EMPLOYMENT AND CONFIDENTIALITY AGREEMENT
THIS EMPLOYMENT AND CONFIDENTIALITY AGREEMENT (this "Agreement") is made
between Synagro - WWT, Inc. ("Synagro "), a Maryland corporation with its
principal place of business at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇, and
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, residing at ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇
06820.("▇▇▇▇▇▇▇▇▇▇").
WHEREAS, Synagro Technologies, Inc. ("Synagro Technologies") has purchased
all the outstanding capital stock of Wheelabrator Water Technologies, Inc., a
Maryland corporation, and various other Waste Management subsidiaries
(collectively "BIO GRO") pursuant to the terms of that certain Stock Purchase
Agreement (the "Stock Purchase Agreement") by and between Synagro Technologies
and Waste Management, Inc. ▇▇.▇▇., dated August 14, 2000 (the "Closing Date");
WHEREAS, ▇▇▇▇▇▇▇▇▇▇, Synagro and BIO GRO desire and agree to dissolve any
prior employment relationship that may have existed between BIO GRO and
▇▇▇▇▇▇▇▇▇▇ prior to Synagro Technologies' acquisition of BIO GRO and formalize
the employment relationship that commenced between Synagro or one of its related
companies (collectively referred to herein as "SYNAGRO"), and ▇▇▇▇▇▇▇▇▇▇
beginning upon the acquisition of BIO GRO by Synagro Technologies.
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, it is mutually covenanted and
agreed by and between the parties as follows.
1. BASE COMPENSATION. For the services rendered by ▇▇▇▇▇▇▇▇▇▇ to
SYNAGRO, SYNAGRO, effective September 1, 2001, shall pay ▇▇▇▇▇▇▇▇▇▇ a base
salary at the rate of $177,718 per year (the "Base Compensation"), which will be
reviewed annually in the second quarter each year and may be increased from time
to time. Base Compensation shall be reviewed annually and increased based on
individual and company performance and is paid in equal installments in
accordance with SYNAGRO's pay policy, but not less frequently than monthly.
2. INCENTIVE COMPENSATION AND BONUSES. In addition to the Base
Compensation, ▇▇▇▇▇▇▇▇▇▇ shall also receive or be eligible to receive
additional compensation in the form of incentive compensation and bonuses as
follows:
(a) INCENTIVE COMPENSATION. In connection with this Employment
Agreement, ▇▇▇▇▇▇▇▇▇▇ has been granted an option to purchase 50,000 shares (for
a total of 320,000 shares) of Synagro Technologies common stock, par value $.002
per share, at an exercise price of $2.50 per share.
(b) BONUSES. ▇▇▇▇▇▇▇▇▇▇ will be eligible to participate in the
SYNAGRO bonus program that may be established from time to time. Such bonus
program changes from time to time and SYNAGRO makes no guarantee that any bonus
shall be paid. Any such bonus paid will be discretionary and based on the
financial performance of the companies and ▇▇▇▇▇▇▇▇▇▇'▇ individual job
performance as determined by SYNAGRO management. ▇▇▇▇▇▇▇▇▇▇ will be eligible to
participate in the bonus program at the Division President level.
Page 1 of 8
SYNAGRO represents that it will provide ▇▇▇▇▇▇▇▇▇▇ with a true copy of the bonus
Program when it is adopted by SYNAGRO for the year 2001. ▇▇▇▇▇▇▇▇▇▇ shall be
entitled to participate in the year 2000 bonus program pro-rated from the
Closing Date under the Stock Purchase Agreement to the end of the year at the
discretion of senior officers of SYNAGRO. In the event, during the term of this
Agreement, SYNAGRO adopts an employee stock option plan, ▇▇▇▇▇▇▇▇▇▇ shall be
eligible to participate in such program at the Division President level.
(c) COMPENSATION. All payments of salary and other compensation to
▇▇▇▇▇▇▇▇▇▇ shall be made after deduction of any taxes and other amounts which
are required to be withheld with respect thereto under applicable federal and
state laws.
