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EXHIBIT 2.10
AGREEMENT CONCERNING EMPLOYMENT RIGHTS
THIS AGREEMENT, is made and entered into, to be effective this 27th day
of January, 2000, by and between: Xxxxx X. Xxxxxx XX, 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 (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
450,000 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 entice
Executive to commit to a longer term of employment and 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,
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changes to the composition of the Company's Board of Directors
resulting 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 $175,000, 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."
Paragraph "4. TERM OF EMPLOYMENT" in the Employment Contract, shall be
deleted and replaced with the following language:
"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 and continuing thereafter so that the remaining term
of employment hereunder is always 24 months, unless Notice of
Termination pursuant to Section 7 is given by either the Company or
Executive to the other party. The Company
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and Executive shall each have the right to give a 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 "evergreen" 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."
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 (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;
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(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 450,000 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) 450,000 and (y) the Fair Market Value per share of the
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) 450,000 (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 450,000 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", "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:
Xxxxx X. Xxxxxx XX, an Individual.
By: /s/ XXXXX X. XXXXXX XX
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Synagro Technologies, Inc, a Delaware Corporation.
By: /s/ XXXX X. XXXXXX
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Xxxx X. Xxxxxx
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