<PAGE> 1
As filed with the Securities and Exchange Commission on September 30, 1998
REGISTRATION NO. 333-_____
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
-------------------
SYNAGRO TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 04-2648081
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
5850 SAN FELIPE, SUITE 500
HOUSTON, TEXAS 77057
(713) 706-6180
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
SYNAGRO TECHNOLOGIES, INC.
AMENDED AND RESTATED
1993 STOCK OPTION PLAN
(Full Title of Plan)
SYNAGRO TECHNOLOGIES, INC.
ROSS M. PATTEN
5850 SAN FELIPE, SUITE 500
HOUSTON, TEXAS 77057
(713) 706-6180
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
With copies to:
T. WILLIAM PORTER
PORTER & HEDGES, L.L.P.
700 LOUISIANA, SUITE 3500
HOUSTON, TEXAS 77002
(713) 226-0600
-------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
=======================================================================================================================
TITLE OF AMOUNT TO PROPOSED MAXIMUM PROPOSED AMOUNT OF
SECURITIES TO BE REGISTERED BE REGISTERED(1) OFFERING MAXIMUM AGGREGATE REGISTRATION
PRICE PER SHARE(2) OFFERING PRICE(2) FEE
- ------------------------------- -------------------- ----------------------- ----------------------- ---------------
<S> <C> <C> <C> <C>
Common Stock, par value 1,100,000 $3,78125 $4,159,375 $1,227
$.002 per share
=======================================================================================================================
</TABLE>
(1) Pursuant to Rule 416(a), also registered hereunder is an indeterminate
number of shares of Common Stock issuable as a result of the
anti-dilution provisions of the Synagro Technologies, Inc. Amended and
Restated 1993 Stock Option Plan (the "Plan").
(2) Pursuant to Rule 457(h), the registration fee is calculated on the
basis of the average of the high and low price per share of Common
Stock, as quoted on the Nasdaq Small-Cap Market on September 23, 1998
and with respect to the maximum number of the registrant's securities
issuable under the Plan.
<PAGE> 2
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The contents of the following documents filed by Synagro Technologies,
Inc., a Delaware corporation (the "Company"), with the Securities and Exchange
Commission (the "Commission") are incorporated into this registration statement
(the "Registration Statement") by reference:
(a) the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1997, as amended;
(b) the Company's Definitive Proxy Statement on Schedule 14A for
the 1998 Annual Meeting of Stockholders, as filed on July 9,
1998;
(c) the Company's Quarterly Reports on Form 10-Q for the quarters
ended March 31, 1998 and June 30, 1998;
(d) the Company's Current Reports on Form 8-K dated June 30, 1998,
and September 5, 1998 and on Form 8-K/A dated September 13,
1998;
(e) the description of the Common Stock contained in the Company's
Registration Statement on Form 10 (No. 21054), as filed on
December 30, 1992, and all amendments and reports thereafter
filed for the purpose of updating such description; and
(f) the description of the Company's preferred share purchase
rights contained in the Company's Registration Statement on
Form 8-A (No. 21054), as filed on December 27, 1996.
All documents filed by the Company with the Commission pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act") subsequent to the filing date of this Registration
Statement and prior to the filing of a post-effective amendment to this
Registration Statement which indicates that all securities offered have been
sold or which deregisters all securities then remaining unsold shall be deemed
to be incorporated by reference in this Registration Statement and to be a part
hereof from the date of filing of such documents. The Company will provide,
without charge, each participant in each of the Company's Amended and Restated
1993 Stock Option Plan (the "Plan"), on written or oral request of such person,
a copy (without exhibits, unless such exhibits are specifically incorporated by
reference) of any or all of the documents incorporated by reference pursuant to
this Item 3.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
<PAGE> 3
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Under Delaware law, a corporation may include provisions in its
certificate of incorporation that will relieve its directors of monetary
liability for breaches of their fiduciary duty to the corporation, except under
certain circumstances, including a breach of the director's duty of loyalty,
acts or omissions of the director not in good faith or which involve intentional
misconduct or a knowing violation of law, the approval of an improper payment of
a dividend or an improper stock purchase or redemption or any transaction from
which the director derived an improper personal benefit.
Section 145(a) of the General Corporation Law of the State of Delaware
("DGCL") grants to the Company the authority to indemnify each officer and
director of the Company against liabilities and expenses incurred by reason of
the fact that he is or was an officer or director of the Company if he acted in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the Company and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful. The
determination as to whether a person seeking indemnification has met the
required standard of conduct is to be made (i) by a majority vote of the
directors who are not parties to such action, suit, or proceeding, even through
less than a quorum, or (ii) if there are no such directors, or if such directors
so direct, by independent legal counsel in a written opinion, if such a quorum
does not exist or if the disinterested directors so direct, or (iii) by the
stockholders. The Restated Certificate of Incorporation and bylaws of the
Company require the Company to indemnify the Company's directors and officers to
the fullest extent permitted under Delaware law, and to implement any such
provisions the Company has entered into pursuant to contractual indemnity
agreement with its directors and executive officers. The Company's Restated
Certificate of Incorporation limits the personal liability of a director to the
corporation or its stockholders to damages for breach of the director's
fiduciary duty.
