement to be performed by such other party,
will operate or be construed as a waiver of any subsequent breach by such other
party or any similar or dissimilar provision or condition at the same or any
subsequent time. The failure of either party hereto to take any action by reason
of any breach will not deprive such party of the right to take action at any
time while such breach continues.
18
29 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and inure
to the benefit of Company and its affiliated entities, and its and their
successors, and upon any person or entity acquiring, whether by merger,
consolidation, purchase of assets or otherwise, all or substantially all of the
assets and business of Company. Any reference herein to "Company" shall mean the
Company as first written above, as well as any successor or successors thereto.
This Agreement is personal to Executive, and Executive may not assign,
delegate or otherwise transfer all or any of his rights, duties or obligations
hereunder without the consent of the Board of Directors. Any attempt by the
Executive to assign, delegate or otherwise transfer this Agreement, any portion
hereof, or his rights, duties or obligations hereunder without the prior written
consent of the Board of Directors shall be deemed void and of no force and
effect. Subject to the preceding provisions of this paragraph, this Agreement
shall be binding upon and inure to the benefit of Executive and his heirs and
assigns.
30 NOTICES. Notices provided for in this Agreement shall be in writing and
shall be deemed to have been duly received (a) when delivered in person or sent
by facsimile transmission, (b) on the first business day after it is sent by air
express overnight courier service, or (c) on the third business day following
deposit in the United States mail, registered or certified mail, return receipt
requested, postage prepaid and addressed, to the following address, as
applicable:
(1) If to Company, addressed to:
Synagro Technologies, Inc.
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: CEO
(2) If to Executive, addressed to the address set forth below his
name on the execution page hereof;
or to such other address as either party may have furnished to the other party
in writing in accordance with this SECTION 30.
31 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be an original,
but all such counterparts shall together constitute one and the same instrument.
Each counterpart may consist of a copy hereof containing multiple signature
pages, each signed by one party hereto, but together signed by both of the
parties hereto.
19
32 EXECUTIVE ACKNOWLEDGMENT/NO STRICT CONSTRUCTION. The Executive
represents to Company that he is knowledgeable and sophisticated as to business
matters, including the subject matter of this Agreement, that he has read the
Agreement and that he understands its terms and conditions. The parties hereto
agree that the language used in this Agreement shall be deemed to be the
language chosen by them to express their mutual intent, and no rule of strict
construction shall be applied against either party hereto. Executive also
represents that he is free to enter into this Agreement including, without
limitation, that he is not subject to any other contract of employment or
covenant not to compete that would conflict in any way with his duties under
this Agreement. Executive acknowledges that he has had the opportunity to
consult with counsel of his choice, independent of Employer's counsel, regarding
the terms and conditions of this Agreement and has done so to the extent that
he, in his unfettered discretion, deemed to be appropriate.
33 SUPERSEDING AGREEMENT. This Employment Agreement shall supersede any
prior employment agreement entered into between the Company and Executive.
20
IN WITNESS WHEREOF, the Executive has hereunto set his hand, and Company
has caused these presents to be executed in its name and on its behalf, to be
effective as of the Effective Date first above written.
WITNESS: EXECUTIVE:
Signature: Signature:
Printed Name: Printed Name: ▇▇▇▇ ▇. ROME
Date: Date:
Address for Notices:
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
ATTEST: SYNAGRO TECHNOLOGIES, INC.:
By: By: __________________________
Title: Its: CHAIRMAN & CEO
Printed Name: Printed Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Date: Date: