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EXHIBIT 10.21
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT, made and entered into as of the 19th day of
February, 1999 (the "EFFECTIVE DATE"), by and between Synagro Technologies,
Inc., a Delaware corporation (hereafter "COMPANY") and Xxxx X. 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.
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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 Xxxx X.
Xxxxxx or the Board of Directors to the best of his ability and with reasonable
diligence. In determining Executive's duties and responsibilities, Xxxx X.
Xxxxxx 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.
(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,
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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.
(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
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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.
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
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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:
(1) A ten percent (10%) or greater reduction in
Executive's annual base salary; or
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(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.
(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
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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.
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,
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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.
(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
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"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
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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:
(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.
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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
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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.
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,
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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.
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
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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.
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
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(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
Xxxxxxxxxx County or Xxxxxx 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. Sections 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.
(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
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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.
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
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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.
0000 Xxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
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.
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.
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33. SUPERSEDING AGREEMENT. This Employment Agreement shall supersede
any prior employment agreement entered into between the Company and Executive.
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: XXXX X. ROME
--------------------- --------------
Date: Date:
----------------------------- -----------------------------------
Address for Notices:
000 Xxxxxxxx Xxxx Xxxx
Xxxxxxx, Xxxxx 00000
ATTEST: SYNAGRO TECHNOLOGIES, INC.:
By: By:
------------------------------- -------------------------------------
Title: Its: CHAIRMAN & CEO
----------------------------
Printed Name: Printed Name: XXXX X. XXXXXX
--------------------- ---------------
Date: Date:
----------------------------- ---------------------------------
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