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EXHIBIT 2.8
AGREEMENT CONCERNING EMPLOYMENT RIGHTS
THIS AGREEMENT (this "Agreement"), is made and entered into, to be
effective this 27th day of January, 2000, by and between: Xxxx X. Xxxxxx, an
individual, hereinafter referred to as "Executive", and Synagro Technologies,
Inc, a Delaware Corporation, hereinafter referred to as "Synagro" or the
"Company."
R E C I T A L S
WHEREAS, Synagro desires to raise capital to continue its business plan
including the acquisition of biosolids treatment, processing, disposal and
beneficial reuse companies;
WHEREAS, GTCR Capital Partners, L.P., a Delaware limited partnership
("Capital Partners"), the Company and certain subsidiaries of the Company are
entering into a Senior Subordinated Loan Agreement on the date hereof (the "Loan
Agreement") pursuant to which, among other things, Capital Partners will make a
loan to the Company on the date hereof and may make additional loans hereafter
from time to time in accordance with the terms thereof;
WHEREAS, GTCR FUND VII, L.P., a Delaware limited partnership ("Fund
VII" and together with Capital Partners, "GTCR") and the Company are entering
into a Purchase Agreement on the date hereof (the "Purchase Agreement") pursuant
to which, among other things, Fund VII will purchase the Company's convertible
preferred stock on the date hereof and may make additional purchases of
convertible preferred stock from time to time hereafter in accordance with the
terms thereof;
WHEREAS, the execution of this Agreement by the Company and the
Executive is a condition to the initial closings under the Loan Agreement and
the Purchase Agreement;
WHEREAS, Executive is employed by Synagro under an employment contract
dated February 19, 1999 (as amended by this Agreement, the "Employment
Contract");
WHEREAS, the Company values Executive's contribution to Synagro's
business plan and whereas the Company and Executive desire that the transactions
contemplated by the Loan Agreement and the Purchase Agreement be consummated;
WHEREAS, GTCR, the Company and the Executive desire that any change of
control resulting from the consummation of the Loan Agreement and the Purchase
Agreement and the carrying out of their terms and the ownership and control
granted to GTCR and its affiliates thereunder shall not constitute a "change of
control" for purposes of (1) any and all stock options for the purchase of the
Company's stock held by Executive and (2) for purposes of Executive's Employment
Contract and any other agreement to which the Executive is party which makes
reference to a change of control
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of the Company or its subsidiaries (including for purposes of the definition of
"Good Reason" in the Employment Contract); and
WHEREAS, the Company desires to make Executive whole with respect to
the waiver of his rights with respect to a change of control of his options as
though the Executive currently holds in the aggregate options to purchase
950,000 shares of the Company's Common Stock at an exercise price of $2.50 on
the date hereof (except that the number of options not actually held by
Executive on the date hereof would be subject to, among other provisions, five
year time based vesting); and
WHEREAS, Synagro desires to amend the Employment Contract to compensate
him for waiving certain rights under the Employment Contract.
NOW, THEREFORE, the parties hereto, in consideration of the mutual
promises and covenants set forth herein, agree as follows:
Executive, being an employee of Synagro, hereby agrees:
1. Executive hereby irrevocably waives any and all rights
(whether granted in the Employment Contract, by action of the
Board of Directors of Synagro or otherwise) to the
acceleration of vesting of Synagro stock options held by
Executive as a result of the investment in and loans to the
Company (including, without limitation, the ownership of the
Company's capital stock resulting thereby, changes to the
composition of the Company's Board of Directors resulting
thereby, and the enforcement of the terms of the Purchase
Agreement, the Loan Agreement and the Warrant Agreement),
whether on the date hereof or in the future, by GTCR and/or
their affiliates pursuant to the terms of the Purchase
Agreement, the Loan Agreement, and the Warrant Agreement
between Synagro and Capital Partners ("Warrant Agreement"),
and hereby agrees that any such investments and loans
(including, without limitation, the ownership of the Company's
capital stock resulting therefrom, changes to the composition
of the Company's Board of Directors resulting therefrom or
pursuant to the terms thereof, and the enforcement of the
terms of the Purchase Agreement, the Loan Agreement and the
Warrant Agreement) by GTCR and/or their affiliates will not
constitute a "Change in Control" for purposes of any such
stock option agreement; and
2. Executive hereby irrevocably waives any and all rights
resulting from a change of control, including for the purposes
of the definition of "good reason" in Section 6 of the
Employment Contract, (whether granted in the Employment
Contract or a separate severance agreement or otherwise) as a
result of the investment in and loans to the Company
(including, without limitation, the ownership of the Company's
capital stock resulting thereby, changes to the composition of
the Company's Board of Directors resulting
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thereby or pursuant to the terms thereof, and the enforcement
of the terms of the Purchase Agreement, the Loan Agreement and
the Warrant Agreement), whether on the date hereof or in the
future, by Fund VII, Capital Partners and/or their affiliates
pursuant to the terms of the Purchase Agreement, the Loan
Agreement, and the Warrant Agreement, and hereby agrees that
any such investments and loans (including, without limitation,
the ownership of the Company's capital stock resulting
therefrom, changes to the composition of the Company's Board
of Directors resulting therefrom, and the enforcement of the
terms of the Purchase Agreement, the Loan Agreement and the
Warrant Agreement) by GTCR and/or their affiliates will not
constitute a "Change in Control" for purposes of any such
agreement.
