Exhibit 10.1
SUPPLEMENT
TO EMPLOYMENT AGREEMENT
THIS SUPPLEMENT TO EMPLOYMENT AGREEMENT (this "SUPPLEMENT") is dated
May 31, 2005, by and between Xxxx X. Rome, an individual, hereinafter referred
to as the "EXECUTIVE", and Synagro Technologies, Inc, a Delaware corporation,
hereinafter referred to as the "COMPANY".
WHEREAS, the Executive and the Company entered into an Employment
Agreement dated February 19, 1999 (the "EMPLOYMENT CONTRACT"), and amended it by
the Agreement Concerning Employment Rights dated January 27, 2000 (the "FIRST
AMENDMENT"), and the Amendment No. 2 to Agreement Concerning Employment Rights
dated March 1, 2001 (the "SECOND AMENDMENT"). The Employment Contract, as
amended by the First Amendment and the Second Amendment and as supplemented by
this Supplement, is referred to as the ("AGREEMENT");
WHEREAS, the Executive and the Company have agreed to terminate the
Executive's employment with the Company;
WHEREAS, in connection with such termination, the Executive and the
Company desire to supplement the Agreement in certain respects as more
specifically set forth below; and
WHEREAS, capitalized terms not defined herein shall have the meanings
given to them in the Agreement.
NOW, THEREFORE, the parties hereto, in consideration of the mutual
promises and covenants set forth herein, agree as follows:
1. TERMINATION OF EMPLOYMENT. The Company and the Executive agree that the
Executive's employment with the Company terminated on April 15, 2005. For
purposes of the Agreement and determining the severance and related amounts to
be paid to the Executive, the Company and Executive agree that the Executive's
employment terminated effective as of April 1, 2005, and such date is referred
to in the Agreement as the "TERMINATION DATE". As a result, the "TERM OF
EMPLOYMENT" and the "EMPLOYMENT PERIOD", as such terms are defined and used in
the Agreement, ended effective as of the close of business on April 1, 2005. The
Executive hereby resigns from all other positions, titles, responsibilities and
authority as an officer, employee and director of the Company's subsidiaries and
affiliates.
2. CONTINUING PAYMENTS. The Executive and the Company acknowledge and agree
as follows:
(a) In accordance with Section 6(a)(1) and (2) of the Agreement, on March
31, 2005 the Executive received his unpaid salary through the Termination Date.
The Executive and the Company agree that the Executive had no accrued and unpaid
vacation pay for the period ending on the Termination Date.
(b) In accordance with Section 6(b) of the Agreement, the Company shall pay
the Executive his current annual salary of $210,000 (the "SEVERANCE AMOUNT").
Such amount shall be payable in installments of $8750.00 twice monthly in
accordance with the Company's normal payroll practices beginning on April 15,
2005 and ending on March 31, 2006. In accordance with Section 18 of the
Agreement, all required federal, state or local taxes will be withheld from the
payments of this Severance Amount. The Executive acknowledges that no further
payments of any kind are due to him under the Agreement except as specifically
provided in this Supplement and, if necessary, under Section 9 of the Agreement.
(c) As contemplated by the Agreement, the payments set forth in this
Section 2 are in consideration for the execution and delivery by the Executive
of the General Release attached as EXHIBIT A to this Supplement, and the
continuing obligations of the Executive under the Agreement, including without
limitation, his obligations set forth in Sections 12, 13, 14, 15, 16, 21, 24,
28, 29, and 32 of the Agreement.
3. CONTINUING BENEFITS.
(a) The Company acknowledges its obligation to provide the Executive with
post-termination medical coverage for two years as set forth in Section 10 of
the Agreement. The Executive acknowledges that his benefits set forth in Section
5 of the Agreement ceased to be effective as of the Termination Date.
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(b) As contemplated by the Agreement, the continued benefits set forth in
this Section 3 are in consideration for the execution and delivery by the
Executive of the General Release attached as EXHIBIT A to this Supplement, and
the continuing obligations of the Executive under the Agreement, including
without limitation, his obligations set forth in Sections 12, 13, 14, 15, 16,
21, 24, 28, 29, and 32 of the Agreement.
4. EXECUTIVE'S STOCK OPTIONS.
(a) The Company and the Executive acknowledge and agree that all of the
Executive's stock options are accurately listed and described on EXHIBIT B to
this Supplement.
(b) The Company and the Executive acknowledge and agree that effective as
of the Termination Date, all of the Executive's stock options set forth on
EXHIBIT B to this Supplement shall immediately vest to the extent unvested and
all such stock options shall be exercisable as set forth in Section 6(c) of the
Agreement.
(c) The Company and the Executive acknowledge that the Company is currently
pursuing a registration and offering of shares by the Company as well as shares
held by certain significant shareholders and management of the Company as
contemplated by the Company's Registration Statement on Form S-1 (File No.
333-122351) (the "REGISTRATION STATEMENT") filed (but not yet effective) with
the Securities and Exchanges Commission. The Company and the Executive agree
that if the Company chooses in its discretion to complete the offering
contemplated by the Registration Statement, then (i) the Executive shall be
permitted to exercise and sell for cash the same percentage of his options then
outstanding as the percentage of vested options the other members of the
Company's senior management are permitted to exercise and sell in the offering,
and (ii) the exercise price for all of the Executive's options exercised and
sold in such offering shall be $2.50 per share. The Executive agrees to exercise
and sell in such offering his options in the order listed on EXHIBIT B to this
Supplement. The Company and the Executive acknowledge and agree that in lieu of
the exercise of such options and sale of shares in such offering, the Company
may chose to pay the Executive a cash payment equal to the spread between the
net sale price in such offering and $2.50 per share for all such options that
would otherwise have been exercised and sold by the Executive in the offering
pursuant to this Section 4(c).