3. INITIAL TERM. Commencing on the second day of August 2001,
▇▇▇▇▇▇▇▇▇▇ agrees to be employed by SYNAGRO, and SYNAGRO agrees to employ
▇▇▇▇▇▇▇▇▇▇, to serve as President & Chief Operating Officer ("COO") of the
Processing Division, or a similar title, and to perform by and on behalf of
SYNAGRO such services for SYNAGRO (i) as are typical of an employee in a
substantially similar position, and (ii) as may be requested by the senior
officers or the board of directors of SYNAGRO. During the period beginning on
the second day of August 2001 and extending for a two (2) year period (the
"Initial Term"), ▇▇▇▇▇▇▇▇▇▇'▇ employment hereunder may not be voluntarily
terminated by SYNAGRO or ▇▇▇▇▇▇▇▇▇▇; provided, however, that SYNAGRO may
terminate ▇▇▇▇▇▇▇▇▇▇ for cause at any time, if any of the following events
("Cause") has occurred:
(a) ▇▇▇▇▇▇▇▇▇▇ willfully and continually, without proper legal
cause, has failed or refused to use his best efforts to follow the directions of
the senior officers or the board of directors of SYNAGRO;
(b) ▇▇▇▇▇▇▇▇▇▇ has been convicted of, or has pleaded guilty or
nolo contendere to a charge that he committed a felony;
(c) ▇▇▇▇▇▇▇▇▇▇ has perpetrated a fraud against, or theft of
property of, SYNAGRO or any Affiliate (as hereinafter defined) of SYNAGRO;
(d) As a result of his negligence or willful misconduct,
▇▇▇▇▇▇▇▇▇▇ has violated any applicable federal or state law or regulation and,
as a result of such violation, has become, or has caused SYNAGRO to become, the
subject of any legal action or administrative proceeding or a suspension of any
right or privilege, which action, proceeding or suspension could have a material
adverse effect on the reputation, prospects, condition or operations of SYNAGRO;
(e) As a result of his negligence or willful misconduct,
▇▇▇▇▇▇▇▇▇▇ has committed any act that causes, or shall knowingly or recklessly
fail to take reasonable and appropriate action to prevent, any material adverse
effect to the reputation, prospects, condition or operations of SYNAGRO;
(f) ▇▇▇▇▇▇▇▇▇▇ has violated any of the provisions of this
Agreement; or
Page 2 of 8
(g) ▇▇▇▇▇▇▇▇▇▇ dies or becomes physically or mentally unable to
perform his duties hereunder at any time.
At any time after the Initial Term, ▇▇▇▇▇▇▇▇▇▇ or SYNAGRO hereunder may
voluntarily terminate ▇▇▇▇▇▇▇▇▇▇'▇ employment upon 30 days prior written notice
by either party to the other, without the payment of severance pay of any kind.
In the event that (i) during the Initial Term, ▇▇▇▇▇▇▇▇▇▇'▇ employment hereunder
is terminated by SYNAGRO at any time for any reason except for Cause, then
▇▇▇▇▇▇▇▇▇▇ shall be entitled to receive, and SYNAGRO shall be obligated to pay
an amount equal to ▇▇▇▇▇▇▇▇▇▇'▇ monthly base salary for 12 months; or (ii)
▇▇▇▇▇▇▇▇▇▇ terminates his own employment hereunder (other than as a result of
SYNAGRO's material breach of this Agreement), at any time, then ▇▇▇▇▇▇▇▇▇▇ shall
not be entitled to receive and SYNAGRO shall not be obligated to pay any
severance amount. In addition to the severance referred to in subparagraph (i)
above, in the event that during the Initial Term, ▇▇▇▇▇▇▇▇▇▇'▇ employment
hereunder is terminated as a result of his death or disability, then ▇▇▇▇▇▇▇▇▇▇
shall be entitled to have all unvested stock options referred to in paragraph
2(a) above, immediately vest and remain exercisable for a period of 90 days.