In a suit brought to obtain a judgment in the corporation's favor,
whether by the Company itself or derivatively by a stockholder, Section 145(b)
of the DGCL only allows the Company to indemnify for expenses, including
attorneys' fees, actually and reasonably incurred in connection with the defense
or settlement of the case, and the Company may not indemnify for amounts paid in
satisfaction of a judgment or in settlement of the claim. In any such action, no
indemnification may be paid in respect of any claim, issue or matter as to which
such persons shall have been adjudged liable to the Company except as otherwise
approved by the Delaware Court of Chancery or the court in which the claim was
brought. According to the statute, in any other type of proceeding, the
indemnification may extend to judgments, fines and amounts paid in settlement,
actually and reasonably incurred in connection with such other proceeding, as
well as to expenses (including attorneys' fees).
Section 145 of the DGCL also allows the Company to purchase and
maintain insurance on behalf of its directors and officers against liabilities
that may be asserted against, or incurred by, such persons in any such capacity,
whether the Company would have the authority to indemnify such person against
liability under the provisions of Section 145. The Company has purchased
insurance on behalf of its directors and officers for such purposes.
Insofar as indemnification for liabilities under the Securities Act of
1933, as amended (the "Securities Act") may be permitted to directors, officers
or persons controlling the Registrant pursuant to the foregoing provisions, the
Registrant has been informed that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act and
therefore is unenforceable.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
<PAGE> 4
ITEM 8. EXHIBITS.
4.1 Synagro Technologies, Inc. Amended and Restated 1993 Stock
Option Plan
5.1 Opinion of Porter & Hedges, L.L.P.
23.1 Consent of Singer Lewak Greenbaum & Goldsteinn, L.L.P.
23.2 Consent of Arthur Andersen LLP
23.3 Consent of Porter & Hedges, L.L.P. (included in Exhibit 5.1)
24.1 Power of Attorney (included on the signature page hereto)
ITEM 9. UNDERTAKINGS.
A. Undertaking to Update
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or
sales are being made, a post-effective amendment to this
registration statement:
(i) To include any prospectus required by
section 10(a)(3) of the Securities Act;
(ii) To reflect in the prospectus any facts
or events arising after the effective date of the
registration statement (or the most recent
post-effective amendment thereof) which, individually
or in the aggregate, represent a fundamental change
in the information set forth in this Registration
Statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered
(if the total dollar value of securities offered
would not exceed that which was registered) and any
deviation from the low or high and of the estimated
maximum offering range may be reflected in the form
of a prospectus filed with the Commission pursuant to
Rule 424(b) if, in the aggregate, the changes in
volume and price represent no more than a 20 percent
change in the maximum aggregate offering price set
forth in the "Calculation of Registration Fee" table
in the effective registration statement.
(iii) To include any material information
with respect to the plan of distribution not
previously disclosed in the registration statement or
any material change to such information in this
Registration Statement;
Provided, however, that paragraphs (A)(1)(i) and (A)(1)(ii) of
this section do not apply if the information required to be
included in a post-effective amendment by those paragraphs is
contained in periodic reports filed by the registrant pursuant
to Section 13 or Section 15(d) of the Exchange Act, that are
incorporated by reference in this Registration Statement.
<PAGE> 5
(2) That, for the purpose of determining any
liability under the Securities Act, each such post-effective
amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering
of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being
registered which remain unsold at the termination of the
offering.
B. Undertaking With Respect to Documents Incorporated by
Reference
The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities
Act, each filing of the registrant's annual report pursuant to
Section 13(a) or Section 15(d) of the Exchange Act that is
incorporated by reference in the registration statement shall
be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona
fide offering thereof.
C. Undertaking With Respect to Indemnification
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and
controlling persons of the registrant pursuant to the
foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such
liabilities (other than the payment by the registrant of
expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense
of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it
is against public policy as expressed in the Act and will be
governed by the final adjudication of such issue.
<PAGE> 6
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that we, the undersigned directors and
officers of Synagro Technologies, Inc., do hereby constitute and appoint Ross M.
Patten, our true and lawful attorney and agent, to do any and all acts and
things in our name and on our behalf in our capacities as directors and
officers, and to execute any and all instruments for us and in our names in the
capacities indicated below, which said attorney and agent, may deem necessary or
advisable to enable said corporation to comply with the Securities Act, and any
rules, regulations and requirements of the Commission, in connection with the
filing of this Registration Statement, including specifically without
limitation, power and authority to sign for any of us, in our names in the
capacities indicated below, any and all amendments hereto; and we do each hereby
ratify and confirm all that the said attorney and agent, shall do or cause to be
done by virtue hereof.
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Houston, State of Texas, on September 28, 1998.
SYNAGRO TECHNOLOGIES, INC.
