EXHIBIT 10.22
AMENDMENT NO. 3
TO EMPLOYMENT AGREEMENT
THIS AMENDMENT NO. 3 to Employment Agreement (this "Amendment") is
dated effective as of December 30, 2003, 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".
WHEREAS, Executive and Synagro 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, the Second Amendment and this Amendment is referred to
as the ("Agreement");
WHEREAS, Executive and Synagro desire to further amend 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:
I. CHANGE OF POSITION, DUTIES AND RESPONSIBILITIES.
(a) The Company and Executive agree that, effective as of
September 8, 2003, Executive's position, duties and responsibilities with the
Company have been modified. Effective as of such date, Executive's position with
the Company has been changed significantly from Chief Executive Officer to Vice
President. The Company and Executive agree that Executive shall remain as
Chairman of the Board of Directors of the Company ("Chairman") until the earlier
of such time as the Company shareholders replace Executive with another duly
elected board member, the other board members elect a new chairman or Executive
resigns. Executive hereby resigns from all other positions, titles and authority
as an officer and director of the Company and its subsidiaries and affiliates.
(b) As a result of such changes in position, duties and
responsibilities, the Company and Executive agree to amend and restate Sections
1, 2, 3 and 4 of the Agreement to read as follows:
"(1) EMPLOYMENT. During the remaining Employment Period (as
defined in Section 4 hereof), the Company shall employ Executive, and
Executive shall serve, as Vice President of the Company.
(2) COMPENSATION. The Company shall pay or cause to be paid to
Executive during the remaining Employment Period an annual base salary
for his services under this Agreement of $281,875.00, in equal
semi-monthly
installments of $11,744.79, in accordance with the Company's normal payroll
procedures until the earlier of (i) December 30, 2005, or (ii) the last day of
the month in which Executive no longer serves as either Chairman or Vice
President for any reason.
In the event Executive ceases serving as Chairman and as Vice
President for any reason prior to December 30, 2005, the Company shall
pay a lump sum cash payment to Executive in an amount equal to $563,750
less the aggregate amount of all base salary installment payments paid
by the Company pursuant to the preceding sentence for the Employment
Period after October 1, 2003. Such lump sum payment shall be due and
payable on the last day of the month in which Executives no longer
serves as either Chairman or Vice President.
In the event Executive continues to serve as Chairman after
December 30, 2005, Executive shall thereafter be entitled to receive
the compensation for serving as a member of the Board of Directors of
the Company equal to the compensation then paid to the Company's
independent directors. Executive shall not be entitled to any
compensation for serving as Chairman or Vice President after the date
of this Amendment and prior to December 30, 2005 other than the
compensation set forth in the first two paragraphs of this Section 2
and in Section 5 of the Agreement.
As further described in the Agreement, the Company and Executive
may terminate Executive's employment with the Company and his director
position as Chairman essentially at any time and for any reason and
upon such termination the Executive shall be entitled to the remaining
guaranteed payments described in the second paragraph of this Section
2. The Company and Executive acknowledge and agree that the guaranteed
payments set forth in this Section 2 are in consideration for (i) the
execution and delivery by Executive of the General Release attached as
Exhibit A to this Amendment (ii) Executive's agreement to continue to
perform the duties and responsibilities assigned to him by the Chief
Executive Officer (iii) the extension of the continuing obligations of
Executive under the Agreement as set forth in Section IV of this
Amendment, including without limitation the extension of Executive's
covenant not to compete.
(3) DUTIES AND RESPONSIBILITIES OF EXECUTIVE. During the
Employment Period, Executive shall perform the duties and
responsibilities assigned to him by the Chief Executive Officer to the
best of his ability and with reasonable diligence. In determining
Executive's duties and responsibilities, the Chief Executive Officer
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. In performing
Executive's duties and responsibilities hereunder, Executive shall not
be required to devote his services full-time to the business of the
Company. Executive will however make himself available, on an as-needed
basis, to provide such duties and responsibilities assigned to him.
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(4) TERM OF EMPLOYMENT. Executive's term of
employment with the Company under this Agreement shall begin on the
Effective Date and continue thereafter until Notice of Termination
pursuant to Section 7 as 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.
The period from the Effective Date through the date of Executive's
termination of employment as Vice President for whatever reason shall
be referred to herein as the "EMPLOYMENT PERIOD"."
II. POST-TERMINATION BENEFITS. As a result of the change in position
with the Company and reduced duties and responsibilities, as well as the
guaranteed compensation payments as set forth in Section 2 of the Agreement (as
amended and restated above), Executive shall not be entitled to any
post-termination benefits or severance under Sections 6 (a) or (b) of the
Agreement or under any severance pay plan or program maintained by the Company
that covers Executive.
III. WAIVER OF RIGHT TO TERMINATE FOR GOOD REASON. Executive hereby
waives his rights and additional benefits under this Agreement that may result
from a termination by the Executive for Good Reason, including without
limitation as a result of the changes in position, duties and responsibilities
described above in Section I of this Amendment. Such waiver by Executive of such
rights and benefits shall be for all purposes under the Agreement. As
consideration for such waiver, the Company and the Executive agree that (i)
effective as of the date of this Amendment, all of the Executive's stock options
that were unvested shall immediately vest, and (ii) upon termination of the
employment of Executive, for any reason whatsoever, the Company shall provide
post-employment medical coverage in accordance with the terms and conditions
beginning with the second sentence of Section 10 of the Agreement, provided,
however, that such post-employment medical coverage shall be provided for
eighteen (18) months following the Termination Date rather than for two (2)
years. The Company and Executive also acknowledge, agree and confirm that under
Section 6(c) of the Agreement all of Executive's outstanding and vested options
that are unexercised as of his Termination Date may be exercised 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.
IV. EXTENSION OF EXECUTIVE'S NONCOMPETE AND OTHER OBLIGATIONS.
Executive acknowledges and confirms 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, Executive's
obligations under Sections 6(c), 11, 12, 13, 14, 15, 16 and 24. Notwithstanding
the preceding sentence, however, Executive agrees that his obligations under
Sections 11, 13, 14, and 16 of the Agreement shall be extended and continue for
a period equal to the later of (i) four (4) years from the effective date of
this Amendment, or (ii) two (2) years after the later of (x) the termination of
the Employment Period or (y) the date Executive ceases to serve as Chairman.
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V. RATIFICATION. Except as provided by this Amendment, (i) the Agreement shall
remain in full force and effect, and (ii) none of the rights, interests and
obligations existing and to exist under the Agreement are hereby released,
diminished or impaired. The Company and Executive agree that in the event of any
conflict between the Agreement and this Amendment, this Amendment shall control.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed effective as of the date first above written.
SYNAGRO TECHNOLOGIES, INC.,
a Delaware corporation
By: /s/ Xxxxx X Xxxxxx XX
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Xxxxx X. Xxxxxx XX, Executive Vice President
and General Counsel
EXECUTIVE
/s/ Xxxx X. Xxxxxx
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Xxxx X. Xxxxxx, Individually
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