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(d) In the event the offering contemplated by the Registration Statement
closes and the Executive is permitted to exercise and sell the percentage of his
options contemplated by Section 4(c) above, then (i) in connection with such
exercise and sale the Executive agrees to execute and deliver to the
underwriters a lock-up agreement in substantially the same form executed and
delivered by the other members of the Company's senior management, and (ii) the
Executive's other options shall remain exercisable in accordance with the terms
set forth on EXHIBIT B; provided, however, that the exercise price for all
remaining options shall be $2.50 per share, and that the exercise period for all
remaining options shall expire at the close of business on the date 90 days
after the expiration of the lock-up period under such lock-up agreement.
(e) In the event the offering contemplated by the Registration Statement is
not consummated on or before June 30, 2005, then, as contemplated by Article 3.0
of the Agreement, the exercise price for all of the Executive's options shall be
$2.50 per share and such options shall be exercisable for a period of 90 days
after June 30, 2005.
5. EXECUTIVE'S OTHER OBLIGATIONS. The Executive acknowledges and agrees
that his obligations under the Agreement that are intended to continue after the
Termination Date shall continue in accordance with their terms, including
without limitation, the Executive's obligations under Section 6(c), 12, 13, 14,
15, 16, 21, 24, 28, 29, and 32.
6. CONSULTING SERVICES. The Company and the Executive agree that in return
for the consideration provided in the Agreement, the Executive will make himself
available, on an as-needed basis, 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 the Executive may have knowledge, information or understanding. The
Executive shall provide these services to the Company as more fully set forth in
Section 6(c)(1) through Section 6(c)(5) of the Agreement. The Executive agrees
he will not receive any additional compensation for these services. Further, the
parties agree that the provisions in Section 6(c)(1) through 6(c)(5) have not
previously been amended in the First Amendment or Second Amendment to this
Agreement.
7. CONTINUATION OF OFFICE SUPPORT SERVICES. The Company and the Executive
agree that the Company shall continue to provide to the Executive, at no cost to
the Executive, through June 1, 2005, the Executive's current Company cellular
telephone, his current Company computer and email account and Company telephone
number and voicemail. The Executive will not have access to the Company's
computer network or access to any other office support during this time except
as may be needed to fulfill the Executive's Consulting Services obligations
under Section 6 described above.
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8. RETURN OF COMPANY INFORMATION. The Executive agrees that, prior to June
1, 2005, he will return and deliver to the Company all Confidential Information,
as well as all documents or data in any format, regardless of creator or current
location, concerning or belonging to the Company or its current or potential
clients, even if not Confidential Information.
9. RATIFICATION. Except as provided by this Supplement or the General
Release, (i) the Agreement shall remain in full force and effect, and (ii) none
of the rights, interests and obligations existing and intended to exist under
the Agreement are hereby released, diminished or impaired. The Company and the
Executive agree that in the event of any conflict between the Agreement on one
hand, and this Supplement and the General Release on the other, this Supplement
and the General Release shall control.
IN WITNESS WHEREOF, the parties hereto have caused this Supplement to be
duly executed effective as of the date first above written.
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Agreed to and executed on this 31st day of May, 2005.
SYNAGRO TECHNOLOGIES, INC.,
a Delaware corporation
By: /s/ XXXXX X. XXXXXX XX
---------------------------------------
Xxxxx X. Xxxxxx XX
STATE OF TEXAS ss.
ss.
COUNTY OF XXXXXX xx.
BEFORE ME, the undersigned authority, on this day personally appeared
Xxxxx X. Xxxxxx XX, known to me to be the person whose name is subscribed to the
foregoing instrument and acknowledged to me that he executed the same on behalf
of Synagro Technologies, Inc. for the purpose and consideration therein
expressed.
GIVEN UNDER MY HAND AND SEAL OF OFFICE this 31st day of May, 2005.
[SEAL]
/s/
----------------------------------------
Notary Public - State of Texas
Agreed to and executed on this 19th day of
May, 2005.
EXECUTIVE
By: /s/ XXXX X. ROME
---------------------------------------
Xxxx X. Rome, Individually
STATE OF TEXAS ss.
ss.
COUNTY OF XXXXXX xx.
BEFORE ME, the undersigned authority, on this day personally appeared
Xxxx X. Rome, known to me to be the person whose name is subscribed to the
foregoing instrument and acknowledged to me that he executed the same for the
purpose and consideration therein expressed.
GIVEN UNDER MY HAND AND SEAL OF OFFICE this 19th day of May, 2005.
[SEAL] /s/
----------------------------------------
Notary Public - State of Texas
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EXHIBIT B
EXECUTIVE OPTIONS
Option Agreement
GRANT DATE NO. OF SHARES EXERCISE PRICE EXPIRATION DATE PLAN
---------- ------------- -------------- --------------- ----
June 29, 1999 90,000 $6.31 06/29/09 1993 Plan
March 30, 1998 40,000 $4.75 03/30/08 Inducement
September 9, 1998 125,000 $2.75 09/09/08 1993 Plan
September 9, 1998 75,000 $2.75 09/09/08 2000 Plan
December 27, 2000 120,000 $2.50 12/27/10 2000 Plan
January 2, 2001 230,000 $2.50 01/02/11 2000 Plan
-------------
Total 680,000
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