By: /s/ ROSS M. PATTEN
--------------------------------------
Ross M. Patten,
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed by the following persons in the capacities indicated
on September 28, 1998.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
Director, Chairman of the Board,
President and Chief Executive Officer
/s/ ROSS M. PATTEN (Principal Executive Officer) September 28, 1998
- --------------------------------------------------
Ross M. Patten
Senior Vice President
and Chief Financial Officer
(Principal Financial and Accounting
/s/ RANDY E. JENNINGS Officer) September 28, 1998
- --------------------------------------------------
Randy E. Jennings
/s/ KENNETH CHUAN-KAI LEUNG Director September 28, 1998
- --------------------------------------------------
Kenneth Chuan-Kai Leung
</TABLE>
<PAGE> 7
<TABLE>
<S> <C> <C>
Director September 28, 1998
- --------------------------------------------------
Irwin I. Gelbart
/s/ J. MARK MEYERS Director September 28, 1998
- --------------------------------------------------
J. Mark Meyers
/s/ ALFRED TYLER 2nd Director September 28, 1998
- --------------------------------------------------
Alfred Tyler 2nd
/s/ DONALD L. THONE Director September 28, 1998
- --------------------------------------------------
Donald L. Thone
/s/ GENE MEREDITH Director September 28, 1998
- --------------------------------------------------
Gene Meredith
</TABLE>
<PAGE> 8
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit Description
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<S> <C>
4.1 Synagro Technologies, Inc. Amended and
Restated 1993 Stock Option Plan
5.1 Opinion of Porter & Hedges, L.L.P.
23.1 Consent of Singer Lewak Greenbaum &
Goldsteinn, L.L.P.
23.2 Consent of Arthur Andersen, LLP
23.3 Consent of Porter & Hedges, L.L.P.
(included in Exhibit 5.1)
24.1 Power of Attorney (included on the
signature page hereto)
</TABLE>
<PAGE> 1
EXHIBIT 4.1
SYNAGRO TECHNOLOGIES, INC.
1993 STOCK OPTION PLAN
The Synagro Technologies, Inc. 1993 Stock Option Plan is an amendment
and restatement, effective as of June 28, 1996, of the plans formerly known as
the "Synagro Technologies, Inc. 1993 Incentive Stock Option Plan" and the
"Synagro Technologies, Inc. 1993 Non-Qualified Stock Option Plan" (collectively,
the "Prior Plans"). All outstanding options previously granted under the Prior
Plans are assumed and continued, without modification, hereunder.
1. DEFINITIONS. The following terms shall have the meanings set forth
below:
(a) Appreciation. The difference between the option exercise
price per share of the Nonstatutory Stock Option to which a Tandem SAR
relates and the Fair Market Value of a share of Common Stock on the
date of exercise of the Tandem SAR.
(b) Board. The Board of Directors of the Company.
(c) Code. The Internal Revenue Code of 1986, as amended, and
the regulations and other authority promulgated thereunder by the
appropriate governmental authority. References herein to any provision
of the Code shall refer to any successor provision thereto.
(d) Committee. A committee appointed by the Board consisting
of not less than two directors who fulfill the "non-employee director"
requirements of Rule 16b-3 under the Exchange Act and the "outside
director" requirements of Section 162(m) of the Code. Without
limitation, the Committee may be the Compensation Committee of the
Board, or any subcommittee of the Compensation Committee, provided that
the members of the Committee satisfy the requirements of the previous
sentence. The Board shall have the power to fill vacancies on the
Committee arising by resignation, death, removal or otherwise. The
Board, in its sole discretion, may bifurcate the powers and duties of
the Committee among one or more separate committees, or retain all
powers and duties of the Committee in a single Committee. The members
of the Committee shall serve at the discretion of the Board.
Notwithstanding the preceding paragraph, the term "Committee",
as used in the Plan with respect to any Incentive Award granted, or to
be granted, to an Outside Director or a member of the Committee, shall
refer to the Board. In the case of an Incentive Award for an Outside
Director or a member of the Committee, the Board shall have all the
powers and
<PAGE> 2
responsibilities of the Committee hereunder as to such Incentive Award,
and any actions as to such Incentive Award may be acted upon only by
the Board (unless it otherwise designates in its discretion). When the
Board exercises its authority to act in the capacity as the Committee
hereunder with respect to an Incentive Award, it shall so designate
with respect to any action that it undertakes in its capacity as the
Committee.
(e) Common Stock. The common stock of the Company, par value
$.002 per share, and any class of common stock into which such common
shares may hereafter be converted, reclassified or recapitalized.
(f) Company. Synagro Technologies, Inc., a corporation
organized under the laws of the State of Delaware, and any successor in
interest thereto.
(g) Consultant. An independent agent, consultant, attorney, an
individual who has agreed to become an Employee, or any other
individual who is not an Outside Director or employee of the Company
(or any Parent or Subsidiary) and who, in the opinion of the Committee,
is in a position to contribute materially to the growth or financial
success of the Company (or any Parent or Subsidiary).
(h) Disability. As determined by the Committee in its
discretion exercised in good faith, a physical or mental condition of
the Employee that would entitle him to payment of disability income
payments under the Company's long term disability insurance policy or
plan for employees, as then effective, if any; or in the event that the
Grantee is not covered, for whatever reason, under the Company's
long-term disability insurance policy or plan, "Disability" means a
permanent and total disability as defined in Section 22(e)(3) of the
Code. A determination of Disability may be made by a physician selected
or approved by the Committee and, in this respect, the Grantee shall
submit to an examination by such physician upon request.