4. DUTIES AND EXTENT OF SERVICES. During the during the Initial Term,
▇▇▇▇▇▇▇▇▇▇ shall devote his services full time to the business of the Company
and perform the duties and responsibilities assigned to him by ▇▇▇▇ ▇. ▇▇▇▇▇▇,
the Chairman & Chief Executive Officer of SYNAGRO, or the Board of Directors to
the best of his ability and with reasonable diligence. In determining
▇▇▇▇▇▇▇▇▇▇'▇ duties and responsibilities, ▇▇▇▇ ▇. ▇▇▇▇▇▇ and the Board of
Directors shall act in good faith and shall not assign duties and
responsibilities to ▇▇▇▇▇▇▇▇▇▇ that are not appropriate or customary with
respect to the position of ▇▇▇▇▇▇▇▇▇▇ hereunder. This Section 4 shall not be
construed as preventing ▇▇▇▇▇▇▇▇▇▇ 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.
5. VACATION. ▇▇▇▇▇▇▇▇▇▇ will be entitled to vacation in accordance
with SYNAGRO's vacation policy terms and conditions. ▇▇▇▇▇▇▇▇▇▇ will be
given credit for his years of service with BIO GRO for purposes of
determining the amount of annual vacation for which he is entitled.
6. AUTO ALLOWANCE. ▇▇▇▇▇▇▇▇▇▇ shall be provided a company car in
accordance with SYNAGRO's policy.
7. BUSINESS EXPENSES. ▇▇▇▇▇▇▇▇▇▇ shall be reimbursed by SYNAGRO for the
reasonable and customary business expenses incurred by him in the performance of
his duties as a SYNAGRO employee. Such expenses will be reimbursed through
▇▇▇▇▇▇▇▇▇▇'▇ timely submission of a properly prepared expense report supported
by receipts in accordance with SYNAGRO's standard expense reporting procedures.
8. BENEFITS. ▇▇▇▇▇▇▇▇▇▇ will be entitled to participate in the standard
SYNAGRO employee benefit plans made available by SYNAGRO in accordance with the
eligibility requirements and terms and conditions of the individual programs;
provided, however, that
Page 3 of 8
▇▇▇▇▇▇▇▇▇▇ shall receive credit as an employee of SYNAGRO for the time he was
employed by BIO GRO. The individual plans and summary plan descriptions govern
the specific terms and conditions.
9. OWNERSHIP. ▇▇▇▇▇▇▇▇▇▇ agrees that all developments made and works
created by ▇▇▇▇▇▇▇▇▇▇ or under his direction in connection with employment shall
be the sole and complete property of SYNAGRO and that any and all copyrights and
other proprietary interests to such works shall belong to SYNAGRO.
(a). NONDISCLOSURE OF CONFIDENTIAL INFORMATION. During the term of
employment and for two years thereafter, ▇▇▇▇▇▇▇▇▇▇ shall hold in strict
confidence, and shall not disclose to any person (other than officers,
directors, employees, agents and consultants of SYNAGRO) any confidential
information of SYNAGRO or its Affiliates (including BIO GRO). For purposes of
this Section 9, the term "confidential information" shall include, without
limitation, trade secrets, client and customer lists, client or consultant
contracts and the details thereof, pricing policies, operational methods,
marketing plans or strategies, business acquisition and expansion plans,
personnel acquisition plans and all other information pertaining to the business
of SYNAGRO or its Affiliates (including BIO GRO), whether previously existing or
pursuant to operation of the business purchased pursuant to the Stock Purchase
Agreement, that is not publicly available. ▇▇▇▇▇▇▇▇▇▇ shall not use such
confidential information except for the sole benefit of SYNAGRO.