This Waiver is limited to the matters expressly set forth above, and
Executive does not waive any other rights that he may have under the Employment
Contract, any stock option agreement or otherwise.
ARTICLE 2.0 - AMENDMENTS TO EMPLOYMENT CONTRACT
To achieve the goals and objectives set out in the Recitals, which are
incorporated into this Agreement as though more fully set forth in this Article,
Synagro and Executive desire to amend the Employment Contract as follows:
The first sentence of Paragraph "2. COMPENSATION" in the Employment
Contract, shall be deleted and replaced with the following language:
"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 $225,000, payable in
equal monthly or semi-monthly installments in accordance with the
Company's normal payroll procedures."
The third sentence of Paragraph "2. COMPENSATION" in the Employment
Contract, shall be deleted and replaced with the following language:
"Executive shall be entitled to participate in an annual bonus "pool"
or other structure established for the Company's top level of
management which shall provide for a bonus up to fifty-percent of base
salary if the goals set by the Board of Directors are satisfied."
The definition of "CHANGE IN CONTROL" in paragraph 6 of the Employment
Contract, shall be deleted and replaced with the following language:
"A `Change of Control' of the Company shall be deemed to have
occurred if any of the following shall have taken place: (a)
Any Person or group of Persons (within the meaning of Section
13 or 14 of the Securities and Exchange Act of 1934 (the
"Exchange Act"), but excluding (i) the executive managers of
the Company as of January 27, 2000, and (ii) GTCR Capital
Partners, L.P., GTCR Fund VII, L.P. and their respective
Affiliates) shall acquire beneficial ownership
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(within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of the outstanding voting stock of the Company
equal to the greater of (x) 25% of the then outstanding shares
of voting stock of the Company and (y) the proportion of the
then outstanding shares of voting stock of the Company held by
GTCR Fund VII, L.P. and its Affiliates; or (b) during any
12-month period, individuals who at the beginning of such
period constituted the Board (together with any directors
designated by the holders of the Convertible Preferred Stock
or the Lender and new directors whose election by the Board or
whose nomination for election by the Company's shareholders
was approved by a vote of at least majority of the directors
who either were directors at beginning of such period or whose
election or nomination was previously so approved) cease for
any reason to constitute a majority of the Board. For purposes
of this provision, "Person", "Affiliates", "Board",
"Convertible Preferred Stock" and "Lender" shall have the
meanings ascribed to such terms in the Loan Agreement."
The above amendments to the Employment Contract are limited to the
matters expressly set forth above, and Executive and Synagro do not waive, amend
or modify any other rights or duties that he or it may have under the Employment
Contract.
ARTICLE 3.0 - OTHER AGREEMENT
To achieve the goals and objectives set out in the Recitals, which are
incorporated into this Agreement as though more fully set forth in this Article,
Synagro and Executive agree that for so long as Executive remains employed by
Synagro and for thirty-days thereafter, in the event that:
(i) Executive's employment hereunder is terminated by the
Company at any time for any reason except (A) for
Cause or (B) Executive's death or Disability;
(ii) Executive terminates his own employment hereunder at
any time for Good Reason; or
(iii) a Change of Control (not otherwise waived pursuant to
this Agreement) occurs
Executive shall be entitled to receive, and the Company shall
be obligated to elect at its option to either (a) issue
options to purchase 950,000 registered shares of the Company's
common stock at an exercise price of $2.50 per share which
shall be fully vested but non-transferable and which shall
expire, notwithstanding any agreement or arrangement to the
contrary, 90 days from the date of issue; (b) a number of
registered shares (if the Company is publicly traded at such
time) of the Company's common stock equal to the result of (A)
the product of (x) 950,000 and (y) the Fair Market Value per
share of the
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Company's common stock less $2.50 divided by (B) the Fair
Market Value per share of the Company's common stock; or (c) a
cash payment equal to (x) the Fair Market Value of the
Company's common stock per share less $2.50 multiplied by (y)
950,000 (alternatives (a), (b) and (c) collectively, the
"Option Payment"). As a condition to receiving the Option
Payment, Executive must surrender all other options to
purchase Synagro common stock that he has been granted.
However, the Option Payment shall not be required to be made
if Executive has, at any time, whether before or after the
date of this agreement, been granted (for purposes hereof,
existing options which are repriced to an exercise price of
$2.50 shall be deemed to be re-granted) options to purchase an
aggregate amount of 950,000 shares of common stock of Synagro
with an average strike price of $2.50 or less. For purposes
hereof, "Fair Market Value" shall mean, with respect to any
date on which any determination of Fair Market Value is to be
made, the average closing price of shares of the Company's
common stock sold on the NASDAQ National Market System during
the previous 21 trading days.
For purposes of this Article 3.0, "Cause", "Change in Control", "Disability" and
"Good Reason" shall have the meanings ascribed to such terms in the Employment
Contract.
ARTICLE 4.0 - SUCCESSORS AND ASSIGNS
This Agreement shall be assignable as provided in Section 29 of the
Employment Contract.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written:
Xxxx X. Xxxxxx, an Individual.
By: /s/ XXXX X. XXXXXX
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Synagro Technologies, Inc, a Delaware Corporation.
By: /s/ XXXXX X. XXXXXX XX
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Xxxxx X. Xxxxxx XX
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