(i) Employee. Any employee of the Company (or any Parent or
Subsidiary) within the meaning of Section 312(d) of the Code who, in
the opinion of the Committee, is one of a select group of executive
officers, other officers, or other key personnel of the Company (or any
Parent or Subsidiary), who is in a position to contribute materially to
the growth and development and to the financial success of the Company
(or any Parent or Subsidiary), including, without limitation, officers
who are members of the Board.
(j) Employment. Employment by the Company (or any Parent or
Subsidiary), or by any corporation issuing or assuming an Incentive
Award in any transaction described
2
<PAGE> 3
in Section 424(a) of the Code, or by a parent corporation or a
subsidiary corporation of such corporation issuing or assuming such
Incentive Award, as the parent-subsidiary relationship shall be
determined at the time of the corporate action described in Section
424(a) of the Code. In this regard, neither the transfer of a Grantee
from Employment by the Company to Employment by any Parent or
Subsidiary, nor the transfer of a Grantee from Employment by any Parent
or Subsidiary to Employment by the Company, shall be deemed to be a
termination of Employment of the Grantee. Moreover, the Employment of a
Grantee shall not be deemed to have been terminated because of absence
from active Employment on account of temporary illness or during
authorized vacation or during temporary leaves of absence from active
Employment granted for reasons of professional advancement, education,
health, or government service, or during military leave for any period
(if the Grantee returns to active Employment within 90 days after the
termination of military leave), or during any period required to be
treated as a leave of absence by virtue of any applicable statute,
Company personnel policy or agreement.
Unless otherwise provided in the Incentive Agreement, the term
"Employment" for purposes of the Plan will also include compensatory
services performed by a Consultant for the Company (or any Parent or
Subsidiary) as well as membership on the Board by an Outside Director.
(k) Exchange Act. The Securities Exchange Act of 1934, as
amended.
(l) Fair Market Value. The fair market value of one share of
Common Stock on the date in question, which is deemed to be (i) the
closing sales price on the immediately preceding business day of a
share of Common Stock as reported on the principal securities exchange
on which Shares are then listed or admitted to trading, or (ii) if not
so reported, the average of the closing bid and asked prices for a
Share on the immediately preceding business day as quoted on the
National Association of Securities Dealers Automated Quotation System
("NASDAQ"), or (iii) if not quoted on NASDAQ, the average of the
closing bid and asked prices for a Share as quoted by the National
Quotation Bureau's "Pink Sheets" or the National Association of
Securities Dealers' OTC Bulletin Board System. If there was no public
trade of Common Stock on the date in question, Fair Market Value shall
be determined by reference to the last preceding date on which such a
trade was so reported.
If the Common Stock is not traded in accordance with clauses
(i), (ii) or (iii) of the preceding paragraph at the time a
determination of its Fair Market Value is required to be made
hereunder, the determination of Fair Market Value for purposes of the
Plan shall be made by the Committee in its discretion exercised in good
faith. In this respect, the
3
<PAGE> 4
Committee may rely on such financial data, valuations or experts as it
deems advisable under the circumstances.
(m) Grantee. Any Employee, Consultant or Outside Director who
is granted an Incentive Award under the Plan.
(n) Incentive Award. A grant of an award under the Plan to a
Grantee, including any Nonstatutory Stock Option, Incentive Stock
Option, or Stock Appreciation Right.
(o) Incentive Agreement. The written agreement entered into
between the Company and the Grantee setting forth the terms and
conditions pursuant to which an Incentive Award is granted under the
Plan, as such agreement is further defined in Section 15.
(p) Incentive Stock Option. A Stock Option granted by the
Committee to an Employee under Section 6(a) which is designated by the
Committee as an Incentive Stock Option and intended to qualify as an
Incentive Stock Option under Section 422 of the Code.
(q) Independent SAR. A Stock Appreciation Right described in
Section 6(c)(1).
(r) Nonstatutory Stock Option. A Stock Option granted by the
Committee to a Grantee under Section 6(b) which is not designated by
the Committee as an Incentive Stock Option.
(s) Option Price. The exercise price at which a Share may be
purchased by the Grantee of a Stock Option.
(t) Outside Director. A member of the Board who is not, at the
time of grant of an Incentive Award, an employee of the Company or any
Parent or Subsidiary.
(u) Parent. Any corporation (whether now or hereafter
existing) which constitutes a "parent" of the Company, as defined in
Section 424(e) of the Code.
(v) Plan. The Synagro Technologies, Inc.1993 Stock Option Plan
as set forth herein and as it may be amended from time to time.
4
<PAGE> 5
(w) Retirement. The voluntary termination of Employment from
the Company or any Parent or Subsidiary constituting retirement for age
on any date after the Employee attains the normal retirement age of 65
years, or such other age as may be designated by the Committee in the
Employee's Incentive Agreement.
(x) Share. A share of the Common Stock of the Company.
(y) Spread. The difference between the exercise price per
Share specified in any Independent SAR grant and the Fair Market Value
of a Share on the date of exercise of the Independent SAR.