(b). POSSESSION. ▇▇▇▇▇▇▇▇▇▇ agrees that, upon request by SYNAGRO,
and in any event upon termination of employment, ▇▇▇▇▇▇▇▇▇▇ shall turn over to
SYNAGRO all documents, papers, or other material in his possession or under his
control which may contain or be derived from confidential information, together
with all documents, notes, or other work product which is connected with or
derived from ▇▇▇▇▇▇▇▇▇▇'▇ services to SYNAGRO whether or not such material is at
the date hereof in ▇▇▇▇▇▇▇▇▇▇'▇ possession. ▇▇▇▇▇▇▇▇▇▇ agrees that he shall have
no proprietary interest in any work product developed or used by ▇▇▇▇▇▇▇▇▇▇ and
arising out of his employment by SYNAGRO. ▇▇▇▇▇▇▇▇▇▇ shall, from time to time as
may be requested by SYNAGRO, do all things that may be necessary to establish or
document SYNAGRO's ownership of any such work product, including, but not
limited to, execution of appropriate copyright applications or assignments.
(c). SURVIVAL OF COVENANT. The undertakings of this section of this
Agreement shall survive the termination or cancellation of the Agreement or of
▇▇▇▇▇▇▇▇▇▇'▇ employment.
10. COVENANT NOT TO COMPETE.
(a). If ▇▇▇▇▇▇▇▇▇▇'▇ employment with SYNAGRO is terminated prior to
the expiration of the Initial Term either by ▇▇▇▇▇▇▇▇▇▇ for any reason (other
than SYNAGRO's material breach hereof) or by SYNAGRO for Cause, then for a 12
month period (the "Covenant Period"), ▇▇▇▇▇▇▇▇▇▇ agrees that he will not, and
shall cause each of his Affiliates not to, directly or indirectly, acting alone
or as a member of a partnership, as a holder or owner of any security, as an
employee, agent, advisor, consultant to, representative, or in any other
capacity:
Page 4 of 8
(i) within any states of the United States in which the
Company transacts business on ▇▇▇▇▇▇▇▇▇▇'▇ termination of employment date, or in
which, as of such termination date, SYNAGRO has made any plans or proposals to
transact business within 12 months from such termination date (referred to
herein as the "Restricted Area"), carry on or be engaged or otherwise take part
in (whether for his own account or for the account of any other person, other
than SYNAGRO or its Affiliates), or render any service (whether for or without
compensation) to any person (other than SYNAGRO or its Affiliates) who or which
is directly or indirectly engaged in the Business (as defined below);
(ii) share in the earnings of, or beneficially own or hold
any security issued by, or otherwise own or hold any interest in, any person who
or which is directly or indirectly engaged in any type of business that is
competitive with the Business of SYNAGRO or its Affiliates;
(iii) solicit, contact or enter into any agreement or contract
with any employee, agent, independent contractor, customer or Prospective
Customer (as defined below) of SYNAGRO or its Affiliates which results in
activities that are competitive with the Business. For purposes of this Section
10(a), the term "Prospective Customer" shall mean a person or entity from which
SYNAGRO or its Affiliates is actively soliciting business or has concrete plans
to solicit business as of the commencement of the Covenant Period;
(iv) request that any present or future employee, agent,
independent contractor, customer or Prospective Customer of SYNAGRO or its
Affiliates curtail or cancel its business or refrain from doing business with
SYNAGRO or its Affiliates, or
(v) directly or indirectly hire, or solicit the employment
or services of, or cause or attempt to cause to leave the employment or service
of SYNAGRO or its Affiliates, any person who or which is employed by, or
otherwise engaged to perform services for SYNAGRO or its Affiliates (whether in
the capacity of employee, consultant, independent contractor or otherwise).
In addition, for a period that runs for 12 months after the end of any
employment term in the event ▇▇▇▇▇▇▇▇▇▇ has been terminated for any reason,
other than by ▇▇▇▇▇▇▇▇▇▇ due to SYNAGRO's material breach of this Agreement,
▇▇▇▇▇▇▇▇▇▇ agrees to comply with the restrictions set forth in subparagraphs (i)
through (v) of this paragraph 10(a).