(z) Stock Appreciation Right or SAR. A Tandem SAR described in
Section 6(c)(2) or an Independent SAR described in Section 6(c)(1).
(aa) Stock Option or Option. Pursuant to Section 6, (i) an
Incentive Stock Option granted to an Employee or (ii) a Nonstatutory
Stock Option granted to an Employee, Consultant or Outside Director,
whereunder the Grantee has the right to purchase Shares of Common
Stock. In accordance with Section 422 of the Code, no Consultant or
Outside Director shall be granted an Incentive Stock Option.
(bb) Subsidiary. Any corporation (whether now or hereafter
existing) which constitutes a "subsidiary" of the Company, as defined
in Section 424(f) of the Code.
(cc) Tandem SAR. A Stock Appreciation Right that is granted in
connection with a related Stock Option pursuant to Section 6(c)(2), the
exercise of which shall require forfeiture of the right to purchase a
Share under the related Stock Option (and when a Share is purchased
under the Stock Option, the Tandem SAR shall similarly be canceled).
If the Common Stock is not traded in accordance with clauses
(i), (ii) or (iii) of the preceding paragraph at the time a
determination of its Fair Market Value is required to be made
hereunder, the determination of Fair Market Value for purposes of the
Plan shall be made by the Committee in its discretion exercised in good
faith. In this respect, the Committee may rely on such financial data,
valuations or experts as it deems advisable under the circumstances.
2. PURPOSE. The purpose of the Plan is to provide an incentive to
officers, directors, Employees, independent contractors, and Consultants of the
Company, and any Parent or Subsidiary
5
<PAGE> 6
(together with the Company, herein collectively referred to as "Synagro") to
remain in the employ of, provide services to, and contribute to the success of
Synagro.
3. ADMINISTRATION. The Plan shall be administered by a Committee
appointed by the Board. Subject to the provisions of the Plan, the Committee
shall have the sole authority to determine:
(a) The persons to whom Incentive Awards shall be granted;
(b) The number of Options and/or SARs to be granted to each
Grantee pursuant to such Incentive Awards;
(c) The exercise price of each Incentive Award;
(d) The period within which each Incentive Award shall be
exercised and, with the consent of the Grantee, any extensions of such period,
provided, however, that the original period and all extensions shall not exceed
the maximum period permissible under the Plan; and
(e) The terms and conditions of each Incentive Agreement
entered into between the Company and the Grantee and of any amendments thereto
(provided that the optionee consents to each such amendment).
The Committee shall meet at such times and places as it determines,
including by means of a telephone conference call. A majority of the members
shall constitute a quorum, and a decision of a majority of those present at any
meeting at which a quorum is present shall constitute the decision of the
Committee. A memorandum signed by all of the members of the Committee shall
constitute the decision of the Committee without the necessity, in such event,
for holding an actual meeting.
4. ELIGIBILITY. Officers, directors, employees, independent
contractors, consultants and other persons providing significant services to
Synagro, as determined by the Committee, shall be eligible to receive Incentive
Awards under the Plan.
5. COMMON STOCK SUBJECT TO PLAN. There shall be reserved for issuance,
upon the exercise of Incentive Awards granted under the Plan, subject to
adjustment in accordance with Section 9 hereof, the greater of (i) 1,100,000
shares of Common Stock and (ii) 10% of the number of shares of Common Stock
issued and outstanding on the last day of each calendar quarter. Any shares
issued upon exercise of Incentive Awards may be treasury shares. If an Incentive
Award
6
<PAGE> 7
granted under the Plan shall expire or terminate for any reason without having
been exercised in full, unpurchased shares subject thereto shall again be
available for the purposes of the Plan. The maximum number of shares with
respect to which Options which may be granted to an optionee who is an employee
of Synagro shall not exceed 125,000 shares in any fiscal year during the term of
the Plan.
6. TERMS OF OPTIONS AND SARS.
(a) Incentive Stock Options. It is intended that options
granted pursuant to this Section 5(a) qualify as "incentive stock options" as
defined in Section 422 of the Code. Incentive Stock Options shall be granted
only to Employees of Synagro. Each Incentive Agreement evidencing an Incentive
Stock Option shall provide that the Option is subject to the following terms and
conditions and to such other terms and condition not inconsistent therewith as
the Committee may deem appropriate in each case:
(1) Option Price. The price to be paid for each Share
of Common Stock upon the exercise of each Incentive Stock Option shall
be determined by the Committee at the time the Option is granted, but
shall in no event be less than 100% of the Fair Market Value of the
shares on the date the Option is granted, or not less than 110% of the
Fair Market Value of such shares on the date such Option is granted in
the case of an individual then owning (within the meaning of Section
424(d) of the Code) 10% or more of the total combined voting power of
all classes of stock of Synagro. As used in this Plan, the term "date
the option is granted" means the date on which the Committee authorizes
the grant of an Option hereunder or any later date specified by the
Committee.
(2) Period of Option and Exercise. The period or
periods within which an Incentive Stock Option may be exercised shall
be determined by the Committee at the time such Option is granted, but
in no event shall any Incentive Stock Option granted hereunder be
exercised more than ten years from the date of grant, nor more than
five years from the date of grant in the case of an individual then
owning (within the meaning of Section 424(d) of the Code) more than 10%
of the total combined voting power of all classes of stock of Synagro.
(3) Payment for Common Stock. The Option exercise
price for each share of Common Stock purchased under an Incentive Stock
Option shall be paid in full at the time of purchase. The Committee may
provide that the Option Price be payable, at the election of the
Grantee and with the consent of the Committee, in whole or in part
either (i) in cash or (ii) by delivery of shares of Common Stock in
transferable form, such shares of Common
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Stock to be valued for such purpose at their Fair Market Value on the
date on which the Option is exercised. No share of Common Stock shall
be issued upon exercise until full payment therefor has been made, and
no Grantee shall have any rights as an owner of Common Stock until the
date of issuance to him of the stock certificate evidencing such Common
Stock.
(4) Limitation on Amount Becoming Exercisable In Any
One Calendar Year. Subject to the overall limitations of Section 4
hereof, the aggregate Fair Market Value (determined as of the time the
Option is granted) of Common Stock with respect to which Incentive
Stock Options are exercisable for the first time by a Grantee during
any calendar year shall not exceed $100,000.
(b) Nonstatutory Stock Options. Nonstatutory Stock Options may
be granted to Employees, Outside Directors, Consultants, independent contractors
and other persons who provide substantial services to Synagro subject to the
following terms and conditions and to such other terms and conditions not
inconsistent with the provisions of this Plan as the Committee may deem
appropriate in each case:
(1) Option Price. The price to be paid for each share
of Common Stock upon the exercise of a Nonstatutory Stock Option shall
be determined by the Committee at the time the Option is granted, but
in no event shall be less than 85% of the Fair Market Value of the
shares on the date the Option is granted.
(2) Period of Option and Exercise. The periods,
installments or intervals during which a Nonstatutory Stock Option may
be exercised shall be determined by the Committee at the time the
Option is granted, but in no event shall such period exceed 10 years
from the date of grant.
(3) Payment for Common Stock. The Option exercise
Price for each share of Common Stock purchased under a Nonstatutory
Stock Option shall be paid in full at the time of purchase. The
Committee may provide that the Option Price be payable, at the election
of the Grantee and with the consent of the Committee, in whole or in
part in (i) cash or (ii) by delivery of shares of Common Stock in
transferable form, such Common Stock to be valued for such purpose at
its Fair Market Value on the date on which the Option is exercised. No
share of Common Stock shall be issued until full payment therefor has
been made, and no Grantee shall have any rights as an owner of shares
of Common Stock until the date of issuance to him of the stock
certificate evidencing such Common Stock.
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(c) Stock Appreciation Rights. Independent SARs and Tandem
SARs may be granted to any Grantee the terms and conditions of which shall be
evidenced by an Incentive Agreement, subject to the following terms and
conditions:
(1) Independent SARs. The terms and conditions of
each Independent SAR shall be evidenced by an Incentive Agreement. The
exercise price per share of Common Stock shall be not less than one
hundred percent (100%) of the Fair Market Value of a share of Common
Stock on the date of grant of the Independent SAR. The term of an
Independent SAR shall be determined by the Committee. Independent SARs
shall be exercisable at such time and subject to such terms and
conditions as the Committee shall specify in the Incentive Agreement
for the Independent SAR grant. Upon exercise of an Independent SAR, the
holder shall receive, for each share specified in the Independent SAR
grant, an amount equal to the Spread. The Spread shall be payable in
cash, shares of Common Stock, or a combination of both, as specified in
the Incentive Agreement (or in the discretion of the Committee if not
so specified). The Spread shall be paid within 30 calendar days of the
exercise of the Independent SAR. The number of shares of Common Stock
which shall be issuable upon exercise of an Independent SAR shall be
determined by dividing (A) by (B), where (A) is the number of shares as
to which the Independent SAR is exercised multiplied by the Spread in
such shares and (B) is the Fair Market Value of a share on the exercise
date.
(2) Tandem SAR. The terms and conditions of each
Tandem SAR shall be evidenced by an Incentive Agreement. The Option
Price per share of a Tandem SAR shall be fixed in the Incentive
Agreement and shall not be less than one hundred percent (100%) of the
Fair Market Value of a share of Common Stock on the grant date of the
Nonstatutory Stock Option to which it relates. A Tandem SAR may be
exercised at any time the Nonstatutory Stock Option to which it relates
is then exercisable, but only to the extent such Nonstatutory Stock
Option is exercisable, and shall otherwise be subject to the conditions
applicable to such Nonstatutory Stock Option. When a Tandem SAR is
exercised, the Nonstatutory Stock Option to which it relates shall
terminate to the extent of the number of shares with respect to which
the Tandem SAR is exercised. Similarly, when a Nonstatutory Stock
Option is exercised, the Tandem SARs relating to the shares covered by
such Nonstatutory Stock Option exercise shall terminate. Any Tandem SAR
which is outstanding on the last day of the term of the related
Nonstatutory Stock Option shall be automatically exercised on such date
for cash, without the need for any action by the Grantee, to the extent
of any Appreciation. Upon exercise of a Tandem SAR, the holder shall
receive, for each share with respect to which the Tandem SAR is
exercised, an amount equal to the Appreciation. The Appreciation shall
be payable in cash, shares of Common
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Stock, or a combination of both, as specified in the Incentive
Agreement (or in the discretion of the Committee if not so specified).