(b) Without limiting the generality of the provisions of this
Section 10, ▇▇▇▇▇▇▇▇▇▇ shall be deemed to be engaged in a particular business if
he (whether alone or in association with one or more other persons) is an owner,
proprietor, partner, stockholder, officer, employee, independent contractor,
director or joint venturer of, or a consultant or lender to, or an investor in
any manner in, any person who or which is directly or indirectly engaged in such
business. Notwithstanding the foregoing provisions of this Section 10,
▇▇▇▇▇▇▇▇▇▇ may own, solely as an investment, securities if ▇▇▇▇▇▇▇▇▇▇ (i) is not
an affiliate of the issuer of such securities and (ii) does not, directly or
indirectly, beneficially own more than 5% of the class of which securities are a
part.
Page 5 of 8
(c) ▇▇▇▇▇▇▇▇▇▇ acknowledges and agrees that the limitations
imposed by this non-competition covenant as to time, geographical area, and
scope of activity being restrained are reasonable and do not impose a greater
restraint than is necessary to protect the goodwill or other business interest
of SYNAGRO. ▇▇▇▇▇▇▇▇▇▇ further acknowledges that the stock options referred to
in Section 2 and severance provisions of Section 3 above are given in exchange
for the terms and conditions of this Agreement and to compensate ▇▇▇▇▇▇▇▇▇▇ for
the reductions in value between this Agreement and his prior employment
agreement with BIO GRO.
(d) "Affiliate" means, with respect to a specified person, (i) any
entity of which such person is an executive officer, director, partner, trustee
or other fiduciary or is directly or indirectly the beneficial owner of 10% or
more of any class of equity security thereof or other financial interest
therein; (ii) if such person is an individual, the spouse of such individual,
and any entity of which his spouse is an executive officer, director, partner,
trustee or other fiduciary or is directly or indirectly the beneficial owner of
10% or more of any class of equity security thereof or other financial interest
therein; (iii) if such person is an entity, any director, executive officer,
partner, trustee or other fiduciary or any direct or indirect beneficial owner
of 10% or more of any class of equity security of, or other financial interest
in, such entity; or (iv) any person that directly, or indirectly through one or
more intermediaries, controls, is controlled by, or is under common control with
the person specified. For purposes of this definition, "control" (including
"controlling", "controlled by" and "under common control with") means the
possession, direct or indirect, or the power to direct or cause the direction of
the management and policies of a person, whether through the ownership of voting
securities, by contract or otherwise.
(e) "Business" means the management of biosolids, including but
not limited to the collection, recycling, treatment, transportation, land
application, drying/pelletizing, incineration, disposal and/or composting of
municipal sludge, industrial sludge, animal manure, agricultural and other
biosolids. However, "Business" shall not include landfilling or other solid
waste disposal.
11. REMEDIES. ▇▇▇▇▇▇▇▇▇▇ agrees that this Agreement is intended to
protect and preserve legitimate business interests of SYNAGRO. It is further
agreed that any breach of this Agreement may render irreparable harm to SYNAGRO.
In the event of a breach by ▇▇▇▇▇▇▇▇▇▇, SYNAGRO shall have available to it all
remedies provided by law, including, but not limited to, permanent injunctive
relief to restrain ▇▇▇▇▇▇▇▇▇▇ from violating this Agreement. SYNAGRO shall also
be entitled to commence legal action against ▇▇▇▇▇▇▇▇▇▇ for any breach of any
confidentiality agreement and/or confidentiality programs in effect at any time
between ▇▇▇▇▇▇▇▇▇▇ and SYNAGRO. Notwithstanding any legal remedies available to
SYNAGRO as a result of a breach of this Agreement, in the event of a breach by
▇▇▇▇▇▇▇▇▇▇, SYNAGRO shall immediately be entitled to withhold and avoid payment
of any sums of money or other benefits then due or to become due under this or
any other Agreement between ▇▇▇▇▇▇▇▇▇▇ and SYNAGRO.
12. REFORMATION OF COVENANTS. ▇▇▇▇▇▇▇▇▇▇ acknowledges that the covenants
contained in Sections 9 and 10 are reasonable in geographical and temporal scope
and in all other respects. If any court determines that any of such covenants,
or any part thereof, are unenforceable, then (a) the remainder of such covenants
shall not be affected by such determination and (b) those
Page 6 of 8
of such covenants that are determined to be unenforceable because of the
duration or scope thereof shall be reformed by the court to reduce their
duration or scope so as to render the same enforceable against ▇▇▇▇▇▇▇▇▇▇.