The Appreciation shall be paid within 30 calendar days of the exercise
of the Tandem SAR. The number of shares of Common Stock which shall be
issuable upon exercise of a Tandem SAR shall be determined by dividing
(1) by (2), where (1) is the number of shares as to which the Tandem
SAR is exercised multiplied by the Appreciation in such shares and (2)
is the Fair Market Value of a share on the exercise date.
(3) Shares Subject to Plan. Upon the exercise of an
SAR under this Section 5, payment for which is made in shares of Common
Stock, the number of shares of Common Stock reserved for issuance under
the Plan shall be reduced by the number of shares so issued.
7. NONTRANSFERABILITY. The Incentive Awards granted pursuant to the
Plan shall be nontransferable except by will or the laws of descent and
distribution of the state or country of the Grantee's domicile at the time of
death or for Nonstatutory Stock Options, pursuant to a qualified domestic
relations order as defined in the Code or Title I of the Employee Retirement
Income Security Act of 1974, as amended, and shall be exercisable during the
Grantee's lifetime only by him (or, in the case of a transfer pursuant to a
qualified domestic relations order, by the transferee under such qualified
domestic relations order) and after his death, by his personal representative or
by the person entitled thereto under his will or the laws of intestate
succession.
8. TERMINATION OF EMPLOYMENT OR OTHER RELATIONSHIP. Unless otherwise
specified in an Incentive Agreement, upon termination of the Grantee's
Employment or other relationship with Synagro, the following shall occur:
(a) Death or Disability. Upon the death or Disability of a
Grantee, unless otherwise provided in the Incentive Agreement, any vested
Incentive Award shall expire on the earlier of (i) the expiration date set forth
in the Incentive Agreement or (ii) the first anniversary of the Grantee's
termination of Employment or other relationship as a result of his death or
Disability, as applicable; provided, however, that in no case shall such
Incentive Agreement provide for the expiration of an Incentive Award before six
months after the termination of the Grantee's Employment or other relationship
under this Section 8(a). Any non-vested portion of any Incentive Awards granted
to Grantee outstanding on the date of termination shall immediately terminate
and no further vesting shall occur.
(b) Retirement. Upon the Retirement (either pursuant to a
Synagro retirement plan, if any, or pursuant to the approval of the Board) of
any officer, director or Employee, any
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vested Incentive Award shall expire on the earlier of (A) the expiration date
set forth in the Incentive Agreement or (B) the expiration of three months after
the date of such Retirement. Any non-vested portion of any Incentive Awards
granted to Grantee outstanding on the date of Retirement shall immediately
terminate and no further vesting shall occur.
(c) Other Termination. Upon the termination of a Grantee's
Employment or other relationship with Synagro for any reasons other than as set
forth in (a) or (b) above, any vested Incentive Awards shall expire 30 days
after the date of such termination. Any non-vested portion of any Incentive
Awards granted to Grantee outstanding on the date of such termination shall
immediately terminate and no further vesting shall occur.
9. ADJUSTMENT OF SHARES; TERMINATION OF INCENTIVE AWARDS.
(a) Adjustment of Shares. In the event of changes in the
outstanding Common Stock by reason of stock dividends, split-ups,
consolidations, recapitalizations, reorganizations or like events (as determined
by the Committee), an appropriate adjustment shall be made under the Plan (i) in
the number of shares set forth in Section 4 hereof and (ii) in the number of
shares and the exercise price per share specified in any Incentive Agreement.
The determination of the Committee as to what adjustments shall be made shall be
conclusive. Adjustments for any options to purchase fractional shares shall be
determined by the Committee. The Committee shall give prompt notice to all
Grantees of any adjustment pursuant to this Section.
(b) Termination of Incentive Awards on Merger, Reorganization
or Liquidation of the Company. Notwithstanding anything to the contrary of this
Plan, in the event of any merger, consolidation or other reorganization of the
Company in which the Company is not the surviving or continuing corporation (as
determined by the Committee) or in the event of the liquidation or dissolution
of the Company, all Incentive Awards granted hereunder shall terminate on the
effective date of the merger, consolidation, reorganization, liquidation or
dissolution unless there is an agreement with respect thereto which expressly
provides for the assumption of such Incentive Awards by the continuing or
surviving corporation.
10. SECURITIES LAW REQUIREMENTS. The Company's obligation to issue
shares of its Common Stock upon exercise of an Incentive Award is expressly
conditioned upon the completion by the Company of any registration or other
qualification of such shares under any state and/or federal law or rulings and
regulations of any government regulatory body or the making of such investment
representations or other representations and undertakings by the Grantee (or his
legal representative, heir or legatee, as the case may be) in order to comply
with the requirements of any exemption from any such registration or other
qualification of such shares which the Company in
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<PAGE> 12
its sole discretion shall deem necessary or advisable. The Company may refuse to
permit the sale or other disposition of any shares acquired pursuant to any such
representation until it is satisfied that such sale or other disposition would
not be in contravention of applicable state or federal securities law.
11. TAX WITHHOLDING. As a condition to the exercise of an Incentive
Award, the Company may require a Grantee to pay over to the Company all
applicable federal, state and local taxes which the Company is required to
withhold with respect to the exercise of an Incentive Award granted hereunder.
At the discretion of the Committee and upon the request of a Grantee, the
minimum statutory withholding tax requirements may be satisfied by the
withholding of shares of Common Stock otherwise issuable to the Grantee upon the
exercise of an Incentive Award.
12. AMENDMENT. The Board may amend the Plan at any time, except that
without shareholder approval:
(a) The number of shares of Common Stock which may be reserved
for issuance under the Plan shall not be increased except as provided in Section
9(a) hereof;
(b) The Option Price per share of Common Stock subject to
Incentive Stock Options may not be fixed at less than 100% of the Fair Market
Value of a share of Common Stock on the date the Option is granted;
(c) The maximum period of ten (10) years during which
Incentive Awards may be exercised may not be extended;
(d) The class of persons eligible to receive Incentive Awards
under the Plan as set forth in Section 3 shall not be changed;
(e) This Section 12 may not be amended in a manner that limits
or reduces the amendments which require shareholder approval.
13. EFFECTIVE DATE. The Plan shall be effective upon the date of its
adoption by both the Board, subject to the approval of the stockholders of the
Company within the 12 month period following such adoption date.
14. TERMINATION. The Plan shall terminate automatically on the earliest
to occur of (i) as of the close of business on the day preceding the 10th
anniversary date of its effectiveness, (ii) by resolution of the Board, or (iii)
as described in Section 9(b) hereof. Unless otherwise provided
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herein, the termination of the Plan shall not affect the validity of any
Incentive Agreement outstanding at the date of such termination.
15. INCENTIVE AGREEMENTS. Each Incentive Award granted under the Plan
shall be evidenced by a written agreement executed by the Company and accepted
by the Grantee, which (i) shall contain each of the provisions and agreements
herein specifically required to be contained therein, (ii) shall indicate
whether an option is to be an Incentive Stock Option (and in such case shall
contain terms and conditions permitting such option to qualify for treatment as
an Incentive Stock Option under Section 422 of the Code), (iii) may contain the
agreement of the Grantee to remain in the employ of, and/or to render services
to, the Company or any Parent or Subsidiary for a period of time to be
determined by the Committee, and (iv) may contain such other terms and
conditions as the Committee deems desirable and which are not inconsistent with
the Plan.
16. NO RIGHT TO EMPLOYMENT. Nothing in this Plan or in any Incentive
Award granted hereunder shall confer upon any Grantee any right to continue in
the employ of Synagro or to continue to perform services for Synagro, or shall
interfere with or restrict in any way the rights of Synagro to discharge or
terminate any officer, director, Employee, independent contractor or Consultant
at any time for any reason whatsoever, with or without good cause.
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EXHIBIT 5.1
September 28, 1998
Securities and Exchange Commission
Judiciary Plaza
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Synagro Technologies, Inc. - Registration Statement on Form S-8
Ladies and Gentlemen:
We have acted as counsel to Synagro Technologies, Inc., a Delaware
corporation (the "Company"), in connection with the registration on Form S-8
under the Securities Act of 1933, as amended, of 1,100,000 shares (the "Shares")
of the Company's common stock, par value $.002 per share (the "Common Stock").
In such capacity, we have examined the certificate of incorporation, as amended,
the bylaws, and corporate proceedings of the Company, and based on such
examination and having regard for applicable legal principles, it is our opinion
the Shares to be offered and sold pursuant to the Registration Statement, when
issued in accordance with the options they are underlying, will be validly
issued, fully-paid and nonassessable outstanding shares of Common Stock.
We consent to the use of this opinion as an exhibit to the Registration
Statement and to the reference to our firm in the Registration Statement.
Very truly yours,
/s/ Porter & Hedges, L.L.P.
PORTER & HEDGES, L.L.P.
<PAGE> 1
EXHIBIT 23.1
CONSENT TO INDEPENDENT CERTIFIED PUBLIC ACCOUNTS
We have issued our report dated February 28, 1996 accompanying the consolidated
financial statements of Synagro Technologies, Inc. and subsidiaries appearing
in the 1997 Annual Report of the Company to its shareholders and accompanying
the schedules included in the Annual Report on Form 10-K/A for the year ended
December 31, 1997 which are incorporated by reference in this Registration
Statement. We consent to the incorporation by reference in the Registration
Statement of the aforementioned report.
/s/ Singer Lewak Greenbaum & Goldstein LLP
SINGER LEWAK GREENBAUM & GOLDSTEIN LLP
Los Angeles, California
September 30, 1998
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated February 20, 1998,
except with respect to certain matters discussed in Note 7 and matters
discussed in Note 14, as to which the date is April 14, 1998, included in
Synagro Technologies, Inc.'s Form 10-K for the years ended December 31, 1997
and 1996, and to all references to our Firm included in or made a part of this
Registration Statement.
ARTHUR ANDERSEN LLP
Houston, Texas
September 25, 1998