13. CONFLICTS WITH EMPLOYEE HANDBOOK. ▇▇▇▇▇▇▇▇▇▇ understands and agrees
that it is his responsibility to obtain and read the SYNAGRO Employee Handbook
and to abide by the rules, policies, and standards set forth in this Employee
Handbook. ▇▇▇▇▇▇▇▇▇▇ also acknowledges that Synagro reserves the right to
revise, delete, and add to the provisions of the SYNAGRO Employee Handbook.
Before implementation, all such revisions, deletions, or additions to this
Employee Handbook must be in writing and must be signed by the Chief Executive
Officer, President, or Chief Financial Officer of SYNAGRO. No oral statements or
representations can change the provisions of the SYNAGRO Employee Handbook or
this employment agreement. ▇▇▇▇▇▇▇▇▇▇ and SYNAGRO further understand that
▇▇▇▇▇▇▇▇▇▇'▇ employment agreement controls in the event of any conflicts with
the SYNAGRO Employee Handbook.
14. GENERAL PROVISIONS.
a. NO WAIVER. The failure of SYNAGRO to terminate this Agreement for
the breach of any condition or covenant herein by ▇▇▇▇▇▇▇▇▇▇ shall not affect
SYNAGRO's right to terminate for subsequent breaches of the same or other
conditions or covenants. The failure of either party to enforce at any time or
for any period of time any of the provisions of this Agreement shall not be
construed as a waiver of such provisions or of the right of the party thereafter
to enforce each and every such provision.
b. NOTICES. All notices and other communications required or permitted
to be delivered pursuant to any provision of this Agreement shall be in writing
and addressed as follows:
(i) If to SYNAGRO:
Synagro - WWT, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇
Telecopy No.: 713/369-1750
(ii) If to ▇▇▇▇▇▇▇▇▇▇, to him at:
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
The address of either party set forth above may be changed by such
party by delivering notice of such change to the other party to this Agreement.
Any notice mailed shall be deemed to have been given and received on the third
business day following the day of deposit in the United States mail.
Page 7 of 8
c. ASSIGNMENTS. The rights and obligations of the parties under this
Agreement may not be assigned without the consent of the parties hereto;
provided, however, that in the event of any reorganization or restructuring of
SYNAGRO in which the business of SYNAGRO or BIO GRO is transferred to an
Affiliate, this Agreement and the rights and obligations of SYNAGRO hereunder
shall automatically be assigned to such Affiliate, and the rights and
obligations of ▇▇▇▇▇▇▇▇▇▇ hereunder shall continue in effect.
d. ENTIRE CONTRACT. This Agreement shall constitute the entire contract
between the parties and supersedes all existing agreements between them, whether
oral or written, with respect to the subject matter hereof. No change,
modification or amendment of this Agreement shall be of any effect unless in
writing signed by ▇▇▇▇▇▇▇▇▇▇ and by the CEO of SYNAGRO.
e. GOVERNING LAW. This Agreement shall be construed and enforced in
accordance with, and the rights of the parties shall be governed by, the laws of
the State of Texas (regardless of the laws that might otherwise govern under
applicable principles of conflicts of law). The parties agree that the exclusive
venue for the dispute resolution concerning this Agreement shall be the state or
federal courts located in ▇▇▇▇▇▇ County, Texas.
f. SEVERABILITY. Should any provision of this Agreement not be
enforceable in any jurisdiction, the remainder of the Agreement shall not be
affected thereby. However, if the covenant not to compete is deemed void or
voidable, then ▇▇▇▇▇▇▇▇▇▇ agrees to return the stock options granted as part of
this Agreement.
IN WITNESS WHEREOF, the parties hereto have signed this Agreement on this
______________ day of August 2001.
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Individually
_________________________________
SYNAGRO - WWT, INC.
By:______________________________
▇▇▇▇ ▇. ▇▇▇▇▇▇
Chairman & CEO
Page 8 of 8